Prelim Exam Flashcards
ØOne of the most important segment of the phenomenon of
Marketing in business.
Ø It is a subset of Supply Chain Management.
Ø derived from French word ‘Loger’, which means art of war
pertaining to movement and supply of armies
Logistics
The process of planning, implementing and controlling
the efficient, effective flow and storage of goods, services
and related information from the point of origin to the point
of consumption for the purpose of conforming the
customer requirement”.
Logistics
__________ + Material
Management + Physical Distribution =
Logistics
inbound logistics
Logistics is that part of the supply chain process that plans,
implements and controls the effective forward and reverse flow
and storage of goods, services, and related information between
the point of origin and the point of consumption, in order to meet
the customer’s requiremen
Concept of Logistics
is to have the right amount of a resource or
input at the right time, getting it to the
appropriate location in proper condition,
and delivering it to the correct internal
or external customer.
the goal of logistics management
The management of the ‘Four Ps’- Product, Price, Promotion, and Place.
● There are signs that this view is rapidly changing, however, as the power of customer service as a possible means of differentiation is increasingly recognized.
● In more and more markets the power of the brand has declined and customers are more
willing to accept substitutes.
Marketing
can be defined quite simply as the
difference between the perceived benefits that flow
from a purchase or a relationship and the total costs
incurred.
customer value
the cost to buy something plus the cost to operate it over its useful
life.
● In business-to-business markets particularly, as buyers become
increasingly sophisticated, the total costs of ownership can be a critical element in the purchase decision.
● ‘Life-cycle costs’, as they are referred to in the military and defense
industries, have long been a critical issue in procurement decisions in
those markets.
Total cost of ownership
where the
immediate purchase
price is the only
aspect of cost that is
visible, whereas
below the surface of
the water are all the
costs that will arise
as a result of the
purchase decisions.
iceberg effect
The functionality, performance and technical specification of the offer.
quality
The availability, support and commitment provided to the customer.
service
The customer’s transaction costs including price and life cycle costs.
cost
The time taken to respond to customer requirements, e.g. delivery lead times.
time
It has been suggested that the role of
____________ is to provide ‘time and
place utility’ in the transfer of goods and
services between buyer and seller. Put
another way, there is no value in the
product or service until it is in the hands of
the customer or consumer.
customer service
The __________ elements of customer service
relate to corporate policies or programs, written statements of service
policy, adequacy of organizational structure and system flexibility.
pre transaction
the _______ elements are those customer service
variables directly involved in performing the physical distribution
function, product and delivery reliability.
Transaction
The _________ elements of customer service
are generally supportive of the product while in use, for instance,
product warranty, parts and repair service, procedures for customer
complaints and product replacement.
post-transaction
Focuses on the consumer
traditional marketing
always purchases a product or service, but might not be the end user.
customer
always the end user of a product or service, but might not have purchased
it.
consumer
how effectively a company gets its products to the
right place at the right time and at the lowest possible cost and how well it uses
resources to produce and deliver goods
supply chain efficiency
converting a product into a service
servitisation
Organizations should strive in developing marketing strategies to maintain and strengthen
customer loyalty.
- Increase customers’ level of satisfaction to the point where they no longer consider other
alternatives.
relationship marketing
The goal of the _______ rule is to identify inputs that
are potentially the most productive and make
them the priority. For instance, once managers
identify factors that are critical to their company’s
success, they should give those factors the most
focus
80-20
is the ratio between
the net profit and the capital that was
employed to produce that profit.
return of investment
is a
flow-oriented concept with
the objective of integrating
resources across a pipeline
which extends from suppliers
to final customers, it is
desirable to have a means
whereby costs and
performance of that pipeline
flow can be assessed.
logistics management
It allows professionals to make
decisions regarding future projects by
allowing them to weigh their costs against
their profits. If the project cost is higher
than the predicted earnings, professionals
can make the necessary changes to the
project to increase the earnings or lower
expenses. This helps maintain profitability
without sacrificing essential company
projects.
Total cost analysis
costs that do not change frequently
fixed logistics cost
are those that change according to the volume of goods involved and other such factors
variable costs
(Total revenue generated by the customer in a year) – (Total expenses incurred
to serve the customer in a year)
annual profit
(Annual profit) x (no. of years customer stays with company)
Cost profitability analysis
sales price - purchase cost
gross margin
warehouse cost + transport cost + store cost
direct product cost
gross margin - direct product cost
Direct product profitability
Shared Information
- Information to be shared between Supply Chain Partners
(demand data and forecasts, production schedules, new product launch
details and bill of material changes)
synchronous supply chain
It is the informational representation or data
visualization of the organization’s physical supply
chain network.”
virtual supply chain
percent of planning
40%
percent of order
20%
percent of design
10%
percent of product
10%
percent of source
20%
The study of the information feedback characteristics of industrial activity to
show how organizational structure, amplification (in policies) and time delays
(in decisions and returns) interact to influence the success of the enterprise. It
treats the interactions between the flows of information, money, orders,
materials, personnel, and capital equipment in a company, an industry or a
national economy.
industrial dynamics
