Marketing logistics involves not only outbound distribution moving products

Marketing logistics involves not only outbound

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Marketing logistics involves not only outbound distribution (moving products from the factory to resellers and ultimately to customers) but also inbound distribution (moving products and materials from suppliers to the factory) and reverse distribution (moving broken, unwanted, or excess products returned by consumers or resellers). That is it involves entire supply chain management - managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers, as shown in Figure 12.5. Figure 12.5 Supply Chain Management Logistics managers must work with a number of groups including marketing, information systems, distribution, transportation, global trade management, strategic sourcing, and after-sales service groups to ensure that overall priorities are strategically aligned and key activities such as forecasting, purchasing, production planning, order processing, inventory, warehousing, and transportation planning are coordinated.
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Companies today are placing greater emphasis on logistics for several reasons. First, companies can gain a powerful competitive advantage by using improved logistics to give customers better service or lower prices. Second, improved logistics can yield tremendous cost savings to both a company and its customers. Third, the explosion in product variety has created a need for improved logistics management. Improvements in information technology have also created opportunities for major gains in distribution efficiency. Finally, more than almost any other marketing function, logistics affects the environment and a firm’s environmental sustainability efforts. So developing a green supply chain is not only environmentally responsible but also can be profitable Goals of the Logistics System Some companies state their logistics objective as providing maximum customer service at the least cost. Unfortunately, as nice as this sounds, no logistics system can both maximize customer service and minimize distribution costs. The goal of marketing logistics should be to provide a targeted level of customer service at the least cost. The objective is to maximize profits , not sales. Therefore, the company must weigh the benefits of providing higher levels of service against the costs. Major Logistics Functions Given a set of logistics objectives, the company is ready to design a logistics system that will minimize the cost of attaining these objectives. The major logistics functions include warehousing, inventory management, transportation, and logistics information management. Warehousing Production and consumption cycles rarely match, so most companies must store their goods while they wait to be sold. A company must decide on how many and what types of warehouses it needs and where they will be located.
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The company might use either storage warehouses or distribution centres .
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