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In the Spotlight

A large refrigerated section of a grocery store contains rows of small round containers of food. Above the rows are the words “fresh hummus and Mediterranean”
Figure 17.1 Marketers need to determine distribution strategies that gets their products in the hands of consumers, like the partnership between Whole Foods and Outstanding Foods. (credit: modification of work “Whole Foods Market Full Middle Eastern Food Shelves” by Raed Mansour/flickr, CC BY 2.0)

Chapter Outline

17.1 The Use and Value of Marketing Channels
17.2 Types of Marketing Channels
17.3 Factors Influencing Channel Choice
17.4 Managing the Distribution Channel
17.5 The Supply Chain and Its Functions
17.6 Logistics and Its Functions
17.7 Ethical Issues in Supply Chain Management

Have you ever had a great idea for a new food product? If so, do you have any idea where you would sell it to reach your target customers? Unlike traditional grocery retailers, Whole Foods specializes in selling high-quality natural and organic foods. Getting the green light to sell through its stores requires manufacturers to follow strict quality standards, including adherence to Whole Foods’ banned ingredient list.

Founders Dave Anderson and Bill Glaser of Outstanding Foods and maker of PigOut, a vegan, bacon-flavored chip snack, recognized that in order to reach vegans and nonvegans with a plant-based, bacon-flavored chip, they need to retail at outlets that would attract such consumers.1

After testing their product, they opted for a nationwide launch and distribution strategy. Using a broker network, they selected distribution channels that aligned with both natural and mainstream grocery stores. This strategy would help secure the national target market coverage they were looking for. The product strategy of natural ingredients gave Outstanding Foods the green light it needed to meet Whole Foods’ strict food standards. Through their partnership, Whole Foods and Outstanding Foods are able to create and deliver value to their vegan customer base who appreciate access to food products that are tasty and bring delight.

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