Mod. 4
Mod. 4
Mod. 4
Ensures a cost effective and efficient movement of goods from the place of
origin to the place of consumption.
Flow of Information
Definition:
Philip Kotler defines Logistics as: “Planning, implementing and controlling the
physical flow of materials and finished goods from the point of origin to the point
of use to meet the customer’s need at a profit”.
Elements:
1. Information Logistics
2. Inventory Logistics
3. Warehousing Logistics
4. Packaging Logistics
5. Transportation
Process:
1. Inbound Logistics
2. Process
3. Outbound
4. Reverse
SUPPLY CHAIN
Supply chain is a network of connected and interdependent organisations
working together to control, manage and improve the flow of products and
information from the point of origin to the point of consumption.
LOGISTICS SCM
Concerned with planning, implementing, Process of planning, implementing, managing,
managing, controlling the flow of goods controlling the whole system of supply chain
network
Deals with acquisition, storage, transportation and It is a network of organisations, people, technology,
delivery of goods along the Supply chain activities, information and resources involved in
moving a product or service from supplier to
customer
Focuses on optimising the flow of products and Focuses on increasing the overall effectiveness of
information supply chain
A channel of supply chain which adds the value of Integration of all the partners in the supply chain
time and place utility network
Channel of distribution is the path or route through which goods flow from
producer to the consumer.
Distribution Channel serves as a bridge to fill the gap between the point of
production to the point of consumption thereby creating time, place and
possession utilities.
Producer Customer
2. Retail Distribution
3. Wholesale Distribution
4. Agent Distribution
Describes the method that controls the flow of goods and services from the
manufactures to the end user. It is influenced by the following strategy:
1. Distribution Intensity –
decides the level of availability of a product and its market coverage
2. Channel Configuration –
Design or number of levels/intermediaries within a channel
Short
Medium
Long
3. Channel Arrangement
Defines the relationships and partnership among members of the channel.
Mutual trust and understanding among the members increase the efficiency of
the channel.
b) Horizontal Marketing System (HMS)- members on the same channel level ( like
two suppliers or two retailers cooperate. They share their distribution expertise
and resources.
1. Market Factors
Number of Buyers
Geographical Distribution
Size of Order
Buyer of Products
2. Product Factors
Perishability
Unit Value
Weight
New Products
3. Company Factors
Financial Resources
Size of the Company
Policy of Distribution
4. Middlemen Factors
Attitude of Middlemen
Availability of Middlemen
Services
Sale Potential
5. Environmental Factors
Occurs when the intermediaries or middlemen in a distribution channel compete
each other by breaking the mutually agreed channel route for selling the
product.
Also known as Disintermediation.
2. Horizontal Conflict –
Conflict between members in the same level of a channel. Eg. Conflict between
retailers in a distribution channel.
1. Communication
Companies maintain regular communication with its channel members to
understand their problems and settle their complaints.
2. Dealer Councils
A committee or body of the channel members are formed to act as a platform
to discuss and resolve conflicts and other problems in distribution.
MERITS
1. Clear targeting
2. Personalisation
3. Immediate action
4. Invisible strategies
5. Measurability
DEMERITS
1. People see advertisement mails as nuisance
2. Companies are unable to get the benefits of mass marketing
3. The success depends on the accuracy of database kept by the company
and should be regularly updated.
Retailing
According to Philip Kotler, “Retailing consists of all the activities related to the
sale of goods and services to the ultimate consumers for personal non-business
use”.
Retailer
The party, trader or enterprise engaged in the sale of commodities to the end
users. He performs the role of an agent of the consumer who buys finished goods
from the manufacturer/wholesale dealer for the use of the consumers.
SCOPE AND IMPORTANCE OF RETAILING
FUNCTIONS OF RETAILING/RETAILER
1. PRIMARY FUNCTIONS
a) searching
b) buying
c) transporting
d) storing
e) sorting
f) breaking bulk
g) packing
h) pricing
i) selling
2. SECONDARY FUNCTIONS
a) advertising
b) merchandising
c) financing
d) risk bearing
e) collecting tax
SERVICES OF RETAILERS
I. TO CUSTOMERS
1. Offer wide variety of goods
2. shopping experience
3. credit facility
4. home delivery
5. After sales service
6. information and guidance
•CONSUMER •SUPERMARKET
COOPERATIVE
STORE •SHOPPING MALL
•CONVENIENCE
STORE
•SPECIALITY STORE*
SPECIALITY ITINERANT NONSTORE
STORE RETAILERS RETAILING
SUPER
MARKET ELECTRONIC
SPECIALITY
TRADERS RETAILING
STORE
AUTOMATIC
STREET
VENDING
TRADERS
MACHINE