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Scenarios for Product Distribution

The following business scenarios demonstrate how companies can use distribution hierarchies and personalization attributes to determine how their products are distributed among their accounts. These scenarios are examples of workflows performed by marketing administrators and key account managers. Your company may follow a different workflow according to its business requirements.

Controlling Product Distribution with Distribution Lists

The administrator at a large beverage manufacturing company is responsible for making sure that the right products are available for each customer account. He does so by controlling product distribution lists at the corporate level. These lists determine the set of products available at the key distribution account level of each account's hierarchy, and the subsets of products available to the accounts down the hierarchy. In addition, the administrator determines where various products should be displayed within retail outlets.

The Ace Corporation account consists of two distribution warehouses, Ace Corporation East and Ace Corporation West, which are used as distribution centers for Ace Corporation. Each warehouse supplies a number of retail outlets throughout North America. Ace Corporation headquarters determines which beverage items are stocked at each warehouse. In addition, Ace Corporation employs a third-party wholesaler, AnyCompany Distribution, to supply products to outlets within the state of Louisiana, in the United States.

The administrator enters the Ace Corporation account hierarchy for product distribution into the Siebel database. He includes the details that the Ace Corporation East and West accounts are Distributors and that AnyCompany Distribution is a wholesaler or supplier account for one or more of the Ace Corporation accounts in its product distribution account hierarchy.

He then establishes an authorized product distribution list for the Ace Corporation account product distribution hierarchy that is based on the inclusive distribution option. Both of Ace Corporation's distribution warehouses (Ace Corporation East and West) are given a distribution code of Premium for the category Fizz and a distribution code of Standard for the category Splash. This designation authorizes both warehouses to receive all of his company's beverage products that are part of the Fizz category, independent of product category, and all products in the Splash category that have a distribution code of Standard or Limited. However, since Louisiana bans the sale of alcoholic fruit drinks, the third-party wholesaler in Louisiana is not licensed to distribute them. The administrator gives the wholesaler a distribution code of Limited for the category Fizz, so that only the subset of his company's products that does not contain alcoholic fruit drinks gets shipped to this warehouse.

The key account manager is responsible for managing and updating the authorized product distribution lists, supplier references and source of supply for each of her key accounts. She notes that Ace Corporation East cannot meet the demand for beverage products for all the retail outlets it supplies, so she fulfills those outlets' needs by designating Ace Corporation West as the alternative supplier for those outlets in the account hierarchy for product distribution.

Finally, the key account manager specifies what percentage of the authorized product distribution list each warehouse supplies and designates merchandising locations for several of the products that will be available to Ace Corporation's outlets.

Controlling Product Distribution with Personalization Attributes

The administrator of a large apparel and footwear manufacturer is responsible for making sure that the right products are available for each customer account, based on that account's market segmentation. These products will then be available to the customer, based on predefined personalization rules, and sales representatives will be able to offer only appropriate products to the customers when creating assortment plans.

Typically, the apparel and footwear manufacturer bulk-loads the information about accounts and products into the Siebel database, including their account personalization attributes. The company product categories and products may already have personalization attributes applied to them. However, her company just acquired a new account, Retailer X, and the administrator needs to enter the information for this account manually. After adding the account, the administrator considers the account's market segmentation.

The Retailer X account consists of a regional headquarters and several retail outlets. The retail outlets are generally located in shopping malls where the apparel and footwear manufacturer's products are sold by several different stores. Maintaining brand equity is a consideration as the administrator decides which of the manufacturer's products should be available in Retailer X's outlets.

Because Retailer X sells high-end apparel and footwear to serious athletes, the administrator applies the account channel Sporting Goods, and the product differentiator Elite, to the headquarters account. When sales representatives create an assortment plan for Retailer X, or when the Retailer X product catalog is displayed, only the product categories and products tagged with the Sporting Goods or Elite attributes will be available.

One of the Retailer X outlets is located in a mall with two competitor stores carrying high-end sporting apparel and footwear; one competitor specializes in products for sports such as basketball and baseball, and the other sells apparel and footwear for serious runners. The administrator chooses to further refine the personalization attributes for this outlet of Retailer X by assigning specific categories of her company's products instead. She assigns the Cross-Training and Walking categories of products to the account catalog for this outlet, so that only Cross-Training and Walking category products will be available to this account.

The key account manager for Retailer X notices that one retail outlet is located in a small shopping mall where there is little brand representation for the manufacturer's apparel and footwear. The key account manager can assign this account the product differentiator Entry, which limits the number of the manufacturer's products available to the account. This decreases the choices of styles available to that outlet, and more accurately reflects the market segment for that outlet.

The key account manager chooses to create a buying group for most of Retailer X's outlets, so that the members can benefit from bulk purchase discounts.