An effective management system at the enterprise is characterized by the flexibility of the organizational structure. This property is determined by a number of reasons, among which are environmental factors that require prompt changes in terms of integration processes in a particular market segment. For this reason, there is a need to combine the concepts of logistics and marketing, which have many interrelated elements that reveal aspects of the functioning of the enterprise.
The essence of concepts
With a wide examination of the subjects involved in the field of the study of logistics and marketing, it becomes obvious that they are practically united by the target objects of management and coordination. If in one case channels, methods and configurations of supply are provided, then in the second - sources and final consumers of the supply object. At the same time, there are different conceptual representations of the relationship between logistics and marketing in the context of entrepreneurial activities.
For example, as a derivative of this relationship, a methodology can be understood in accordance with which methods for optimizing the activities of an enterprise within the framework of direct marketing management will be found. A different approach suggests that marketing tools as such will help optimize logistics processes by expanding its structure through a comprehensive analysis of the channels of product movement from the production conveyor to the consumer.
In both cases, a complex system of many components is considered, with which logistic models and marketing research tools can somehow interact. The following structural and functional blocks can be included in the basic set of elements of such a system:
- Market research.
- Assortment formation.
- Establishment of pricing policy rules.
- Advertising.
- Sales organization.
- Service.
Also in the basics of marketing and logistics, management functions are naturally considered, involving the introduction of such structural components as planning, organization, control and development strategy. Depending on the level of the enterprise, the list of these components may change in the direction of reduction or expansion. For example, in international marketing systems, currency and financial differences, factors of customs problems, the nuances of international law, will be taken into account.
Reasons for relationship
In the course of the enterprise’s activities, various structural units operate, performing their specific tasks. Logistics may affect the technological processes of the marketing department, financial services, control and production systems. Why is the relationship between logistics and marketing highlighted?
To answer this question, you should turn to the basic tasks that the company solves through marketing tools:
- Market research.
- Analysis of consumer requests.
- Determination of the assortment of goods.
- Planning and developing a strategy for market behavior.
The marketing service solves tasks related to analytical activities and research directly in isolation from logistics. In the first two paragraphs, the interests of logistics are affected only indirectly and it cannot affect them systematically.
However, the assortment formation already lays down organizational requirements for the future design of the logistic model. For example, for a particular product, it is necessary to organize channels for the supply of raw materials, inventory management schemes and solve the problems of transportation to the market. Regarding the fourth point, logistics and marketing can interact on the platform of the service being developed.
In other words, through logistics, strategic marketing objectives will be solved. But there is also feedback, in which a list of factors is determined to determine the possibilities of promoting and marketing products. The same development of a market strategy cannot be considered without potential opportunities taking into account logistics resources.
Differences in the functions of logistics and marketing department
Despite the expressed points of interaction, the management and coordination of various aspects of the enterprise should be divorced according to the functions of marketing and logistics. Direct marketing functions include the following:
- Research. Again, purely analytical measures are supposed to determine the company's positioning, target market segments, product characteristics, pricing policy, etc.
- Decision on the release of products. The feasibility of the production and release of a new product is also evaluated in the marketing area.
- Identification of resource sources. Another example of the fulfillment of the marketing function, although in this case the logistics costs should also be taken into account, which may be associated with transportation costs, storage of material and technical resources, etc.
- Process management. This example shows the possibilities for combining marketing, logistics and enterprise management. The management process is implemented by making responsible decisions, however, the basis for them will be logistic opportunities and marketing analysis.
Of course, there are functions that are directly related to the field of logistics. These include all activities related to the design, technical organization and operation of delivery channels, sales and distribution of raw materials and goods. And this is only part of the tasks that are conditionally isolated solvable by the logistics department.
Marketing Logistics Sales Approach
As a result of using a logistic model built taking into account marketing tools, the implementation of deliveries is considered. This is a technological task, which from the point of view of marketing is understood as customer service. Logistics infrastructure itself, without taking into account market demand and developing criteria for assessing the attractiveness of goods in a particular segment, does not bear any benefit.
The concept of the interaction of logistics and marketing is expressed as a mechanism for balanced customer service, taking into account psychological factors related to the field of market research.
Based on the foregoing, we can formulate the concept of marketing logistics as a marketing approach. Its difference from the usual marketing support for sales is the integrated emphasis on the product in the general context of production management.
The sales and sales processes are presented as a means of communication with a potential client based on data on the study of his request, but also with the possibility of flexible changes in the parameters of the proposal. Thus, logistics and marketing allow you to clearly define the criteria of the requested with its content and at the same time control the quality of the sale of goods at all stages. The supply and supply service is controlled by the marketing data and can be quickly adjusted due to the possibilities of change and logistic models already at the technical level.
Marketing base for logistic design
Marketing tools lay the foundation for the company’s commercial activities, establishing guidelines for the technical stages of organizing trade. From the point of view of the formation of logistics links, this toolkit can operate in several directions:
- In relation to consumers. The demand for products and services is being studied.
- With regard to the development of measures to satisfy consumer demand.
- In relation to suppliers. We study the capabilities of suppliers, conducted
- control and monitoring of measures for their development.
