This document discusses the link between logistics and customer service, with a focus on delivery service. It makes three key points: 1) Logistics helps create customer service advantages through place/distribution and secondary impacts on product and promotion. Effective delivery service is especially important. 2) Customer service involves pre-transactional, transactional, and post-transactional components. Transactional service focuses on order fulfillment and delivery factors like time, information, flexibility, inventory, and accuracy. 3) Segmenting customers allows companies to tailor delivery service and other aspects of customer service to meet different customer needs. This improves customer retention by developing loyal, long-term customers.

1. Customer service – the link
between logistics and marketing
• Products are more alike (commodities)
• Customer service differentiates -> competitive
advantage
• Logistics helps create service in:
– Place/distribution (primarily)
– Product and promotion (secondary)
• Key part of customer service: DELIVERY
SERVICE
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2. 1. Types of service
• Pre-transactional/before purchase: deals with company
customer policy, which the customers are infored about
before purchase → ensures agreement on terms and
principles
• Transactional/the buying situation: deals with activities
during the order process, which influences the
customer’s satisfaction → What does the customer buy?
Do we do, what we promised? (ref. following)
• Post-transactional/after purchase: how do we treat the
customer after he has received the product → do we
check if he’s satisfied?
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3. 1.1 The transaction: What does the
customer buy?
1. The product:
– Standardised products (as a consequense of
globalisation)
– Specialised products (often b2b, adjustment
of components etc.)
► result: individualisation of mass produced
products, postponement
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4. 1.1 cont. (what does the customer buy)
2. Delivery service (The 5 D´s)
– Delivery time
– Delivery information
– Delivery flexibility
– Inventory service degree
– Delivery observance
• Overall evaluation of these factors provide a
conclusion to the relationship between the
customer’s expectations regarding service and
the company’s actual service level
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5. I.E.
• Quality:
– Product quality
– Process quality
which is more valuable for the customer is
individual (think expensive shop where you
return because the shop assistant was very
nice, or shop which survives because it has a
favourable return policy)
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6. 2. Customer retention:
• Goal for customer service is to develop
loyal customers = high life-long purchase
– Cost of finding a new customer is 5 (five)
times as high as the cost of keeping an
existing customer
– Need for special service for very loyal or very
important customers
Customer retention management
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7. 3. Customer segmentation
• Customers have different needs = need
for segmentation
– marketing decides need and want
– Logistics translates these needs and wants to
logistic factors (e.g. OWC/OQ p. 37/39 and
table 2.6 p. 50/51 for Coca Cola – always
within reach – goal for product availability in
e.g. distribution channel)
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8. WORD OF WISDOM
• ”[..]There is a limit to how many
customers/customer groups a company can
realisticly keep in close dialogue with and adjust
to. The company will thus focus on specific
customer groups. In relation to Porter’s generic
strategies, such a selection will correspond to a
focus strategy, where the company choses a
segment of the market and differentiates the
delivery service to these customers”
Trojka: logistik, p. 87 (own translation)
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9. 4. Quality
• One of the things, which differentiates from customer to
customer is the definition of quality
• Quality is:
– Individual, dynamic, a value
– The ability to meet a need, no waste/errors, better than competition etc.
• Quality focus allows for improvements in both effeciency and
competitive strength
• Quality can be managed in two ways:
– Quality management: proactive, in construction, production, marketing
or logistics, e.g. TQM
– Quality control: reactive, stops errors as early in the system as possible,
e.g. ISO 9000
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10. Logistical consequenses of
customer service
• Define customer expectation regarding:
– The product
– Service (before, during and after)
• Evaluate the company’s potential for meeting these expectations,
• Adjust or negotiate (b2b) – both regading service and price (next
topic)
• Ensure information- and knowledge management: order
management, information regarding preferences, tendencies etc. To
ensure that changes in customer preferences are continuously
registred and used to improve customer service (proactive
managment, CRM – customer relations management)
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11. Assignments:
• Case study 2.4 p. 43/45 (IKEA)
• Restaurant Malibu (distributed)
• Customization of shoes: www.nike.com
– Design your own shoe using the Nike-ID system and
answer the following questions:
• How many different versions of your shoe does Nike have to
have in stock to be able to supply your exact choice
(approx.)? How would you manage this inventory (give
concrete examples, please)?
• How is it possible for Nike to sell the customized shoes for
almost the same price as the standards in the shops? Do
you see any problems for the shop managers in Nike selling
the customised shoes over the net?
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