Green River Clothing Company Case Study: Channel Structure and members.
Read the case study Green River Clothing Company Case Study: Channel Structure and members' attached (Monger page 513) and answer the following questions.
What were Green Rivers concerns and questions regarding:
1. Trade Standing
2. Ordering and payment history.
3. Willingness to cooperate in joint programmes
4. Willingness to share information
Green River Clothing Company
As a clothing company, Green River has a vital interest in distribution.
All the factors of logistics are important (order processing and fulfilment, transporting stock to the stores and ensuring proper stocking levels). Like many other organisations, Green River looks to turning logistics management into a means of gaining efficiencies and lowering costs and expenses, in particular with respect to stocking levels.
In regards to channel decisions, Green River has a mix of direct and indirect exposure, using select intermediaries such as Country Road and 0 David Jones to facilitate some of its value through 0 the utilisation of their expertise, reputation/brand and location(s).
Distribution objectives
Open five new shops in Australia.
Further develop the online catalogue on the wehsire.
Increase direct sales as follows:
- interim ($1.15 million)
- international ($1.5 million).
Increase presence in significant department stores in Australia by 20%. Increase the number of company-owned stores.
New factory outlet.
Wholesale-distributor markets.
Apart from an overall increase in sales of about 8% this year (including the projected increase in David Jones sales-see product customisation) Green River does nor propose adjusting the Wholesale-Distributor Markets marketing plan from the current strategy and tactics.
Green River's aim is to give clients the assur-ance that it will he there when needed. So it is its objective this year to:
offer a better sale or return policy open distribution facilities in Melbourne and Brisbane to ensure faster delivery. (This can he in conjunction with a factory outlet that will specialise in moving slow-moving products from the sale or return policy.)
Logistics
• Planned opening of new distribution centres in Melbourne and Brisbane.
o Early next yeas open three 'theme' outlets in the USA (Seattle, Los Angeles, San Francisco).
Green River Clothing Company
Selecting the best channel structure and members In selecting the best intermediaries. Green River consider:: three main groups of factors: internal. external and linking.
Internal factors
Those factors concerning the channel member being assessed:
Management strength-Knowledge levels of management within the potential channel member are important, as they will affect the decisions made by that channel member.
Staff effectiveness-How effective are the staff of our intermediaries in selling or supporting our marketing efforts?
FinanCial strength-Does the channel member have the necessary financial resources and cash flow to enable it to perform?
Location, equipment and facilities-Physical infrastructure required for the channel member to perform.
Training programs-Indication of the firm's commitment to the channel and its future.
External factors
Those factors external to the channel member being assessed are:
Market coverage-Green River wants to match the abilities of the selected channel member to your requirements.
Product lines-There is opportunity for both symbiosis and conflict with Green River's intermediary's other products.
Promotional factors-A preference for a channel member that is of like mind in this field in order to match Green River's own objectives and strengths.
Services offered-Selecting a channel member which offers a 'full service' ro its customers may be more expensive, but may save you money in the long run if Green River doesn't need to have direct dealings with customer.
Linking factors
Those (actors connecting the channel member with others are:
Trade standing-How well does this firm deal with its existing partners?
Ordering and payment history-Does the pattern you see here reflect one with which you are comfortable? Do they order small lots too often? Very large lots too seldom? Do they pay on a basis with which you are comfortable?
Willingness to cooperate in joint programs-Will this channel element participate in cooperative advertising? Will they pass along trade incentives? Will they place Green River's product on the end of an aisle when they are doing a national promotion?
Willingness to share information-Since the best market information often comes from this channel, how easy is it to get? How expensive is it? How good is the data?