Chapter1Marketing'sValuetoConsumers,Firms,andSociety

knowwhatmarketingisandwhyyoulearnit1understanddifferencebetweenmarketingandmacro-marketing2knowthemarketingfunctionsandwhymarketingspecialistsperformthem3undersatndwhatamarket-driveneconomyisandhowitadjuststhemacro-marketingsystem4LearningObjectivesknowwhatthemarketingconceptisandhowitshouldguideafirmornonprofitorganization5understandwhatcustomervalueisandwhyitisimportanttcustomersatisfaction6knowhowsocialresponsibilityandmarketingethicsrelatetothemarketingconcept7understandtheimportantnewterms8LearningObjectivesMarketing—what’sitallabout?MorethanSellingandAdvertising!

Whatshouldafirmdoinproducingbicycles?predictwhenEstimatedemandsPredictwantsAnalyzeneedsprovideserviceestimatecompetitiondecidepromotiondeterminewhereMarketingv.s.ProductionMarketing:providedirectionforproduction,makesuretherightgoodsandservicesareproduced,andfindtheirwaytoconsumersProduction:makegoodsandperformservicecustomersatisfactionMarketingisimportanttoyou1Marketingisimportanttoeverycunsumer.2Marketingwillbeimportanttoyourjob.3Marketingaffectsinnovationandstandardsofliving.Howtodefinemarketing?microview

asetofactivitesperformedbyorganizations.Marketingmacroview

asocialprocessMarketingMarketingistheperformanceofactivitiesthatseektoaccomplishanorganization'sobjectivesbyanticipatingcustomerorclientneedsanddirectingaflowofneed-satisfyinggoodsandservicesfromproducertocustomerorclient.CharacteristicsofmarketingappliestoprofitandnonprofitorganzationsmorethanjustpersuadingcustomersbeginswithcustomerneedsdoesnotdoitalonemarketinginvolvesexchangesbuildsrelationshipwiththecustomerMacro-marketingMacro-marketingEmphasisisonwholesystem.BridgethegapbetweenproducersandconsumersMarketingfunctionsSelling

Transporting

Storing

Risktaking

markeitngfunctionsMarketinformationBuyingStandardizationandgrading

Financing

Economicsystem

market-directedeconomy

commandeconomy

Decisionsaremadebygovernmentofficialsmayworkwellif:simpleeconomy;littlevariety;adverseconditionsadjustsitself

priceisvaluemeasuregreatestfreedomofchoicegovernment'srolelimitedMarket-directedmacro-marketingsystemManyindividualproducersintermediariescollaboratorsperformuniversalmarketingfunctionsovercomediscrepanciesandseparationcreatevalueanddirectflowManyindividualconsumersmonitoringbygovernment(s)andpublicinterestgroupsMarketing'srolehaschangedalotovertheyearsSimpletradeera

Productionera

Salesera

Marketing

departmenteraFamiliestradedorsoldtheir"surplus"outputtolocaldistribution.Acompanyfocusesonproductionofafewspecificproducts.

Acompanyemphasizessellingbecauseofcompetition.Allmarketingactivitiesarebroughtunderthecontrolofonedepartment.MarketingcompanyeraMarketingpeopledeveloplong-rangeplans;thewholecompnayisguidedbythemarketingconcept.MarketingconceptMarketingconceptProfit(oranothermeasureofsuccess)asanobjectiveCustomersatisfactionTotalcompanyeffortCustomervalue

Customervalue

—thedifferencebetweenbenefitsacustomerseesfromamarketofferingandthecostsofobtainingthosebenefits.Costs,benefits,andcustomervaluecustomer'spercievedfairvaluelinePerceivedsuperiorvaluePerceivedinferiorvaluehighlowlowhighCoststargetcustomerseestoobtainbenefitsBenefitstargetcustomerseesinafirm'sgoodsandservicesBuildingrelationshipswithcustomervalueBuildingrelationshipswithcustomersrequiresthateveryoneinafirmworktogethertoprovidecustomervalue

beforeandaftereachpurchase.BuildingrelationshipswithcustomervalueTotalcompanyefforttosatisfycustomersSatisfycustomersRetaincustomersBuildprofitablerelationshipswithcustomersOffersuperiorcustomervalueAttractcustomersIncreasesalestocustomersMarketingconceptappliedinNPOs1234NewcomersformarketingthinkingSupportmaynotcomefromsatisfied"customers"ConsideringthebottomlineMaynotbeorganizedformarketingMarketingconceptforNPOsMicro-macrodilemmaMicro-macrodilemmaWhatifprofitssuffer?SocialresponsibilityShouldallconsumersneedsbesatisfied?MarketingethicsThemarketingconceptguidesmarketingethics.Marketingethics

