Study Guides (238,069)
Canada (114,906)
Commerce (450)
COMM 103 (51)

Comm 103 Final Exam Notes

31 Pages
Unlock Document

Queen's University
COMM 103
Gary Bissonnette

Comm 103 Final Exam Notes Chapter 9 – Operations and Supply Chain Management -successful organizations understand the interconnectivity of strategy, business structure, and operations, and seek to ensure that all three are integrated into the decision making process and that both structure and operations are aligned and in support of the organization’s strategic intent Three components of a business system: 1. Strategy – what we want to accomplish 2. Business structure – provides the controls and formal communication and responsibility framework which will guide the organization as it seeks to realize its strategy 3. Operations – the actual processes employed, which, when combined with the utilization of the organization’s capital assets, enable strategic outcomes to be actualized -Successful businesses look to establish within their business systems competitive advantages which enable them to deliver their products/services to their targeted market segments in a manner which is superior to the competition Operations management – all about the effective design, development, and management of the processes, procedures, and practices embedded within an organization’s business system for the purpose of achieving its strategic intent -The areas of interconnected responsibility for operations management are: -Process management - the design and development of the work flow and connectivity of the operational requirements needed to ensure that an organizations products/services are efficiently produced and effectively delivered to the marketplace -Supply Chain management – the management of the flow of materials/products, information, and costs through the front end of an organization’s value chain -Product/Service management – the variety of activities which commence with the design and development of potential new products in R&D, and extend to the post purchase support of products and services now in the hands of customers -at the centre of the ‘value chain’ model is the underlying principle that managers should seek to make decisions across the chain’s activity areas in a manner which contributes positively to the overall value of the products or services being produced or offered Value Chain – Primary Activities Inbound logistics – the management of supplier relationships relating to those parts/components or finished products which are brought into the organization in order to manufacture finished products for the marketplace i.e. purchase components of ipad, purchase a shirt from Thailand and coordinating shipping to warehouse, storage etc. Operations – the manufacturing and/or product change processes which are set up to ensure that the final product is ready for the marketplace Outbound logistics – distribution activities required to get the right product to the right place at the right time Marketing and sales – those activities which create profile and awareness for the organization’s products, services, or brands, and the benefits derived from the acquisition and use of such products or services Customer service – the support provided to customers before, during, and following the purchase process. I.e. tech support, repair support, installation, customer training etc. -the development of strong supplier and distributor relationships are invaluable to the organization, with regards to understanding market trends and shifts, maintaining a watchful eye on competitive innovation, and ensuring that cost control management practices are put into place throughout the supply chain in order to maintain competitive pricing strategies Support activities – those areas within the organizations which are not directly associated with the actual processes which the organization uses to produce products/deliver services. They are still integral parts of the support structure, however i.e. IT dept., R & D dept., HR mgmt, legal dept., etc Business Planning Cycle Company Company Performance Growth and and Expansion Profitability START: Strategy Productive execution Resource Capability Assessment Strategy Formulation Operations cycle – the alignment of the operational tasks within an organization, by its management team, in order to meet the strategic outcomes defined in the organization’s business strategy Operations Cycle Make the required Manage the Operational process to changes and rperformancered investments Determine what needsto START: What is execute the the strategy? strategy Does this translate into an emphasis on lower prices or better quality? i.e. if an organization’s intent is to focus on differentiated markets, the operations cycle will possess flexibility and customization. If the organization’s desired strategic position is to focus on low price and acceptable quality, the operations cycle will place an emphasis on process standardization and simplification Strategic Intent Operation Management Operations Applications Focus Focus Low cost / Low Tight cost control Process standardization prices Structured organization Process simplification Tight process supervision Economies of Scale Meeting volume based Technology intensive targets Low cost distribution R&D process improvement focus Differentiated Focus on quality vs quantity Higher labour skills strategy/higher Emphasis on culture of Strong emphasis on prices collaboration and creativity skills communication Strong tie in with marketing Greater allowance for Strong R&D product creativity and self development focus achievement Strong partnership approach Emphasis on defining and with distributors adding value to products Key decision areas of Process Management 1. Process Design, Layout and Execution – the assessment and implementation of the type of tasks needed to get required work accomplished, and how such tasks will be grouped and sequenced to ensure that the most efficient and effective processes are utilized in the production or deliver of products and/or services -process management decisions will need to be made as to how the flow of work will be sequenced and what steps must be initiated into the process to ensure that quality, timing, performance, and