Question

According to the retail company Abercrombie and Fitch, Answer the following questions in a multiple full paragraph response .

1. Does the firm try to deliver its offerings directly to customers, or does it better deliver selected offerings by involving other organizations?

2. What channel(s) are used in distributing product/service offerings?

3. What physical distribution facilities do you think they use? Where are they be located? What are their major characteristics?

Answer 1

[1] The firm try to deliver its offerings directly to customer instead of selected offerings by involving other organisation as a direct contact with the customer help to create a close relationship between the company and its customer and its helps developing a better market for its product and services by knowing exactly what its customer wants from the company , what are its actual tastes and preference, and this direct contact with the customer also helps the company with the reduced intermediary cost that are incured on the middle organization involved in the transaction.

Even the customer get the product at reasonable as the extra cost is not included in the product which result from the involvement of these intermediaries and thus the customer will be more satisfied and will in return provide with a positive feedback which is also easy to obtain as there is a diect contact of the company with their customers.

[2] The following are the channels used in distributing product and services-

Basically there are two types of channel involved in the distribution of product and services-

(a) Direct channel- Here the seller or vendor of the product directly contact with the customer in order to sells its product directly to their customer without involving any intermediary- The direct channel further involves the following sub channels-

• Selling through opening own shop- Here the vendor in order to reach its customer directly opens their own shop in order to sell its product directly through these shops that doesnt involve any intermediary.
• Door-to-door selling- The door to door selling refers to the direct selling of the companies product and services directly reaching to the customer doors at their own conveneince.
• Sales through mail order method- In this the company receives order from their customer through the mail and thus creating a direct contact with the company in order to purchase the product.

(b) Indirect channel- It is said when their is no direct contact of the vendor and its customer and thus their are certain intermediaries involved in order to sell the companies product to the customer so their is no direct relation between the manufacturer and the buyer The following are certain indirect channel that are discussed below-

• Producer and consumer- It occurs in case of the costly product where the buyer are few and mostly includes industrial user.
• Producer-Wholesaler-Consumer - It involves big retailer or departmental stores or consumer super market in order to provide goods to the consumer.
• Producer-Wholesaler-Retailer-Consumer - It includes the industrial goods which are used in the further production not for further reselling.
• Producer-Sole Agent-Wholesaler-Retailer-Consumer - It refers to one of the longest channel in the indirect channel distribution but refers to one of the most popular channel.

[3] The following are some of the physical distribution facilities used by them -

• Warehousing- It refers to the process of storing goods until they are sold to the ultimate customer by preserving them, it helps in equalising supply time-wise but the location is an important factor in the process of marketing They are mostly located near the market are in order to ease with the supply when required
• Material Handling- Instead of using man-handling system we use material handling system in the modern handling , this system is mechanised in the western countries.
• Transport- It simply refers to the network of activities comprised of storage facility at many of its location interconnect by the series of transport link in the process of distribution, it is known as gordian knot.
• Inventory control- It serves as a reservoirs for the goods to be held in anticipation of sales. This inventory control helps in creating a link between production activity and customer order, it increases at a accelerated rate as the customer service level reaches 100%

The major characteristics of these physical distribution system are-

• storing
• maintaining and selling of goods and services.
• Insuring
• Paying
• Packaging and storing of the good .
• Receiving
• Inspection