Marketing channels Essay Example | Topics and Well Written Essays - 2000 words

Marketing channels - Essay Example As a result the retailers no longer have to pay the transportation price to the suppliers and the retailers get the products in a much lesser rate. Due to the irregularity in the distribution networks and the better inventory and transport coordination mechanisms in FGP, it is likely to result in high savings both for retailers and ultimately the consumer. FGP is about improving transport efficiencies by understanding the true costs. For example, suppliers who are highly skilled and cost efficient at providing transport solutions will continue to provide this service to the retailer. Whereas suppliers who do not see transport as their core competency, or do not have highly efficient operations, have an opportunity, through FGP, to transfer the responsibility to the retailer or logistics provider. Improved Availability: FGP has increased retailer/supplier collaboration which has a positive affect on the whole supply chain. The major aim of FGP is to ensure that more products are available on shelf for consumers. The promising future of FGP has already been demonstrated in the UK where leading retailers such as Tesco and Sainsbury’s have implemented FGP for a part of their product range. Other British retailers such as Asda, Somerfield, Safeway, and Waitrose have announced plans for FGP (IGD website, Finegan 2002). Potter et al. (2003) report significant potential kilometer reductions due to FGP for the case of Tesco. Interviews with Dutch retailers indicate that they have high expectations for FGP as well (Blanc, et al., 2004). Environmental pollution due to vehicles is a major cause of concern around the world. FGP has resulted in limiting the transportation activities in an organized manner. Higher vehicle load fills leads to fewer journeys which, coupled with increasingly sophisticated route planning systems, results in lower overall emissions (IGD, 2004). CPFR is a business practice wherein trading partners use