Download Principles of Marketing

Principles of
Marketing
Lecture-29
Summary
of
Lecture-28
Manufacturer
Customer
Manufacturer
Customer
Manufacturer
Customer
Manufacturer
Customer
Manufacturer
20 Contacts
Manufacturer
Customer
Manufacturer
Manufacturer
Customer
Wholesaling
Intermediary
Customer
Manufacturer
Customer
Manufacturer
9 Contacts
Marketing Channels for
Consumer Goods
Producer
Consumer
Producer
Retailer
Producer
Producer
Wholesaler
Agent/
Broker
Wholesaler
Retailer
Retailer
Consumer
Consumer
Consumer
Marketing Channels for
Business Goods
Business
User
Producer
Producer
Agent/
Broker
Producer
Producer
Agent/
Broker
Business
User
Wholesaler
Business
User
Wholesaler
Business
User
Channel Design
Decisions
Analyzing Consumer Service Needs
Setting Channel Objectives & Constraints
Identifying Major Alternatives
Intensive
Distribution
Selective
Distribution
Exclusive
Distribution
Evaluating the Major Alternatives
Channel Management
Decisions
Motivating
Evaluating
FEEDBACK
Selecting
Today’s Topics
Logistic
Management
Push Versus Pull
Strategy
Producer
Marketing
activities
Intermediaries
Demand
End users
Demand
Push Strategy
Marketing activities
Producer
Demand
Intermediaries
Demand
End users
Pull Strategy
Producer
Marketing
activities
Intermediaries
Demand
End users
Demand
Push Strategy
Marketing activities
Producer
Demand
Intermediaries
Demand
End users
Pull Strategy
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
Costs
Minimize Costs of
Attaining Logistics
Objectives
Order Processing
Submitted
Processed
Shipped
Logistics
Transportation
Water, Truck, Rail,
Pipeline & Air
Functions
Warehousing
Storage
Distribution
Inventory
When to order
How much to order
Just-in-time
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
Receive goods into
warehouse
Functions
of
Materials
Handling
Identify, sort, and
label goods
Dispatch the goods to
temporary storage
Recall, select, or pick the
goods for shipment
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
Water
Low cost for shipping bulky, low-value
goods, slowest form
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
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
Place
Right
Cost
Right
Product
Right
Time
Right
Condition
Enough for
today. . .
Summary
Producer
Marketing
activities
Intermediaries
Demand
End users
Demand
Push Strategy
Marketing activities
Producer
Demand
Intermediaries
Demand
End users
Pull Strategy
Marketing Logistics
and Supply Chain
Management
Functions of
Logistics Systems
Costs
Minimize Costs of
Attaining Logistics
Objectives
Order Processing
Submitted
Processed
Shipped
Logistics
Transportation
Water, Truck, Rail,
Pipeline & Air
Functions
Warehousing
Storage
Distribution
Inventory
When to order
How much to order
Just-in-time
Next….
Retailing
and
Wholesaling
Principles of
Marketing
Lecture-29