Chapter 12 - Chapter 12 Physical Distribution Gets It To...

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Chapter 12 Physical Distribution Gets It To Customers Place requires logistic decisions o Logistics is the transporting, storing, and handling of goods in ways that match target customer’s needs with a firms MMix—both individual firms and along a channel of distribution o Physical Distribution (PD) is another common name for logistics Lots of different combo’s of logistics decisions—each combo can result in a different level of distribution service and different costs Developed economies in the US and Europe spend about 9-15% of GDP on logistics related costs—while the economies of Latin America and Africa costs are 30% or more Physical Distribution Customer Service Customers think in terms of the physical distribution customer service level —how rapidly and dependably a firm can deliver what they, the customers, want PD is, and should be, a part of marketing that is “invisible” to most consumers o It only gets their attention when something goes wrong o Since we don’t really think about PD all that much, it must mean that these market-directed macro-marketing systems work pretty well The trade-off’s that must be made in the PD can be complicated. The lowest-cost approach may not be the best—if customer’s aren’t satisfied Physical Distribution Concept Focuses On The Whole Distribution System The physical distribution (PD) concept 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 Both lower costs and better service help to increase customer value Firms work together to decide what aspects of service are most important to customers at the end of the channel o They focus on finding the least expensive way to achieve the target level of service
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This note was uploaded on 12/04/2011 for the course MKT 320F taught by Professor Miller during the Spring '08 term at University of Texas at Austin.

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Chapter 12 - Chapter 12 Physical Distribution Gets It To...

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