The Diversity of Distribution Channels in the Retailing Industry

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Said Ali                                                                                                      P2  Unit 41        

Introduction

In this assignment I will be writing a report into ‘The Diversity of Distribution Channels in the Retailing Industry’, I will be looking a the following sectors;

  • Tesco
  • Amazon
  • Pets At Home

 The word distribution means to transfer goods from the manufacturer to “the user”.

Tesco

Distribution Channels

Without the Diversity of Distribution Channels in the Retailing Industry Tesco would have not survived in the world of business. An example of a distribution of milk in Tesco is:

Distribution Process

Distribution process means how the goods are transferred from one place to another

  • The Dairy farmers milks the cow
  • The milk goes to a Packaging factory
  • The Packaging factory packages the products for the supplier (Tesco).
  • Then it goes to the retailer which is Tesco
  • This is the final stage where it reaches the Customer

The use of logistics in Tesco

Logistics is the flow of goods between the tip of origin to the point of destination Logistics involves the mixing of transportation, warehousing, material-handling and packaging.

Tesco use logistics to get the products form the warehouse to the stores, logistics companies that Tesco use are Stobart and the own brand.

The logistics processes are:

  • ROAD
  • RAIL
  • WATER
  • AIR
  • PIPE

Tesco manly use road and air to transport the goods on time,  

Retail control of the supply chain

Tesco sells the own brand with other known brands so that they can control the supply chain. By selling different brands, this will help Tesco sell more of the brands because when customers sees a well known cornflakes brand at an expensive price but sees a Tesco brand at a cheaper price the they will more likely go for the Tesco brand because the will have a choice of picking a expensive brand or a premium one.

Also by selling the own brand they don’t have to relay on other suppliers, and also by Tesco using the own brand they will have more control over their products. Furthermore transportation will be a lot easy because all the goods only get supplied at Tesco.

Provision of products enhancing functions

Transportation is vital because if the suppliers are late then Tesco will lose lot money so for this not to happen Tesco orders goods before it runs out, it also has warehouse close to it so the goods can be transported as quick as possible.

Storage is also important because if any of the Tesco goods run out they must have spare goods in the warehouse or it means more loss of Tesco.

Tesco also provides warranty or guarantee services for their goods. After the sales, for the reason that if the customers buy an electrical goods and its goes faulty a certain period of time then the customers will not be satisfied so for that reason Tesco is a able to refund or repair or replace goods.

Supply chain

A supply chain has three key parts which are:

  • Manufacturing
  • Supply
  • Distribution

A “supply chain is the system of organizations, people, technology, activities, information and resources involved in moving a product or service” taken from

  • A good supply chain will have the following categories:

  • Reduce stock level. Which means to keep supplying the merchandise to Tesco, if this is possible then they will be able to bring new goods
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  • Improve availability of stock , which means that there is more of the product at the warehouse so if any of the Tesco Retail shops run out of a product they are able to get it from the warehouse ASP.

  • Improve choice, means that Tesco should have more Varity products  e.g. drinks like strawberry, mango ect

  • Offer up-to-date products, this means that Tesco should latest merchandise e.g. if a new games comes out Tesco should have it.

Sourcing from UK & global

Tesco generally source their products from the UK and some they source ...

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