Seoul Dairy CoporativeContents Part 1 : Background Information Part 2 : Channel Structure Part 3 : Strategy and Policy Part 4 : RecommendationBackground Information Background Information (Unit: thousand per day) Seoul Milk as a leading campany has about 40% of market share in dairy industry. Dairy industry Dairy industry produce dairy product that made from processing process with natural milk It includes [milk, cheese, butter, cream, caffe latte, etc] in the business areaSeoul Cooperative is a business organization owned and operated by a group of Dairy farms for their mutual benefits Target Market Dairy goods : Premium 1a milk butter, cheese, cream, yogurt - Fruite Juice Living creator that make better life and food Seoul Milk plays a important role in producing human respect and best values to dairy farms Background InformationBackground Information Major Competitior Market Share 40% 18% 16% company 서울우유 매일우유 남양우유 빙그레 롯데우유 Growth rate 112% 118% 160% 98% 83% (2000 년대비 2006 년 ) Backgactic acid bacteria supplier Vender Model Discount Store Convenience Store Direct Selling (via EDI) Bottler Part Suppliers Seoul Milk RetailerVendor model Business Model Operate distribution center owned by retailers - Delivering products as soon as receiving orders from retailers. Direct Selling Limited product : butter, cream, cheese… etc Generally, almost all retailers are operating vendors Vendor Means : -Managed by retailers which is not specialized in having milk Function: - Providing goods or services to company. A vendor often manufactures inventoriable items and sells those items to customers.Channel Structure Dairy Farm D Mart SEOUL Milk Factory Distribution Agency Discount Store Customers Lactic acid bacteria supplier Distribution Agency Model Convenience Store 삼건 T M KOTRA Distribution Center Bottler Retailer Seoul Milk Part Suppliers DistributorDistribution Agency model 삼건 T M Business Model Seoul Milk just produce dairy goods and other distribution agencies sell goods Disf milking, Seoul milk manage all the marketing channel so part supplier can be pushed by Seoul milk Channel Strategy and Practice Part SuppliersChannel strategy and practices Policies and strategy Intensive channel Strategy : Based on various channel partner , they have stable sale volumes Cold chain system policy : After packing milk, move maintaining on cold state Co-Marketing : After sales on online market with Amway, sales increase to 117% [Starbucks, Dongseo ] Channel Strategy and Practice Seoul MilkChannel strategy and practices Policies and strategy Excessively competitive price of product between Retailers especially in discount store (EDLP) - Complimentary product s attached to origin product [ one+one ] Selling commodities which use Intensive channels. - They have a advantage of place and operate time. Channel Strategy and Practice Channel Strategy and Practice Discount Store Convenient StoreWHYWhy the channel structure is as is a short(long) channel Direct channel : Cheeses,turer. - Traditional Method of Seoul Milk to deliver goods to everywhere. To gain Customer data To focus on quality management systemStrengthAgency Model - Convenient to buy goods : Delivery at each house by salesperson Using vending machine Online purchase Maintain freshness of milk : Cold chain system Obtain regular customers : School meal and military supplyDistribution Agency model 삼건 T M Through using KOTRA distribution center, Seoul Milk could reduce about 24% of total cost 5508 4170 Focus only on producing diary goods without thinking of distribution, promotion Reduce cost by KOTRA distribution center Easy to reach abroadVendor model - Have to compete with rivals Vendor does not meet the expectation of Seoul Milk : Cold chain system Retailers can manage their own inventory - Increasing Flexibility Increase of Sales volume Reduction of marketing channel(Agency) : Cost down ☞ In the case of direct selling Maintain freshness of milk Overcome the limited number of factory Flexible me channel operated by Seoul Milk The nearest agency manages the delivery of online order provided by Seoul Milk - Faster delivery Protect quality from deterioration Recommendation Online Channel Private agency usually sells dairy goods on the Internet open market for extra benefits. : Auction, G-market …etc It can cause problems during delivery by un-refrigerator carriage. - Quality deterioration Physical breakage of Milk Seoul Milk doesn’t have any responsibility according to PL clause It can lead to bad image on Seoul MilkSeoul Milk Factory Vendor Convenience Store Discount Store C U S T O M E R Direct Selling (via EDI) Seoul Milk Factory Private Agency C U S T O M E R Supermarket As-Is (Discount Store) 단위 : 원 Due to “agency”, supermarkets are required to sell same products at more expensive price than discount store. Different structures make price gap And conflict between Retailers As-Is (Supermarket) Recommendation Price GapAttach complimentary product to Seoul Milk sold only in show}