Principles of Marketing Lecture-29

Summary of Lecture-28

20 Contacts Manufacturer Customer

9 Contacts Manufacturer Customer Wholesaling Intermediary

Marketing Channels for Consumer Goods

Producer Agent/ Broker WholesalerRetailerConsumer Producer WholesalerRetailerConsumer ProducerRetailerConsumer ProducerConsumer

Marketing Channels for Business Goods

Producer Agent/ Broker Wholesaler Business User ProducerWholesaler Business User Producer Business User Producer Business User Agent/ Broker

Channel Design Decisions

Analyzing Consumer Service Needs Setting Channel Objectives & Constraints Exclusive Distribution Exclusive Distribution Selective Distribution Selective Distribution Intensive Distribution Intensive Distribution Identifying Major Alternatives Evaluating the Major Alternatives

Channel Management Decisions

Selecting Motivating Evaluating FEEDBACK

Today’s Topics

Logistic Management

Push Versus Pull Strategy

Producer End users Interme- diaries Marketing activities Demand Push Strategy Demand

End users Interme- diaries Producer Demand Pull Strategy Marketing activities

Producer End users Interme- diaries Interme- diaries Producer Marketing activities Demand Push Strategy Pull Strategy Marketing activities Demand

Marketing Logistics and Supply Chain Management

Companies must decide on the best way to store, handle, and move their products and services from points of origin to points of consumption.

Marketing Logistics (physical distribution)

The tasks involved managing the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customer requirements at a profit.

Supply Chain Management

Managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, reseller, and final consumers

Marketing Logistics and Supply Chain Management

Involves getting the right product to the right customers in the right place at the right time. Marketing logistics addresses: – Outbound distribution, – Inbound distribution, – Reverse distribution, – Entire supply chain management.

Supply Chain Management

Nature and Importance of Marketing Logistics

Involves getting the right product to the right customers in the right place at the right time.

Companies today place greater emphasis on logistics because…..

– Effective logistics is becoming a key to winning and keeping customers. –Logistics is a major cost element for most companies.

– The explosion in product variety has created a need for improved logistics management. – Information technology has created opportunities for major gains in distribution efficiency.

Functions of Logistics Systems

Inventory When to order How much to order Just-in-time Inventory When to order How much to order Just-in-time Costs Minimize Costs of Attaining Logistics Objectives Costs Minimize Costs of Attaining Logistics Objectives Warehousing Storage Distribution Warehousing Storage Distribution Order Processing Submitted Processed Shipped Order Processing Submitted Processed Shipped Logistics Functions Transportation Water, Truck, Rail, Pipeline & Air

Costs

Order Processing

Order Processing System System whereby orders are entered into the supply chain and filled. The “order” brings the supply chain in motion.

Order processing involves several stages: - first, the order is transmitted by a variety of means such as the Internet, an Extranet, or EDI; - next, the order is entered into the appropriate databases; - then the information is sent to those who need it.

Electronic Data Interchange Information technology that replaces paper documents that accompany business transactions.

Warehousing

 Involves the physical storage or stock-keeping of raw materials, product components, and/or finished goods.  Three basic functions: 1. Movement 2. Storage 3. Information transfer

Warehouse and Materials-Handling Functions of Materials Handling Receive goods into warehouse Dispatch the goods to temporary storage Recall, select, or pick the goods for shipment Identify, sort, and label goods

Inventory When to order? How much to order? Just-in-Time

Inventory Control System A method of developing and maintaining an adequate assortment of materials or products to meet a manufacturer’s or a customer’s demand.

Just-in-Time (JIT) Concept

JIT is an inventory supply system that operates with very low inventories and requires fast, on-time delivery. When parts are needed for production, they arrive from supplier “just in time,” which means neither before or after they are needed. JIT is used in situations where demand forecasting is reliable. It is NOT appropriate for inventories that are to be stored over a significant period of time.

Transportation

Transportation Modes

Rail Truck Flexible in routing & time schedules, efficient for short-hauls of high value goods Truck Flexible in routing & time schedules, efficient for short-hauls of high value goods Water Low cost for shipping bulky, low-value goods, slowest form Water Low cost for shipping bulky, low-value goods, slowest form Pipeline Ship petroleum, natural gas, and chemicals from sources to markets Pipeline Ship petroleum, natural gas, and chemicals from sources to markets Air High cost, ideal when speed is needed or to ship high-value, low-bulk items Air High cost, ideal when speed is needed or to ship high-value, low-bulk items

Checklist for Choosing Transportation Modes

1. Speed. 2. Dependability. 3. Capability. 4. Availability. 5. Cost.

Customer Service Concept

Customer service is the ability of logistics management to satisfy users in terms of: - time - dependability - communication - convenience

Right Product Right Cost Right Place Right Condition Right Time

Enough for today...

Summary

Producer End users Interme- diaries Interme- diaries Producer Marketing activities Demand Push Strategy Pull Strategy Marketing activities Demand

Marketing Logistics and Supply Chain Management

Functions of Logistics Systems

Inventory When to order How much to order Just-in-time Inventory When to order How much to order Just-in-time Costs Minimize Costs of Attaining Logistics Objectives Costs Minimize Costs of Attaining Logistics Objectives Warehousing Storage Distribution Warehousing Storage Distribution Order Processing Submitted Processed Shipped Order Processing Submitted Processed Shipped Logistics Functions Transportation Water, Truck, Rail, Pipeline & Air

Next….

Retailing and Wholesaling

Principles of Marketing Lecture-29