service expectations are met DICE Define the tasks and activities required Identify the sequencing needed to maximize efficiency and effectiveness Create the process – layout and fine tuning Execute the process (put it into action) and evaluate PERT – (Program evaluation and review technique) charts that focus on the identification and dependency relationships of the task required and the recognition of the critical components of the project which must be completed otherwise project delays will occur Gantt – provide similar information, but focus more on the communication of the task timeline and anticipated time duration for each task 2. Materials Management – the management of the input required in order to develop the products or services which the organization is intent on delivering to the marketplace 3. Facility Design and Layout – infrastructure layout and related facility components which will be required to house and support the processes noted above. Key decisions in this area of operations include decisions relating to production capacity, plant, facility locations, warehousing etc. These decisions often have to be made years in advance given anticipated market conditions 4. Capital Asset Evaluation and Acquisition – refers to an assessment, by the operations management team, of the state of current capital assets and a determination as to their applicability to meeting the needs of the organization. Obsolete equipment must be replaced/modernized and new technologies need to be acquired. Customers Retailers Suppliers Supply Chain Partners Transportation Distributors aCompanoesics Supply Chain Management Responsibilities: 1. Supply chain planning – refers to the development of the supply chain structure and the accumulation of the necessary information needed to make effective supply chain decisions i.e. analyzing sales forecasts, designing transportation networks, making decisions relating to outsourcing various supply chain functions or not etc. 2. Supply chain operating execution – the execution of the specific tasks which are necessary in order to ensure that key performance results are achieved i.e. management of inventory levels, effective use of tech systems, accurate and timely invoicing and collections etc 3. Supply chain performance evaluation – the critical outcomes which the supply chain must achieve in support of the organization’s overall operating performance. Two critical outcomes are 1) max utilization of the capital asset base and 2) minimization of the time involved within the cash operating cycle -the cash operating cycle is the amount of time it takes for an organization to recover the cash which it has paid out for the development, production, and distribution of products -in general, the shorter the cash operating cycle, the quicker the organization is getting back the cash it has expended on producing its goods and services and therefore the less the organization needs to rely on cash reserves or short term debt financing to cover the costs of expenditures incurred Product/Service Management Focus  Existing Product/Service Changes – relate to the existing products/services offered to the marketplace within which the organization currently competes. Represents an assessment of the current value of an existing product within the existing market which it currently serves, and the required additions, adjustments or deletions which are required to enhance or maintain its current position  New Product Opportunities – refers to the development of new products for market opportunities which exist today and for which research has concluded that near-term revenue potential exists  Long reach opportunities – refers to the investment in and development of new product research for potentially emerging markets of the future -a key weapon in this ongoing challenge to preserve quality and maintain the product standards expected by customers, in the face of pressure to reduce costs, lies with the organization’s culture and the development of performance standards Quality Impact Factors  Market expectations  Employee education & training  Process analysis  Systematic & Fact-based decision approach  Effective communication of strategy & intent  Product Consistency ISO certification (International Organization for Standardization) – an essential first step in ensuring that an organization can meet the expectations of their customers. ISO standards strive to make the manufacturing of products safer, more efficient, and more socially responsible Six Sigma – a methodology which focuses on a philosophy of total improvement. Six sigma seeks to integrate within an organization’s culture an organized approach for the analysis of processes, with the intent of minimizing and eliminating the occurrence of defect. Analyses guide managers to map the processes being used within the organization, align these with customer needs, and then seek to improve or develop such processes and implement the necessary controls for maintaining the heightened quality levels. Uses a methodology of DMAIC/DMADV (define measure analyze improve control / define measure analyze design verify) TQM – total quality management, more broad based approach to managing quality than Six Sigma, seeks to assimilate the concept of quality improvement across the entire organization. Challenges the organization to be customer focused and to strive for total employee involvement to ensure that quality is fully integrated as a core component into the strategy, processes, and communication messages of the organization Business Processing Engineering (BPR) – focuses on how organizations transform production and manufacturing processes to improve the way that people work Successful Quality Initiative Implementation  Strong management support and commitment  Well structured approach & deployment – needs to include clear identification of the roles and responsibilities of those involved. SMAC (specific, measurable, actionable and controllable) objectives must be identified  Full team involvement – quality initiatives must be viewed as requiring a team based approach. Involvement, input, rewards and recognition must be shared with all involved  Effective communication of progress and results – the