Principles of Marketing

Lecture-29

Summaryof

Lecture-28

20 Contacts

Manufacturer

Manufacturer

Manufacturer

Manufacturer

Manufacturer

Customer

Customer

Customer

Customer

9 Contacts

Manufacturer

Manufacturer

Manufacturer

Manufacturer

Manufacturer

Customer

Customer

Customer

Customer

Wholesaling Intermediary

Marketing Channels for Consumer Goods

ProducerAgent/Broker

Wholesaler Retailer Consumer

Producer Wholesaler Retailer Consumer

Producer Retailer Consumer

Producer Consumer

Marketing Channels for Business Goods

ProducerAgent/Broker

WholesalerBusiness

User

Producer WholesalerBusiness

User

ProducerBusiness

User

ProducerBusiness

User

Agent/Broker

Channel Design Decisions

Analyzing Consumer Service NeedsAnalyzing Consumer Service Needs

Setting Channel Objectives & Constraints Setting Channel Objectives & Constraints

ExclusiveDistributionExclusive

DistributionSelective

DistributionSelective

DistributionIntensive

DistributionIntensive

Distribution

Identifying Major AlternativesIdentifying Major Alternatives

Evaluating the Major AlternativesEvaluating the Major Alternatives

Channel Management Decisions

SelectingSelecting

MotivatingMotivating

EvaluatingEvaluating

FE

ED

BA

CK

Today’s Topics

Logistic Management

Push Versus Pull Strategy

Producer End usersInterme-diaries

Marketingactivities Demand

Push Strategy

Demand

End usersInterme-diariesProducer

Demand Demand

Pull Strategy

Marketing activities

Producer

End users

End users

Interme-diaries

Interme-diaries

Producer

Marketingactivities Demand

Demand 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

InventoryWhen to order

How much to orderJust-in-time

InventoryWhen to order

How much to orderJust-in-time

CostsMinimize Costs ofAttaining Logistics

Objectives

CostsMinimize Costs ofAttaining Logistics

Objectives

WarehousingStorage

Distribution

WarehousingStorage

Distribution

Order ProcessingSubmittedProcessed

Shipped

Order ProcessingSubmittedProcessed

Shipped

Logistics

FunctionsTransportation 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

Functionsof

Materials Handling

Receive goods into warehouse

Dispatch the goods totemporary storage

Recall, select, or pick the goods for shipment

Identify, sort, and label goods

InventoryWhen 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

RailRail

TruckFlexible in routing & time schedules,

efficient for short-hauls of high value goods

TruckFlexible in routing & time schedules,

efficient for short-hauls of high value goods

WaterLow cost for shipping bulky, low-value

goods, slowest form

WaterLow cost for shipping bulky, low-value

goods, slowest form

PipelineShip petroleum, natural gas, and chemicals

from sources to markets

PipelineShip petroleum, natural gas, and chemicals

from sources to markets

AirHigh cost, ideal when speed is needed or to

ship high-value, low-bulk items

AirHigh 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

End users

Interme-diaries

Interme-diaries

Producer

Marketingactivities Demand

Demand Demand

Push Strategy

Pull Strategy

Marketing activities

Demand

Marketing Logistics and Supply Chain

Management

Functions of Logistics Systems

InventoryWhen to order

How much to orderJust-in-time

InventoryWhen to order

How much to orderJust-in-time

CostsMinimize Costs ofAttaining Logistics

Objectives

CostsMinimize Costs ofAttaining Logistics

Objectives

WarehousingStorage

Distribution

WarehousingStorage

Distribution

Order ProcessingSubmittedProcessed

Shipped

Order ProcessingSubmittedProcessed

Shipped

Logistics

FunctionsTransportation Water, Truck, Rail, Pipeline & Air

Next….

Retailing and

Wholesaling

Principles of Marketing

Lecture-29