Back again this week we continued our talk about Fresh Patches. We started off with going into the distribution side of what is going on in the business. We worked out in small groups how Fresh Patches supply chain would look like. The general consensus was that it would look something like this:
Supplier (Ventura, CA)
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Distributor
(Most likely UPS, Fedex, etc.)
|
/ \
East Coast West Coast
($15 shipping) ($7 shipping)
| |
Customer Customer
In this supply chain the supplier in Ventura does majority of the work when it comes to packaging and getting it all ready for the distributor to have. But with Andrew's plan for Fresh Patches to have an East coast Distribution Center it would help cut costs of shipping along with potentially cutting cost from the supplier for having to package everything.
Also with Barbara's plan to sell in retail stores, it would also change the supply chain around as well because different retails may control the distribution itself, maybe having their own delivery system of getting it to different store locations. This would also cut costs because then Andrew would have to pay less in shipping costs to get it to the stores and would be making a good profit from them now selling his product.
Distribution of Products
Thursday was a day of classifying different products into various groups and explaining their distribution intensities. Here are all of the products that were given to us.
These products were then separated into their respective product classifications:
Unsought: Septic Service
Shopping: Smart TV, Suit
Specialty: Jaguar, Rolex
Convenience: Hostess Products
After specifying this we continued on to talk about that different places that would carry these products, such as a department store for the suits or a jewelry store for the rolex. By figuring out where we could find these products/services it helped us to then select which distribution intensity the products fit into.
The 3 classifications included Exclusive, few dealers in an area will sell the product, Selective, product is sold in a decent amount of stores, and Intensive, the product is sold practically everywhere. Some products were easy to classify such as the Hostess products being Intensive, while others like the Suits could sometimes be Selective or Exclusive, however in this case since they are an "everyday suit" we would put them with Selective. By doing this it gave us more knowledge on what else goes into the marketing strategies when putting a product out there.
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