Definition

Physical distribution is the group of activities associated with the supply of finished product
from the production line to the consumers. The physical distribution considers many sales
distribution channels such as wholesale and retail, and includes critical decision areas which
include customer service, inventory, materials, packaging, order processing, and transportation
and logistics. You often will hear these processes be referred to as distribution which is used to
describe the marketing and movement of products.
Accounting for nearly half of the entire marketing budget of products, the physical distribution
process typically garnishes a lot of attention from business managers and owners. As a result,
these activities are often the focus of process improvement and cost saving initiatives in many
companies.
Importance of Physical Distribution
The importance of physical distribution to a company can vary, and is typically associated with
the type of product and the necessity it has to customer satisfaction. Strategically staging
products in locations to support order shipments and generating a rapid and consistent manner to
move the product enables companies to be successful in dynamic markets.
Physical distribution is managed with a systems approach and considers key interrelated
functions to provide efficient movement of products. The functions are interrelated because any
time a decision is made in one area it has an effect on the others. For eample, a business that is
providing custom handbags would consider shipping finished products via air freight versus rail
or truck in order to epedite shipment time. This importance of this decision would offset the
cost of inventory control which could be much more costly. !anaging physical distribution from
a systems approach can provide benefit in controlling costs and meeting customer service
demands.
Function of Physical Distribution Systems
The key function within the physical distribution system are"
#ustomer service
$rder processing
%nventory control
Transportation and logistics
Packaging and materials
Customer Service
The customer service function is a strategically designed standard for consumer satisfaction
which the business intends to provide its customers. As an eample, a customer satisfaction
approach for the handbag business mentioned above may be that &'( of all custom handbags are
delivered to the customer within &) hours of ordering. An additional approach might include that
*'( of custom handbags be delivered to the customer within *+ hours of purchase. $nce these
customer service standards are set, the physical distribution system is then designed to attain
these goals.
Order Processing
Order processing is designed to take the customer orders and eecute the specifics the customer
has purchased. The business is concerned with this function because it directly relates to how the
customer is serviced and attaining the customer service goals. %f the order processing system is
efficient, then the business can avoid other costs in other functions, such as transportation or
inventory control. For eample, if the handbag business has an error in the processing of a
customer order, the business has to turn to premium transportation modes such as net day air or
overnight to meet the customer service standard set out, which will increase the transportation
cost.
Inventory Control
%nventory control is a ma,or role player in the distribution system of a business. #osts consider
investment into current inventory, loss of demand for products, and depreciation. There have
been inventory control systems implemented such as first in-first out .F%F$/ and flow through,
which are methods for businesses to handle products.
First in-first out, or F%F$, is a method in which the new products coming into the warehouse
replace eisting products of the same S01 so that merchandise is cycled and does not epire or
become old as more recent production is available. Flow through, on the other hand, is product
that does not get processed in the warehouse. %t is off loaded from an inbound trailer, pushed
across the warehouse and onto outbound trailers for departure without being stored in the
warehouse.
For eample, a handbag business has a direct ship on custom handbags but also controls
inventories for retail orders at a warehouse. The production considers what units are on hand and
what demand is in the market. For higher demand the products can move into the warehouse and
be prioriti2ed on store delivery trucks without being stored in the warehouse .the flow through
approach/. Another eample would be the most recent production being stored into the
warehouse and products already available pulled for store delivery, the F%F$ approach.
Transportation and Logistics
Transportation and logistics costs are a large component of the marketing budget for a product.
The system is what moves the products from the production line to the end consumer. This
system includes transportation of over the land, sea, and air and the storage and processing of
goods through warehouses and distribution centers. %n the case of the handbag business, moving
the products - whether they are customer orders or retail supplies - incur some form of
transportation and logistics. !oving the handbags from factory to customer of via some other
supply chain entity and arranging the transit and storage of the products is a delicate cost
component, which has a direct effect on the other functions of the system.
Packaging and aterials
The packaging and materials function includes all of the activities that are related to
maneuvering products through the production facility and transportation and logistics terminals.
Putting freight on pallets or using bubble wrap or paper to hold the products in place are
common approaches to securing the value of the goods. For eample, the handbag business
might stuff each bag with recycled paper to allow the bag to hold its shape while being packed
for transit to the customer or retail store.
Summary
Physical distribution includes all the activities associated with the supply of finished product at
every step, from the production line to the consumers. %mportant physical distribution functions
include customer service, order processing, inventory control, transportation and logistics, and
packaging and materials.
Channels of Distribution
A channel of distribution or trade channel is defined as the path or route along which goods
move from producers or manufacturers to ultimate consumers or industrial users. %n other words,
it is a distribution network through which producer puts his products in the market and passes it
to the actual users. This channel consists of "- producers, consumers or users and the various
middlemen like wholesalers,selling agents and retailers.dealers/ who intervene between the
producers and consumers. Therefore,the channel serves to bridge the gap between the point of
production and the point of consumption thereby creating time, place and possession utilities.
! channel of distribution consists of three types of flo"s#$
3ownward flow of goods from producers to consumers
1pward flow of cash payments for goods from consumers to producers
Flow of marketing information in both downward and upward direction i.e. Flow of
information on new products, new uses of eisting products,etc from producers to
consumers. And flow of information in the form of feedback on the
wants,suggestions,complaints,etc from consumers4users to producers.
An entrepreneur has a number of alternative channels available to him for distributing his
products. These channels vary in the number and types of middlemen involved. Some channels
are short and directly link producers with customers. 5hereas other channels are long and
indirectly link the two through one or more middlemen.
These channels of distribution are broadly divided into four types#$
Producer$Customer"- This is the simplest and shortest channel in which no middlemen
is involved and producers directly sell their products to the consumers. %t is fast and
economical channel of distribution. 1nder it, the producer or entrepreneur performs all
the marketing activities himself and has full control over distribution. A producer may
sell directly to consumers through door-to-door salesmen, direct mail or through his own
retail stores. 6ig firms adopt this channel to cut distribution costs and to sell industrial
products of high value. Small producers and producers of perishable commodities also
sell directly to local consumers.
Producer$%etailer$Customer"- This channel of distribution involves only one
middlemen called 7retailer7. 1nder it, the producer sells his product to big retailers .or
retailers who buy goods in large 8uantities/ who in turn sell to the ultimate
consumers.This channel relieves the manufacturer from burden of selling the goods
himself and at the same time gives him control over the process of distribution. This is
often suited for distribution of consumer durables and products of high value.
