Marketing Essentials

Chapter 22: Physical Distribution

Chapter Summaries

Section 22.1

• Physical distribution links a business and its customers. Physical distribution, also known as logistics, comprises all the activities that help to ensure that the right amount of a product is delivered to the right place at the right time. It involves transporting, storing, order processing, stock handling, and inventory control of materials and products.
• The different kinds of transportation are marine, air, pipeline, and land transportation. Land transportation includes both trucking and railroads.
• Transportation service companies handle small- and medium-size packages. Examples are the U.S. Postal Service, express delivery services, bus package carriers, and freight forwarders.

Section 22.2

• Storage is the marketing function of holding goods until they are sold. Products are stored in warehouses until orders are received from customers.
• There are four types of warehouses: private warehouses, public warehouses, bonded warehouses, and distribution centers.
• Globalization is increasing the importance of international distribution. Businesses must follow the import-export laws of their home countries and of any countries where they would like to do business. They need to take into consideration language barriers as well as differences in physical transportation systems and retail outlets.