WHAT ARE THE DIFFERENT TYPES OF DISTRIBUTION CHANNELS USED BY MCDONALD’S?

DIRECT CHANNELS OF MCDONALS

38,000 RESTAURANTS IN 100+ COUNTRIES – OWNED OF MCDONALDS, PRIMARY WAY TO DISTRIBUTE ITS PRODUCT.

INDIRECT CHANNELS OF MCDONALDS

AIRPORTS- RESTAURANT IN MANY AIRPORTS AROUND THE WORLD

COLLEGE CAMPUSES- RESTAURANT IN MANY COLLEGE CAMPUS

ONLINE MCDONALD’S- ORDER FOOD THRU ONLINE, DELIVERED TO THEIR HOMES/OFFICE

WHAT ARE THE FACTORS TO CONSIDER WHEN CHOOSING A DISTRIBUTION CHANNEL FOR A FAST FOODCHAIN?

THE PRODUCT- THE TYPE OF PRODUCT BEING SOLD ARE BIG IMPACT

THE TARGET MARKET- WILL EFFECT BEST DISTRIBUTION CHANNEL|EX: CHAIN THAT TARGETS YOUNG PEOPLE MAY
WANT TO USE ONLINE ORDERING.

THE COST- ANOTHER IMPORTANT FACTOR TO CONSIDER|SUCH AS DIRECT MAIL CAN BE VERY EXPENSIVE, WHILE
OTHERS SUCH AS ONLINE ORDERING CAN BE MUCH MORE COST-EFFECTIVE.

THE LEVEL OF CONTROL- HAVE OVER THE DISTRIBUTION PROCESS| SUCH AS OWNING AND OPERATING THEIR
OWN RESTAURANTS, GIVE THE CHAIN A LOT OF CONTROL, WHILE OTHER CHANNELS SUCH AS SELLING TO
WHOLESALRES GIVE THE CHAIN THE LESS CONTROL.

THE AVAILABILITY OF THE CHANNEL- IF A FASTFOOD CHAIN WANTS TO REACH CUSTOMERS IN RURAL AREAS, THEY
MAY NEED TO USE DIFFERENT CHANNEL THAN IF THEY WANT TO REACH CUSTOMERS IN URBAN AREAS.

THE COMPETITIVE LANDSCAPE-EX: IF THERE ARE A LOT OF OTHER FASTFOOD CHAINS USING THE SAME
DISTRIBUTION CHANNEL, THE FASTFOOD CHAIN MAY HAVE TO OFFER A LOWER PRICE OR BETTER SERVICE TO
COMPETE.

HOW CAN DISTRIBUTION BE USED TO IMPROVE CUSTOMER SERVICE?

PROVIDING ACCURATE AND TIMELY DELIVERY- CUSTOMER EXPECT TO DELIVERD ACCURATELY ON TIME.

BY HAVING WELL-FUNCTIONING DISTRIBUTION SYSTEM, COMPANIES ENSURE THE ORDERS CAME ON TIME TO
THEIR CUSTOMER.

OFFERING A VARIETY OF DELIVERY OPTIONS- CUSTOMERS APPRECIATE HAVING A VARIETY OF DELIVERY OPTION TO
CHOOSE FROM. INCLUDE SAME-DAY/NEXT DAY DELIVERY, FREE SHIPPING. OFFERING IT MAKES THE COMPANIES
EASIER FOR THE CUSTOMER TO GET THEIR ORDER.

PROVIDING TRACKING INFORMATION- CUSTOMER WANTS TO KNOW THEIR ORDER/WHEN WILL ARRIVE.
PROVIDING TRACKING INFO GIVES CUSTOMER PEACE OF MIND.

BEING RESPONSIVE TO CUSTOMER INQUIRIES- WHEN CUSTOMER HAVE QUESTION TO THEIR ORDER, THEY WANT
AN ANSWER QUICKLY. BY HAVING RESPONSIVE CUSTOMER SERVICE COMPANIES CAN ASURE, THE CUSTOMER.

RESOLVING CUSTOMER ISSUES QUICKLY AND EFFICIENTLY- WHEN THERE A PROBLEM WITH AN ORDER, CUSTOMER
WANT THEM TO BE RESOLVED QUICKLY. HAVING A PROCESS IN PLACE FOR RESOLVING CUSTOMER ISSUES,
COMPANIES CAN MINIMIZE THE IMPACT OF THESE PROBLEMS.

HOW CAN DISTRIBUTION CHANNEL USED TO REDUCE COST?

OPTIMIZING INVENTORY LEVELS- KEEEPING INVENTORY LEVELS AT MINIMUN, CAN REDUCE THE AMOUNT OF
MONEY THEY SPEND ON COST.

NEGOTIATING BETTER SHIPPING RATES- NEGOTIATING BETTER SHIPPING RATES WITH CARRIES, CAN REDUCE THE
COST OF TRANSPORT THEIR PRODUCT.

USING MORE EFFICIENT TRANSPORTATION METHODS- SUCH AS RAIL OR WATER, CAN REDUCE COST OF
TRANSPORTING THEIR PRODUCT.

CONSILIDATING SHIPMENTS- CAN REDUCE THE NUMBER OF SHIPMENTS THEY MAKE, CAN SAVE MONEY SHIP COST

USING THIRD-PARTY LOGISTICS PROVIDER- CAN OUTSOURCE THEIR DISTRIBUTION ACTIVITIES TO A SPECIALIST, CAN
SAVE MONEY ON LABOR.

AUTOMATING DISTRIBUTION PROCCESS- CAN REDUCE COST ON MANUAL LABOR, SAVE MANUAL LABOR COST

USING TECHNOLOGY TO TRACK INVENTORY AND SHIPMENTS- REDUCE RISK OF STOCKOUTS AND DELAYS,

CAN SAVE MONELY ON LOST SALES AND CUSTOMER DISATISFACTION

HOW DISTRIBUTION CHANNEL USED TO INCREASED SALES?

