1. LOGISTICS AND DISTRIBUTION CHANNEL

2. LOGISTICS
The process of planning, implementing and efficiently control the flow of materials, storage, in-process inventory and finished products and relevant information from the point of origin to the point of consumption, at lowest possible cost.

3. A series of activities that must be made to achieve objectives.
Logistic chains
A series of activities that must be made to achieve objectives.
It is an information system.
It can be as large or as small as the company wants.
All activities are equally important.
Information System
Raw material storage
Finished product storage
Shopping
Production
Distribution
Customer Service
Transport

4. Logistics 5 rights Right Product Right place Right time
Right condition
Right cost

5. Logistics Activities Customer Services Communication Transport
Inventory control
Shopping
Handling returns
Storage
Plant and warehouse location

6. Logistics Activites Warranties and Services Packing Reverse logistics
Waste and scrap
Purchase order
Material handling
Demand forecasting

7. Distribution Channel
Distribution is the bridge between producers and final consumers.
There are 4 stages of distribution
Periodic markets
Permanent markets
Fragmented markets
Integrated markets

8. History and Distribution Market
Periodic Markets
1.From the origin to the middle ages.
2. Barter
3.Merchants have their fairs and markets and religious festivals.
Permanent markets
1.Modern age
2.Geographic markets
3.Markets settled permanently in certain cities.

9. Fragmented Markets
1.Industrial revolution
2. They specialize the merchants. It eliminates the producers-traders.
3.Focused on production and distribution.
Integrated Markets
Crisis of 1929
Distribution structure.
Producers, wholesalers,distributors

10. Intermediaries
People and organizations that get products from manufacturers to the consumer. Own the product at the time and facilitating the transfer of ownership of the products.

11. Role of Intermediaries
Consumer search
Provider search
Storage
Price equilibrium
Financing
Services
Product approach
Packaging of perishable products
Obsolesces & deterioration risk
Promotion

12. Types of Intermediaries
Wholesalers
Purchase products for resale
Commercial
Products purchase for resale
Retailer
Agents or Brokers
Never own the product but the transfer of rights

13. Brokers commitment with producers
Determination of prices
General conditions of sale
Definition of geographical areas
Specification of all the details

14. Design of Distribution Channels.
It requires well organized method for designing channels that satisfy the customers and overall competition.
There are 4 choices-
Specify the distribution function
Select the type of channel
To determine the intensity distribution
Select specific members of channel.

15. 1.Specify the distribution function
A channel strategy should be designed within the context of the overall marketing mix.
It reviews the objectives of marketing.

16. 2. Select the type of channel
After specifying the distribution function of the overall marketing program, it chooses the most suitable for company’s product.
1.Manufacturer Consumer
2.Manufacturer Retailer–--Consumer
3.Manufacturer--Wholesaler---Retailer–--Consumer
4.Manufacturer--Wholesaler---Jobber---Retailer–-- Consumer
Example of Customer Marketing channels

17. 3. To determine the intensity distribution
Intensive Distribution-these products are found everywhere.
Eg- Cigarettes
Exclusive distribution- granting of exclusive products distribution to a few distributors.
Selective Distribution- it provides relative weakening of controls that aspires all the products. So it reduces the costs of marketing of products.

18. 4. Select specific members of channel.
Certain companies choose to distribute the product, since there are often many companies to choose from.

19. Factors affecting the selection of channels
Market factors
Type of market
Number of potential buyers
Geographical concentration of the market
Product factors
Unit value
Perishability
Technical nature of product
Company factors
Desire to control the channels
Services given by the seller
The ability of executives
Financial resources.