SDRM Case
SDRM Case
SDRM Case
Challenges
Despite the advantages for direct distribution, it has some potential drawbacks and
disadvantages, one of the biggest challenges is that sizeable costs that can come with
direct distributions. As an example you may need to purchase trucks, hire drivers and
rent storage space you may find it harder to reach potential customers without the
network an established distributer provides.
● Benefits
●The second distribution channel is from Alice – Grocery store – Customer, the third
distribution channel is from Alice – Grocery store – Customer and forth
distribution channel is from Alice – Specialty Grocery Store – Customers. All
these distribution channels in case which brings third person between producer and
consumers is called indirect distribution, this also has advantages and disadvantages.
Going through external sales channels has its own benefits. Indirect distribution
allows you to:
share shipping and storage costs
make it easier for customers to find your products
benefit from your third-party’s experience, infrastructure and salesforce
avoid the complexity of managing distribution logistics.
● Challenges
The main challenge with indirect distribution is the distance it puts between you
and your customers. By adding an intermediary, you are also increasing the
amount of time it takes for your product to reach the buyer.
It’s also harder to establish brand loyalty when you are not interacting directly
with your customer. Still, it is a good way of bringing your product to market
without burdening yourself with the start-up costs of establishing your own
distribution channels.
If you decide to go the indirect route, it’s important to clearly define the terms of
your agreement with your partner from the beginning. You should agree on roles
and responsibilities, training and customer support, reporting and performance
monitoring, among other issues.
2- Based on the case synopsis what distribution approach (es) would you suggest
Alice’s Dressings? Why?
Answer 2) in my idea the best option would be licensing the formulas and restaurant
name to another manufacturer and receive a 4 percent to 5 percent royalty on net
sales. This distribution and sales decision is also low-risk, with low-resource
requirements. The long-term potential return is much higher than selling out of a
single restaurant. Because surviving in the market and competing with existing and
potential competitor needs prior knowledge about markets, economic, social and
political conditions and require managerial knowledge as well, that’s why I would
recommend that Alice should go for licensing the formula to those who are into
business and get profit in long term