ICA: Integrating physical distribution Introduction Successful marketers must pa
ID: 1125516 • Letter: I
Question
ICA: Integrating physical distribution
Introduction
Successful marketers must pay attention to the distribution customer service they provide their customers. They also must worry about the cost of the service they provide--because ultimately the price of a product should cover the cost. Deciding on the right balance between the distribution customer service level and the costs of transporting and storing is sometimes difficult--and identifying how best to achieve that balance can be even more of a challenge. The job of integrating all of the logistics activities is even more complicated when it requires coordination among different firms in a channel. But the job must be done and done well. One firm can't just reduce its own PD costs if that raises costs somewhere else in the channel--or reduces the service level. For example some business customers may demand just-in-time delivery or expect the convenience and speed of electronic data interchange (EDI)--because that is what is required to make the whole channel more competitive.
Many marketing managers know about the physical distribution concept, but it's easy to fall into the trap of just accepting 'a firm's PD system as "the way it's always been"--never even bothering to think about how to improve it. This exercise gives you practice in analyzing different PD situations--and in applying the concepts discussed in Chapter 11 to improve a marketing strategy.
Assignment
Read each of the following situations carefully. Identify the major PD problem(s) and then make specific suggestions about how you might improve the strategy. State any assumptions that you think are important to your recommendation. In your answer, be sure to show that you understand the various concepts--including the different storing and transporting alternatives--discussed in the text. The first problem is answered for you as an example of the approach to take. But keep in mind that there may be more than one "correct" answer in each situation. The solution will depend, in part, on your creativity!
EuroMotor Works (EMW) is a manufacturer of family automobiles and has enjoyed real success in serving a small, but profitable, segment of the U.S. market. EMW's vehicles are renown for safety and durability. But this success brings problems. EMW must provide dealers with repair parts for five different models, many of which have changed significantly over the years. Yet, the success of EMW's strategy depends on strong service from dealers--to keep customers happy, word-of-mouth favorable, and repeat sales strong. The company operates 10 U.S. parts warehouses and ships to dealers by common carrier truck. As the number of older models still in service has increased, dealers have begun to complain about the long re-stock time and the large number of parts they must keep in stock to handle the discontinued models. Some customers face a long wait for parts before the dealer can fix a car.
Problem:
b) Recommendation:
Explanation / Answer
From the above case we have identifiy the problem that relates that parts of the old model is the major problem. As in the case it tell about the strong service is the major strategy of success of EMV and if they don't provide the parts of old model than why the customer purchase from them and bring happy.
Now, Recommendation
The major recommendation that they should provide the old parts so that they can don't wait the customers for a long period of time and also the important thing is building the trust among them will definitely increase the market share of the EMV.