—themoralstandardsthatguidemarketingdecisonsandactions.Marketing'scriticsAdvertisingProductsServiceCustomers'informationeverywhere,anoying,misleading,orwastefulpoorquality,toomanyunnecessaryproductsstinks,nobodycaresreavealedwithoutpermissionTermsreview

e-commercemacro-microdilemma

commandeconomy

financingintermediary

innovation

Keytermsstoringmarketingcustomersatisfaction

economicsofscalecollaboratorscustomervaluesocialresponsibilitymarketingethicsmarket-directedeconomyCasestudy(Case1)Question1EvaluateLisaAham’scurrentstrategyregardingseniorcitizens.DoesthisstrategyimprovethisMcDonald’simage?Question2Whatshouldshedoabouttheseniorcitizenmarket—thatis,shouldsheencourage,ignore,ordiscourageherseniors?Question3Whatshouldshedoaboutthebingoidea?Pleaseexplain.JoyfulmomentExercisesChapter2MarketingStrategyPlanning

understandwhatamarketingmanagerdoes1knowwhatmarketingstrategyplanningisanditsimportance2understandthetargetmarketing3befamiliarwith4P'sinmarketingmix4LearningObjectivesknowthedifferencesbetweenamarketingstrategy,amarketingplanandamarketingprogram5befamiliarwiththeframeworkofstrategyplanning6knowfourbroadtypesofmarketingopportunitiesthathelpinidentifyingnewstrategies7understandwhystrategiesforopportunitiesininternationalmarketshouldbeconsidered8LearningObjectivesunderstandtheimportantnewterms9ThemanagementjobinmarketingStrategicplanningStrategic(management)planning

—themanagerialprocessofdevelopingandmaintainingamatchbetweenanorganziation'sresourcesanditsmarketopportunities.Marketingstrategy

Marketingstrategyspecifies

atargetmarketandarelatedmarketingmix.Targetmarketing—afairlyhomogeneous(similar)groupofcustomerstowhomacompanywishestoappeal.Marketingmix

—thecontrollablevariablesthecompanyputstogethertosatisfythistargetgroup.MarketingstrategyTargetmarketThemarketingmixSelectingamarket-orientedstrategyistargetmarketingDevelopingmarketingmixesfortargetmarketsYourTextHereYourTextHereTargetmarketreachingthetargettellingandsellingthecustomerthegoodsorserviceforthetarget'sneedsmakingitrightproductplacepricepromotionstrategicdecisionsareasorgainziedbythefourP's4P'SphysicalgoodsservicefeaturesbenefitsqualitylevelaccessoriesinstallationinstructionwarrantyproductlinespackaingbrandingobjectiveschanneltypemarketexposurekindsofintermediarieskindsandlocationsofstoreshowtohandletransportingandstoringservicelevelsrecruitingintermediariesmanagingchannelsobjectivespromotionblendsalespeoplekindnumberselectingtrainingmotivationadertisingtargetskindsofadsmediatypescopythrustpreparedbywhompublicitysalespromotionobjectivesflesibilityleveloverproductlifecyclegeographictermsdiscountsallowancesProductPlacePromotionPriceFourexamplesofbasicchannelsofdistributionforconsumerproductsPromotionelementpersonalsellingmasssellingsalespromotionpromotionMarketingmixplanningWedevelopaproducttosatisfythetargetcustomers;Wefindawaytoreachourtargetcustomers'place;Weusepromotiontotellthetargetcustomersabouttheproductthathasbeendesignedforthem;Wesetapriceafterestimatingexpectedcustomerreactiontothetotalofferingandthecostsofgettingittothem.EachofthefourPscontributestothewholeMarketingplanMarketingplanisawrittenstatementofamarketingstrategyandthetime-relateddetailsforcarryingoutthestrategy.Implementationputsplansintooperation.Severalplansmakeawholemarketingprogram.Elementsofafirm'smarketingprogramCustomerequityCustomerequityistheexpectedearningstream(profitability)ofafirm'scurrentandprospectivecustomersoversomeperiodoftime.Marketingstrategyiescanfocusonattractingnewcustomersaswellasretainingandgrowingcurrentcustomers.TheimportanceofmarketingstrategyplanningStrategydecisionsusuallydeterminesuccessandfailure.

