Marketing and Supply Chain Management - Essay Example

?Marketing and Supply Chain Management Introduction When companies are undergoing a major economic hurdle, they have to look for ways of minimising their expenses and increasing their profitability. This means that they have to try everything they can to ensure that they maintain their clientele and still hold on to the position they have in the market share. It is in this particular instance that each of the individual companies shows their prowess and showcases what type of management they have and how stable that management is. Adversities always call for the greatest minds to work out the best management cues that will definitely allow the company to withstand any turbulent moment and engage the stakeholders in every aspect of the decision-making pyramid. Relationship management is the main source of relief for any company that is seeking leverage in economic hardships (Goldberg 2001, p. 11). However, these relationship management strategies may come with even worse effects if not handled properly. Thus, understanding what the company requires and how this can be achieved with minimal changes is an essential step towards meeting the goals of the company. The maximum is expected but this has to be approached in a slow but sure manner (Bowersox, Closs and Cooper 2002, p. 33). As will be witnessed in this report, the case of ChemCo industries is one significant study that will help us understand the importance of key accounting management, the relevance of relationship management and how a mishap in implementing either can lead to total disaster. The case study will also be used to investigate the impact of KAM as applied by the company and what impact it had on its stakeholder sin the long run. The report will also explore the different ways and means through which internal and external relationships can be harmonized to create a company that has better and stronger economic outlook despite the challenges they face. Supply Chain Management and Business-to-Business Marketing Business –to-Business marketing can be defined under the notion of the changing relationships between the organisations engaging in either supplying or distribution of products amongst each other. They may be defined as the continuing interactions between the two parties rather than a sequence of encounters where manipulation of prices or demand is done by the supplier as they engage with suspicious customers (Hoegh 2008, p. 302). This can be related to the fact that those given the chance to deal with the marketing strategies may have competing interests in the business which may hinder rational decision making when the company is in question this may be witnessed and confirmed by the fact that ChemCo’s KAM manager decided what prices were to be set for certain clients while neglecting others in a bid to win over clients during their downhill financial trend. When dealing with the market and the organisation, there is something called marketing logistics that needs to be reconsidered to help understand what is expected in any setting. The market logistics are aimed at critically analysing the relationships between the two parties. This is where theories such as the 4P’s, Porter’s five force analysis and PCDA model of quality control come into focus. The company looks at the best ways through which their products can be attractive, how their prices and processes can be maintained or altered to improve their appeal to their clients or how they can analyze their processes and improve them to meet the demands of the clients (Hines 2004, p. 66). As such, any supply chain manager will seek to use even broader logistics to come up with a strategy that suits the entire chain and works at meeting the goals of the company whether by including the subsidiaries or delegating duties and targets for each of the subsidiaries to achieve (Mentzer et. al. 2001, p. 3). However, it is crucial to understand that chain management does not exclude even the smallest retailers in the chain. Instead, as a manager, considering the benefits of maintaining clear vision on B2B marketing should be a concept that is practiced entirely rather than exclusively on one sector alone. The SCM theorem looks at maintaining the very best relation with all the business partners rather than discriminating the other subsectors for the OEMs and larger corporate. All retailers, whether small or big, are critical in any supply chain. Neglecting either could be disastrous (Halldorsson, Kotzab, Mikkola and Skjoett-Larsen 2007, p. 286). The manager must always maintain the collaboration of the firms in order to avoid making any haste decisions that may affect the way they relate. Good relations always allow the company to meet its obligations while building and sustaining relationships with its customers from the top tier to their lowest of all. Stakeholders are essential in the running of the company whether external or internal (Desbarats 1995, p. 4). The internal stakeholders are expected to reach their maximum output if they are awarded a chance to perform free from any hindrances from their superiors. The external stakeholders expect that those in power will make proper arrangements to allow them continue dealing with their clients and other suppliers Larson and Halldorsson 2004, p. 30). All in all, they must create a customer relations management program