Business and Management

MARKETING STRATEGY PLANNING PROCESS

• Channel system may be direct or indirect.
• REASONS FOR CHOOSING DIRECT:
  • Greater control (Gucci: produces product and sells it directly: they want to control their brand and customer experience).
  • Lower cost (if you can control everything).
  • Internet makes direct distribution easier.
  • Direct contact with customers.
  • Suitable intermediaries not available.
• Direct channels are common with business customers and services. Business to business: order sales are huge. Services need to be delivered personally.
• REASONS FOR CHOOSING INDIRECT:
  • Good when you have mass distribution.
  • Channel specialists may reduce discrepancies and separations.
  • Channel of distribution gets you what you want, when you want.
  • Discrepancies in assortment: Channel specialists adjust discrepancies with regrouping activities: accumulating product (having inventories); bulk-breaking; they store it; they assort it.
• Channel relationship must be managed: key issues in channel.

Management: choosing the type of relationship; whole-channel product-market commitment; conflict handling; role of channel captain.

Vertical marketing systems focus on final customers.

Ideal market exposure

Limiting market exposure

Entering international markets: exporting; licensing; management contracting; joint venture; direct investment. Generally increasing investment, risk, and control of marketing.

Physical distribution gets it to customers: logistics or physical distribution.

Physical distribution concept focuses on the whole distributing system.

Better information helps coordinate PD.

Areas where computers help PD service: electronic data interchange; continuously updated information system.

Ethical issues may arise:

• PRODUCT AVAILABILITY: false expectations about delivery speed; selling products that are not available; running out of popular products.
• COORDINATION OF PD: intentional delays in order confirmation; shifting of burden of holding inventory.

16.09.18

Prof. Harraf

I SLIDE: What is Operations

Design: what process and what capacity will these products require? What equipment and technology is necessary for these processes?

Location: where should we put the facility? On what criteria should we base the location decision?

Layout design: how should we arrange the facility and material flow? How large must the facility be to meet our plan? Ex. where I put the kitchen?

Human resources and job design: how do we provide a reasonable work environment? How much can we expect our employees to produce? Ex. how many chefs we need? Which skills they must have?

Supply-chain management: Should we make or buy this component? Who are our suppliers and who can integrate into our e-commerce program?

Inventory, material requirements planning and JIT: How much inventory of each item should we have? When do we re-order?

Intermediate and short-term scheduling: Are we better off keeping people on the payroll during slowdowns? Which jobs do we perform next?

Maintenance: Who is responsible?

for maintenance? When do we do maintenance? What are the OM Jobs? Technology/methods, facilities, strategic issues, response time, quality etc. Contributions from: human factors, industrial engineering, management science, biological science, physical sciences, information science. New challenges in OM: From: Local or national focus - Batch shipments - Low bid purchasing - Lengthy product development - Standard products - Job specialization - To: Global focus - Just-in-time - Supply chain partnering - Rapid product development, alliances - Mass customization - Empowered employees, teams. Characteristics of goods: Tangible product, consistent product definition, production usually separate from consumption, can be inventoried, low customer interaction. Characteristics of service: Intangible product, produced and consumed at the same time, often unique, high customer interaction, inconsistent product definition, often knowledge-based, frequently dispersed. Productivity Challenge: Productivity is the ratio of

Inputs

Productivity:

Measure of process improvement, represents output relative to "input, only through productivity increases can our standard of living improve.. Less inputs you use, greater units produced you get high productivity. Nowadays, companies are trying to use more technology and less labor so they get higher productivity, since productivity can be seen as units produced divided by labor-hours used + material + energy.

Multi-factor productivity:

Output divided by labor capital + miscellaneous. Also known as total factor productivity, output and inputs are often expressed in dollars.

Quality:

Measurement problems when we talk about productivity we do not consider quality. Quality

may change when we produce more, it can get worse. Quality may change while the quantity of inputs and outputs remains constant. – External elements may cause an increase or decrease in productivity. Ex. if you are a farmer, weather conditions can affect productivity. – units of measure may be lacking. Sometimes we can not be specific with measurement.

Productivity variables: Labor (contributes about 10% of the annual increase), Capital (contributes about 32% of the annual increase) and Management (contributes about 52% of the annual increase - managing your time).

Key variables for improved labor productivity: Basic education appropriate for the labor force; diet of the labor force; social overhead that makes labor available; maintaining and enhancing skills in the midst of rapidly changing technology and knowledge.

Service productivity: typically labor intensive; frequently focused on unique individual attributes or desires; often an intellectual task performed by professionals;

Ethics and social responsibility: Developing safe quality products; maintaining a clean environment; providing a safe workplace; honoring community commitments.

Global strategies: Boeing – sales and production are worldwide; Benetton – moves inventory to stores around the world faster than its competition by building flexibility into design, production and distribution; Sony – purchases components from suppliers in Thailand, Malaysia and around the world etc

Reason to globalize: Tangible reasons

• Reduce cost
• Improve supply chain
• Provide better goods and services
• Understand markets
• Learn to improve operations

Intangible reasons

• Attract and retain global talent

Reduce costs: Foreign locations with lower wage rates can lower direct and indirect costs

Improve the supply chain: Location facilities closer to unique resources

Provide better goods and services:

• On-time deliveries
• Cultural variables
• Improved customer service

Understand markets: Interacting with foreign customers and suppliers can lead to new opportunities (ex. cell phone design from Europe, cell phone fads from Japan and extend the product life cycle)

Learn to improve operations: remain open to the free flow of ideas (ex. General Motors partnered with a Japanese auto manufacturer to learn or Scandinavian design ideas have been used to improve equipment design and layout)

Attract and retain global talent: Offer better employment opportunities -> Better growth opportunities and insulation against unemployment; Relocate unneeded personnel to more prosperous locations; Incentives for people who like to travel

Cultural and Ethical Issues: Cultures and attitudes can be quite different. For example, punctuality, lunch breaks, environment (some countries care about the environment, others do not), intellectual property, thievery.

1. Goods and services design
2. Quality management
3. Process and capacity design
4. Location strategy
5. Layout design
6. Human resources and job design
7. Supply chain management
8. Inventory management
9. Scheduling
10. Maintenance