Chapter 15&16 notes
Chapter 15&16 notes MBUS303
Popular in Marketing in the Global Economy
Popular in Marketing
This 5 page Class Notes was uploaded by Aimee Castillon on Thursday May 5, 2016. The Class Notes belongs to MBUS303 at George Mason University taught by Dr. Joiner in Spring 2016. Since its upload, it has received 11 views. For similar materials see Marketing in the Global Economy in Marketing at George Mason University.
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Date Created: 05/05/16
Organization name Student name Marketing student email address MBUS 303 • Spring 2016 Heading: 5/3/16 Notes: Chapter 14&15 Chapter 15 Supply Chain Management Raw materials/components Supply chain management: A set of approaches and techniques firms → manufacturer → end employ to integrate their suppliers, manufacturers, warehouses, stores, and user transportation intermediaries into a seamless operation 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 that their customers require Is a key part of marketing! Fulfilling delivery promises Meeting customer expectations/ adding value Marketing = reliant on an efficient supply chain Designing marketing channels Direct channel: manufacturer → customer Indirect channels: One intermediary: Manufacturer → retailer → customer Two intermediary: manufacturer → wholesaler → retailer → customer Contributions of supply chains In addition to being a necessity (to distribute the product) Properly managed, supply chains can add value to a marketer’s operations: Reduce number of transactions Specialization As number of transactions decrease, the supply chain can become more efficient and effective Increase value for customers Managing multiple “flows” Flow of merchandise I.e. direct vs. indirect channels I.e. distribution center vs. direct store delivery Inventory Management: JustInTime (Quick Response) Systems Designed to deliver less merchandise on a more frequent basis Benefits Reduced lead time Increased product availability and lower inventory investment Flow of information e.g. Electronic Data Interchanges Flow of payments and ownership Managing the Supply Chain Key issue: handling supply chain conflict Managing the marketing channel and the supply chain Vertical conflict i.e. manufacturer has conflict with its retailers Horizontal conflict i.e. conflict within retailers Managing supply chain relationships through vertical integration Independent marketing channel/administered distribution channel vs. vertical marketing channel/contractual vertical marketing channel Differ in terms of formality and ownership Administered relies more on power and persuasion Contractual Corporate I.e. Company has its own stores Trend: managing supply chains through strategic relationships involves the supply chain members being committed to maintaining the relationship over the long term and investing in opportunities that are mutually beneficial Focus on common goals Chapter 16 Retailing and Multichannel Marketing What is unique about “Retailing” Both a part of many marketers’ supply chain and a business with their own marketing objectives, target market, positioning, marketing mix, etc. There are a wide variety of retailers that have different characteristics I.e. Giant has a lot of private brands I.e. Hershey vs. Godiva; Rolex vs. Timex Service retailers firms that primarily sell services rather than merchandise, are a large and growing part of the retail industry Choosing retail partners: channel structure Degree of vertical integration Strength of manufacturer’s brand (vs. privatelevel brands) Relative power of manufacturer and retailer Customer expectations Distribution intensity # of outlets Intensive distribution distribute products in as many outlets as possible (i.e. Hershey’s, Snickers, Coke) Selective distribution Use a smaller of selected Distinguish the variety of retailers in a territory (i.e. iPhones) products that are in Walmart compared to Costco Exclusive distribution manufacturers grant exclusive geographic territories to one or very few retail customers (i.e. Rolex, automobiles) Retail Strategy: Using the Four P’s to create value Retailers are part of the distribution channel for manufacturers, but they also have their own decisions (product, price, promotion, place) possible conflicts Product Providing the right mix of merchandise and services Retail product Atmospherics design of an environment by stimulation of the five senses Visual communications Lighting Colors Music Scent (i.e. recent study on space and scent) Starbucks is a great example i.e. Abercrombie and Fitch, Cinnabon of how they place the stores Goal: influence customers and ultimately affect their purchase behavior Price Price defines the value of both the merchandise and the service provided Promotion Retailers use a wide variety of promotions, both within their retail environment and through mass media Place: why is store location important for a retailer? Location: typically prime consideration in customer’s store choice Strategic importance: can help to develop sustainable competitive advantage Location decisions are risky Hard to change in the short run High cost Consumers’ expectations Stores: benefits Benefits Browsing Touching and feeling Personal service Cash and credit Entertainment and social interaction Instant gratification Risk reduction Benefit of Internet and Multichannel retailing Deeper and broader selection Personalization Gain insights into consumer shopping behavior Increase customer satisfaction and loyalty Expand market presence Trend: move toward multi channel marketing Goals for retailers: Overcome the limitations of any single format Expanding marketing presence Increasing share of wallet Insights into customer’s shopping behaviors (research) Article Zulily Really efficient distribution system Small number of warehouses Do orders at 2 very efficient locations Ship order to customers Problem: didn’t meet customer expectations Took 23 weeks to deliver order Article discussed in class Trend: Stores are leaving traditional malls
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