Business Problem
Chocoberry has decided that they will introduce their new chocolate flavored product after evaluating several ideas. The technical department is responsible for developing bar goods for the company. The new product varies from single ounce or bigger molded bars of chocolate made of milk, dark, inclusion containing (fruits, nuts, etc.) products. There are certain important decisions that are needed to be made in terms of Chocoberry’s choices of retail outlets, numbers that can be serviced, sales methods, intermediary channels, warehouse locations and control, and location in retail outlets. These distribution choices needed to be made to ensure the new Chocoberry product is a success.
Distribution options
Retail Outlet Types
There are different types of retail stores that can be used by Chocoberry to market their product.
Among all options supermarkets, specialty stores and Etailers provide them the best distribution opportunities. Supermarkets are quite commonly used by business like Chocoberry, as end-users get access to a wide range of goods under one roof. Among various food products and household items, Chocoberry can easily be sold on in the supermarket candy shelf. Another option for Chocoberry is specialty stores such as bakeries that specialize in selling chocolate products among other baked products. Etailers have become one of the most sources of distribution for chocolate making companies like Chocoberry as customer gets a chance to order their favorite chocolates directly to their home (Londhe, 2006, p. 2-4).
Intermediary Channels
In terms of intermediary channels, Chocoberry has can choose from several options such as agents, wholesalers and retailers. Agents can help in tying up with several wholesalers and retailers at one point and reach the majority of their potential customers. Wholesalers and retailers are also important for Chocoberry distribution as business partnerships with major chains are essential intermediaries for reaching out to customers in different geographical regions. Chocoberry has to tie-up with wholesalers and retailers with a refrigerated distribution system to ensure that the health and taste qualities of Chocoberry products are maintained over a period of time (Longenecker, 2009, p. 206-208).
Image from (Longenecker, 2009, p. 206)
Direct and indirect channels are two different channels that can be used by Chocoberry to sell their products. Direct channels do not require intermediaries as the producer can directly to the consumers. Intermediaries are needed in the indirect channel where retailers, wholesalers and agents that have the access to reach out to consumers.
Sales Methods
Chocoberry can use different sales methods in their distribution system such as utilization of brokers and candy companies with well developed channels. Brokers can help Chocoberry to sell their new chocolate flavored product to agents, retailers and wholesalers who have the potential to reach out to the masses. Brokers are a necessary part of most businesses and their attempt to sell their product to eventual consumers. Candy companies with a well developed market base can be an exciting sales channel for Chocoberry. Large corporations can be sold the bars and they can provide a wider audience in terms of their developed brand name. Overall, Chocoberry needs to utilize both brokers and candy companies in the sales distribution system.
Warehouse Locations
Warehousing and chosen locations is also another important aspect of Chocoberry distribution system. Since, Chocoberry is a perishable product and needs refrigeration, it is important warehouses are available in all cities where Chocoberry are planning to sell. Warehouse location and size need to be accessible to all agents, wholesalers and retailers part of the distribution system. Having a well developed warehousing strategy is an essential part of making an efficient distribution system. Units of delivery are also important as warehouse should be able to hold enough products and maintain their health and state quality.
Retail Outlet Location
Chocoberry also needs to decide the location of their new chocolate flavored product in retail outlets. It probably would be better if the product is placed on the candy shelf as it would ensure customers view it as a confectionery, rather than a health bar. Even though there are several ingredients of the product that are healthy in nature, it is clear that chocolate made products should be part of the confectionery self or candy shelf. It is also advisable that endcaps are bought in retail outlets to introduce the product and create buzz about the product. Finally, the retail outlet location should not be anywhere near the health food section as many retail stores have health bars in that section.
Advantages and Disadvantages
Chocoberry’s new product is chocolate flavored and bar shaped which will be sold in single ounce or larger slabs of chocolate made of milk, fruits, nuts, etc. The product is designed to add a new dimension to the current product mix of Chocoberry and it is a healthier product due to contents of dairy, fruits and nuts. Chocoberry also has developed distribution system that they utilize for the new product. Chocoberry also faces significant challenges from several well-established chocolate flavored brands that have a loyal customer following and well established distribution network. Overall, Chocoberry have several advantages and disadvantages in terms of product and distribution system and all choices need to be measured and effective.
References
Lamb, C. W., Hair, J. F., & McDaniel, C. D. (2006). Essentials of marketing. Princeton, NJ: Recording for the Blind & Dyslexic.
Londhe, B. R. (2006). Retail and Distribution Management. Pune, India: Nirali Prakashan.
Longenecker, J. G. (2009). Small business management: Launching and growing new ventures. Toronto, Canada: Nelson Education.
