LOGISTICS HAS GAINED IMPORTANCE DUE TO THE FOLLOWING

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



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´



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



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.



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



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.



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.



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.



OBJECTIVES OF MARKETTING

LOGISTICS

The General objectives of the logistics can be

summarized as:

1. Cost reduction

2. Capital reduction

3. Service improvement



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



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



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



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

LOGISTICS HAS GAINED IMPORTANCE DUE TO THE FOLLOWING

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