JITD is being considered to improve operations for both Barilla and their customers, by determining the quantities and delivery schedules, rather than current approaches and procedures of responding to erratic demand patterns. This would help with eroding margins that both manufacturers and retailers are experiencing, by shipping product only as needed rather than holding large quantities of stock in both Barilla’s facilities. What are the underlying causes of the difficulty that JITD is expected to solve? The underlying causes of the issues that JITD is trying to resolve are: • Issue: Erratic demand / poor forecasting, which is driven by: o Manual process at the retailer level of both checking and conveying inventory needs o Customer behavior, which is driven by outside forces, such as competitors’ offerings, incentives, trends, etc. o Barilla’s own sales incentives drive erratic trends in purchasing large quantities (driven specifically by bulk discount incentives) • Issue: Inventory limitations and distribution centers and retailers, which are driven by: o Physical space limitations (shelf and floor space) o Competition’s need for space, incentives to retailers and distributors, etc.
However, we have all seen the drastic changes in our lives that marketing have brought us today. Man are no longer satisfied by just being able to have the flexibility to purchase goods or services which is brought about by marketing, instead they look at all the other attributes that comes with a product. How fast can a good be delivered, the quality of that product, the cost and quantity are also taken into consideration when we decides what product that we should buy. The scopes of marketing have led to consumers’ satisfaction when it comes to goods and services. Consumer needs varies widely, and as such, producers have the task of continuously responding to consumers need by developing a relationship with them in other to exceed their expectation.
What are the possible advantages of investing in the R&D center for advanced technologies? Discuss the implications, considering the changing perceptions and demands of consumers. The possible advantages of investing in the R&D center for advanced technologies are: improving profitability, differentiating from competitors, improving the quality of products, getting products to market more quickly, anticipating changes in the market (e.g. obsolescence of a product) and strengthening the brand. Through R&D, production costs can be significantly reduced to offer competitive pricing and/or increase profitability.
The company needs to invest in R & D to come up with innovative models to stay at consumer’s top choice. Generic Strategy is differentiation Swot Threats DaBest is exposed to the international nature of trade so it sells its product in different currencies which destabilizes the costs and margins for profits over long periods of time. This type of exposure may cause DaBest to be manufacturing and/or selling at a loss, although that is not the case for a giant as itself. Price Sensitivity Consumers are constantly shopping
Introduction: Production and Capacity planning is one of the key aspects of operations management as it determines the amount of goods or services which can be produced within a given time duration. Too less capacity indicates that customers won't be satisfied and too much capacity would result in the operation being under-utilized with resultant high fixed costs and also affecting breakeven and profitability. A company, when it has to increase its capacity it has various options to consider, from working overtime to building a new facility or a plant. Forecasting demand is critical to capacity planning and companies can adopt different strategies of capacity planning, to ensure customer satisfaction and maintain the operations well
QUEST SOLUTION The biggest challenge to Barilla Spa was to implement a constant inventory control leading to overstock and stockouts. SOLUTION 1 Promoting JITD for everyone of it retail customers a quality and implementing market for JITD. PROS Having a higher profit by saving on warehouse space. Time to delivery helps with fresh stock and variation. The last part that helps is lower transportation cost by having one time delivery instead of multiple deliveries.
They use forward integration strategy which is meant by involves gaining ownership or increase control over distributors or retailers. The opportunities are low cost, high profit margin, and have more customers. The challenges are it’s hard to control the quality of the products and the management system. Second Case: What It Means to be Overstocked 1. Customer service is the vital component, not only to Overstock.com, but also to any online retailing business.
First, it must be determined if a company is pricing their products at below variable cost. Companies that do not reach their average variable costs, they make a decision to leave the market. Secondly, if costs have been reduced, then companies can reduce their prices as well. Lastly, the rationale behind predatory pricing doesn’t make much sense. When a company drives the prices so low and gets rid of competition and then raises prices, other companies will come along with lower prices to beat out the higher prices (Garg, 2011).
Comparing Products & Their Marketing Mix by M Mendoza 10/2012 Marketing Mix Differences: Staple Convenience Products vs. Homogeneous Shopping Products. When developing a marketing mix, marketers must understand the product type. Staple products need to focus the marketing mix on place, and be widely distributed to make purchases convenient. Homogeneous products focus less on place, but put more attention on price so they can be competitive. Here are the reasons why: Staple convenience products are customer products that are purchased regularly and without much thought.
In addition, the CA market is very broad and fragmented, which creates more potential for market penetration strategy. Therefore, Loctite should leverage its major industrial player role (75% market share with other two players) to achieve further penetration in the current market with CA products. However, the product development strategy to launch BAM will potentially bring negative impact on the company’s focus on market penetration. As company resources are limited, BAM launch will inevitably diversify the management and financial resources that should be used on market penetration. In addition, BAM will also generate additional costs such as product development and sales force training and lead the company to additional competition with similar products.