Olotewo, J., 2015.

Marketing and Logistics Strategy: The Integration Process, International Journal of Online Marketing Research, 1(1), pp. 8-12

International Journal of Online Marketing Research

www.ijomr.org

ARTICLE

Marketing and Logistics Strategy:

The Integration Process
Dr. John Akpesiri Olotewo
Department of Marketing, Girne American University, Turkey

ARTICLE INFO ABSTRACT

Doi: 10.5455/IJOMR.2015201333 The purpose of this paper is to examine how firms can integrate both
Key Words: marketing and logistics functions for better performance. The paper will
Marketing strategy, also highlight whether the strategy is a long run or a short run approach.
Logistics strategy, It will also create a model on how manufacturing firms can integrate both
Marketing and logistics marketing and logistics function for better performance. The paper has
Integration, developed a long-term strategy for integrating marketing and logistics in a
Internal processes, manufacturing company. The model is based on four levels of integration,
Cross-functional relations. including corporate integration, strategic customer integration, strategic
supplier integration, and marketing and logistics strategy integration. The
Article History: corporate level integration involves the development of corporate and
Received | 9 July 2015 business strategies that are aimed at creating customer and shareholder
Accepted | 1 August 2015 value. The strategic customer integration is an internal process that
Published | September 2015 involves the alignment of the needs of the customers with the value
propositions of a company. The strategic supplier creates an alignment
Corresponding Author: between the suppliers and customers. This level provides the integration
Dr. John A. Olotewo
between the customer co-creation value and the supplier value creation.
Department Of Marketing, Girne
The model provides a coordinated approach that can allow managers in
American University, Turkey.
the marketing and logistics to make more informed decisions.

Introduction risks, there is the need to create network-based

The business networks and models have evolved over
time as companies are shifting from the traditional
hierarchical, vertically integrated structures to looser
associations with the key suppliers. The business
networks consist of a series of activities and
connections that require close management and
monitoring. Companies are increasingly outsourcing
those activities that they do not have enough
competence, and thus expanding the network.
Organizations in such networks are exposed to risks,
particularly when the networks fail to perform as
expected. In order to eliminate or minimize these
business models that integrate decision making from
all the participants of the network starting from the
suppliers to the end customers. The development of
this model is essential but challenging, and it is
primarily the integration of marketing and logistics
and supply chain strategies.
According to Jüttner, Christopher and Baker (2007),
marketing strategies are usually associated with how
a company plans to conduct its marketing operations.
It is concerned with how to achieve effective market
segmentation, and how the company can position

