1. Response Time to Customers:

2. Product Variety

3. Product Availability

4. Customer Experience

5. Faster Time to Market

6. Order Visibility

7. Returnability

8. Direct Sales to Customers

9. Flexible Pricing, Product Portfolio and Promotions

10. Efficient Funds Transfer

In selling products that cannot be downloaded, an e-business without a physical retail outlet takes longer to fulfill a customer request than a retail store.

Example: ◦ A mutual fund prospectus or music can be

downloaded from the Web. ◦ Whereas a physical mailing of these products or

even making a trip to a music store takes much longer.

More selection compared to the bricks-and-mortar store. Example: Amazon

An e-business greatly increases the speed with which info on customer demand is disseminated throughout the Supply chain, giving rise to accurate forecasts

Allows access to customers who cannot access a physical stores open only during business hours

surge in orders after their bricks-and-mortar store closes.

Without e-business, see people staying in and around visit you

Dell often introduces new products earlier than its competitors' that use traditional channels.

Allows manufacturers to enhance revenues by bypassing intermediaries and reaching out directly to customers.

This allows collection of intermediary’s incremental revenue.

Example:Dell

An e-business, can easily alter prices by changing one entry in database linked to its Web site.

Advantage:◦ Pricing can be done based on current inventories

and demand.◦ Example:

Airlines make available last minute low cost fairs…… Analogous to vegetable market….

An e-business enhances revenues by speeding up collection.

Some probable questionsSome probable questions

Is e-business likely to be more beneficial in the early part or the mature part of a product’s life cycle?

In the future, do you see the number of distributors decreasing, increasing, or staying about the same?

What has been the impact of e-business on supply chain cost?

What has been the impact of e-business on customer service?

Girl: What is the price of this dress?

Shopkeeper: Rs. 10,000/-

Girl: Aww!

Girl: ok what is the price of the pink dress?

Shopkeeper: Aww! + Aww!

The Customer service dimension – Customer Service and Customer Retention, Service driven logistics systems, Setting customer service priorities and service standards

Customer service is the provision of service to customers 

◦ before, ◦ during and ◦ after a purchase.

No value in the product or service until it is in the hands of the customer

The importance of customer service may vary by product or service, industry and customer.

Good customer service experience = change in entire perception a customer wrt the

organization.

1. Delivery frequency2. Reliability3. Stock levels4. Order cycle time

Interaction among all theseaffects the process of making products & services available to whom ?

To address this argument,

many organizations have employed a variety of methods to improve their customer satisfaction levels,

and other key performance indicators (KPIs)

Customer service could be examined under :

Corporate policies or programs◦  i.e. written statements of service policy,◦ adequacy of organizational structure and ◦ system flexibility.

Variables directly involved in physical distribution.◦  Order cycle time,◦ Inventory availability ◦ Order fill rate, Order status information

The post transaction elements of customer service are generally supporting of the product while in use e.g.

product tracing / warranty, parts and repair service, procedures for customer complaints and

product replacement. 

Post- transaction ElementsPost- transaction Elements

Switch in brand loyalty

Cost penalty for:◦ Manufacturers ◦ Retailers

46% of potential sales

Many companies have suffered, why?

Their focus -> traditional Marketing◦ Product development◦ Promotional activities◦ Price competition via reduction in logistics

Are these important?◦ Yes they are but not at the cost of logistics

Low cost strategies

Low cost strategies

Efficient logistics

Effective logistics= ≠

The impact of logistics has resulted in a focus on marketing towards…

Creation of customer franchise

Creation of consumer franchise

◦ The above two can be enhanced or diminished based upon the efficiency of the suppliers’ logistics system.

“People don’t

buy products,

they buy

Benefits”

-Theodore Levitt

What do you understand from that?

The lifetime value of a customer is much greater than the profit generated from just a single deal with that customer.

A simple formula follows:

Lifetime value = Average transaction value * Yearly frequency of purchase* customer life expectancy

The role of logistics can be seen as the development of systems and the supporting co-ordination processes to ensure that customer service goals are met.

Main idea of service driven logistics systems : to meet predefined service goals. 

Ideally all logistics service systems are defined along the following lines:◦ Identify customers' service needs◦ Define customer service objectives◦ Design the logistics system

We are entering the era of supply chain competition - the fundamental difference here is that the company cannot act individually but ….

must act as a supply chain entity to ensure competitiveness in the marketplace.

As the new competitive context of business continues to change, brining with it new complexities and concerns for management generally, it also has to be recognized that the impact of these changes on logistics can be considerable.

Of the many issues facing organizations today perhaps the most challenging are in the area if logistics.

“The feeling that ‘no one is listening to me’ make us want to spend time with

machines that seem to care about us.” 

(Sherry Turkle)

Connected, But ALone

Why people are hooked on to cell phones?