Forces Affecting the Distribution Systems

Forces Affecting the Distribution Systems

Eighth Edition Purchasing Selection and Procurement for the Hospitality Industry ANDREW HALE FEINSTEIN AND JOHN M. STEFANELLI 2011 John Wiley and Sons, Inc. All Rights Reserved CHAPTER 4 Forces Affecting the Distribution Systems

2011 John Wiley and Sons, Inc. All Rights Reserved YOU SHOULD BE ABLE TO: Identify and differentiate the economic and political forces that affect the channel of distribution. Describe the role of ethics in the channel of distribution. Explain the legal restrictions that affect the channel of distribution. Provide examples of technological advances that are impacting the ways in which products are distributed. 2011 John Wiley and Sons,

Inc. All Rights Reserved FORCES AFFECTING THE DISTRIBUTION CHANNEL Economic Force Political Force Sources (growers, manufatuures, and processors) Intermediaries (middlemen) Ethical Force

Retailers (hospitality operators) Legal Force Technological Force Other Forces Consumers ECONOMIC FORCE Supply and demand Basic commodities a product in demand where many suppliers sell it without qualitative differentiation

Demand up, price goes up and vice versa Perceived value Depends on the buyer Perceived quality + perceived services / EP cost 2011 John Wiley and Sons, Inc. All Rights Reserved ECONOMIC FORCE (CONT.) As-Purchased (AP) Cost Price charged by the supplier

Edible-Portion (EP) Cost AP Price divided by the edible yield percentage Monopolistic competition Each supplier can set their own prices by differentiating their products and services 2011 John Wiley and Sons, Inc. All Rights Reserved POLITICAL FORCE Lobbyists The NRA (Natl Restaurant Association) AHLA (Amer Hotel and Lodging Assoc)

Primary sources have the most influence Typically used to influence produce availability, prices, and channel member behavior 2011 John Wiley and Sons, Inc. All Rights Reserved ETHICAL FORCE What is ethical? Fair and Honest business practices Codes of ethical behavior Written codes that a company may adopt to regulate the ethical and honesty

Examples Illegal Rebate Kickback 2011 John Wiley and Sons, Inc. All Rights Reserved LEGAL FORCE Sherman Antitrust Act (1890) Forbids any action to reduce or eliminate competition Meat Safety Legislation Sinclair Lewis The Jungle (meat packing industry) USDA established in 1862

Pure Food Act (1906) Meat Inspection Act (1906) Poultry Products Inspection Act (1957) Primarily focuses on meat, poultry, and eggs 2011 John Wiley and Sons, Inc. All Rights Reserved LEGAL FORCE (CONT.) Meat safety legislation (cont.) Wholesome Meat Act (1967) Wholesome Poultry Products Act (1968) Safe-Handling Procedures The Federal Food, Drug, and Cosmetic Act

(1906) FDA administers this law Evaluates contaminate levels (EPA) 2011 John Wiley and Sons, Inc. All Rights Reserved LEGAL FORCE (CONT.) Seafood safety legislation Only a voluntary program at this time Packed under Federal inspection (PUFI) for a fee FDA has authority to examine seafood in interstate commerce. Federal Trade Commission (1914) Amended by the Wheeler-Lea Act (1938) Deals with advertising, deceptive promotions,

monopolies, and conduct in the marketplace 2011 John Wiley and Sons, Inc. All Rights Reserved LEGAL FORCE (CONT.) Clayton Act (1914) Used to control antitrust violations Tying agreements Exclusive dealings Perishable Agricultural Commodities Act (1930) Control interstate commerce Prohibits unfair practices in sale of produce 2011 John Wiley and Sons,

Inc. All Rights Reserved LEGAL FORCE (CONT.) Agricultural Adjustment Act (1933) & Agricultural Marketing Agreement Act (1937) Ensure steady flow of perishable products Robinson-Patman Act (1936) Known as the small business protection act Promotional discounts favoritism through a quantity limits provision Predatory pricing 2011 John Wiley and Sons, Inc. All Rights Reserved

LEGAL FORCE (CONT.) Hart Act (1966-1969) Fair Packaging and Labeling Act Packaging pictorial aspects Misleading descriptions and illustrations Package label regulations The Internal Revenue Service (IRS) The Bureau of Alcohol, Tobacco, and Firearms (BATF) 2011 John Wiley and Sons, Inc.

