Beyond supply chain management: jointly optimising operations/ supply and the marketing mix

With the increasing use and availability of computing power and raised consumer power comes the need in competitive markets to produce and offer products and services that provide as precisely as possible the exact features of offerings that match customer requirements, with as little waste as possible. Further, customers have different thresholds of willingness to pay for sets of features. The purpose of this paper is to conceptualize and model the merging of supply chain strategies with the marketing decisions, which is key to the overall optimization of aspects of a firm’s strategy, including design of its products and their features, pricing, and positioning. The method used was to create the comprehensive modeling approach that represents these challenges not based on products, but based on individual features of those products, atomistically. The theoretical contribution made is the integration of supply chain optimization approaches, that are essentially based on the resource based view of the firm and focus on cost, with the marketing orientation approach to product design, pricing and marketing strategies. Further, this theoretical contribution recognises in its models that mass customization provides for individualization of features offered to each customer, at prices that reflect their assessed willingness to pay. There are many practical implications: many firms are moving towards full customization of feature sets, and increasingly pricing in a customized manner, and this trend will continue in practice as big data applications in markets go further and become more cost efficient. The integration of the marketing view and the resource-based operations view allows for a fully integrated view of competitive strategy and the design of products and services, so that firms can profit optimize their offerings.