Assignment 1: LASA 2—Afterschool Depot: Plan Development Issues

Clearly, Afterschool Depot clients exhibit great similarities in marketing channel although there exist differences to meet their needs. The U.S public school district administrators represent several institutions and, therefore, their demand for several mobile kitchens. The units should thus be shipped as a single package to the delivery premises from where the authority in charge determines how they will be distributed. Given the size of the order, district officer would require that the kitchens be delivered to their premises rather than accessing Afterschool Depot's company. Despite the orders being for a period, spatial convenience remains important for the bulk delivery. Delivery is essential since it is the only way that Afterschool Depot gets to deliver the invoice to receive later the payment for the units supplied. The purpose of the Healthy Kitchen unit is to provide a solution to the nutritional needs of the school going, children. The mobile kitchen meets the basic needs, and, therefore, the schools won't be finding variety once an optimal solution is given. The schools will also benefit from the information on the implementation of the nutrition-based programs. The kitchens should be simple and basic thus not much customer service is required once the staff has the information on the implementation. The same marketing channel applies to the depart of defense that has a similar ordering and capacity. Afterschool Depot should thus place the two clients in the same marketing channel.

The private after school programs too has its different marketing channel that is, however, similar to that of Youth Weight Camp administrators. For this segment of clients, bulk breaking is important since the decision to purchase lies with individual camp administrators and program administrators. Each camp and program receives their delivery regardless of the others. Payments for the kitchens are also made from within the individual camps or programs. The terms of payments also indicate that Afterschool Depot needs to deliver the Healthy Kitchens to receive full payment for their product. The institutions locations are also static . Thus the depot can conveniently deliver the kitchens.The delivery time is also hastened since the two groups provide down payments thus their commitment is clear. Since the healthy kitchen is a bulky product and still new in the market, clients would prefer the order is delivered rather than accessing Afterschool premises to make the purchase. Similar to other clients, the camps and programs will require training on the implementation of the nutrition-based program. But from the low unit purchase, provision of the materials should not attract any discounts. The need for variety provision should also be low especially since each group orders independently. Customer service requirement is low after the provision of usage information is provided. Afterschool Depot should, therefore, do a better job providing the same product for the nutrition-based program rather than find alternatives.

Task 2

The decision on whether to sell directly to retailers or include wholesalers as channel members rely on the sole purpose of doing business and that is profits. Both wholesale outlets and retailers form part of the distribution network. The purpose of these two channel member in disseminating products and product information is vital for the business' sustainability. These members could be used jointly, or a company could decide to stick to a single line of distribution that is easier to manage. Each channel member faces challenges that could directly or indirectly affect company sales. The member with the best balance in challenges and benefits becomes the best candidate for use by the company.

Customer contact is a crucial aspect for a start-up business. It is imported in building customer loyalty, and also it helps connect to more customers. Selling the kitchens directly to retailers cuts this contact and the producer is no longer able to get first-hand feedback. Retailers could also decide to find an alternative for the product that could come from competitors. Also, retailers might lead to a decline in sales from the added retail cost to clients. Despite several shortcomings, retailers are constant customers to producers. Since they are not the end users, once they sell some units, they would them place an order for more kitchens from the producer.

A wholesale on the other hand grants the company the control of the product and customer touch. It also allows the company to control the prices and offer the best bargains to their customers. Afterschool Depot would further utilize the wholesale through making a delivery to clients and could manage to stock branded kitchens on order. Warehousing, however, presents the challenge of storage cost and sales representative compensation. The importance of networking in a new business cannot be overlooked. It presents entrepreneurs with an opportunity to acquire new clients, form partnerships that could help enhance their growth. Overhead costs incurred when transporting the units to a retailer then to the client is significantly reduced. A wholesale is, therefore, a more efficient channel member due to the little price spread (Dey & Banerjee, 1991).

Task 3

In the channel design matrix, integrative distribution intensity is an important aspect centered on the ownership of Afterschool's distribution network. Vertical integration allows the company to own some or the entire distribution channel. There are arguments in support of vertical integration. There are several issues with vertical integration that are beneficial to the company. These issues include brand control, control promotions and overpricing, direct contact with clients since the nodes in the supply chain are eliminated, and the most important is the feedback from the channel. A company considering whether to implement vertical integration the greatest determinant is efficiency. Efficiency reflects on the cost of doing business, therefore, efficient business processes help to reduce this cost and increase the company's profit (Ross, 2015).

Usually, most companies do not vertically integrate since it is typically inefficient. The reason it is considered inefficient is because of its costly implementation in establishing facilities, personnel, inventories, logistic functions and local marketing. The cost is largely felt by big companies that already have several processes under its operations. These expenses shift a company's focus away from its key role as a producer. These facts should however not scare the producer from the design matrix. A producer could own the distribution channel provide it has the resources and the strategy that improves the efficiency over time. Despite having identified a few target markets, Afterschool depot is still a small scale company. Its operations have not yet hit the threshold of complexity to warrant the risk of inefficiency. Therefore, it is more profitable to own a distribution channel while finding the appropriate strategies and acquire the resources necessary for long-term efficiency as the company grows (Ross, 2015).

Vertical integration provides producers with direct channel to the consumers from the production line. Companies have more control over the value chain and the distribution process. The same control is handed to retailers suppose they decide to engage in the manufacturing process. The control is extended to the products quality and the standard market price. The integrity also offers the ability to control costs across the distribution process. Traditionally, the distribution process contains markups where the resellers earn their profit. The elimination of these middlemen enables the producer to provide the goods the client at a lesser price compared to having a retailer. Afterschool will thus be in a position to optimize resource utilization and steer clear of wasted costs (Lilien & Grewal, 2012).

The control of the distribution process is also important to gaining competitive advantage. Afterschool line of business is an emerging trend and soon it could flood with competitors. The nature of the products used in this trade is one with little recurrence. Therefore, sales made represent a declining client base over short periods of time. However, with the control of the distribution channels, the company limits its resources to increase its competitive gain. The company could also register patents of the kitchens' design and in the case that a competitor comes up; they can regulate the market or benefit from licensing patents. The other benefit of vertical integration is product differentiation. A company haves access to distribution resources, production inputs, and retail channels. Since the production company acts as the retailer, it is possible to acquire customer feedback directly and respond appropriately (Lilien & Grewal, 2012).

Some companies is better suited to vertical integration than others. The nutrition program is an industry that is still evolving. Packaging of Healthy kitchen units entails large products that could do not allow grouping into a larger package. The product, therefore, does not call for a need for supply stores. The method of distribution was used in the 19th century by industrialists who dominated the market and acquired vast wealth. The size of the Healthy Kitchens would be unsuitable in a regular retail shop since they burden the owners with finding extra storage space. The mode of purchase of the product is also on order, where clients are provided with delivery services rather than visiting the retailers. The company's efforts should be channeled to marketing and branding of the product. Being a new product, it is important that the company invests in having adequate personnel to find clients and popularize the product. An exhibition shop could also be a beneficial platform that the company uses to demonstrate the kitchens to potential clients. The platform is also a perfect way of advertising in addition to online platforms. The higher the share of the consumer a producer gets, the more the efficiency of the marketing system (Dey & Banerjee, 1991).

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