What is Marketing Logistics?
Marketing logistics is the process of distribution of goods and services from the producers to the target (ultimate) consumers that ensures the right product at the price, time, and place.
Marketing logistics is also called physical distribution that is concerned with managing the physical flow of products from the supplier’s point to the consumption point. In simple words, the sign of coherence of marketing and logistics is the marketing logistics.
It is one of must focus tasks for the marketing manager or marketer. As it is a combination of marketing and logistics. Marketing is the activity that aims at making informed customers about the products and services a marketer offers. And, logistics is the set of parties, channels, or intermediaries that guarantee the secure distribution of goods and services to the ultimate users.
Only the product, price, place, and promotion do not make marketing successful i.e. might not drive the result as expected, here, marketing logistics aims at making these 4Ps right, which means it guarantees the acceptance of customers and profits to the firm.
By Stanton – marketing logistics is the activity that is concerned about the movement of the right amount of products to the right place at the right time. It is a system of planning and acting that guarantees that ordered goods will be supplied on time, with the use of proper means of transportation, in the quickest way and possibly the cheapest.
It combines the 4Ps of the marketing mix to achieve customer service. In doing so, it distributes products safely at the right time to the right market and minimizes the total cost of the flow of product from point of production to the point of consumption.
Essentials of Marketing Logistics (7R’s of Logistics)
Logistics management involves the careful planning, implementation, and control of activities that participate in the physical movement of products to the final users.
The distribution of products to the customers might be difficult, expensive, and even costly. A simple supplier or marketer may or may not be able to deliver the right offer to his target customer.
The 7R’s (rights) are the fundamental elements of the marketing logistics concept. For a better understanding and result from logistics activities, one should to clearly understand these 7R’s of logistics. They are,
The first essential of marketing logistics is the right product. What do you think, what is the right product?
The right product is one that best fits the expectation of you (customer), needs, and wants. The logistics manager should consider the delivery of the right product as a demand made by the consumer, if not logistics activity fails to meet its objectives.
Right quantity means the amount or number of products that customers demand and the supplier’s delivery system delivers the number of products as desired by customers. Right quantity also means adding the right amount of ingredients to the products.
A clear understanding of customers’ orders and the planning of the delivery process is required to deliver the right quantity to the customers.
Right price means a reasonable price that clarifies all the doubts about a product price if anyone interferes with that product’s price.
The price of the product or service must be based on materials used, labor expense, delivery, and other significant elements consideration. The price should be acceptable to the target market.
The right price ensures the fairness of the prodcut quality and other features and customers know about the benefits of products just by looking its price rate.
Time, what to say about time? We all are disappointed with someone or something (especially people) when they do not work on time.
In logistics, the distribution of products should be based on time as it is written on the finalized order i.e. at the right time. One or ten-minute loss in delivery, the huge loss to the supplier or producer or marketer.
One best example of the right time is the delivery of Pizza. You see when a pizza delivery man just becomes 1 minute late, the customer’s intent is to get that pizza for free or they cancel the order even the delivery man is at the door of that customer.
When delivering the products to the final consumers, the products must not be scratched, that is the products should be in the right condition as when it was while packing.
The delivering party should consider the situation of the product while delivering. The products should be packed in a way that guarantees the safety of the products inside the package.
However, while packaging the products one should pack based on the nature of the product, one should focus on the right packaging materials. Because once the products reach the customer’s door with damage or any scratch there is almost no chance for acceptance.
The right customer is one who ordered the products in your store. Or, the logistics manager should carefully study the market based upon the product’s quality, demand, supply, and condition to find out the right customers.
If a company produces quality products, the right customers for this company are quality-sensitive customers, who always seek quality either the price is a bit more.
The delivery of the ordered prodcut should be to the customer who ordered that product.
The right place is where the right i.e. ultimate customer lives. To make logistics activity profitable the distribution of products should be at the right place.
To ensure the delivery at the right place, the supplier should carefully, asks the customers detail including name, id, number, location, etc. If there is only order with the ordered man’s name – no other information, the supplier might not deliver to the right customer location.
Making the right product, setting the right price, right quantity, right condition, identifying the right customer, distribution at the right time goal finally depends upon the right place (location) of the target customer. All the above six elements of marketing logistics might fail if the supplier or producer does not know the right place of the customer.
Functions of Marketing Logistics
The functions of marketing logistics include a set of interrelated functions with specific boundaries. The major marketing logistics functions can be listed as below:
- Inventory management and control
- Order processing
- Material handling and customer service decision
Transportation is the element of marketing logistics that links geographically separated markets and facilities. Its elements create utility facilities on products by moving from the production point to the point of consumption.
One can either use railway transportation, or high ways transportation, or water transportation, or pipeline transportation, or air transportation.
In this modern business world, one benefit of transportation is that it assures regular mobility of factors of production from one place to another, so it makes continuous production possible.
A warehouse is a place where the products are kept in a way whenever needed or required by the market they can be easily distributed.
One can use either a private warehouse (owned by a single person), a public warehouse, or bonded warehouse (imported products are stored before the payments of duties by the importers).
One benefit of warehousing is that it lengthens the life of products and maintains product quality.
Inventory Management and Control
Lots of inventories are not managed properly, hence inventory management is concerned about the management of keeping the right size of th stocks of products at right time.
Inventory management is concerned with balancing the cost of carrying inventory, ordering products from supplies, and controlling other inventory costs to achieve the desired level of customer satisfaction.
Order processing brings the marketing logistics system into action. It involves collecting, checking, and transmitting sales order information.
In addition, it checks the orders made by different customers and ensures what are right orders and what are not.
Material Handling and Customer Service Decision
Material handling is also called physical handling of products is an activity that is important in inventory, warehousing, and transportation. Material handling systems are crucial in enhancing the capacity of the warehouse thereby reducing the product handling time.
Proper material handling is key to quality customer service. Better the material handling mechanism, the higher the customer satisfaction.