All Rights Reserved LEGAL FORCE (CONT.) Franchise law franchisor can enforce Contract law binding agreement Agency law authority Title to goods when buyer owns product

Consignment sales not common Warranties and guarantees Patents and copyrights Rebates gifts of cash or product 2011 John Wiley and Sons, Inc. All Rights Reserved TECHNOLOGY FORCE Genetically engineered foods Product preservation irradiation Value-added foods Convenience Food Transportation

Packaging Packaging accounts for 8% of purchase price 2011 John Wiley and Sons, Inc. All Rights Reserved OTHER FORCES Intangible Forces Not easily determined by the buyer Advertising and promotions Credit terms Differentiation of supplier and sales person

2011 John Wiley and Sons, Inc. All Rights Reserved

Recently Viewed Presentations

  • Pfiesteria in Maryland: Reactions and Reality Dan Terlizzi ...

    Pfiesteria in Maryland: Reactions and Reality Dan Terlizzi ...

    Pfiesteria in Maryland: Reactions and Reality Dan Terlizzi Water Quality Specialist University of Maryland Sea Grant The Chesapeake Bay… a nutrient enriched estuary Excess Phytoplankton: Low oxygen Decline in SAV HAB concerns Bad Day at Hyrock August, 1996 Estuarine HSB...
  • Microscope Basics

    Microscope Basics

    Place a slide on the stage and secure it using the stage clips. Use the coarse adjustment knob (large knob) to get it the image into view and then use the fine adjustment knob (small knob) to make it clearer....
  • The Old Testament Background for Teaching the Sacred

    The Old Testament Background for Teaching the Sacred

    S1 The Bible tells of God's self-revelation in the history of the Chosen People, culminating in the life and teaching of Jesus Christ. • The Abraham story tells how God chose to call and be faithful to special people. ccc...
  • Xylem and Phloem - Groby Bio Page

    Xylem and Phloem - Groby Bio Page

    Sugar -> sieve tube elements - active transport. Water -> sieve elements -osmosis. Water creates turgor pressure in the sieve elements, which forces the sugars and fluids down the phloem tubes toward the sinks. At the sinks, the sugars are...
  • Networked Weather Station (EE 4391 Group 2.3)

    Networked Weather Station (EE 4391 Group 2.3)

    Networked Weather Station (EE 4391 Group 2.3) Senior Design Project Team. Dean Thomasson, Stephen Frank, & Nick Speir ... Rain Gauge: Self-Tipping Bucket, 0.011 inch increments. ... Wind Vane: Eight resistance type sensors, 22.5° increments. Light Sensor. Contains both infrared...
  • Diving Into ocean ecosystems - Weebly

    Diving Into ocean ecosystems - Weebly

    Explore- marine ecosystems project. The ocean covers more than 70% of our Blue Planet. Includes many different ecosystems that range from the depths of the deep to the sunny surface, close to shore to thousands of miles away from the...
  • PowerPoint Presentation Unit 45 Metal Framing Industry and

    PowerPoint Presentation Unit 45 Metal Framing Industry and

    A trimmer joist is constructed by fitting a C-shape joist member inside a track member of equal size and securing the two members together with #8 screws 24″ OC. Clip angles tie the headers to the floor joists. ... sill...
  • Revitalizing IT:A Layered Approach - Cloud Object Storage

    Revitalizing IT:A Layered Approach - Cloud Object Storage

    Trinity Industries, Inc. is a diversified industrial company that owns a variety of market-leading businesses providing products and services to the energy, transportation, chemical, and construction sectors