2.

Identify and discuss the four major areas of interface between channel
management and logistics management.
Channel management: Administration of all major of channel flow
Logistics management: Concentrate, specifically on product flow
The key major areas interface between channel management and logistics
Defining of logistic service standards: The higher the services, the higher cost: As the
managers should decide the type and levels of logistics service desired by channel
member
Evaluation the logistics program meet the consumers need: If included as a major
component of manufactures overall approach for supporting channel member needs, the
logistics program may be the key feature of a strategic alliance. Managers should
ensuring the program and expert prepare is what the channel members want
Selling the logistics program: 1. Minimize the out-of-stock 2. Reduce channel member
inventory requirement 3. Strengthen the manufacture-channel member relationship---
managers should extending superior logistics capabilities to help channel members
improve their logistics and marketing capabilities
Monitoring the logistics systems: Logistics systems must be continually monitored,
both in terms of how successful they are performing for the manufacturer and how well
they are meeting changing member needs. Key issue for Channel Manager: Continually
monitoring the channel members reactions to logistics programs.
Section B
Q1. Logistic management
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Chapter 13
Logistics- planning, implementing, and controlling the physical flows of materials and
final goods from the points of origin to points of use to meet customers needs at a profit.
Third-party logistics providers:
1. Specialize in performing most or all of the logistical tasks that manufactures or other
channel members would normally perform themselves.
2. Provide service at lower cost than the firms who hire third-party providers
3. Currently growing rapidly into a major industry
Systems concept, interrelated components of a system- transportation, packaging,
materials handling, order processing, warehousing, inventory control
1. Transportation-most fundamental and necessary component, account for the
largest percentage of the total cost. issue: choosing the optimum mode of
transportation to meet customer service demands
2. Materials handling- range of activities & equipment involved in the placement &
movement of products in storage areas. Issue: minimizing the distance products
are moved within the warehouse during the course of receiving, storage &
shipping. Choosing the kinds of mechanical equipment that should be used.
Making the best use of labor when receiving, shipping
3. Order process-its importance in logistics lies in its relationship with order
cycle time Issue: developing an efficient order processing system
4. Inventory control-the firms attempt to hold the lowest level of inventory that will
still enable it to meet customer demand. Issue: keeping inventory at lowest
possible level while concurrently placing orders for goods in large quantities
5. Warehousing Issues: the location of warehousing facilities, the number of
warehousing units, the size of the units, the design of the units, the question of
ownership
6. Packaging- packaging & its associated costs can affect the other components of the
system. Issue: using packaging to make a significant difference in the effectiveness
& efficiency of the logistics system
Logistics Service Standards
Time from order receipt to order shipment
Order size & assortment constraints
Percentage of items out of stock
Percentage of orders filled accurately
Percentage of orders filled within a given number of days from receipt of the order

Percentage of orders filled
Percentage of customer orders that arrive in good condition
Order cycle time
Ease & flexibility of order placement
Logistics management- concerned, specifically with product flow
Channel management- the administration of all the major channel flow
Four level interface:
1. Defining of logistic service standards The higher the service standards, the higher
the cost Key issue for channel manager Determining precisely the types
and levels of logistics service desired by channel members
2. Evaluating the logistics programs If included as a major component of the
manufacturers overall approach for supporting channel member needs, the logistics
program may be the key feature of a strategic alliance. Key issue for channel
manager: ensuring that the program the experts prepare is what the channel
members want
3. Selling the logistics program 1. Minimize out-of-stock occurrences
2. Reduce channel member inventory requirements 3. Strengthen the
manufacture-channel member relationship Key issue for channel manager:
extending superior logistics capabilities to help channel member improve their
logistics and marketing capabilities
4. Monitoring the results of the logistics program Logistics systems must be
continually monitored, both in terms of how successfully they are performing for the
manufacturer and how well they are meeting changing channel member needs. Key
issue for channel manager: Continually monitoring the channel members
reactions to logistics programs.
Q2. Channel design
Chapter 6
1. A decision made by the marketer 2. The creation or modification of channels 3. The
active allocation of distribution tasks in an attempt to develop an efficient structure 4.
The selection of channel members 5. A strategic tool for gaining a differential advantage
Developing a new product or product line, aiming an existing product at a new market,
making a major change in some other component, establishing a new firm, adapting to
changing intermediary policies that may inhibit attainment of distribution objectives
Dealing with changes in availability of particular kinds of intermediaries, opening up new
geographic marketing areas, facing the occurrence of major environmental
changes, meeting the challenge of conflict or other behavioral problems, reviewing and
evaluating
1. The need for congruency
4psgeneral marketing objectives & strategies Firms overall objectives
2. Distribution tasks
Outlining distribution tasks is specific and situational dependent on the firm

For example: distribution tasks for a manufacturer of consumer products differs from
those for products sold in industrial markets.

