Supply Chain Management

• Marketing processes deliver the product to the right customer at the right time.
• The fourth P in the marketing mix, "Place," includes activities related to production and distribution to deliver the right product.
• The right product needs to have the right quantities, right locations, and be delivered in the right time.
• Many marketers often do not understand the importance of "place" in the marketing mix.
• Supply chain management adds immense value when running efficiently and is highly visible when operational issues arise.

Supply Chain Management

• Supply chain management, or Marketing Channel Management, integrates suppliers, manufacturers, warehouses, stores, and transportation intermediaries into a seamless operation.
• If the supply chain works correctly, one would not see any evidence of it in motion.
• Members of a supply chain includes suppliers, manufacturers, warehouses, retail stores, and transportation intermediaries.
• In simple supply chains, manufacturers make the product and sell them to retailers or wholesalers.
• Wholesalers are firms that buy products from manufacturers and resell them to retailers.

Each Member Value

• The transportation partner manages delivery of products to the distribution center.
• Through the distribution center, retailers have centralized access to multiple product types and brands.
• The transportation partner then manages delivery from the distribution center to the retailer.
• The retailers promote the products in-store, online, or both.
• Retail salespeople can educate the customer about the product.
• Retailers can also facilitate delivery, payment, or training related to the product.
• Retailers and end-customers expect to have their goods delivered and services performed on time.

Channel Partners

• Distribution centers are facilities for the receipt and storage of large quantities of items, stored temporarily.
• Goods and packages are stored and moved in and out of distribution centers in large quantities, usually on pallets.
• A main purpose of a distribution network is to reduce order lead times and shipping costs for businesses.
• Fulfillment centers specialize in small-parcel, direct-to-consumer (DTC) logistics.
• Warehouse teams receive goods in bulk, break them down into saleable units, and store them until a customer places an order.
• To fulfill the order, they locate the item, pick it from the shelf, pack it, label it, and ship it to the customer's address

Direct Marketing

• In direct marketing channels, there are no intermediaries between the buyer and seller.
• By not going through a retailer, the seller can increase their margin.
• Direct marketing operations sometimes do not scale or are not advantageous for complex products that would benefit from a showroom or salesperson
• Direct-to-consumer (DTC) brands sell directly to customers online, bypassing wholesalers and retailers.
• This allows DTC brands to control the user experience, collect first-party shopper data, and increase margins.
• Starting in the late 2000s, upstart brands in hyper-focused categories launched online to take advantage of direct access to customers.
• Examples of DTC brands includes Gymshark, BONOBOS, Hims | Hers.
• When brands sell products through retailers, those retailers own the relationships with customers.
• With their own e-commerce platforms, brands can acquire their own customers directly through social ads.
• Another key point of differentiation of DTC brands was their emphasis on providing premium customer experience.
• In indirect marketing channels, one or more intermediaries work with manufacturers to provide goods and services to customers.
• Wholesalers are more common in developed economies in which large retail stores are common.

Inventory Management

• Inventory management systems track goods throughout stores, warehouses, and distribution centers.
• Just-in-time (JIT) inventory management delivers less merchandise more frequently than traditional inventory systems.
• The firm gets the merchandise “just in time” for it to be used.
• Just-in-time inventory management is also known as a quick response (QR) inventory system.

Franchising

• Franchising refers to a contractual agreement between a franchisor and a franchisee.
• The franchisee is allowed to operate a retail outlet using a name and format developed and supported by the franchisor.
• The franchisor are people who open up the Franchise.
• The franchisee pays a lump sum plus a negotiated royalty on all sales in return for the right to operate in a specific location.
• The franchisor provides assistance in identifying the retail location, developing the products or services offered, and training the franchisee.
• Marketing activities such as advertising, product development, and pricing are typically done by the franchisor with costs shared across all franchisees.
• Top Franchises in the U.S. includes Popeyes, Taco Bell, Jersey Mikes, Kumon, and Servpro.
• Franchising is a lucrative second career for many professional athletes.

