As an essential component of marketing, logistics is the process of planning, implementing and controlling the efficient, cost-effective flow and storage of raw materials, in-process inventory, finished goods and related information from the point of origin to point of consumption for the purpose of conforming to customer requirements. Logistics’ making extensive use of human and material resources can have influence on national economy. A research conducted by Michigan State University indicated that logistics could represent between 10 to 15 per cent of the gross domestic product of most major North American, European and Asia/Pacific economies (Rushton, Oxley and Croucher, 2000). Therefore, many brands take account into logistics management and design. Avon and Chanel are two main brands in Australian cosmetic market. These two companies all have very long history and large numbers of loyal customers. They both have their own particular channels of distribution, which will be researched in this study.
Avon and Chanel’s channels of distribution
Avon is the largest direct seller of cosmetic products in the world, whoes independent sales representatives, usually known as Avon Ladies build up Avon’s marketing network covering more than 150 countries (Avon Australia offitial website). The channel of distribution of Avon could be described as “manufacturer directly to customers”. In this channel of distribution, consumers purchase and get the products directly from the manufactory, which means no intermediaries—wholesalers, retailers, or warehouse are needed. The products of Avon are in storage in the warehouse in distribution centres and be sold to the customers via alone representatives, who get the produchs from distribution centre. Avon’s representatives provide the customers with everything about the beauty— knowledge of health and cosmetic, the latest information of products. They make beauty plan for each costomer and recommend the cosmetic product that fit for their personal situation. The customers purchase the products via Avon ladies and gain the persistent service and suggestions form Avon ladies after purchasing. “For 125 years, Avon ladies have brought beauty into the lives of women— first at home through door-to-door sales, then in the workplace to colleagues and friends, and now online (Avon Products Inc.)
Luxury brand is the first impression of people when talking about Chanel. Chanel produces a variety of produces: fashion, accessories, fragrance, fine jewelry and watches, besides, cosmetic including make up and skincare is a significant component as well, which is sold normally in upscale shopping districts, upscale department stores and malls, and inside major airports. In Australia, cosmetic products of Chanel usually can be purchased on its counter in David Jones and MYER. “Manufacturer via retailer to customer” basically is the channel of distribution of Chanel. Manufacturers supply products to national distribution centres or regional distribution centres, and then, these products are delivered to Chanel’s counters located in shopping stores and malls. The customers go to these counters to purchase the cosmetic products and get service from the shop assistants.
Service Output Demand in Avon and Chanel’s channels
To satisfy the demand of customers is the key point for a brand to get success. Service-output-demand analysis can help the marketing channel managers to get to know what end-users really want and subsequently make a proper decision. The first step to conduct service-output-demand analysis is to segment the market. The target market of either Avon or Chanel is mostly the female customers. The demands of this target market may be slightly differentiated depend on the customers with different ages, areas, level of income and so on. The next step is to describe each service-output-demand, such as bulk breaking, spatial convenience, delivery/waiting time, assortment/variety,...