Purchasing Chapter 3 Distribution Systems
Describe the various intermediaries(the middlemen) with whom hospitality operations deal. How do these middlemen differ from one another?
-Distributors:1.)Specialty Distributor-handles one type or classification of products, for example, coffee and tea. 2.)Full-line distributor-food and nonfood supplies. 3.)Broadline-distributor- food, non food and equipment. -Brokers: neither buy nor resell, their job is to promote products and put sellers in contact with buyers. -Manufacturers representative: Provide such additional end-user services as usually carrying items, and possibly even providing additional service to the buyers. Reps work more frequently with equipment and furnishing trades. -Manufacturers agents: primary sources employ agents to represent them in a specific geographic area, and agents typically work exclusively for one source. -Commissaries: Usually owned and operated by a large foodservice company. Processes food products according to exact requirements that the company has determined. -Wholesale clubs/Cash-and-Carry: A type of buying club that charges membership fees. The primary patrons are small hospitality operations that do not order enough from vendors to qualify for free delivery. Ex. Costco -Buying clubs: Groups of independent purchasers who join together to purchase collectively to obtain more competitive prices by placing larger orders. -Group Purchasing Organization: Utilize many small, independent businesses as a group to combine their purchasing power to receive better discounts than they would as individual businesses.
Define the four economic values. Give an example of each. Why might buyers be reluctant to pay for the information value?
-Time Value: If you want to buy a product at the time you select, you must be willing to pay for this privilege. -Form Value: Form is what turns a raw ingredient into something more user friendly. Ex. Precut steak is much easier to purchase, store, and use than a large cut of beef. -Place Value: If you want an item delivered to the place of your choice, you must pay for this convenience. -Information Value: Most controversial. Some people would pay extra for a dishwasher if the manufacturer sent an instructor for three or four days to show workers how to use it. Some people might not want to pay extra because so much information is available online. Most food establishments don't want to pay extra for the recipe on the back of a bag of flour.
How does the channel of distribution for services differ from the distribution channel for food?
Distribution systems for furniture, fixtures, equipment, and services are slightly less complex than for food items. Less manufacturers to choose from.
Define the major primary sources in the hospitality channels of distribution, and explain how they differ from one another?
Growers-farmers and ranchers, provide fresh food and floral products to the hospitality operations. Manufacturers-controls production of an item from raw materials to a finished product. Wood transformed into paper napkins, bags and placemats. Processors-takes one or more food items and assembles them into a new end product. Ex. Flour, water, yeast, tomato sauce, cheese and seasonings to produce frozen pizzas