Tag Archives: distribution

Suez Canal Blockage: Big Impact on Global Supply Chains

Q: What is a marketing channel, and how important is it?

A: A marketing channel is how companies get products into the hands of consumers and the channel is absolutely critical to sales. No channel. No revenue.

But, before delving into the marketing channel, let’s back up a little and consider the enormous impacts on businesses from the full supply chain – not only moving the finished products to market, but also getting raw materials/semi-finished goods to manufacturers. If these materials don’t make it to companies on time, then there is no way to effectively keep the manufacturing operation at full-force or keep the marketing channel functioning.

Consider also that an effective supply chain is a global issue. An estimated 90 percent of global retail products move around the world in containers through oceans, seas, and canals. One of the most important of these is the Suez Canal – a 120-mile long channel in Egypt, running between the Mediterranean and Red Seas, linking shipping transportation between Africa and Asia. The Suez Canal provides a direct route between the seas and reduces the trip from the Arabian Sea to London by 5,500 miles (8 days). Eight days is a lot of time in today’s global economy, plus fuel costs for ships average $25,000/day! In 2020, more than 18,500 ships traveled the canal.

This March, a container ship named ‘Ever Given’ blocked the Suez Canal after it was knocked sideways by a strong southerly wind.  The ship, at more than one-quarter-mile long and a weight of 224,000-tons, held 20,000 containers worth $9 billion, and was stalled for nearly a week in the canal, holding up billions of dollars of international commerce! More than 400 ships were backed up to use the canal, with dozens of other vessels deciding to forego the canal and take the long way around the Horn of Africa. For those in line at the canal, it could take weeks to get all the ships clear and return to normal operations.

And, the work done to free the ship is a story unto itself. For six days tugboats and dredgers cleared away 30,000-cubic meters of sand and mud from around the ship’s bow and stern. Whew.

Supply chains are critical in marketing!

Group Activities and Discussion Questions:

  1. Discuss the importance of the supply chain and logistics in marketing.
  2. Show video of the Suez Canal blockage: https://youtu.be/8BSdmIhB9wc (Note: Make sure to look for more recent videos as the story gets updated.)
  3. What is the impact of the Suez Canal blockage on trade?
  4. Have students research how raw materials, semi-finished goods, and finished products move to market.
  5. What commodities and materials are shipped via container and the sea?
  6.  

Source:  Associated Press; CNN; New York Times; Wall Street Journal; other news sources

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Doggie Desserts

We love our dogs, always asking them “who’s a good dog?” And then of course, rewarding and treating our very good dogs. One snack that dogs love to munch is ice cream. And now Vermont ice cream company Ben & Jerry’s has introduced a new line of frozen dog treats – Doggie Desserts.

Doggie Desserts is the company’s first movement into the growing markets of pet foods and treats. According to the American Pet Products Assoc., the number of U.S. households with pets grew to 84.9 million homes in 2020. During these trying Covid times, pet adoptions are at an all-time high, meaning that more pets than ever are trying to keep their humans sane. From 2015 to 2020 spending on dog treats jumped 44% to $5.5 billion.

Doggie Desserts follow the Ben & Jerry’s model and are made with fairtrade-certified, non-GMO ingredients. The company stated that it worked with a veterinary nutritionist and other consultants to make sure the non-dairy products are safe and easy for pups to digest. No one wants Spot to have an upset tummy!

There are two flavors sold in 4-ounce cups: Pontch’s mix of peanut butter and pretzel swirls, and Rosie’s Batch of pumpkin and mini cookies. Prices at $2.99 per cup (four for $4.99) and the frozen treats will be placed near popsicles in the frozen food aisles, conveniently located near Ben & Jerry’s ice cream. That’s one pint for us, and one for our dogs.

Now, who’s a good human?

Group Activities and Discussion Questions:

  1. Discuss the four primary marketing strategies: market penetration, market development, product development, and diversification.
  2. Show Ben & Jerry’s website: https://www.benjerry.com/flavors/doggie-desserts
  3. A video can be found at: https://youtu.be/h2lzIEeRVsQ
  4. Which strategy is Ben & Jerry’s using for this product? Why?
  5. Discuss setting SMART objectives (specific, measureable, achievable, realistic, and time-bound).
  6. Divide students into teams. Have each team set three SMART objectives for this strategy.
  7. How would these objectives change if a different market strategy was used?
  8. Have each team determine the marketing mix (4Ps) to support their strategy choice.

Source:  Minneapolis Star Tribune; Washington Post; other news sources

 

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Amazon Drones get U.S. Approval for Delivering Packages

Drones seem to be ready to take over the skies, but are they really ready for prime time? Can they deliver the goods? And how does this change delivery services around the globe? We may soon find out the answers to some of those questions.

Amazon is the latest company to receive FAA approval to operate a fleet of delivery drones. The approval gives Amazon Prime Air broad privileges to “safely and efficiently deliver packages to customers.” Amazon will test its drones with the goal of achieving 30-minute deliveries for packages of up to five pounds within a 15-mile radius of a warehouse. The company has been working on using drones for deliveries since 2013, continually innovating the drone models. The FAA approval gives Amazon permission to operate a fleet and is not tied to a specific model of drone.

Amazon isn’t the only game in town though. Last April, Wing (owned by Alphabet) received FAA approval for commercial deliveries. UPS also received approval to operate a fleet of drones as an airline last year. However, in all these cases, widespread use is likely still years in the future as the FAA needs to establish new, automated air-traffic systems as drone operations will exceed what human air controllers can handle.

Ready for your drone delivery?

Group Activities and Discussion Questions:

  1. Review key aspects of developing a product positioning map, including determining the axis labels for positioning.
  2. Show Amazon drone video: https://youtu.be/3HJtmx5f1Fc
  3. Optional: Here is an older version of the Amazon drone model: https://youtu.be/MR9PoBAssw0
  4. Show competing drone services:
  1. Discuss which industries and services will be most impacted by drones. Why these?
  2. Will drones benefit consumers? How?
  3. Divide students into teams and have each team develop a positioning map for drone delivery services. What will be most important to consumers?

Sources: Associated Press; CNBC; New York Times; Wall Street Journal; other news sources

 

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