Producer$&holesaler$%etailer$Customer"- This is the most common and traditional
channel of distribution. 1nder it, two middlemen i.e. wholesalers and retailers are
involved. 9ere, the producer sells his product to wholesalers, who in turn sell it to
retailers. And retailers finally sell the product to the ultimate consumers. This channel is
suitable for the producers having limited finance, narrow product line and who needed
epert services and promotional support of wholesalers. This is mostly used for the
products with widely scattered market.
Producer$!gent$&holesaler$%etailer$Customer"- This is the longest channel of
distribution in which three middlemen are involved. This is used when the producer
wants to be fully relieved of the problem of distribution and thus hands over his entire
output to the selling agents. The agents distribute the product among a few wholesalers.
:ach wholesaler distribute the product among a number of retailers who finally sell it to
the ultimate consumers. This channel is suitable for wider distribution of various
industrial products.
An entrepreneur has to choose a suitable channel of distribution for his product such that the
channel chosen is fleible,effective and consistent with the declared marketing policies and
programmes of the firm. 5hile selecting a distribution channel, the entrepreneur should compare
the costs,sales volume and profits epected from alternative channels of distribution and take
into account the following factors"-
Product Consideration"- The type and the nature of products manufactured is one of the
important elements in choosing the distribution channel. The ma,or product related
factors are"-
Products of low unit value and of common use are generally sold through
middlemen. 5hereas,epensive consumer goods and industrial products are sold
directly by the producer himself.
Perishable products; products sub,ected to fre8uent changes in fashion or style as
well as heavy and bulky products follow relatively shorter routes and are
generally distributed directly to minimise costs.
%ndustrial products re8uiring demonstration, installation and aftersale service are
often sold directly to the consumers. 5hile the consumer products of technical
nature are generally sold through retailers.
An entrepreneur producing a wide range of products may find it economical to set
up his own retail outlets and sell directly to the consumers. $n the other hand,
firms producing a narrow range of products may their products distribute through
wholesalers and retailers.
A new product needs greater promotional efforts in the initial stages and hence
few middlemen may be re8uired.
arket Consideration"- Another important factor influencing the choice of distribution
channel is the nature of the target market. Some of the important features in this respect
are"-
%f the market for the product is meant for industrial users, the channel of
distribution will not need any middlemen because they buy the product in large
8uantities. short one and may as they buy in a large 8uantity. 5hile in the case of
the goods meant for domestic consumers, middlemen may have to be involved.
%f the number of prospective customers is small or the market for the product is
geographically located in a limited area, direct selling is more suitable. 5hile in
case of a large number of potential customers, use of middlemen becomes
necessary.
%f the customers place order for the product in big lots, direct selling is preferred.
6ut,if the product is sold in small 8uantities, middlemen are used to distribute
such products.
Other Considerations"- There are several other factors that an entrepreneur must take
into account while choosing a distribution channel. Some of these are as follows"-
A new business firm may need to involve one or more middlemen in order to
promote its product, while a well established firm with a good market standing
may sell its product directly to the consumers.
A small firm which cannot invest in setting up its own distribution network has to
depend on middlemen for selling its product. $n the other hand, a large firm can
establish its own retail outlets.
The distribution costs of each channel is also an important factor because it
affects the price of the final product. <enerally,a less epensive channel is
preferred. 6ut sometimes, a channel which is more convenient to the customers is
preferred even if it is more epensive.
%f the demand for the product is high,more number of channels may be used to
profitably distribute the product to maimum number of customers. 6ut, if the
demand is low only a few channels would be sufficient.
The nature and the type of the middlemen re8uired by the firm and its availability
also affects the choice of the distribution channel. A company prefers a
middlemen who can maimise the volume of sales of their product and also offers
other services like storage, promotion as well as aftersale services. 5hen the
desired type of middlemen are not available, the manufacturer will have to
establish his own distribution network.
All these factors or considerations affecting the choice of a distribution channel are inter-related
and interdependent. 9ence, an entrepreneur must choose the most efficient and cost effective
channel of distribution by taking into account all these factors as a whole in the light of the
prevailing economic conditions. Such a decision is very important for a business to sustain long
term profitability.
4 important elements or decisions in physical distribution of products are
as follows:
1. Transportation:
Transportation is that activity through which products are moved from one place to another. By
making the products reach a desirable place can increase the importance and value of those
products.
products
For example:
Himachal Pradesh and ashmir grow apples in large !uantities and their demand is throughout
the country. These apples are moved to their desired places by means of transportation.
"any means of transportation are available# like road# railway# air# water# pipeline etc. $hile
choosing the means of transportation# the following elements should be kept in consideration:
%i& 'ost# %ii& (peed# %iii& )ependability# %iv& Fre!uency# %v& Power# %vi& (afety. *xamples:
%i& For F"'+ goods or Perishable +oods high speed transport system should be used.
%ii& For +as and Petroleum the use of Pipeline is advisable.
2. Inventory:
By inventory we mean the stock of raw material# semi,finished goods and finished goods held in
anticipation of sales or use. How much inventory should be kept for various items- This is an
important decision in Physical )istribution.
The main reason as to why this decision is important is that if the inventory is either more or less
than re!uired# both the situations have their advantages and limitations. .ike:
(i) Low uantity of !toc":
/f the !uantity of inventory is kept low# then less amount of money is blocked and as a result of
this investment is small. 0n the other hand# with the slight increase in demand because of the
scarcity of inventory the consumers will turn to the rival companies.
(ii) #$cessive %uantity of !toc":
/f the stock is available in excessive !uantity# then any demand can be met. (o the risk that
consumers will desert drops to 1ero. 0n the other hand# investing more in inventory will block
the money unnecessarily and investments will increase. /n short# after analysing the pros and
cons of both the situations the decision about the ade!uate !uantity of stock should be taken.
&. 'arehousin(:
0ften it is noticed that it takes sometime between purchasing2 manufacturing and selling. For
this time period material has to be kept in stock. 3nder warehousing activity the following
decisions regarding the inventory of material are taken:
%i& $hich is a better option- %To own or to rent a warehouse&
%ii& $hich is the right location for a warehouse- %4earer the factory or nearer the market&.
%iii& $hich decision is more appropriate- %To locate the warehouse at one place or at different
places& by taking warehousing facility at different places# the advantage of meeting the demand
of material expeditiously is gained.
Here the thing to be kept in mind is that warehousing re!uires investment. (o after analysing its
advantages and usefulness desirable decision should be taken.
4. )rder *rocessin(:
0rder Processing means the process which is followed to fulfill the material order of the
customer. )ifferent steps of an order processing are as follows:
%i& 0rders placed by consumers to salesperson.
