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Supply Chain Management (SCM) is the systemic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole (Mentzer et al, 2001).
As part of the promotion mix in marketing, advertising is one of the most dynamic and costly promotional activity. Although declined with about 2,6 % by comparison to the previous year, the U.S. advertising expenditure has still been above $ 130 billion dollars in 2008 (according to a The Nielsen Company report).
Nothing is worst than having to wait in a crowded airport for hours and hours or miss your connection flight because of a delayed aircraft. Such situations can create a lot of frustration and tension among passengers and usually lead to a lot of headaches for the airline representatives.
In a previous blog post we investigated the Return on Marketing Investment, a metric that analyzes the marketing activity from a financial point of view that is more complex than the revenue from sales generated by marketing. The current blog post aims at exploring another area where finance meets marketing: the break-even analysis. In this area, we consider that finance actually needs marketing: the break-even analysis aims at determining from which point on (i.e. volume of sales), a business begins to generate profits.
One of the greatest challenges for marketing professionals is to “probate” the results of their activity in terms of financial numbers. To do so, a simplistic approach that might still be in use in organizations which lack an accurate performance measurement system is looking into the value of sales. Fair enough, marketing efforts should, in the end, lead to selling as much as possible. Brand building, image construction, client relationship optimization and all other marketing directions aim, in the end, at generating sales.
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