Lecture purchasing selection and procurement for the hospitality industry (8th edition) chapter 4 feinstein, stefanelli

All Rights Reserved CHAPTER Forces Affecting the Distribution Systems 4... YOU SHOULD BE ABLE TO:• Identify and differentiate the economic and political forces that affect the channel

Selection and Procurement for the Hospitality Industry

Purchasing

ANDREW HALE FEINSTEIN AND JOHN M STEFANELLI

E i g h t h E d i t i o n

© 2011 John Wiley and Sons,

Inc.

All Rights Reserved

CHAPTER

Forces Affecting the

Distribution Systems

4

YOU SHOULD BE ABLE TO:

• Identify and differentiate the economic and political forces that affect the

channel of distribution.

• Describe the role of ethics in the

channel of distribution.

• Explain the legal restrictions that affect the channel of distribution.

• Provide examples of technological

advances that are impacting the ways

Economic Force

Political Force

Ethical Force

Other Forces

Legal Force

Technological

Force

Sources

(growers, manufatuures, and processors)

Intermediaries

(middlemen)

Retailers

(hospitality operators)

Consumers

FORCES AFFECTING THE DISTRIBUTION CHANNEL

ECONOMIC FORCE

Basic commodities are typically acquired through a bidding procedure

Co-op farmers

Established market prices

Perceived quality + perceived services /

EP cost

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ECONOMIC FORCE (CONT.)

and EP cost?

POLITICAL FORCE

availability, prices, and channel member behavior

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ETHICAL FORCE

What is ethical?

LEGAL FORCE

Sinclair Lewis’ The Jungle

Pure Food Act (1906)

Meat Inspection Act (1907)

USDA established in 1862

• Primarily focuses on meat, poultry, and eggs

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LEGAL FORCE (CONT.)

Poultry Products Inspection Act (1957)

Wholesome Meat Act (1967)

Wholesome Poultry Products Act (1968)

(1906)

FDA administers this law

Evaluates contaminate levels

LEGAL FORCE (CONT.)

PUFI for a fee

FDA has authority to examine seafood in interstate commerce

Amended by the Wheeler-Lea Act (1938) Deals with advertising, deceptive

promotions, monopolies, and conduct in

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LEGAL FORCE (CONT.)

• Clayton Act (1914)

Used to control antitrust violations

• Tying agreements

• Exclusive dealings

• Perishable Agricultural Commodities Act

(1930)

Control interstate commerce

Prohibits unfair practices in sale of produce

LEGAL FORCE (CONT.)

Agricultural Marketing Agreement Act (1937)

Ensure steady flow of perishable products

Known as the “small business protection

act”

Promotional discounts favoritism through a quantity limits provision

Predatory pricing

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LEGAL FORCE (CONT.)

Packaging pictorial aspects

Misleading descriptions and illustrations Package label regulations

Firearms (BATF)

LEGAL FORCE (CONT.)

© 2011 John Wiley and Sons,

Inc.

All Rights Reserved

TECHNOLOGY FORCE