The Role and Place of Distribution and Logistics in Today's Business

LOGISTICS AND DISTRIBUTION MANAGEMENT

SESSION # 1

Logistics and distribution management Academic year 2013/2014Dobromir STOYANOV [email protected]

Presenter

Presentation Notes

- Hello everyone. For those of who already had the course “Marketing basics” with me this morning I will repeat who I am and what I am fighting about. Let me introduce myself briefly/shortly. For those of you have seen me during the first weeks of the orientation I am the Welcome desk guy who was helping some of you or may be lying sometimes, sorry for that. What you don’t know about me is that I am also a PhD candidate of the University of economics – Varna (Bulgaria). I have 4 years of professional experience in the field of marketing and advertising. In my home university in Bulgaria I am leading classes on Distribution management and marketing research in logistics. What brought me in Strasbourg was the idea to travel a bit and to explore new opportunities like many of you I guess, also to see another education system (France) and mostly because of the research topic of my dissertation. OK enough for me for now, if you have some questions later on I could answer. Now about the course I am going to teach you. �- For me it will be a pleasure to work with you this semester and to lay your foundations about the marketing science because Marketing is everywhere around is, regardless of what your economic specialization, education or profession we are involved in the marketing process even only as a consumers. So the idea of this course is to give you a broad idea about some basic marketing concepts no matter if you want to become a bank manager, accountant, enntrepreuneur, etc.

Course overview

Session # 1 The role of distribution and logistics in today’s business. How to successfully develop a distribution plan

Session # 2 Integrating multichannel distribution systems. Strategies to manage channel conflicts. Store and non-store distribution in retailing. Trends in wholesaling

Session # 3 Logistics. Integrated Logistics Systems. Logistic decisions on order processing, storage and warehousing, inventory, transportation and operational management.

Session # 4 Work on a case study

Session # 5 Group work presentations

Logisitics and distribution management Academic year 2013/2014 Dobromir STOYANOV [email protected] `

Presenter

Presentation Notes

Expectations from this course. Basic knowledge on marketing & management (requirements)

Performance assessment & evaluation

Final grade

Group workon a case study

Group work on a marketing project

50 % 50 %


Recommended literature /available in the library/

Solomon, M., Marshall, G., & Stuart, E. (2006). Marketing. Real people, real choices. 4th ed., Pearson Prentice-hall

Kotler , Ph. & Keller, K. (2006). Marketing management. 12th ed., Prentice-hall (especially Chapter 15 & Chapter 16)

Rushton, A., Croucher, Ph., Baker, P., (2006). The Handbook of Logistics and Distribution Management. 3th ed., Kogan Page

/accessible when logged in ENT at: http://unistra.scholarvox.com.scd-rproxy.u-strasbg.fr/reader/index/docid/10159941/page/1


http://unistra.scholarvox.com.scd-rproxy.u-strasbg.fr/reader/index/docid/10159941/page/1

Group work assignements

Form international groups of ≤ 4 students /till next time/

Assignment: Develop a 1 year plan for…… (1) distribution channel of ….. (2)

Presentation of the project: during the last session

Send the project by e-mail to: [email protected]

Deadline for sending the projects: 2 days before the presentation

Presentation time: 15 - 20 min. (approx. 5 min/team member)


mailto:[email protected]

The leader picks up two “lucky charms” for the team:

Types of distribution channels (1) Product categories (2)1.1. Direct channel (Outlet) 2.1. Flowers & plants

1.2. Indirect channel (+intermediaries) 2.2. Toys

1.3. B2B channel (business-to-business) 2.3. Electric devices & appliances

1.4. C2C channel (consumer-to-consumer) 2.4. Sweets & candies

1.5. Reverse channel (reverse logistics) 2.5. Diary products

1.6. E-channel (e-commerce) 2.6. Tobacco products

1.7. M-channel (m-commerce) 2.7. Application & Software1.8. V-channel (vending commerce) 2.8. Eggs


Presenter

Presentation Notes

The rules of the game:

1. The role of distribution and logistics in today’s business. How to successfully develop a distribution plan.


Agenda

1. What is the distribution system?

2. The importance of distribution management and logistics ?

3. Types of distribution channels

4. How to successfully design a distribution channel?


The role of distribution and logistics in today’s business.

Delivering value to the customers (consumer perspective)

Source: Produced from Porter, M. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. New York, pp. 11-14

Inbound logistics: all the activities related to receivegoods from the suppliers, decision about thetransportation scheduling, storing the goods asinventory, managing the inventory etc.

Outbound logistics: all the activities that are requiredto transfer the finished products to the customers viawarehousing, order fulfillment, transportation, anddistribution management.

Marketing and sales: it includes another part of thethe distribution management.

