Logistics is a connector between many of the topics we have been looking at this week and can have an effect on price in the marketing mix. Where I live we are considered rural as the nearest port, metropolitan area, and airport is about $80$ miles away. This distance creates more expensive freight charges for those doing business here in town, including my work. There are often rural and fuel surcharges as trucks have to make the extra distance to get here. While this may not seem like much, it does make an impact on retailers and service providers and the prices they charge. In my town retail items, including food, tend to be higher priced than if I travel just $15$ miles down the road as that town is not considered rural and does not incur the additional fees. Businesses in my town have a few options in handling these charges. They can build the fee into the prices of the merchandise and pass it on to consumers, or they can cover the cost themselves and remain price competitive with the next town over. However, this will offer them less of a profit margin. I dealt with this a lot when I owned my shipping stores. Delivery of my inventory was consistently higher priced as were the retail shipping charges we charged in comparison with similar stores a few miles away.

Class: In reflecting back to our lessons throughout the course, what are some examples of how logistics costs incurred in moving product thought a channel can be handled? What reasoning led you to your conclusions?