The Diversity of Distribution Channels in the Retailing Industry Essay
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.
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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 http://en. wikipedia. org/wiki/Supply_chain * 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 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 it globally, the advantages that Tesco has from sourcing the merchandise from UK is that it takes less time for the product to arrive, for the reason that merchandise will be travelling in a shorter distance. Sourcing merchandise from UK is easier to monitor and to communicate with the distributors. On the other hand Tesco does also source their goods from internationally, but the disadvantage of sourcing goods from internationally is that it will be difficult and costly.
This is because Tesco has to pay there goods to be delivered to UK which is expensive they all so have to pay insurance ECT Suppliers Without suppliers Tesco would have not been successfully, Tesco relies on suppliers because of its Reputation, Brand Name and Image. With big suppliers Tesco is able to less well known brands with its own branded so customers will have the choice in which brand they want to buy, Distributor Distributors are organisations that work on behalf of international company’s that supplies goods to Tesco stores such as T W Truck Equippers Inc is a distributor .