Marketing Center

The marketing center consists of two groups that have different controls from each other :

a. Groups of supply fulfillment activities are referred to as order fulfillment activities or logistics
activities.

b. A group of activities related to getting orders, which take place before orders are received or
marketing activities.

Logistics Activity

Logistics activities are activities that are involved in moving goods from the company to the
customer and collecting receivables due from customers. These activities include transportation to
distribution centers, warehousing, shipping, delivery and collection of accounts receivable.

Marketing Activity

Marketing activities are activities carried out by the company to obtain orders. These activities
include marketing testing, formation, training, and supervision of the workforce, advertising, and
sales promotion.

Control techniques that can be applied to logistics activities, in general, cannot be applied to
marketing activities. Failure to see this fact can lead to inappropriate decisions. For example, there
is often a reasonable correlation between sales volume and the burden of the proportion of sales
for advertising. The meaning is that sales expenses vary with sales volume, but such a conclusion
is wrong. Flexible budgets that are adjusted to changes in sales volume cannot be used to control
sales costs that occur before sales take place. Neither the advertising budget nor the sales
promotion budget should be adjusted to accommodate changes in short-term sales volume.