NewstrategiesintheautoindustryIn1961Themid1950sThemid1920sTheearly1920sMorerecentlyIn2004Bythe1980sinthe1970sWhatareattractiveopportunities?Breakthroughopportunitiesarethebest.Competitiveadvantageisneeded—atleast.Avoidhit-or-missmarketingwithalogicalprocess.MarketingstrategyplanningprocessS.W.O.TAnalysisS.W.O.TAnalysisstrengthweaknessopportunitythreatFourbasictypesofopportunitiesPresentproductsNewproductsPresentproductsNewproductsMarketpenetrationProductdevelopmentMarketdevelopmentDiversificationPresentmarketNewmarketPresentmarketNewmarketInternationalopportunitiesshouldbeconsidered1234Theworldisgettingsmaller.Developingacompetitiveadvantageathomeandabroad.Getanearlystartinanewmarket.Findbettertrendsinvariables.5Weightherisksofgoingabroad.Termsreview

advertisingSWOTanalysiscustomerequity

targetmarketingmarketingmix

distribution

Keytermsdiversificationstrategicplanningcompetitiveadvantage

massmarketingpublicitysalespromotiondifferentiationmarketingstrategymarketingstrategybreakthroughopportunityCasestudy(Case29)Question1ContrastCustomCastings,Inc.’scurrentstrategyandtheproposedstrategy.Question2WhatshouldMollyDaneksaytoJesseShupingtopersuadehimtochangehismind?Question3ShouldMollyDanekjustplantosellhydraulicjacks?Explainyourreasons.JoyfulmomentExercisesChapter3FocusingMarketingStrategywithSegmentationandPositioning

knowaboutdefininggenericmarketsandproduct-markets1knowwhatmarketsegmentationisandhowtosegmentproduct-marketsintosubmarkets2knowthreeapproachestomarket-orientedstrategyplanning3LearningObjectivesknowdimensionsthatmaybeusefulforsegmentingmarkets4knowwhatpositioningisandwhyitisuseful5understandtheimportantnewterms6LearningObjectivesWhatisacompany'smarket?Agroupofpotentialcustomerswithsimilarneedswhoarewillingtoexchangesomethingofvaluewithsellersofferingvariousgoodsorservices—thatis,waysofsatisfyingthoseneeds.MarketingstrategyplanningprocessFromgenericmarketstoproduct-marketsgenericmarket

amarketwithbroadlysimilarneedsandsellersofferingvarious,oftendiverse,waysofsatisfyingthoseneeds.Twobasictypesofmarketsproduct-market

amarketwithverysimilarneedsandsellersofferingvariousclosesubstituewaysofsatisfyingthoseneeds.Product-marketproducttype(typeofgoodandtypeofservice)

