23 importance physical distribution system is the

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2.3. Importance Physical distribution system is the most powerful support to distribution channel. Even the best distribution channels are not likely to yield derived results without adequate support provided by the system of physical distribution. The importance of physical distribution system will be better understood from the following: Annamalai University
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183 1. A well-devised Physical Distribution system helps to minimize cost of marketing. Recently, all the major components of marketing cost, viz., transportation cost, materials handling, inventories, order processing etc. have registered a sharp increase primarily due to inflationary conditions all the world over. It is against this that physical distribution management assumes particular significance. A sizable chunk of marketing cost could very well be curtailed by evolving an appropriate PDS. 2. Physical distribution system helps to attain the objective of utmost customer satisfaction. Customer satisfaction is the end of all marketing activities. A satisfactory physical distribution system ensures best possible warehousing, inventory control, transporting, protective packaging, physical handling, order processing, etc. which gives the customer the service they expect. 3. PDS creates time and place utilities : Physical distribution creates utilities of time and place by making available a product at the time it is needed and at the place where it is needed. 4. PDS form a major part of national wealth : PDS in the form of rail, road, highways, trucks, aircraft, ship, docks, etc. represents a major portion of national income. Hence PDS becomes important from the point of view of the national economy as well. Thus, the process of physical distribution is of utmost importance not only from the view point of the enterprise in question but also from the broader national angle. 3. COMPONENTS OF PDS PDS comprises the following broad areas. 3.1. Transportation As a component of the physical distribution system of an organisation, transportation refers to the movement of products from the warehouse (s) to the consumer destination (s). Transportation is the crux of the problem of physical distribution. It plays an important role in the economic development of a nation. In marketing, transport discharges an important function, since the entire work of assembling and dispersing of goods is done with the help of some form of transport. Better transport opens up new markets, which, in turn, increase the volume of production requiring the support of wider and larger transport facilities. Without the development of transport, large-scale production would have been impossible. There are several modes of transport such as, Land / Road Transport (Road & Railways). Water Transport. Some of the factors determining the choice of selecting transport medium may be pointed out here.
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