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Marketing 333

Marketing 333. Chapter 11 Distribution: Customer Service and Logistics. The Place Component of the Marketing Mix:. Channels of Distribution Logistics Materials Management Physical Distribution. Components of the Logistics Strategy. Inventory Management Transportation Warehousing

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Marketing 333

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  1. Marketing 333 Chapter 11 Distribution: Customer Service and Logistics

  2. The Place Component of the Marketing Mix: • Channels of Distribution • Logistics • Materials Management • Physical Distribution

  3. Components of the Logistics Strategy • Inventory Management • Transportation • Warehousing • Merchandise Handling • Order Processing • Packaging

  4. The Output of Physical Distribution is Customer Service • Customer Service Level • Trade-offs of costs service sales • Total cost approach

  5. Sharing and Shifting ???? ???? ???? ???? ???? Reducing Conflict JIT Supply Chain Management Better Information-EDI and Internet Coordinating Logistics Activities 11-4

  6. Inventory Management • Major cost component • Management of stock at various stages of the distribution channel • Customer service depends on inventory management • Reduces out of stocks

  7. The Transportation Function Adds Value to a Marketing Strategy • Facilitates economic development and exchange • Represents a significant cost • Regulation

  8. Modes of Transportation Truck Rail Air Pipeline Water The Transporting Function 11-5

  9. Reduces stock-outs Varies by channel system Costs Rapid Response The Storing Function 11-6

  10. Characteristics Type of warehouse Public Private Fixed Investment Very high No fixed investment Unit Cost High if volume is low Very low if volume is very high Low Control High Low managerial control Adequacy Highly adequate May not be convenient Flexibility Low High Comparing Private and Public Warehouses Exhibit 11-5 11-7

  11. Merchandise Handling • Labor versus equipment • Types of equipment

  12. Order processing/procurement • Orders from customers • Orders to suppliers • Errors increase costs

  13. Packaging • Protection • Communication • UPS codes

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