that will help them interact with each of their clients, whether a large organisation or a smaller retailer, so that they can learn from them how to improve their services. Efficiency and pricing will also intertwine if they play their roles well and improve on their services (Mentzer et. al. 2001, p. 5). ChemCo Case Study In the 1990s, the economic hardships were very few. There were lesser companies that had the prowess and the ability to improve their presence in their respective industries based on their revenue. However, those that managed to improve on the little detail were nonetheless very successful because they were always a step ahead in meeting the demands of the clients. There were several theorems that had been formulated by then that helped marshal as many workers as possible towards meeting the required goals of the company (Blythe and Zimmerman 2005, p. 108). Workers were motivated and incentives made sure that they were satisfied with their jobs and hence were able to perform more productively. There were technological improvements that were very crucial in meeting the goals of the companies. There was more literature on ways that companies, more so manufacturing companies on how they could reduce their lead time and improve on meeting the demands of their clients (Arussy 2005, p. 29). A reduction in lead time in particular is one key way that companies came by during this session when people rarely knew about it. Nevertheless, for companies like ChemCo, they had the means of acquiring such information and the nerve to implement it and the results were ingenuous. As noted in the text, ChemCo was one of the four remaining suppliers in the period between 1992 and 1998 when the number of suppliers fell from 8 companies to 4. During this period, the demand was high and the companies with the might to produce as much had the opportunity to set premium prices by product differentiation. This alone was something that each company dreamt off because they knew they had the power to manipulate the markets based on how stable they were and how much they were willing to grapple with to remain at the helm of their industry (Haag et al. 2006, p. 87). ChemCo had divided itself into three segments which included the global majors which dealt with the international scale purchasers, the largely-known nationally-based companies with dominant positions in their respective markets and finally the small-scale local chemical blenders. The main problem that they could have resolved at this point in time when they were at their best was to come up with a means of co-ordinate their buying activity which would have involved the use of the customer relationship management model that would have been an essential way of consolidating their market share (Kostelnick 1998, p. 475). They were, however, excellent at making good use of R&D improvement while creating key customer liaison offices that were to cover all the geographical regions that the company had a presence in. Though the local managers felt that they had better control of their relations with the local managers, there was something lacking in this coordination (Kostelnick 1998, p. 477). Each meeting must have relevance when it occurs to avoid wasting time. Further, there must be checks-and-balances because the untamed tagging of prices led to an infiltration that went on to harm the company’s revenue by the end of the decade. They had no appropriate means of hoarding their products to regulate price but depended on the way each product was requested and produced. By having a CRM, the company could have created strategies through which each subsidiary would follow before putting a price tag on any product and this would really save the company a lot in the coming years (Greenberg 2009, p. 7). But this changed when market shares dropped and the company had to downsize to meet its revenue and expenditures. They were faced with a demand decline hence a need for cost reduction as demanded by the clients. The increase in the number of alternative companies by the end of the decade led to an increase in the number of companies that could offer alternative services at a lower price made it difficult for them to maintain a bargaining chip like they did before. They could not manipulate the prices nor could they just put price tags without consultations (Ketchen and Hult 2006, p. 576). By looking at the above, the relationship management program used before the millennia was very shoddy. It did not ensure quality, efficiency, decrease the costs while attracting and retaining loyal clients nor did it improve in increasing the company’s profitability. Though many might dispute that last phrase, there is evidence that they did not benefit exclusively from manipulating their prices. As noted, when the decade-long leadership in the industry, they could not marshal any more revenue to remain afoot and had to close several outlets and maintain 7 that they could work with comfortably. They could have been minimising on expenditure to remain relevant but the fact is they could not visualise more than 7 of their trusted business allies to trade with. They cease to explore the options that they could have had when the profits were at their best and this failure led to the current misfortune. Lack of foresight led the company to crumble from its own mistakes (Ketchen and Hult 2006, p. 578). ChemCo’s