%ii& Transmission of order by salesperson to the company.
%iii& *ntry of order in the 'ompany 0ffice.
%iv& *valuating the reputation of the customer.
%v& 'hecking inventory and preparing schedule.
%vi& (hipment of material in accordance to the order.
%vii& 5eceiving Payment
The customer service level is 6udged from the fact as to how expeditiously the shipment reaches
the consumer. 'ustomer satisfaction and speed of shipment are directly inter,related.
Hence# faster the pace of shipment# higher the rate of customer satisfaction will be. eeping this
thing into consideration companies are nowadays using system based on /nformation
Technology so that by delivering shipment expeditiously customer service level can be
improved.
Supply chain management
Supply chain management .SC/ is the management of the flow of goods. %t includes the
movement and storage of raw materials, work-in-process inventory, and finished goods from
point of origin to point of consumption. %nterconnected or interlinked networks, channels and
node businesses are involved in the provision of products and services re8uired by end customers
in a supply chain.
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Supply chain management has been defined as the ?design, planning,
eecution, control, and monitoring of supply chain activities with the ob,ective of creating net
value, building a competitive infrastructure, leveraging worldwide logistics, synchroni2ing
supply with demand and measuring performance globally.?
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S#! draws heavily from the areas of operations management, logistics, procurement, and
information technology, and strives for an integrated approach.
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Origin of the term and definitions
The term ?supply chain management? entered the public domain when 0eith $liver, a consultant
at 6oo2 Allen 9amilton .now 6oo2 B #ompany/, used it in an interview for the Financial Times
in C*D). The term was slow to take hold. %t gained currency in the mid-C**Es, when a flurry of
articles and books came out on the sub,ect. %n the late C**Es it rose to prominence as a
management bu22word, and operations managers began to use it in their titles with increasing
regularity.
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#ommonly accepted definitions of supply chain management include"
The management of upstream and downstream value-added flows of materials, final
goods, and related information among suppliers, company, resellers, and final consumers
The systematic, strategic coordination of traditional business functions and tactics across
all business functions within a particular company and across businesses within the
supply chain, for the purposes of improving the long-term performance of the individual
companies and the supply chain as a whole
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A customer-focused definition is given by 9ines .)EEA"p&+/" ?Supply chain strategies
re8uire a total systems view of the links in the chain that work together efficiently to
create customer satisfaction at the end point of delivery to the consumer. As a
conse8uence, costs must be lowered throughout the chain by driving out unnecessary
epenses, movements, and handling. The main focus is turned to efficiency and added
value, or the end-user7s perception of value. :fficiency must be increased, and
bottlenecks removed. The measurement of performance focuses on total system
efficiency and the e8uitable monetary reward distribution to those within the supply
chain. The supply chain system must be responsive to customer re8uirements.?
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The integration of key business processes across the supply chain for the purpose of
creating value for customers and stakeholders .Fambert, )EED/
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According to the #ouncil of Supply #hain !anagement Professionals .#S#!P/, supply
chain management encompasses the planning and management of all activities involved
in sourcing, procurement, conversion, and logistics management. %t also includes
coordination and collaboration with channel partners, which may be suppliers,
intermediaries, third-party service providers, or customers. Supply chain management
integrates supply and demand management within and across companies. !ore recently,
the loosely coupled, self-organi2ing network of businesses that cooperate to provide
product and service offerings has been called the Extended Enterprise.
A supply chain, as opposed to supply chain management, is a set of organi2ations directly linked
by one or more upstream and downstream flows of products, services, finances, or information
from a source to a customer. Supply chain management is the management of such a chain.
=D>
Supply chain management software includes tools or modules used to eecute supply chain
transactions, manage supplier relationships, and control associated business processes.
Supply chain event management .S#:!/ considers all possible events and factors that can
disrupt a supply chain. 5ith S#:!, possible scenarios can be created and solutions devised.
%n many cases the supply chain includes the collection of goods after consumer use for recycling.
%ncluding third-party logistics or other gathering agencies as part of the G! re-patriation process
is a way of illustrating the new endgame strategy...
Functions
Supply chain management is a cross-functional approach that includes managing the movement
of raw materials into an organi2ation, certain aspects of the internal processing of materials into
finished goods, and the movement of finished goods out of the organi2ation and toward the end
consumer. As organi2ations strive to focus on core competencies and becoming more fleible,
they reduce their ownership of raw materials sources and distribution channels. These functions
are increasingly being outsourced to other firms that can perform the activities better or more
cost effectively. The effect is to increase the number of organi2ations involved in satisfying
customer demand, while reducing managerial control of daily logistics operations. Fess control
and more supply chain partners led to the creation of the concept of supply chain management.
The purpose of supply chain management is to improve trust and collaboration among supply
chain partners, thus improving inventory visibility and the velocity of inventory movement.
Importance
$rgani2ations increasingly find that they must rely on effective supply chains, or networks, to
compete in the global market and networked economy.
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%n Peter 3rucker7s .C**D/ new
management paradigms, this concept of business relationships etends beyond traditional
enterprise boundaries and seeks to organi2e entire business processes throughout a value chain of
multiple companies.
%n recent decades, globali2ation, outsourcing, and information technology have enabled many
organi2ations, such as 3ell and 9ewlett Packard, to successfully operate collaborative supply
networks in which each speciali2ed business partner focuses on only a few key strategic
activities .Scott, C**@/. This inter-organisational supply network can be acknowledged as a new
form of organisation. 9owever, with the complicated interactions among the players, the
network structure fits neither ?market? nor ?hierarchy? categories .Powell, C**E/. %t is not clear
what kind of performance impacts different supply network structures could have on firms, and
little is known about the coordination conditions and trade-offs that may eist among the players.
From a systems perspective, a comple network structure can be decomposed into individual
component firms .Hhang and 3ilts, )EEA/. Traditionally, companies in a supply network
concentrate on the inputs and outputs of the processes, with little concern for the internal
management working of other individual players. Therefore, the choice of an internal
management control structure is known to impact local firm performance .!int2berg, C*&*/.
%n the )Cst century, changes in the business environment have contributed to the development of
supply chain networks. First, as an outcome of globali2ation and the proliferation of
multinational companies, ,oint ventures, strategic alliances, and business partnerships, significant
success factors were identified, complementing the earlier ?,ust-in-time?, lean manufacturing,
and agile manufacturing practices.
