Logistics

Management (3)

Wholesalers

Duties? - Take ownership of goods where agents do not

- Storage

- Reduce physical contact cost between producer and consumer i.e.

customer service costs

- Could take on marketing responsibilities

Retailers

NB role in distribution of products - Strong personal relationship with customer

- Hold several brands and products

- Offer credit to consumers

- P&S promoted & merchandised

- Sets final price … well, not always

- Brand name

Agents

Secure order for producer and takes

commission.

No title of goods.

“Stockist agent” could hold consignment

stock.

Difficult to keep control due to

distances.

Traditional distribution chain

Wholesaler Retailer Consumer

Supplier

Manufacturer

Producer

Importer

Only one retailer

Wholesaler Retailer Consumer

Supplier

Manufacturer

Producer

Importer

Two retailers

Retailer Retailer Consumer Manufacturer

International distribution channel

Local manufacturer

(Amalgamated Bottling

Industries) Local wholesaler

(Makro)

Local retailer (corner café)

Overseas franchisor (Coke USA)

Consumer

Planning an international distribution system

SA producer/ manufacturer/ supplier

SA intermediary: -International trading

company -Export merchant

-Agent - Resident buyers

- Allied manufacturers - Export management

company - Export commission

house

Foreign intermediary: -Merchants

- Agents - Importers

- Wholesaler - Retailer

- Industrial distributor

Transfer of expertise or ideas:

-Licensing - Franchising - Contracting

D Direct investment: -Sales subsidiary - Manufacturing

subsidiary - Joint ventures - Foreign branch

subsidiary

Strategic alliances

Foreign markets and customers

Indirect exporting Direct exporting

The distribution channel for industrial

materials

Manufacturer

Wholesaler

Sales company

Wholesaler

Wholesaler

Trading company

Distributor

Dealer

User

User

User

User

User

Intermediaries involved in the industrial

distribution of food products

Agricultural commodities

Food producers

Consumables goods

manufacturers

Food service providers

Wholesale/ Distributors

Processors

Consumer

Restaurants Retail food

chains Supermarkets

The flow of industrial products in the

distribution of food products

Farmers Chemicals/ Packaging

materials

Restaurant

Food service distributor

Food and packaged goods processers

Ingredient processers

Grocery wholesaler

Supermarket

Eat food at home

Take-away outlet

Take-away

Eat food @ restaurant or food outlet

The typical distribution channel

Choice depends on

target market,

marketing

objectives and

the nature of the

product

The distribution channel for services

Four distinguishing characteristics of services

Intangibility

Inseparability of production and

consumption

Perishability

Heterogeneity

The service act

Nature of the product People Things

Tangible actions Directed at the body Goods and physical possessions

Intangible actions Directed at the mind Intangible assets

The service act

Nature of the product People Things

Tangible actions Directed at the body Goods and physical possessions

Intangible actions Directed at the mind Intangible assets

The service act

Nature of the product People Things

Tangible actions Directed at the body Goods and physical possessions

Intangible actions Directed at the mind Intangible assets

The service act

Nature of the product People Things

Tangible actions Directed at the body Goods and physical possessions

Intangible actions Directed at the mind Intangible assets

The service act

Nature of the product People Things

Tangible actions Directed at the body Goods and physical possessions

Intangible actions Directed at the mind Intangible assets

Method of service delivery

Nature of interaction between C and service organisation

Single site Multiple set sites

C goes to service organisation

Service organisation goes to c

C and service organisation transact at arm’s length i.e. mail or electornic communication

Availability of service outlets

Method of service delivery

Nature of interaction between C and service organisation

Single site Multiple set sites

C goes to service organisation

Service organisation goes to c

C and service organisation transact at arm’s length i.e. mail or electornic communication

Availability of service outlets

Method of service delivery

Nature of interaction between C and service organisation

Single site Multiple set sites

C goes to service organisation

Service organisation goes to c

C and service organisation transact at arm’s length i.e. mail or electornic communication

Availability of service outlets

Method of service delivery

Nature of interaction between C and service organisation

Single site Multiple set sites

C goes to service organisation

Service organisation goes to c

C and service organisation transact at arm’s length i.e. mail or electornic communication

Availability of service outlets

Method of service delivery

Nature of interaction between C and service organisation

Single site Multiple set sites

C goes to service organisation

Service organisation goes to C

C and service organisation transact at arm’s length i.e. mail or electornic communication

Availability of service outlets

Method of service delivery

Nature of interaction between C and service organisation

Single site Multiple set sites

C goes to service organisation

Service organisation goes to c

C and service organisation transact at arm’s length i.e. mail or electornic communication

Availability of service outlets

Method of service delivery

Nature of interaction between C and service organisation

Single site Multiple set sites

C goes to service organisation

Service organisation goes to c

C and service organisation transact at arm’s length i.e. mail or electornic communication

Availability of service outlets

Method of service delivery

Nature of interaction between C and service organisation

Single site Multiple set sites

C goes to service organisation

Service organisation goes to c

C and service organisation transact at arm’s length i.e. mail or electornic communication

Availability of service outlets

Guidelines for designing service channels

Airline tickets

- At airline’s own outlet - Telephone directly from airline - Telephone from travel agent - Internet - Delivery to C

Education

- Direct classroom contact - Televised lecturers - Web-based training - Combining contact with a distance-learning approach - CDR/ course website

Seek physical manifestation of

services

Distribution alternatives and strategies

Guidelines for designing service channels

Library services

- Travelling bus - Mail-order books - Interlibrary loans - Web-based access to periodicals and journals

Bank - Personal banker coming to your office - Internet banking - Purchase cell phone air time @ ATM

Develop alternative

contacts

Distribution alternatives and strategies

Guidelines for designing service channels

Repairs - Repair my fridge at my home - Handyman services at my home

Collection and delivery

- Collect clothing to be dry-cleaned - Inthebag.co.za - Buying executive wardrobe and personal items from office via telephone, catalogue or selecting from samples brought to office

Develop logistics channels where

none existed before

Distribution alternatives and strategies