STUDENTS' CORNER - 140
We have to study now the second cost involved in introducing a variety
of products which is considered a first obstacle to achieving supply chain
management with efficiency. We have already spent some time on Production
costs. Now, we will move on to the second cost, marketing costs. In this context, it is generally called
The essence of market mediation refers to a skill -- which might include
at times what is known as gut feeling—that manages to strike and largely
maintain a balance between demand and the inventory of the product. It is
easier discussed than achieved. There
does not seem to be some standard well-defined guideline that makes an exact
prediction of demand for a product. In other words, there is this unpredictable
uncertainty with regard to demand and marketing capability must find ways to
deal with this uncertainty in such a way that the company does not stand to
When you have a variety of products to market, you face a lot of
issues that you cannot decide with conviction.
First of all, you do not know which product enjoys or is likely to enjoy
a good market share; which product has already earned some market recognition;
which product can command attention from the customers for quality, and so on.
Again, budget allocation remains a great challenge; you cannot sink
capital in a product that does not guarantee expected volume of sale. If budget
allots some considerable amount to such products, you may fall short of
allotment for those products which demand more investment so that they can
retain their position in the market. You find in every task of finding fund for
the variety of products there is the burden of uncertainty. And tackling uncertainty consumes bulk of
energy and time. At times, the problem is so complex that certain companies
choose to postpone the introduction of newer products in terms of variety. Or,
they choose the best strategic way of manufacturing to order. This may not be
an aggressive marketing for the products but at least it is safe and free from
Under any circumstances, the companies cannot afford to take such
decisions that will make customers dissatisfied. Customer satisfaction is the sole
secret of success in business.
We will see next obstacle to achieving supply chain fit.