Marketing and Logistics

The logistics function, a still unknown cross-company function in most companies, is deeply linked with Marketing function.

One of the key success factors of modern companies lies in the implementation of an actual and effective collaboration between both professions.

Indeed, supplying the good product to the market in good service conditions and in the good place is a common concern and requires a perfect coordination of both functions.

The recent development of ECR method (launched in 1994) aiming at developing more reagent logistic organizations in their capacity to answer the customer’s request while taking care of costs reduction, strengthens the notion of necessary collaboration of all extended company’s actors since the strategy definition until its execution.

Going into details of old notions like Marketing Mix - Philip Kotler’s 4P, we can already point out clearly the interaction between both professions:

• Product: operations of delayed differentiation, integration in products of all additional services regarding delivery,
• Price: consideration of the product’s complete cost (including logistics and storage costs), margins and purchasing conditions control,
• Place: choice of an orders distribution mode (built to order or on stocks, stocks allocation along the supply chain),
• Promotion: Demand planning and adapted logistic organization.

The necessary collaboration appears also clearly if we focus on the market’s knowledge and aspirations.

Indeed, a logistics can be successful regarding a given market only if the marketing function knows its expectations and needs, defines clearly the relative service offer and shares it with the logistic function, which responsibility will be to implement means and organizations necessary to respect this offer.

On the other hand, the logistic function thanks to its proximity with customers, both through physical operations realization and supply or needs planning functions, has key information regarding the knowledge of the customers markets.

A collaborative process and joint studies between both professions ensure a “customer oriented” internal logistics organization, correctly sized and economically optimized.

Once the internal logistics mastered, the company can integrate its suppliers, providers and customers in an extended and efficient supply chain.

In order to synchronize marketing and logistic processes, it is important for each party to know the basics of the other one’s profession. That is why, Free-Logistics.com © proposes you a presentation of the Marketing function basics.