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16 Cards in this Set
- Front
- Back
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• Logistics
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—the transporting, storing, and handling of goods in ways that match target customers’ needs with a firm’s marketing mix—both within individual firms and along a channel of distribution
AKA physical distribution (PD) |
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• Physical distribution (PD)—
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—is another common name for logistics
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customer service level
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—how rapidly and dependably a firm can deliver what they, the customers, want
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• The physical distribution (PD) concept
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o –says that all transporting, storing, and product-handling activities of a business and a whole channel system should be coordinated as one system that seeks to minimize the cost of distribution for a given customer service level.
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o Total cost approach
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—involves evaluating each possible PD system and identifying all of the costs of each alternative
• Ex: inventory and carrying costs |
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• JIT
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o Just-In-Time delivery systems (Chapter 6)
• Reduces PD costs • Requires extremely high quality control in every PD activity • Need to adhere to customer’s buying schedule • Shifts greater responsibility for PD activities backwards in the channel |
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supply chain
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—the complete set of firms and facilities and logistics activities that are involved in procuring materials, transforming them into intermediate or finished products, and distributing them to customers
• Want the chain to work together towards the needs of the customer at the very end of the chain • Gives it a competitive advantage among other ____ chains |
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Electronic data interchange (EDI)—
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—an approach that puts information in a standardized format easily shared between different computer systems
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o Transporting
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—the marketing function of moving goods
• Makes products available when and where they need to be—at a cost. • But the cost is less than the value added to products by moving them or there is little reason to ship in the first place. • Can help achieve economies to scale in production • Production costs can be reduced by producing larger quantities in one location = worth the cost of transporting the finished products to customers • Can be a large part of the total cost for heavy products of low value—like many minerals and raw materials railroads, trucks, ships, inland waterways, pipelines, airfreights/airplanes, containers, piggyback |
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o Containerization
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—grouping individual items into an economical shipping quantity and sealing them in protective containers for transit to the final destination
• Protects products and simplifies handling during shipping |
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o Piggyback service
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means loading truck trailers—or flatbed trailers carrying containers—on railcars to provide both speed and flexibility
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o Storing
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—the marketing function of holding goods so they’re available when they’re needed
• Necessary when production of goods doesn’t match consumption |
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o Inventory
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—the amount of goods being stored
• Hard to maintain when can’t foresee demand |
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• Private warehouses
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specialized—are storing facilities owned or leased by companies for their own use
o Used when large volume of goods must be stored regularly o Can be expensive o Common |
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• Public warehouses
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specialized—independent storing facilities
o May be used if firm doesn’t have a regular need for space o Fill special needs o Can be helpful in foreign markets |
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o Distribution center
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—is a special kind of warehouse designed to speed the flow of goods and avoid unnecessary storing costs
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