Sudsy Soap, Inc. - Logistics Management Mrk 622

...

- Should the exterior of the Sudsy Soap package be altered to show what dish it contains? If so, who should pay for the extra costs?

The exterior should be altered demonstrate what is inside the package to inform the consumer what they are purchasing, remind them of the promotion, prevent consumer confusion and indicate that there is a free item inside. The dish-maker will get advertising from these soap packages and therefore should be paying for part of the costs. The spilting of the costs should be negotiated and would depend on the agreement of the two companies.

- Assume you are another one of Johnsons’ assistants and your principal responsibility is managing the inventories of all the firms’ inputs, finished products, packages and outbound inventories. What additional work will the dish proposal cause for you?

There might be a rise in sales, and an increased need for all inputs into production as well as need for higher capacity and inventories. There would need to be an estimate of the possible sales increase demands will be imposed to new delivery requirements and the change in package size and weights. The dishes would need to be monitored as would the printed packages

- You are Beever. Your staff has voiced many objections to the dish tie-in proposal, but you believe that much of the problem is your staffs’ reluctance to try anything innovative. Draft a message to the dish company that, although not accepting their proposal, attempts to clarify points that may be subject to misinterpretation and also takes into account some of your staffs’ legitimate concerns.

The letter would include the following points and questions to clarify the situation and what is being proposed;

- If Sudsy Soap cannot fulfill delivery of the cross promotion packages during the TV Campaign who is liable to each other and to the consumers.

- What if there is a problem on route from the dish company to Sudsy Soap?

- What product liability and quality assurance can be provided for the dishes and who is responsible?

- If a consumer cannot find the right pieces for a set, who will supply the missing pieces, at what cost, and will there be backlash against Sudsy Soap because of this?

- Who pays for extra freight and shipping charges, increased packaging and handling costs, redesign of package, import duties, liabilities, returns and schedule complications?

- What type of campaign promotion will Sudsy be involved with, will it affect Sudsy negatively?

- What other logistical issues do you recognize that can impact the success of this promotion? Can they be addressed? How?

Negotiations between both firms should be taking place for a strategic plan that will allow both firms to share responsibility with this cross promotion to ensure success. If terms cannot be agreed by both parties they should consider alternative methods, perhaps a contest or promotion to be only sending out a smaller limited supply that could work for this positional cross promotion. They should be considering all of the factors that come with shipping and receiving, and the logistics of the supply chain.