Professional Documents
Culture Documents
Outputs
Is dependent on the end-users
demands for a product/ service
Demand into not what they want to
consume but how end-users want to
buy and use the products/ services
Peapod Operations
Initially orders were taken on-line through a
proprietary software.
Peapod employees then shopped the aisles of actual
Jewel-Osco stores to fill each order & delivered at a
specified time
In October98 they started the WWW based access
system
The new software made gave an option of speedier
check out, nutrients & ingredients list, & a
cumulative list of what has been purchased during an
on-line shopping trip.
In December 1998 Peapod started their 1st dedicated
distribution center leading to a reduced delivery costs
to customers, efficient assortment of grocery, diary &
frozen products & to be replenished just in time basis
by suppliers
Peapod Operations
Perishable products are planned to be Crossdocked implying that they will sit in inventory
for a minimal amount of time
They have also introduced a new transportation
routing to lower costs of delivery
Delivery charges varies from $ 9.95 per order with
no monthly fees to $5 per order plus $4.95 flat
charges per month or unlimited deliveries for
$19.95 per month.
Peapod Operations
In August 98 they started pre selected bundles of
products to fit niche buying occasions like the
holiday season, new baby gifts, Christmas gifts
etc., with deliveries across the nation
They also tied up with Greatfoods.com to give
services of packaged foods
This gave them an opportunity to make a brand
name across the country even where they were not
present
Bulk breaking
Spatial convenience
Waiting or delivery time
Product variety
Bulk Breaking
Ability of the end user to buy in desired small
quantities though the original produced packaging
could be big.
Purchases move directly into consumption rather
than into inventory
Lesser product handling by the end user
Lesser storage space & costs
Increases the service output of the MC
Which could lead to an increased price for the end
user
Spatial convenience
Is the distance convenience of shopping to the end
user.
It increases customer sat because of the shorter
distances involved.
Exs are neighborhood supermarkets, convenience
stores, vending machines, gas stations etc.,
Companies like Grainger in the US offer spatial
convenience to business customers by offering
them their requirements by having branches at
distances of 20 minutes from most business
establishments
Breadth of assortment
Wider the breadth of assortment or the
availability of product variety higher is the
service outputs of the channel
The higher the service output of the
channel, higher is the distribution costs
because of the inventory carrying costs
which is passed onto the end user.