Distribution Channels and Strategy of Hershey The majority of Hershey’s products have a short shelf life. Generally, these product categories have low profit margins so importance is given upon volume. At the same time, an infrastructure of warehousing and distribution centres in order to efficiently move the product is critical. With poor material flow network, a company might create large unnecessary costs which can limit the potential profit of the product. Hershey realized the significance of downstream material process flow as a global supply chain from the beginning.
1. Vendor Managed Inventory (VMI) Vendor Managed Inventory (VMI) is a method of optimizing the operation of the supply chain in which the supplier is responsible for the level of inventory of the retailer. Suppliers have access to the inventory data of the retailer and are responsible for coordinating the orders. As companies in the supply chain decide to work together, the result of this collaboration is usually better information exchange, coordination processes and activities are improved (on the basis of support). each other).
This includes the demand of the designed product, which dictates the volumes that will need to be produced per given duration of time (Swift, & Booker, 2003). Apart from the costing factor, the sustainability of the process is a major factor in The Cheesecake Factory. This is the factor that relates to corporate social responsibility of the organization in production, which is an important tool for customer appeal. The process must be developed in such a way that environmental pollution is minimized (Swift, & Booker, 2003). Similarly, the process must be one that significantly conserves energy and other natural resources, such as water (Swift, & Booker, 2003).
Inventory Management Adidas Group manages its inventory level efficiently in order to satisfy the needs and changing demands of the consumers. It also ensures quick replenishments of the required raw materials. A sudden decline in demand can lead to excess inventories which will have negative implications on the financial performance of the Group. Likewise, a rapid in increase in demand for footwear or apparels can lead to a shortfall in the inventory level thereby adversely affecting the brand value and reputation of Adidas Group. The main issue in the inventory management of Adidas Group was that there was no real time information regarding the status of shipping details and inventory levels.
Wing Zone uses fresh and hygienic products to occupy a clear and desirable place in the minds of target customers. Marketing Mix Product Product options offered by a restaurant are very important. At Wing Zone, there is a wide variety of dishes suitable for both vegetarians and non-vegetarians. Price The customers’ perception of value is an important determinant of the price charged. Wing Zone customers should get what they pay for or they won’t return.
FIVE FORCE ANALYSIS OF THE FOOD INDUSTRY Firstly, I will analyze the buying power of customers in the food industry. Customers can have a big influence on the suppliers in the food industry, not only directly but through retailers also. If customers reduce the amount of a product they buy due to its cost, it may have very little impact on the retailer, but should the retailer stop selling it or try to
Advantages of directing marketing include gaining customers’ loyalty, reduced cost of marketing since there are no intermediaries in the distribution channel, instant feedback from customers and quick response by the firm to address issuing arising from the customers. Its disadvantage includes customers getting bored by the frequent communication from the company. The benefit of a single middleman in form of a retailer is increased efficiency in the market, minimization of distribution cost and ease of customer identification. The drawbacks of this distribution channel are increased cost of products since the intermediary wants a mark up on the sales. In the Chocoberry firm-wholesaler-retailer-customer distribution channel the benefits to be derived include low distribution costs, promotion services will be offered by these intermediaries and very helpful in situation where the target customers are far apart.
6.1 FINDINGS After completion of the research and analysis of the data got from the research following are the findings. 6.1.1 VALS- Values and lifestyle segmentation- most popular segmentation system combining lifestyles and values. After factor analysis the lifestyle traits which were found out to be in the buyer of ready to eat food products indicated that following were the segments which bought it- MAKERS- • Motivated by self expression and low resources • Value practicality and self sufficiency, spend leisure time with family and close friends • This might be a proably the individual segment which we got through factor analysis as their characteristics were I buy ready to eat food because it saves time and money INNOVATORS- • The other type of segment which buy ready to eat food are the innovators • These are successful, sophisticate and take charge high self-esteem people • Excess resources and receptive of new ideas and technologies • These are the people who spend their leisure time in high end activities like golf, clubbing, tours etc • These people are those whose purchase reflect cultivated taste for upscale niche products and services • These are those individuals who have a perception that there is no harm in trying new product EXPERIENCERS- •
A slack in this will cause the breakdown in the entire supply chain. Figure below was depicted from Tesco company document to illustrate the current issue in data management performance as information, sourcing and transportation were implemented as secondary drivers. Sourcing team was not able to provide an accurate forecasts and an intermittent changes in the orders under very short notice impacts the external supporting team, in this case, suppliers had no ability to drive efficiency in the supply chain network. There was a clear sign of intra functional scope in Tesco (M) operations as sourcing team does not have visibility or understanding on the impacts on the end-to-end costs to ensure the shelfs are always fully
These are the reasons that this food chain will be successful, as it will attract people from all the age groups. This how this chain will earn their share of profit and generate cash flow. That is the targeted audience for this particular food chain will also be diverse as almost all the people now days are health conscious whether adults or teenagers (Story, 2008). That is this food chain would not be confined to any particular generation. Developing new services, products, different innovative ideas, all are key elements in starting a business.