Download unit f management of distribution, promotion, and selling

UNIT F
MANAGEMENT OF DISTRIBUTION,
PROMOTION, AND SELLING
10.02 Summarize
management of the
distribution process.
Marketing logistics
• Marketing logistics (physical distribution):
The tasks involved in managing the physical
flow of materials, final goods, and related
information to ensure that products are
delivered to the right place, at the right time,
and in the right quantity to meet customer
requirements while generating a profit.
– Past logistics managers started with the
product in the plant and looked for a way to get
it to the consumer.
– Currently, logistics managers start with a focus
on the marketplace and work backward to the
factory and the sources of supply.
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Marketing logistics (cont.)
• Supply chain management:
The system for coordinating
inbound, outbound, and
reverse distributions.
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Marketing logistics (cont.)
– Inbound distribution – moving
products and materials from
suppliers to the factory.
Example: fabrics, threads, and
elastics shipped to the factory to be
used in manufacturing
undergarments
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Marketing logistics (cont.)
– Outbound distribution – moving
products from the factory to
resellers and ultimately to
customers.
Example: from Jockey to Belk to
consumer
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Marketing logistics (cont.)
– Reverse distribution – moving broken,
unwanted, or excess products returned by
consumers or resellers.
Example: A consumer returns a flawed
item to the retailer and the retailer then
returns it to the manufacturer.
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Marketing logistics (cont.)
The logistics manager
– Coordinates the activities of suppliers,
purchasing agents, marketers, channel
members, and customers
– Those activities include forecasting,
information systems, purchasing,
production planning, order processing,
inventory, warehousing, and
transportation planning.
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Importance of logistics
• Competitive advantage
• Cost savings
• Need for improved management of
more products
• Greater distribution efficiency through
use of improved information
technology
• Third largest expense for most
businesses
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Major logistics functions
1. Order processing
2. Warehousing
a. Storage warehouse: A large building used
to store goods for moderate to long
periods of time until they can be sold.
b. Distribution center: A large, highly
automated warehouse designed to receive
goods from various plants and suppliers,
take and fill orders efficiently, and deliver
goods to customers as quickly as
possible.
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Major logistics functions (cont.)
3. Stock handling – receiving, checking,
and marking items for sale
4. Inventory management
a. Delicate balance between too much
and too little stock
b. Just-in-time logistics system –
shipment of new stock exactly when
needed, in exactly the amount
needed
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Major logistics functions (cont.)
5. Transportation
a. Choice of carrier is important because
customer satisfaction is affected by
pricing, delivery performance, and
condition of the goods.
b. A balance among speed, dependability,
availability, cost, and special handling is
necessary.
c. Transportation modes include truck, rail,
air, pipeline, and water.
d. Intermodal transportation: Combining two
or more modes of transportation.
Examples: fishyback, trainship, and
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airtruck
Integrated logistics management
The logistics concept that
emphasizes teamwork, both
inside the company and among
all the marketing channel
organizations, to maximize the
performance of the entire
distribution system.
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Integrated logistics management
(cont.)
• Aspects of integrated logistics management
– Cross-functional teamwork: Working together inside the
company to coordinate logistics decisions related to
marketing, sales, finance, operations, and purchasing to
create high market satisfaction at a reasonable cost.
– Logistics partnerships: Working with channel partners
outside the company to meet goals of efficiency and lower
costs while satisfying customers and improving the wholechannel distribution.
– Third-party logistics provider (3PL): An independent
logistics provider that performs any or all of the functions
required to get the client’s product to market. (To send out
work to an outside provider to cut costs or to relieve some
of the workload is called outsourcing.)
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