Present KAM-Based Actions When discussing about the KAM actions that ChemCo took when the demand began to plateau and the prices began plummeting, there are certain things that we note. The company sought to create the post of the KAM manager who was to liaise with the global majors. There was some discontent about this move from the internal areas of the company as they believed that the company was neglecting the national corporations that they served. The manager is expected to be a link between the client and the company by understanding what they need and how they can manage their needs within the company’s budget and still make profits from these interactions (Movahedi, Lavassani and Kumar 2009, p. 82). It is supposed to ensure greater customer satisfaction, higher customer retention, and stronger customer relationships, improve the management of customer needs and enhance the entry level for any competitor. That is what KAM action plans are meant to ascertain. However, there was something wrong with this plan when ChemCo took it up. By creating a liaison office without involving the workers would be disastrous. It is significant to note that KAM is an organisational change and not a part of the sales criteria (Hart-Davidson et al. 2008, p. 12). If the company knew this, the impact within the company would be better received rather than how skeptically it was viewed. A business-to-business (B2B) venture requires that companies manage their relationships with strategically-crucial customers without overlooking the potential that they possess while they come into the partnership. Thus, KAM must be a revolutionary aspect rather than sales-oriented approach because there are things that the operations department ought to do and those that the IT department needs to concentrate on (Gellevij and Van Der Meij 2004, p. 225). However, for ChemCo, they chose to concentrate on the larger manufacturers at the expense of the lower tier companies that could have offered them a back-up plan incase international deals do not go as expected. Instead of looking at how the KAM manager can control price because of the market, the company should have sought a more influential individual that could lead to what Supply Chain Management theory terms as distribution network configuration. As witnessed, the lack of correspondence between what the company does and what the manager ought to stand up for cost the company a whole lot. B2B ventures require more interest in the way each company handles its internal issues so that they do not negatively affect the external cases (Pennington 2007, p. 67). The ChemCo plan was ingenuous but the implementation was pegged on flawed misconceptions of how business ought to have been run during such a shaky period in their financial outlook. The impact could have been turned into a positive venture but the company sought to look the other way as the KAM manager went from one strategy to the other in a bid to woo more clients, leading to a disastrous performance for the company. Their short-term goals were very short-lived and though some would argue that they were necessary, there was a flaw in setting them. One thing that the manager did not do was set parallel measures that would see the long-term goals actualised. Instead, the manager embarked on a short-term venture and forgot that after meeting these goals, they needed something to boost them when things got back on track. By using the coercive power stance based on short-term transactional goals, the manager did not create any long-term benefits that the suppliers could peg their hopes on for continued support (Halldorsson, Kotzab and Skjott-Larsen 2003, p. 349). Instead, other companies were able to bring ChemCo down to their level and engage it in price wars which ended up hurting them even more. The combination of the traditional industry attitudes that characterised the early 90s and the overreaction by the buyers using policies that were aimed at creating a bargaining chip for the clients made it even more difficult for the external supplier to enjoy their support for the company. Furthermore, the KAM strategy has locked out the local relationships which mean that their opponents have an opportunity to woo them to their side. By losing out on the locals, they are sending mixed signal to the clients that depend on them for their supplies (Jacoby 2009, p.93). As such, they may lose confidence in the way they interact with the company and this will affect their sales in the long run. If they had interacted with their clients before making any choices, they could have maintained a clear stand on how each of these segments would be handled just to ensure that each of them is considered during the decision-making process. Furthermore, they ignored some of the most salient attributes such on-time deliveries, product quality and lead times which are essential in keeping both the internal and external stakeholders in check (Simchi-Levi, Kaminsky and Simchi-Levi 2007, p. 76). Quality and on-time delivery will assure clients that they will receive their products as they ordered for them. The lead time will assure the two factors and motivate the workers to perform their duties as is expected of them. Recommendations One of the best ways through which the external stakeholders could have been involved in a fair interaction with ChemCo is by allowing each of the KAM managers