Archive for the ‘Mktg – Distribution’ Category

Reinventing the world’s most efficient distribution system …

February 13, 2013

In the old days, I didn’t know that the Girl Scouts mission was building “courage, confidence, and character”.

I thought that they were just a highly efficient cookie distribution outfit … good marketing, highly effective sales force, and low cost delivery system.

Well, the Girl Scouts aren’t resting on the laurels.

 

130212000159-girl-scout-cookie-truck-c1-main

Girl Scouts of the USA has revamped its business approach, taking innovative measures to broaden customer access and overall appeal.

These girls will stop at nothing to make their sale.

(more…)

General Mills’ Monster Cereals’ limited availability creates continued demand

November 8, 2012

Punch line: General Mills’ Monster Cereals create a buzz for fans with limited availability.

Die hard fans of Boo Berry, Count Chocula and Franken Berry will go to great lengths to purchase the 1970’s classics, and resellers have capitalized on this, selling the boxes for 3X the price on ebay.

* * * * *
Excerpted from the WSJ’s, “Boo Berry is Big at Halloween with Kids, Hoarders and Resellers”

October is the coolest month for Roger Barr. For a few happy weeks, grocery stores stock the object of his desire: Boo Berry.

monster_cereals

That is the berry-flavored cereal that turns milk bluish, delighting generations of American kids—and some adults, too.

The problem is that you can’t eat as much Boo Berry as you might  like.

Not long after Halloween, Boo Berry disappears from stores like an apparition.

The same affliction haunts lovers of Count Chocula and Franken Berry, the other two cereals General Mills produces for the Halloween season.

At first, the three surviving cereals were year-round familiars.

But the cereal maker cut distribution to the period from September to around Halloween in 2010.

General Mills wanted to focus on the pre-Halloween weeks to best capture the holiday excitement and enthusiasm for the products.

he company doesn’t release sales figures and won’t say whether the cereals were selling poorly the rest of the year.

One of the most amazing things about the monster cereals is the passion of the people.

Carol Shelley Thomas, a 45-year-old medical-billing specialist, for the past several years has bought 14 boxes of Franken Berry in October, enough to last until the following Halloween when more of the neon-pink cereal again appears in stores.

A quest for Count Chocula will lead Ron Macedo, a 41-year-old Toronto food distributor, across the border this month to Buffalo, N.Y., in order to buy at least 10 boxes of Chocula for himself and at least 20 boxes of Boo and Franken Berry for friends—to take back to Canada, where General Mills doesn’t market the stuff.

Many fans would love the cereals to be less elusive, but General Mills has no plans to make the three cereals available year-round.

But those who run out can turn to people like Josh Rhodes, who on eBay charges $7 per box from buyers.  Last year, he says, he sold about 300 boxes and expects to sell about 350 this year.  “Sure, I get some funny looks at the register,” says the 35-year-old Orchard Park, N.Y., resident, who buys about 40 boxes at a time for about $2 each.  “It’s worth it,” he says.

“People are willing to pay an arm and a leg for this stuff.”

Edit by BJP

You can slip into these sneaks for about $300 … deal or no deal?

September 12, 2012

Punch line: How do you market a pair of $300-plus sneakers? If you’re Nike, you just do it quietly. And by acting like you’re not marketing them at all.

image

* * * * *

Excerpted from Advertising Age, “Nike’s $300 Shoe Has the Marketing Built Right In”

Nike found itself in another controversy this week when news surfaced that it’s planning its most-expensive sneaker ever: the uber expensive LeBron X …

As the Swoosh is no stranger to controversy it is poised to combat the backlash through:

  1. Counterattack: The athletic giant hasn’t said what the final price will be for the shoe but it ripped the $315 price tag quoted by the WSJ as “inaccurate.”
  2. Word of mouth: Instead of expensive ads, Nike’s relying on word-of-mouth to build anticipation. The result: the buzz from athletes and sneaker blogs has helped score stories in every major media outlet.
  3. Product placement: Nike had the placement of all placements when millions of NBC TV viewers watched LeBron wear the shoes while leading the U.S. men’s basketball team to the gold medal in London.

