Marketing Logistics

By
Pramod Kumar Mishra

1
Introduction to marketing logistics
Marketing is a process by which the companies
create value for the customers and build strong
customer relationships in order to capture value
from customers in return
--- Kotler et al !"#$#%
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&ontinued'
Product
Price
Promotion
Place
(Ps) of Marketing*
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&ontinued'
Process
0fficiency 1esponsiveness
&ost 2ime
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3rivers behind marketing logistics

&ustomer sophistication

Perceived product e.uality

2ransition from a sellers) to a buyers) market

Price competition
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Marketing-logistics link
4irm Market
5ogistics
6
6nderstanding logistics

Purchasing

4low of goods7services

3istributing

2ransporting

1everse logistics

8arehousing

4low of information
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Marketing logistics
Marketing logistics involves planning9
implementing and controlling the physical flow
of goods7services and related information from
point of origin to the point of consumption to
meet customer re.uirements at a profit
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-b:ectives of marketing logistics

2o reduce cost

2o provide better customer service

2o maintain customer relationships

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5ogistics tasks

;ow orders should be handled,

8hich warehouse should be chosen for storage,

;ow much stock should be kept on hand,

;ow should the goods be transported,

;ow should the information be monitored,

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Key decision areas
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-rder processing

4irst-in-first out

<dvanced payment orders

5ong vs short distance

;igh volume vs low volume

Based on lead times etc

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Purchasing9 material handling9
and inventory control

Materials re.uirement planning !weekly%

0conomic order .uantity !0-=%

>afety stock and re-order point

Material handling procedure !manual vs automatic%

?I2 !@ero inventory%

Make to stock !push% or make to order !push% or hybrid

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EOQ
economic order quantityis the order quantity that minimizes
total inentory holdin! "osts and orderin! "osts# $t is one o% the
oldest "lassi"al &rodu"tion s"hedulin! models# 'he %rame(or)
used to determine this order quantity is also )no(n asWilson
EOQ Modelor Wilson Formula# 'he model (as deelo&ed *y
+ord ,# -arris in 1913.*ut /# -# ,ilson. a "onsultant (ho
a&&lied it e0tensiely. is !ien "redit %or his in1de&th analysis#
EOQ a&&lies only (hen demand %or a &rodu"t is "onstant oer
the year and ea"h ne( order is deliered in %ull (hen inentory
rea"hes zero# 'here is a 20ed "ost %or ea"h order &la"ed.
re!ardless o% the num*er o% units ordered# 'here is also a cost
for each unit held in storage, commonly known
asholding cost. sometimes e0&ressed as a &er"enta!e o% the
&ur"hase "ost o% the item#
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8arehousing and distribution

5ocating warehouses !own7AP5Ps%

&entrali@ed vs decentrali@ed

&ross-docking

2rans-shipment

Product handling procedure !manual vs automatic%

3eferred distribution7product differentiation

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Cross-dockingis a &ra"ti"e in thelo!isti"so% unloadin!
materials %rom an in"omin!semi1trailer tru")orrailroad "ar
and loadin! these materials dire"tly into out*ound tru")s.
trailers. or rail "ars. (ith little or no stora!e in *et(een# 'his
may *e done to "han!e the ty&e o% "oneyan"e. to sort
material intended %or di3erent destinations. or to "om*ine
material %rom di3erent ori!ins into trans&ort ehi"les 4or
"ontainers5 (ith the same destination or similar destinations#
less1than1tru")load 46'65 # $n the 6'6 tru")in! industry. "ross1
do")in! is done *y moin! "ar!o %rom one trans&ort ehi"le
dire"tly onto another. (ith minimal or no(arehousin!# $n retail
&ra"ti"e. "ross1do")in! o&erations may utilize sta!in! areas
(here in*ound materials are sorted. "onsolidated. and stored
until the out*ound shi&ment is "om&lete and ready to shi&
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2ransportation
Mode of transportation !along with product shipment re.uirements%
1oad !adv and dis-adv%
1ail !adv and dis-adv%
>ea !adv and dis-adv%
<ir !adv and dis-adv%
Pipeline !adv and dis-adv%
4leet si@e
-wn7AP5Ps
5ead time vs cost trade offs
'he most %requent trade1o3 in lo!isti"s is *et(een trans&ortation and inentory
"ost
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5ogistics flows

4unctional supply chain*

3airy-food supply chains in India

Innovative supply chain*

<pparel supply chain

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