The paper "What is the Right Supply Chain for Your Product" is a perfect example of a Marketing Assignment. For each of the three scenarios below categorize the demand for bulk breaking, spatial convenience, waiting time/delivery time, assortment/ variety as high, medium or low in each case explain your answer for three cases: Case-I: A woman in an emerging market country of Southeast Asia wishes to buy some cosmetics for herself. She has never done so before and is not entirely sure of the occasions on which she will wear cosmetics she does not live near a big city she is too poor to own a car but has a bit of extra money for a small luxury. Analysis: For the given case, the service output demand level can be analyzed as under: Further, the appropriate channel which would be catering well to the given case can be depicted as under.
The cosmetics are manufactured and then the wholesaler distributes it to a small retailer who ultimately will sell it to the end-users or consumers. Case-II: A manufacturer uses a particular industrial chemical in one of its large scale production processes and needs to buy more of this chemical.
The rest of the raw materials for its plant operations are delivered in a just in time fashion. Analysis: For the given case, the service output demand level can be analyzed as under: Further, the appropriate channel which would be catering well to the given case can be depicted as under. The chemical would have been made by some manufacturers. A business supplier would then supply the same to the business consumer. Case-III: Before you visit certain parts of the world, you are required to get a yellow fever vaccine.
Many travelers let this slip until the last minute, forgetting that it is advisable or (or avoiding an unpleasant shot as long as possible) but they definitely realize they need the shot, and they do not want to cancel their trip at the last minute because they did not get it. They often find themselves making a long trip to a regional medical center because they did not plan ahead. Analysis: For the given case, the service output demand level can be analyzed as under: Further, the appropriate channel which would be catering well to the given case can be depicted as under.
The manufactured vaccines would be distributed by the wholesaler to the medical centers where the end-users or travelers can get the vaccine shots. If a consumer buys an item through a catalog over the phone with a credit card, is the credit card company a channel member? If yes, what flows does it perform? Case II: If the product is delivered by FedEx, is FedEx a channel member? If yes, what flows does it perform? Analysis: In order to decide whether an associate entity is a channel partner or not, let us understand the definition first.
A marketing channel is a set of interdependent organizations involved in the process of making a product or service available for use or consumption. Thus any entity serving a role to achieve the aforesaid purpose will be a channel partner. To analyze this better let us focus on the role played by these channel partners vis-a-vis the market flows. There are basically eight market flows which usually happen among the channel partners (Vaile, Grether, & Cox, 1952).
These are associated with getting physical possession, ownership, promotion, negotiation, financing, risking, ordering and payments (Stern et al, 2001). Various channel partners perform specific tasks. Like various marketing, research agencies work on disseminating information across the channel. Various media companies work on promotions and advertisements. Logistics companies help in transporting goods from one place to another. Whereas warehouse help in storing the inventory of goods. There are various financial institutions like banks and factoring agencies that help finance channel activities. At the same time, there are some insurance partners who indemnify the channel activities against various risks. When a consumer buys an item through a catalog over the phone with a credit card, the credit card company definitely is a channel member. The given case forms part of a multi-channel channel distribution system which can be depicted by the arrow as under: Now as per the second case, the product is delivered by FedEx which is acting as a freight forwarding agent.
The freight forwarding agent acts as an intermediary for giving the physical passion of the product to the end-user.
It takes the possession of the product from the retailer or the distributor and delivers to the end-user, wherein the two parties are not in physical proximity or when the end-user is not visiting the physical outlets for purchasing the product. Now the credit card company forms part of the channel based on the criterion of market flow. The credit card company in the first place is financing the purchase of the end-user. At the same time, it is also getting the payment released from the consumer end, though on credit, and delivering the same to the retailer against the demand of the purchase order. Thus the credit card company is an integrated part of the market flow performing two vital operations in the overall supply chain.
Based on the analysis it is clear that the credit card company becomes an integrated channel partner in this case. Though in this case, the credit card company is not apparently visible to the parties it is interacting i. e. the end-user who is paying through credit card and the retailer to which the payment is a target for the purchase.
Thus we can assume a virtual channel partner between the retailer and the end-user. This virtual channel partner executive the market flow of financing and payment is the credit card company (Alba et al. , 1997). Thus Fedex as a freight forwarding agent makes an important part of the supply chain and hence becomes a channel partner. There could also be a possibility in this case that the product being a part of reverse logistics and is being delivered back from the end-user to the retailer or the manufacturer.
This often happens when the products are returned back by the end-user in case they are not received in the form they are desired to be. In both cases, the freight forward agent is a channel partner which executes the market flow associated with physical possession of the product.
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Dvorak, R. and van Paasschen, F. (1996). Retail logistics: one size doesn’t fit all. McKinsey Quarterly. Issue 2. pp.120-129.
Fisher, M. L. (1997). What is the Right Supply Chain for Your Product? Harvard Business Review. Mar/Apr, Vol. 75, Issue 2. pp.105-116.
Stern, L.W., El-Ansary, A.I., Coughlan, A.T. & Anderson, E. (2001). Marketing Channels. 6th ed. Prentice Hall. Upper Saddle River. New Jersey.
Vaile, R. S., Grether, E. T., & Cox, R. (1952). Marketing In the American Economy. New York: The Ronald Press Company.