Sourcing: Deciding where to buy from.
Delivery: How a customer receives a product or service. How important is delivery? Netflix allowed people to order DVD's over the internet and have them delivered directly to the customer's home in the US.
Netflix didn't stop with offering movies by mail. They now offer a streaming service that costs users $8 (Dh 30) per month. One-third of all internet traffic in the US is now Netflix streaming videos. ONE-THIRD!
Delivery is also how Amazon wants to take over the world. Imagine a future where you order something online and this delivers it in less than an hour:
Other concepts we discussed in class:
Returns: How easy/hard is it to return a product if the customer is not satisfied?
Make or buy: Companies must decide whether to produce (make) something inside the company or to buy it from someone else (outsourcing).
A good example of outsourcing for UAEU is Khadamat. UAEU used to handle scheduling, IT services, and building maintenance using employees of the university. Now those functions have been outsourced to Khadamat.
This brings up two more terms: Anything going inside a company is referred to as "internal" while anything going outside a company is called "external."
Companies will often offer a package of services or goods. This is called bundling and it helps sales and it helps companies sell stuff they might have trouble selling.
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In class we spent time discussing the difference between a good and a service. My teaching this class is a pure service. The textbook for this class is a pure product. Most of the things you buy is a mixture of products and services: Like going to a restaurant. The food is a product. The waiter/waitress is a service. Both need to be good for you to want to return to that restaurant.