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ib_ilm

ib_ilm

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Published by rsrao70

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Published by: rsrao70 on May 30, 2010
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12/24/2010

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1
UNIT-I
[Marketing Logistics: Concept, objectives and scope; System elements; Relevanceof logistics in international marketing; International supply chain management andlogistics; Transportation activity
 – 
internal transportation, inter-state goodsmovement; Concept of customer service.]
Learning objective:
After reading this chapter you should be able to understand the following
 
Marketing logistics concept, objective, scope and its elements
 
Interface between international marketing and logistics & supply chainmanagement.
 
Role of transport in logistics.
 
Concept of customer service.INTERNATIONAL LOGISTICSIntroduction: LOGISTICS
International marketing is becoming more important to companies as the worldshifts from distinct national markets to linked global markets. Globalization bringshomogenization of consumer needs, liberalization of trade, and competitiveadvantages of operating in global markets. Companies are forced to think and actglobally in order to survive in such a dynamic environment. All these elements havea deep impact on the development and the positioning of companies on internationalmarketplaces where competition is cruel. Furthermore, another significant changeconcerns the customers since they are more demanding in term of quality, lead timeand order fulfilment. In this context, firms must be more and more flexible andreactive to anticipate and to adapt to such changes. This quest for flexibility andreactivity affects the conception and the management of firms and more generallytheir logistic systems and contributes to the development of partnership relations, tothe emergence of mergers or strategic alliances between companies. As a result, a
 
2firm can no longer be considered as an isolated entity but as a component of a widersupply network.International Firms have begun to implement various strategies in order to remaincompetitive in world market. Logistics is one of the key areas in the process of international marketing as the delivery of goods to the buyer is as important as anyother activity in business and marketing. Quite often, the most crucial part inInternational trade is the timely delivery of goods at a reasonable cost by theexporter to the importer. In fact, the prospective buyer may be willing to pay evenhigher price for timely supplies. The emergence of logistics as an integrativeactivity, with the movement of raw materials from their sources of supply to theproduction line and ending with the movement of finished goods to the customerhas gained special importance. Earlier on, all the functions comprising logisticswere not viewed as components of a single system. But, with emergence of logisticas an important part of corporate strategy due to certain developments in the field of international marketing has gained special significance. Before discussing thevarious aspects of logistics, let us look at its definition:According to Council of logistics management:
“Logistics is the process of planning, implementing and controlling the
efficient, effective flow and storage of goods, services and related informationfrom point of origin to point of consumption for the purpose of conforming the
customer requirement”.
This definition clearly points out the inherent nature of logistics and it conveysthat Logistics is concerned with getting products and services where they areneeded whenever they are desired. In trade Logistics has been performed since the
 
3
 beginning of civilization: it‟s hardly new. However implementing best practice of 
logistics has become one of the most exciting and challenging operational areas of business and public sector management. Logistics is unique, it never stops!Logistics is happening around the globe 24 hours a days Seven days a week duringfifty-two weeks a year. Few areas of business involve the complexity or span thegeography typical of logistics.
I - CONCEPT OF INTERNATIONAL MARKETING LOGISTICS
Word, ‟Logistics‟ is derived from French word „loger‟, which means art of war 
pertaining to movement and supply of armies. Basically a military concept, it isnow commonly applied to marketing management. Fighting a war requires thesetting of an object, and to achieve this objective meticulous planning is needed sothat the troops are properly deployed and the supply line consisting, interalia,weaponary, food, medical assistance, etc. is maintained. Similarly, the plan shouldbe each that there is a minimum loss of men and material while, at the same time, itis capable of being altered if the need arises. As in the case of fighting a war in thebattle-field, the marketing managers also need a suitable logistics plan that iscapable of satisfying the company objective of meeting profitably the demand of thetargeted customers.From the point of view of management, marketing logistics or physical distribution
has been described as „planning, implementing and controlling the process of 
physical flows of materials and final products from the point of origin to the point
of use in order to meet customer‟s needs at a profit
. As a concept it means the art of managing the flow of raw materials and finished goods from the source of supply totheir users. In other words, primarily it involves efficient management of goodsfrom the end of product line to the consumers and in some cases, include the

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