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
UNIVERSITY OF ECONOMICS IN BRATISLAVA, SLOVAK REPUBLIC
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
UNIVERSITY OF ECONOMICS IN BRATISLAVA, SLOVAK REPUBLIC
4. New product development and ESI – early supplier
involvement
5. Selling and buying at right price. Tendering
6. Contract negotiations
7. Capital investment purchases
UNIVERSITY OF ECONOMICS IN BRATISLAVA, SLOVAK REPUBLIC
1. Inter company relations and purchasing
policy
Supply chains and networks
UNIVERSITY OF ECONOMICS IN BRATISLAVA, SLOVAK REPUBLIC
Logistics and Supply Chains
A Supply Chain is that network of organisations that are involved,
through upstream and downstream linkages, in the different processes
and activities that produce value in the form of products and services
in the hands of the ultimate customer or consumer.
Types of Supply Chain
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
Customer
relationship
management
Reverse logistics
Returns
management
Product development
& commercialisation
Customer service
management
Supply Chain Management
– Eight Processes
Supplier relationship
management
Company interaction with
suppliers, short-term, longterm - intensity
Quality of products and
services
Manufacturing flow
management
Demand management
Order
fulfillment
Balancing
requirements
with
capabilities....
active
influencing
demand
Operations management,
Quick response manufacturing
Logistics and Supply Chains
Ten ways of Managing Supply Chain Risk
1
Diversification – multiple sourcing
2
Stockpiling – inventory as a buffer
3
Redundancy – maintaining excess production, storage...
4
Insurance – against losses
5
Supplier selection – more careful assessment of suppliers
6
Supplier development – working closely with suppliers
7
Contractual obligation – imposing legal obligations
8
Collaborative initiatives – spreading risks
9
Rationalisation of the product range
10
Localised sourcing – shortening transport distances
Logistics and Supply Chains
Range of expenditures as percentage of the sales
Purchasing
55 – 65 %
Transport
3,5 – 7 %
Labor
2,5 – 6 %
Inventory
3–9%
System and administration
1,5 – 3 %
Facilities
0,7 – 2 %
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.
More specific objectives of buying unit
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.
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UNIVERSITY OF ECONOMICS IN BRATISLAVA, SLOVAK REPUBLIC
What is Purchasing?
Purchasing
and Change
Globalisation Impact
• Transgression of
national boundaries
• Advantage of cost
• Specialised labour skills
Information
Technology
Impact
Chasing Production &
Management
Philosophies Impact
• Slicker transactions
• Competitive advantage
• Quality of management
data
• Outsourcing
• Strategic link with
suppliers
• Supply chain
management
• Emerging economies
• Paperless environment
Supply networks
What is Purchasing?
Purchasing
in the Future
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
Total acquisition costs and total cost of ownership
The price/cost iceberg
and Supply
Chains
Seven Structure
Characteristics
of New
Type Organisations
Radical
Decentralisation
Demanding
Distributed
Networking &
Expectations
Leadership
Reciprocity
Transparent
Boundary
Intense
Performance
Interdependence
Busting
Standards
„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 an
organisation forms with suppliers, manufacturers and distributors
to produce and market a product.”
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A network is not a world of individual and isolated transactions.
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Network structures allow organisations to bring resources together
on a long-term basis to reduce costs.
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Networks relate to all aspects of the supply chain, including
marketing and distribution.
Structure and Supply Chains
Factors in Configuration
First-tier Suppliers
Second-tier Suppliers
Those that integrate for direct
supply to the assembler or who
have a significant technical
influence on the assembly while
supplying indirectly
Those that supply components to
first-tier suppliers for integration
into systems or provide some
support service
UNIVERSITY OF ECONOMICS IN BRATISLAVA, SLOVAK REPUBLIC
Structure and Supply Chains
Convergent
and divergent
elements in a
supply chain