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Chapters 10

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Title: Chapters 10


1
Chapters 10 12Production Consumer Behaviour
2
A brief history of production
  • Until 1700s artisans
  • mid-late 1700s Industrial revolution

3
A brief history of production THE EARLY 1900s
  • Assembly line
  • Scientific management

4
A brief history of production THE MID 1900s
  • Large corporations economies of scale
  • Why do economies of scale exist? That is, what
    enables large factories to produce at a lower
    average cost than small factories (in some
    industries)?
  • Industrialized countries

5
A brief history of production 1970s and 1980s
  • Japanese manufacturing
  • Increased customer-focus

6
A brief history of production THE 1990s
  • The Asian Tigers
  • Korea
  • Singapore
  • Hong Kong
  • Taiwan
  • Also
  • Malaysia
  • Thailand
  • and CHINA

7
A brief history of production NORTH AMERICAN
TRENDS IN THE 1990s
  • Manufacturing ? Services
  • Mass customization

8
A brief history of production - 2006
  • Outsourcing services to India
  • In todays competitive world businesses must
    perform their production activities very well!

9
Todays Class - PRODUCTION
  • Elements of production
  • Planning
  • Scheduling
  • Managing inbound materials
  • Quality

10
Planning - CAPACITY
  • What is the main disadvantage of maintaining more
    capacity than is needed for normal production?
  • What are the advantages of maintaining extra
    capacity?

11
Planning - LOCATION
  • When deciding on where to locate a manufacturing
    plant, what factors should a company consider?
  • Have technology improvements (such as the
    internet and telecommunications) changed the
    degree to which facility location matters?
  • Does it make sense to put a manufacturing plant
    in PEI, if the markets for the product are
    throughout Canada and the US?

12
Inbound material handling
  • Materials and components are large part of COGS
  • Recent years
  • reduce number of suppliers and component designs
  • e.g. Westjet uses only Boeing 737s. What is the
    advantage of using only one kind of jet?
  • Auto companies common platforms

13
Inbound material handling - JIT
  • Just-in-time
  • suppliers usually close
  • information sharing
  • Why is it expensive to hold a lot of inventory?

14
Quality
  • Old way
  • inspect incoming materials
  • inspect finished goods coming off assembly line
  • New way
  • build quality into production in the first place

15
Total quality management (TQM)
  • W. Edwards Deming
  • First 7 of his 14 points
  • Create constancy of purpose.
  • Take the lead in adopting the new philosophy.
  • Cease dependence on inspection to achieve
    quality.
  • End the practice of awarding business on the
    basis of cheapest costs.
  • Improve constantly.
  • Institute modern on the job training.
  • Institute supervision to develop inspired
    leaders. Create constancy of purpose.

16
Total quality management (TQM)
  • Last 7 of his 14 points
  • Drive out fear and instill learning.
  • Break down barriers between departments.
  • Eliminate slogans, exhortations, and targets.
  • Eliminate management by numbers, and management
    by objective. Substitute leadership.
  • Remove barriers to pride in workmanship.
  • Institute education and self-improvement.
  • Put everybody to work to accomplish the
    transformation.

17
Benchmarking
  • study methods of firms that have the best
    practices
  • e.g. and
  • sources
  • consultants
  • arrangements with other companies
  • publicly available info
  • customers suppliers

18
Re-engineering ISO 9000
  • Business process re-engineering
  • Fundamental rethinking and radical redesign of
    business processes
  • e.g. IBM credit
  • ISO 9000
  • Documentation of processes designed to achieve
    quality

19
Modern production
  • Quality is critical to survival
  • Cost is too!
  • Practice efficiency and effectiveness here at
    university!

20
Chapter 12Marketing I
21
Marketing expenditures
Coca-Colas Operating Income
22
Todays Introduction to Marketing
  • What is marketing?
  • Shift towards customer orientation
  • Four Ps
  • Marketing in a competitive environment
  • Data collection
  • B2B
  • Segmentation

23
Marketing is
  • Much broader than advertising whole process of
    generating sales
  • Includes
  • Identifying target market (research)
  • Designing product that meets needs of target
    market
  • Choosing appropriate price
  • Research into message conveyance
  • Other promotion (e.g. shelf presentation)
  • Make product available

24
Increasingly Customer Oriented
  • Old days
  • Focused more on style rather than substance
  • Planned obsolescence
  • Nowadays
  • Quality matters
  • Whole experience
  • Reasons
  • Japanese showed North America up
  • Increased competition
  • Better Information e.g. Amazon.com

25
4 Ps
  • Product
  • Promotion
  • Price
  • Distribution Place

26
Competitive Issues
  • Why competitors matter
  • Want to fill need that no-one else is filling
  • If possible want to be very different
  • Coke and Pepsi are very similar to each other and
    compete hard against each other. Yet both
    companies are very profitable. Why do you think
    they succeed so well despite intense competition?

27
Data Collection
marketing
  • The three most important things in real estate
    are
  • Location
  • Location
  • Location

Research
Research
Research
28
Primary Sources
  • Observation
  • .
  • .
  • Survey experienced any?
  • Focus groups
  • Experimentation
  • Test markets
  • Winnipeg?

29
B2B
  • Less visible
  • Relationships are critical
  • Even accountants do it
  • Usually big dollars
  • Customers usually evaluate value they dont
    impulse buy

30
Segmentation
  • Way of identifying market
  • Who is in Starbucks target market?
  • Why do businesses bother to identify a target
    market? Why not try to reach everybody?

31
Segmentation in the Automobile Industry
  • Suppose you are marketing cars. How would the
    following bases of segmentation affect your
    marketing?
  • AGE
  • GENDER
  • INCOME
  • EDUCATION

32
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