Basic Marketing: A Global Managerial Approach

Perreault−McCarthy: Basic

Marketing: A

Global−Managerial

Approach, 14/e

12. Distribution Customer
    Service and Logistics

Text © The McGraw−Hill

Companies, 2002

place

price

promotion

product

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ct

distribution on target. In the

United States, computer sys-

tems show Coke managers

exactly what’s selling in each

market; that allows Coke to

plan inventories and deliveries.

Coke also operates a 24-hour-

a-day communications center

to respond to the two million

requests it gets from channel

members each year. Orders

are processed instantly—so

sales to consumers at the end

of the channel aren’t lost

because of stock-outs. And

Coke products move effi-

ciently through the channel. In

Cincinnati, for example, Coke

built the beverage industry’s

first fully automated distribu-

tion center. Forklifts were

replaced with automatically

guided vehicles that speed up

the product flow and reduce

labor costs.

Coke’s strategies in interna-

tional markets rely on many of

the same ideas. But the stage of

market development varies in

different countries, so Coke’s

emphasis varies as well. To

increase sales in France, for

example, Coke must first make

more product available at retail

stores; so Coke is installing

thousands of soft-drink coolers

in French supermarkets. In

Great Britain, Coke is using mul-

tipacks because it wants to

have more inventory at the point

of consumption—in consumers’

homes. In Japan, by contrast,

single-unit vending machine

sales are very important—so

Coke uses an army of truck

drivers to constantly restock its

870,000 vending machines,

more per capita than anywhere

else in the world. Coke is even

testing vending machines that

raise the price when it’s hot or

when few cans are left. In less-

developed areas, the Place

system is not always so sophis-

ticated. In China, for example,

the Communist Party won’t let

Coke control all of the details,

but a local manager struck a

deal. For some cash, the Com-

munist Party keeps inventories

in some of its local offices. Then

retired party members use

bicycle-powered pushcarts to

sell the Coke inventory at

densely populated housing

projects.