Marketing and Logistics: The Dynamics of Distribution

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Marketing and Logistics The Dynamics of
Distribution

• Third Logistics Conference
• Emirates Towers - Dubai
• February 25, 2004

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TransLogistique Canada and ME

• TLC was incorporated in Toronto 2002 as a
  response to needs of Dubai and Middle East
  Community for top credentials and certification
  programs.
• Logistics Supply Chain Management Surveys and
  Research carried on ongoing basis.
• Alliances with leading certifying bodies in
  Canada and USA for Logistics, Leadership and
  Tourism.
• TLC presence with associates in UAE through
  training workshops, seminars and conferences.

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Theme of Third Logistics Conference in Dubai

• Marketing and Logistics The Dynamics of
  Distribution Feb 25, 2004
• Surging Supply Chain Strategies Fujairah Leads
  The Way Feb 23, 2003.
• Logistics in Emerging Economies A Case For Dubai
  October 22, 2002.

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Issues in Marketing and Logistics Academic
Perspective

• A task force set up in 1997 under Dr Thomas
  Freese, CLM Logistics Educational Materials
  Project Committee CLM Toolbox
• There was a huge concern that standard textbook
  authors like Philip Kotler and Gary Armstrong
  addressed the influence of logistics in one
  chapter (12) of ninth edition but yet the faculty
  everywhere did not relate the importance of this
  new business function that overwhelm corporate
  strategy in reducing cost to stay lean and
  agile in the competitive market.

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The Marketing-Logistics Toolbox

• Creating a set of materials for textbook authors
  that will enable them to develop a more in-depth
  and interesting coverage of logistics in texts
  and
• Creating a set of materials that will enable
  faculty to comfortably deliver materials that
  informs and excite students.
• University of Sharjah Experiment in 2002 with
  TLC strategy.

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Issues in Logistics and Marketing Industry
Perspective

• Companies around the world were consumed by the
  vision of customer satisfaction and retaining
  good customers was more than challenge.
• As is evident , to secure a NEW customer was more
  expensive than keeping OLD customer through
  effective marketing programs.
• Logistics- Marketing Interface Study of Auto
  Industry by Dr Daniel Flint and Dr John Mentzer
  changes in the value desired by customers and
  logisticians role in fulfilling them. It
  highlights the strategic role of logistics in
  delivering value to customers.

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Suppliers Retain Strategically Important Business
Customers

• Focus on customer value strategies involves
  anticipating and responding to changes in
  customers desired value- what customers want
  from suppliers.

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Issues in Logistics and Marketing Economic
Strategy Planning Perspective

• In an economic growth strategy resting on
  alternatives to revenues from oil, Dubai has been
  a leader in UAE and GCC Region in implementing
  proactive policies that encourage FDI ( Foreign
  Direct Investment) duly supported by a sound
  infrastructure in logistics and transportation
  system.
• The concept of city building and creating free
  trade zones is right approach to capture
  attention of metanational and trans-global
  companies- primarily through logistics
  capabilities and resources.
• Eventually - The Trade Follows the Flag of UAE

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Dubai Commercial Success

• The concept of hub-and-spoke system of trade
  policy and investment pursued by Dubai in the
  UAE.
• Dubai has lived up to the hype of a diversified
  economy that is committed to development of
  ports, free zone, highways, bridges and
  multi-modal transportation system.
• The key to Dubais success is being what its
  neighbours are not open-minded, openhearted and
  wide open for business.

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Issues in Logistics and Marketing Dubai and GCC
Growth Perspective

• If other parts of the country and the region
  could emulate the success story of Dubai, then
  the combined potential of GCC would be comparable
  to other more vibrant trading blocs NAFTA / EU
  /MERCUOR, ASEAN and so on.
• Everyone of the countries in these trading blocs
  have focused on logistics capabilities and
  marketing prowess.
• The lesson is loud and clear How and Why
  Changes Occur That Influence Customer Behaviour.

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Logistics Related Changes in Desired Value ( Dr
Flint and Dr Mentzer 1997)
Customers desire changes from
Customers desire changes to

• Supplier product delivery
• Supplier services characteristics
• Suppliers solving logistical problems on request
• Suppliers being logistics responsive
• Supplier know your own logistical capabilities

• Integrated supplier systems delivery
• Supplier person performances
• Suppliers identifying and solving logistical
  problems before being asked
• Suppliers being logistics proactive
• Supplier know our business as well as you do
  yours, including logistics challenges

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A Fix-It in Logistics Anticipates Changes and
Customers Desires Profitable Path in Business
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More Specific Changes L M -1
Resulting Customer Consequences
Desired Supplier Attributes

• Supplier logisticians involved in projects early
• Supplier logistician think longterm, becoming
  involved with multiple customer contacts, working
  on prototypes
• Supplier become QS9000 certified
• Supplier logistician understand customers
  customers

