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CHAPTER 14
COMPETING ON MARKETING AND
SUPPLY CHAIN MANAGEMENT
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
1. articulate three of the four Ps in marketing (product, price, and promotion) in a global
context.
2. explain how the fourth P in marketing (place) has evolved to be labeled supply chain
management.
3. outline the triple As in supply chain management (agility, adaptability, and alignment).
4. discuss how institutions and resources affect marketing and supply chain management.
5. participate in two leading debates concerning marketing and supply chain management.
6. draw implications for action.
GENERAL TEACHING SUGGESTIONS
Ask your class, “How many of you are NOT involved in selling?” Many will raise their hands
but then you can point out that all are involved and have been all of their lives it is just that some
of their sales were not successful. As a baby, they tried to sell the parents on changing their
diaper, as a child they tried to sell the parents on getting them a toy, as a teenager they tried to
sell someone on going out with them, and later they tried to sell someone on hiring them.
Sometimes they made their sale and sometimes they did not.
Point out to the students that marketing involves more than just selling: it involves identifying
what customers want and then providing them the product they want at a price they are willing to
pay at the place that they want it and promotion lets them know about the product, price, and
place. That is a challenge and it is especially a challenge when trying to reach a variety of market
segments around the world who have different tastes regarding the product, who may respond
differently to price and promotion and there are significant challenges in providing that product
at the place desired through an often very complex supply chain.
Then introduce this chapter which covers what you have just said.
OPENING CASE DISCUSSION GUIDE
Marketing Aflac in the United States and Japan
The Aflac duck appeared in its first television commercial on January 1, 2000. On the first day,
Aflac’s website had more visits than it had in the previous year. The Aflac duck has become a
popular advertising icon in the United States. In Japan, the duck was modified to appeal to the
Japanese culture. Aflac also introduced the Maneki Neko Duck or the cat duck, which has
become very popular in Japan.
CHAPTER OUTLINE: KEY CONCEPTS AND TERMS
Sections I through VI of Chapter 14
I. THREE OF THE FOUR P’S IN MARKETING
1. Key Concept
In international marketing, the leading concern about product is standardization versus
localization. Marketers care about price elasticity—how responsive purchasing behavior
is when prices change. In promotion, marketers need to decide whether to enhance or
downplay the country-of-origin effect.
2. Key Terms
Market segmentation is identifying consumers who differ from others in purchasing
behavior.
Marketing is efforts to create, develop, and defend markets that satisfy the needs
and wants of individual and business customers.
Marketing mix is the four underlying components of marketing: (1) product, (2)
price, (3) promotion, and (4) place.
Price is the expenditures that customers are willing to pay for a product.
Price elasticity is how demand changes when price changes.
Product is the offering that customers purchase.
Promotion is the communications that marketers insert into the marketplace.
Supply chain is the flow of products, services, finances, and information that passes
through a set of entities from a source to the customer.
Supply chain management is the activities to plan, organize, lead, and control the
supply chain.
Total cost of ownership is the total cost needed to own a product, consisting of
initial purchase cost and follow-up maintenance/service cost.
II. FROM DISTRIBUTION CHANNEL TO SUPPLY CHAIN MANAGEMENT
1. Key Concept
Technically, “place” used to refer to distribution channel—the location where products
are provided. More recently, the term “distribution channel” has been replaced by
“supply chain management” in response to more outsourcing to suppliers, contract
manufacturers, and 3PL providers.
2. Key Terms
Distribution channel is the set of firms that facilitates the movement of goods from
producers to consumers.
Place is the location where products and services are provided.
III. TRIPLE As IN SUPPLY CHAIN MANAGEMENT
1. Key Concepts
Agility involves the ability to quickly react to unexpected shifts in supply and demand.
Adaptability refers to the ability to reconfigure supply chain in response to longer-term
external changes. Alignment focuses on the alignment of interests of various players in
the supply chain.
2. Key Terms
Adaptability is the ability to change supply chain configurations in response to
longer-term changes in the environment and technology.
Agility is the ability to react quickly to unexpected shifts in supply and demand.
Alignment is the alignment of interests of various players.
Make-or-buy decision is a decision about whether to produce in-house (“make”) or
to outsource (“buy”).
Third-party logistics (3PL) is a neutral, third-party intermediary in the supply chain
that provides logistics and other support services.
IV. HOW INSITITUTIONS AND RESOURCES AFFECT MARKETING AND SUPPLY
CHAIN MANAGEMENT
1. Key Concept
Formal and informal rules of the game around the world significantly impact these two
areas. Managers need to assess marketing and supply chain management based on the
VRIO criteria.
2. Key Terms
None
V. DEBATES AND EXTENSIONS
1. Key Concept
The debates are (1) manufacturing versus services and (2) market orientation versus
relationship orientation.
2. Key Terms
Market orientation is a philosophy or way of thinking that places the highest
priority on the creation of superior customer value in the marketplace.
Relationship orientation is a focus to establish, maintain, and enhance relationships
with customers.
VI. MANAGEMENT SAVVY
1. Key Concepts
Knowing the formal and informal rules of the game inside and out will enable savvy
managers to answer challenges. To avoid marketing blunders, managers should focus on
product, price, promotion, and place (the four Ps). Managers can enhance supply chain
management by focusing on agility, adaptability, and alignment (the triple As).
2. Key Terms
None