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Second, technological changes, particularly the dramatic
fall in communication costs .a significant component of transaction costs/, have led to changes in
coordination among the members of the supply chain network .#oase, C**D/.
!any researchers have recogni2ed supply network structures as a new organisational form, using
terms such as ?0eiretsu?, ?:tended :nterprise?, ?Iirtual #orporation?, ?<lobal Production
Jetwork?, and ?Jet <eneration !anufacturing System?.
=C@>
%n general, such a structure can be
defined as ?a group of semi-independent organisations, each with their capabilities, which
collaborate in ever-changing constellations to serve one or more markets in order to achieve
some business goal specific to that collaboration? .Akkermans, )EEC/.
The security management system for supply chains is described in %S$4%:# )DEEE and %S$4%:#
)DEEC and related standards published ,ointly by the %S$ and the %:#.Supply #hain !anagement
draws heavily from the areas of operations management, logistics, procurement, and information
technology, and strives for an integrated approach.
'istorical developments
Si ma,or movements can be observed in the evolution of supply chain management studies"
creation, integration, and globali2ation .!ovahedi et al., )EE*/, speciali2ation phases one and
two, and S#! ).E.
Creation era
The term ?supply chain management? was first coined by 0eith $liver in C*D). 9owever, the
concept of a supply chain in management was of great importance long before, in the early )Eth
century, especially with the creation of the assembly line. The characteristics of this era of
supply chain management include the need for large-scale changes, re-engineering, downsi2ing
driven by cost reduction programs, and widespread attention to Kapanese management practices.
Integration era
This era of supply chain management studies was highlighted with the development of electronic
data interchange .:3%/ systems in the C*+Es, and developed through the C**Es by the
introduction of enterprise resource planning .:GP/ systems. This era has continued to develop
into the )Cst century with the epansion of %nternet-based collaborative systems. This era of
supply chain evolution is characteri2ed by both increasing value added and cost reductions
through integration.
A supply chain can be classified as a stage C, ) or @ network. %n a stage CLtype supply chain,
systems such as production, storage, distribution, and material control are not linked and are
independent of each other. %n a stage ) supply chain, these are integrated under one plan and is
:GP enabled. A stage @ supply chain is one that achieves vertical integration with upstream
suppliers and downstream customers. An eample of this kind of supply chain is Tesco.
(lobali)ation era
The third movement of supply chain management development, the globali2ation era, can be
characteri2ed by the attention given to global systems of supplier relationships and the epansion
of supply chains over national boundaries and into other continents. Although the use of global
sources in organisations7 supply chains can be traced back several decades .e.g., in the oil
industry/, it was not until the late C*DEs that a considerable number of organi2ations started to
integrate global sources into their core business. This era is characteri2ed by the globali2ation of
supply chain management in organi2ations with the goal of increasing their competitive
advantage, adding value, and reducing costs through global sourcing.
Speciali)ation era *phase I+# outsourced manufacturing and distribution
%n the C**Es, companies began to focus on ?core competencies? and speciali2ation. They
abandoned vertical integration, sold off non-core operations, and outsourced those functions to
other companies. This changed management re8uirements, by etending the supply chain beyond
the company walls and distributing management across speciali2ed supply chain partnerships.
This transition also refocused the fundamental perspectives of each organi2ation. $riginal
e8uipment manufacturers .$:!s/ became brand owners that re8uired visibility deep into their
supply base. They had to control the entire supply chain from above, instead of from within.
#ontract manufacturers had to manage bills of material with different part-numbering schemes
from multiple $:!s and support customer re8uests for work-in-process visibility and vendor-
managed inventory .I!%/.
The speciali2ation model creates manufacturing and distribution networks composed of several
individual supply chains specific to producers, suppliers, and customers that work together to
design, manufacture, distribute, market, sell, and service a product. This set of partners may
change according to a given market, region, or channel, resulting in a proliferation of trading
partner environments, each with its own uni8ue characteristics and demands.
Speciali)ation era *phase II+# supply chain management as a service
Speciali2ation within the supply chain began in the C*DEs with the inception of transportation
brokerages, warehouse management, and non-asset-based carriers, and has matured beyond
transportation and logistics into aspects of supply planning, collaboration, eecution, and
performance management.
!arket forces sometimes demand rapid changes from suppliers, logistics providers, locations, or
customers in their role as components of supply chain networks. This variability has significant
effects on supply chain infrastructure, from the foundation layers of establishing and managing
electronic communication between trading partners, to more comple re8uirements such as the
configuration of processes and work flows that are essential to the management of the network
itself.
Supply chain speciali2ation enables companies to improve their overall competencies in the same
way that outsourced manufacturing and distribution has done; it allows them to focus on their
core competencies and assemble networks of specific, best-in-class partners to contribute to the
overall value chain itself, thereby increasing overall performance and efficiency. The ability to
8uickly obtain and deploy this domain-specific supply chain epertise without developing and
maintaining an entirely uni8ue and comple competency in house is a leading reason why supply
chain speciali2ation is gaining popularity.
$utsourced technology hosting for supply chain solutions debuted in the late C**Es and has
taken root primarily in transportation and collaboration categories. This has progressed from the
application service provider .ASP/ model from roughly C**D through )EE@, to the on-demand
model from approimately )EE@ through )EE+, to the software as a service .SaaS/ model
currently in focus today.
Supply chain management ,-. *SC ,-.+
6uilding on globali2ation and speciali2ation, the term ?S#! ).E? has been coined to describe
both changes within supply chains themselves as well as the evolution of processes, methods,
and tools to manage them in this new ?era?. The growing popularity of collaborative platforms is
highlighted by the rise of Trade#ardMs supply chain collaboration platform, which connects
multiple buyers and suppliers with financial institutions, enabling them to conduct automated
supply-chain finance transactions.
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5eb ).E is a trend in the use of the 5orld 5ide 5eb that is meant to increase creativity,
information sharing, and collaboration among users. At its core, the common attribute of 5eb
).E is to help navigate the vast information available on the 5eb in order to find what is being
bought. %t is the notion of a usable pathway. S#! ).E replicates this notion in supply chain
operations. %t is the pathway to S#! results, a combination of processes, methodologies, tools,
and delivery options to guide companies to their results 8uickly as the compleity and speed of
the supply chain increase due to global competition; rapid price fluctuations; surging oil prices;
short product life cycles; epanded speciali2ation; near-, far-, and off-shoring; and talent
scarcity.
