Channel Management Strategy for Edible Research Paper

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The product's perishibility makes the supply chain area of fulfillment critical. Using a regional distribution center strategy and working with retailers, independent chains and mass merchandisers to achieve at least two inventory turns a month, inventory and forecast optimization strategies need to be put into place to alleviate the additional costs of distribution there will be Vendor Managed Inventory (VMI) programs in place for the mass merchandisers and stock balancing with only the largest mass merchandisers. In addition, the use of marketing co-op funds and a market development funds program to support smaller retailers and stores selling the cards on their own, reimbursing them for advertising will be produced. This will operate in much the same was as the marketing co-op program at Intel called Intel Inside, which reimburses resellers for their pre-approved marketing expenses.

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The overarching goal of the multi-channel management strategy needs to be focused on how to capture interest from potential customers and provide them with as many channels as they choose to use to learn about, try and eventually become brand loyal to the edible greeting cards. Extensive use of distribution centers for mass merchandisers, the use of VMI systems to manage their inventory and the use of market development funds and co-op to subsidize marketing efforts in the channel are critical. As this is a highly differentiated product, it is possible to take a "Lexus" strategy of choosing channel partners, taking only the top 5% of retailers, which is exactly what Toyota did when they launched their premium brand of luxury automobiles......

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