progress and results of the initiatives must be effectively communicated to all involved. The sharing of knowledge and successes is fundamental to developing a quality focused culture -operational efficiency and effectiveness is one of the predominant challenges facing the small business owner, since in many cases he/she will possess limited resources and expertise and may not be able to fully take advantage of the technologies and practises available to maximize the cost effectiveness of their businesses. Also, they have a smaller employee base and have to attend to broader business issues (sales, finance, HR etc) while tackling the intricacies of operations management -to be successful in meeting customer expectations and in contributing to the organization’s overall value proposition, operations managers must develop the deep functional expertise and the general business skills needed to develop and manage the processes and methodologies required for competitive purposes Chapter 10 – The Marketing Challenge Marketing – in its simplest context, the purpose of marketing is to design, develop, and communicate value Principle 1 – customers don’t buy products/services, they buy solutions to problems or needs Principle 2 – customers will not pay more for a product if they can get a similar product for less Value Proposition = service benefits + product benefits + brand benefits + cost benefits + emotional benefits 6 R’s of Marketing  Right need to pursue  Right solution to offer  Right value proposition to position the organization’s products/services around  Right methodology for delivery  Right price to charge  Right communication message to use 6 Core challenges of marketing 1. Message development and delivery 2. Need identification 3. Assess our ability to respond 4. Value proposition creation and positioning 5. Distribution capabilities 6. Price point validation The marketing formula: An effective and well defined market position + superior marketing effort = profitability and growth -to be successful in the execution of its overall corporate strategy, an organization must be successful at both the product strategy level and the business strategy level Positioning – the place in the consumer’s mind which you want your organiztaion’s brand, products and/or services to own. All about developing a unique, credible, sustainable and valued place in the minds of our customers Successful positioning objectives:  Communicate the solution effectively to the targeted customers  Understand the market to be served  Understand the customers to be targeted  Deliver the solution in a way which is superior to competitors -Companies realize that they cannot be all things to all people, and therefore develop a product to target one market segment. The concept of market segmentation recognizes that ‘one size does not fit all’ -Companies use marketing research to help them accurately segment the market Primary sources of information are info sources which we as an organization develop and or utilize to generate info specific to our organization and the products we offer i.e. customer surveys, customer input, focus groups etc Secondary sources of information focus on conducting research of and drawing conclusions from information which already exists and is available at no cost or on a fee basis I.e. researching StatsCan , google searches, annual reports -in tying marketing research to segmentation, marketers and managers will strive to create a profile of the customers within the various segments identified within a market. This profile is developed around a combination of four core characteristics: 1. Demographics – age, gender, income, etc 2. Geographic clustering – location, reach, etc 3. Psychographics – lifestyle, status, ego, emotion, tastes, trends, etc 4. Behavioral – use, buying patterns etc Marketing Process What opportunities exist? What opportunities could we pursue? Which opportunities will we choose? What action path will we take? 1. Marketing research 2. Segmentation 3. Target market 4. Value proposition development and profiling 5. Marketing mix development 6. Message rifling and concentration Evaluate and adjust. Target marketing – leveraging the information acquired during the research and segmentation process and determining which market segment(s) the organization feels is/are its primary or best opportunity for penetration and sales success Industry/Sector(100%) Potential Market (30%) InterestedMarket (15%) Able Market (10%) Target market (5%) -Segmentation defines the need, and target marketing defines those who will pay for the need Need identification – focuses on assessing opportunities which exist within the marketplace for our current and potential products/services 1. Where do opportunities exist? 2. What market dynamics present themselves in the segment which we are considering? Ansoff Matrix (Product/Opportunity Matrix) Existing Products New Products Product and/or service Existing Market Penetration development Markets (Customers) Assessing Market Opportunities New Markets (Customers) Market Development Diversification i. Market Penetration Opportunities – focuses a manager’s attention on growing the sales revenue of the organization’s existing products through its existing customer base. This means seeking ways to get existing customers to purchase more frequently and/or with a higher average transaction revenue per purchase (higher share of wallet) ii. New Product/Service Opportunities – focuses a management team on identifying and developing new products/services for the existing markets within which it competes i.e. Walmart adds grocery store iii. Market Development Opportunities – focuses a management team on identifying and cultivating new customers for the existing products which an organization currently offers through segmentation stretch or finding new uses for existing products i.e. Cheerios adding multigrain, banana nut etc; baking soda used not only for baking but for clean fridges, toothpaste. Cannibalism – sales volume erosion that occurs due to the newly launched extended brand that may occur Customer Desertion – customers switch to different products if company repositions itself and sends a message that no long applies to them iv. Diversification