Logistics and distribution management Academic year 2013/2014 Dobromir STOYANOV [email protected] `

Presenter

Presentation Notes

As a part of the marketing process one of the 4Ps the key function of the Distribution is to deliver customer value. At every stage Porter value chain model:

Distribution system = Distribution management + Logistics


Distribution management- analyzing- planning- execution

- control

Logistics – transport, order processing, labelling, packaging, loading,

warehouse and storage

Presenter

Presentation Notes

In the context of this course we are going to look at the distribution management and logistics from the marketing perspective. Which means that distribution system consist of 2 subsystems . I want to say once again this is the marketing perspective. If you ask someone involved into logistics may be he/she will say to you the opposite thing that distribution is part of the logistics and so on….. I don’t mind if you also think so. Based on your personal experience and knowledge you have the right to create your own vision about logistics , distribution. So I am saying to you that I don’t want to force you to believe in it

Source: Adapted from Tonkova, E., (2011)Distribution management. Problems, case studiesand tests. University of economics - Varna , p. 4

Profitability (c) = Profits / Costs Roi = Pf / TC

Efficiency = Total revenues / Total costsEf = TR / TC

Profit = Total revenues – Total costsPf = TR – TC

Distribution(Place, Market coverage)

Total revenues = Price * QuantityTR = P * Q

Total costs(TC)

Price at a certain level of the distribution channel

P = AVC + AFC + pf

Distribution costs ( DC )- Logistic costs (TFC + TVC)- Distribution management costs (TFC + TVC)

Profitability, cost savings & cost efficiency (company’s perspective)

The role of distribution and logistics in today’s business.

Presenter

Presentation Notes

Example: for

The role of distribution in reducing transactions via intermediaries


Solomon, M., Marshall, G., & Stuart, E. (2006). Marketing. Real people, real choices. 4th ed., Pearson Prentice-hall, p. 452

N = 5 * 5 = 25 contacts N = 5 + 5 = 10 contacts

3. Distribution channels ?


A. Traditional distribution channels


Source: Kotler , Ph. & Keller, K. (2012). Marketing management. 14th ed., Prentice-hall, p. 420

B. Electronic distribution channels

B2C (business-to-consumer/business-to-customer)Example: transactions conducted directly between a company and consumers who are theend-users of its products or services.

B2B (business-to-business)

Example: The transactions/relationships in these channels are between businesses:manufacturers and wholesalers or between retailers and wholesalers.

B2G (business-to-gouvernment)Example: When a software company is hired by the government to develop and support socialonline platform delivering administration services


B. Electronic distribution channels C2C (customer-to-customer/consumer-to-consumer)Example: online auctions in which a consumer posts an item for sale and other consumers bidto purchase it. The intermediaries (auction websites) generally charge a flat fee or commissionto match the consumers. The websites can exercise some control over the quality of theproducts being offered, by stopping for sale some illegal such as pirate CDs or DVDs, cocaine,marihuana (E-bay, Amazon)

C2B – (customer-to-business/consumer-to-business)Example: consumer provides a business with a fee-based opportunity to market a product orservice on the consumer's website or blog. The owner of the website is paid to review theproduct or service through blog posts, videos or podcasts. In most cases, paid advertisementspace is also available on the consumer website. Websites where consumers as freelancerspost their design projects (logos, drawings, HQ photos) or create their profiles of job seekersand companies can visits those websites to look for fresh ideas/competent job candidates(Elance: www.elance.com ; Gury: www.guru.com ; Peopleperhour: www.peopleperhour.com )


http://www.elance.com/

http://www.guru.com/

http://www.peopleperhour.com/

C. Other distribution channels

Direct channels: zero level channels, disintermediation: door-to-door sales, home parties, mailorder, telemarketing, TV selling, Internet selling, and manufacturer-owned stores, ATM gas stations Indirect channels: that include at least one intermediary

Straight channel:

Reverse channels:

Store distribution channels: convenience stores, discount stores, supermarkets, drug stores etc.

Non-store distribution channels: with no physical store/personal selling, direct marketing, vending channels, e-channels, m-channels.


Manufacturer Consumer

4. How to successfully develop

a distribution plan plan ?


SOSTAC


2. Objectives 4. Tactics 5. Action3. Distribution

strategy:1. Situation

analysis ?

MANAGEMENT = ANALYZING + PLANNING + EXECUTION + CONTROL

Where are we now ?

Where do wewant to be ?

How do weplan to do it ?

- Number of channel levels- Conventional, vertical, orhorizontal marketing system- Intensive, exclusive, selective

6. Control

How exactly do we plan to do it ?

Let’s do it ?Are we where

we wanted?

To support the overall marketing goals

GAP maps; SMART

Internal & External(micro & macro level)

PESTE, Porter’s 5 forces; SWOT,

- Select channel partners- Manage the channel- Develop logistics strategies– Order processing– Warehousing– Materials handling– Transportation– Inventory control

Performance management

Balanced scorecard(Hard & Soft indicators)

CoveragePull, Push & Pull & Push

THANK YOU FOR YOUR ATTENTION !


The Role and Place of Distribution and Logistics in Today's Business

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