By Brian Bass Updated January 25, 2019
Marketing logistics involve planning, delivering and controlling the flow of physical goods, marketing materials and information from the producer to the market. The aim is to meet customer demands while still making a satisfactory profit. To maintain your competitive edge, you need to create an effective strategy regarding product, price, place and promotion. These four functions of marketing logistics help the organization to reach the target customers and deliver the products or services sold by the organization to these customers.
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The four functions of marketing logistics are product, price, place and promotion.
Function One: Product Delivery
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.
Function Two: 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.
Function Three: 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.
Function Four: 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. For 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.
