The Relation Between Marketing and Supply Chain Management

MARKETING STRATEGY AND SUPPLY CHAIN MANAGEMENT

Anuradha Chatterjee        16125012

Harsha Sinha                        16125018

R Vishnuraj                        16125031

Rehan Atiqulla                16125033

Prajakta Sakpal                16125036

Shivam Gupta                16125039

Vijay Kumar                        16125049

Vinayak Modi                16125051

Abstract

This paper aims to investigate the growing collaboration between the supply chain of a firm and its marketing strategies, in order to foster operational success and drive financial performance. Addressing a lack of research on the relationship between marketing efforts and supply chain management, this paper reviews various prior relevant literature to discuss an emerging discipline that has not been heavily discussed yet - supply chain marketing. Several tested hypotheses have been included to better assess the interdependence of SCM and marketing and to appreciate the impact that such a holistic integration has, on enhancing customer value proposition and the overall performance of an organization.

Introduction

Marketing management is the science and art of selecting target markets and acquiring, keeping, and growing customers through creating, delivering, and communicating superior customer value. Supply chain management starts before physical distribution and means strategically procuring the right inputs (raw materials, components, and capital equipment), converting them efficiently into finished products, and dispatching them to the final destinations [1]. Hence it can be seen that both these aspects help in satisfying the customer needs in a better way and drive the profits for any company.  Effective supply chain management ensures that the superior customer value is delivered in the best way possible and hence, it is imperative for successful implementation of a marketing strategy.

Aligning marketing strategies throughout supply chain to enhance performance [2]

A strategic long-term relationship with the supply chain partners is a key to successful supply chain management which leads to satisfaction of the ultimate customers with the product/service and also the cost reductions. The primary processes of businesses that must be integrated and be in complete coordination are purchasing, manufacturing, marketing, logistics and information processes. The research question being dealt with in the paper is ‘whether marketing strategy at the supply chain level to satisfy the end customer leads to a better supply chain and ultimately leading to better organizational performance?’ Currently the competition of businesses is at the supply chain level and hence integrating marketing strategies with the supply chain will lead to a competitive advantage for businesses leading to happier end customers and hence it will ultimately lead to better organizational performance. A marketing strategy alignment model is proposed where marketing strategy alignment precedes the supply chain performance which precedes the organizational performance. The basic requirement for all of the above is the organisation must have a customer focussed approach towards business and also a strong ability to develop inter-frm relationships and exchange information and communicate effectively also called the relational exchange in order to effectively react to changes in the customer demands.

In order to have a successful marketing strategy alignment with the supply chain it is imperative for marketing representatives to get into a collaboration with the supply chain partners to work on the following:

• New product/service development planning right from the conception stage
• Pricing, promotion and distribution strategy for the end customers
• Create value for the end customers by developing integrated processes
• Communication of the value to the end customers by the help of integrated communication
• The ultimate goals of the marketing strategy alignment with the supply chain are:
• Capability enhancement of the supply chain for zero-defect product delivery, on-time delivery and delivery of the precise quantity demanded by the end customers.
• Elimination of incomplete, damaged or late deliveries
• Value added services delivery
• Speedy resolution of customer complaints lead to a relatively lower cost

The conclusions drawn from the research are that the supply chain performance is positively influenced by the marketing strategy alignment which leads to better marketing performance of the entire organisation which ultimately leads to improved financial performance. However, the financial performance of an organisation is not directly affected by the supply chain performance but linked via the marketing performance of the organisation which is expected because of the satisfaction levels of the end customers. The organisational performance is also indirectly linked to the marketing strategy alignment.

The interplay between key marketing and supply chain management capabilities: The role of integrative mechanisms [3]

This paper attempts to identify marketing strategy and supply chain management related factors and how they affect and get affected by each other, based on the integrative mechanisms that the company uses. For this, the authors have conducted a series of in-depth personal interviews with marketing and SCM executives, and conceptualized an empirical framework for the same.

Since it is widely accepted that marketing and supply chain are fundamental to any firm’s success, it is important to understand that relation between the two. And despite extensive research in the two fields, there still exists a disconnect between the two, and a lot needs to be done to integrate the two organisational functions. The authors recognise that there exist synergies between the two that need to be examined and the effect of integrative mechanisms that firms employ needs to be explored in detail.

In order to accomplish this, the authors ask the following questions:

• What are the key marketing and SCM capabilities deployed by firms?
• How do behavioural mechanisms affect the relationship between these capabilities?

The following aspects are covered by the authors in a qualitative study that are done through a qualitative research:

• Identification of key marketing and SCM capabilities and adding empirical insights to them
• Explanation of how innovativeness, market learning capability, supply chain agility, and relational capability are interrelated
• Explanation of how behavioural organisational forces affect these interrelationships

The authors have built their theoretical foundations as follows:

• Marketing and SCM capabilities:

Since both marketing and SCM are closely associated to develop and deliver value to the customers, this relationship can be seen through specific capabilities such as innovativeness and supply chain agility. Marketing acts as the source of knowledge that is key for competitive advantage, and SCM aims to improve effectiveness and efficiency. Together, these can prove to deliver superior performance on part of the company, but there exists a significant disconnect between the two because of generally conflicting objectives.