Logistics
The Role Of Efficient Logistics In Achieving Optimal Pricing
By Isaac Ngatia
The goal of every marketer is to ensure products and services that a business offers resonate and meets the goals of the end user . Creating effective communication and all the messaging are all important . However , the ultimate comes at the ‘ when ’ and ‘ how ’ a given product gets to the customer . The background planning , reviews , monitoring as well as the hassles to ensure a product reaches the customer comes down to one key thing - logistics . Whether it ’ s a farmers ’ market to bring produce to wakulima market , or a manufacturing plant importing machinery from China , having the product reach the destination in time , in the expected condition and to the satisfaction of the buyer comes to logistics . Having an optimal process has an impact on the cost , which ultimately influences the final price passed down to the customer .
Logistics involves the planning , implementation , and control of the movement and storage of goods , services , and information within a supply chain . It encompasses various activities , including transportation , warehousing , inventory management , order fulfillment , and distribution . Efficient logistics ensures that products are delivered to the right place , at the right time , and in the right condition .
This cuts across markets and businesses , no matter the size . Effective logistics are both the underlying levers that make significant differences as well as cogs that ensure efficiency along the processes .
Logistics have an impact both at a macro and micro level , and marketers need to be abreast of any developments along the way . Covid era disruptions provided key learnings , which have continued to date albeit on a steeper curve .
Unlocking Africa ’ s market potential relies greatly on having efficient logistics , which not only ensures the smooth flow of goods from manufacturers to consumers but also significantly impacts pricing strategies .
Global trading hubs such as Singapore , Dubai , Amsterdam , continue to thrive because of the underlying efficiencies in their logistics .
But why should marketers be interested in efficient logistics ?
• Lower inventory costs , which contribute to more competitive pricing , and without sacrificing the profitability of the company . In addition , by maintaining optimal inventory levels , businesses can minimize carrying costs , such as storage and insurance expenses .
• Minimized supply chain disruptions , as efficient logistics systems can assist to minimize supply chain disruptions . By proactively identifying and addressing potential issues , businesses can avoid costly delays and stockouts . This stability allows your business to maintain consistent pricing , avoiding sudden price hikes due to supply chain interruptions . For instance , the disruptions along the red sea have resulted in price increases , currently denoted as the red sea inflation .
• Achieving economies of scale , either via consolidation , timely delivery or optimizing routes to the markets . Such a benefit can then be passed to the customers .
• Better negotiation power with suppliers and transportation providers , as by demonstrating reliability and consistency , the business can negotiate favourable terms and rates .
Marketers therefore need to keep an eye on the local and global logistics sector to understand the dynamics , changes and the effect these aspects have on their products . Whether its produce from a farm in Kinangop to Marikiti market ; or from a manufacturer in Industrial area to a wholesaler in Kajiado ; or from a manufacturer in Korea to the port of Mombasa , it is paramount for the marketer to understand the logistics to enhance the movement of goods , and work hand in hand with the logistics team to realize the benefits of efficient logistics .
Isaac Ngatia is a market analyst , based in Dubai , covering the Middle East and Africa region . He is the author of ‘ Mwafrika - a book on understanding the people and markets in Africa ’. You can reach him on this and related issue via email at : Itngatia @ gmail . com or on Twitter @ IsaacTN .
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