Page 225 - DMGT408DMGT203_Marketing Management

Marketing Management/Essentials of Marketing

Notes
Example: If a marketer wants a distributor to concentrate on the company’s products
which are not performing well, the distributor may not follow the advice because it is an
independent business seeking to achieve its objective of profit maximisation.
Similarly, agents or brokers are interested in performing the selling function because they are
paid commissions on sales value. Agents or brokers are generally reluctant to perform non-
selling functions such as collecting market information, new product development, and payment
collection.
Adaptive Factor: In a rapidly changing market co nditions, the industrial marketer must be able
to control and modify the channel structure. At the same time there should be an agreement or
commitment to each other among the channel members. The evaluation of channels must consider
the degree of adaptability of the channel to the changes taking place in the market place.

Self Assessment

Fill in the Blanks:
10. To evaluate the …………………… performance of the channel, industrial marketer is
required to estimate the levels of sales revenue and selling costs of each channel alternative.
11. The industrial distributor/dealer channel gives the …………………… control.
12. Agents or brokers are interested in performing the selling function because they are paid
…………………… on sales value.
9.5 Logistics and Supply Chain Management

Logistics has always been a central and essential feature of all economic activities. The concept
of logistics as an integrative activity in business has developed within the last twenty years.
Logistics management is a process of strategically managing the movement and storage of
materials, parts and finished inventory from supplier through the firm and on to customers.

Logistics is thus concerned with the management of physical distribution of material. It begins
from sources of supply and ends at the point of consumption. It is, therefore, much wider in its
reach than simply a concern with the movement of finished goods – a commonly held view of
physical distribution. Logistics deals with all activities that facilitate product flow from the
point of raw material acquisition to the point of final consumption as well as the information
flow that set the production in motion for the purpose of providing adequate levels of customer
service at a reasonable cost. Logistics management involves two issues namely, movement of
raw materials to the plant known as physical supply or material management and second, flow
of finished products from the plant to the customers, known as physical distribution.
Supply chain management starts from the supplier of raw materials, then conversion at factory
into finished products, storage at warehouses, and finally, supply to distribution channels to
meet the demand of end-user for a finished product at an acceptable cost and service level.
Physical distribution starts in a forward movement of goods from the company’s production
facility to end-user, and supply chain management starts before physical distribution.

!
Caution According to Stern, El-Ansari, and Coughlan, “The term logistics management
and supply chain management are widely used to describe the flow of goods and services
and related information from the point of origin to the point of consumption”.

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