Managing Product Movement

Order Entry and Processing System

The marketer must have a system allowing customers to easily place orders.  This system can be as simple as a consumer walking to the counter of small food stand to purchase a few vegetables or as complicated as automated computer systems where an electronic order is triggered from a retailer to a manufacturer each time a consumer purchases a product at the retailer’s store.  In either case, the order processing system must be able to meet the purchasing needs of the customer.  In some cases, an efficient ordering system can be turned into a competitive advantage.  Firms such as Amazon.com, turned their order handing system into a product feature with the patented “1-click” ordering option that streamlines online ordering by reducing the number of clicks needed to make purchases.

Forecasting

Inventory management is often an exercise in predicting how customers will respond in the future.  By predicting purchase behavior the marketer can respond by making sure the right amount of product is available.  For most large-scale resellers effective inventory forecasting requires the use of sophisticated statistical tools that look at many variables, such as past purchase history, amount of promotional effort that triggers an increase in customer ordering, and other market criteria to determine how much of the product will be needed to meet customer demand.