4.4 Testing and analysis of the second hypothesis (The strategic integration between marketing and global supply chain will lead to more competitive advantage and increase customer service & loyalty leading to increased outcomes).
Besides the use of self-fulfilling questionnaires, the researcher also conducted interviews with experts in supply chain management and marketing activities who were all directors of the respective departments in the three selected organizations (Coca-Cola, Pepsi, and Nestle) in Egypt. When asked what they think about the link between marketing activities and supply chain management, all the marketing and supply chain directors acknowledged that supply chain management and marketing are inseparable. For instance, the marketing director of Pepsi indicated that, ‘…there is no doubt that supply chain activities must be informed by the market conditions….’ Similarly, the supply chain director of Coca-Cola indicated that, ‘…. to be sincere, it is impossible to achieve sustainable marketing activities without a plausible supply chain….’ To a previous study conducted by Juttner, Christopher & Godsell (2010), integrating supply chain management operations with marketing activities is necessary because market needs dictate ‘what’ is to be supplied and ‘how’ the final products will be supplied to the markets.
When asked whether market orientation should be extended to supply chain management orientation, the majority of the interviewees revealed that extending marketing orientation to supply chain orientation is necessary for sustainable customer orientation. For example, the marketing director of Nestle indicated that ‘…. it is necessary to understand the market dynamics and extend them within the supply chain….’ Similarly, the supply chain management director of Coca-Cola noted that market dynamics informs any changes in the supply chain, and thus market orientation usually informs supply chain orientation. As such, organizational learning was considered in this study to be a collaborative approach in the supply chain and marketing sides. For instance, the supply chain management director of Pepsi revealed that ‘…. given the link between supply chain management and marketing, then definitely learning in the entire organization must be a collaborative approach in both the sides…’ This clearly shows that marketing management and supply chain management ought to be collaboratively managed within global organizations. In this regard, both qualitative and quantitative customer data was found to be quite useful in predicting customer value along the supply chain.
Among the best practices that this study revealed to be quite useful in facilitating the integration of marketing strategy and supply chain management is technology within an organization’s value chain. Among all the interviewees in this study, the use of electronic data interchange (EDI) and point of sale (POS) technologies were revealed to be among the most useful supply chain management systems that help in linking the entire supply chain with the demand chain management system. For instance, the supply chain management director of Nestle noted that ‘…using technology in integrating supply chain with the demand side is quite useful, like the use of electronic data interchange and a point of sale software….’ As a result, inter-functional integration was considered to be necessary to ensure that marketing, logistics, and manufacturing are linked; to facilitate the integration of marketing and SCM processes. As revealed by the marketing director of Coca-Cola, ‘…linking marketing with logistics and manufacturing facilitates a holistic approach towards marketing efficiency…
The use of local marketing workforce (talents) was also highlighted in this study to be necessary to enable an organization to be able to understand the needs of the communities they serve better. Through the use of local talent, it becomes easier for an organization to be able to coordinate supply chain management with marketing activities. Based on Wolf (2013) ideas, local staff members are usually preferable in multinational firms because of their ability to integrate local values into the organizational value chain; and thus promote a better relationship between an organization and the communities around them. This explains why it is necessary to integrate local marketing talents into the supply chain management activities of multinational firms to enable the firms to be in a position to meet the specific needs of the local markets in the most effective manner as the researcher sees that integrating the local marketing talent with the global supply chain for the MNC in more strategic level will facilitate the information flows between the partners within the supply chain network.
When asked about whether the integration of SCM and marketing can lead to quick response, all the interviewees acknowledged the significance of integrating the entire supply chain with marketing activities to enhance quick response. As indicated by the supply chain director of Pepsi, ‘…when marketing intelligence information is shared in timely manner to the upper echelon of the supply chain, then it becomes easier for manufacturers to respond quickly to any changes in demand…’ This brings in the concept of the agile supply chain where unnecessary inventories are avoided within the supply chain when the market information is shared within the supply chain (Banker, 2009). For example, the marketing director of Nestle indicated that ‘…when sufficient information about the market demand is shared promptly within the supply chain, then it becomes easier to control inventories within the supply chain….’ This leads to demand chain management where marketers tend to receive the right amount of stocks from the supply chain side based on the demand. These findings seem to corroborate with a previous study conducted by Juttner, Christopher & Godsell (2010) which revealed that, integrating supply chain management and marketing is necessary for prospective organizations in the currently globalized environment.
However, this study revealed several challenges that face the integration of supply chain management and marketing. As indicated by the supply chain management director of Pepsi, ‘…supply chain complexity in overseas markets resulting into bullwhip effect is a major factor that has been interfering with agility in many supply chains…’ With numerous middlemen, some companies find it difficult to track their products along the supply chain, and subsequently source information from the market upstream in the supply chain (Flint, 2004); posing a potential challenge in ensuring cohesive supply chain integration with marketing activities. Another key challenge was indicated by the supply chain management director of Nestle who pointed out that, the highly dynamic consumer needs make it difficult for firms to make forecasts on demands; thus making it difficult to balance between the demand chain and the processes in the upper echelon of the supply chain. To counter the challenges related to market dynamics, (Dubais, Hulten & Pedersen ,2004) suggest the use of an automated supply chain management system that enables instant sharing of information upstream or downstream along the supply chain. For example, in cases of any unexpected changes in the market, retailers can share the information quickly with the manufacturers and thus enhance quick response within the system.
