UNIVERSITY OF ECONOMICS IN BRATISLAVA, SLOVAK REPUBLIC BUSINESS MARKETING – CURRENT TOPICS IMPACTING ON SALES AND PURCHASES IN THE COMPANY. KNOWLEDGE FROM

UNIVERSITY OF ECONOMICS IN BRATISLAVA, SLOVAK REPUBLIC

BUSINESS MARKETING – CURRENT TOPICS IMPACTING ON SALES AND PURCHASES IN THE

COMPANY. KNOWLEDGE FROM PRACTICE.

MARKETING/INTERNATIONAL ECONOMICS – UCL – JANUARY, 2014

LECTURER MILAN ORESKY


BUSINESS MARKETING – CURRENT TOPICS IMPACTING ON SALE AND PURCHASES IN THE COMPANY

1. Intercompany relations and purchasing policy. Supply chains and networks.

2. E-SCM and E-procurement, E-reverse auctions

3. Customer relationship management – Supplier relationship management


4. New product development and ESI – early supplier involvement

5. Selling and buying at right price. Tendering

6. Contract negotiations

7. Capital investment purchases


1. Inter company relations and purchasing policy

Supply chains and networks


Logistics and Supply ChainsA Supply Chain is that network of organisations that are involved,

through upstream and downstream linkages, in the different processesand activities that produce value in the form of products and services

in the hands of the ultimate customer or consumer.

Can be classified according to:• Customer/supplier characteristics – concentrated, batch, retail

and distribution• Virtuality - information• Scope – international, regional, • Service• Complexity – direct, extended, ultimate• Products – end product (build to forecast, build to order)• Purpose and value

Types of Supply Chain

Supply Chain Management– Eight Processes

Customerrelationship

management

Product development& commercialisation

Supplier relationshipmanagement

Manufacturing flowmanagement

Orderfulfillment

Demand management

Customer servicemanagement

Returnsmanagement

Quality of products and services

Balancing requirements with capabilities.... active influencing demand

Operations management, Quick response manufacturing

Company interaction with suppliers, short-term, long-term - intensity

Reverse logistics

Logistics and Supply Chains

Diversification – multiple sourcingStockpiling – inventory as a buffer

Redundancy – maintaining excess production, storage... Insurance – against losses

Supplier selection – more careful assessment of suppliers

Localised sourcing – shortening transport distancesRationalisation of the product range

Collaborative initiatives – spreading risksContractual obligation – imposing legal obligations

Supplier development – working closely with suppliers

Ten ways of Managing Supply Chain Risk1

2

3

4

5

6

7

8

9

10

Logistics and Supply Chains

Purchasing 55 – 65 %

Transport 3,5 – 7 %

Labor 2,5 – 6 %

Inventory 3 – 9 %

System and administration 1,5 – 3 %

Facilities 0,7 – 2 %

Range of expenditures as percentage of the sales

What is Purchasing?MARKETING STRUCTURE AND DEMAND

Business markets contain fewer but larger buyers.Business customers are more geographically concentrated.

Business buyer demand is derived from final consumer demand.

Demand in many business markets is more inelastic - not affected as much in the short run by price changes.

Demand in business markets fluctuates more, and more quickly.

What is Purchasing?NATURE OF THE BUYING UNIT

Business purchases involve more buyers.Business buying involves a more professional purchasing effort.

TYPES OF DECISIONS AND THE DECISION PROCESS

Business buyers usually face more complex buying decisions.The business buying process is more formalized.In business buying, buyers and sellers work more closely together and build close long-run relationships.

To select the best suppliers in the market. To help generate the effective development of new products. To protect the company’s cost structure. To maintain the correct quality/value balance. To monitor supply market trends. To negotiate effectively in order to work with suppliers who will

seek mutual benefit through economically superior performance. To adopt environmentally responsible supply management.

More specific objectives of buying unit


What is Purchasing?Purchasing and Change

Globalisation ImpactInformationTechnology

Impact

Chasing Production &Management

Philosophies Impact

• Transgression of national boundaries

• Advantage of cost

• Specialised labour skills

• Emerging economies

• Slicker transactions

• Quality of management data

• Strategic link with suppliers

• Paperless environment

• Competitive advantage

• Outsourcing

• Supply chain management

Supply networks

What is Purchasing?

Increase in strategic importance

Automated tactical activities

Master contracts

Electronic purchasing

Strategic purchasing competency centres

Shared supply chain resources

Profit contribution

Changed emphasis on individual skills

Purchasing in the Future

The price/cost iceberg

Total acquisition costs and total cost of ownership

Structure and Supply Chains Seven Characteristics of New Type Organisations

RadicalDecentralisation

DemandingExpectations

DistributedLeadership

Networking &Reciprocity

IntenseInterdependence

TransparentPerformance

Standards

BoundaryBusting

„Small is beautiful“

+ multidisciplinary approaches

Leadership distributed among

people

Direct relationships and communication between individuals

“A network structure is a series of strategic alliances that anorganisation forms with suppliers, manufacturers and distributors

to produce and market a product.”

A network is not a world of individual and isolated transactions.

Network structures allow organisations to bring resources together on a long-term basis to reduce costs.

Networks relate to all aspects of the supply chain, including marketing and distribution.

Factors in Configuration

Structure and Supply Chains

First-tier Suppliers

Second-tier Suppliers

Those that integrate for direct supply to the assembler or who have a significant technicalinfluence on the assembly while supplying indirectly

Those that supply components tofirst-tier suppliers for integration into systems or provide some support service


Structure and Supply Chains

Convergent and divergent elements in a supply chain

Documents

UNIVERSITY OF ECONOMICS IN BRATISLAVA, SLOVAK REPUBLIC BUSINESS MARKETING – CURRENT TOPICS IMPACTING ON SALES AND PURCHASES IN THE COMPANY. KNOWLEDGE FROM