PHYSICAL DISTRIBUTION

TRANSPORTATION

MEANING- PHYSICAL DISTRIBUTIONPhysical distribution is the set of activities

concerned with efficient movement of finished goods from the end of the production operation to the consumer.

Physical distribution is part of a larger process called "distribution," which includes wholesale and retail marketing, as well the physical movement of products.

The importance of physical distribution is also based on its relevance to customer satisfaction.

COMPONENTS Physical distribution can be viewed as a system of

components linked together for the efficient movement of products.

Small business owners can ask the following questions in addressing these components:

Customer service—What level of customer service should be provided?

Transportation—How will the products be shipped? Warehousing—Where will the goods be located? How

many warehouses should be utilized? Order processing—How should the orders be handled? Inventory control—How much inventory should be

maintained at each location? Protective packaging and materials handling—How

can efficient methods be developed for handling goods in the factory, warehouse, and transport terminals?

These components are interrelated: decisions made in one area affect the relative efficiency of others.

EXAMPLE:

For example, a small business that provides customized personal computers may transport finished products by air rather than by truck, as faster delivery times may allow lower inventory costs, which would more than offset the higher cost of air transport. Viewing physical distribution from a systems perspective can be the key to providing a defined level of customer service at the lowest possible cost.

COMPONENTS – TRANSPORTATION

MEANING:Physical distribution of goods and services

require transportation. Transportation means physical movement

of people and goods from place to place.Transportation plays a vital role in

marketing.Transportation helps in the physical

movement of goods from the production centers or point of origin to the consumption centers.

FUNCTIONS OF TRANSPORTATION Widens Market-by bringing the producers, distributors, and

consumers closer to one another. Increases Mobility Of Labor And Capital -physically

transported from one place to another. Creates Time And Place Utility-Transportation facilitates

physical movement of goods from one place to another. Goods are made available at the time of consumers need.

Employment Opportunities-uses a lot of people while carrying out its functions.

Transformation Of The Economy-also develops modern industry as well as production of agricultural products. This leads to increased productivity resulting transformation of the economy.

Large Scale Of Production-helps in distribution of the products on a large scale. As markets continue to widen, production capacity has to be increased. This leads to large-scale production and reduction in cost.

Overall Economic Development-The development of transportation is part and parcel of economic development. It stimulates the development of other sectors of the economy like agriculture, industry and tourism. Even perishable products can be delivered to the markets with greater speed using transportation.

 Price Equalization-Transportation helps in supplying products to the consumers when it is demanded. The excess supply from one location can be transported to places where the demand is high. As a result, scarcity is avoided and price fluctuations are controlled.

Encourages Job Specialization And Division Of WorkTransportation facilitates regional and geographical concentration of labor and production centers. As a result, labor becomes specialized, i.e. transporters. Transportation also facilitates in producing goods and services as desired by the consumers. This leads to specialization.

MODES OF TRANSPORTATION:

◦Road Transportation◦Rail Transportation◦Water Transportation◦Air Transportation

ROAD TRANSPORTATION

Road transportation is the oldest and best form of transportation. Through road transport, people and goods can be transported to different destinations. Road transportation is convenient and relatively fast. It can be used for door-to-door delivery of the products.

FEATURES: Small Investment, Multipurpose, Freedom Of Movement, Door-to-door service, Economy Of Time

 

ROAD TRANSPORTATIONADVANTAGES DISADVANTAGES

FlexibilityEconomyConvenienceFeeder ServicesDelivery In Good

ConditionSafetyRural DevelopmentSuitable For

Perishable Products

UnsuitabilityLess SpeedUnreliableUnstable freight

RAIL TRANSPORTATION Rail transportation or railways are the cheapest

mode of transport around the world. Rail transport is owned and operated by the governments of each country. They are more reliable compared to road or water transportation. Railways are popular and widely used transport system. Railways could be meter gauge or broad gauge depending on the capacity, speed and the traffic.

FEATURES:  Monopoly, Huge Investment, Specific Infrastructure, No Uniform Pricing , Large Carrying Capacity.

RAIL TRANSPORTATION

ADVANTAGES DISADVANTAGES

Suitable For Bulky Products

Greater SpeedCheaperDependable And

Regular ServicesSafe CarrierFlexible Carrier

Heavy InvestmentCostly InflexibleUnsafe For

Perishable ProductsUnsuitable For Rural

And Hilly AreasEvils Of Monopoly

WATER TRANSPORTATION

Water transport includes river, oceans and canals as a means of transportation. It is the oldest mode of transportation. Water transportation is used for bulky products, which have low unit price. Water transportation is cheaper than other modes of transportation but is extremely slow. Water transport does not require heavy capital investment because the ships and boats can travel over natural waterway.

FEATURES: Natural Waterway, Little Power Consumption, Low Operational Cost, Flexibility, Slow Movement

WATER TRANSPORTATION

ADVANTAGES

DISADVANTAGESCheapestLarge Carrying

CapacitySaferInternational Trade

Slow SpeedLimited Area Of

OperationSeasonal

DifficultiesRiskyUnsuitable

AIR TRANSPORTATION

Air transportation is the most advanced mode of transport. It has reduced the distance between countries and tourism industry has flourished. Air transportation is the fastest mode of transport and used mainly for travel by people and carrying mails. It is helpful in supplying relief services in time of emergency like floods or earthquakes and war. Air transportation has created time utility in both national and international markets. It links different parts in the country and the cities in different countries.

FEATURES: High Speed, Unbroken Journey, Expensive, Extensive Network.

AIR TRANSPORTATIONADVANTAGES

DISADVANTAGES

Highest SpeedBoon To Perishable

ProductRegular,

Comfortable and Punctual

Shortest RouteAccess To All Areas

ExpensiveUncertainties and

UnreliableLimited CapacityHigh Construction

And Operational Cost 

Accidents

THANK YOU

PRESENTED BY:ANCY

GEORGE