Whatcustomer(user)needs

tomeetwhatcustomertypesforwhomgeographicarea

whererelationshipbetweengenericandproduct-marketMarketsegmentationMarketingsegmentationnamingbroadproduct-markets.segmentingthesebroadproduct-marketsNarrowingdowntotargetmarketsMarketsegmentationmarketsegmentationcriteriafor"good"marketsegments1234Homogeneous(similar)withinHeterogeneous(different)betweenSubstantialOperationalsegmentersandcombinersThestrategystrategyonestrategythreestrategytwoAsegmenterdevelopesadifferentmarketingmixforeachsegmentSingletargetmarketapproachMultipletargetmarketapproachsegmentersandcombinersThestrategyAcombineraimsattwoormoresubmarketswiththesamemarketingmix.segmentersandcombinersCombinerstrytoincreasethesizeoftheirtargetmarketsbycombingtwoormoresegments.Combinerslookatvarioussubmarketsforsimilaritiesratherthandifferences.Segmentersaimatoneormorehomogeneoussegmentsandtrytodevelopadifferentmarketingmixforeachsegment.Potentialtargetmarketdimensions1Behavioralneeds,attitudes,andhowpresentandpotentialgoodsandservicesfitintocustomers'consumptionpatterns.2Urgencytogetneedsatisfiedanddesireandwillingnesstoseekinformation,compare,andshop.3Geographiclocationandotherdemographiccharacteristicsofpotentialcustomers.possiblesegmentingdimensionsandtypicalbreakdownsforconsumermarketsDemographicGeographicBehavioralregionofworld,countryregionofcountrysizeofcityneedsbenefitssoughtthoughtsrateofusepurchaserelationshipbrandfamiliaritykindofshoppingtypesofproblemsolvinginformationrequiredincomeagefamilysizefamilylifecycleoccupationeducationethnicitysocialclassqualifyingdimensionsanddetermingdimensionsQualifyingdimensionarethoserelevanttoincludingacustomertypeinaproduct-market.Determingdimensionarethosethatactuallyaffectthecustomer'spurchaseofaspecificproductorbrandinaproduct-market.FindingtherelevantsegmentingdimensionsAllpotentialdimensionsQualifyingdimensionsDeterminingdimensions(product)Deternmingdimensions(brand)Dimensionsgenerallyrelevanttopurchasingbehavior.Dimensionsrelevanttoincludingacustomertypeintheproduct-market.Dimensionsthataffectthecustomer'spurchaseofaspecifictypeofaproduct.Dimensionsthataffectthecustomer'schoiceofaspecificbrand.Segmentingdimensionsbecomemorespecifictoreasonswhythetargetsegmentchoosestobuyaparticularbrandoftheproduct.SegmentingdimensionssegmentingdimensionsDifferentdimensionsneededfordifferentsubmarkets.Ethicalissuesshouldbeconsideredinselectingsegmentingdimensions.Internationalmarketingrequiresevenmoresegmenting.Therearemoredimensions—butthereisaway.differentiationandpositioningDifferentiatethemarketingmix—toservecustomersbetterPositioning

referstohowcustomersthinkaboutproposedorpresentbrandsinamarketing."Productspace"representingconsumers'perceptionsfordifferentbrandsofbarsoap

differentiationandpositioningPositioningisbasedoncustomer'sviews.Eachsegmentmsyhaveitsownpreferences.Positioningaspartofbroaderanalysis.Positioningstatementprovidesdirectionformarketingstrategy.Termsreview

segmentersdetermingdimensioncombinerCRMpositioningmarket

Keytermssegmentingqualifyingdimension

marketsegmentationsingletargetmarketapproachmultipletargetmarketapproachclusteringtechniqueCasestudy(Case7)Question1Identitythelikelycharacteristicsofthemarketsegmentbeingtargetedbythecompany.WhyaremosttargetcustomerslikelytobeforeignersratherthanNewZealanders?Question2Suggestwhatexpectationstargetcustomersarelikelytohaveregardingthequality,reliability,andrangeofservice?WhataretheimplicationsforBenOhauLodge?Question3HowdifficultisitforBenOhauLodgetoundertakemarketresearch?Pleaseelaborate.JoyfulmomentExercisesChapter4FinalConsumersandTheirBuyingBehaviorDescribehoweconomicneedsinfluencethebuyerdecisionprocess.1Understandhowpsychologicalvariablesaffectanindividual’sbuyingbehavior.2Understandhowsocialinfluencesaffectanindividual’sbuyingbehavior.3Explainhowcharacteristicsofthepurchasesituationinfluenceconsumerbehavior.4LearningObjectivesExplaintheprocessbywhichconsumersmakebuyingdecisions.5Understandimportantnewterms6Consumerbehavior—Whydotheybuywhattheybuy?Needs?Stimulus?

