Monthly Archives: November 2010

Marketing and Supply Chain – A Love-Hate Relationship?

intricate link between marketing and supply chain as seen from

stages of marketing within supply chain taken from

Article taken from :

In class, we talked about how marketing focuses on top-line revenue and, accordingly, seeks product variety (available on short notice) from well-stocked inventory pools. Operations worry about cost, looking for efficiencies in manufacturing and the supply chain.

An intriguing point was how a lot of companies fail to focus on creating value for customers. A notable example would be Amazon. The name referring to the tension between marketing and supply chain is Differentiated Service Policies.

Marketing wants to offer the broadest possible array of titles to reinforce Amazon’s sales pitch of having huge variety and delivering those titles instantaneously to reinforce the convenience of online shopping. Operations, on the other hand, cannot support such a proposition — at least not cost-effectively.

It tries to address this conflict by examining the economics of inventory and understanding the value of lead time to customers. Thereafter, it sets shipment lead times to come to a good compromise between marketing and operations.

Another underrated solution is to use price to drive customer behavior ranks among. Companies should also consider option bundling to increase complexity and offer a variety of services to customers. Examples include packaging complementary products that are easy to market and supply.

Potluck: Social Enterprise?

the network potluck belongs to taken from:

Potluck Cafe taken from

Potluck is a good example of a social enterprise. It operates a fully professional enterprise that services corporate and non-profit clients.

It is a registered charity whose café and catering revenue is invested back into 5 community social programs. It provides a daily Meal Program with free meals for residents. It also has a Community Kitchen Program that welcomes DTES residents to learn basic cooking and nurture relationships. However, it is hard to determine whether it is creating sufficient social value. Potluck must work on increasing the availability, accessibility and choice of quality, nutritious food.

It combines the passion of a social mission with an image of business-like discipline, innovation, and determination. Its social mission is explicit and central. Through its programs, it is evident that mission-related impact is its central criterion. It is difficult to measure its social value creation through customer satisfaction.

Whether Potluck attains a long-term social return on its investment remains to be seen. It has to come up with innovative ways to ensure that their ventures will have access to resources as long as they are creating social value.

This link gives a good idea of the social entrepreneurial standards Potluck upholds.

Zappos, an enterprising company

I think that Zappo is an incredibly innovative and entrepreneurial company. The company does not exactly make new products or employ new production methods but markets them in a unique way. It is probably not the first customer-centred organization, but the extensive amount and quality of effort it puts into building relationships with customers is impressive and the key factor in retaining its huge customer base.

It has a groundbreaking form of organizational culture which is very informal, and which seems to place a lot more emphasis on intrinsic motivation instead of extrinsic motivation. The workplace atmosphere is really informal and the workers are all enthusiastic. The amount of wealth creation is huge and the speed of wealth creation is really fast. Zappos takes risks in the form of It has an innovative marketing strategy from the way it puts in a lot of effort into building personal connections with its customers.

Swift & Stylish: More on Zara’s Marketing Strategy

similar article on Zara’s marketing strategy

Zara: Cool Clothes Now, Not Later taken from:…/Zara_CASE.doc

lack of advertising, but this storefront attracts many customers and has a much vaunted marketing strategytaken from

It is wise for Zara to focus on reacting swiftly to consumer demand instead of forecasting it.  Forecasting would require extensive market research which would add unnecessarily to the company’s costs. Zara’s ability to react quickly to consumer tastes and preferences is evident from how staff members get direct verbal feedback from customers and its efficiency in shipping products to stores that are strategically geographically clustered in Spain. This also makes the distribution channel choices in the simplified supply chain much more evident. Zara embodies the notion of variability, keeping in mind the probability of expected events that are going to happen.

It might seem counterintuitive to ship small stocks of clothing to stores. However, Zara compensates for this by capitalizing on the exclusivity of its clothes. There is high customer traffic as customers want to check out the regularly changing products, thus increasing stock turnover.

I admire Zara for its unconventional, yet intellectual marketing strategy. However, to successfully penetrate the US market, it would have to tweak its strategy. It would not be able to rely on the geographical proximity of its stores initially, as stores would likely be spread out over the larger geographical area.