• Customers leverage logistics expertise,learn,reduc
  e costs because changes can be made earlier
• Customer can differentiate, retain known supplier
• Customer improves quality in own processes
• Customer can create greater value to his customers

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More Specific Changes L M 2
Resulting Customer Consequences
Desired Supplier Attributes

• Supplier do distribution and related service
  design work for the customer
• Supplier reduce cycle times
• Supplier logistician tighten delivery windows
• Supplier logistician start bar coding

• Customer removes costs of non-core work
• Customer can bring vehicles to market faster
• Customer can plan more effectively and increase
  productivity
• Customer improve inventory management

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More Specific Changes L M 3
Resulting Customer Consequences
Desired Supplier Attributes

• Supplier logistician customize packaging
• Supplier logistician provide cost saving ideas
• Supplier share logistics technology information
• Supplier carry inventory
• Supplier locate warehousing / manufacturing near
  customer around the globe

• Customer improves facility utilization
• Customer reduces costs, learns
• Customer learns and improves
• Customer reduces costs
• Customer reduces costs, improves cycle times

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The Success Story in Logistics Repeats
Understanding Customer Value and Desires
Dubai Freight Forwarders you know them on first
name terms who have made it to top of NAFL
membership directory
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Hierarchy Level Supplier Logistics Attributes and
customer consequences
Volatility Number of logistics related changes
taking place simultaneously
Form Existence Priority Performance level
Changes in Customers Desired Logistics Value
Magnitude Size of the change from previous desires
Rate Evolutionary Revolutionary
CVC - Customer (desired) Value Change
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Logistics Capabilities Adds Value To Marketing
Dubai Research Study done in 2000
A firm attempting to differentiate itself
through a competitive strategy will best achieve
this goal by leveraging its logistics
value-added capabilities. That is focus on the
customer by regularly providing new services and
flexibility in accommodating special requests.
In doing so, a firm will strategically position
itself against competitors by offering different
and more highly valued services to customers. As
customers change (as is often the case in the
Gulf region), so will a firm that follows this
differentiated strategy. Strategically employing
varying logistics capabilities that add value
will foster this change in the growth and
development of a business enterprise.
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4 Ps of Marketing and Logistics Merged (contd.)
P1 .Logistics Product A complex set of
multi-company and functionally integrative
skills, relationships with 3 PL service
providers, Knowledge of and access to software
packages, Knowledge of capital equipment and
infrastructure Options and extensive experience
in price cutting etc
P2 Logistics Price What the logistician wants
in return from the Marketer (e.g.
recognition, Resources) and The dirhams value
placed on Providing this expertise To the
external customer
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4 Ps of Marketing and Logistics Merged
P4 Logistics Promotion Advertising or selling In
a traditional marketing sense. Logistician
actively sell Their value to internal And
external customers In person and / or ensure
that their expertise and capabilities are
represented in internal documents as well
as Promotion campaigns
P3 Logistics Place Logistician him /
herself being in the right place at the right
time. Internal sales and marketing Meetings in
order To influence decisions
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Logistician As A Marketer
Purchasing Manager Designer / negotiator of new
desired value (logistics And otherwise) Other
key customer logistics Contacts Designer,
influential, user of new desired logistics value
Logistician Creator of Supplier Logistics
Value Marketing, Sales Professionals Coordinato
r of solutions To respond to all changes In
customer desired value
Arrows indicate a logistician marketing to
another party
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Sara Lee Case Study of Marketing and Logistics

• A key to success for the 175 million Sara Lee
  Corp.'s Household and Body Care Division (HBC) -
  with its more than 800 SKUs - is establishing and
  maintaining just the right balance between supply
  and demand
• Shift in core competencies outsourcing
  manufacturing and distribution meat packing and
  knitting mills sold off.
• Technology has helped HBC. For the HBC sales
  force, the company uses an enterprise-level
  forecasting module within the demand planning
  system, which enables the sales force to do
  customer-level forecasting fairly easily.
• With the data now available, HBC forecasts by
  SKU by warehouse. The company's logistics
  operations determine how product supply is
  allocated. Customer service has visibility into
  stock in all warehouses, and can decide where and
  when to cut orders.

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Palisades Toys Small Is Beautiful

• Palisades Toys' continued existence depends on
  delivering the goods, every time.
• Maintains its market position with giant retail
  stores such as Target and Musicland
• Palisades uses UPS Supply Chain Solutions
• Realistic expectations for what a 3PL can do

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Your time and attention is appreciated. Enjoy the
rest of presentations today!!!

• Here is a final thought
• Nothing is more endangered in the modern world
  than the powerful combination of hard work toward
  meaningful goals joined with an exuberant embrace
  of the present moment. 
• -- Tom Morris