Flow of Information

• Information flows from the customer to stores, to and from distribution centers, to and from wholesalers, to and from product manufacturers.
• Then information flows on to the producers of any components and the suppliers of raw materials
• This flow of information is enabled by technology and infrastructure that recognizes and transmits data across channels
• When warehouse and retail workers scan products, data is transmitted to parties throughout the channel chain.
• A universal product code (UPC) is the black-and-white bar code found on most merchandise.
• Radio frequency identification (RFID) chips automatically transmit to a special scanner all the information about a container's contents or individual products.

Distribution Center Model

• Distribution center model advantages relates to more accurate sales forecasts and the volume of stores.
• Inventory is lower in each store, meaning that there are lower overall inventory costs
• Easier to avoid running out of stock or having too much stock at one retail location.
• Square footage for storage is less expensive in a remote warehouse than an expensive retail location.

Direct Store Delivery (DSD) Model

• Direct store delivery or DSD is better for perishable goods, in-demand items that positively influence the retailer's image, trendy or fad products.
• DSD gives manufacturers control over stocking and merchandising by eliminating distribution centers for retailers with few outlets.
• Both Distribution Center Model and Direct Store Delivery Models are indirect.
• Relationship management is critical in keeping a supply chain running efficiently.
• However, supply chain members sometimes have conflicting goals that result in channel conflict.

Conflict in Supply Chain

• When members of the supply chain have competing interests, two distinct types of conflicts arise: vertical channel conflict or horizontal channel conflict.
• Vertical channel conflicts occur when supply chain members that buy and sell to each other disagree about the goals or roles.
• Horizontal channel conflict occurs when there is disagreement among members at the same level of a marketing channel.
• Conflict can arise in any marketing channel, but is influenced by how another member has power over one another
• Power in a marketing channel refers to the means or ability of one member to dictate the actions of another member at a different level of distribution.
• In a corporate vertical marketing system, the parent company has complete control.
• This system the firm owns its facilities such as manufacturing plants, warehouse facilities, retail outlets, or other methods of transportation.
• In contrast, an independent marketing channel several independent members each attempts to satisfy its own objectives.
• Channel partners, such as the manufacturer, wholesaler, and retailer each trying to maximize its profits, often at the expense of the other members
• If one partner is dominant in either size or market present, they can exert power over other members.
• An example is Walmart, with its size and leverage, which can exert significant power over the manufacturer

Sources of Power

• With its reward power, Walmart offers retailers monetary incentives if the wholesalers or manufacturers do what Walmart wants them to do.
• Coercive power arises when Walmart threatens to punish or punishes wholesalers or manufacturers for not undertaking certain tasks.
• Walmart may also have referent power if a supplier wants to be associated with Walmart to enable that supplier to attract other retailers' business.
• If Walmart exerts expertise power, it relies on its vast experience and knowledge to decide how to market the wholesalers and manufacturers' products.
• Because Walmart has vast amounts of data about consumers, it might exert information power over wholesalers or manufacturers by providing or withholding important market information.
• Legitimate power is based on getting a channel member to behave in a certain way because of a contractual agreement between the two firms.
• Increased levels of globalization means consumers have easier access to international products.
• This provides both opportunities for U.S.-based firms to try and appeal to international consumers, and for international brands to market their products.
• The principles associated with global marketing are the same as domestic marketing, but the key difference is the uncertainty of the operating environment.
• With each new international market a firm operates in, there are increased uncontrollable factors the firm must prepare for

Global Entry Strategies

• After conducting an analysis of its target market, the firm must conduct an internal assessment of its capabilities.
• This assessment includes the firm's access to capital, manufacturing capacity, and management abilities.
• Based on this assessment, the firm will decide how to enter the marketplace.
• Exporting means producing goods in one country and selling them in another.
• This entry strategy requires the least financial risk but also allows for only a limited return to the exporting firm.
• Global expansion often begins when a firm receives an order for its product or service from another country.