= distribution tasks are a function of the distribution objectives and the types of firms
involved.
3. Channel structure dimensions
1. Number of levels in channel
Range from two to five or more, number of alternatives is limited to two or three choices,
limitations result from the following factors: particular industry practices, nature & size
of the market, availability of intermediaries
2. Intensity at the various levels intensive selective exclusive
3. Type of intermediaries
Electronic online auction firm -eBay, industrial products sold in B2B, Alibaba
Variable affecting channel structure, market, product, company, intermediary,
environmental, behavioral
Heuristics in channel design
Benefit- fairly simple prescriptions for channel structure
Limitation- mostly useful as rough guide to decision making
Optimal channel structure
1. Management is incapable of knowing all possible alternatives
2. Precise methods for calculating the exact payoffs associated
with each alternative structures do not exist.
1
2
Approaches for choosing channel structure
Characteristics of goods & parallel system approach
Financial approach-Transaction cost analysis approach
Management science approach
Judgment-heuristic approach
If managements ability to make sharp judgments is high
+ Good empirical data on costs and revenues is available
Its possible to make highly satisfactory channel-choice decisions using
judgmental-heuristic approaches
Q3. 4Ps Channels Members Corporation
Chanter 2, chapter 7
The selected distribution channel is reflexive of the overall marketing strategy for
the product, and answers the place question of the marketing mix (4 P's).
Just as with the other elements of a firm's marketing program, distribution activities are
undertaken to facilitate the exchange between marketers and consumers. Every
company must decide on the correct distribution method for its products. That is, a
company must figure out how to get its products to the user. There are many things to
consider in this decision, as distribution channels ultimately say a lot about the product
itself. Even the best product will fail if it is not sold in the right place. Thus, the channel
chosen by a marketer becomes an integral part of the marketing plan.
Marketing Strategy
Marketers must carefully evaluate how their products fit into different distribution
channels. There are many types of channels, and the selected channel becomes a function
of the overall marketing strategy. A marketing strategy is a process that can allow an
organization to concentrate its limited resources on the greatest opportunities to increase
sales and achieve a sustainable competitive advantage. This strategy is reflexive of the 4
P's of marketing:
What the product is and how it meets a customer need
Credit & financial condition, Sales strength, Product line, Reputation, Market coverage,
Sale performance, Management succession, management ability, attitude, size
What the price of the product will be
What promotions will be used to sell the product?
And what place the product will be sold.
The distribution channel is primarily concerned with this last item.
Distribution Channels
It is important for a company to match its products with the characteristics of the
distribution channel. The company must decide whether to sell its products through an
intermediary (such as a chain store) or attempt to sell its products directly to the customer.
Using an intermediary may sometimes lower transaction costs, as much of the burden is
shifted from the producer to the intermediary.
There are three basic types of distribution for a marketer to consider: Intensive, selective,
and exclusive. I ntensivedistribution means the producer's products are stocked in
the majority of outlets. This strategy is common for basic supplies, snack foods,
magazines, and soft drink beverages. Selectivedistribution means that the producer relies
on a few intermediaries to carry their product such as wine, clothes, and
cigarette. Exclusive distribution means that the producer selects only very few
intermediaries, such as is often the case with luxury goods.
A marketer will consider the three types of distribution and select the one that most
closely fits the overall marketing strategy. Generally, as one moves from intensive to
selective to distribution channels, the more that company can charge for its products.
However, the trade-off is in how widely available the company wants its product.
Carefully considering the possible distribution channels will help maximize the potential
of a product.

Trends in size & concentration
Size of wholesaler: majority are small business
Sales volume: nearly 45% of all firms have annual sales of less than $1 million
Retail structure trends
Decreasing number of establishment
Increasing sales
= increase in size of retail establishments measured by average sales volume per store
The selection process
Finding prospective channel members
Filed sales organization- trade sources- reseller inquiries- customers- advertising-
trade shows- other sources
Product line
1. Manufacturer offers good product line with strong sales & profit potential
2. Stress value of good product line from channel members perspective
Offering Inducements
Advertising & promotional support
Management assistance
Fair dealing policies & friendly relationships
Q4. Shipping logistic
Logistics is much more than simply shipping products to customer. Explain
Logistics is complex and simply everywhere
Modern logistics involves planning, implementing, controlling, creating and monitoring
flows of goods and information. To carry out these jobs, logisticians need to understand
and conceive business processes. Although these complex structure may often remain
hidden from consumers, logistics has long been an indispensable part of daily life. Across
industries, it ensures that goods and merchandise always where they are needed. Logistics
fuels innovation and creates jobs around the world.

()
1. Identify and discuss the four major areas of interface between channel
management and logistics management.
2. The product, price, promotion and logistics variables may be viewed by the
channel manager as resources in helping secure a higher level of channel member
cooperation. Discuss the statement.
3. Logistics is much more than simply shipping products to customer. Explain