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8/7/2019 LOGISTICS HAS GAINED IMPORTANCE DUE TO THE FOLLOWING
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INTERNATIONAL LOGISTICS
International marketing is becoming more important tocompanies as the world shifts from distinct nationalmarkets to linked global markets. Globalization bringshomogenization of consumer needs, liberalization of trade, and competitive advantages of operating in
global markets. Companies are forced to think andact globally in order to survive in such a dynamicenvironment. All these elements have a deep impacton the development and the positioning of companies
on international marketplaces where competition iscruel. Furthermore, another significant changeconcerns the customers since they are moredemanding in term of quality, lead time and order fulfillment
8/7/2019 LOGISTICS HAS GAINED IMPORTANCE DUE TO THE FOLLOWING
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According to Council of logistics management:
³Logistics is the process of planning, implementingand controlling the efficient, effective flow and
storage of goods, services and related
information
from point of origin to point of consumption for thepurpose of conforming the customer
requirement´
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Raise in transportation cost.
Production efficiency is reaching a peak Fundamental change in inventory philosophy
Product line proliferated
Computer technology
Increased use or computers
Increased public concern of products Growth of several new, large retail
chains or mass merchandise with large demands & very sophisticated
logistics services, by pass traditional channel & distribution.
Reduction in economic regulation
Growing power of retailers
Globalization
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CONCEPT OF INTERNATIONAL
MARKETING LOGISTICS
Word, ¶Logistics¶ is derived from French word µloger¶, whichmeans art of war pertaining to movement and supply of armies.Basically a military concept, it is now commonly applied tomarketing management. Fighting a war requires the setting
of an object, and to achieve this objective meticulous planningis needed so that the troops are properly deployed and thesupply line consisting, interalia, weaponry, food, medicalassistance, etc. is maintained. Similarly, the plan should beeach that there is a minimum loss of men and material while, at
the same time, it is capable of being altered if the need arises. As in the case of fighting a war in the battle-field, themarketing managers also need a suitable logistics plan that iscapable of satisfying the company objective of meetingprofitably the demand of the targeted customers.
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SIGNIFIGANCE OF MARKETING
LOGISTICST
he important of a logistics systems lies in the fact thatit leads to ultimate consummation of the salescontract. The buyer is not interested in the promisesof the seller that he can supply goods at competitiveprice but that he actually does so. Delivery according
to the contract is essential to fulfilling the commercialand legal requirements. In the event of failure tocomply with the stipulated supply of period, the seller may not only get his sale amount back, but may alsobe legally penalized, if the sales contract so specifies.
There is no doubt that better delivery schedule is agood promotional strategy when buyers are reluctantto invest in warehousing and
keeping higher level of inventories. Similarly, better and/or timely delivery helps in getting repeat orders
through creation of goodwill for the supplier
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SOME OTHER ISSUEIN ILM
1. Transform in the customers attitude towards the
total cost approach rather than direct cost
approach .
2. Technological advancement in the fields of information processing and communication.
3. Technological development in transportation
and material handling. 4. Companies are centralizing production to gain
economies of scale.
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5. Most of the MNC organizations are
restructuring their production facilities on a global
basis.
6. In many industries, the value added by
manufacturing is declining as the cost of
materials and distribution climbs.
7. High volume data processing and transmissionis revolutionizing logistics control systems.
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8. With the advancement of new technologies,managers can now update sales and inventoryplanning faster and more frequently, and factories can
respond with more flexibility to volatile marketconditions.
9. Product life cycles are contracting. Companies thathave gone all out to slash costs by turning to large
scale batch production regularly find themselvessaddled with obsolete stocks and are unable to keeppace with competitors¶ new-product introductions.
10. Product lines are proliferating. More and more
product line variety is needed to satisfy the growingrange of customer tastes and requirements, and stock
levels in both field and factory inevitably rise.
11. The balance of power in distribution chain is shifting
from the manufacturers to the trader.
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OBJECTIVES OF MARKETTING
LOGISTICS
The General objectives of the logistics can be
summarized as:
1. Cost reduction
2. Capital reduction
3. Service improvement
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THE SPECIFIC OBJECTIVE OF AN IDEAL LOGISTICS
SYSTEM IS TO ENSURE THE FLOW OF SUPPLY TO
THE BUYER, THE:
right product
right quantities and assortments
right places
right time
right cost / price and,
right condition
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1. Improving customer service
As we know, the marketing concept assumes that
the sure way to maximize profits in the long run isthrough maximizing the customer satisfaction. As
such, an important objective of all marketing
efforts, including the physical distribution
activities, is to improve the customer service
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2. Rapid Response:
Rapid response is concerned with a firm's ability tosatisfy customer service requirements in a timelymanner. Information technology has increased thecapability to postpone logistical operations to thelatest possible time and then accomplish rapiddelivery of required inventory. The result is
elimination of excessive inventories traditionallystocked in anticipation of customer requirements.Rapid response capability shifts operationalemphasis from an anticipatory posture based on
forecasting and inventory stocking to responding tocustomer requirements on a shipment-to-shipmentbasis. Because inventory is typically not moved in atime-based system until customer requirements areknown and performance is committed, littletolerance exists for operational deficiencies
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3. R educe total distribution costs:
Another most commonly stated objective is to minimize
the cost of physical distribution of the products. As
explained earlier, the cost of physical distribution
consists of various elements such as transportation,
warehousing and inventory maintenance, and any
reduction in the cost of one element may result in anincrease in the cost of the other elements. Thus, the
objective of the firm should be to reduce the total cost
of distribution and not just the cost incurred on any
one element. For this purpose, the total cost of alternative distribution systems should be analyzed
and the one which has the minimum total distribution
cost should be selected
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