A distribution channel is organizations joined together in the process of making products available to consumers. An effective distribution channel can help improve company sales while lowering costs. An ineffective distribution strategy can be very costly to a company and might even cause financial troubles. This paper will take a look at the logistics, production and shipping strategies of Colgate-Palmolive. This paper will also discuss the marketing channels and areas the Colgate Company can improve on.
Logistics, Production and Shipping
Having an effective logistics, production and shipping strategy can give companies an advantage over their competitors. Producing and getting products to customers can be costly. Having an effective strategy can help reduce costs and increase profits. Colgate works closely with suppliers in order to increase quality, cost effectiveness and innovation. The company only chooses to work with suppliers that share the same values as the Colgate-Palmolive company (Colgate, 2011).
Over the years Colgate-Palmolive has had to take a look at the number of plants the company had and where those plants were located. The company sells products in over two hundred countries and has plants located in different regions around the world. Since 2004 Colgate reduced the number of plants they operated worldwide (Colgate, 2011). The company started to use contract manufacturing rather than doing its own manufacturing (Trunick, 2011). By making these changes the company has been able to control costs more and become more profitable.
Products need to find a way from manufacturing plants to the customers. Colgate uses several ocean containers, truckload shipments and smaller truck shipments (Trunick, 2011). Shipping costs can be very costly. With some plants closing travel miles from the plant to the customer grew. Rising gas prices along with the extra miles caused costs to rise (Trunick, 2011).
Marketing Channels
According to Berry (2010) “in its most simplistic form, a marketing channel performs the work of moving goods from producers to consumers.” According to Quelch and Laidler (2011) “In 1987, traditional food stores sold 75% of oral care products, but by 1992 they accounted for only 43% of toothbrush sales and 47% of toothpaste sales.” The distribution strategy for Colgate is through large retail stores, grocery stores, drug stores, dentists and plastic surgeons. Colgate has been very successful in positioning Colgate products in store locations where they would gain customers attention (Khurana, 2010).
The Procter and Gamble Company. (2013, November 17). Company Strategy. Retrieved March 22, 2014, from http://www.pginvestor.com: http://www.pginvestor.com/GenPage.aspx?IID=4004124&GKP=208821
Per Kalogeropoulos (2016), the company is better able to ensure product availability while managing their costs because of their latest logistics initiative. They have recently created a network of deployment centers that reduces the time between when the product leaves a supplier to when it hits the shelf at the Home Depot store which drives profits higher. Parnell (2014), relays that companies who use low-cost strategy seek distribution channels that minimize cost. Home Depot’s new logistics initiative provides the company with economies of scale and a market advantage because it adds to their low-cost
In addition to the change in behavior of consumer, many companies or retailers change the sales channel combinations. The greatest impact of the Web-bases electronic revolution has occurred in companies adopting the click-and-mortar approach. Click- and-mortar is one the strategy used by the companies or retailers that they continue to conduct their business in the physical locations and have added the electronic commerce component to their business activities. According to one study, 37% of United States retailers are selling through a combination of the internet, in stores and catalogs. This represents a growing demand for the business-to-customer package delivery service.
The Frito-Lay product distribution location strategy is to sell in grocery stores, convenience stores and gas stations. Frito-Lay’s distribution strategy is from manufacturer to retailer and from retailer to customer, thus the retailers offer the company a location to sell their products and allows for intensive distribution ("P7distributioncasestudy - Fritolay"). Frito-Lay products are sold in the snacks area. Frito-Lay aims local customers in the countries in which they distribute their packed
7. communication strategy should involve channels, that allow to enhance awareness and keep brand loyalty (for individual brands – price and points of difference should be stressed, when applicable), meaning keeping the consumer from switching to substitute products. The message to be used in promotion is inconvenience of unavailability of floss when it’s necessary and discomfort as a result (meaning making the consumer, plus
Wrong distribution channel and Pre-pricing policy: The placement of product and distribution to mass stores was not a correct strategy. Data shows that the velocity of Single pack was more in food store and convenience stores as more consumers but their gums from these store and not mass stores. Also, the pre-pricing policy would result in decreasing margin for the retailers and convenience and food store would not like to suffer the loss forcing the company to sell most of the quantity through mass stores.
Founded in 1907 as a messenger company, United Parcel Service has grown into a world renowned provider of specialized transportation and logistics services. This multi-billion corporation enables and manages the flow of goods, information, and funds to over 200 countries and territories around the globe (UPS.com, 2013). Air, freight, oceanic is just a few of the modes that UPS uses to move the flow of goods around the globe. The company structure of UPS entails operations in three segments: U.S. Domestic Package operations, International Package operations, and Supply Chain & Freight operations. It’s just about an everyday occurrence to see an brown UPS truck on the road as we go about our everyday lives, the U.S. Domestic Package operations are comprised of delivery of documents, packages, and letters around the United States. The International Package operation delivers specifically outside the United States. Providing deliveries to the world’s major business hubs up to three times a day, UPS can deliver packages to at the best time possible for their customers. UPS has teamed up with the U.S. Commercial Service, an agency of the U.S. Department of Commerce, to help customers get started exporting or increase their sales to new global markets (UPS.com, 2013). Partnering within a supply chain can prove to be very important in the success of the overall supply chain. Communication within a supply chain that flows freely between partners reduces in-efficiencies such as excess inventory (bullwhip effect), and lost profits. The Supply Chain & Freight operation within UPS entails forwarding and contract logistics operations and UPS Freight. As a freight forwarder they organize shipments from various sources to their final p...
This essay describes how Costco has undergone evolutionary changes from its inception to present through its value chain model to become a success story. For example, in its distribution system, Costco utilizes the cross-docking technology to help in the conveyance of products in the different locations. This ensures that there are no product delays in the respective markets (Guo, 2016). Accordingly, Costco can attract more customers who prefer the warehousing services provided by the company.
The industry is said to have acquired the mature stage in its lifecycle where it faces consolidation and stability. Not much is expected to change over the next few years; however there are some factors that need to be looked at for the future (Palmolive, September 2011).
...e different supply chain mechanism ultimately helped Morrison to be strong and stable in replying the customer. In the following there have been some strategies that have been introduced in Morrison to survive and to make profit in the competitive market.
Colgate Palmolive's senior management decided to launch a new toothbrush priced in the Super Premium segment. Susan Steinberg, the product manager, has to determinate the best marketing mix to implement and which of the follow options are the best in order to position the product in the market: A) Under a mainstream B) Under a niche strategy. Each strategy has involves different prices and volumes of unit sold.
Rajagopal. "International Journal of Retail & Distribution Management." Emerald. Emerald Group Publishing Limited, 2011. Web. 21 Feb. 2014
Distribution- work on alternatives of outsourcing the distribution network or transportation routes. Should focus on outsource this non-core business activities if it is non-profitable. It is costly by not understanding the multi distribution network in standard line delivery (Multiple drop off points through retail channel sales)
Colgate Palmolive is the current leader in manufacturing and distribution of oral care and general hygiene products in the world (Crescendo Networks, 2011). Almost all households on the globe use a product of Colgate Palmolive. The success story of Colgate Palmolive started way back in 1873 when its founder, Mr. Colgate, started the company, and ever since, the company has been rising in the corporate world to achieve its current position. However, this does not mean that all has been well throughout. Each business environment has challenges that businesses have to overcome to remain competitive. This is mainly done by formulating and adopting effective strategies that will not only help to overcome the challenge but also to enhance creativity and innovation. At Colgate Palmolive, innovation is highly encouraged and practiced which explains its broad range of products.
· The Right Marketing Mix – Is the product right?, Is it sold in the