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A Tighter Knot Needed for Inventory & Marketing

Technology promises to extend the electronics supply chain beyond raw materials purchasing, manufacturing outsourcing, facilities management, distribution centers, and retail store floors on to the Internet.

What do I mean? If you believe component buyers at top brands such as Apple don't consider branding and marketing as part of the entire supply chain, think again. Supply chain managers and buyers need to consider what happens after the finished widgets get shipped from manufacturing to distribution centers and how online marketers brand products and services.

It's amazing how information can increase efficiencies and profits. With Timothy Cook now at the helm of {complink 379|Apple Inc.}, expect the company to tie supply chain and marketing strategies even closer. Cook, the former Apple chief operating officer who became CEO when Steve Jobs resigned, “built a supply chain bigger than anyone could have imagined and distributed products in a way that even Wal-Mart’s Sam Walton would envy,” according to the Washington Post. The Motley Fool's Eric Bleeker told the paper that this “allowed the company to make, for example, a quality tablet computer that few have been able to undercut in price.”

Supply chain managers can ensure marketers know the type of inventory coming down the pike by sending continual product inventory feeds or alerts to online employees creating search engine marketing. Sharing information like this completes the supply chain, helps marketers optimize Websites to let specific keywords rank higher in search queries, and allows early testing of paid search campaigns. These campaigns, running through Google AdWords or Bing adCenter, could achieve better conversion rates and higher return on investment with a little preparation and branding before the product hits store shelves.

Today, building a better supply chain requires communicating valuable information to all involved in the marketing and selling process, too. Buyers should send marketers some sort of product feed keeping them up to date on finished goods en route from manufacturing facilities to distribution centers and retail stores. Alerting marketers of increased production, declining inventories, or out-of-stock products helps optimize campaigns.

Aaron Goldman, chief marketing officer at Kenshoo and the author of Everything I Know About Marketing I Learned from Google , agrees. “Many retailers and distributors connect inventory feeds with marketing campaigns, but there's definitely opportunity to go further upstream and hook in with OEMs,” he said. “The minute a product rolls off the assembly line is the minute direct marketing activity should begin. And of course, general brand marketing needs to begin well before that, too.”

As products leave manufacturing facilities, buyers can work with marketers by sending them a data feed with product specs and keywords. That's when marketers should start to build and test paid search ads for brand components in the finished goods — similar to the famous “Intel Inside” campaign. As items get sold and stock depletes, search marketers will pause campaign keywords and reduce bids in paid search platforms such as AdWords and adCenter.

Keywords and phrases can drive sales for multiple products. Marketers will know which keywords to pause or change. For example, manufacturing might halt halfway through the distribution of a “two-speaker computer system with base unit,” but not for a “two-speaker system.” If keywords drive multiple SKUs, any pause of the keywords might cause the company to miss out on sales. As long as the products remain in production, even if there's a break in distribution or out-of-stock items, continue to feed keywords through the data pipeline, and allow marketers to determine which ones should be paused.

3 comments on “A Tighter Knot Needed for Inventory & Marketing

  1. prabhakar_deosthali
    August 30, 2011

    Such close linkage between direct marketing and the production rollout can also be used to advantage when say a product is in short supply. The marketing dept can use such temporary scarcity of a product to create an impression  that the demand is outstripping the supply therby charging some premium price on those products. Customers always want products which are in demand and are ready to wait and also pay premium for such products compared to the products that are readily available.

  2. Mr. Roques
    August 30, 2011

    Funny that you mention how Apple has delivered a wonderful product at a very competitive price (that few have been able to beat) … in doing that, they have gone against what they have showed over their entire history. 

    Apple has always been the 'luxury' brand in consumer electronics. It, through effective marketing, gives the user a better feeling about life and about themselves. 

    But when talking about tablets, they have a price which directly competes with others, while continuing to sell that “je ne sais quoi”. Read: Game over for competitors.

  3. Laurie Sullivan
    August 30, 2011

    prabhakar – you're correct. Companies can use a close link between direct marketing and production to their advantage by sharing information. Marketers might highlight that demand outstrips supply to create additional buzz around the product. The two division need to stay in sync. In fact, all divisions responsible for producing, marketing and selling the product need to remain in sync by sharing information. That's what creates a well-run supply chain.

    If you work at an OEM that closely ties production to marketing, please, share your experience.  

     

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