Supply Chain is the management of flows. There are Five major flows in any supply chain : product flow, financial flow, information flow, value flow & risk flow. The product flow includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs. The financial flow consists …
Category: Business
The Bullwhip Effect in Supply Chain
The bullwhip effect is a distribution channel phenomenon in which forecasts yield supply chain inefficiencies. It refers to increasing swings in inventory in response to shifts in customer demand as you move further up the supply chain. Causes of Bullwhip effect The bullwhip effect is mainly caused by three underlying problems: 1) a lack of …
Aggregation Methods in Supply Chain – temporal, spatial and product
In supply chain, there are broadly three types of demand aggregation: Temporal Aggregation: Suppose you are a hyper local grocery retailer, say Big Basket. If the demand from certain area is not enough for you to deliver it every day, then you will aggregate the demand across multiple days and say that you will deliver …
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Service Output Demands and Sales Channel Design
Channel design is a crucial element in any product's marketing plan. It is sometimes the most crucial factor for success. A channel designed properly will bring in customers and increases your market share. Most of the times a channel is designed by the marketing teams and the structure and the maintenance is done by the …
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Inventory Management, Inventory Costs, Newsvendor vs. EOQ
Different models are used to manage inventory for products that are continually available (like milk) or products available for limited time (like seed).The Economic Order Quantity (EOQ) model determines the least cost level of inventory to carry, as well as costs. News Vendor models are used for products only available for a single period. EOQ …
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Leadership – Goal Management – How to approach goals?
GUAGE THE SITUATION RIGHTLY AND HAVE THE RIGHT APPROACH Any business situation can be defined as a goal that needs to be achieved and the assumptions, constraints and resources available under that situation. One needs to use those resources and work with certain constraints and assumptions to make an approach towards achieving a goal in a situation. …
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Economic value to the customer (EVC)
Economic value to the customer is simply the purchase price that customers should be willing to pay for your product, given the price they are currently paying for the reference product and the added functionality and diminished costs provided by your product. Start with the purchase price of the reference product and then add improvements …
Margin or Contribution Analysis
Margin Analysis, also referred as Contribution Analysis, is a tabular data to track the prices, variable costs and profit margins for all the members in a value chain (producer, distributor, retailer) for every relevant product within the firm's product line and across competitors. This data is mainly used to understand the below: Which among the …
Break-even Analysis and Break-even Cannibalization Rate (BECR)
A break-even analysis is a key part of any good business plan. It can also be helpful even before you decide to write a business plan, when you're trying to figure out if an idea is worth pursuing. Long after your company is up and running, it can remain helpful as a way to figure …
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Overview of the Marketing Budget of a Brand
The marketing budget of an FMCG brand typically comprises of the following elements: 1. Above The Line (ATL) budget 2. Below The Line (BTL) budget The ATL budget broadly comprises of two components: the media budget and the production budget. Media budget is the actual money that is spent on advertising the brand in conventional …
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Importance of question sequence in MR questionnaire design
One of the most important aspects in designing a market research (MR) questionnaire is the sequence of the questions. Each question that you ask poses a potential danger to sensitize or condition the respondent, and thereby bias the respondent in the subsequent questions. One example is that asking a question like ‘Have you heard of Brand …
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How the visibility budgets are used for price undercutting in FMCG?
If you speak to any Territory Sales In-charge or Manager (TSM) of a large FMCG company, they are going to mention one huge problem called price undercutting that affects their daily work. In an earlier post, I have written about how the wholesale trade leads to price undercutting. In this post, I am going to write about …
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Analysis of New Triers, Repeaters, and Lapsers of a Brand – ecommerce and fmcg
At any period of time, the consumer base of a brand is comprised of two sets of buyers: New Triers, and Repeat Purchasers. The terms are self-explanatory. To put it simply, Repeat Purchasers are consumers (or households) who repeated the purchase of the brand, and New Triers are consumers (or households) who bought the brand …
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How Price Undercutting happens via Wholesale Trade?
Wikipedia defines price undercutting as: 'Price cutting, or undercutting, is a sales technique that reduces the retail prices to a level low enough to eliminate competition'. It is obvious that price under-cutting happens mostly to boost volume sales. This article is about how undercutting works in the context of Indian FMCG. Brief Overview of the …
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The buzz about Twitter, TV, and Nielsen
What is Twitter for TV ? Historically, TV viewers have always liked to discuss and debate about TV shows. People always talked about that particular cricket shot, actor, and that movie scene as they watched TV in their drawing rooms. But, the discussion was traditionally limited (geographically) to people inside the room. Twitter for TV allows you to tweet your ‘talk’ …
Entertainment in Television Advertisements
As I mentioned in earlier blog posts, to communicate something to a recipient one has to command the recipient’s attention and then be relevant to the recipient. Communication: Command Attention (Clutter breaking) -> Be Relevant This holds true even for communication among two individuals or two groups of people or for television commercials (TVCs). For the …
Choice based Conjoint (CBC) and Brand Price TradeOff (BPTO)
Choice based Conjoint Choice based Conjoint (CBC) is a research technique based on the observation that consumers always choose products among a set of products in the marketplace, and a simulation of it is the closest to the real consumer behaviour. CBC is a technique wherein the respondent is shown a set of concepts (with …
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The Modern Trade Consumer in India
With increased exposure to global brands, latest internet communications, and desire for better lifestyle, the consumers today are looking to use the global, trendy, life-style oriented products and are demanding more in terms of the shopping experience, simplicity, quality products, and value. The evolution of Modern Trade is just meeting the demands of these consumers …
Wholesale market in India
Wholesellers are none but middlemen who buy products from distributors (wholesale/retail) and sell them to retailers. In most cases, the retailers come to the wholesellers to buy products to replenish their stock. However, wholesellers may also sell to end consumers, but such sales are minimal. In the Indian FMCG market, we have broadly two types of wholesellers: 1. …
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