Supply Chains

Time for a new marketing post! Even it is still November, I can feel the Christmas spirit all around me.The weather is getting colder which makes me think of home. Maybe, it is because of all the Christmas decoration in the big stores, but i have the feeling that Christmas is tomorrow and i have to bake cookies and buy presents for my friends. Anyways, this post will be about something different. It will be about a celebration which i am sure all of us know. As people say this is the most romantic day of the year. Well, according to me everyday can be special and romantic if you make it like that, but yes, i am talking about Valentine's day. This special 14th of February when all people go insane buying flowers and chocolates, trying to impress their 'better half'. A lot of people will look at it, as a symbol of love and affection, but I, as a Sauder student, will look at it as one of the most profitable day of the year. Yes, I was provoked by the movie we watched in class, and I think many people would be surprised of how much work and finances people put into the preparation of this single day. The factor I would like to discuss is the supply chain and how it can actually help the business in this particular moment. From the video we watched, we saw that the process of delivering the roses to the consumers was long and filled with many agents among the way. The roses were transported from South America to Europe, then sold on the market, delivered to retailers and then to consumers. One factor that will be probably positive for the consumers is that the quality of the roses was very good and they were delivered on time. But the probability of those events occuring is not always 1. Among with the advantage of using cheap labor and wide range of territory, sending roses from another continent can be very risky. There could be many unfavourable events at the land where they have been grown. For example, the quality could be low, because of change in temperature, the shape of the roses could be different because of lack of attention from the workers and agents, the delivery could happen later than expected. If roses arrive late, there will be huge loss for both producers and retailers. If you cant find a rose from one store, you will go to another and thus the first store will lose its profits. There could be another risk as well. A lot of people will find it funny, but it is an important factor. In all those South American countries, the level of crimes is very high and subject of such unfortunate events could be a very expensive rose delivery.As a conclusion, I could say that the risk of having such a long supply chain is very high and you should be very careful when determine how to produce and sell your product. Sometimes a short supply chain can be more expensive but it can also be very effective and less risky. Take for example the Sauder company. They use one company to fully replace all the different agents among the road of producing furniture. They cut, produce and buy their products. Using such a supply chain, they cut all the necessary expenses and operate quickly. Another important factor is that ( i will quote my accounting professor now) 'money goes from one pocket to the other'. The company uses different divisions within the company instead of using the service of other external companies.
Here, I gave you an example of two different supply chains. I personally think that having a short supply chain will satisfy the needs and values of customers more effectively and in a shorter period of time.

Should you spend money on product promotion or you should allow your product to promote your company?

When you think of successful clothing brands, I am sure you suddenly think of ZARA, Mango, BCBGAMAXARIA. Yes, we all know those names and we can identify their brand everywhere we go. This has been a result of their good marketing strategy and product positioning. Those companies have spent a fortune on advertisements and season campaigns with famous models and actors with the main idea to create a symbol of their product. Take for example H&M. A couple of years ago they launched a multi dollar campaign with the pop icon Madonna. She was their model for the spring/summer season collection. Even though this was a very risky and expensive campaign, it had a huge success. Sales rose sharply and H&M had a huge increase in revenues. If somebody asks me to give an example for a successful campaign, I would give this one as an example. The clothing magnate wanted to expand their target market reaching to all kind of people, from different ages. Using Madonna as a face of the store, H&M wanted to show that they offer low prices but at the same time good quality of clothing and most of all STYLE.
There are other examples of companies that do not spend such substantial amount of money for advertising campaigns and still have great popularity and many customers. Take for example the clothing brand 'Primark', which is really popular in the United Kingdom. If I have to make a comparison between the policy of 'Primatk' and 'H&M', I would say for sure that 'Primark' has a completely different perspective of how they should mark their products. They have the opinion that huge ad campaign with celebrities are useless and not necessary. Maybe you would think that high revenue is not possible without advertising. Here, we should distinguish what we mean under advertising. You can either advertise your product or your product can advertise you. In the case of 'Primark' they have chosen the second path. They do invest in product quality and store design but they don't spend money on country wide ads or banners across towns. Their low prices ( and when i say low, i really mean it) are their most precious marketing tool. Everybody know that you can go there and buy clothing with good quality for very, very low prices. As a result of that the sales are massive, followed by 12% increase in revenues for 2009, which is 7 % more than the economic increase of Africa.
As a conclusion I would like to say, that they way you present your products does not need to be connected with huge ad campaigns and many celebrities. At the end the majority of customers are looking for quality and reasonable pricing and this could be provided in simply investing in your product rather than spending money on tv ads and posters.

Isn't Halloween too 'sexy' those days?

A  few days after Halloween is over, I would like to discuss briefly the connection between this celebration and marketing. Yes, Halloween is a time to have fun and to dress up crazy. For this reason, I went to a store with the intention to buy a costume ( first time I wanted to do this). There was a great variety of costumes, I admit. You could find everything. Many producers and merchandisers have made a successful attempt to fulfill all the 4p requirements( price, place, product,and promotion). First of all you could find a costume for $10 and for $100. You could find them everywhere, practically every store was selling something connected with this holiday. I think, the biggest and most important part was the promotion. It started nearly one month ago. People were reminded that Halloween was coming and they were attracted by the way costumes, chocolates and all kind of accessories were promoted.
Exposed to such variety of products, its time for consumers to make the decision which in our case is - what should i wear? At this point an important role play all the factors that effect the consumer behavior and decision. Our values, attitudes and social circle would be factors, which will shape our decision. Yes, maybe I have been raised in a conservative family, but I could not understand the 'sexy' format of this celebration. Everything was not a costume, but a 'sexy' costume. And I was amazing from the fact that the majority of girls were dressed up as something like that. What is the conclusion? Instead of a fun celebration, it turns out into this feast of 'sexy' costumes and drunk people. Having said that, I do not think the marketing for Halloween is really appropriate, because firstly it doesn't serve as a good example for small children, and secondly because it loses most of the meaning of the celebration.