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In this report I will be comparing methods used by two different retailers on how they distribute two chosen products, of my choice, in two different retailing sectors. Seeing as the food and clothing sector both have very different styles of how they meet their product requirements, I will compare Tesco and JD; The products from these two companies itself that I’m going to compare is ‘Tesco Value Bread’ and Nike hoodies.
For the food retailing sector (Tesco) there are many different departments that address what type of design is necessary for the distribution chain, the types that are available for a company such as Tesco is: frozen, chilled, and fresh foods, with packed goods too. However, for the clothing sector (JD) for a product like Nike hoodies JD need to consider various things like amount of the specific product they want, how they’re going to get them (whether it’s overseas or not) and will they have enough to reach customer demand, etc.
Tesco have manufacturers that mass produce products such as their ‘Tesco Value Bread’ to keep up with their customer satisfaction in quantity. The goods travel from the manufacturer to the actual retailer (Tesco) and from there it’s sold directly to the customer for their consumption or any other need. However, for the Nike Hoodies to get to the customer Nike have to go through additional steps to get their item out on the market.
As always, the product, in this case Nike hoodies, start off being massed produced by the manufacturer, which then get sent off to the wholesaler- which would be Nike; After all of this the final adjustments are done to the good (Nike hoodie) it’s sent to retailers, mainly abroad, for them to sell it directly to the customers. These two products production processes are quite different as they go through different their production quality is very different.
Plus, the amount of time it takes to produce each product differentiates from the two also. The only main similarity they really have is the delivery procedures that take place; this could mean the shipping costs, the quality of transport and what’s expected. There are more outgoing costs in the production process for the Nike hoodies than the ‘Tesco Value Bread’ as the clothing’s going to more places, and costs a considerable amount more to make than the bread.
The warehousing locations used to hold the goods (the food and the clothing) may be identical in size but the number of locations is most likely different. Because of the fact that the Nike hoodies are bigger in size compared to the ‘Tesco Value Bread’ one may be lead to believe that Nike have purchased/hired out a lot more warehouses to contain their goods compared to Tesco. On the other hand, even though Nike may seem to have more warehouses than Tesco it doesn’t necessarily mean that they sell more, as there are different levels of demand for both the products.
Nike promote their hoodies through a lot of ways; Nike use mainly advertisements through the web, television and advertisements through shops-most of the time their own shops. They mass promote their Nike hoodies, whether they’re new releases or just old hoodies that need to go. Through companies like JD that sell Nike hoodies most of the time they put the hoodies on sell to promote the product further and make it more appealing to the customers that may want to purchase it.
Tesco, to some extent, do in fact the same thing in regards to reduced cost methods but it isn’t even close to comparable when looking at how much of the total cost of the two items I’ve chosen are; for example: ‘Tesco Value Bread is around 45p, Tesco could suddenly decide to reduce it to 37p, there’s an 8p difference. JD however, sells Nike hoodies for around £60-£70, they could choose to reduce it to £30, and the difference would be ? 30-? 40. Now, the overall difference between the bread and the Nike hoodie is about £29.92-£39.92; clearly looking at the statistics there’s a massive difference. Nike as a massive retailing company would find it easy to sell their Nike hoodie merchandise as they’ve already built up their reputation across the globe as to how much quality and various other reasons why the customer should buy their Nike hoodies; just like Nike, Tesco have also built up a fearsome reputation on the market for selling their goods at reasonably cheap prices that appeal to majority of people.
Nike also have a wide range of the target market that they aim their products at, however, Tesco have more of a range on their goods, like their ‘Tesco Value Bread’ are aimed at pretty much everyone and anyone that wants cheap bread, but mainly targeted at a family orientated customer. Comparing Tesco and Nike to offers that occur after a trade/purchase is a really one sided comparison. Tesco excel the most at keeping their customers loyal and retained through keeping them updated on new offers/things that will benefit them greatly.
Tesco are mainly known for their Clubcard points, the Clubcard points can be added up to give them a nice discount from their next exchange with Tesco, which again ensures that they always come back- it’s like a cycle. Currently Nike is trying their best to retain their customers. Nike aren’t that well known for trying to keep their customers loyal and retaining them but they’re slowly but surely increasing that weakness and turning it into a strength, just like how Tesco have.
In conclusion, I have listed, explained and compared the methods that Tesco and Nike have/currently used to distribute their specific goods that chose, which were; ‘Tesco Value Bread’ and Nikes’ hoodies and how they impacted the market. I have also addressed their target market and how this may affect how they portray their company in order to distribute their goods.