S#! ).E leverages solutions designed to rapidly deliver results with the agility to 8uickly
manage future change for continuous fleibility, value, and success. This is delivered through
competency networks composed of best-of-breed supply chain epertise to understand which
elements, both operationally and organi2ationally, deliver results, as well as through intimate
understanding of how to manage these elements to achieve the desired results. The solutions are
delivered in a variety of options, such as no-touch via business process outsourcing, mid-touch
via managed services and software as a service .SaaS/, or high-touch in the traditional software
deployment model.
/usiness process integration
Successful S#! re8uires a change from managing individual functions to integrating activities
into key supply chain processes. %n an eample scenario, a purchasing department places orders
as its re8uirements become known. The marketing department, responding to customer demand,
communicates with several distributors and retailers as it attempts to determine ways to satisfy
this demand. %nformation shared between supply chain partners can only be fully leveraged
through process integration.
Supply chain business process integration involves collaborative work between buyers and
suppliers, ,oint product development, common systems, and shared information. According to
Fambert and #ooper .)EEE/, operating an integrated supply chain re8uires a continuous
information flow. 9owever, in many companies, management has concluded that optimi2ing
product flows cannot be accomplished without implementing a process approach. The key
supply chain processes stated by Fambert .)EEA/
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are"
#ustomer relationship management
#ustomer service management
3emand management style
$rder fulfillment
!anufacturing flow management
Supplier relationship management
Product development and commerciali2ation
Geturns management
!uch has been written about demand management. 6est-in-class companies have similar
characteristics, which include the following"
%nternal and eternal collaboration
%nitiatives to reduce lead time
Tighter feedback from customer and market demand
#ustomer-level forecasting
$ne could suggest other critical supply business processes that combine these processes stated
by Fambert, such as"
a. #ustomer service management
b. Procurement
c. Product development and commerciali2ation
d. !anufacturing flow management4support
e. Physical distribution
f. $utsourcing4partnerships
g. Performance measurement
h. 5arehousing management
a/ #ustomer service management process
#ustomer relationship management concerns the relationship between an organi2ation and its
customers. #ustomer service is the source of customer information. %t also provides the customer
with real-time information on scheduling and product availability through interfaces with the
company7s production and distribution operations. Successful organi2ations use the following
steps to build customer relationships"
determine mutually satisfying goals for organi2ation and customers
establish and maintain customer rapport
induce positive feelings in the organi2ation and the customers
b/ Procurement process
Strategic plans are drawn up with suppliers to support the manufacturing flow management
process and the development of new products. %n firms whose operations etend globally,
sourcing may be managed on a global basis. The desired outcome is a relationship where both
parties benefit and a reduction in the time re8uired for the product7s design and development. The
purchasing function may also develop rapid communication systems, such as electronic data
interchange .:3%/ and %nternet linkage, to convey possible re8uirements more rapidly. Activities
related to obtaining products and materials from outside suppliers involve resource planning,
supply sourcing, negotiation, order placement, inbound transportation, storage, handling, and
8uality assurance, many of which include the responsibility to coordinate with suppliers on
matters of scheduling, supply continuity, hedging, and research into new sources or programs.
c/ Product development and commerciali2ation
9ere, customers and suppliers must be integrated into the product development process in order
to reduce the time to market. As product life cycles shorten, the appropriate products must be
developed and successfully launched with ever-shorter time schedules in order for firms to
remain competitive. According to Fambert and #ooper .)EEE/, managers of the product
development and commerciali2ation process must"
C. coordinate with customer relationship management to identify customer-articulated
needs;
). select materials and suppliers in con,unction with procurement; and
@. develop production technology in manufacturing flow to manufacture and integrate into
the best supply chain flow for the given combination of product and markets.
d/ !anufacturing flow management process
The manufacturing process produces and supplies products to the distribution channels based on
past forecasts. !anufacturing processes must be fleible in order to respond to market changes
and must accommodate mass customi2ation. $rders are processes operating on a ,ust-in-time
.K%T/ basis in minimum lot si2es. #hanges in the manufacturing flow process lead to shorter
cycle times, meaning improved responsiveness and efficiency in meeting customer demand. This
process manages activities related to planning, scheduling, and supporting manufacturing
operations, such as work-in-process storage, handling, transportation, and time phasing of
components, inventory at manufacturing sites, and maimum fleibility in the coordination of
geographical and final assemblies postponement of physical distribution operations.
e/ Physical distribution
This concerns the movement of a finished product or service to customers. %n physical
distribution, the customer is the final destination of a marketing channel, and the availability of
the product or service is a vital part of each channel participant7s marketing effort. %t is also
through the physical distribution process that the time and space of customer service become an
integral part of marketing. Thus it links a marketing channel with its customers .i.e., it links
manufacturers, wholesalers, and retailers/.
f/ $utsourcing4partnerships
This includes not ,ust the outsourcing of the procurement of materials and components, but also
the outsourcing of services that traditionally have been provided in house. The logic of this trend
is that the company will increasingly focus on those activities in the value chain in which it has a
distinctive advantage and outsource everything else. This movement has been particularly
evident in logistics, where the provision of transport, warehousing, and inventory control is
increasingly subcontracted to specialists or logistics partners. Also, managing and controlling
this network of partners and suppliers re8uires a blend of central and local involvement" strategic
decisions are taken centrally, while the monitoring and control of supplier performance and day-
to-day liaison with logistics partners are best managed locally.
g/ Performance measurement
:perts found a strong relationship from the largest arcs of supplier and customer integration to
market share and profitability. Taking advantage of supplier capabilities and emphasi2ing a long-
term supply chain perspective in customer relationships can both be correlated with a firm7s
performance. As logistics competency becomes a critical factor in creating and maintaining
competitive advantage, measuring logistics performance becomes increasingly important,
because the difference between profitable and unprofitable operations becomes narrower. A.T.
0earney #onsultants .C*D'/ noted that firms engaging in comprehensive performance
measurement reali2ed improvements in overall productivity. According to eperts, internal
measures are generally collected and analy2ed by the firm, including cost, customer service,
productivity, asset measurement, and 8uality. :ternal performance is measured through
customer perception measures and ?best practice? benchmarking.
h/ 5arehousing management
To reduce a company7s cost and epenses, warehousing management is carrying the valuable role
against operations. %n the case of perfect storage and office with all convenient facilities in
company level, reducing manpower cost, dispatching authority with on time delivery, loading B
unloading facilities with proper area, area for service station, stock management system etc.
Components
anagement components
S#! components are the third element of the four-s8uare circulation framework. The level of
integration and management of a business process link is a function of the number and level of
components added to the link .:llram and #ooper, C**E; 9oulihan, C*D'/. #onse8uently, adding
more management components or increasing the level of each component can increase the level
of integration of the business process link.
