Distribution Management

Case Analysis: Eddie Bauer Inc.

Critical problems in current system

Differential pricing is not allowed by policy Catalog and retail used different distribution centers Catalog Customer has to wait for a month while ordering catalog product through internet or phone but they could not buy it from store until a month later Catalog received credit for demand even though customer had come to store yet store sale debited if items were returned Multiple channels emphasis in synergy complicated recruiting of employees and promotion of products through different channels It easy to add more pages to the catalog a very miniscule cost, but they cannot add more square feet to the store

Operating profit % & Revenue: I-media (19%, Revenue= $17.25 million) , Catalog(4%, Revenue= $345 million), Retail (11%, Revenue=$1.5 billion) Here Operating profit percentage is higher for I-media and it is growing very fast Hence it is advisable to retain I-media in the intensely competitive cloth industry where segment rivalry was very high

Recommendation
All 3 marketing channels are important for Eddie Baur. It should retain all 3 marketing channels and modify channel structure so that it channel is independent yet reinforce each other but at the same time it should not compete against each other

It should remodel the design and layout of the merchandise in the store to allow more selling space which could be used as more popular sizes of cloths which will reduce return as replacement is available in store