Coca cola memorandum

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Independent Institute of Education - Assessment

to
chain and a value chain' Make sure
1.1 Explain the difference between a supply (20)
for each'
include all relevant definitions and diagrams

Van Heerden' C'H" Van
(LU 7. Source: Strydom, W'J" Nel' D'' Bothma' C"
Scheers, T. & Grove' T' (2OOg)
Distribution Manaoement 2"d edition'
Pretoria, Van Schaik Publishers'Pp' 22-25'
gets 7 mark'
llse discretion, each valid point only
4 marks defining suPPIY chain'
4 marks for diagram suPPIY chain'
4 marks defining value chain'
4 marks for diagram value chain'
4 marks for explaining the difference')

Supolvchain:Startsfromtheoriginsoftherawmaterials(1)usedinthe
or
product has been discarded
production of products and ends once the
recYcled. (1.)

Thephysica|,financiaIandinformationnetworksthatinvo|vethemovement
through the full logistics
of materials, (-1) funds and related information
Process'fromtheacquisitionofrawmateria|stothede|iveryoffinished
includes atl vendors' service
products to the end-user' The supply chain
providersrcustomersandintermediaries'(1)andendsoncetheproducthas
been discarded or recYcled'

Retailers'
Manufac-
resellers or
turing Plant
customers (I)
(1)

to examining the development of
A varue chain: rs the systematic approach
competitiveadvantage'(1,)Itisatooltoidentifyhowmorecustomervalue
channel (supply chain)'
can be created (I) in the distribution
delivery and support (l)
It formF part of the design, production' marketing'
of products.

Aschematicana|ysisusedtoidentifywhereincrementa|costsoccurand
in a corporate structure' (J)
where more customer value is created

@ Independent Institute of Education (Pty) Ltd 2012 Page 3 of 13

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- Assessment 2072
Independent Institute of Education

I.2 Sketch the flow of the international distribution system for Coca Cola and briefly
(10)
explain with examPles.

(LU 7. Source: strydom et al, 2oo9t p. 37. Provide 7 mark for each of the 5
steps indicated below and assign the other 5 marks as follows:)

overseas franchisor: (J) would be the coca-cola company in the usA; (1)
Local manufacturer: (l) would purchase the licensing rights to bottle coke
in South Africai (1)
o Local wholesaler: (-1) Would receive on nation-wide scale; (1)
o Local retailer: (1) Anything from Pick n Pay to corner caf6's and spaza
shops; (1.)
consumer: (1) The stakeholder who purchases the product in, for example,
a 34oml can. (1)

{.$}sg*s*:* * *t w€r'**x sxt{* s} * f"** c"$ tts *

e-r:ii1 ri*::rL fliff.:l.

i'' rr.

@ Independent Institute of Education (Pty) Ltd 2012
Page 5 of 13

Independent Institute of Education - Assessment 2012

1.3 There are three (3) main decisions a company must make in selecting its
distribution
structure: intensive, selective or exclusive. which one (1) of these three (3) have
Coca Cola used in South Africa? Define the distribution structure you have
selected
and provide one (1) good reason why you know this is the distribution
structure
used?
().,

(LU 7, Source: Strydom et al, 2OO9: pp. 6O-61.)

Intensive distribution structure; (I)
rntensive distribution involves the placement of products (usually
convenience products) (1) in as many rocati ons (1) by using the optimum
number of intermediaries possible; (1)
coke is sold practicaily on every street corner in south Africa. (1)

L4 What type of franchising model would Coca Cola have used in South Africa
and whv?
"/
r'q

(LU 3. source: strydom et al, 2oo9: p. llo. Award I mark for identification
of the eorrect type of franchising and 4 marks maximum for the
explanation,)

Product and trade-name franchisingi (1)
Because a sales relationship has been established between coca cola and
Amalgamated Bottling rndustries (l) where the last mentioned is granted
the right to sell coca cola's product (r) in exchange for fees or royalties (l)
as welf as the obligation to sell the franchisor,s product (1)- i,e. coca cola
provides Amalgamated Bottling rndustries with the recipe (syrup)
to make
the product. (I)

1.5 In south Africa, as a developing country, continued success of the cash-and-carry
wholesaler would be evident. Provide two (2) reasons for thls and discuss usinq
Coca
Cola as example. (s)

(LU g. Source: Strydotm et al, 2OO9: p, ll3.)

Manufacturers are increasingly confronted with rising distribution costs
(l) such as delivery costs and the high risk of credit provision, (l) which
means they tend to foist these marketing functions on to the cash-and-
carry wholesaler who is able to perform them more cheaply. (1)
The smaller retailers are experiencing problems purchasing products from
the full-service wholesalers because the latter do not sell small
consignments. (1)

@ Independent Institute of Education (pty) Ltd 2012
Page 6 of 13

Coca cola memorandum

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