Fiterature on business process re-engineering
=)@>
buyer-supplier relationships,
=)A>
and S#!
=)'>
suggests various possible components that should receive managerial attention when managing
supply relationships. Fambert and #ooper .)EEE/ identified the following components"
Planning and control
5ork structure
$rgani2ation structure
Product flow facility structure
%nformation flow facility structure
!anagement methods
Power and leadership structure
Gisk and reward structure
#ulture and attitude
9owever, a more careful eamination of the eisting literature
=)+>
leads to a more comprehensive
understanding of what should be the key critical supply chain components, or ?branches? of the
previously identified supply chain business processesNthat is, what kind of relationship the
components may have that are related to suppliers and customers. 6owerso and #loss .C**+/
state that the emphasis on cooperation represents the synergism leading to the highest level of
,oint achievement. A primary-level channel participant is a business that is willing to participate
in responsibility for inventory ownership or assume other financial risks, thus including primary
level components .6owerso and #loss, C**+/. A secondary-level participant .speciali2ed/ is a
business that participates in channel relationships by performing essential services for primary
participants, including secondary level components, which support primary participants. Third-
level channel participants and components that support primary-level channel participants and
are the fundamental branches of secondary-level components may also be included.
Direct marketing
3irect marketing is about making direct contact with
eisting and potential customers to promote your
products or services. 1nlike media advertising, it enables
you to target particular people with a personalised
message. 3irect marketing can be cost effective and
etremely powerful at generating sales, so it is ideal for
small businesses.
3irect marketing uses a variety of different methods.
3irect mail, mailshots and leafleting are widespread, and
other forms of direct and integrated communication are
growing in popularity. Telephone marketing, mobile
marketing, email and teting offer more opportunities to
reach your target market.
Direct marketing is a channel-agnostic form of advertising that allows businesses and nonprofit
organi2ations to communicate straight to the customer, with advertising techni8ues that can
include cell phone tet messaging, email, interactive consumer websites, online display ads,
database marketing, fliers, catalog distribution, promotional letters, targeted television
commercials, response-generating newspaper4maga2ine advertisements, and outdoor advertising.
Amongst its practitioners, it is also referred to as 3irect Gesponse Advertising.
3irect marketing messages emphasi2e a focus on the customer, data, and accountability. 9ence,
besides the actual communication, creation of actionable segments, pre- and post-campaign
analytics, and measurement of results, are integral to any good 3irect !arketing campaign.
#haracteristics that distinguish direct marketing are"
A database of names .prospects, customers, businesses, etc./, often with certain other
relevant information such as contact number4address, demographic information, purchase
habits4history, company history, etc., is used to develop a list of targeted entities with
some eisting common interests, traits or characteristics. <enerating such a database is
often considered part of the 3irect !arketing campaign.
!arketing messages are addressed directly to this list of customer and4or prospects.
3irect marketing relies on being able to address the members of a target market.
Addressability comes in a variety of forms including email addresses, phone numbers,
5eb browser cookies, fa numbers and postal addresses.
3irect marketing seeks to drive a specific ?call to action.? For eample, an advertisement
may ask the prospect to call a free phone number, mail in a response or order, or click on
a link to a website.
3irect marketing emphasi2es trackable, measurable responses, results and costs from
prospects and4or customersNregardless of medium.
3irect marketing is practiced by businesses of all si2esNfrom the smallest start-up to the leaders
on the Fortune 'EE. A well-eecuted direct advertising campaign can prove a positive return on
investment by showing how many potential customers responded to a clear call-to-action.
<eneral advertising eschews calls-for-action in favor of messages that try to build prospectsM
emotional awareness or engagement with a brand. :ven well-designed general advertisements
rarely can prove their impact on the organi2ationMs bottom line. The demonstrable result of
3irect !arketing is the reason for its increasing popularity.
/enefits
3irect marketing is attractive to many marketers because its positive results can be measured
directly. For eample, if a marketer sends out C,EEE solicitations by mail and CEE respond to the
promotion, the marketer can say with confidence that campaign led directly to CE( direct
responses. This metric is known as the 7response rate,7 and it is one of many clearly 8uantifiable
success metrics employed by direct marketers. %n contrast, general advertising uses indirect
measurements, such as awareness or engagement, since there is no direct response from a
consumer.
!easurement of results is a fundamental element in successful direct marketing. The %nternet has
made it easier for marketing managers to measure the results of a campaign. This is often
achieved by using a specific website landing page directly relating to the promotional material. A
call to action will ask the customer to visit the landing page, and the effectiveness of the
campaign can be measured by taking the number of promotional messages distributed .e.g.,
C,EEE/ and dividing it by the number of responses .people visiting the uni8ue website page/.
Another way to measure the results is to compare the pro,ected sales or generated leads for a
given term with the actual sales or leads after a direct advertising campaign.
Channels
Any medium that can be used to deliver a communication to a customer can be employed in
direct marketing, including"
0mail marketing
Sending marketing messages through email or email marketing is one of the most widely used
direct-marketing methods.
=CC>
$ne reason for email marketing7s popularity is that it is relatively
inepensive to design, test, and send an email message. %t also allows marketers to deliver
messages around the clock, and to accurately measure responses.
Online tools
5ith the epansion of digital technology and tools, direct marketing is increasingly taking place
through online channels. !ost online advertising is delivered to a focused group of customers
and has a trackable response.
Display Ads are interactive ads that appear on the $eb next to content on $eb pages or
$eb services. Formats include static banners# pop ups# videos# and floating units.
'ustomers can click on the ad to respond directly to the message or to find more
detailed information. 7ccording to research by e"arketer# expenditures on online display
ads rose 89.:; between 8<=< and 8<==.
>=8?
Search: 9@; of 3( spending on /nternet ads goes to search# in which advertisers pay
for prominent placement among listings in search engines whenever a potential
customer enters a relevant search term# allowing ads to be delivered to customers
based upon their already,indicated search criteria.
>=A?
This paid placement industry
generates more than B=< billion for search companies. "arketers also use search
engine optimi1ation to drive traffic to their sites.
Social Media Sites# such as Facebook and Twitter# also provide opportunities for direct
marketers to communicate directly with customers by creating content to which
customers can respond.
obile
Through mobile marketing, marketers engage with prospective customers and donors in an
interactive manner through a mobile device or network, such as a cellphone, smartphone, or
tablet. Types of mobile marketing messages include" SMS .short message service/Nmarketing
communications are sent in the form of tet messages, also known as teting. MMS .multi-media
message service/Nmarketing communications are sent in the form of media messages.
