Distribution Business Articles

Several border skirmishes are being fought over the lucrative business of movie distribution. These battles are not like the wars fought by the RIAA against consumers of free music downloads. Retailers are fighting to hold their space in the movie distribution niche.

Target Corp. 'accounts for about 15% of the big studios' DVD Sales' according to The WSJ article Target, a Big DVD Seller, Warns Studios Over Download Pricing. The article details efforts Target is making to tighten up its ship and keep its place in the hierarchy of distribution.

Target seems to fear an erosion of its consumer base to movie download sites like Movielink, Guba, CinemaNow, Amazon's Unbox and a little known upstart in the music download arena with an unlikely movie name called Apple ITunes! Target does have a few things going for it. Current market share and purchasing capability is very important and the movie industry and big studios can not ignore a customer that accounts for almost a fifth of its distribution.

Target also offers a significant amount of advertising and shelf space for these movies. Target may only account for 15% of sales, but they are putting titles in front of eyeballs in their stores. Target has to be concerned that they will tip a consumer off to a movie title. The consumer might then buy their household items, go home, and surf for a cheaper movie download online.

The keyword is 'cheaper' or maybe more precisely its all about price. Target is claiming that movie download services like Amazon, a Target partner, are getting access to cheaper prices for movies than traditional DVD distributors. Target would argue that this is an unfair competitive price advantage.

Now, the obvious rebuttal is that the movie download services can offer up a movie download cheaper as there is no cost of physical distribution, packaging, stocking, overhead for the bricks and mortar manufacturing line, distribution center, warehouse and store and a number of other items.

Target may win at the end of the day. First, they are a very large customer and the studios will have to make decisions for future business against current business (assuming Target doesn't build out its Amazon venture and offer up a download service of its own). Studios will not want to upset Target and so Target may when in the short term, which will be just fine with Target shareholders over the next 3-4 quarters, but not necessarily for the long haul.

Second, movie studios may not be able to defend its pricing scheme legally. The movie studios might find themselves walking a very narrow line of the law when it comes to offering content to two different customers for different prices. There are additional costs associated with Target's physical distribution, but Target offsets some of this with the scale of business.

Plus, the DVD distribution business has long been rumored to stuff a few costs in different segments of the distribution chain where they do not truly belong. If the higher costs can not be backed up with hard ABC facts, then the movie studios might find their pricing scheme under attack not just by big customers, but by the Justice Department.

Wal-mart has lost a case, which is now being certified as a class action suit in Pennsylvania. Workers litigated Wal-Mart in relations to claims that Wal-Mart forced them to work through breaks and off the clock. At the heart of Wal-Mart's success is their central nervous system or Information Systems. Wal-Mart is often held up as the example of how a retailer can track transactions and activities throughout their distribution chain. It appears that these same systems had some information that supported the worker's claims as well. According to a report on MSNBC, "The plaintiffs used electronic evidence, such as systems that show when employees are signed on to cash registers and other machines, to help win class certification during several days of hearings last year."Penn. jury fines Wal-Mart $78 million - U.S. Business - MSNBC.com The initial lawsuit was started by lead plaintiff Dolores Hummel from Reading Pennsylvania. She worked in the Sam's Club bakery from 1992 - 2002. She claimed that she was forced to work anywhere from 8-12 hours off the clock each month. Wal-Mart has heard similar claims from other workers around the country. In 2004, Wal-Mart was heavily criticized for locking workers in the store at night. It would seem that the heavy expenditure and terrific return on that expenditure as it relates to their informations systems was the cake, but those same systems might not let Wal-Mart have its icing too! This might prove even more troublesome for Wal-Mart if other attornies find a way to benchmark on the Information Systems information. The irony of this is that Wal-Mart's competitors have been trying to benchmark on the results of those systems for years.

