The objectives of this Report are to draw together the links between retail petroleum marketing and physical distribution, and to determine whether there is an ideal mix in the physical distribution activities that achieves an optimum level of customer satisfaction.
Chapter 1 reviews the five physical distribution activities of transportation, warehousing, inventory holding, impact on production and order/information processing. Chapter 2 attempts to clarify the meaning of customer service, as well as put it in its correct relationship with physical distribution and marketing. To do this, an early study by Lalonde and Zinszer (1976) has been analysed. Customer service is generally understood to be an all embracing corporate philosophy aimed at satisfying all of the customer's needs. It is also pivotal in that well selected physical distribution strategies achieve a high level of customer service, which is essential in satisfying the Place component of the four P's (Price, Promotion, Product and Place) of the marketing mix.
Chapters 3 to 7 are detailed reviews of the physical distribution activities outlined in Chapter 1. In particular as these activities relate to the oil industry in Australia.
In order to determine how important the various elements of customer service are, a survey is undertaken. The survey and responses are outlined in Chapters 8 and 9. Twenty-five (25) retail service stations for each of the six major oil companies (Ampol, BPA, Caltex, Esso, Mobil and Shell) were surveyed using a customer service questionnaire. The results are qualitatively analysed to determine how well each oil company handles its customer service. The results vary from company to company. Product availability, order cycle time, are financial terms are more important aspects of customer service than are general marketing support, information availability and assistance in ordering. These results are consistent with other surveys carried out in Austral ia and the United States.
The Report concludes with Chapter 10, which attempts to relate the physical distribution activities to elements of customer service. Without knowing the total cost of each of the physical distribution activities, it is difficult to conclude which strategies lead to an optimal level of customer service. The total cost of physical distribution must be a minimum consistent with achieving a satisfactory level of customer service. The oil companies need to review their physical distribution to varying degrees, as it would seem that there is room to improve upon their customer service levels.