Meaning of marketing logistics• It is the management of the flow of goods, information and other resources in a repair cycle between the point of origin and the point of consumption in order to meet the requirements of customers.
Meaning of geographical/physical distribution• PD consist of marketing activities which are related to physical handling of goods.
Relationship of logistics and physical distribution.• Logistics originated in the military• Logistic system as two major product movement:1. Physical supply, consisting of raw materials, components ,2. Physical distribution, consisting of delivering the completed products to customers and intermediaries.
Nature of physical distribution• It includes activities like order processing, inventory management,materials handling, warehousing and transportation.
Evaluating the channel alternatives• Economic factor:- economic performance of each channel alternative should be compared sales revenue, total selling cost.• Control factor:-the degree of control that the industrial marketer can exercise over the channels is an important factor.• Adaptive factor:-the industrial marketer must be able to control and modify the channel structure.
Total cost approach• Focuses on balancing the two important elements.• Total distribution cost• The level of service provided to the customers.- customer service needs, competitors levels, company profitability objective.
Minimizing the total distribution cost• An attempt to minimize any single cost element can actually increase the total cost.• Hence the company must consider the total distribution cost of the proposed distribution systems and select the system that minimizes the total distribution cost.