1. PHYSICAL DISTRIBUTION CHAPTER 25

2. Nature & Scope  Physical Distribution  Process of transporting, storing, & handling goods to make them available to consumers  Transportation of goods  The marketing function of moving goods from a seller to a buyer.

3. Types of Transportation  Truck  Convenient, most flexible form of transportation  Interstate Commerce Commission (ICC) – regulates transportation of goods between states  Staggers Rail & Motor Carrier Act- Relaxed Rules & Regs.  4 Types  Common- any business in area for a fee  Contract- On a selective basis according to an agreement  Private- Transport for an Individual Business  Exempt- free from direct regulations of rates & operating procedures. Usually agricultural products or local

4. Types of Transportation  Rail  Used for carrying large quantities of heavy and bulky items.  Ton-Mile- movement of one ton of freight one mile  Piggyback & Fishtail, Specialized Services, Package cars, Diversion-in –transit, Processing –in-transit  Ships and Boats  Can handle large quantities and large products.  Internal Waterways- connecting waterways  International Waterways- Connect continents & countries

5. Types of Transportation  Air  Used for high-value, low-weight items. Also used for perishable items.  Pipelines  Most frequently used to transport oil, water, and natural gas. Normally owned by the company using them

6. Storing Goods  Storage  Marketing function of holding goods until they are sold  Why?  Production is faster then consumption  Timing- agricultural products  Stabilize prices  Discounts for buying in bulk  Faster delivery  ? ? ? ? UTILITY TIME & PLACE UTILITY

7. Where to store goods  Private warehouse  Owned by a business for its own use  Public warehouse  Available to any business that will pay for its use  Distribution center  Warehouse designed to speed delivery of goods, minimize storage costs  Bonded warehouse  Store products that require payment of federal tax  Cannot be removed until tax is paid  Can be private or public

8. Partnering for Success  Case Study p. 332  Why did they decide to contract distribution?  Did it save money?  What services are being preformed?  What about long time vendors?

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