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How to Deal with Inventory Management and Product Development
Ordinarily, balancing supply and demand as far as stocks are concerned will pose a big problem if the person assigned does not know how to make formidable forecasts. While the consumer market reaction toward product acceptance of a certain commodity or good will always be erratic, providing and making initial assumption towards potential market demand with the support of enumerated advertising and promotional support for the said products will have to shell out expected product movement for a certain period.
Such has been a problem with the bottled beverage industry. Owing to the congested market in the Philippines today, strategic management and forecasts need to be done thoroughly to assure that the credibility of wholesale distributor and suppliers can be able to meet the demand by the consumer market towards newly introduced products in the market. It is not purely a guessing game. It is about putting together all the gathered facts and projected assumptions to come up with an efficient forecast of how much to supply a commodity or good in line with the probable demand for the product. In most instances, there will discrepancies in the demand.
One factor is the product acceptance since ideally, produce awareness and education are lacking. This is where the role of advertising and promotions would come in. Consumers will not patronize or even try out a product without the proper information, such as nutritional benefits, price range, product category and other necessary product features that molded into its final product. It is thus through advertising and promotions that such information would be segregated and spread over the target market class area. The usual modes known to be able to spread the said information are through the usual media of print, radio and television.
Everything in the product mix needs to be satisfied. Leaving out one will surely be like an open wound or a chink in the armor for the whole production process. While this occurrence cannot be avoided, it is something that can be put at a minimum level. A business is something that is more than just hiring good personnel and investing money to finance the entire venture. Product development is something that needs the investment of ideas and time as well. It is not an overnight success. Product development is a long process that would need a lot of considerations, especially the environmental factors such as the cultural, social and political aspects to the area it will focus on. The information gathered from such research efforts are key determinants in identifying what factors to consider and providing alternative course of action for the benefit of the product development issue.
This is where such strategic management tools such as the TOWS Matrix (SWOT Analysis) and Grand Strategy Matrix are of big use. They help enumerate the factors for consideration and select the best course of action to help in the product development mix. Not all business people are aware of the benefits of such, but it really helps in putting into detail what a business should consider.
Once all of the product segregation and product development issues have been settled, this is where inventory management will come in. The production of goods to be stocked need to implement proper safety levels for distribution. Forecasts should also take into consideration peak and lean seasons, since the inventory storage would have to take into consideration the expiration date and product life. Each year, as marketing continues to push its products and commodities, the need to boost production shall certainly be needed. It is the only proper path to follow for businesses which aim to become large business empires in the mold of such established giants such as Universal Robina Corporation, San Miguel Corporation and Coca-cola Corporation.
About the Author: Brian Yalung, MBA, is the Marketing Director for Merlion International Sales, Inc. He also maintains a blog site on Business, Entrepreneurship and Marketing. His work can be seen at http://www.blogadviser.com - The Blog Adviser Today.