SimpleResponseModelStimulusOrganismResponseModelofBuyingBehaviorBuyer’sdecisionprocessBuyer’scharacteristicsCulturalSocialPersonalPsychologicalMarketingStimuliandOtherstimuliBuyer’sblackboxBuyerresponsesPersonmakingdecisionsEconomicneeds.PsychologicalvariablesSocialinfluencesPurchasesituationConsumerdecisionprocessEconomicneedsEconomyofpurchaseConvenienceEfficiencyIncomeDependabilityPsychologicalFactorsPerceptionLearningAttitudes,Trust&lifestyleMotivationInfluencesonConsumerBehaviorSocialInfluencesReferencegroupscultureFamilySocialclassEthnicgroupsCultureCulturalFactorsSubcultureSocialClassBuyerPurchasesituationPurchasereasonTimeSurroundingsMaslow’sHierarchyofNeedsPsychologicalneeds(food,water,shelter)1Safetyneeds(security,protection)2Socialneeds(senseofbelonging,love)3Esteemneeds(self-esteem,recognition)4Self-actualization(self-developmentandrealization)5Needs,wantsanddrivesWantsare“needs”thatarelearnedduringaperson’slife.

adriveisastrongstimulusthatencouragesactiontoreduceaneedNeedsarethebasicforcesthatmotivateapersontodosomething.ThelearningProcessDriveCuesResponseReinforcementMarket-directedmacro-marketingsystemInformationsearchIdentifyalternativesSetcriteriaEvaluatealternativesStepsBetweenEvaluationofAlternativesandaPurchaseDecisionEvaluationofalternativesPurchasedecisionUnanticipatedsituationalfactorsAttitudeofothersPurchaseintentionHowCustomersUseor

DisposeofProductsProductGetridofittemporarilyGetridofitpermanentlyKeepitLoanitRentitStoreitConverttonewpurposeUsefororiginalpurposeGiveitawayTradeitSellitThrowitawayDirecttoconsumerTointermediaryThroughmiddlemanTobeusedTobe(re)soldThebuyerdecisionprocessfornewproductsStagesintheadoptionprocessAwarenessInterestsEvaluationTrialAdoptionInfluenceofproductcharacteristicsonrateofadoptionRelativeadvantageCompatibilityComplexityDivisibilityCommunicabilityTermsreview

cuesexpectationresponse

SocialneedsperceptionneedsKeytermsdrivewantsEconomicbuyers

DiscretionaryincomeSelectiveexposurelearningEconomicneedsSafetyneedsPhysiologicalneedsLifestyleanalysisreinforcementSelectiveretentionCasestudy(Case1)Question1EvaluateLisaAham’scurrentstrategyregardingseniorcitizens.DoesthisstrategyimprovethisMcDonald’simage?Question2Whatshouldshedoabouttheseniorcitizenmarket—thatis,shouldsheencourage,ignore,ordiscourageherseniors?

Question3Whatshouldshedoaboutthebingoidea?Explain.Joyfulmoment世界上最好的推銷員哈利在櫥窗上看到一則廣告，上面寫著：“招人世界上最好的推銷員,高薪”“我就是個不錯的推銷員,”哈利心里想著,“我能賣掉任何東西，我要進去請求這份工作?！彼哌M商店并對經(jīng)理說“我是世界上最好的推銷員”，他說，“給我這份工作吧”?！澳惚仨氉C明你是最好的”經(jīng)理說。“我會通過你給我的所有測試，”哈利對他說?！昂玫??！苯?jīng)理從他的桌子里拿出一盒糖。世界上最好的推銷員“上禮拜我買了一千盒糖，如果你能在這禮拜之內把它們都賣掉，我就給你這份工作?！薄昂芎唵巍惫f。他拿著這盒糖離開了辦公室。哈利每天并且一整天都忙著從一家店跑到另一家，試著賣糖，可是一盒都沒賣掉。糖是那么的低劣，他甚至不能把它送人。到了周末，他回到經(jīng)理那，“很抱歉，先生，”他說，“我看錯自己了。我不是世界上最好的推銷員，但是我知道誰是”?！芭?？”經(jīng)理說?！笆钦l?。俊薄澳莻€把一千盒糖賣給你的人。”哈利說。ExercisesChapter5BusinessandOrganizationalCustomersandTheirBuyingBehaviorDescribewhothebusinessandorganizationalcustomersare.1Seewhybusinessandorganizationalpurchasedecisionsofteninvolvemultipleinfluences.2Understandtheproblem-solvingbehavioroforganizationalbuyersandhowtheygetmarketinformation.3undersatndwhatamarket-driveneconomyisandhowitadjuststhemacro-marketingsystem4LearningObjectivesknowaboutthenumberanddistributionofmanufacturersandwhytheyareanimportantcustomergroup.5Knowhowbuyingbyservicefirms,retailers,wholesalers,andgovernmentsissimilarto—anddifferentfrom—buyingbymanufacturers.6Understandimportantnewterms7LearningObjectivesBusinessandOrganizationalCustomers—Abigopportunity!

