1. Understand why physical distribution (logistics) is such an important part of Place and marketing strategy planning.
2. Understand why the physical distribution customer service level is a key marketing strategy variable.
3. Understand the physical distribution concept and why it requires coordination of storing, transporting, and related activities.
. See how firms can cooperate and share logistics activities to improve value to the customer at the end of the channel.
5. Know about the advantages and disadvantages of the various transporting methods.
6. Know how inventory decisions and storing affect marketing strategy.
7. Understand the distribution center concept.
8. Understand the important new terms.
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Chapter 12: DistributionCustomer Serviceand LogisticsWhen you finish this chapter, you should12-2Chapter 12 Objectives 1. Understand why physical distribution (logistics) is such an important part of Place and marketing strategy planning.2. Understand why the physical distribution customer service level is a key marketing strategy variable.3. Understand the physical distribution concept and why it requires coordination of storing, transporting, and related activities. 4. See how firms can cooperate and share logistics activities to improve value to the customer at the end of the channel.5. Know about the advantages and disadvantages of the various transporting methods.6. Know how inventory decisions and storing affect marketing strategy.7. Understand the distribution center concept.8. Understand the important new terms.Exhibit 12-112-3Understanding Physical DistributionCosts ($)Customer Service Level0090%Transporting CostLost Sales Inventory CostTotal Cost of PDCoordinating Logistics ActivitiesBetter Information-EDI and InternetChain of SupplyJITReducing ConflictSharing and Shifting????????????????????12-4The Transporting Function12-5ModesofTransportationWaterAirRailTruckPipelineThe Storing FunctionPrice StabilityFlexibilityCostsSpecialized Function12-6Exhibit 12-612-7Comparing Private and Public WarehousesAdequacyControlFixed InvestmentCharacteristicsPrivateHighly adequateHighVery highFlexibilityLowPublicMay not be convenientLow managerial controlNo fixed investmentHighType of warehouseUnit CostHigh if volume is lowVery low if volume is very highLowContainerizationPiggyback ServiceFreight ForwardersStoringInventoryPrivate WarehousesPublic WarehousesDistribution CenterJITPhysical Distribution (PD)LogisticsCustomer Service LevelPD ConceptTotal Cost ApproachChain of SupplyElectronic Data InterchangeTransportingPool Car ServiceDiversion in Transit12-8Key Terms
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