Page 163 - DMGT546_INTERNATIONAL_TRADE_PROCEDURE_AND_DOCUMENTATION

International Trade Procedures and Documentation

Notes Product

One function of logistics marketing is finding out who your customer is and how to get the
product or service to the customer. Each customer can have individualized needs so the logistical
services provided may vary from customer to customer. Regardless of these differences, the
customers expects 100 percent conformance and assured reliability at all times with every
transaction.
The goals of this aspect of marketing logistics include filling the order, on-time delivery, precise
invoicing and zero damage.

Price

An organization bases pricing decisions on both internal and external factors. Marketing logistics
must recognize price drivers. The profile of the customer, the product and the type of order are
factors that drive the price. These changes are not typically controlled by marketing logistics.
However, marketing logistics must react to these factors and understand how the factors affect
customers’ decisions. Discounts for quantities and the related logistical cost structure can impact
the price the customer will ultimately pay for the product or service.
Additional factors driving price include the shipping costs based on the size, weight and distance
the organization will ship the item. Further, the size of the manufacturing run, labor costs and
the types, quantities and quality of the materials used in the manufacturing process can affect
price.

Promotion

Promotion is another important aspect of an organization’s marketing logistics process. When
bringing a product to market, the organization must coordinate the logistics of the various
marketing materials.
For example, the art department might design the artwork for the product’s box and an outside
supplier might manufacture the boxes with the artwork. Marketing logistics can help to ensure
that all of these entities work together and produce the marketing materials needed to sell the
product.
Place

The function of place in marketing logistics allows the organization to simplify the transactions
between a logistics provider and the customer.

The organization must execute logistics in such a way that the customer is not aware of the
complexities involved in the logistics process.
For the customer, the output is always more important than the process. The organization
should, therefore, never expose the backroom processes involved with logistics delivery to the
customer. Also the location of the factory, warehouse and customer can greatly impact the
marketing logistics process by increasing or reducing costs.

Example: Locating a factory in Mexico might reduce the labor costs associated with a
product. However, at the same time locating the factory in Mexico might increase the shipping
costs and negate any cost savings.

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