Introduction Successful marketers must pay attention to the distribution custome

Question

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!

BrickOven Bakeries makes a variety of sugar-free cookies that are sold by several large supermarket chains in the Midwest. Data from the stores' checkout computers is automatically linked to the BrickOven Bakeries in Chicago so that each day's production run, and the shipments to each store, can exactly match the assortment needed to refill each store's display. This reduces inventory costs and also results in fresh cookies. While studying sales figures, the BrickOven Bakeries marketing manager noticed that during the previous two months there had been no sales of Almond cookies at one store. On investigation, the manager discovered that a case of Almond cookies were crushed in transit. The shattered cookies--clearly visible through their plastic bags--had been placed on the rack by a stock clerk. Because no customers were buying the damaged cookies, none passed through the checkout scanners, and no replacements were ordered.

a)         Problem:

b)         Recommendation:

Explanation / Answer

problem-

Problem:-

After going through the case I found that problem lies in system approach. In general case for any physical distribution case it is very important to have strong hold on system approach. Because overall the functions are all inter related as decision made in one area will effect the other. Similarly in this case the system approach of supermarket is not working accordingly. Managing physical distribution from a systems approach can provide benefit in controlling costs and meeting customer service demands.

Recommendation- I would like to recommend the practice of proper system approach so as in case of any issue in one area will reflect in the other area. It is because of poor system approach that supermarket has not find the broken cookies case. If the supermarket has noticed this before then obviously the brickoven bakeries have restocked the same almond cookies and would not face loss in this case.

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