Chapter 15

Marketing and Supply Chain Management

LEARNING OBJECTIVES

After studying this chapter, you should be able to:

1. Articulate three of the four Ps in marketing (product, price, and promotion) in a global context

2. Explain how the fourth P in marketing (place) has evolved to be labeled supply chain management

3. Outline the triple As in supply chain management (agility, adaptability, and alignment)

4. Discuss how institutions and resources affect marketing and supply chain management

5. Participate in two leading debates concerning marketing and supply chain management

6. Draw implications for action

MARKETING AND SUPPLY CHAIN MANAGEMENT

marketing - the effort to create, develop, and defend markets that satisfy the needs and wants of individual and business customers

supply chain - flow of products, services, finances, and information that passes through a set of entities from a source to the customer

supply chain management - activities to plan, organize, lead, and control the supply chain

TERMS RELATED TO THE FOUR MARKETING Ps

product - offerings that customers purchase

market segmentation - way to identify consumers who differ from others in purchasing behavior

THREE OF THE FOUR MARKETING Ps

price - expenditures that customers are willing to pay for a product

price elasticity - how demand changes when prices change

total cost of ownership - direct and indirect costs related to cost of purchase and also all aspects in the further use and maintenance of the equipment, device, or system; a form of full cost accounting

THREE OF THE FOUR MARKETING Ps

promotion - communications that marketers insert into the marketplace: TV, radio, print, and online advertising, as well as coupons, direct mail, billboards, direct marketing (personal selling), and public relations

country-of-origin effect - positive or negative perception of firms and products from a certain country

FROM DISTRIBUTION CHANNEL TO SUPPLY CHAIN MANAGEMENT

place - fourth P in the marketing mix - to the location where products and services are provided which includes the online marketplace

distribution channel—the set of firms that facilitate the movement of goods from producers to consumers

TRIPLE As IN SUPPLY CHAINMANAGEMENT

agility - ability to quickly react to unexpected shifts in supply and demand

adaptability - ability to change supply chain configurations in response to long-term changes in the environment and technology

alignment - way in which the interests of various players involved in the supply chain align

make-or-buy decisions - decisions whether to produce in-house or to outsource

TRIPLE As IN SUPPLY CHAINMANAGEMENT

make-or-buy decisions - decisions whether to produce in-house or to outsource

third-party logistics - neutral intermediary in the

supply chain

INSITITUTIONS AND RESOURCESAFFECT MARKETING AND SUPPLY CHAINMANAGEMENT

most countries impose restrictions, ranging from taboos in advertising to constraints on the equity level held by foreign retailers and 3PL providers

most marketing blunders happen due to firms’ failure to appreciate the deep underlying differences in cultures, languages, and norms -all part of the informal institutions

norm in supply chain management is to source from Asia

RESOURCES, MARKETING AND SUPPLY CHAIN MANAGEMENTVRIO criteria

traditional media are losing viewers, readers, and thus effectiveness, but marketers do not have a good handle of how advertising on the new online media adds valuemanagers need to assess the rarity of marketing and supply chain activities – if all firms use FedEx to managelogistics which does add value), these activities, in themselves, are not rarehow likely is it for rivals and partners to imitate?

is the firm organizationally ready to accomplish

objectives?

MANUFACTURING vs. SERVICES

Consider contract manufacturing service. Is it manufacturing? Service? Both? Does it matter?

Although marketing and supply chain management would be regarded as services historically, this classification may not matter that much.

Does McDonald’s manufacture hamburgers? How much difference is there between McDonald’s and Boeing?

Both market new products, both make to order (finalize a product based on an order), and both extensively rely on powerful supply chain management systems around the world.

Market Orientation vs.Relationship Orientation

Market orientation refers to a philosophy or way of thinking that places the highest priority on the creation of superior customer value in the marketplace.A market-oriented firm genuinely listens to customer feedback and allocates resources accordingly to meet customer expectations.Relationship orientation, defined as a focus to establish, maintain, and enhance relationships with customers.Marketers have heavily debated whether a market orientation or a relationship orientation is more effective in global markets. Key to the debate is how firms benefit from market or relationship orientation differently around the world.