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excellent product which failed because it was in a wedge-shaped package which could not be stacked on the shelf), and protection against pilferage, damage and tampering in transit, in storage, or at the retail store. At the wholesaler and bulk transport level the package has to meet dimensional requirements for being held on pallets or in containers without excessive waste of space.
In the industrial goods field as well, packaging must primarily take into account the requirements of product protection, and storage on pallets and in containers. Even here, the concept of value added in packaging can be used constructively. For example, diesel-generator sets could be shipped in standardized containers which could be reassembled on site to form sheds for the equipment.
Modern materials and techniques are making packaging a rapidly developing area. The consultant who expects to undertake marketing assignments should keep abreast of these developments. Subscriptions to one or two of the relevant trade journals and visits to exhibitions could be good professional investments.
15.3 Consulting in commercial enterprises
In commercial enterprises, stock turnover is one of the key issues. In a well-run firm this forms the focal point of all activities; purchasing and stock level planning are based on stock rotation objectives. The consultant’s first task in such enterprises should be to check the stock (inventory) control procedures. If these are found to be unsatisfactory, suitable procedures will have to be established. Different types of goods need different stock-control systems, and seasonal sales fluctuations (e.g. Christmas, beginning of school year, etc.) must be anticipated in inventory planning.
The establishment of stock-control procedures comes first, because further work will need the data such procedures will produce. Indeed, very often the assignment aims to achieve no more than the installation of good stock-control procedures and the training of management in using stock-control data for planning and administration. In recent years the concept of just-in-time inventory management has become very popular. It allows a business to keep inventory levels at a minimum while reducing the risks of running out of stock.
Some assignments, however, will also have various general management aspects (e.g. setting up management-by-objectives (MBO) programmes in multidepartment firms), and sometimes training in specialized techniques will have to be arranged.
The above account for the bulk of what might be called corrective or remedial consulting activities in commercial enterprises. Some firms, however, get themselves into more serious trouble through unsound policies. In these cases the remedies are usually obvious, if drastic, and the consultant’s main function is to provide management with the support needed to make disagreeable or unpalatable decisions.
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For example, a retailer of luxury goods (watches, sports goods, and so on) might have been enticed into giving extended credit terms because it is so much easier to sell such goods in this way, only to find accounts receivable equal to six months’ sales or more.
Quite often retailers will pick store locations that are unsuitable for the goods they handle, for example, trying to sell large household items in a convenience store site or vice versa. A variation of this situation is the case of the real-estate developer, with little knowledge of retailing or consumer behaviour, who builds a shopping centre and leases space to retailers who are inappropriate for that location. Problems of this kind tend to appear soon after the shopping centre “boom” starts in any area; they are quite common in many developing countries.
15.4 International marketing
There was a time when international trade consisted of developing countries exporting raw materials to, and importing manufactured goods from, developed countries. This simple dichotomy is no longer valid. A rapidly growing variation of this theme (which will probably become dominant in the not-too-distant future) is that developed countries export manufacturing technologies to developing countries, with manufactured goods flowing in the other direction. This leads to corresponding changes in marketing consulting, with developedcountry consultants being asked to evaluate prospective host-country markets in connection with proposed technology-transfer activities through joint ventures or other arrangements, and developing-country consultants having to evaluate developed-country markets for manufactured goods and set up suitable marketing channels. Consultants in both developed and developing countries will need knowledge of export credit guarantee systems, preferential tariff systems, “most favoured nation” and World Trade Organization agreements, and other arrangements that influence international trading. They will also, of course, have to find out how much of their marketing experience is culture specific, and so not transferable to other countries.
In the future, international trade alliances such as the North American Free Trade Agreement (NAFTA) between the United States, Canada and Mexico, or the Maastricht Treaty in Europe could substantially change the way products are produced and marketed in these areas.
In addition to these new trends in international marketing, the consultant may be asked to advise on the more traditional form of export marketing. This differs from international marketing in degree rather than in kind, the principal differences being the complications of the required paperwork (shipping firms will usually take the responsibility for this) and the additional difficulties of working with distributors in a remote country (language, distance, product training and support, etc.). Banks, with their international contacts, can be helpful in checking references and credit ratings, and the exporter and
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consultant can call upon the services of the commercial attaché of the national embassy in the destination country.
The main point to keep in mind about going into exporting is that it is not a quick fix for getting rid of surplus goods or finding an outlet for spare production capacity. Developing an effective international distribution network requires time and effort, and must be taken very seriously if any success is to be achieved. There must be a definite commitment of financial and human resources to a planned programme with a specific objective.
15.5 Physical distribution
At long last physical distribution (often referred to as logistics) is coming to be regarded as a distinct and serious activity, accounting for a substantial part of the total costs of an enterprise. Consultants will find themselves increasingly being asked for advice in this area.
Complications can arise in such assignments from three sources. First, there is the problem of arriving at a clear definition of the authority and responsibilities of the distribution manager, as the physical distribution function is affected by decisions made in all departments, from purchasing through to sales, and procedures that minimize costs within each department will not necessarily result in the lowest overall cost. This can result in difficulties in reconciling conflicting objectives. Secondly, very few firms have cost-accounting systems geared to reporting physical distribution costs, so the assignment will usually have to be extended to include changes in cost accounting. Thirdly, although a substantial amount of operations research work has been done in this area and useful results obtained on some topics (for example, vehicle scheduling), there are still no algorithms that can conveniently be used in physical distribution planning for calculating how to arrive at overall lowest costs. Trial-and-error methods are too time-consuming to be practicable in a system of any complexity. Computer-based simulation programs ease this problem, and the advent of decentralized computer availability can make such programs part of the regular toolkit of physical distribution management. Specialized software, electronic data interchange (EDI) and electronic funds transfer (EFT) are all elements in the management of the supply chain into and out of the plants.
15.6 Public relations
Public relations (PR) is a component of the marketing mix, and at the same time transcends marketing in that it addresses a much wider audience than simply the firm’s customers. This audience includes the general public, government regulating agencies, shareholders, and the firm’s employees themselves. However, it is in the nature of PR that the corporate image it seeks to create in
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the minds of these various audiences will inevitably feed back into and affect the image held by the firm’s customers. For instance, a presentation given to stock market analysts and reported in the financial pages of the newspapers cannot be kept secret from customers. It is therefore important for the marketing department to be involved in the design of PR campaigns to avoid creating conflicting images.
Expenditure on PR has increased dramatically in recent years, as companies have started to use it proactively rather than simply reactively. Press conferences are tending to replace (at much greater expense) press releases. PR consultants are being brought in to train executives in how to handle media interviews or manage crises (e.g. product recalls) and to advise on corporate image creation.
The consultant should check that the images which the client’s advertising and PR efforts seek to create are consistent with each other, and that there is close liaison between the marketing and the PR functions. The consultant may also recommend training in dealing with media interviews for some senior managers. Statements made by named officers of the firm carry much more conviction than those made by an anonymous spokesperson, but this is a twoedged weapon, and a poorly handled interview can generate undesirable publicity even if the underlying situation is favourable to the firm.
1 T. Levitt: “Marketing myopia”, in Harvard Business Review, July–Aug. 1960, pp. 45–56. See also idem: The marketing imagination (New York, The Free Press, 1983).
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