Opportunities – focus managers on assessing opportunities which lie outside of the organization’s current products and or services, and represent the creation or development of new markets served by new products/services. Could be the result of natural organic growth or acquisition i.e. Apple first sold computers, now ipads, ipods, iphones, macs, etc -a critical aspect of marketing is the identification of needs which exist in the marketplace and which can be responded to by an organization Consumer Decision Making Process Loyal Consideration Customer of Options Loop Active purchase Consandration influence Evaluationof Options Committed Customer Pointof Loop Purchase -be at the top of the potential customer’s purchase list as they enter the decision making process, and reinforce and support the purchase of our product as the potential customer transitions to the point of purchase -if we are not at the top of the list, then our goal is to disrupt the predetermined list – this can occur at any arrow! -assuming that we have won the battle for initial purchase, reinforce and support the customer in a way which encourages him/her to develop a loyalty and commitment to our product, making future purchases almost ‘automatic’ Marketer’s Tool Box Category Tools of the Trade Company Driven Marketing Techniques Advertising Sales Promotion Publicity Point of Purchase Displays Dedicated Sales Force Consumer Driven Marketing TechniquInternet Searches Product Reviews Analysts Blogsations Social Media Websites Channel Support & Interaction Dealer Incentives Techniques Point of Purchase Discounts Channel Member Training Exclusivity Arrangements Salesperson Recommendations -Marketing does not end at the point of purchase. Considerable emphasis needs to be placed on the post purchase period which is where true customer loyalty and commitment is developed -Things like ongoing servicing and training (after purchase) and comments from other customers have a large influence on the customer Growing the Customer Base: Existing Customer Base + New Customers – Deserting Customers = New Customer Base Quality Price Quality Perception Relationship Emotional Benefits Perceived Positive Brand Benefits Value of the Service Benefits product Product Benefits Price of Product Cost Benefits -the need to respond to consumer driven marketing techniques and channel support point of sale techniques grow in importance the further the potential customer moves through the decision making process -the concepts of marketing research, segmentation, and target marketing are equally important to the not for profit in determining which services to offer, where and how to deliver such services, and how to best tap into the various private philanthropic, public and private grant, and government funding opportunities vital to their success Five Critical Factors of Market Dynamics 1. Market clarity and stability 2. Customer analysis 3. Competitor analysis 4. Competitive advantage analysis 5. Culture and business system analysis Chapter 11 Four Pillars of the Marketing Effort – Marketing Mix 1. Product Strategy – Value Proposition Attributes 2. Pricing Strategy – maximize return on sales 3. Distribution Strategy – connecting with customers 4. Communication Strategy – communicating ‘fit’ -assuming that our marketing research, segmentation, and target marketing analysis is accurate, an effective marketing mix effort should result in achieving a definitive ‘fit’ between our product/service offering and the needs of our potential customers -viewing product strategies as the development of value proposition attributes shifts the marketing team’s focus from simply building a better mouse trap to creating positive performance gaps between the company and its competitors through tangible and intangible product attributes Value Proposition Attributes  Brand leveraging  Cost advantages  Behaviour linkages  Point of sale and post purchase services and benefits  Financial incentives and benefits  Tangible product attributes  Psychological and social benefits -Truly successful brands, which add power to a company and or its products and services, are brands which have evolved to the top end of the brand ladder (brand awareness -> brand preference -> brand loyalty -> brand commitment) -Brands which have reached the brand commitment level have an active and loyal customer base which continually places the brand at the top of their pre- determined purchase list -the ability to transition a brand from awareness to commitment is all about delivering the value proposition in a way which demonstrates distinctiveness and creates emotional and psychological ownership with customers as the proven solution to solving their needs Responding to price pressures: Protect our price point  Communicate product importance  Develop brand distinction  Develop quality differentials  Develop unique need solution features Respond to price reduction requirements  Process innovation  Develop greater economies of scale  Reduce quality  Reduce marketing effort -the ability to effectively differentiate ourselves will enable us to minimize price as a major point of comparison, thereby reducing its influence on the decision making process -Price is king where there exists generic product attributes (little differentiation) and or brand indifference (weak brand positioning) -The impact of price on the decision making process will be lessened where there exists perceived or real product uniqueness and or perceived or real brand differences Key fundamentals to setting price:  Determine the degree of value proposition strength – this will enable the marketers and managers to identify the premiums which can be allocated to the base pricing model, given core differentiators  Analyze the price elasticity which exists (driven by substitutability)  Understand your competitor’s cost structures and the extent to which they intend to focus on price as a major point of comparison  Analyze your critical cost structure components -Successful pricing strategies seek to maximize the return on sales on the product and or service which we offer in a way which ensures competitiveness, lies within the customer’s acceptable price range, results in a recognized value advantage between our