1.

Response Time to Customers:

2. Product Variety

3. Product Availability

4. Customer Experience

5. Faster Time to Market

6. Order Visibility

7. Returnability

8. Direct Sales to Customers

9. Flexible Pricing, Product Portfolio and

Promotions

10. Efficient Funds Transfer

 In selling products that cannot be
downloaded, an e-business without a
physical retail outlet takes longer to fulfill a
customer request than a retail store.

 Example:
◦ A mutual fund prospectus or music can be
downloaded from the Web.
◦ Whereas a physical mailing of these products or
even making a trip to a music store takes much
longer.
 More selection compared to the bricks-and-
mortar store. Example: Amazon

 An e-business greatly increases the speed

with which info on customer demand is
disseminated throughout the Supply chain,
giving rise to accurate forecasts
 Allows access to customers who cannot
access a physical stores open only during
business hours

 surge in orders after their bricks-and-mortar

store closes.

 Without e-business, see people staying in

and around visit you
 Dell often introduces new products earlier
than its competitors' that use traditional
channels.
 Allows manufacturers to enhance revenues by
bypassing intermediaries and reaching out
directly to customers.

 This allows collection of intermediary’s

incremental revenue.

 Example:Dell
 An e-business, can easily alter prices by
changing one entry in database linked to its
Web site.

 Advantage:
◦ Pricing can be done based on current inventories
and demand.
◦ Example:
 Airlines make available last minute low cost fairs……
 Analogous to vegetable market….
 An e-business enhances revenues by
speeding up collection.
 Some probable questions
What has been the impact of e-business on supply chain
cost?

What has been the impact of e-business on customer

service?

In the future, do you see the number of distributors

decreasing, increasing, or staying about the same?

Is e-business likely to be more beneficial in the early part

or the mature part of a product’s life cycle?
 Girl: What is the price of this dress?

 Shopkeeper: Rs. 10,000/-

 Girl: Aww!

 Girl: ok what is the price of the pink dress?

 Shopkeeper: Aww! + Aww!

The Customer service dimension –
Customer Service and Customer Retention,
Service driven logistics systems,
Setting customer service priorities and
service standards
 Customer service is the provision
of service to customers 

◦ before,
◦ during and
◦ after a purchase.
 No value in the product or service until it is in
the hands of the customer

 The importance of customer service may vary

by product or service, industry and customer.

 Good customer service experience =

 change in entire perception a customer wrt the organization.
1. Delivery frequency
2. Reliability
3. Stock levels
4. Order cycle time

Interaction among all these

affects the process of
making products & services
available to whom ?
 To address this argument,

 many organizations have employed a variety

of methods to improve their customer
satisfaction levels,

 and other key performance indicators (KPIs)

 Customer service could be examined under :
 Corporate policies or programs
◦  i.e. written statements of service policy,
◦ adequacy of organizational structure and
◦ system flexibility.

 Variables directly involved in physical

distribution.
◦  Order cycle time,
◦ Inventory availability
◦ Order fill rate, Order status information
Post- transaction Elements
 The post transaction elements of customer
service are generally supporting of the product
while in use e.g.

 product tracing / warranty,

 parts and repair service,
 procedures for customer complaints and

product replacement. 
 Switch in brand loyalty

 Cost penalty for:

◦ Manufacturers
◦ Retailers

 46% of potential sales

 Many companies have suffered, why?

 Their focus -> traditional Marketing

◦ Product development
◦ Promotional activities
◦ Price competition via reduction in logistics

 Are these important?

◦ Yes they are but not at the cost of logistics
 Low cost strategies

Low cost Efficient Effective

strategies = logistics ≠ logistics
 The impact of logistics has resulted in a focus
on marketing towards…

 Creation of customer franchise

 Creation of consumer franchise

◦ The above two can be enhanced or diminished

based upon the efficiency of the suppliers’ logistics
system.
“People don’t

buy products,

they buy

Benefits” What do you

understand from
-Theodore Levitt that?
 The lifetime value of a customer is much
greater than the profit generated from just a
single deal with that customer.

 A simple formula follows:

Lifetime value = Average transaction value * Yearly

frequency of purchase* customer life expectancy
 The role of logistics can be seen as the development
of systems and the supporting co-ordination
processes to ensure that customer service goals are
met.

 Main idea of service driven logistics systems : to

meet predefined service goals. 

 Ideally all logistics service systems are defined along

the following lines:
◦ Identify customers' service needs
◦ Define customer service objectives
◦ Design the logistics system
 We are entering the era of supply chain
competition - the fundamental difference
here is that the company cannot act
individually but ….

 must act as a supply chain entity to ensure

competitiveness in the marketplace.
 As the new competitive context of business
continues to change, brining with it new
complexities and concerns for management
generally, it also has to be recognized that
the impact of these changes on logistics can
be considerable.

 Of the many issues facing organizations

today perhaps the most challenging are in the
area if logistics.
Why people are hooked on to cell phones?

“The feeling that ‘no one is listening to me’

make us want to spend time with machines
that seem to care about us.” 
(Sherry Turkle)

Connected, But ALone