The “mantra” of marketing to have the right product in the right place at the right time has increased the importance of logistics and supply chain in the domain of marketing and distribution management. Logistics and marketing are referred to as key management orientations in a company and interpreted as the functional and integrated processes in company. It is essential to recognize the relationship between logistics and marketing before implementing any marketing strategy, be it related to product, price, packaging, promotion, and place. Marketing and logistics share a symbiotic relationship to offer good customer service and what happens in one department affects the other. Better coordination between marketing and logistics also offer competitive superiority in the market.
Product design and packaging is directly linked to efficient stacking, storage, and transport of products. The marketing strategy of having different SKUs and differentiating these SKUs by size, color, and style have put an additional demand on logistics management activities like warehousing and transportation. Various promotional campaigns like advertising and sales promotions need to be coordinated with logistics department so that the promoted products are available in sufficient quantities with the channel partners and warehouses to handle the additional sales generated through these promotional efforts. Customer satisfaction is linked with a company’s ability to provide reliable delivery, prompt service from the channel partners, and fast and on-time delivery of shipments of replacement parts in case of emergencies. Shortages of products with the channel partners will result in stock-out problems which will further affect customer satisfaction. Promotional strategies, such as quantity discounts to reduce inventory levels, are again a linkage between marketing and logistics.
Interfunctional coordination among the different processes in an organization is a key to create superior customer value. Logistics activities offer customer service by providing a place, time, and form utility by ensuring the product availability at the right time, at the right place, and in the right condition. On the other hand, Marketing enables possession utility by creating awareness of the product, pricing of the product, and the associated after-sales service and warranty on the product. An efficient and effective logistics management can help to strengthen customer relationships, customer loyalty, and customer equity.
Source: Richard R. Still, Edward W. Cundliff, Normal A. P Govoni, Sandeep Puri (2017), Sales and Distribution Management: Decisions, Strategies, and Cases, Pearson; Sixth edition.