Transcript Session 2 Marketing Logistics

Session 2: Marketing Logistics
Copyright  2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: Creating and Delivering Value 5e, by Quester, McGuiggan, Perreault McCarthy
By Carolin Plewa
11-1
When we finish this lecture you
should understand
• Why logistics (physical distribution) is an important part of
place and marketing planning
• Why the level of customer service is a marketing strategy
variable
• Transportation, inventory and warehousing
• How inventory decisions and storage affect marketing
strategy
• The concept of distribution centres
Copyright  2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: Creating and Delivering Value 5e, by Quester, McGuiggan, Perreault McCarthy
By Carolin Plewa
11-2
Royal Flying Doctor Service
[Click on the image to play the movie]
Copyright  2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: Creating and Delivering Value 5e, by Quester, McGuiggan, Perreault McCarthy
By Carolin Plewa
11-3
Exhibit 11.1
Physical distribution issues are relevant to the marketing of many
services—for example the distribution airline tickets
Copyright  2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: Creating and Delivering Value 5e, by Quester, McGuiggan, Perreault McCarthy
By Carolin Plewa
11-4
Physical distribution focus customer service
• The transporting and storing of goods to match target
customers' needs with the organisation’s marketing mix
• Customers think of physical distribution in terms of the
customer service level
– How rapidly and dependably a company can deliver what the
customer wants
• There are trade-offs among physical distribution costs,
customer service levels and sales
Copyright  2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: Creating and Delivering Value 5e, by Quester, McGuiggan, Perreault McCarthy
By Carolin Plewa
11-5
Royal Flying Doctor Service
[Click on the image to play the movie]
Copyright  2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: Creating and Delivering Value 5e, by Quester, McGuiggan, Perreault McCarthy
By Carolin Plewa
11-6
Coordination of activities
• Activities of organisation channel system
– including transporting, storing and product-handling activities
•
Coordination of activities as one system helps to
– minimise the costs of distribution
– provide for a given customer service level
• Manager has to decide what aspects of service are most
important to customers, e.g.
– order delivery time
– availability of products
– order status information
Copyright  2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: Creating and Delivering Value 5e, by Quester, McGuiggan, Perreault McCarthy
By Carolin Plewa
11-7
Table 11.1 Examples of factors that affect
the physical distribution service level
Copyright  2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: Creating and Delivering Value 5e, by Quester, McGuiggan, Perreault McCarthy
By Carolin Plewa
11-8
Figure 11.2 Comparative costs of airfreight
versus rail and warehouse
Copyright  2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: Creating and Delivering Value 5e, by Quester, McGuiggan, Perreault McCarthy
By Carolin Plewa
11-9
Exhibit 11.2
Companies such as Hewlett-Packard can assist companies in
taking a holistic view of their logistics channel
Copyright  2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: Creating and Delivering Value 5e, by Quester, McGuiggan, Perreault McCarthy
By Carolin Plewa
11-10
Supply chain
• Supply chain
= complete set of organisations, facilities and activities involved in procuring
materials, transforming them into intermediate and finished products and
distributing them
• Just-in-time delivery (JIT)
= Reliably delivering products just before the customer needs them
– Requires close coordination and information flows
– Reduces handling and storing costs
– Shifts greater responsibility to the supplier
• Electronic data interchange (EDI)
= Puts information in a standardised format that is easily shared between
different computer systems
Copyright  2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: Creating and Delivering Value 5e, by Quester, McGuiggan, Perreault McCarthy
By Carolin Plewa
11-11
Exhibit 11.4
Companies such as TNT assist companies with coordination of
physical distribution decisions through electronic data sharing
Copyright  2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: Creating and Delivering Value 5e, by Quester, McGuiggan, Perreault McCarthy
By Carolin Plewa
11-12
Transportation
• Transportation
= Marketing function of moving goods
– Helps facilitate economies of scale in production
– May limit potential target markets
• Choice of transportation affects customer satisfaction in
terms of
– pricing of product
– on-time delivery performance
– condition of goods on delivery
Copyright  2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: Creating and Delivering Value 5e, by Quester, McGuiggan, Perreault McCarthy
By Carolin Plewa
11-13
Figure 11.3 Transportation costs as a percentage
of selling price for different products
Copyright  2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: Creating and Delivering Value 5e, by Quester, McGuiggan, Perreault McCarthy
By Carolin Plewa
11-14
Transportation choices
• Five major modes of transportation
–
–
–
–
–
Rail
Truck (road)
Ship (water)
Pipeline
Air (aeroplane)
• Choice of transportation mode depends on
–
–
–
–
–
cost and delivery speed
number of locations served
ability to handle a variety of goods
frequency of scheduled shipments
dependability in meeting schedules
Copyright  2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: Creating and Delivering Value 5e, by Quester, McGuiggan, Perreault McCarthy
By Carolin Plewa
11-15
Figure 11.4 Benefits and limitations of
different modes of transport
Copyright  2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: Creating and Delivering Value 5e, by Quester, McGuiggan, Perreault McCarthy
By Carolin Plewa
11-16
Exhibit 11.6
Companies such as Federal Express make transportation choices
for companies easier
Copyright  2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: Creating and Delivering Value 5e, by Quester, McGuiggan, Perreault McCarthy
By Carolin Plewa
11-17
Storage
• Storage
= The marketing function of holding goods to provide time utility
– Necessary when production does not exactly match consumption of
products
• Inventory
= The amount of goods being stored
• Cost of storage
– Goods are stored at a cost
– Can be minimised and shared by distribution channel
Copyright  2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: Creating and Delivering Value 5e, by Quester, McGuiggan, Perreault McCarthy
By Carolin Plewa
11-18
Figure 11.6 A comparison of private
warehouses and public warehouses
Copyright  2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: Creating and Delivering Value 5e, by Quester, McGuiggan, Perreault McCarthy
By Carolin Plewa
11-19
Amazon.com
[Click on the image to play the movie]
Copyright  2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: Creating and Delivering Value 5e, by Quester, McGuiggan, Perreault McCarthy
By Carolin Plewa
11-20
Logistics & Supply Chain
• Watch the DVD on Pacific Coast Feather Cushion Company
• Consider how Logistics and Supply Chain Management fit
into the Value Chain and Marketing Mix
Copyright  2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: Creating and Delivering Value 5e, by Quester, McGuiggan, Perreault McCarthy
By Carolin Plewa
11-21
Logistics & Supply Chain
• Read Case Study: Supply Chain Cooperation
• Answer the Questions at the end of the Case Study.
Copyright  2007 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: Creating and Delivering Value 5e, by Quester, McGuiggan, Perreault McCarthy
By Carolin Plewa
11-22