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Retail distribution.ppt

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SUPPLY CHAIN MANAGEMENT
SUPPLY CHAIN MANAGEMENT
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Retail distribution.ppt

  1. 1. Retail Distribution and Supply Chain Management Dr. Gopal Thapa Tribhuvan University
  2. 2. Channels and Channels Flow  Marketing channel is the path or route taken by goods or services as they move form producer to final consumer - Dictionary of Marketing  There are different supply chain structures based upon extended, limited and direct channels 2/5/2023 Prepared by Dr. Gopal Thapa 2
  3. 3. Channel Flows  Physical flow – the movement of goods and method of transport, from one part of the chain to another;  Ownership flow – the transfer of title for ownership/usage from one channel member to another.  This is important for legal aspects of delivery, damage and storage by the producer and intermediary as well as for the final customer; 2/5/2023 Prepared by Dr. Gopal Thapa 3
  4. 4. Channel Flows  Service flow – if services are rendered as part of the process or the end product is a service or mainly service based, it is necessary to ensure that all the characteristics of the services are fully understood  Information flow – there is a need for timely and accurate two-way information between all channel members; 2/5/2023 Prepared by Dr. Gopal Thapa 4
  5. 5. Channels Flow  Payment flow – there is a necessity for agreed payment transfer terms based upon services rendered or goods delivered;  Promotion flow – a flow of communication material needs to be used to influence both trade partners and consumers.  The objectives of the promotion will be to produce a positive attitude and image for the retailer. 2/5/2023 Prepared by Dr. Gopal Thapa 5
  6. 6. Supply Channel  The supply channel is the total process by which products reach the end consumer as goods or services.  This is a sequence of events that involves strategic decisions over different resources and the maintenance of relationships all focused on delivering optimum value to the end consumer. 2/5/2023 Prepared by Dr. Gopal Thapa 6
  7. 7. Traditional Supply Channel for Retail Products 2/5/2023 Prepared by Dr. Gopal Thapa 7
  8. 8. Supply channel to achieve:  reduced inventory and storage investment in the chain;  improved end-user and customer service benefits through productivity and effectiveness (faster order cycle times, improved on-time shipment, lack of damage/defects, etc.);  development of strong relational links, and hence a strong chain, in order to build competitive advantage; and  lower procurement, transportation and unit costs which can be used to price more competitively and to increase value- added benefits. 2/5/2023 Prepared by Dr. Gopal Thapa 8
  9. 9. Distribution logistics and stock control  The customer’s central expectation of retail service delivery is one of availability.  No amount of service enhancement or added incentives will effectively make up for an empty shelf.  As a customer, the ultimate measure of a retail service is whether the goods or services are available as required 2/5/2023 Prepared by Dr. Gopal Thapa 9
  10. 10. Distribution logistics and stock control  Modern retailing is underpinned by a complex infrastructure that seeks to meet this central customer expectation.  All of this has its cost and, therefore, from a management perspective it will be vital to deliver the retail service in an efficient manner. 2/5/2023 Prepared by Dr. Gopal Thapa 10
  11. 11. Distribution logistics and stock control  This is becoming increasingly important as profit growth cannot be easily achieved when sales growth is not high; such extra profit has to be gained from improvements in productivity.  The achievement of productivity gains is available from a retail logistics system infrastructure which consists of several elements 2/5/2023 Prepared by Dr. Gopal Thapa 11
  12. 12. Logistics Definition  Logistics is the process of strategically managing the procurement, movement and storage of materials, parts and finished inventory through the organization and its marketing channels in such a way that current and future profitability are maximized through the cost-effective fulfillment of orders.  Christopher (1992) 2/5/2023 Prepared by Dr. Gopal Thapa 12
  13. 13. Retail Logistics  The word logistics is derived from the French word ‘loger’ which means to quarter and supply troops  Logistics has developed from the systematic planning required when large numbers of troops and their equipment move, to that of the moving of large amounts of goods. 2/5/2023 Prepared by Dr. Gopal Thapa 13
  14. 14. Retail Logistics  Retail logistics is the organized process of managing the flow of merchandise from the source of supply to the customer – from the producer/manufacturer, wholesaler/ intermediary through to the warehouse, transport to the retail units until the merchandise is sold and delivered to the customer 2/5/2023 Prepared by Dr. Gopal Thapa 14
  15. 15. Retail Logistics  The massive increase in product variety in stores has created a need for improved logistics and sophisticated systems  From a marketing point of view the system has to satisfy the customer based upon the old adage of getting the right product to the right customer in the right place at the right time. 2/5/2023 Prepared by Dr. Gopal Thapa 15
  16. 16. Retail Logistics  This requires a starting point at the marketplace and then working backwards to ensure everything is put in place to provide improved delivery, better service, lower prices through efficient logistics and added value. 2/5/2023 Prepared by Dr. Gopal Thapa 16
  17. 17. Retail Logistics Functions  the physical movement of goods;  the holding of these goods in stockholding points;  the holding of goods in quantities required to meet demand from the end consumer;  the management and administration of the process which, in modern complex distribution systems, is a function in its own right. 2/5/2023 Prepared by Dr. Gopal Thapa 17
  18. 18. Retail Logistics Functions  All of this is based upon the aspects of:  order processing;  transport;  storage;  inventory. 2/5/2023 Prepared by Dr. Gopal Thapa 18
  19. 19. Retail logistics – the cost structure  Many retailers pursue distribution strategies which explicitly or implicitly acknowledge the importance of the total distribution concept (TDC) which is based on the work of West (1989).  The TDC encourages everyone in the company to think in terms of all components of distribution – from the moment of manufacture to when, in the case of the retailer, goods are sold through the checkout – as an integrated linear model. 2/5/2023 Prepared by Dr. Gopal Thapa 19
  20. 20. Total Distribution Cost (TDC)  TDC = TC + FC + CC + IC + HC + PC +MC  Where,  TC = transport cost  FC= Facilities cost  CC = Communication cost  IC = Inventory cost  HC = Handling cost  PC =Packaging cost  MC = Management cost 2/5/2023 Prepared by Dr. Gopal Thapa 20
  21. 21. Retail marketing practices in Nepal 2/5/2023 Prepared by Dr. Gopal Thapa 21

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