Online education is growing and growing quickly. Corporations and businesses are rapidly embracing the capabilities of the technology. Online Education offers a unique flexibility that can be embraced by businesses possibly more rapidly than in an institution of higher learning. Traditional educators have a desire to embrace technology. However, the instilled bureacracy at a college, university or even a high school might not embrace that technology or might have extra rigorous controls and purchasing requirements that are less willing to cut a loss in a failed program and move on to a better solution. Corporations, especially public companies, are often chastised for a short term quarterly outlook. This weakness can be a strength when it comes to benchmarking on latest trends and making rapid cuts in programs that do not live up to expectations. Business can therefore try new online programs somewhat easier and continue moving from a good program to a better program. This continued demand coupled with a continued need for a replenishment or improvement in programs could promote an accelerated growth in the industry. One of the key benefits of an online program is the extreme availability of diverse online course s. The list and availability of online courses is growing everyday. A business can cherry pick the right course for the right employee or division or section at the right time and the right price. Rolling out the program can similarly take place rapidly as well. The logistics of rolling out in person training is minimal. Trainers do not need to fly from one area of a country to the next. Training materials do not need to be shipped around or purchased. Most materials are available online. Evaluations and metrics are available and provided according to requirements as well, making documentation of Government required courses relatively easy to document and provide proof on demand.

Marketing Sherpa put together a great 6 step article on working with the Press at a trade show titled How to Get Reporters to Write About You at a Busy Trade Show. Now, I won't steel their thunder. Step four of their approach delivers a very useful insight. They talk about providing inexpensive and practical chotchkes in the press room at a trade show. A good pen or a great coffee mug can go a long way, but their mention of USB thumb drives seems to be the most practical for the modern age. Providing a thumb drive with a press release and lots of product details and pictures, will be useful in getting your message out. It will also be a useful tool that can always come in handy for a reporter later on down the road. My company first utilized this trend almost two years at CES and it worked very very well. We put our brand on a USB thumb drive and provided them to reporters as well as prospective buyers. Since then the practice has become much more common at trade shows. So the best practice tips for utilizing these thumb drives needs to change a bit as well. Instead of offering a 64mb thumb drive and producing several hundred or even several thousand of these, think big. Consider that if many different companies are offering inexpensive flash drives with a small amount of storage, these things will feel like they are a dime a dozen. Choose a flash drive size that is large enough to hold triple to quadruple the file space required to hold the press release and the product literature. You do not want to provide a drive that is tempting to use, but requires someone to wipe your literature off at first usage. Make it big enough so that deleting your product information is tedious and gets delayed untill that last possible minute. Put aside several dozen very large flash drives in the multiple gigabyte range. Load the product literature on these devices, plus maybe a little extra. Maybe a free trial for a software, a downloaded movie, or even a coupon code to your online store. Save these large flash drive freebies for the reporters as opposed to the masses attending the trade show. A reporter may have multiple flash drives. They are more likely to consolidate their files on the larges drive as opposed to carrying around a few hundred 64mb flash drives. Try and be the company that provides the large drive that they will actually keep on their person for the next year. Technorati Tags: Trade Show Tips, Media management, Flash Drives, chotchkes

The FDA is promoting the implementation of RFID technologies in the prescription drug supply chain to achieve transparency and accountability. The mass serialization and identification of individual packages would be a requirement for this industry. This is a major obstacle, however if overcome, it could pave the way for the adoption of RFID technology, which could decrease the amount of theft and pilferage at various points along the supply chain. More importantly the technology could provide tracing information. This information could provide the historical tracking of a given drug from its source of production to its final sale off the shelf at a point of retail. As an example, a pharmacist might receive a prescription for a patient. The prescription might call for Risperdal. The pharmacist might run an epocrates check on their handheld PDA to confirm that the drug is appropriate for the patient, check and see if there are generic alternatives and confirm that the RFID tag for the drug in stock validates all the way back down the supply chain to the source of production. After validating the source of the drug, the Pharmacist or pharmacy for that matter could provide a seal of authenticity or approval on the drug to the patient. The patient would receive the additional confidence that they are taking a drug correctly prescribed and produced and sourced as intended and as approved by the FDA. The technology of RFID can document the historical logistics of a given tagged drug package and provide just such a history on demand in a relational database to pharmacists, doctors, inventory analysts, store managers, and even the CEO of a pharmaceutical company or chain of retail stores.

Wal-Mart has delayed a decision to build a distribution center in the southeast.  It has been pondering the establishment of a distribution hub in Jacksonville, Florida at the site of a former Naval base.

There is a line item on the ballot in Florida which would determine whether the business park in question should be developed further for business or turned back over to the Navy.  Wal-Mart's priorities identified in the spring appear to be decreasing as Jacksonville and the state of Florida take up the local issue.


Technorati Tags: Wal-mart Distribution Center, jacksonville, florida, naval base