%n $ctober )EC@, the Federal Telephone #onsumers Protection Act made it illegal to contact an
individual via cell phone without prior epress written consent for all telephone calls using an
automatic telephone dialing system or a prerecorded voice to deliver a telemarketing message to
wireless numbers and residential lines. An eisting business relationship does not provide an
eception to this re8uirement.
Mobile Applications: Smartphone-based mobile apps contain several types of messages. Push
Jotifications are direct messages sent to a user either automatically or as part of a campaign.
They include transactional, marketing, geo-based, and more. Gich Push Jotifications are full
9T!F Push Jotifications. !obile apps also contain %nteractive ads that appear inside the mobile
application or app; Location-Based Marketing: marketing messages delivered directly to a
mobile device based on the user7s location; QR Codes .8uick-response barcodes/" This is a type
of )3 barcode with an encoded link that can be accessed from a smartphone. This technology is
increasingly being used for everything from special offers to product information. Mobile
Banner Ads: Fike standard banner ads for desktop 5eb pages but smaller to fit on mobile
screens and run on the mobile content network
Telemarketing
Another common form of direct marketing is telemarketing, in which marketers contact
customers by phone. The primary benefit to businesses is increased lead generation, which helps
businesses increase sales volume and customer base. The most successful telemarketing service
providers focus on generating more ?8ualified? leads that have a higher probability of getting
converted into actual sales.
%n the 1nited States, the Jational 3o Jot #all Gegistry was created in )EE@ to offer consumers a
choice whether to receive telemarketing calls at home. The FT# created the Jational 3o Jot
#all Gegistry after a comprehensive review of the Telemarketing Sales Gule .TSG/.
=CA>
The do-
not-call provisions of the TSG cover any plan, program, or campaign to sell goods or services
through interstate phone calls.
The )EC) modification, which went into effect on $ctober C+, )EC@, stated that prior epress
written consent will be re8uired for all autodialed and4or pre-recorded calls4tets sent4made to
cell phone; and for pre-recorded calls made to residential land lines for marketing purposes.
Further, a consumer who does not wish to receive further prerecorded telemarketing calls can
Oopt outP of receiving such calls by dialing a telephone number .re8uired to be provided in the
prerecorded message/ to register his or her do-not-call re8uest. The provisions do not cover calls
from political organi2ations or charities.
=C'>
#anada has its own Jational 3o Jot #all Fist .3J#F/. %n other countries it is voluntary, such as
the Jew Healand Jame Gemoval Service.
1oicemail marketing
Ioicemail marketing emerged from the market prevalence of personal voice mailboes, and
business voicemail systems. Ioicemail marketing presented a cost effective means by which to
reach people directly, by voice. Abuse of consumer marketing applications of voicemail
marketing resulted in an abundance of ?voice-spam,? and prompted many ,urisdictions to pass
laws regulating consumer voicemail marketing. !ore recently, businesses have utili2ed guided
voicemail .an application where pre-recorded voicemails are guided by live callers/ to
accomplish personali2ed business-to-business marketing formerly reserved for telemarketing.
6ecause guided voicemail is used to contact only businesses, it is eempt from 3o Jot #all
regulations in place for other forms of voicemail marketing.
Ioice-mail courier is a similar form of voice-mail marketing with both business-to-business and
business-to-consumer applications.
/roadcast fa2ing
6roadcast faing, in which faes are sent to multiple recipients, is now less common than in the
past. This is partly due to laws in the 1nited States and elsewhere which regulate its use for
consumer marketing. %n )EE', President 6ush signed into law S.&CA, the Kunk Fa Prevention
Act of )EE' .KFPA/, which allows marketers to send commercial faes to those with whom they
have an established business relationship .:6G/, but imposes some new re8uirements. These
re8uirements include providing an opt-out notice on the first page of faes and establishing a
system to accept opt-outs at any time of the day. Goughly )( of direct marketers use fa, mostly
for business-to-business marketing campaigns.
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Couponing
#ouponing is used in print and digital media to elicit a response from the reader. An eample is a
coupon which the reader receives through the mail and takes to a store7s check-out counter to
receive a discount.
Digital Coupons: !anufacturers and retailers make coupons available online for electronic
orders that can be downloaded and printed. 3igital coupons are available on company websites,
social media outlets, tets, and email alerts. There are an increasing number of mobile phone
applications offering digital coupons for direct use.
3aily 3eal Sites offer local and online deals each day, and are becoming increasingly popular.
#ustomers sign up to receive notice of discounts and offers, which are sent daily by email.
Purchases are often made using a special coupon code or promotional code. The largest of these
sites, <roupon, has over D@ million subscribers.
=C&>
Direct response marketing
Direct Response Marketing is designed to generate an immediate response from consumers,
where each consumer response .and purchase/ can be measured, and attributed to individual
advertisements.
=CD>
This form of marketing is differentiated from other marketing approaches,
primarily because there are no intermediaries such as retailers between the buyer and seller, and
therefore the buyer must contact the seller directly to purchase products or services. 3irect-
response marketing is delivered through a wide variety of media, including 3GTI, radio, mail,
print advertising, telemarketing, catalogues, and the %nternet.
+irect response mail order
!ail order in which customers respond by mailing a completed order form to the marketer. !ail
order direct response has become more successful in recent years due to internet eposure.
=C*>
+irect response television
3irect marketing via television .commonly referred to as 3GTI/ has two basic forms" long form
.usually half-hour or hour-long segments that eplain a product in detail and are commonly
referred to as infomercials/ and short form, which refers to typical @E-second or +E-second
commercials that ask viewers for an immediate response .typically to call a phone number on
screen or go to a website/. TI-response marketingNi.e. infomercialsNcan be considered a form
of direct marketing, since responses are in the form of calls to telephone numbers given on-air.
This allows marketers to reasonably conclude that the calls are due to a particular campaign, and
enables them to obtain customers7 phone numbers as targets for telemarketing. $ne of the most
famous 3GTI commercials was for <insu 0nives by <insu Products, %nc. of G%. Several aspects
of ad, such as its use of adding items to the offer and the guarantee of satisfaction were much
copied, and came to be considered part of the formula for success with short-form direct-
response TI ads .3GTI/.
Forms of direct response marketing on television include standard short form television
commercials, infomercials and home shopping networks. Short-form direct-response
commercials have time lengths ranging from @E seconds to ) minutes. Fong form infomercials
are typically @E minutes long. An offshoot of the infomercial is the home shopping industry. %n
this medium, items can potentially be offered with reduced overhead.
