Omni-Channel Marketing

There are many channels the organization may use to communicate with its potential customers. Once the customer is ready to make a purchase, the organization must have the channel or channels that will allow for a seamless buying experience. The consumer may order Starbucks coffee via app and pick up the coffee at the store. This discussion addresses the following module outcomes: MO1: Understand how the supply chain creates value for the consumer (CO5, 8) MO2: Understand the needs of the multi-channel and omni-channel consumers (CO1, 5) Analyze the marketing strategies for omni-channel consumers. Using the course materials and/or additional research, identify an organization currently using omni-channel marketing and discuss how its omni-channel tactics correspond to best practices of omni-channel marketing. Module 6: Module Notes: Delivering Value to the Consumer The Supply Chain The image is of a container ship docked in a port. Cranes are unloading the cargo and trucks are shown removing the containers from the port.Getting the right product to the consumer at precisely the time the consumer is ready to purchase is a critical function of the supply chain. The 21st century technology and global competition have made it possible for consumers to purchase virtually anything from anywhere around the globe. It can be confusing for a consumer to differentiate among competitors for his/her purchase decision; what separates competitors? How consumers discern differences among competitors will most likely determine what organization will enjoy the final purchase decision. Although there are numerous ways for organizations to differentiate themselves from competitors, delivering value to the consumer through the companys supply chain can bring a competitive advantage. The Supply Chain The supply chain, sometimes called the distribution channel, includes all the activities and intermediaries from manufacturers to consumers (Esmaeilikia, Fahimnia, Sarkis, Govindana, Kumar, & Mo, 2016). Supply chain management (SCM) is a network of all the activities involved with the physical flow of the product to consumers (Supply Chain Management, n.d.). It involves procuring either raw materials or finished goods from all over the world that end up on the retail shelves ready for purchase. The Council of Supply Chain Management stated SCM is providing the Right Product, At the Right Time, Right Place and at the Right Cost to the Customer (para. 3). Organizations strive to successfully manage SCM and be first to offer what the consumer wants to buy; thus, using the supply chain as a competitive advantage. The critical timing of SCM for an organizations ability to provide the right products at the right time is managed by supply chain logistics. Supply Chain Management and Logistics While scholars argue that supply chain logistics is the new term to describe the supply chain, there are differences. The Council of Supply Chain Management (CSCMP) (n.d.) defined the function of the supply chain as overseeing activities such as linking major business functions and processes within the organization and the physical process from producers to the consumer (para. 7). Management of the supply chain logistics involves the transportation, warehousing, packaging, and inventory management (Bisk, n.d.). Supply chain logistics, therefore, is only a part of the supply chain that oversees the efficient and timely flow and storage of goods from the point of origin to the consumer (CSCMP). Amazon The logistics of supply chain management can bring a competitive advantage. Amazon has moved from a small provider to a formidable giant, in part from its supply chain logistics. Amazon received approval from the U. S. government in 2015 to act as a freight forwarder for ocean shipping. In addition, the company received approval from the Chinese government to buy space on container ships at wholesale rates and charge retail rates for resell rates. Amazon also acquired wholesale shipping rates with Air Transport Services. Finally, Amazon has distribution centers strategically located to provide fast delivery. Known as vertical integration (when one supply channel member assumes the function of other channel members), Amazon is well positioned to offer consumers a broad range of products and competitive pricing (Bentley, 2017). Multi-Channel vs. Omni-Channel Strategy Multi-Channel Strategy Organizations must communicate with potential customers to make those consumers aware of products or services available for purchase. Traditional channels of communication include broadcast (television, radio) or print (mailings, publications) and were the only outlets for the organization to let the consumer know of upcoming sales or other promotional tactics. Today, however, the Internet and social media sites offer the organization a plethora of communication outlets. The consumer may have notification appeal on a smartphone, tablet, email, text, or other digital venues. The consumer may use an app to make a purchase, or any number of the digital venues. The key for the organization is to offer an integrated, seamless buying experience, the omni-channel strategy. Omni-Channel Strategy Todays consumers demand a seamless buying experience. The consumer may make a digital purchase and go to a physical location to pick up the purchase or have the purchased delivered. A purchase such as a video or a game may also be digitally downloaded onto a device. Whatever channel the consumer uses, the consumer demands the experience is the same. As stated by Kotler (2017), marketers need to identify all the possible touchpoints and channels. Remember Blockbuster? Consumers visited the store to rent movies and later games. Blockbuster enjoyed being the market leader and provider of videos. The company enjoyed charging late fees, too, as nearly $800 million of their 2000 income was in late fees (Anderson & Liedtke, 2010, para. 11). A new player in video rentals emerged, Netflix. Netflix charged a monthly subscription and mailed videos to consumers, with no late fee on late returns. Neflixs strategy embraced technology and the Internet, while Blockbuster remained steadfast in its current model. Blockbusters CEO once passed on an opportunity to purchase Blockbuster in 2000, believing the company to be a minor player and only a narrow market niche was willing to pay a monthly subscription (Chong, 2017). Meanwhile, Netflix implemented its forward-thinking strategy for the omni-channel consumers and offered online streaming content in addition to its mailing program. We know the rest: Blockbuster recognized the changing consumer demand too late and no longer exists. Conclusion The 21st century consumer has global purchase alternatives, and using the supply chain and its logistics as a competitive advantage differentiates competitors. Whether the purchase is made via an app on a digital device or through traditional venues, the consumer demands a seamless buying experience. References Anderson, M., & Liedtke, M. (2010, September 23). Hubris and late fees doomed Blockbuster. [Web log comment]. Retrieved from Ballard, J. (2015). The difference between multichannel and omnichannel. 1:02. SAP. [Video file]. Retrieved from Bentley, M. (2017, February). Fighting Amazon’s supply chain takeover. Logistics Management 56(2), 42-46 Chong, C. (2015, July 17). Blockbusters CEO once passed up a chance to buy Netflix for only $50 million. Business Insider. Retrieved from Esmaeilikia, M., Fahimnia, B., Sarkis, J., Govindan, K., Kumar, A., & Mo, J. (2016, September). Tactical supply chain planning models with inherent flexibility: Definition and review. Annals of Operations Research, 244(2), 407-427. Retrieved from Academic OneFile database Kotler, P. (2017). Marketing : Moving from tradition to digital. Hoboken, NJ: John Wiley & Sons, Inc. Lucero, D. (.). Why Blockbuster failed. Siam Tek. [Web log comment]. Retrieved from Supply chain management Definition and importance of its strategies. (.). [Web log comment]. Retrieved from Supply chain management definitions and glossary. (.). Council of Supply Chain Management Professionals (CSCMP).