19.11.19 - Marketing channels and supply chain management PDF

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A combination of the lecture notes and textbook information. All definitions and information....

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Marketing

19.11.19

Marketing channels and supply chain management

Supply chain o Important as it is used for many as the main source of competitive advantage o Supply chain management: a management system that coordinates and integrates all of the activities performed by supply chain members into a seamless process, from the source to the point of consumption o Marketing channel: A set of interdependent organizations that ease the transfer of ownership as products move from producer to business user or consumer. o Supply chain: The connected chain of all the business entities, both internal and external to the company, that perform or support the logistics function

Distribution intensity levels

Marketing channel functions o Channels fulfil 3 important functions: - Specialization and division of labour - Overcome discrepancies - Providing contact efficiency o Specialization and division of labour: - Provides economies of scale - Breaks down complex tasks into small manageable ones - Aids producers who lack resources to market directly.

Marketing

19.11.19

- Builds relationships with customers o Overcoming discrepancies: - Temporal discrepancy: a situation where customer is not ready to purchase an already produced product. Inventory must be maintained in anticipation of demand in order to prevent this. - Spatial discrepancy: difference between the location of a producer and the location of widely scattered markets. Marketing channels overcome this by making products available in locations convenient to consumers - Discrepancy of quantity: the difference between the amount of product produced and the amount a user wants to buy. (Retailers can buy in bulk and sell in smaller quantities) - Discrepancy of assortment: the lack of all the items a customer needs to receive full satisfaction from a product of products. Supply chains overcome this by facilitating the movement of goods (purchase in one place)

Drivers behind efficiency in supply chain management o The rationalization process: - All societies have inherent need to give some logical meaning to a world that -

appears to be haphazard Collective organisations Individuals seek out values and practices that guide action Calculate all possible means available, choose alternatives which best allow them to reach their end goals and then follow that lone of action

o Webber’s theory of rationality: - Bureaucracy: a large-scale organisation dictated by a structure. It is composed by a -

hierarchy of offices. Each person has certain responsibilities and must act according to the rules For Webber, the bureaucracy is the model of rationalization Formal rationality: through optimum means to an end is shaped by rules, regulations and large social structures

- Bureaucracy is efficient because:      

Can handle a large number of tasks and emphasis on quantification Formal rules, highly scripted Efficient, well entrenched rules ensure predictability Able to replace humans with machines Control over people Division of labour

- But bureaucracy is argued by weber to be highly inefficiency. They are an ideal type on paper but when they are operationalised, they lead to inefficiency.  They become unquantifiable. 

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It suffers from the irrationality of rationality. People are confined and can’t express themselves – dehumanising. Poor quality of work and service.

o Taylor’s scientific management: - The development of time motion studies: a systematic approach to finding the -

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optimum means to an end in doing a job. According to Taylor:  Find a control group of skilled workers  Study their movements  Time each step (calculability)  Eliminate all false movements (efficiency)  Create the one best method of accomplishing a task (predictability) The result: work is standardized, greater control creates greater efficiency. More profitably

o Henry Ford’s assembly lines: - The assembly line: workers take no unnecessary steps, parts travel shortest -

distance, highly controlled, technology driver, worker specialization. Moving factory system where party come to workplace. Specialise production – repetitive work to improve efficiency Reducing Behaviour to machine-like actions. Eliminate human variability Controlling the Process and the Product Production processes have become more:  Systematic  Controlled  Predictable  Planned

- Control means using technology in a supply chain to create: Predictability -

(uniformity), Efficiency (speed to market), Calculability (yield) 3 Functions: Transactional, logistical and facilitating...