DISTRI

Chapter 2
• Physical Distribution

Chapter 2 Physical Distribution

Chapter Plan
• Concept & Definition
• Logistics
• Relation with other Marketing Mix
Variables
• Importance of Physical Distribution
• Components of Physical Distribution

Chapter 2 Physical Distribution

Definition
• Physical distribution ‘involves planning, implementing and controlling the physical flows of materials and final goods from place of production to the place of end use to satisfy buyers ‘ needs.’’
– Philip Kotler

Chapter 2 Physical Distribution

Logistics
• Logistics management includes both physical distribution and physical supply

Chapter 2 Physical Distribution

Relation with Marketing Mix
A. Product-physical Distribution
•
•

FMCG- Mass Distribution
Perishable product- shortest distri.

B. Price-Physical Distribution
•

Reciprocal Relationship

C. Promotion-Physical Distribution
– Grab the market potential

Chapter 2 Physical Distribution

Objectives of Physical
Distribution Process
1. Total Cost Concept
2. Customer Service Concept
a.
b.
c.
d.
e.

Time
Dependability
Communication
Convenience
Accuracy

Chapter 2 Physical Distribution

Objectives of Physical
Distribution Process
3. Distribution Cost- service trade offs
•
•

Achieve right balance between them
Flexibility is important in balancing the cost and service

Chapter 2 Physical Distribution

Component of Physical
Distribution
1.
2.
3.
4.
5.

Order Processing
Transportation
Warehousing
Material Handling
Inventory Management and Control

Chapter 2 Physical Distribution

Order Processing
a.
b.
c.
d.
e.
f.

Verifying customers’ credibility
Checking for any outstanding payment
Monitoring stock level
Preparing invoice
Arranging transporter
Sending the consignment and information Chapter 2 Physical Distribution

Selection of the transportation mode 1.
2.
3.
4.
5.

Suitability or nature of product