MAKING PRODUCTS AVAILBLE TO MORE CUSTOMERS- EXPANDING DISTRIBUTION CHANNEL, MAKE THEIR
PRODUCTS AVAILBABLE TO MORE CUSTOMERS. LEAD TO INCREASED SALES

PROVIDING A BETTER CUSTOMER EXPERIENCE- IMPROVING DISTRI CHAN, CAN PROVIDE BETTER CUSTOMER
EXPERIENCE. INCREASE CUSTOMER SATISFACTION AND LOYALTY LEAD TO INCREASED SALES.

REACHING NEW MARKETS- USING DISTRI CHAN THAT TARGET NEW MARKETS, REACH NEW CUSTOMERS AND
INCREASE SALES.

DISTRIBUTION PLANNING- SYSTEMATIC DECISION MAKING REGARDONG THE PHYSICAL TRANSFER OF GOODS.

*TRANSPORTATION- WAY TO TRANSFER GOODS FROM MANUFACTURER TO BUYER.

*WAREHOUSING- STORING GOODS IN ASAFE/SECURE LOCATION UNTIL THEY NEEDED.

*INVENTORY MANAGEMENT- KEEPING TRACK OF THE QUANTITY/LOCATION OF GOODS IN INVENTORY.

*ORDER FULFILLMENT-PICKING, PACKING, AND SHIPPING GOODS TO CUSTOMER

*LOGISTICS-PLANNING AND EXECUTING THE TRANSPORTATION OF GOODS.

*REVERESE LOGISTICS- COLLECTING/RECYCLING RETURNED GOODS.

*PACKAGING- ABILITY TO MAKE PRODUCT PRESENTABLE

DISTRIBUTION CHANNEL- NETWORK OF ORG/INDIVI INVOLVED IN MOVING A PRODUCT FROM PRODUCER TO

FINAL CUSTOMER.

TYPE OF DISTRIBUTION CHANNELS

*DIRECT CHANNELS- COMPANY SELLS DIRECTLY TO THE END CONSUMER. WITHOUT ANY INTERMEDIARIES

OFTEN CASE HIGH-VALUE OR HAVE A LONG SHELF LIFE.

*INDIRECT CHANNELS- COMPANY USES INTERMEDIARIES SUCH AS WHOLESALERS/RETAILERS TO SELL ITS

PRODUCTS. OFTEN CASE FOR PRODUCTS HAVE LOW-VALUE OR HAVE A LONG SHELF LIFE.

*HYBRID CHANNELS- COMPANY USES A COMBINATION OF DIRECT/INDIRECT CHAN. OFTEN CASE FOR PRODUCTS
THAT ARE SOLD ONLINE AND IN STORES.

DIRECT CHANNEL RETAIL CHANNEL WHOLESALE CHANNEL AGENT CHANNEL

PRODUCER PRODUCER PRODUCER PRODUCER
AGENT/BROKER
WHOLESALER/DISTRIBUTOR WHOLESALER/DISTRIBUTOR
RETAILER RETAILER RETAILER
CONSUMER CONSUMER CONSUMERS CONSUMERS
FACTORS TO CONSIDER WHEN CHOOSING DISTRIBUTION CHANNEL

*THE TYPE OF PRODUCT- SOME PRODUCTS ARE SUITTED FOR DIRECT/ INDIRECT CHANN. EX: HIGH-VALUE
PRODUCTS SOLD THROUGH DIRECT CHANNEL; LOW-VALUE SOLD THROUGH INDIRECT CHANNEL

*THE TARGET MARKET- NEEDS/PREFERENCES AFFECT CHOICE OF DISTRIBU CHANN.EX: IF THE TARGER MARKET IS
PRICE-SENSITIVE THEN INDIRECT CHANNEL MAY BE MORE APPROPRIATE.

*THE DESIRED LEVEL OF CONTROL-COMPANY MAY WANT CONTROL FOR ITS PRODUCTS, IN CHOOSING DIRECT
CHANNEL. OR THE COMPANY MAY BE WILLING TO GIVE UP SOME CONTROL IN ORDER TO REACH AUDIENCE, IN
WHICH CASE IT MAY CHOOSE INDIRECT CHANNEL.

*THE AVAILABLE BUDGET- COST OF USING PARTICULAR DISTRIBUTION CHANNEL WILL ALSO BE FACTOR. DIRECT
CHANNELS ARE EXPENSIVE THAN INDIRECT CHANNEL.

TYPES OF TRANSPORTATION

RAILROADS-CARRY HEAVY, BULKY ITEMS THAT ARE LOW IN VALUR OVER LONG DISTANCE|SOME PRODUCTS ARE
INEXPENSIVE AND LOW SELLING PRICE.

ROADWAYS- COMMON FORM OF TRANSPO. INCLUDE CARS, TRUCKS, BUSES AND MOTORCYCLES. INEXPENSIVE TO
BUILD/MAINTAIN.USED WIDE VARIETY OF GOODS/PEOPLE. CONS- POLLUTED/CONGESTED.

WATERWAYS- EFFIECIENT WAY OVER LONG DISTANCES- INEXPENSIVE TO BUILD. BUT SLOW/NOT ALWAYS AVAILABLE

PIPELINES- LIQUID/GAS OVER LONG DISTANCE, INEXPENSIVE TO BULD/NOT POLLUTING. BUT NOT FLEXIBLE.

AIRWAYS- FASTEST WAY, EXPENSIVE FORM|NOT ENVIRONMENTALLY FRIENDLY AS OTHER FORMS.