interphase of operation strategy with marketing strategy

kartik

Kartik Raichura
Staff member
Advance selling is a marketing strategy in which an advance sales period precedes
the standard consumption, or spot, period. The advance sales period is used to increase
sales by o%uFB00ering customers a chance to commit early to purchasing at what is usually a
discounted price. This strategy takes advantage of customers being uncertain about their
future product valuation. Advance selling has become increasingly more popular with
recent technologies such as smart cards and online booking (see the Economist (2005)
[32]).
Most applications of advance selling are in the service industry. For example, consider
ticket sales for a concert. Ticket prices may be $50 at the door but on sale for $30 if
bought in advance. Other examples of advance selling in the service industry may include
conference registration, movie tickets, and vacation packages.
Much of the literature in advance selling has to do with %uFB01nding the optimal pricing
policy for the advance and spot sales periods. I am interested in extending this marketing
analysis to include operations decisions, speci%uFB01cally an inventory management decision.
I assume that a one-time inventory order must be placed at the beginning of the
advance sales period. The inventory will not arrive until consumption, which occurs at the
end of the spot period. I may consider a situation in which there is a long lead time for an
inventory order and no opportunity to place another order before consumption.
An example of this scenario may occur in the toy industry. I may need to decide
on an order quantity of toys for an upcoming sales season. Demand may be uncertain
in that customers have not yet realized their future valuation of a particular toy. If the
toys are produced in a distant facility with a long lead time, I may only have one order
opportunity. An advance selling strategy would be to o%uFB00er reservations of some portion of
these toys and to reserve the remaining portion for in-store sales

An excerpt from http://etd.fcla.edu/UF/UFE0024879/seref_m.pdf .

Depending on the time you are allotted for your speech, you should gather examples and speak on them. Ideally, create one example that encompasses all topics that you wish to touch upon.
 
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