Marketing Strategy Analysis: Evaluating Cereal Distribution Channels

Marketing Strategy Analysis: Phase 3: Place Tasha Hall MKTG211 Davenport University

Phase 3: Place Marketing Channel: Post foods like many other food industries have a marketing channel in which they are able to get their products out on store floors. Post Foods uses the retailer channel. One will find most supermarkets; convenience stores and other major food outlets have isles with cereal lining all the shelves. It is easily accessible and hassle free to obtain cereal which is one of the many reasons it is highly sought after. “A study was conducted in 2016 which revealed that supermarkets, E-commerce, convenience stores, and others are the major distribution channels for the cereal market. In 2016, supermarket dominated the breakfast cereal market and is expected to maintain its dominance until 2025.” (Breakfast Cereal Market Size, Share: Industry Trend Report 2018-2025, n.d). Marketing Channel Functions: Post Holding Foods uses a direct market to the retailer. The retailer helps Post by interacting directly with the customer for Post versus Post selling directly to the consumer. The retailers help in transactional functions by purchasing the goods from Post Holdings and then distributing the product to their stores and selling it to the customer. The manufacture of the goods like Post Holdings saves a lot of risk and time having a retailer sell their products because it reduces space needed such as warehouses where inventory is held. Major retailers such as Walmart and Meijer assist Post by handling things like the facilitating function . These major retailers are dealing with all the sale side of the products. They are

establishing things like price and sale prices. Most of the time these major retail stores are responsible for much of the advertisement of these products by creating ads or promotions to get people to come to their store to buy products. The major retailers are often the face of the operation as they are often left to handle the front line with customers. Retailers of all shapes and sizes sell cereal like Fruity Pebbles to consumers. Some of these major retailers include Walmart, Meijer, Costco, Sam’s Club, and other smaller convivence stores. Chain stores such as Walmart and Meijer are “able to buy a wide variety of merchandise in large quantity discounts. The discounts substantially lowered their cost compared to costs of single unit retailers. As a result, they could set retail prices that were lower than those of their small competitors and thereby increase their share of the market.” (Learning, n.d). Level of Distribution: Post Foods uses intensive distribution to get its products to as many places as possible over the biggest possible geographical location. ‘Intensive distribution is usually required where customers have a range of acceptable brands to choose from. In other words, if one brand is not available, a customer will simply choose another.” (Types of Distribution: Intensive, Selective and Exclusive Distribution, 2013). This type of distribution is vital to cereal companies like Post. The cereal market is large in size and has a lot of competition within itself. For that reason, it is important that every cereal company uses intensive distribution so that their product is in as many stores as possible. This is so important to the companies because every store will have cereal in stock, so it’s up to the company to ensure that their brand of cereal is there otherwise consumers will decide on a different brand and flavor of cereal because your brand was

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inconveniently not at that store. Having a product in as many places and stores as possible make it much easier for the consumer to retrieve the product therefore they are likely to form bonds with the product and they will continue to buy the cereal. Conflict: Currently in the world every businessmen and governments worst nightmare is occurring. America is fighting off its first pandemic off in a very long time. Every individual person has been affected by this issue and everyone has seen the impacts of this devastating situation. This time is a perfect example of a distribution channel conflict. This kind of conflict is different in the sense that no one specific side is causing the problem rather mother nature is taking its course and disruption the distribution flow. Every consumer and manufacturer are facing the task of getting their products on the shelf so that they are readily available for the consumer to buy. Cereal has been stocked in stores for the most part but with all business besides the essential businesses being shut down it won’t be long before both the consumer and manufacture start to see the results of something as catastrophic as this. This provides a great example of how well things work when there are no outside forces disrupting the workflow. The physical distribution side of things are being affected by this the most. Physical Distribution: Inventory Control: Post Brand Cereals have partnered with Dot Foods which is one of the largest food redistributors to help the flow of their cereal products. "We believe our new relationship with Dot Foods offers many advantages for Post's food service customers who want less than truckload quantities," said Al Miano, national sales manager, Post Foods, LLC. "Our full line of

cereal products will now be available nationally without minimum order quantity limitations, which now allow many more customers to try our great brands. Dot's weekly deliveries and short lead-times enable distributors to respond faster to retailers' needs, while increasing inventory turns."( Dot Foods - Post® Brand Cereals Are Now Available Through Dot Foods, n.d.). Partnering with a third-party distributor helps spread inventory and products out more evenly and often in a timelier manner. Warehouses uses tools like inventory spreadsheets that they use to document inventory levels within the warehouse. When shipments are received the boxes have barcodes that are scanned, and the data is transported into the spreadsheets where it is easier to visibly see the inventory on hand. B Warehousing and Materials-Handling: Again, Post foods has partnered with Dots Foods which has allowed a lot of the inventory and warehousing facilities to be taken over by them. Dot foods does most of the ground working on moving the products from warehouses and getting them to retail stores such as Walmart. Temperature controls in the warehouse for Post Fruity Pebbles are not as complex as refrigerated foods. The warehouse needs to be kept at a comfortable temperature of 50-60 degrees. It should be neither to warm nor too cold. C. Transportation: Post foods uses trucks to transport their goods from the warehouse and puts it in stores for the consumer to buy.

Dot Foods - Post® Brand Cereals Are Now Available Through Dot Foods (Mt. Sterling, IL). (n.d.). Retrieved from https://www.dotfoods.com/news/post®-brand-cereals-are-now-available- through-dot-foods/ Types of Distribution: Intensive, Selective and Exclusive Distribution. (2013, December 11). Retrieved from http://www.yourarticlelibrary.com/distribution/types-of-distribution-intensive- selective-and-exclusive-distribution/5780 Learning, L. (n.d.). Principles of Marketing [Deprecated]. Retrieved from https://courses.lumenlearning.com/marketing-spring2016/chapter/reading-types-of-retailers/

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Breakfast Cereal Market Size, Share: Industry Trend Report 2018-2025. (n.d.). Retrieved from https://www.grandviewresearch.com/industry-analysis/breakfast-cereals-market

Marketing Strategy Analysis- Phase Three

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