 

One of the strongest selling features for shoes like the LeBron X is that they’re not for everybody.

In fact, Nike will only make 25,000 to 50,000 pairs which is expected to drive up prices and demand.

Edited by JDC

>> Latest Posts

Knock, knock … here’s your Big Mac.

December 14, 2011

TakeAway: Fast food franchises are replacing drive-thru with delivery in Asia, Middle East, & African markets. Comin’ to America?

* * * * *
Excerpt from WSJ: “Asia Delivers for McDonald’s”

Delivery is becoming an important part of McDonalds and KFC where cities are too crowded and real estate costs too high to build drive-throughs.

KFC offers delivery in more than half its 3,500 restaurants in China, and estimates delivery in more than 2,000 new KFC restaurants in China over the next decade.

McDonalds says delivery sales have been posting double-digit growth every year in every country where it’s offered. In Egypt, where McDonald’s first started offering delivery in 1994, more than 30% of total sales come from delivery.

Still, it’s not a model either company plans to export to Western markets. McDonald’s derives about two-thirds of its sales in the U.S. from drive -through customers.

In some countries, such as China, customers pay a flat fee for delivery. In others, people pay a fee equal to 15% to 20% of their order price.

Edited by ARK

>> Latest Posts

Stores are yesterday … get your ketchup online.

November 8, 2011

TakeAway: Heinz is launching its new premium ketchup with limited distribution through Facebook … and higher prices that includes shipping.

* * * * *
Excerpt from NY Times: “Ketchup Moves Upmarket, With a Balsamic Tinge”

In the era of squeeze bottles, patience is no longer required, but to create anticipatory buzz for a new ketchup variety, Heinz initially will limit its availability.

Heinz Tomato Ketchup Blended with Balsamic Vinegar, which substitutes balsamic for the traditional white vinegar, won’t initially be available  in stores.

Rather, consumers will be able to buy the ketchup only through the brand’s Facebook page until the product begins to appear in supermarkets later this year.

The balsamic ketchup will only be sold in 14-ounce glass (non-squeezable) bottles. The ketchup will carry a suggested retail price of $2.49 (plus a $2 shipping charge on Facebook), compared with $1.89 for the original in a plastic bottle of the same size at your local grocer.

Edit by ARK

>> Latest Posts

A Subway stop on every corner …

March 10, 2011

The marketing principle: Ubiquitous distribution.  Coke wants to always be within arm’s reach of every person. That’s ubiquity.

Now, Subway wants to be in every nook & cranny – anywhere somebody might yearn for a sandwich.

Punch line:  It’s official: the Subway sandwich chain has surpassed McDonald’s Corp. as the world’s largest restaurant chain, in terms of units.

At the end of last year, Subway had 33,749 restaurants worldwide, compared to McDonald’s 32,737.

Subway just opened its 1,000th location in Asia, including its first in Vietnam.

There are almost 8,000 Subways in unusual locations. “The non-traditional is becoming traditional.”

Subway has achieved its rapid growth, in part, by opening outlets in non-traditional locations such as an automobile showroom in California, an appliance store in Brazil, a ferry terminal in Seattle, a riverboat in Germany, a zoo in Taiwan, a Goodwill store in South Carolina, a high school in Detroit and a church in Buffalo, New York.

“We’re continually looking at just about any opportunity for someone to buy a sandwich, wherever that might be. The closer we can get to the customer, the better.”

McDonald’s is still the leader when it comes to sales. The burger chain reported $24 billion in revenue last year.

Excerpted from WSJ,  Subway Runs Past McDonald’s Chain , March 8, 2011

Where, oh where, is My McRib?

November 2, 2010

TakeAway: The McRib – a boneless pork patty molded into the shape of a rib slab and adorned with pickles, onions and barbecue sauce on a bun – is almost never available at all McDonald’s restaurants at the same time.

Instead, the Golden Arches offers them in different cities at different times, rarely for longer than a few weeks.

The elusive nature of McRibs has prompted a “McRib Locator” website and offers cache to a humdrum sandwich.

Sometimes, distribution is slim on purpose.

