Case 11: the Cooper Processing Company

* Channel is monopsonistic - customer (liquor board) has tremendous influence over products reaching the shelves.

1- The total unit cost = Total Variable Cost + Production Fixed Expenses + Advertising Expense + Selling and Administrative Expense = 3.23 + 1.20 + 0.30 + 0.19 = 4.92.

2) Explain the role of channel intermediaries in the product distribution process. Why is their role important?

Distribution channels are organized in several ways: conventional, vertical, horizontal and multichannel (Kern R. 2013). Some of these organizational methods are more structured than others. When a distribution channel deals with more than one independent producer, such as wholesalers and retailers, the channel is known as a conventional distribution channel. (Kern R. 2013) These channels are not normally known to be strong and typically don’t give the customer the quality of product that they deserve. In a vertical marketing system, the retailers, wholesalers and producers, join forces to create a unified front, promoting an individual product (Kern R. 2013). Vertical distribution channels are stronger than the conventional distribution channels because all of the companies involved carry some of the load of power. (Kern R. 2013) In a horizontal distribution channel, companies join up and combine all of their finances and resources, in order to take on more than one company or product (Kern R. 2013). A multichannel distribution channel is where a large corporation uses two or more marketing channels to better target their desired customer segments (Kern R.

As mentioned in an earlier assignment, there are three main types of distribution channels. The first is the channel that goes from the producer, then to the wholesaler, then to the retailer or sells to the consumer. The second channel starts with the producer who sells straight to the retailer, who then sells to the consumer. The third channel goes directly from the producer to the consumer. Channels one and two are classed as indirect marketing channels, whereas channel three is a direct marketing channel as it goes straight from producer to consumer.

→ about 65% of revenues from sale of individual products; customized products represent 35% of sales

Given the use of each resource in the sales fulfillment cycle, determine the profitability of each customer.

In this report I will be comparing methods used by two different retailers on how they distribute two chosen products, of my choice, in two different retailing sectors. Seeing as the food and clothing sector both have very different styles of how they meet their product requirements, I will compare Tesco and JD; The products from these two companies itself that I’m going to compare is ‘Tesco Value Bread’ and Nike hoodies.

managed effectively in one way or another, that is $1.8 billion in merchandise. If half of these customers choose

retail channels. As the case points out, convenience stores and supermarkets made up approximately 90% of retail sales dollars should be our primary focus.

The natural foods channel has a unique distribution system that includes a wholesaler in a four step process; whereas, in the supermarket the distribution system only goes through a three step process. The channels may differ in distribution systems, consumer audiences, business models, and ethics; but, they have one thing in common. They both want to sell products that will make both the market and the manufacturer money.

Regardless of current channel, single channel businesses are becoming multi-channel businesses. Retail only are expanding to online services as

of the orders placed and 80% of the delivery expense. The foodservice channel accounts for 30%

Current funds allocated to advertising and sales promotion is 3% of net sales ($80,000,000) = $360,000

per case by the number of cases we shipped to get our cost of goods. Then, we