General Nutrition Companies Case Study

Product and Place

Introduction

General Nutrition Companies, Inc. (GNC) is the largest specialty retailer of vitamin, mineral, and sports nutrition supplements in the world. The company originated in 1935 and has risen above many struggles to get them where they are today. The once single store that was run by a family of brothers could no longer complete in the market when Supermarkets and drug stores began to tap into the success of selling nutritional supplements. Therefore, GNC found alternative distribution channels that led to the success of GNC. (www.gnc.com/history)

Overview of Distribution Channels

The concept of distribution channels is the various paths a product can take getting the manufactured product to the end consumer. Examples of distribution paths include franchises, direct byers and indirect buyers to name a few. GNC now focuses on the franchise and direct buy methods of distribution to their customers.

Analyze Target Market's Needs in Distribution Channels

GNC's uses two forms of distribution channels, franchising and direct buy for their customers. In 1985 with the death of the original founder a leadership change led Jerry Horn to the president seat in the company which in turn led to a very different way of marketing and distributing the GNC label (gnc.com/history). It was at this point that the company used strategically placed franchises as a main focus for the distribution of their nutritional products. Stores were set up uniformly across the board. Campaigns were launched to target key segments of the population and employees were trained to specifically know the products they were selling. Labels were changed to reflect the new concept of GNC and also change the dwindling image that had been associated with GNC.

Determine Channel Members with Explanation

Channel Members include all who touch the given product prior to the consumer. This starts with the manufacturer and ends with the consumer. Depending on the product and how the distribution channel is achieved would be the key to how many channel members are required.

Discuss How Many Channel Members with Explanation

For the purpose of GNC the distribution channels include franchises and customer direct sales. Franchise distribution is accomplished through uniform store fronts that consumers are accustom to for the products, as well as their products carrying a consistent GNC label an all of their products. The other way that these products can get into the consumers hand is buying them direct from the company on their website. By using the franchises the distributers are constant and sole providers to the franchises. This not only controls cost but lets the franchise work with the just in time