* * * * *

Excerpted from the Wall Street Journal, “Bona Fide Fans Chase Rib-Free Rib Sandwich” By Julie Jargon and David Kesmodel, October 11, 2010

The sandwich’s elusiveness has created a fan base of people who go to considerable lengths to munch on a McRib.  On Nov. 2, for the first time in 16 years, McDonald’s will offer the McRib at outlets across the U.S., but even then, only for six weeks or so. “It doesn’t sell well all year long because people get tired of it,” says McDonald’s USA President Jan Fields.

Plenty of companies offer limited-time products to coincide with holidays or promotions. Burger King offered actual ribs for a while this year. Mars sells red and green M&M’s at Christmas.

While the chain says it sold more than 60 million McRib sandwiches in the last three years, it sold 1.5 billion Big Macs in the same period. But every sale counts in a business that demands month after month of strong same-store sales.

Edit by AMW

* * * * *

Full Article:
http://online.wsj.com/article/SB10001424052748704696304575538373863627604.html?mod=WSJ_hps_RIGHTTopCarousel_2

 

* * * * *

Leveraging a "P": Wal-Mart Expands Its Reach via FedEx

October 1, 2010

TakeAway: Wal-Mart is experimenting with allowing customers to buy merchandise online and have it delivered for free to urban FedEx locations in a bid to boost sales in big cities where the retailer has little to no store presence.

A perfect example of one of the 6Ps – placement!

* * * * *

Excerpted from the Wall Street Journal, “Wal-Mart Uses FedEx to Expand Urban Push” By Miguel Bustillo,September 20, 2010

This summer, Wal-Mart started tests in Los Angeles and Boston to allow customers to direct purchases made on Walmart.com to FedEx Office outlets at no cost, mimicking a Wal-Mart offering called Site to Store that lets online buyers send items to the retailer’s stores for free.

Wal-Mart has no stores in Boston and two in Los Angeles, but FedEx has many locations in both. Wal-Mart is still collecting feedback from the tests.

Some retail experts said it seemed like an inevitable next step for the retailer, which has struggled to expand into America’s largest cities amid political opposition from labor unions. Wal-Mart is searching for new ways to spark domestic growth without needing to invest in real estate.

Wal-Mart also is pursuing younger urban shoppers, who don’t think twice about making big purchases online.

The partnership could allow FedEx to capitalize on its locations near college campuses it inherited when it acquired Kinkos in 2004.

Edit by AMW

* * * * *

Full Article:
http://online.wsj.com/article/SB10001424052748704416904575501790739176042.html

* * * * *

EC says “not so fast” on internet sales …

April 29, 2010

TakeAway:  Who should have more control over where goods are distributed – manufacturers or retailers? 

Seems like the maker of the good (i.e., the manufacturer) should have the say over where its goods are made available for sale. 

Not so in Europe.  The European Commission is prepared to mandate retailer-favored distribution policies.

* * * * *

Excerpted from WSJ, “EU to Overhaul Online-Retail Rules,” By Peppi Kiviniemi, April 19, 2010

Heavy lobbying from luxury-goods companies has led the European Commission to water down proposals aimed at expanding online sales of goods in Europe …

The new rules … will protect luxury-goods manufacturers against damage to their image by allowing them to insist in many cases that online sales be restricted to retailers who have “bricks and mortar” stores … This would prevent online-only retailers like Amazon and Ebay from selling the goods directly.

Preventing consumers from buying clothes or cosmetics brands over the Internet from a company that has an “online-only” business model will limit consumer choice and lead to higher prices and less innovative goods, said Director General of the European Consumers Organisation BEUC. But famous names like LVMH and Estée Lauder have argued that an uncontrolled push online could damage their image, and that online entrepreneurs shouldn’t benefit from the brand recognition they have worked hard to build up …

With the Internet now the fastest-growing retail channel in Europe, the overhaul of the competition rules has been long expected by the industry. Previously, luxury-goods makers had full control over who could sell their goods and they were able to prevent most online sales.

Overall, the new EU-wide rules will open up online sales by ensuring that manufacturers cannot discriminate against online shops when setting up their distribution networks, the document shows.

