Friday, 22 August 2014

The Logistical Relationship with Marketing within the Firm

As customer satisfaction is one of the main focuses of marketing there needs to be a clear relationship with logistics and the marketing department. Logistics and marketing use the four P’s of marketing, which are as follows:
  •  Place
  •  Price
  •  Production
  •  Promotion
Place
Place decisions involve both marketing and logistics. Logistics has to come up with the most effective ways to move and store the products between where it’s produced and where it’s sold. Marketing have to decide on new strategies for reaching the customers.

Price
Logistics costs need to be managed effectively as if they’re not managed it could mean the end of the company’s profits. Transport costs often account for 50% of the total logistic costs. The company has to manage these costs using different methods such as the FOB origin and FOB destination pricing systems. FOB doesn’t add any transport costs for the consumers but marketers aren’t keen on these options as it’s difficult to ensure all costs remain the same. The FOB destination system gives the consumers the costs of transportation, helping to keep the costs the same each time. Logistics has to work together with marketing to find the right option.

Production
Production decisions need to work with logistics and there are many different interfaces where they can work together. When marketers increase product offerings the logistic challenges are increased in several areas including storage, tracking and identification. Product design can also have implications on logistics too; designs can cause problems with storage, damage control and space.

Promotion Decisions
Marketing and logistics have to work together to make many promotional decisions. When good are being promoted it’s important to have plenty of the promoted items in stock. A sales campaign can damage a company if this isn’t the case. By working with logistics it’s possible to coordinate promotions to push through products with high levels of stock that need to be shifted.

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