MARKET LOGISTICS AND CHANNEL DYNAMICS

MARKET LOGISTICS
Definition:-It involves the planning, implementing, controlling the physical flow of material, finished goods and related information from point of origin to point of consumption. TWO TYPES OF MARKET LOGISTICS INBOUND LOGISTICS OR MATERIAL PLANNING: -This involves the transfer of goods, services; information into the business generally for its manufacture is called inbound logistics. OUTBOUND LOGISTICS OR PHYSICAL DISTRIBUTION: -The activities involved in the shipping out final products to customer are called outbound logistics. REVERSE LOGISTIC This involves the transport of used product from point of consumption to point of origin. Example, the transport of empty cold drink bottle from retailers shop to bottling plant for refilling. This method is also used for recycling the products SUPPLY CHAIN MANAGEMENT [SCM]:Supply chain management calls for better material planning, inventory management, management of transportation and warehouse and information management. By using SCM practices the required stock of raw material or finished goods is maintained i.e. the CHAIN is being managed. This leads to proper utilization of capital and other sources. GOALS OF LOGISTIC SYSTEM Targeted level of customer satisfaction at least cost W A L-M A R T o o o o Founded by SAM WALTON in1962 with goal to offer low prizes to everyone In 2006 company had sale of $345 billion, 1.8 million employees, and 6500 facility store across 14 countries Manages 85000 suppliers, billions in inventory in its warehouses, and bring that inventory to retail shelves To manage this all W A L-M A R T uses IT system with POS[Point of sale] scanners, EDI[Electronic device interface]by which information about stock flows via computer not only to W A L-M A R T head quarter but also to W A L-M A R T supplier

LOGISTIC DECISION/FUNCTION TRANSPORTATION DECISION:Inadequate transport service, uncertain transit time, no availability of transport leads to mismatch in demand and supply. This leads to requirement of large stock of inventory & finished product & ultimately more capital. All this leads to increased cost poor customer service, and missed product sales opportunities. FACTORS CONSIDERED WHILE SELECTING TRANSPORT MODE:1. COST 2. DEPENDABILITY OF MODE 3. TRANSIT LOSS AND DAMAGE 4. REACH OF MODE ex. BY ROAD, AIR, RAIL 5. SPEED AT WHICH FIRM IS ABLE TO REACH THE MARKET WAREHOUSING Every company must store finished goods until they are sold, because production and consumption cycle rarely match. Warehouse can be company's own or may use third partys. Third party warehouse is more preferred because it saves capital and gives flexibility. Customer service can be improved significantly through this approach. FACTORS CONSIDERED WHILE TAKING DECISION ABOUT WAREHOUSE:1. No. of warehouse and their location 2. Level of customer service required to be provided to give a competitive edge 3. Cost of distribution 4. Latest use of technology- automated warehousing INVENTORY MANGEMENT This decision involves consideration of when to order and how much to order. Just in time [JIT] is now commonly used process which consist of arranging of suppliers to come into factory at the rate that they are needed.

CHANNEL DYNAMIC
This involves study of impact of environmental forces such as economic, legal, political, social, technological, competitive forces on marketing channel in order to reduce cost, achieve economies of scale, stabilize supplies, achieve coordination among themselves and overcome conflict. The various channel member need to integrate their function under the direction of channel leader either horizontally or vertically. HORIZONTAL MKTG SYSTEM: - Sharing resources among two or more unrelated business at the same level of operation to attain common benefit. VERTICAL MKTG SYSTEM: - Producers, wholesalers, retailer perform marketing activity jointly. Various types of VMS are corporate, administered, and contractual. RECENT EXAMPLE OF POLITICAL FACTOR AFFECTING MARKETING CHANNEL The Asian countries CHINA, SRILANKA, BHUTAN, NEPAL, BANGLADESH, and AFGANISTAN are going to be connected by road route. In this project INDIA is boycotted as china wants to show its power in Asia to US A.