manufacturing .
The choice of manufacturing sites could also be global in nature . While this has benefits of lower set up costs , the response time to markets can be slower with heightened risks for shipping the products . It also assumes a great degree of standardised products with minimal customisation and very predictable customer behaviours .
Inventory Management
Inventory management models are part of effective RtM strategy . The most popular inventory management models include just-in-time and justin-case models . The two models are adopted to balance the demand side of the business with supply side .
Just-in-time ( JIT ) model focuses on producing or ordering products at the time they are required . This model is ideal for keeping minimum inventory levels and related costs of inventory while eliminating risks of waste and loss from inventories held . To deliver on JIT model , companies require investment in technology that is linked to customers to manage orders and stock levels and must be backed by efficient supply delivery logistics . Speed of deliver and order fulfilment is critical for this model to work .
On the other hand , just-in-case ( JIC ) inventory management model involves manufacturing or ordering products in advance to ensure availably to meet demand . JIC provides flexibility and manages risks of stock outs or unavailability . This comes with high inventory management costs and risks of wastage and loss . This model is suitable for businesses that operate in competitive environments where substitutes are readily available .
It is possible for companies to adopt a hybrid of the two models . The choice is influenced by the nature of the
product , markets and reliability of the chosen supply chain .
Logistics Chains
The next important consideration for an effective RtM strategy is logistics chains . Logistics chains management can be internally managed , outsourced or a combination of both . The choice directly impacts operational effectiveness and efficiency in meeting customer needs .
In internal management , the company makes the choice for total control and management of the entire logistical processes . These processes include transport , storage , warehousing and delivery of the products . This requires high levels of investment and operational costs . It involves complexities that impact workload to deliver on customer service level agreements .
On the other hand , companies may choose to outsource the managing of logistics chains . This involves deployment of thirdparty service providers . This option has the advantage of reducing workload and frees the management to focus on core business processes . The downside of this option is that the business may lose control and visibility ( this risk can be eliminated by technology ) due to over dependency on the external third parties .
Just like in the inventory management , a hybrid of these two options can be pursued . The choice depends on the degree of control , complexity and cost-benefit delivery . The hybrid model supports the balance of control while balancing the benefits of oversight and operational efficiency .
Attendant Benefits
A well-executed RtM strategy delivers great benefits . The spectrum of such benefits includes market penetration . This is evidenced by growth in sales in terms of quantum and target area coverage . This supports development and deepening of sales routes and decision making on which markets to develop and expand geographically . Businesses can then drive sales growth supported by cheaper customer acquisition costs , as untapped markets are cheaper to sell in than saturated markets . This supports competitiveness .
RtM strategy supports initiatives for optimising and choosing profitable outlets . These are the outlets that enhance reach to customers profitably . This also guides investment to such outlets and delivers targeted customer segmentation .
With clearly defined route to market strategies , marketing is then targeted well , leading to higher conversion rates . This also optimises costs . This supports delivery of low-cost channels , low costs of customer acquisition and improved sales coverage . This frees resources that can be deployed into product quality and brand equity building initiatives .
Conclusion
Just like in moving cargo from origin to destination sites , the whole activities in an effective RtM strategy determines how profitable and sustainable the selling activities will be . The design of an effective RtM strategy , must always be live to the fact that the move to the target customer is a symphony of many factors . These factors determine profitability of the sale .
Further the design must always be aligned to the overall company strategy . It must be customer centric . It must grow competitive edge . Ultimately , it must support customer satisfaction , and edge out competition , sustainably .
The road to the customer must be cleared of any hurdles by deployment of a great RtM strategy . Nothing is really out of gauge , that cannot be delivered through an effective RtM strategy .
CPA Michael Nzule is the Finance & Strategy Director of Mitchell Cotts Freight Kenya Limited , a leading total logistics services provider in Kenya . He holds an MBA in Accounting , with specialization in Marketing , and a Bachelors of Commerce ( Accounting Option Hons ) from the University of Nairobi . He is a member of the Institute of Certified Public Accountants of Kenya ( ICPAK ). Views expressed here-in are personal . You can commune with him via mail at : Mikemaithyanz @ gmail . com .