Any qualitative conditions that manufacturers set on who is allowed to sell their products must apply equally to high-street and online sales. This means that shopkeepers who are allowed to sell branded goods on the high street can also set up a store inside eBay or elsewhere on the Web to sell the same products online, provided that their online presence meets the brand requirements for look, feel and pre- and after-sales services …

Edit by TJS

* * * * *

Full Article
http://online.wsj.com/article/SB10001424052748704671904575193993537322862.html?mod=WSJ_business_whatsNews

* * * * *

Diageo Pushes Pricey Pods For Chilled Beer Displays

April 23, 2009

Excerpted from WSJ, “Diageo Serves Up New Campaign Aimed at Shoppers” By Aaron O. Patrick, Apr 7, 2009

* * * * *

With people going out less often amid the recession and drinking more at home, Diageo is adding a twist to its marketing.

The company, whose brands include Johnnie Walker scotch and Guinness beer, is developing in-store displays to encourage shoppers to buy more of its products in supermarkets and liquor stores. Central to its approach is a plan to roll out big refrigeration units so stores can sell their beer chilled.

The idea is to create a partially enclosed, refrigerated beer zone within a supermarket aisle, using a design Diageo calls “the pod.” The refrigeration units, which will cost retailers roughly €10,000 ($13,000) each, are intended to hold all kinds of beer, not just Diageo’s brands, in an attempt to boost beer sales overall.

No retailer has yet bought the pod … But Diageo says it is working with Spar, a European food chain, to install a smaller version this spring.

The effort is part of a strategy by Chief Executive Paul Walsh to make Diageo, the world’s biggest alcoholic-beverage company by revenue, better at working with supermarket chains, an increasingly important outlets for alcohol sales …

Diageo is installing computer screens in liquor stores to help people plan parties. Customers type in the cocktails they want to serve and the number of guests they are expecting, and the computer prints out a list of ingredients and quantities, including ice. The machines, which the company says are in 500 liquor stores in 38 U.S. states, can also send cocktail recipes via email …

Analysts say Diageo’s retail push seems to be working. Sales of its Smirnoff vodka grew 2.2% in the U.S. in January, twice the rate of the spirits market as a whole … while sales of most big spirits brands fell … In Europe, Diageo’s Irish unit has emerged as a leader in the supermarket strategy. In the past few years it has given away 600 display stands that hold spirits, mixers and condiments …

Spirits account for most of London-based Diageo’s profit, but beer is especially important to it in Ireland, where it brews Guinness as well as such brands as Budweiser and Carlsberg. Diageo Ireland learned that 78% of those who buy beer in Ireland drink it within three hours, says Henry Dummer, the company’s head of customer marketing in Ireland. Many Irish supermarkets don’t sell chilled beer, missing out on sales, he says.

Now, Spar has agreed to install Diageo-designed beer refrigerators in all 50 of its Irish Eurospar stores over the next two years, says Declan Ralph, Spar Ireland’s retail-development director … Diageo is in talks with other retailers about the pod.

Edit by SAC

* * * * *

Full Article:
http://online.wsj.com/article/SB123906172693095137.html

* * * * *

Want more from the Homa Files?
Click link =>
The Homa Files Blog

Unilver Plays Hardball and Gets Axe’d …

March 12, 2009

Excerpted from WSJ, “Big Grocer Pulls Unilever Items Over Pricing” By C. Rohwedder, A. Patrick, and T. Martin, Feb 11, 2009

* * * * *

A big grocery chain has removed from its Belgian stores about 300 Unilever products that it says are priced too high, a sign of mounting tension between retailers and suppliers as the recession grinds on. The move by Brussles-based Delhaize SA comes just days after Unilever reported strong fourth-quarter profit that was driven in large part by its ability to command big price increases despite the ailing economy.

