Promotion Promotion mix set of processes by which we manage customer buying process influence attempt in which a firm recognizes they we the product Advertising exist o Want consumer to think we need this product o Use media to advertise print mag news radio tv internet o Advertising media has changed Sales promotions to try or to buy coupons buy 1 get one free scholarships o Incentive to choose s product over another Public relations focuses on image not sales o New companies need to build an image o Retain restore change image o Changing image is hard o Repair can be really hard BP oil Direct marketing Personal selling sales people greeters in stores SAT s colleges contact you o Before stuff in mail unsolicited buy focus on your needs Story marketing campaign get Saks gift card for test driving car Car increase sale of cars in a slow month Direct marketing financial packages Personal selling sales people most similar to customer follow up emails Advertising invitation Public relations still tell story 10 years later recommend company Price Who pays for this promotion Dealership manufacturer Saks or combination Marketing campaign s fixed costs don t change with the quantity Who might pick up the cost Dealership increase sales manufacturer use highest capacity Saks attract customers Dealership and manufacturing company usually split costs 50 50 o Mail 1 Mail 2 Sales rec car Saks o Pays for card 1 card 2 Mail list Supply chain the stuff upstream Marketing Channel the stuff downstream Supply channel From you MFG RM IG From you MFG Wholesale Retailers End Any level of purchasing finding buying from vendors Distribution levels supply chain Traffic o Physical transport of goods materials LOGISTICS the time and transport of materials Must estimate demand down Order up To estimate demand informal formal o o Informal eyeballing amounts Formal Econometric look at past current sales to predict demand Time series Gives trends and usual cyclicality seasonality income unemployment rate weather etc Regression Cross sectioning Excess inventory estimate too high BAD EFFECTS Using extra storage excess FC Excess costs Have sales erosion of brand image and inventory People wait till stuff goes on sale loss Sell to TJ Maxx loss Correct sold everything RARE Stockout estimate too low BAD EFFECTS Angry customers Lose sales person goes to rivals Possibility lose customer forever Lose money and takes hit to brand Supply chain management is about getting the right stuff in the right amount in the right place at the right time at the right price at the lowest cost Right amounts of the right stuff right quantities of sizes Independent businesses multiple manufactures and retailer What holds it all together No overall management Market transactions stable with regards to price availability attributes They are transactions between each stage o Predisposed to spot transactions o Overwhelming number are purchasing transactions held together if we all have consistent products purchases Reality not always stable Sources of instability random cyclical season natural cycle new trends
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