At the stage of developing a commercial project within the enterprise, marketing and logistics perform a key function in drawing up a plan for organizing and managing information flows in the operational and strategic period. The following factors are distinguished as prerequisites for the effective organization of the management scheme:
- Solvent demand for target goods among consumers.
- The need for the proposed products and services.
- The presence of sufficient economic, organizational and technological resources of the company.
Marketing can provide the expected result in terms of fulfilling its function only under the condition of a comprehensive market analysis, taking into account also the capabilities of suppliers. Only in this case can one speak of an enterprise as oriented towards a logistic development model, in which it is possible to achieve end-to-end management of the flows of goods and resources in conditions of fierce competition.
Logistics in the implementation of marketing strategies
Entrepreneurship at the present stage exists in conditions of uncertainty. Marketing, in turn, acts as a means of timely adaptation to changing conditions, and one of the objects of change is the logistics model of the enterprise. In this context, the role of logistics in marketing is not always correctly assessed by managers who may set goals incorrectly when solving strategic tasks.
Therefore, the marketing department as a conditional author of the development strategy should prioritize as flexibly as possible, objectively assessing the capabilities of the enterprise structure, taking into account the need for further adaptation. One of the indicators of potential resources that may be required for possible changes is precisely the logistics system.
As an example of the implementation of the adaptation model, we can cite Russian companies that regularly face the challenges of entering new market areas. Effective assistants in the implementation of such plans are logistics and marketing, which at the same time deal with their issues. In particular, the marketing department is developing an assortment formation program for a new market, predicts optimal product characteristics and develops a service service policy.
With regard to logistics, it is engaged in the development of supply chains, sales and distribution, taking into account maintaining the maximum level of service. As you can see, although both functional structures work in parallel, their tasks complement each other, making it possible to effectively achieve the common goal of integration into the new trading environment.
The interaction of marketing logistics with finance and production
The logistics system that the company uses to develop a strategy and its implementation interacts with several functional areas, including production administration and financing. In the course of planning, it is logistics that determines the conditions of production, and sometimes technological support. In terms of financing, such functions as a control system, development of an information system, budget planning will be significant.
An interconnected review of logistics, marketing and finance will also set criteria for cost analysis, processing conditions and order entry. Administration and financing are closely related to the development of budget control systems, the resources of which can be spent on logistics tasks. This may be the arrangement of a warehouse for the storage of goods, the organization of a transport network, the choice of equipment, etc.
Factors of production activity are related to logistics in terms of scheduling production, sales forecast, order processing schemes, general dispatching, quality control, etc. And this is not to mention the basic tasks of organizing the external and internal communication infrastructure that industrial logistics is involved in. Marketing has no direct relation to these schemes, but it determines the equally important subject-assortment orientation of production, which affects the implementation parameters of the same logistic model.
For example, the wider the assortment of products, the more acute the tasks of the logistics department will be when developing systems of material support and organizing flows at all stages of production activity. Depending on the requirements of strategic objectives, the assortment can be formed both taking into account possible difficulties in the production, delivery and distribution of goods, and without taking them into account.
Areas of interaction between logistics and marketing
In the conditions of the correct construction of the organizational model, the problems that arise when the interests of logistics and marketing tasks are merged should be solved by the department that is responsible for cross-functional coordination. The transition from the control of individual functions to an integrated management system naturally causes a violation of functional boundaries in the work processes of different services. There is the effect of an invasion of conditionally alien areas, which creates the prerequisites for conflict.
Maintaining a balance between the concept of separation of powers and tactics of effective interaction between the departments of logistics and marketing in sales, where tools for expanding sales areas and attracting investments, will be of key importance in terms of resolving conflicts. A clear definition of areas and positions of these factors of organizational and management activities will help maintain this balance.
So, marketing takes direct control of supply and demand, also dealing with methods of differentiating services. Logistics, in turn, performs the functions of developing and managing the mechanisms for implementing the company's proposals.
Distribution Logistics and Marketing
Coordination of operations performed by different departments of the corporate environment is also a tool for balancing different services in achieving common strategic objectives. In ensuring this condition, the distribution and coordination of production processes within the enterprise is important. Most involved in the development of this scheme are employees of the distribution logistics department. Marketing in this case is a managed entity in the processes of inter-organizational logistics coordination.
A new function of controlled distribution is introduced, during the implementation of which the tasks of the logistics department and related services are solved. For example, the same marketing with the sales department can become sources of certain “values” when creating a coordination model.
Conclusion
With all the differences between the corporate departments of large companies, they should all be oriented towards common goals and objectives. The factors of interaction between services in the management of logistics and marketing are explained by the similarity of interests, however, a close merger in coordinating the actions of different departments often becomes a cause for conflict.
Initially correctly developed strategy and model of its implementation helps to prevent possible problems of organizational nature. Moreover, it is often not the tools of creating an organizational model that come to the forefront in terms of the effectiveness of coordination of services, but the mission of the company, the definition and implementation of which comprehensively takes into account not only material, technical, but also socio-psychological factors of business processes.