International Journal of Online Marketing Research |Volume 1| Issue 1 | September 2015 [8]
Olotewo, J., 2015. Marketing and Logistics Strategy: The Integration Process, International Journal of Online Marketing Research, 1(1), pp. 8-12
itself to its potential customers based on its products.
The marketing strategies are also concerned with
decisions on appropriate pricing, distribution, and
promotion of the product. Therefore, the marketing
strategies determine how the product is received and
its success in the market. The logistics and supply
chain strategies the relationship between a company
and its collaborative partners in the network, and
encompasses process configuration across the critical
logistics and supply chain processes. The logistics
strategies emphasize on the optimization of the
activities across different organizations, and it is
mainly dependent on the interactions with the internal
company marketing and sales resources, processes
and skills. Therefore, there is the need to integrate the
internal marketing strategies with the cross-
organizational business activities and processes.
According to Flynn, Huo and Zhao (2010), marketing
and logistics networks will enjoy mutual benefits
through close alignment of the strategies. The
logistics and supply chain management can leverage
an organization’s market orientation and marketing
strategies. Moreover, it can assist in the creation of
the superior customer value through facilitation of the
market strategy in the global logistics environments.
Flynn, Huo and Zhao state that the marketing
performance of an organization can be improved
through the logistics and supply chain strategy.
Moreover, the logistics strategy acts as a link
between an organization’s market orientation and
marketing success. There are many research studies
that have examined the relationship between
marketing and logistics systems, but there is no
model that has been developed to conceptualize this
interface in a logistics network context from a
strategy perspective. This paper provides a model
that can be used to align the marketing strategies to
the logistics and supply chain strategies. The paper
will begin by examining the existing literature on the
marketing and logistics management integration
based on a strategic perspective. The second section
will provide a strategic model consisting of different
integration levels, and provides the managerial issues
within and between the levels. The final section will
discuss the managerial implications of the model to
an organization.
Marketing and Logistics Integration Based on A
strategy Perspective
Most of the research studies have shown that
integrating marketing strategies and logistics
strategies can improve the performance of an
organization. However, there is no conceptual model
that has been developed to integrate marketing and
logistics from a strategy perspective. It is important
International Journal of Online Marketing Research |Volume 1| Issue 1 | September 2015
for organization to develop strategies that are affected
with the external partners in the logistics network.
Thirdly, the strategy development involves definition
of a set of processes for strategy implementation. The
development of a strategy involves the identification
of the capabilities, processes, and systems within
organizations. Therefore, formulation and
implementation of a strategy is dependent on the
context that the development takes place.
There are three strategic context characteristics that
can be examined at the interface between marketing
and logistics. Firstly, the strategic integration
connects activities from marketing and logistics to
customer value creation. Secondly, the strategic
integration connects activities across organizations
within the logistics network. Thirdly, strategy
provides a set of defined processes for strategy
implementation.
A strategic Integration Model
This model is based on the internal integration
process of firms, particularly at the business unit
level. This framework supports the supports the
concept that marketing and logistics integration leads
to the effectiveness of business strategies in the
logistics contexts. The levels of integration that are
included in this framework include corporate
integration, strategic customer integration, strategic
supplier integration, and marketing and logistics
strategy integration.
The corporate level integration involves the
development of corporate and business strategies that
are aimed at creating customer and shareholder value.
There must be a closer association between the
marketing and logistics integration and the customer
and shareholder value creation (Patel, Azadegan, and
Ellram, 2013). In large manufacturing organizations,
the success of marketing strategies is dependent on
the ability to improve shareholder value. However,
customer s and relationships between channels
should be regarded as strategic assets rather than
objects of marketing actions. According to Green,
Whitten and Inman, most of the managers regard the
logistics system as a means to enhance short-term
cost effectiveness. However, the short-term profit
improvements based on the logistics network can
cause the long term financial strength of a company
to decline, and thus destroy the shareholder value.
The purpose of the corporate integration is to ensure
that the corporate objectives of the company are
translated into business unit objectives. The
objectives of the business unit are based on both
marketing and logistics, and are developed to
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Olotewo, J., 2015. Marketing and Logistics Strategy: The Integration Process, International Journal of Online Marketing Research, 1(1), pp. 8-12
leverage the connection between customer value and
shareholder value.
The strategic customer integration is another internal
process that involves the alignment of the needs of
the customers with the value propositions of a
company. The value creation for customers involves
a series of activities that are conducted by customers
in order to attain specific objectives. The customer
value is based on the amount of information about a
product and the knowledge and skills on how to use
the product to suite his or her needs. The close
association between the marketing and logistics is co-
creation value. In most cases, companies use market
segmentation as a strategic tool to attain their
marketing objectives (Vickery et al., 2003). There is
the need to develop strategic customer integration as
the basis co-value creation across target customer
segment. In short, the strategic customer integration
aims at the development of a segmentation approach
that is based on the co-creation value. The approach
must support the recognition of co-value creation
opportunities jointly through marketing and logistics.
The management of supplies is a critical aspect of
any organization, and in this case manufacturing
Figure 1: A conceptual model for Logistics and Supply chain Integration
The marketing and logistics integration shown above
provides the integration process at all levels. As
indicated, the marketing and logistics strategy
International Journal of Online Marketing Research |Volume 1| Issue 1 | September 2015
organizations. This level provides the integration
between the customer co-creation value and the
supplier value creation. The integration process
synchronizes the upstream supplier segmentation and
the downstream customer segmentation. The
objective of the strategic supplier integration is to
create an alignment between the suppliers and
customers.
The marketing and logistics strategy integration level
defines how the supplier integration and customer
integration can be translated into effective value
creation processes that will ensure seamless activities
from suppliers to customers. The process
configurations created by the integration of the
marketing and logistics strategies must be supported
by the value proposition decisions. This model is
aimed at providing managers that will assist in the
long term creation of the customer and shareholder
value by aligning marketing and logistics strategies.
The model provides a coordinated approach that can
allow managers in the marketing and logistics to
make more informed decisions. The figure below
shows the model for marketing and logistics
integration is shown in the figure below.
integrates that internal processes defined by the
corporate and business unity strategy. These
strategies are responsible for the definition of the
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Olotewo, J., 2015. Marketing and Logistics Strategy: The Integration Process, International Journal of Online Marketing Research, 1(1), pp. 8-12
marketing and logistics strategies. The following
steps will be followed in order to facilitate the
integration between marketing and logistics. The first
step is the definition of the current level of internal
integration. This involves the identification of the
activities of interaction and collaboration in the
system.
There are various internal activities that are
integrated at this level including developing a
common understanding of responsibility, reaching
mutual understanding, and mutual goal achievement.
These are the most important step toward the
integration process because the marketing and
logistics activities require a common understanding
and a mutual goal achievement. The other integration
activities include group decision making, exchanging
materials and ideas, teamwork, exchanging reports
and forms, sharing or information and resources,
group decision making, and supervised group
planning. These internal activities must be properly
defined in order to allow effective integration
between marketing and logistics.
The second is for the manufacturing company to
identify the link between the level of collaborative
behavior and the level of integration. The level of
integration between the marketing and logistics
functions in a company depends on the level of
collaborative behavior of all the employees in
marketing and logistics in functional areas. The
marketing activities include pricing activities,
product promotion, market research, and product mix
management. The logistics activities are mainly
concerned with transport management, inventory
management, warehousing management, and delivery
of products and sharing of delivery information.
Generally, the logistics management is concerned
with the flow of products while marketing is
concerned with the management of the relationship
between the company and its products and customers.
There are various points where the activities of
marketing and logistics intersect. These areas include
customer service, packaging, distributions channel,
and information flow. For instance, the marketing
will be responsible for the selection of places and
areas that can be used for product promotion.
Moreover, it will prepare for proper environmental
conditions of promoting the company’s products. On
the other hand, the logistics system will be
responsible for the delivery of goods and materials
for promotion. Moreover, it will be responsible for
deployment of goods and services after promotion.
The cooperation between these activities will ensure
the realization of proper potential customer services
International Journal of Online Marketing Research |Volume 1| Issue 1 | September 2015
level. The success of these activities will depend on
information gathering, processing, preparation of
logistics and marketing tasks, and planning of the
marketing and logistics activities. As described
earlier, the group decision making, exchanging
materials and ideas, teamwork, exchanging reports
and forms, sharing or information and resources,
group decision making, and supervised group
planning will enable successful completion of these
activities for the manufacturing company.
Performance Improvement
The marketing and logistics integration model
described in this paper will enable a manufacturing
company to increase its performance in various ways.
For instance, the supplier integration and customer
integration can be translated into effective value
creation processes that will ensure seamless activities
from suppliers to customers. This will be achieved
because the material flow from the suppliers to the
customers will be effective because of integrated
information gathering and sharing between marketing
and logistics. According to Daugherty and coauthors
(2009), effective information sharing between
marketing and logistics will lead to the design of
optimal flow of products, shorter lead times, and
simplification of administration. Moreover, the
marketing activities will identify the areas of market
demand while the logistics will move swiftly to
satisfy it. The integration of planning of marketing
and logistics activities will ensure that customer
demand is satisfied, and thus improve the creation of
customer value.
The marketing and logistics strategy integration level
defines how the supplier integration and customer
integration can be translated into effective value
creation processes that will ensure seamless activities
from suppliers to customers. The process
configurations created by the integration of the
marketing and logistics strategies must be supported
by the value proposition decisions. The value
proposition decisions are derived from the corporate
integration and business unit integration, which
determines the strategic position and internal
activities. However, the main strategy is to increase
revenues through increased sales and consumer
satisfaction.
Under this model, both marketing and logistics will
have a joint responsibility for customer service. Thus,
the cross-functional relations between marketing and
logistics will improve the company’s performance in
the marketplace. According to Gimenez and Ventura
(2012), poor working relations between marketing
and logistics will lead to lack of coordination and
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Olotewo, J., 2015. Marketing and Logistics Strategy: The Integration Process, International Journal of Online Marketing Research, 1(1), pp. 8-12