product and or service and those of our competitors and contributes to the long term wealth of the organization Consumer price threshold – the maximum price point which the customer is willing to pay Indirect and Mixed Systems Distribution Channel Decisions Delivery Degree of Options Sales Support Direct Distribution – implies that the organization intends to connect directly with its customers and handle the final sale of its products and or the delivery of its services without the assistance of a channel intermediary -organizations tend to use direct distribution channels as a result of a belief that their product is better supported by dedicated, company-employed sales personnel, and or they can gain greater share of wallet by dealing directly with the customer Company Customer Indirect distribution – implies the use of a channel intermediary, such as a broker, wholesaler, or retailer, to facilitate the sales of an organization’s products and or services to the customer. Organizations tend to use indirect distribution tactics as a result of the belief that significantly greater market reach and support can be provided by leveraging the expertise, location, facilities, and experience of channel intermediaries -indirect distribution is also used when an organization feels that customer familiarity with the use of a product is sufficient enough that a personal or company dedicated selling approach is not essential to the overall value proposition strategu, and or when the cost of reaching customers is significantly higher than that incurred by using a channel intermediary -channel intermediaries are often experts in moving these products in a manner which minimizes costs Channel Company Intermediaries Customer Mixed Distribution systems – distribution systems which incorporate both direct and indirect distribution options within their distribution strategy i.e. a company will sell its products at its store and online Channel Intermediaries Customer -in general, the greater the complexity of the product, the greater the price, and the greater the lack of familiarity with the product category with the customer, the more important the sales support becomes at the time of purchase -although customers care about the quality of the product and its price, it’s a positive buying experience that really drives value Intensive distribution arrangements - seek to maximize product availability in the marketplace. Implies a desire by an organization to distribute the product/service through as many locations or channel outlets as is possible; the idea is to have customers see your product wherever they go. A good example of this lies with convenience goods, like soda or chocolate bars, that can be found at convenience store, department stores, grocery stores, restaurants, office lobbies, etc. An advantage of this distribution approach is that it maximizes market penetration and offers tremendous potential for achieving significant scale. The risk is that it requires a significant financial commitment in inventory, and results in having the product handled by a larger number of distributors, many of whom are carrying a wide variety of products, a number of which are most likely in direct competition with the products/services the organization is trying to sell – no focused commitment on our product offering Selective Distribution arrangements – narrow the breadth of access that products/services have in the marketplace. The decision to limit of the extent of the reach could be based on the need for heightened sales support at the time of purchase. It could also be based on the desire to reinforce a brand name or a particular image for a product or service (i.e. Coach at the Bay but not at Walmart). Selective distribution may also be based on geographic clusters, differentiation initiatives, joint ventures, and strategic alliances. Using selective distribution means the products can be better supported at the point of sale and the organization can retain a greater degree of control over how the product is priced, marketed, and sold. The organization can also offer an authorized dealer status and contractually limit the number of competitive offerings which the channel member agrees to carry, minimizing direct competition at the point of purchase Exclusive distribution arrangements – reflect a further focusing on the distribution of products through a single, authorized channel intermediary. Organizations often use exclusive distribution arrangements when the selling process associated with their products requires the highest levels of support, or when the organization is attempting to break into new markets. The benefit for organizations is that it is anticipated that the awarding of an exclusive distribution contract to a channel intermediary will result in a total or higher level of commitment by that intermediary, and the organization has maximum say in how the product will be marketing and sold. Company Owned Exclusive Dealer Distribution External - -In many situations, channel intermediaries bring to the market experience and expertise which the manufacturing and or service company does not possess inhouse -Significant risk mitigation can also take place through channel intermediaries, who commit to purchasing products/services in advance, and absorb the cost of unsold inventory once these products are purchased -Channel intermediaries are a key stakeholder and partner in the overall demand generation and selling process Message rifling – takes segmentation, target market selection, customer profiling and positioning and embodies this within a focused message, driven by a well defined and well developed value proposition and targeted specifically at a defined audience. Is all about making sure that you aare communicating the right product/service value proposition components to the right audience at the right time via the right message mechanism -the growing importance of social media means that you must engage the customer and create interest in the brand in a way that enables the customer to personalize a relationship with the brand and hence act as an ambassador for it -people follow br
More Less

Related notes for COMM 103

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.