Question

Explain in detail Supply Chain interface with Marketing Mix (4ps) with Supply Chain
perspective.
DEFINITION OF SUPPLY CHAIN MANAGEMENT
Supply Chain Manageent encopasses the planning and anageent of all
activities involved in sourcing and procureent! conversion! and all Supply Chain
Manageent activities. "portantly! it also includes coordination and colla#oration
with channel partners! which can #e suppliers! interediaries! third$party service
providers! and custoers. "n essence! Supply Chain Manageent integrates supply
and deand anageent within and across copanies.
DEFINITION OF MARKETING
%n early #ut narrow de&nition of arketing #y %M% (%erican Marketing
%ssociation) was as follows'

()he perforance of #usiness activities that direct the *ow of goods and services
fro producer to consuer or user+
,ro these de&nitions! it is clear that function of arketing is a#out eeting
huan needs and wants. )he custoer$oriented Modern Marketing concept holds
that the ain task of a &r is &rst to deterine the needs! wants! and preferences
of a targeted custoer segent! and to deliver the desired satisfaction (value
o-ers) to those custoers. Siply! it is a #usiness function that is supposed to
eet needs pro&ta#ly. .ood custoer service is the desired end result of all
#usiness activities! particularly that of odern custoer$oriented arketing! and
the Supply Chain are an extreely iportant part of these activities. /hether
perfored #y a producer! wholesaler! or
retailer! or outsourced to soe other &r! the physical distri#ution (logistics)
function has a signi&cant ipact on custoer service and satisfaction.
BRIEF BACKGROUND OF SUPPLY CHAIN CONCEPT
Earlier in this century! functions now grouped under the ters Supply Chain were
part of arketing. "n 01234s 534s arketers tended to focus on product prootion
and developent! neglecting areas of warehousing! transport and inventory
control. )he reali6ation that storage and distri#ution costs were a#sor#ing an
increasing percentage of sales revenue sparked a renewed interest in this area in
late 01534s and 734s.
8ver tie Supply Chain assued priary responsi#ility for warehousing! inventory
and transport within any organi6ations with arketing responsi#le for
negotiation! prootion and selling. 9ow a day it has #een recogni6ed that
arketing and Supply Chain functions are strategic resources! to #e #est eployed
as a part of an overall strategic plan. Supply Chain has the task of ensuring that
deand generated #y arketing is actually serviced or ful&lled.
Supply Chain is concerned with getting products and services where they are
needed when they are desired. "t is di:cult to visuali6e accoplishing any
arketing or anufacturing without logistical support.
uar.sadda;gail.co
<age 1 of 4
Supply Chain has #een perfored since the #eginning of civili6ations. "t is hardly
new. =owever! ipleenting #est practice of Supply Chain has #ecoe one of the
ost challenging operational areas of #usiness.
MARKETING FUNCTION AND MARKETING MIX
)he essence of arketing function coprises of the #elow entioned arketing
su#ixes. "n other words! (4<s+ is the decoded for of arketing function. )he
ter (arketing ix+ is part of the %>C4s of arketing! and is well$known and self$
explanatory.
)he inherent interface of place (<) (logistics) with the reaining ?<s is long
recogni6ed and esta#lished. %s it is already known! fro the de&nition of su# ixes
of arketing ix (4<s) (<rice! <roduct and service! <rootion! <lace)! @ogistics is
part of the (<lace+ su# ix which is ade up of distri#ution (value) channels and
logistics.
THE STRATEGIC IMPORTANCE AND INTERDEPENDENCE OF PHYSICAL
DISTRIBUTION (LOGISTICS) IN MARKETING MIX
)he strategic iportance and interdependence of physical distri#ution (@ogistics) is
evident in all eleents of the Marketing Mix or Aalue 8-er such as shown in &gure
#elow'
SOME ELEMENTS OF MARKETING MIX AND THEIR RELATION TO LOGISTICS
Some Elemen! o"
M#$%e&n' M&( ()#l*e
O+e$)
Rel#&on o Lo'&!&,!
uar.sadda;gail.co
<age - of 4
<roduct design and packaging
ust allow for e:cient stacking! storage!transport!
and tracking
Bi-erentiating products #y
si6e ! color!and style
ust take into acount additional deands placed on
warehousing and shipping facilities
Copetitive pricing
ay depend on a &r4s a#ility to provide relia#le
delivery or eergency shipents or replaceent
parts
Quantity discounts in pricing
,irs trying to lower inventory costs ay o-er
Cuantity discounts to encourage large purchases
<rootional capaigns
ust #e coordinated with distri#ution functions so that
advertised products are avalia#le to #uyers and order
processing departents can handle additional sales
ordes e:ciently
"n*uence a &r4s stockouts
Channel e#ers ust consider warehousing and
transportation costs! which ay in*uence a &r4s
stockouts or its choice to centrali6e (or decentrali6e)
inventory
FLO. OF MARKETING MIX THROUGH DISTRIBUTION CHANNELS OR THE
SUPPLY CHAIN
%s is known! distri#ution channels are where arketing functions take place! and
through which product *ow is carried to the &nal consuers. Contrary to
widespread ipression! not only physical goods *ow through the distri#ution
(value) channels #ut the whole arketing ix as well.
Marketing function and its copleent (Marketing Mix+ (4<s) or (Aalue <roposal+
is carried through downstrea distri#ution channels or within the conteporary
context of (the valueDsupply chain.+ "n actuality! the Supply Chain is the su total
of all downstrea oveent of Marketing Mixes (4<s). %s shown in the &gure
#elow! each arketing ix is coprised of ?<s plus 0(<) (the @ogistics su# ix)
which takes place at each stage of the value channel. %s a atter of fact! the total
of the arketing ixes that ove through each value chain e#er constitutes
the Supply Chain. "n fact! one view of =olistic Marketing sees it as (integrating the
value exploration! value creation! and /#l*e 0el&/e$1 activities with the purpose
of #uilding long ter! utually satisfying relationships! and co$prosperity aong
key stakeholders+.
uar.sadda;gail.co
<age 2 of 4
@ast #ut not least! the @ogistic service &rs4 arketing policies and
ipleentations are also relevant. Siply! #oth industries (producers! wholesalers
and retailers) and logistic service &rs (?rd <arty! etc.) are #ound to #e engaged in
arketing and its constituent logistics. "n other words! the #roadened view of
arketing function is eCually applica#le here.
"n addition! the logistics &rs also need to &nd custoers and prospects to sell
(contract) their services through arketing functions. %lthough they ay not call
theselves such! in this context logistics service &rs are arketers as well! ore
than the producers! wholesalers and retailers calling theselves logistics &rs.
)he logistics departents of the anufacturing &rs or the outsourced @ogistics
&rs (?<@s) deliver whatever is proised. )he production &rs! through eans of
arketing counications! ake proises to custoers or prospects to sell
certain goods or services fro agreed upon prices and deliver the! at the right
tie when custoers want! in the right aount! without any daage! to the right
places.
uar.sadda;gail.co
<age 4 of 4