communication that is important for optimal
distribution of products in the market. The model
improves the working relations between marketing
and logistics, and thus will improve the distribution
of products in the market. This will lead to visibility
on orders, products, and stock, reliable service and
lead time, and proactive exception management that
will improve customer service.
company. Under this model, both marketing and
logistics will have a joint responsibility for customer
service. Thus, the cross-functional relations between
marketing and logistics will improve the company’s
performance in the marketplace. Finally, the model
provides a coordinated approach that can allow
managers in the marketing and logistics to make
more informed decisions.

This model is aimed at providing managers that will References

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This paper has examined the logistics and marketing Jüttner, U., Christopher, M. and Baker, S. (2007).
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The corporate level integration involves the chain strategy on customer service and
development of corporate and business strategies that financial performance: an analysis of direct
are aimed at creating customer and shareholder value. versus indirect relationships. Journal of
The strategic customer integration is an internal Operations Management
process that involves the alignment of the needs of
the customers with the value propositions of a
company. The strategic supplier creates an alignment
between the suppliers and customers. This level
provides the integration between the customer co-
creation value and the supplier value creation.

From the discussion presented in the paper, internal

activities must be properly defined in order to allow
effective integration between marketing and logistics.
Moreover, the manufacturing company must identify
the link between the level of collaborative behavior
and the level of integration. This will allow
successful integration between marketing and
logistics that will improve the performance of the

International Journal of Online Marketing Research |Volume 1| Issue 1 | September 2015 [12]