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Unit 2 Customer Service and Logistics Contents Role of Logistics in Marketing Mix The definition of customer service Importance of customer service in logistics Logistics service quality management Three levels of customer service in logistics Issues in improvement of customer service Role of Logistics in Marketing Mix Marketing, production, and logistics are collectively managed to achieve customer service objectives. Role of Logistics in Marketing Mix The fundamental utility of a product is created through production, marketing and logistics. Production: form utility Marketing: possession utility Logistics: place and time utility Role of Logistics in Marketing Mix The definition of customer service The definition of customer service Importance of customer service in logistics Customer service and cost are the two measures used to evaluate logistics system effectiveness. Customer service policies should be developed with the understanding that a critical purpose of logistics is to deliver to internal and external customers as agreed upon. Superior customer service is often achieved through a combination of fast response, local presence, and quick, reliable delivery. Logistics service quality management Reliability stable supply of inventory capable of providing desired performance rapid supply of accurate information Continuous improvement Three levels of customer service in logistics Three levels of customer service in logistics 1. Basic customer service: supply and performance Supply: the ability of providing products and services immediately as customers require Supply can be set up by inventory which includes basic inventory and safety inventory. Supply can be measured by criteria such as stock-out frequency, ratio of supply to demand and order fulfillment rate. Performance can be measured by speed, reliability, flexibility of response and recovery of defect. Three levels of customer service in logistics 2. The Perfect Order: reaching
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