Marketing Channels Essay Example | Topics and Well Written Essays - 2000 words

Marketing Channels - Essay ExampleThe factory gate is the contingent at which the product is fully assembled and ready to be sent to the retailers distribution center (Factory Gate set 2004). Under FGP, the retailer takes over the primary distribution from the supplier which means the retailer no long-lasting has to pay the cost of transportation that was previously included in the price the supplier charged for product. The retailer buys the product at the factory gate and arranges transport. Instead of several separate vehicles making delivery to a central point, one vehicle can make several stops to pick up goods from suppliers in a specific geographical area. Also, goods can be collected at port of entry into the UK which provide cost less, and collecting goods at a manufacturing site located outside the UK could create additional savings.FGP has been in use in the UK by a number of grocery retailers and, as stated earlier, offers component cost of product with transportation costs separated. According to Scottish Food and Drink, t here is a lack of fellowship about FGP among suppliers, but the majority of those suppliers using FGP have had a positive experience and believe it is here to stay (How Do I 2004). According to them, certain areas need exploration in deciding whether FGP is the proficient solution.According to Potter (2003), FGP was first introduc... Understanding supply chain costsHaving thorough understanding of logistics trading operationsPutting cross-functional teams in placeMaking top-level commitments between organisations, for instance, CEOs Once these factors have been considered and FGP is put in place, it becomes taken for granted(predicate) that transportation costs are a key area of concern.Effect on Supply twine Partners and CustomersAccording to Potter (2003), FGP was first introduced in the UK by the fashion and automotive sectors in order to have organisation and optimisation of transport by purchaser to point of delive ry. Applying FGP in the UK grocery sector, however, is probably its intimately complex application. Tesco was the first to implement it, then Sainsburys, Asda and Carrefour. A Tesco case study realized the following FGP benefits1. drop-off in transport miles2. Reduction in transport costs3. Supply chain visibility alert of orders being placed on suppliersAnalyses of the extra costs of demand amplification on transport cave in use of transport through backloading Higher service levels The more consolidation, the more savings on wider platefulPotter, p. 20Collaborative Planning, Forecasting and Replenishment What Is ItAccording to the Grocery Manufacturers association, collaborative planning, forecasting and replenishment (CPFR) is a revolutionary business concern process wherein trading partners use technology and a standard set of business processes for Internet-based collaboration on forecasts and plans for replenishing product (Collaborative Planning 2002, par. 1). Because it is a new process within the industry, intended to bring about a collaboration strategy among trading partners, a study was undertaken by GMA outlining basic tenets