Marketing Chp 15: Supply chain

Supply chain management
Marketing channel management; value chain, demand chain. Only real value of a product is what we are willing to give.
-Refers to a set of approaches and techniques firms employ to efficiently and effectively integrate their suppliers, manufactures, warehouses, stares, and transportation intermediaries into seamless value chain in which merchandise is produced and distributed in the right quantities, to the right locations, and at the right time as well as to minimize systemwide costs while satisfying the service levels their customers require.
Marketing channel management
Supply chain management
-refers to a set of approaches and techniques firms employ to efficiently and effectively integrate their suppliers.
Wholesalers
Those firms engaged in buying, taking title to, often storing, and physically handling goods in large quantities, then reselling the goods (usually in smaller quantities) to retailers or industrial or business users
Retailers
sells directly, mainly to final consumers.
Agent and/or Broker
Facilitates sale between mfg and others. Does not take title.
marketing channel
A set of interdependent organizations that eases the transfer of ownership as products move from producer to business user or consumer.
-Add value and can affects other aspect of marketing ie sales, distribution.
-INTERMEDIARY: less transaction
-MIDDLEMEN: check overall process
distribution center
A facility for the receipt, storage, and redistribution of goods to company stores or customers; maybe operated by retailers, manufacturers, or distribution specialists.
Marketing Channel affects other aspects
-Fulfilling delivery promises
-Meeting customer expectations: we just want to buy what’s there
-Reliant on an efficient supply chain
direct marketing channel
The manufacturer sells directly to the buyer
-local
-service oriented
-shorter intermediaries: Complex, expensive, customized items, many B2B products
indirect marketing channel
when one more intermediaries work with manufacturers to provide goods and services to customers.
-Expand business
-mass merchandise
-Longer intermediaries: Low cost, standard items, most consumer products
disintermediation
The cutting out of marketing channel intermediaries by product or service producers or the displacement of traditional resellers by radical new types of intermediaries: TECHNOLOGY
-Regardless, still need to be performed by someone
Number of intermediaries
-Market characteristics: Size, geographic dispersion, buying patterns.
-Product factors: Complexity, cost, ease of movement
-Company (mfg) factors: Size, desire for control, diversity in consumers/retailers.
Factors in deciding________
Levels of distribution intensity
-Intensive: Convenience goods, many, Coke
-Selective: Shopping and specialty goods, several, Umano
-Exclusive: specialty goods, one, testila
Intensive
Convenience goods, many, Coke
Selective
Shopping and specialty goods, several, Umano
Exclusive
specialty goods, one, Tesla
Strategic Relationships
Between two firms doing business together
-Mutual trust
-Open Communications
-Common Goals
-Interdependence
-Credible Commitments
Information flow
Walmart mastered
-Customer to store: UPC code
-Store to buyer: Data exchange
-Buyer to manufacturer: Purchase/product info
-Store to manufacturer: communicate needs for product
-Store to distribution center: what will be shipped
-Manufacturer to distribution center and buyer: Advance shipping notice (ASN)
Universal Product Code
UPC
The black-and-white bar code found on most merchandise
advanced shipping notice
ASN
An electronic document that the supplier sends the retailer in advance of a shipment to tell the retailer exactly what to expect in the shipment
electronic data interchange
EDI
The computer-to-computer exchange of business documents from a retailer to a vendor and back
-Cycle time
-Quality of communications
-Easily analyzed and used
Vendor-managed inventory
VMI
An approach for improving supply chain efficiency in which the manufacturer is responsible for maintaining the retailer’s inventory levels in each of its stores
-Meet intimidate demand
-Reduce cost
push marketing strategy
Traditional, forecast sell. Designed to increase demand by motivating sellers (wholesalers, distributors, or salespeople) to highlight the product, rather than the products of competitors, and thereby push the product onto competitor.
-Good for steady demand items. (milk egg)
-Does not need sophisticated IS system
People use both push and pull
Pull marketing strategy
Designed to get consumers to pull the product into the supply chain by demanding it.
• Orders based on sales data
• More accurate inventory
• Better when demand is uncertain
-Cons: Costly, less flexibility to adjust demand.
People use both push and pull
Distribution center vs Direct store Delivery
Consider cost
-More accurate sales forecasts are possible when retailers combine forecasts for many stores.
-Less merchandise in store
-Avoid running out of stock
-More space in distribution center
logistic
is its own component, movement of products. Ex. UPS educated public on its logistic, includes its global flat form, UPS song.
Distribution center
-Management of inbound transportation: getting product + who pays for expense.
-Receiving and checking using UPC and RFID: benefits from knowing where product is.
-Storing and Cross‐Docking
-Getting Merchandise Floor Ready: (ready to be place on selling floor) ticketing and marking
-Preparing to ship
-Shipping to store: complex for multi‐store chains, Distribution centers use sophisticated routing and scheduling systems
Planners
In a retailing context, employees who are responsible for the financial planning and analysis of merchandise, and its allocation to stores
receiving
the process of recording the receipt of merchandise as it arrives at a distribution center or store
checking
the process of going through the goods upon receipt to make sure they arrived undamaged and that the merchandise ordered was the merchandise received.
Radio frequency identification tag
RFID
Tiny computer chips that automatically transmit to a special scanner all the information about a container’s content or individual products
cross-docking
Operations in a warehouse which involve moving goods between different trucks without intermediate storage.
pick ticket
A document or display on a screen in a forklift truck indicating how much each item to get from specific storage areas
ticketing and marking
Creating price and identification labels and placing them on the merchandise
-Increasingly firms are forcing suppliers to ship floor ready merchandise
quick response
an inventory management system used in retailing; merchandise is received just in time for sale when the customer wants it
just-in-time inventory system
JIT – Pull
Inventory management system designed to deliver less merchandise on a more frequent basis than traditional inventory systems; the firm gets the merchandise “just in time” for it to be used in the manufacture of another product, in the case of parts or components, or for sale when the customer wants it, in the case of consumer goods. Also known as quick response system
JIT Benefits
-Reduced lead time
-Increased product availability and lower inventory investment
Inbound transportation
• Dispatcher coordinates deliveries
• Manufacturer may pay transportation expenses or retailers may negotiate directly with trucking companies and pay expenses
Cannibalization
a situation that occurs when sales of a new product cut into sales of a firm’s existing products
-Aim at new segment but hit old segment