7 Ps of Logistics Sector

7 Ps of logistics sector
1) PRICING
The price is a key element of the marketing mix.It must be acceptable to the target customers and it must reflect other components of the mix accurately. The price of the service is the value attached to it by the service provider and it must correspond with the customers perception of value. If the service priced at too high a level, it will be seen as poor value for money by customers who will not buy it. On the other hand, if the price is too low, the service may be perceived as shoddy or inferior in quality.
E.g. Transportation of goods offer at different prices according to the distance and location, & in warehousing price is charge according to the space occupied by goods.
Some Pricing Concepts:
Price Skimming: Here, the supplier skims the cream off the market by offering a product or service at a higher price on a low volume basis. This is particularly appropriate for new product in new market situations where a proportion of consumers is always prepared to pay more for new, innovative goods. Frequently, the price reduces after a period as products become more popular & the sales volume increases.
E.g. In case of perishable product a logistic company can charged higher prices and
vice- versa in case of cargo products.
Penetration pricing: In this case, the price is set at a low level in order to attract high volume sales, thus penetrating the market & gaining substantial market share. For new products &services, the payback period is lengthy, but with the advantage of establishing a strong market position. The strategy is especially suitable for use when entering highly competitive market
E.g. In courier DTDC & Blue Dart charged their customers not-so-high prices, because they faced a lot of competition from other providers, the biggest being Indian postal services.
Mixed pricing: This pricing method is a combination of both of the above mentioned methods.
E.g. Indian postal services started off by charging very high prices to its customers, but then brought its price quite low afterwards, which was because of competition.
Differential Pricing: Under this approach, different prices are charged for the same service at different/same times or to the same/different customers.
E.g. Logistics companies can charge different prices according to the nature of goods, in case goods required more safety during transportation charged higher prices and vice-
versa for goods which are unbreakable
2) PROMOTION
Promotion is used to communicate information about goods and services to target audiences their by facilitating the exchange process. Promotion plays an important role in informing, educating, persuading and remanding customers. This role is even more important in the services sector industry where there is a high degree of intangibility so there is no physical product to attract the customers attention. Also, effective communication is required to inform the customers about their role in the delivery process.
E.g. In logistics sector the companies put logos and tag lines on their delivery vehicle, they also provide company uniform and various gifts which has logo and tagline of company & they also use their offices for promotion
3) Place
Services, unlike products, cannot be stored & transported. This implies that services must be available must be available for consumption at the point of production. In fact the consumers are a part of the service delivery process. The inseparable nature of services means that they must be made accessible and available to the customers for the exchange to take place. Because of intangibility of services they cannot be stored, transported & inventoried. Also because of inseparability, they must be created & sold at the same time. These 2 characteristics make the channel very short.
4) People
People play a major role in service organizations. It is their responsibility to see that the customers needs and wants are satisfied. This requires the employees to be well motivated and focused about their job. The providers have to be in the highest state of readiness and also in the highest level of skill.
When several organizations vie for what is essentially the same group of customers, the level of customer service offered becomes a very important differentiator. This becomes even more important in the case of the service industry where the product is mostly intangible and thus cannot be a differentiator . Also, the inseparable nature of the services implies that the human element forms intrinsic part of service package. the service industry can be classified into either High contact or Low contact based on whether it is a labour-intensive or equipment based service since the logistics sector is so varied it has under it both high contact and low contact services.
It is the employees of an organization which represents the organization to its customs. In an organization, basically the employees are the contact personnel with customer. Therefore an employee plays an important role in the operation of an organization, in logistics the employees are given the change or work on the basis of size of the project.
E.g. DTDC has a strength of 170 people & people are given salaries & incentives according to the work.
5) Physical Evidence

7 Ps of Logistics Sector

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What are the different pricing strategies discussed in the text?

What role does promotion play according to the text?

7 Ps of logistics sector

Some Pricing Concepts:

vice- versa in case of cargo products.

versa for goods which are unbreakable

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