Question

Marketing management question:

Q: Compare and Contrast between Up Stream and Down Stream Partners

Answer 1

Upstream process

Upstream means all the activities needed to gather the materials required to create a product. The upstream phase of production process captures searching & extracting raw materials. The upstream part do not do anything with the material itself, such as processing. This just simply finds and extracts the raw material.

Therefore, any industry that relies on the extraction of raw materials commonly has an upstream stage in its production part.

Example the upstream process, the petroleum industry. In this industry, locating underground or underwater oil reserves characterizes the upstream process. Additionally, the upstream process in petroleum involves bringing oil and gas to the surface. Extraction wells represent an example of a structure operating in this stage in the process.

The upstream stage in the production process may also make itself as a supplier providing raw materials to manufacturers.

Downstream process

In contrast, the downstream process involves processing the materials collected during the upstream stage into a finished product. The downstream stage further includes the actual sale of that product to other businesses, governments or private individuals. The type of end user will vary depending on the finished product. Regardless of the industry involved, the downstream process has direct contact with customers through the finished product.

The downstream process often includes elements such as distribution, wholesaling and retailing, all of which are made in ensuring timely delivery to clients. Customer service is also part of the downstream process because it is the final bridge between the product and the end user. Inefficient customer service can negatively impact the sale of the final products.

Staying with the petroleum industry example, the downstream process could consist of converting crude oil into other products and then selling those final product to customers . Thus, oil refineries represent structures that operate within the downstream process. However, any kind of plant that processes raw materials may qualify as operating within the downstream stage of production.