to be trained on what is expected of them. Instead of giving them the office and expecting them to act, there is a need to ensure that each of these managers is ready to meet their obligations and is ready to meet with the stakeholder to map out vital strategies (Cieslak and Gaby 2006, p. 38). Further, the KAM manager should not be from one department. All departments should have been included. However, the fact that they sought to have one manager meet all the requirements means they neglected some of the key departments that need extra attention when it comes to creating a product that meets the clients’ expectations (Ryals and McDonald 2007, p. 76). For instance, there must be a sales manager in the KAM office, one from the technical and another from the operations department. This way, they will have a broad range of skills that will be critical in meeting the requirements that characterise such an office (Pennington 2007, p. 68). Another thing regarding the KAM strategy is that the company should set the right metrics. The training will basically be expected to meet the goals of building a long-term relationship with the customer and how this may be maintained this is done correctly, everyone will benefit from such ideologies because they will make decisions based on long-term goals rather than short-term incentives (DeGregor 2011, p. 98). This also implies that they must come up with ideal objectives that are realistic and all inclusive rather than coming from one individual alone. By setting the right metrics, the managers will be able to work in a motivated environment which will enable them to be more productive rather than working as though they were getting rewarded for a normal sales job. Another recommendation is that the company ought to create a benchmark and build on it to achieve bigger things in the future. The R&D advancement that they used to move to the top of the program is what they should use to ensure they reach the top again (Roy, Dewit and Aubert 2001, p. 390). This way, they will meet the requirements of each department and recreate a new program that will dwell on their relationship with their customers. The customer relationship management program always has a way of increasing efficacy and quality which is missing in this company. Combined with the KAM strategies and an improved supply chain management program, the CRM will be detrimental in meeting all the goals of the company as well as recreate the company’s initial drive to be at the top of the industry (Joachim 2002, p. 1). Such motivation will lead the company to meet its goals and attract as many clients as possible through their improved and enhanced performance. It may also require the use of the vendor relationship management program to allow the clients to deal with the company independently and learn a thing or two from them (Ka-Ping 2002, p. 279). This way, they will engage with them in meeting their goals and thus improve relationships which are quite significant in any business. Reducing the lead time is another main step that will help increase production, improve competitiveness and engage as many stakeholders as possible in the delivery of the required product (Lavassani, Movahedi and Kumar 2009, p. 86). The time that elapses from the ordering to the delivery needs to be reduced to help improve the company’s image and ensure that each of these suppliers, clients and distributors enjoys the new look of the company (Laney 2001, p. 49). Total cycle time compression has always been critical when it comes to managing, directing and owning the production process the management must look into changing the current system to allow them to meet the new targets. Working on the B2B relations will also be a welcome opportunity to utilise the skills and potentials in the company for the betterment of the company (Kouvelis, Chambers and Wang 2006, p.450). As such, each of these stakeholders must be provided with a chance to participate in the building of the company rather than just sitting and waiting for the KAM manager or the Suppliers manager to make all the decisions on their own. Teamwork always wins hurdles and more pooling of ideas and resources rather than neglecting some of the team players because you think they are not worth at the time. Conclusion As a relationship manager, setting the right goals require that they first create firm relationships with their client and their suppliers. As such, they will have ensured that the right mechanisms are in progress. This means that they must apply theorems that engage their workers to meet their potential through inspiration rather than coercion. They must be able to define, analyze and quantify relationships with their stakeholders so that nothing in their management system gives them away when dealing with their competitor. They should adapt a CRM to enable them keep in touch with their clients and close any knowledge gaps and system gaps that may hinder them from fully satisfying their clients. To meet this, it is advisable that they enhance the KAM strategy by training the managers in meeting the long-term while they delegate the short-term goals to the respective departments. They should cut deals with the larger clients but not neglect their backbone enterprises that offer them a chance to be greater in the country. References Arussy, L. 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