Logistics and costumer value

Logistics and costumer value

1. The marketing and logistics interface

   • Marketing based on 4 Ps
     • Place is losing power
       • Why? Because customer service is gaining power.
         • Why? Because customers are accepting substitutes and the technology between the products is similar
           • This is causing 2 new tendencies: 1) Customer expectation is increasing 2) Commodity type markets are increasing

2. Delivering costumer value

   • Is becoming more important every day
     • Why? Because success or failure is determined by costumer value.
   • Like an Iceberg, where the adquicition cost is visible but service, warranty, maintenance, techincal suport and managment cost are not visible
   • Can be resumed in one formula: Costumer Value= Perception of benefits / Total cost of the ownership
     • Also: Costumer value = quality x service / cost x time

3. What is costumer service?

   • Basicaly, costumer service is the action to provide time and place utility
     • PRODUCT IN CUSTOMER HANDS>>>> value
     • Product in seller hands= 0
     • To transfer products and services to the customer
   • Composition
     • Pre transaction elements
       • Accessibility Organisation structure System flexibility
     • Transaction elements
       • Inventory Order information
     • Post transaction elements
       • Call out time Warranty Complaints

4. The impact of out of stock

   • Represents a big loose for the company
     • A study proves that only 15% of people in an out of stock case will delay their purchase.
     • Directly related to Marketing Effectiveness
       • why? Because of the following formula
         • Consumer franchise X Customer Franchise X Supply chain efficiency = Marketing Effectiveness

5. Customer service and customer retention

   • Customer retention is las important as new costumers
     • That's why companies should focus on keeping the interest in the existing customer and not just trying to find new ones
   • Focused in "servitisation" strategy
     • If you have a good product but you don't give a good customer service your clients are going to leave you for your competence or for similar products.

6. Market supply chains

   • The classical approach to supply chains is focus on manufacture but the things are changing.
     • This old way of seeing things put customer at the end of the supply chain.
   • Today the most important part of the supply chain is the costumer.
     • Today, the most succesfull companies put customer at the beggining of the supply chain
       • To identify customer needs a company have to put it target on groups or segments because every single customer is different

7. Defining customer service objectives

   • The main goal of defining customer service objectives is to have a perfect order.
     • The perfect order is achieved when the costumer requirements are met in full
       • Eventhough a company should give the same service to every single customer it is very hard to achieved it.
         • This is why, ones again the company has to understand the big difference in profitability between customers. This leads to the 80/20 rule
     • To calculate the actual service level you have to multiply your percentages of quality in your service.
       • Example: % of deliveries on time X % of deliveries in-full X % of deliveries with error = REAL PERFECT ORDER

8. Setting customer service priorities

   • A company need to set the service priorities beacause of many reaseons
     • Customers are all different
     • Some customers needs more attention than others
       • The company has to do an analysis of the most important products and customers that they have. Ones again, we return to the 80/20 rule.
     • Giving a perfect service is expencive

9. Setting service standards

   • The definition of a perfect service is to accomplish all the customer expectation
     • To make it happen a company has to focus all the efforts on the customer.
       • This can be done by giving a very good service before, while and after the purchase.
       • The delivery of the product and the avaibility of the products (NO OUT OF STOCK) is very important
       • Giving the customer the maximum commodity has to be a main goal

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