Channel Management Strategy for Edible

Channel Management Strategy for Edible Greeting Cards

Edible greeting cards need to have a hybrid distribution channel that includes the traditional components of greeting cards, yet also capitalize on where consumers choose to purchase gifts and chocolates. Studies of consumers who are the most brand- and product loyal indicate they rely on multiple channels in making their purchasing decisions and choosing when and were to buy (Lee, Kim, 2009). This has been shown across many different product categories and underscores the criticality of the edible greeting cards having a well-define multichannel-based strategy.

Multichannel Management Considerations

In defining the channel management strategy for edible greeting cards, it's critical to focus on having a balance of in-store retail and online channels that can compliment each other. Online channels promise efficiency, being available on a 24/7 basis and also having a lower cost per transaction, yet they don't offer the same benefits as in-store, 800 numbers, or catalogs. Yet the online channel is by far the most scalable across multiple nations quickly and also can preserve the freshness of the chocolate (Vreeland, 2009). Integrating the supply chain, packaging and fulfillment with the website, 800 number and catalog sales also ensures a consistency of quality that is critical for customer loyalty to be gained over time.

Of all channels however the most complex and potentially difficult to manage over time is the reliance on retailers and mass merchandisers (Hollar, 2001). As mass merchandisers are creating significant market consolidation, the creation and continual strengthening of a retail channel is strategically important to any new business that concentrates on gifts and greeting cards.

In constructing the retail channel there needs to be a focus on how to first choose which retail chains, independent retailers and mass merchandisers that will be recruited to sell. As the product, edible greeting cards, is differentiated and offers the potential for significant sales and margins, the strategy needs to be to choose only those top-performing retailers to construct the channel. The product's perishibility makes the supply chain area of fulfillment critical. Using a regional distribution center strategy and working with retailers, independent chains and mass merchandisers to achieve at least two inventory turns a month, inventory and forecast optimization strategies need to be put into place to alleviate the additional costs of distribution there will be Vendor Managed Inventory (VMI) programs in place for the mass merchandisers and stock balancing with only the largest mass merchandisers. In addition, the use of marketing co-op funds and a market development funds program to support smaller retailers and stores selling the cards on their own, reimbursing them for advertising will be produced. This will operate in much the same was as the marketing co-op program at Intel called Intel Inside, which reimburses resellers for their pre-approved marketing expenses.