Summary Overview Logistics is the transporting, storing, and handling of goods to match target customers’ needs with a firm’s marketing mix. Physical distribution (PD) is another name for logistics. Whenever the product includes a physical good, Place requires decisions about logistics. Key Issues Physical distribution provides time and place utility and makes possession utility possible. Physical distribution activities typically make up half or more of total marketing costs. By making physical distribution more efficient, an organization can increase its profits, cut prices, improve service, or achieve some combination of all three. An example of how marketers made physical distribution more efficient in the grocery industry is through a system called Efficient Customer Response (ECR). This complex system involves collaboration among many supermarket chains and producers, and the use of technology to streamline transactions. ECR has resulted in savings to U. S. consumers of about $30 billion per year. Discussion Question: What consumer trends have contributed to an increased emphasis on physical distribution as an element of Place? This slide relates to material on p. 321.