Nevertheless, this study revealed that there are some legal issues that multinational firms must adhere to when integrating their supply chain management and marketing activities. Among such issues is the competition law, which inhibits large firms from making collaborations. In addition, the legal practitioner of Coca-Cola also noted that ‘…ethical sourcing of raw materials is also necessary, while also providing honest promotions to the customers…’ In multinational companies, the legal practitioner of Pepsi indicated that ‘…legal and cultural diversity is a key factor which firms must consider when planning a marketing or supply chain design….’ This clearly showed that all the activities related to supply chain management and marketing have legal obligations, and thus organizations must always act within the stipulated legal frameworks in the countries they operate in.
When we go to the interview with the martial planner director of Almaraie. And it was very important; especially since Almaraie is in a joint venture with PepsiCo.
First let’s introduce this partnership the partnership is a joint venture which 51% Almarai & 49% PEPSICO, by the way, they share a specific Juice Beyti that was owned by Beyti company before the company sold to Almaraie and PepsiCo. But they still offer Beyti juice in the Egyptian market until now and this will be clear within the body of the interview.
To understand well the conclusion of the interview we have to present the interview in some detail:
When the researcher asked her about the way of working in the supply chain department and the challenges. She told me if they have a launch on a tide time, the Supply chain department can go to external suppliers, so we can conclude that the policy of SCM regardless dealing with internal suppliers or external suppliers, but the main importance is the quality and the lead time and this what the researcher is focusing on this research, the strategic integration within supply chain network, as we know marketing and sales considered as internal customers of the supply chain, so supply chain department ‘is trying to achieve the marketing and sales needs as well as the marketing and sales departments should respect the timeline and business flows of supply chain network. When the researcher asked her if the marketing department as an internal customer to the supply chain department can change or alter the supply chain design at any time regardless of the terms and the conditions of working. She answered that the Supply chain department takes the plans and instructions from the marketing department but in case the marketing needs specific products from the supply chain department for a particular event, the operation of that has to be on a marital plan in six or seven months before the event on also she said to me that, the supply chain can bring everything from local external suppliers or global external suppliers or mix between both, but everything have to be aligned within the supply chain management “the supply chain network”.
Now we‘re moving to the main important point about the collaboration between Almaraie and PepsiCo.
The researcher asked her about the nature of this partnership on the way of working and communication between all partners within the supply chain network, she said PepsiCo. Deal directly with the marketing department of Almaraie, as the marketing department considered an internal supplier to Almaraie’s supply chain department so the information flow within the supply chain network plays a vital role in ensuring the efficiency of the activities which enables all the partners within the supply chain network to represent their perspective, also she said the only direct communication between the supply chain department of Almaraie and PepsiCo Lies on one or two meetings between PepsiCo’s board director and Almaraie’s supply chain department during the year. Hence the role of the marketing department to ensure the efficiency of the information flows within the supply chain network. Also when the researcher asked her about the main challenges that face Almaraie’s supply chain, she said that PepsiCo. Could restrict specific lead-time and specific external suppliers on Almaraie’s supply chain to bring some of the raw materials of some sort” tastes” within (Tropicana juice) from a specific supplier either locally or globally so Almaraie’s supply chain can face some problems in case of the external supplier don’t respect the timeline that PepsiCo needs in its product (Tropicana), by the way, the marketing department is also responsible to achieve this operation so the effective information flow is a very critical player within the supply chain network, when the researcher asked her about what Almaraie’s supply chain do to prevent the problems that could face when dealing with a specific external supplier which PepsiCo Choose it? She said that Almaraie’s supply chain started to set an internal strategy to prevent these problems from happening such as setting higher safety stock also they could increase the led time, also the researcher asked her in case the external supplier had big problems in delivering the raw materials to Almaraie’s supply chain, what Almaraie will do? She said also PepsiCo. Haven’t access to handle these problems and Almaraie’s supply chain with the marketing department are the only 2 partners responsible for handling all of these problems in front of PepsiCo, so if the problems with the external supplier that Almaraie deals with aren’t solved, then Almaraie’s supply chain and marketing department can recommend PepsiCo another external supplier so again PepsiCo. Their Investigation on this external supplier requires effective investigation from the local marketers of PepsiCo, Hence the improvement of the local marketing talent of the Multinational firms is very important and also can play a multi-role within one country or other countries and the researcher will discuses it in the following hypotheses of the research.
Coming back to the relation between all partners within the supply chain network, the Researcher asked her which suppliers PepsiCo Prefers local or multinational external suppliers. She said both is acceptable to PepsiCo, but the main important is the quality so we can conclude that the global norms within the integrated / Interdependent economic system “ Global economy system” ease a lot of procedures in today’s business.
Finally the researcher asked her about the partnerships that occurred between Almaraie and PepsiCo. Still offer “Beyti Juice” in the Egyptian market that was owned for “Byeti company before it sold to Almaraie and PepsiCo, she answered that Both companies realized that Beyti juice” has a high market share in the Egyptian market so they still sell the juice through the know how of the Beyti company so we can conclude that everyone in the supply chain may value something different. As well as recognizing that many methods both qualitative and quantitative will be needed to capture those different values perception. But the main important to ensure the efficiency between all partners is the strategic integration between marketing and supply chain management.
From the last interview above we can conclude that supply chains involve relationships through key firms who could in one form of partnerships such as joint ventures, strategic alliances mergers, and acquisitions, or others that require effective supply chain networks and strategic integration between marketing and supply chain management to attain Mutual strategic goals for the multinational firms.
Finally, in the second hypothesis, we can conclude from the above; the advantages that multinational firms can gain from the integration between marketing and supply chain management and the importance of local marketing talent to be integrated with the Global supply chain management design in more strategic level for the Multinational firms within a particular framework which will be discussed on the research framework on the third Hypotheses.