Page 161 - DMGT546_INTERNATIONAL_TRADE_PROCEDURE_AND_DOCUMENTATION

International Trade Procedures and Documentation

Notes The interrelation of different logistic elements and their costs should be based on total cost
rather than individual costs.

Self Assessment

Fill in the blanks:

1. ........................... logistics means the movement of materials received from suppliers.
2. ....................... objective is to ascertain that products arrive in good condition, in the right
place and at the right time.

3. The objective of an ........................ control system is to ensure the constant availability of
products
4. Customer ...................... is the key interface between Marketing & Logistics.

5. .............................. plays a significant role in developing and maintaining customer loyalty
& continuous satisfaction.
6. ......................................... must ensure that no/absolute damage happens while the Product
is in the custody of Logistics.
7. ........................ Costs incurred during transportation should be considered as a throughput
cost, since they will continue regardless of inventory levels

8. Transportation by Road is perhaps the only mode which can be used .....................
9. The main goals of ........................... in any Organization would be to take care of proper
storage & transport.

10. Transportation’s objective is to ascertain that ....................... arrive in good condition, in the
right place and at the right time.

7.4 Concept of Marketing Logistics System

Managing the components of Logistics, like – product (procuring, assembling or self-production),
form (shape, size, label, design), time (the period of booking and execution of the order), quality
(quantity, material, colour, in view of the competitive products in the market, or as per demand
of the customer), price (low, high, competitive), services (labelling, packaging, transportation,
supply) – are the vital factors in the overall marketing process. Simply, Logistics is a subsystem
of Supply Chain Management, which is a key part of Marketing process.

7.4.1 Relationship of Logistics to Marketing and Production

While the production element in the marketing-mix leads to creation of ‘form’ utility by taking
decisions as product line variety, design, colour brand, etc. The distribution element comprising
distribution channel fixation and physical movement, creates ‘time’ and ‘place’ utility by ensuring
that the produced goods reach the place and time selected by the buyer.
Logistics is the designing and managing of a system in order to control the flow of material
throughout a firm. This is a very important part of an international company because of
geographical barriers. Logistics of an international company includes movement of raw
materials, coordinating flows in and out of different countries, selection of transportation, cost
of the transportation, packaging of the product for shipment, storage of the product, and
managing the entire process.

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