Whoarebusinessandorganizationalcustomers?ProducersofgoodsandservicesintermediariesGovernmentunitsNonprofitorganizationsTypesoforganizationalcustomersKeydifferencesbetweenorganizationalcustomersandfinalconsumers.BusinessandorganizationalcustomersandtheirbuyingbehaviorKeycharacteristicsofspecifictypesoforganizationalcustomers1Businessmarkets

2Consumermarketsvs.Businessvs.ConsumerMarketsFewerbuyersbutlargerbuyersGeographicallyconcentratedDeriveddemandInelasticdemandFluctuatingdemandBusinessvs.ConsumerMarketsProfessionalpurchasing專業(yè)購買Severalbuyinginfluences影響力量Directpurchasing直接購買Reciprocity互惠Businessvs.ConsumerMarketsBuyingdecisionsNatureofthebuyingunitMoredecisionparticipantsMoreprofessionalpurchasingeffortMorecomplexMoreformalizedClosesupplier-customerrelationshipParticipantsintheBusinessBuyingProcessGatekeepersBuyersInfluencersDecidersUsersBuyingcenterOverlappingneedsofindividualinfluencersandthecustomerorganizationRiskJobsecurityComfortCareeradvancementMoneyrewardsOtherneedsInnovationsurvivalCustomersatisfactionGrowthProfitOtherneedsTypesofbuyingsituationsNewtaskbuying新購ModifiedRebuy調整后的重購NewvehiclesElec.EquipConsultantsComputerequip.Straightrebuy直接重購UtilitiesOfficeSuppliesBulkchemicalsCustomfurnitureInstalledcomponentsBuildingsWeaponsystemsMajorInfluencesonIndustrialBuyingBehaviorLevelof demandEconomic outlookInterestrateRateoftechno- logicalchangePoliticaland regulatory developmentsCompetitive developmentsSocialresponsi- bilityconcernsEnvironmentalObjectivesPoliciesProceduresOrganizational structuresSystemsOrganizationalInterestsAuthorityStatusEmpathyPersuasive-nessInterpersonalAgeIncomeEducationJobpositionPersonalityRiskattitudesCultureIndividualBusinessBuyerBuyer-sellerrelationshipsinbusinessmarketsCloserelationshipsmayproducemutualbenefitsRelationshipsmaynotmakesenseRelationshipshavemanydimensionsCooperationtreatsproblemsasjointresponsibilitiesSharedinformationisusefulbutmayberiskyOperationallinkagessharefunctionsbetweenfirmsContractsspellourobligationsBuyer-sellerrelationshipsinbusinessmarketsSpecificadaptationsinvestintherelationshipPowerfulcustomermaycontroltherelationshipBuyersmaystilluseseveralsourcestospreadtheirriskVariationsinbuyingbycustomertypeInstitutionalMarketsCaptivePatronsLowBudgetsGovernmentMarketsDomesticSuppliersOpenBidsCostMinimizationPublicReviewPaperworkTermsreview

BuyingcenterMultiplebuyinginfluence

New-taskbuyingCompetitivebidrequisitionKeytermsISO9000VendoranalysisBusinessorganizationalcustomers