Franchising

• Franchising is a contractual agreement between a firm, the franchisor, and another firm or individual, the franchisee.
• Franchising is the fastest-growing market-entry strategy by increasing skill centralization and decreasing operational decentralization.
• Global franchising entails lower risks and requires less investment than does opening units owned wholly by the firm.
• However, the firm has limited control over the market operations in the foreign country, its potential profit is reduced.
• Monitoring costs, adapting products appropriately, and establishing brand equity in the new market are key to success.
• Strategic alliances refer to collaborative relationships between independent firms.
• The partnering firms do not create an equity partnership; that is, they do not invest in one another.
• Although the companies work together to reach new consumers, each company still operates independently.
• Strategic alliances are established out of mutual need to achieve a common objective, benefits include opportunities for rapid expansion into new markets, access to new technology, more efficient production and innovation, reduced marketing costs, and Access to additional sources of products and capital.
• A joint venture is formed when a firm entering a market pools its resources with those of a local firm.
• Ownership, control, and profits are shared between the firms.
• The local partner offers the foreign entrant greater understanding of the market and access to resources such as vendors and real estate.
• Some countries require joint ownership of firms entering their domestic markets.
• Direct Investment requires a firm to maintain 100% ownership of its plants, operation facilities, and offices in a foreign country.
• This is often through the formation of wholly owned subsidiaries.
• Requires the highest level of investment and exposes the firm to significant risks.
• Many firms believe that in certain markets, the potential risks of direct investment are outweighed by the high potential returns.
• With this strategy, none of the potential profits must be shared with other firms.
• Also, direct investment offers the firm complete control over its operations in the foreign country

International 4P's

• International marketing strategy has two core components: determine the target through segmentation, targeting and positioning, and develop/adapt the 4Ps of their marketing mix.

Global Product Adaptations

• The most common method of launching a product in an international market is to offer the same product as is in the home market.
• Some products will require only minor changes to their core features to appeal to customers in an international market.
• Depending on the level of economic development and cultural adaptations required, the firm can choose to offer entirely different products or services globally.

Global Pricing Strategies

• Determining the selling price in the global marketplace is an extremely difficult task.
• Many countries have rules governing the competitive marketplace, including those that affect pricing.
• Remember that package size also impacts price, specifically in developing markets.
• Distribution networks form complex value chains, and delivering products to local retailers can be incredibly difficult and frustrating.
• Infrastructure issues often prevent traditional distribution methods and require creative adjustments to reach remote markets.
• Global promotion strategies needs to factor in poorly encoded and translated messages and how they become meaningless to the receiving audience and may harm brand perceptions.
• When promoting promotions it is key to focus on culturally relevant activities.

Assessing Global Markets

• Generally, the greater the spending power of a country's population, the greater the business opportunity for the firm.
• An economic analysis of a country consists of three key areas: general health of the economic environment, market size and population growth, and real income.
• One measure of market potential is the relative level of imports and exports.
• A trade deficit results when a country imports more goods than it exports.
• Firms prefer to manufacture in a country with a trade surplus, meaning the country has a higher level of exports than imports.
• The most common way to assess the market potential of an economy is by looking at its standard metrics of output.
• Gross domestic product (GDP) is defined as the market value of the goods and services produced by a country in a year.
• Gross national income (GNI) consists of GDP plus the net income earned from investments abroad.
• Infrastructure is defined as the basic facilities, services, and installations needed for a community or society to function.
• Governmental actions can significantly impact a firm's ability to do business in an international market.
• A tariff is a tax levied on a good imported into a country and is intended to make imported goods more expensive and thus less competitive.
• A quota designates a maximum of a product that may be brought into a country during a specified time period.
• Exchange control refers to the regulation of a country's currency exchange rate, the measure of how much one currency is worth in relation to another.
• A trade agreement is an intergovernmental agreement designed to manage and promote trade for a specific region.
• A trading bloc consists of those countries that have signed a particular trade agreement.
• Culture, or the shared meanings, beliefs, morals, values, and customs of a group of people, exists on two levels: Visible artifacts and Underlying values.

Individualism Versus Collectivism

• Individualism focuses on self-orientation and Collectivism focuses on the group over the individual.
• Masculinity refers to the extent to which dominant values are male-oriented, focuses on assertiveness and achievement such as how "Masculine is higher value on achievement and assertiveness and Feminine" is higher value on cooperation and nurturing.
• Uncertainty avoidance focuses on risk orientation and the extent to which society relies on orderliness and structure, intolerance of ambiguity and whether they distrust new ideas.