Identifying Channels of Distribution
For this assignment pick a product with which you are very familiar or take the time to go through your clothes closet and try and find a product made in the USA, or one that you can anticipate being able to research easily.
Map the supply chain of your product as far back as is feasible. A simple example is a diamond sold by a local jewelry store, purchased direct from diamond wholesalers in the Netherlands, bought by wholesalers from diamond centers in South Africa, and brought out of mines owned by a company in South Africa. Identify as many participants in the channel as possible by company name and location.
Identify the mode of transportation used between each stage in the channel.
Identify by name and location the component parts of the product if any.
Channels of Distribution: Budweiser Beer
Introduction
Budweiser beer is one of the most prominent American made beers. In eleven states, US breweries make this product. Producing and distributing this product to meet the needs of customers is a big challenge for the company. Anheuser-Busch makes the product. The company uses an extensive distribution network to distribute the products in different regions. The mode of transportation and parts of the products are the central elements of the study. The study shows how the firm utilizes modes of transportation and gets the product at the right place at the right time.
Mode of transportation used between each stage in the channel
In the distribution network, used for Budweiser beer, several stages are involved. For Instance, Anheuser-Busch is a producer of the product. The product reaches from producer to wholesaler. Retailers get the product from wholesalers, and finally, sell it to customers. In all these stages, different transportation modes have been used.
The firm uses rail transportation, as the beer is to be distributed to different wholesalers in different cities. As mentioned, Anheuser-Busch is producing beer in 11 states of the United States of America (Duprey, 2018). Thus, to reach other states or cities, rail is a safe and appropriate mode of transportation. Wholesaler stores an immense quantity of beer in large warehouses. Now, the mode of transportation changes due to the low distance between wholesaler and retailer. For Instance, wholesalers use road transportation such as trucks to reach retailers. The firm has to bear the cost of infrastructure and construction. High maintenance cost of this mode has been always a significant risk for the company, which may also create an impact on the product cost. Customers buy the product directly from retail stores.
It is to mention that the cost of rail transportation is higher than road transportation. However, it has been observed that rail transportation is less risky for the company. Both models are important in this extensive distribution network. The purpose of using these modes is to support the production and needs of customers in the United States’ brewery industry.
The parts of the product by name and location
Budweiser beer is made of several ingredients. These ingredients can be called components of the product. Barley Malt, Rice, Water, Yeast, and Hops are the main components of this product. It has been revealed that all the components are found in the United States except rice. The firm needs a variety of rice from Belgium. Suppliers in Belgium are integrated with the production process in the United States. Also, the firm also has to import this component from Asian regions. Thus, air transportation or marine transportation is two options for the company. Depending on the cost and distance, the firm uses both modes of transportation (Rodrigue, Slack, & Comtois, 2018). The United States has good water, hopes, malt, and yeast resources. The firm is integrated with concentrated suppliers to get these product components.
Conclusion
In the end, it is to conclude that the Budweiser beer is still a best seller in the United States, and the availability due to effective distribution is the main reason behind it. Mode of transportation is an essential part of the distribution channel to reach the customer in an effective and lucrative manner. In this contemporary business era, especially in the brewery industry of the United States, it looks imperative to use the right distribution channel to reach the target customers. Low-cost distribution or mode of transportation must sustain the quality of the product to enhance the visibility of customer acceptance and satisfaction.
References
Duprey, R. (2018, July 2). 10 Top-Selling Products Still Made in America. https://www.fool.com/slideshow/10-top-selling-products-still-made-america/?slide=3
Rodrigue, J.-P., Slack, B., & Comtois, C. (2018, January 1). Transportation Modes, Modal Competition and Modal Shift. https://transportgeography.org/?page_id=1731
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