Logistics

As an Operation Manager at a concrete restroom manufacturing company I deal with distribution and logistics daily. The company uses a Business-to-Business distribution channel when ordering our materials for the manufacturing process. The majority of the materials the company buys have been produced by the original manufacture and then shipped to a local store. The company I work for then has a weekly inventory pick-up where we purchase the processed parts and materials from the local stores. Some of our materials such as concrete are bought right from the original manufacture.
On the other hand once the materials are used to manufacture our concrete restrooms and there is a final product it must be deliver to the customer. All of our products are too big and heavy to be shipped any other way besides semi trucks. When running logistics it is important to make sure that we setup a date that the customer would like the product. Once that date is set the company has to make sure that there will be a crane on the job site to off load the restroom and a semi truck to take the product from our company’s manufacturing site to the customer’s job site.
The concrete restroom business requires a Business-to-Business Channel of Distribution for the manufacturing process but it also requires a Typical Consumer Channel of Distribution to ship the products to our customers.

Price the Product-Debate

In our marketing 360 class people have been asking, "How do you price a product?" Dr. Featherman always responds with market research. I do believe market research is important but what exactly is market research? Market research can include anything from what customers want and think to what other competitors are doing in the market. After working the past 8 months or so in trying to sell a corporation I have seen what is really important in selling anything. The one most important key to selling a product is pricing the product relative to the competition. When trying to sell this company potential investors always ask, "Who are your competitors?"
No matter what you are selling there is going to be a product that sells to that exact target market that you are selling to. Many students ask, "What if the product is new and different from anything out there, then how do you price it?" The answer is there is always a similar product. For example when the automobile was first invented who were the customers? The first customers were customers who needed or wanted transportation. The customer who already had a wagon or buggy was the most likely to buy that first car as an adopter of the new product.
Now to the pricing. The cost to produce the product is the first aspect you should look at. You will need to sell the product for more than the cost to produce it including overhead costs. Once you figure out the breakeven point and you know you must sell it for more than that, you then need to look at your competition and figure out what is "better" about your product. Is your product cheaper, better quality, easier to use, more efficient, or etc.; whatever it is you must have an advantage of why customers want your product. Once you know your competitors you can price your product accordingly. If you have a better quality for example you should price your product higher than the competition but not so high that it can't compete. An example is if you are selling running shoes and your direct competitor is Nike, you shouldn't sell the shoe for $300 unless you personally can justify $300 for a pair of shoes. A good selling price would be from $65 to $150 depending on the type of advantage such as cheaper price vs. higher quality and performance.
Now you see it is important to first cover cost and then focus on competing. If you look at these two variables you should have a good price range for you customers.