The banished products include everything from Dove soap and Axe deodorant to a jam brand called Effi … The stare-down shows how fraught relations between retailers and their suppliers are becoming amid the severe slump in consumer spending. Grocery stores across the globe are putting growing pressure on food and drink companies to lower prices or to offer other more favorable termsMeanwhile, consumer-goods companies such as Unilever are struggling with a drop in demand from stores whose customers are trading down to cheaper private-label brands …

Delhaize says its conflict with Unilever is rooted in the supplier’s effort to push a broad range of goods into its stores, including some that the grocer says it would prefer not to stock because they are unpopular. If the supermarket doesn’t buy the whole range of products Unilever has threatened to raise prices by an average of 30% for the remaining items

Unilever wants Delhaize to promise it won’t stop selling Unilever products without consulting the company first, Unilever spokeswoman says. The Anglo-Dutch consumer-goods giant wants to increase prices for Delhaize by an average 2.5% … Delhaize is the only large retailer in Belgium that hasn’t agreed to a price rise this year, she says.

Unilever managed to push through steep price increases in 2008 even though the economic crisis drove down the prices of many commodities. In the fourth quarter, its prices rose more than 9% world-wide. But the company could be about to change strategy. A new chief executive, Paul Polman, said that Unilever will now concentrate on increasing the volume of items it sells, suggesting he may moderate future price increases.

* * * * *

Last month, the chief executive of British retailer Tesco PLC, urged suppliers to pass on to stores the recent drops in commodity and oil prices. “These lower prices need to be fed into the supply chain and passed on to consumers who are under growing financial pressure” … 

Deborah Weinswig, an analyst for Citi believes Wal-Mart’s plans to freshen up its Great Value brand will trigger more price cutting on the national brands sold at Wal-Mart. And if Wal-Mart reduces its national-brand prices, “I think the food retailers will have to follow or they will be at risk of losing market share,” she says.

SuperValu Chairman said during an earnings call last month that the 2009 first half would be a “battle ground” with manufacturers over price. Kroger declined to comment, but Chairman David Dillon said in a conference call on third-quarter earnings that Kroger’s strong private-label program, which accounted for 27% of third-quarter sales, gives the grocer leverage when suppliers approach it about a cost increase.

If national brands won’t lower prices, he added, the store’s private labels “will just pick up even more market share than we have already” …

Edit by SAC

* * * * *

Full Article:
http://online.wsj.com/article/SB123430797027570341.html

* * * * *

Want more from the Homa Files?
Click link =>
The Homa Files Blog

Unilver Plays Hardball and Gets Axe'd …

March 12, 2009

Excerpted from WSJ, “Big Grocer Pulls Unilever Items Over Pricing” By C. Rohwedder, A. Patrick, and T. Martin, Feb 11, 2009

* * * * *

A big grocery chain has removed from its Belgian stores about 300 Unilever products that it says are priced too high, a sign of mounting tension between retailers and suppliers as the recession grinds on. The move by Brussles-based Delhaize SA comes just days after Unilever reported strong fourth-quarter profit that was driven in large part by its ability to command big price increases despite the ailing economy.

The banished products include everything from Dove soap and Axe deodorant to a jam brand called Effi … The stare-down shows how fraught relations between retailers and their suppliers are becoming amid the severe slump in consumer spending. Grocery stores across the globe are putting growing pressure on food and drink companies to lower prices or to offer other more favorable termsMeanwhile, consumer-goods companies such as Unilever are struggling with a drop in demand from stores whose customers are trading down to cheaper private-label brands …

Delhaize says its conflict with Unilever is rooted in the supplier’s effort to push a broad range of goods into its stores, including some that the grocer says it would prefer not to stock because they are unpopular. If the supermarket doesn’t buy the whole range of products Unilever has threatened to raise prices by an average of 30% for the remaining items

Unilever wants Delhaize to promise it won’t stop selling Unilever products without consulting the company first, Unilever spokeswoman says. The Anglo-Dutch consumer-goods giant wants to increase prices for Delhaize by an average 2.5% … Delhaize is the only large retailer in Belgium that hasn’t agreed to a price rise this year, she says.

Unilever managed to push through steep price increases in 2008 even though the economic crisis drove down the prices of many commodities. In the fourth quarter, its prices rose more than 9% world-wide. But the company could be about to change strategy. A new chief executive, Paul Polman, said that Unilever will now concentrate on increasing the volume of items it sells, suggesting he may moderate future price increases.