ModifiedrebuyoutsourceNegotiatedcontractbuyingPurchasingspecificationStraightrebuyJust-in-timedeliveryPurchasingmanagersNAICScodesCasestudy(Case5)Question1WhatshouldPrestondotopersuadethemanagementtosupporttheproject?Question2HowcouldPrestondispelthedoubtsaboutthenewproduct?Question3Whatshouldthemanagersdo?Joyfulmoment生意不好一個商人在和汽車旅館的主人閑聊?！吧獯笤懔?，”旅館主人說，“真的太糟了?！薄翱墒敲看挝荫{車經(jīng)過這兒，你都掛上了‘客滿’的牌子，”商人說?！澳堑故钦娴??！甭灭^主人答道，“可是過去我一夜就謝絕三十至三十五人，而如今只能謝絕十至十五人?！盓xercisesChapter6DistributionCustomerServiceandLogisticsUnderstandwhylogisticsissuchanimportantpartofplaceandmarketingstrategyplanning.1Understandwhythephysicaldistributioncustomerservicelevelisakeymarketingstrategyvariable.2Understandthephysicaldistributionconceptandwhythecoordinationofstoring,transportingandrelatedactivitiesissoimportant.3Seehowfirmscancooperateandsharelogisticsactivitiesthatwillprovideaddedvaluetotheircustomers4LearningObjectivesKnowabouttheadvantagesanddisadvantagesofvarioustransportationmethods.5Knowhowinventoryandstoragedecisionsaffectmarketingstrategy.6Understandthedistributioncenterconcept.7Understandimportantnewterms8LearningObjectivesPhysicaldistributionGetittocustomersintime!

WhatisPhysicaldistribution

Physicaldistributionisthesetofactivitiesconcernedwithefficientmovementoffinishedgoodsfromtheendoftheproductionoperationtotheconsumer.WhatisPhysicaldistribution

Physicaldistributiontakesplacewithinnumerouswholesalingandretailingdistributionchannels,andincludessuchimportantdecisionareasascustomerservice,inventorycontrol,materialshandling,protectivepackaging,orderprocession,transportation,warehousesiteselection,andwarehousing.WhatisPhysicaldistribution

Physicaldistributionispartofalargerprocesscalled“distribution,”whichincludeswholesaleandretailmarketing,aswellthephysicalmovementofproducts.ActivitiesinPhysicaldistribution

DemandforecastingInventorymanagementpackagingCustomerservicetransportationwarehousingInformationmanagementAPhysicaldistributionsystemcanbemadeupofmanydifferentfunctionalactivities.Distributioncustomerserviceandlogistics1Logisticscustomerservice2transporting3storingLogisticscustomerservice

WhatisLogisticscustomerservice?LeveltoofferCostconsiderationsUsingJITandEDItocoordinatelogisticsStoringStorageandstrategyplanningInventorycostsStoragefacilitiesDistributioncentersLogisticscustomerservice

WhatisLogisticscustomerservice?LeveltoofferCostconsiderationsUsingJITandEDItocoordinatelogisticsCustomerservicelevelCustomerservicelevelmeanshowrapidlyanddependablyafirmcandeliverwhatthey,thecustomers,want.Trade-offsCustomerservicelevelInventorycostLostsalesTransportingcostPhysicaldistributionconceptAlltransporting,storing,andproduct-handlingactivitiesofabusinessandawholechannelsystemshouldbecoordinatedasonesystemthatseekstominimizethecostofdistributionforagivencustomerservicelevel.JITJust-in-timedeliveryReducePDcostsRequireacoordinatedeffortTransportingmodesairpipelinewaterway

featurestruckRailWhichtransportingalternativeisbest?Thetransportingfunctionshouldfitintothewholemarketingstrategy.Pickingthebesttransportingalternativedependsontheproduct,otherphysicaldistributiondecisions,andwhatservicelevelthecompanywantstoofferSupplyChainManagement

12-157WhyGreaterEmphasisisBeingPlacedonLogistics:OffersfirmsacompetitiveadvantageCanyieldcostsavingsGreaterproductvariety