=)E>
+irect response radio
%n direct response radio, ads contain a call to action with a specific tracking mechanism. $ften,
this tracking mechanism is a ?call now? prompt with a toll-free phone number or a uni8ue 5eb
1GF. Gesults of the ad can be tracked in terms of calls, orders, customers, leads, sales, revenue,
and profits that result from the airing of those ads.
Direct response maga)ines and ne"spapers
!aga2ine and newspaper ads often include a direct response call-to-action, such as a toll-free
number, a coupon redeemable at a brick-and-mortar store, or a QG code that can be scanned by a
mobile deviceNthese methods are all forms of direct marketing, because they elicit a direct and
measurable action from the customer.
)ther direct response media
$ther media, such as maga2ines, newspapers, radio, social media, search engine marketing and
e-mail can be used to elicit the response. A survey of large corporations found e-mail to be one
of the most effective forms of direct response.
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Direct mail
The term Advertising, or direct ail! is used to refer to communications sent to potential
customers or donors via the postal service and other delivery services. 3irect mail is sent to
customers based on criteria such as age, income, location, profession, buying pattern, etc. 3irect
mail includes advertising circulars, catalogs, free-trial #3s, pre-approved credit card
applications, and other unsolicited merchandising invitations delivered by mail to homes and
businesses. 6ulk mailings are a particularly popular method of promotion for businesses
operating in the financial services, home computer, and travel and tourism industries.
%n many developed countries, direct mail represents such a significant amount of the total
volume of mail that special rate classes have been established. %n the 1nited States and 1nited
0ingdom, for eample, there are bulk mail rates that enable marketers to send mail at rates that
are substantially lower than regular first-class rates. %n order to 8ualify for these rates, marketers
must format and sort the mail in particular ways L which reduces the handling .and therefore
costs/ re8uired by the postal service. %n the 1S, marketers send over *E billion pieces of direct
mail per year
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Advertisers often refine direct mail practices into targeted mailing, in which mail is sent out
following database analysis to select recipients considered most likely to respond positively. For
eample, a person who has demonstrated an interest in golf may receive direct mail for golf-
related products or perhaps for goods and services that are appropriate for golfers. This use of
database analysis is a type of database marketing. The 1nited States Postal Service calls this
form of mail ?advertising mail? .admail for short/.
Insert media
Another form of direct marketing, insert media are marketing materials that are inserted into
other communications, such as a catalog, newspaper, maga2ine, package, or bill. #oop or shared
mail, where marketing offers from several companies are delivered via a single envelope, is also
considered insert media.
Out$of$home
$ut-of-home direct marketing refers to a wide array of media designed to reach the consumer
outside the home, including billboards, transit, bus shelters, bus benches, aerials, airports, in-
flight, in-store, movies, college campus4high schools, hotels, shopping malls, sport facilities,
stadiums, taisNthat contain a call-to-action for the customer to respond.
Direct selling
3irect selling is the sale of products by face-to-face contact with the customer, either by having
salespeople approach potential customers in person, or through indirect means such as
Tupperware parties.
(rassroots3community marketing
The door-to-door distribution of flyers and leaflets within a local community is a business-to-
consumer form of direct marketing used etensively by restaurants, fast food companies, and
many other business focusing on a local catchment. Similar to direct mail marketing, this method
is targeted purely by area and community, and costs a fraction of the amount of a mailshot, since
it is not necessary to purchase stamps, envelopes, or address lists with the names of home
occupants.
5etail marketing refers to the range of activities undertaken by a retailer to promote awareness
and sales of a companyCs products. /t makes use of the common principles of marketing mix
which include# product# price# place and promotion. *ffective implementation of the marketing
mix is crucial for success in retail marketing.
Retailing is defined as a conclusive set of activities or steps used to sell a product or a service
to consumers for their personal or family use. It is responsible for matching individual demands
of the consumer with supplies of all the manufacturers. The word retail is derived from the
French work retailer, meaning to cut a piece off or to break bulk.
The ,oncept of -etail .ar"etin(
In the growing market, retail marketing has become one of the major emerging trends in
the entire economical cycle. It is the retail market only which provides the consumer a
basic platform to encounter with goods and a shop keeper for the first time. Retail
market consists of a fixed location like boutique, store, departmental store etc, here in
these location consumers meets the shop keeper and purchase goods in return of certain
value. Maintaining a certain profit margin, these shop keepers sell goods to their
consumers. he basic motive of these shopkeepers is to satisfy the consumers and fulfill
their needs and demands.
Retail marketing strategy has become one of the basic elements of marketing strategy
which includes a lot of planning and proper execution of this planning. !ow let us first
focus on the basic nature of retail. "irstly in retail, a marketer needs to focus primarily
on the needs and desires of the customers.
Retail marketing even focuses on satisfying the customers, maintaining a proper profit
margin for the owner of the goods. #ustomer needs are the basic key factors of retail.
Retail marketing consists of $ basic pillars, first is saving the precious time of the
customers. %econd is setting the right prices of the goods, third is creating a proper
connection with the emotions of the customers, fourth pillar is paying the right respect
to the customers and lastly solving the problems of the customer is another pillar of
retail.
#reating customer loyalty is the basic function of retail, as once you create customer
loyalty towards your brand it will be easier for you to stay in the market for a longer
period of time. #reating customer loyalty is not a very easy task, as it takes years for a
brand to create customer loyalty.
&ou can only create customer loyalty if you have a retail marketing plan, some of such
marketing plans are the sales promotional activities like loyalty cards, loyalty one, gifts,
coupons, special discounts and reward program.
Reward program includes special gifts on purchase of bulk goods and loyalty cards are
special privileged cards which are offered to customers in order to provide them huge
discounts and free gifts. hese sorts of special sales promotional activities not only
increase the sales target but at the same time increase customer loyalty also.
'ith so many new sales promotional programs promoted by the retail marketing
strategies, now it is possible to create a healthy relationship with the customers.
(reviously creating emotional bonding with the customers was not taken into
consideration, and thus customers were only treated as customers who were just
supposed to pay the price of the goods. hus, this resulted in lower customer loyalty and
it gave rise to huge number of product switching.
(reviously customers used to shift to other brands very easily as there did not exist any
brand loyalty. )ut now with the extensive features of retail marketing, it has become
easier for the company not only to capture a huge market but at the same time create a
strong bonding with the customers. hus, this sort of marketing strategy did not only
ignite the sales target and profits but at the same time increased the brand loyalty.