Fisherman's Friend Seminar Solution2.pdf - Fishermans Friend Case The Distribution Partnership of Lofthouse of Fleetwood and Nedan 1 Summarise the

Fisherman's Friend Seminar Solution2.pdf - Fishermans...

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Fisherman’s Friend Case: The Distribution Partnership of Lofthouse of Fleetwood and Nedan 1) Summarise the reasons why Lofthouse of Fleetwood chooses to use distributors rather than dealing directly with the retail trade itself. The main reasons include transaction efficiency , since L has only to manage the one link with the distributor in the geographic locale rather than many relationships with retailers. L’s products can immediately slot into the distributor’s system taking advantage of their role specialisation and economies of scale. The distributors add lots of value in terms of service. It’s a short case study but there seem a lot of evidence of their broad role nonetheless. In terms of facilitating value we have financing (the distributors are picked for their financial strength and so are in the position to provide a cash flow within the channel) and information (they are also picked because they have knowledge about the local market and contacts there, that can be passed to L). As for transactional value we have all three: risk (the distributor takes title to the goods well before they sell them); marketing (the distributor uses their knowledge to take on the marketing effectiveness risk – they perform the selling role, they share advertising responsibilities, they are in charge of deciding pricing…); administration (e.g., the distributors set up the administrative structure to sell the product – sales office, etc.). For logistical value we have assortment (distributors are picked for their complimentary confectionary products – thus making it easier for retailers to source their confectionary supply), storage (they take the products one month in advance), and transportation (Nedan’s policy is to deliver within 24 hours).
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