All marketing efforts will be wasted if the rightly designed & promoted product of reasonable price does not

reach the consumers in right time & right place. Producer can not satisfy customers unless he can deliver the goods.

According to Philip Kotler physical distribution involves planning, implementing & controlling the physical flow of the materials and final goods from place of production to the place of end use to satisfy buyers needs. Physical distribution requires a distribution infrastructure that includes transportation, warehousing, material handling, inventory control, order processing & customer service.

Product & Physical Distribution: Channel & physical distribution strategies depend on the nature of product. e.g. FMCG product require large no. of intermediaries. Price & Physical Distribution: Price of the product changes with the factors such as the distribution mode, number of intermediaries used etc. Promotion & Physical Distribution: Promotion activities must be planned with physical distribution system to ensure product availability at the appropriate place & time

Customers may like the product. Right promotion may create a favorable image. The customers may not have any issues with the product prices. What will happen if the products are not available at the convenient place & time, especially if the product is daily needed or frequently purchased? Even the highly brand loyal customers can not wait for the product & it is the ideal situation for competitors to enter the market where demand already exists & customers are waiting for the product.

Customer Satisfaction-Customer service is the key to the customer satisfaction. Customer service in the terms of time, place, accuracy, convenience & communication. Cost Reduction-Cutthroat competition is shrinking the profit margins. Lowered distribution costs make it possible to reduce the price & yield higher profits. Manufacturers should try to balance both customer satisfaction & cost reduction.

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The manufacturer The intermediaries like wholesalers, retailers etc End users Many other facilitating institutions are involved indirectly e.g. Marketing research firms, insurance companies etc

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Order Processing Transportation Warehousing Material handling Inventory Management & Control

Physical distribution begins with the purchase order from the customer. Orders are generally received through mail, telephone, fax, email or in person. It comprises activities such as : 1. Verifying customers credibility 2. Checking for any outstanding payment 3. Monitoring stock level & replenishing the stock 4. Preparing invoices 5. Arranging transporter 6. Sending the consignment & informing customers etc

Many big organizations use advanced software packages & automate the entire order processing activities. General Electric operates a computer-oriented system that upon receipt of order checks customers credit & whether & where items are in stock. The computer issues an order to ship, bills the customer, updates the inventory records, sends a production order for new stock & relays the message back to the sales representative that the customers order is on its way- all in less than 15 seconds

Transportation deals with the systematic movement of the products from one place to another. Transport decisions affects pricing, on time delivery & condition of the goods when they reach to the customer Thus it has key role in achieving customer satisfaction

Five Basic transportation Modes 1. Rail 2. Road 3. Air 4. Water 5. Pipeline In Practice, a combination of different modes is used: Piggy back-Use of Road+ Rail Fishy back-Use of Road +Water Train ship- Use of Rail+ Water Air truck- Use of Road +Air

Rail is efficient at transporting large bulky freight over long distances & is environmentally but lacks flexibility. Road transport is usually preferred because of its flexibility, speed & door to door service capabilities. In terms of movement from manufacturer to retail outlet it dominates physical distribution. Air transport is expensive but has the advantage of speed over long distances. It is useful for the movement of perishable goods such as flowers. Water transportation is inexpensive but slow. Pipelines are used to move liquids & gases.

There is always a time gap between production & consumption. Production is in advance to the orders. Warehouse can be used to store the raw materials, semifinished goods & finished goods. Wholesalers or other intermediaries too can use the warehouses. Warehousing is one of the important functions of the wholesaler. Rather manufacturers expect that the channel members should take the responsibility of arranging the warehousing facilities.

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Private warehouse: These are owned or leased by the manufacturer, wholesalers or large retailers to stock large volume of goods. Public Warehouse: Public warehouses generally owned by Government or Co operative societies. They charge for the rented space Distribution Warehouse: Known as distribution centres, act like central dispatch department where goods are stored temporarily for a short span Bonded Warehouse: These are licensed go-downs for storing imported goods & goods to be exported. Especially custom department controls these warehouses. Mother Depot: Mother depot is situated at a central location & maintains large inventory. It serves many small warehouses.

Material handling is an important activity in warehousing & transportation. Even though material handling does not add any value to the end product, poor material handling results in delays leading to increasing idle labour & machine time and definitely increases the distribution cost. It depends on the nature of product to be handled. Material is handled several times before it takes the form of finished goods & reach to customers. Every time an item is handled, there is a chance of damage or loss.

Use of right kind of material handling equipments minimize the losses from breakage & spoilage, damages & accidents. Both fixed & mobile equipments can be used for material handling. Common equipments are Conveyors, Bucket elevators, hoists, lifts, cranes, forklifts, trolleys, dumpers, trucks, tractors etc.

Inventories are goods held in stock by the manufacturer or the channel members for future use or sales. It comprises raw materials, semi finished or finished goods and spare parts. The level of inventories need to be managed & controlled in such a way that resources are not blocked, unnecessarily. Decisions on inventories concern, when to order & how much to order so that there will be a balance between inventory carrying cost & inventory ordering cost.

JIT concept is originated in Japan & manufacturers employing it in different industries were successful in keeping inventory cost down without affecting there productivity. It is a simple concept aims at providing inventory exactly when needed & no sooner. Material should reach the manufacturer just in time before production starts. There should be no inventory that remains idle in store or stands waiting in storage. The effectiveness of this practice depends upon the reliability of suppliers & close communication between supplier & producer. However, high risk is involved in maintaining no or such a small inventory, as there is possibility of stock out & delays. In India Tata Motors is successfully implementing this concept.

Select any two products Find the Distribution strategies of these products Prepare Power Point Presentation of 5 minutes on that basis. Minimum 5 slides are expected.

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