* * * * *

Last month, the chief executive of British retailer Tesco PLC, urged suppliers to pass on to stores the recent drops in commodity and oil prices. “These lower prices need to be fed into the supply chain and passed on to consumers who are under growing financial pressure” … 

Deborah Weinswig, an analyst for Citi believes Wal-Mart’s plans to freshen up its Great Value brand will trigger more price cutting on the national brands sold at Wal-Mart. And if Wal-Mart reduces its national-brand prices, “I think the food retailers will have to follow or they will be at risk of losing market share,” she says.

SuperValu Chairman said during an earnings call last month that the 2009 first half would be a “battle ground” with manufacturers over price. Kroger declined to comment, but Chairman David Dillon said in a conference call on third-quarter earnings that Kroger’s strong private-label program, which accounted for 27% of third-quarter sales, gives the grocer leverage when suppliers approach it about a cost increase.

If national brands won’t lower prices, he added, the store’s private labels “will just pick up even more market share than we have already” …

Edit by SAC

* * * * *

Full Article:
http://online.wsj.com/article/SB123430797027570341.html

* * * * *

Want more from the Homa Files?
Click link =>
The Homa Files Blog

Economy does what the automakers can't … reduce number of dealers

February 18, 2009

Ken’s Take: It’s no secret that Detroit automakers have too many dealers in their distribution networks.  It’s  function of legacy overbuilding, and rigid laws (usually state) that restrict de-franchising.  Perhaps the bad economy is solving the problem for them.

* * * * *

Excerpted from Knowledge @ Emory, “Car Dealers Suffer as Sales Stall “, Feb. 12, 2009

Automobile dealers, many of which are family-owned businesses, were hammered by high energy prices and the tight credit market, and are one of the economic downturn’s latest casualties.

Based on falling sales, about 5,000 car dealers across the U.S., or nearly 25 percent of the estimated total, would have to close in 2009 to enable average sales per dealer to match 2007’s results, according to a study released in January by the accounting firm Grant Thornton LLP.

http://knowledge.emory.edu/article.cfm?articleid=1218# 

* * * * *

Want more from the Homa Files?
Click link =>
  The Homa Files Blog

Apple’s secret weapon … controlled distribution

October 30, 2008

Excerpted from  Influential Marketing Blog:.”The Real Secret To Apple’s Success”, Rohit Bhargava ; reported by MarketingProfs.com

* * * * *

At some point just about every marketer is bound to look at something that Apple is doing and wish they could have done it for their own brands.

There is a temptation … to simplify the success of Apple to two things: innovative products and great marketing.

There is a crucial missing third element that most people never talk about  …  they control distribution.

They have their own stores, their own sales people, and their own model for selling their products that cuts out any middleman or competitors completely.

The fact that they control distribution offers many benefits:

Communicates a consistent of messaging – Apple can control their sales force and the messages that they learn to talk about. As a result, everyone tells the same story about their products.

Removes the competition at point of sale – A big issue for many of their competitors is that a customer may come into a store with one product in mind, but can often get steered toward another during the time they are in store. Often they will walk out not with the product they intended to buy, but something that was cheaper, recommended more heavily by the sales staff, or (most frustratingly) another product whose packaging simply was more appealing.

Makes upselling easier – When you walk into an Apple store, everything is Apple branded in some way (even the products manufactured by other companies). As a result, you are in the ultimate upselling situation, where you might pay $45 for a connector cable that would ordinarily cost $5 elsewhere. When you are captive in the store and already spending $499 on a big product, who really cares about another $45, right?

Pricing is controlled – It is virtually impossible to find huge discounts on Apple products (particularly new ones) … if you are setting the places people buy your products, you can also centrally control the price. Not only does this allow for more consistency, it also gives you the ability to include pricing in your marketing materials and ads because you know its the same price everywhere.

* * * * *

Full article:
http://rohitbhargava.typepad.com/weblog/2008/08/the-real-secret.html

* * * * *

Want more from the Homa Files?
Click link =>
  The Homa Files Blog