Pylypenko D.R.

Simon Kuznets Kharkiv National University of Economics, Ukraine

MARKETING SUPPORT OF MANAGEMENT ORGANIZATION OF THE INTEGRATED CORPORATE LOGISTICS SYSTEMS

 

Current economic conditions are characterized by the expansion of integration trends role and the emergence of various kinds of associations. The management organization of such associations requires considering simultaneous of the two concepts which are widely represented in the scientific literature but are in not full consensus with each other. According to the first concept the matter of the enterprise logistics system is being transformed and expanded into integrated chains of value creating. The second concept is related to more significant reorientation of marketing systems towards support of cooperation and interaction with a narrower range of consumers.

The basis of each of these concepts has been formed by the objective processes such as reducing time horizon planning, organizational boundaries blurring, restructuring of enterprises, fundamental and radical restructuring of business processes, expansion of interaction with competitors and the work activation with subcontractors, the introduction of new information and communication technologies and etc.  These tendencies call for providing synchrony and support of high performance of all commodity flow participants. According to the opinion of A. Rushton, P. Crowther and P.Wacker it is possible only on the basis of the logistics methodology [8, p.5 22] or, according to the opinion of  Handfield R. and E. Nichols, on the basis of the introduction of supply chains management system [2, p.23]. It should be noted that the logistics management pays more attention to optimizing the flow within the organization, while supply chain management is carried out basing on the idea that internal integration alone is not sufficient [1, p.27].

Accordingly, it is necessary to take into account the opinion of D. Seifert [9]. This author claims that now the conventional is view, according to which there are three main ways of organizing economic activity (hierarchy, market and network) and there takes place a gradual transition to market transactions, that develops within long term relationships. At the same time, as a part of approaches focused on creating, maintaining and developing long-term partnerships, marketing plays the main integration function. Its main objective is to find effective partners in the market, ways of interaction with them for common resources consumption, finding competitive advantages, the managing of market relations portfolio through the adaptation to the partners in accordance with established agreements on cooperation and partnership.

         The first work on partnerships marketing were focused on dual relationships of enterprises [3], the loyalty analysis of customers selected by companies [7] or cooperative interaction while carrying out joint financial classic market researches [4]. Later researchers covered the wide range of network relations and there were formed several approaches to determining marketing of relationships: British, North American, European and German approaches [5]. The main difference between the approaches is various scope of marketing relationships and differences in the procedures of interaction analysis. In our opinion, the most appropriate is to determine the partnerships marketing as a continuous process of identifying and creating new values with individual consumers, and then joint receiving and dividing benefits of this activity between the parties of interaction [6, p.20] .

            Analyzing this interpretation it is fair to say about increasing of the consumer role and transition from consumer manipulation to forming genuine consumer interest (communication and knowledge sharing); focus of process of installation, support and development of relationships with customers and other partners for achieving common goals; focus on analysis, planning, realization and control measures which cause, stabilize, strengthen and renovate business relationship with stakeholders of corporations, mainly with consumers, and focus on  the creation of mutual value in the course of these relations; support and development of a network with individual customers for mutual benefits through interaction, individualization for a long time.

            So with regard to the relevance of the two mentioned concepts their combination could be offered, in this case we obtain a set of partnerships and value creating chain. At the same time it is proposed to introduce certain limitations that should be taken into account while organizing the logistics chain management: the only entity that invests in the supply chain is the final consumer who decides to purchase the product; support of stable logistics system functioning can only be provided when all members of the supply chain receive additional income from their cooperation; supply chain management consists of ensuring  favorable conditions for creating additional value. Thus, the main goal is such positioning of companies in the supply chain, which allows them to provide the highest level of consumer satisfaction and value in use in conditions of effective use of the competencies of all organizations participating in this supply chain.

            The concept of partnerships marketing allows to determine two aggregate levels related to the relationship with the end-consumer (loyalty programs) and relationships with partners in the middle of the logistics value creating chain. In this context it is arguable that the second level of partnerships marketing in some ways is related to institutional theory and the interaction fields, proposed by N. Fligstein [10], in which actors with different organizational capacities are building their behavior with each other.

            It should be noted that marketing partnership has considerable integrating property. Thus, if the formation of the logistics value creating chain takes place without regard to marketing principles, as a rule membership of the logistics system is formed by accident, chains can be excluded heedlessly, the importance of presence of the individual chains, that correspond to successive technological stages of customer satisfaction, is underestimated. So in order to expand customer relationship firstly it is necessary to decide: what type of customers is proposed to attract, what type of customers’ future benefits are related to, what type of new consumers is likely to be interested in the company products?

         In the context of interaction prolongation the actual are questions of determining the type of customers that should be kept, defining those who provide the greatest profits or those who can go to the competitors and identification of dissatisfied clients. The developing of relationships also requires posing specific questions, such as: interaction with what customers can create added value, what products can attract and interest specific customers, what products are being bought in conjunction with others?

            Taking this into account analytical assurance of developing loyalty programs deserves more detailed consideration. One of the most common methods is the method "sales funnel" (it breaks logistic process in stages, each of which affects the final volume of sales and determines prospects) and another common method is the customer classification method MEANACTS (abbreviation that means: money, emotions, authority, need, areas of uniqueness, competition, timescale, scale).  It is also possible to carry out the surveys concerning the assessment of various attributes of the proposed product. Along with that it is worth to mention its certain limitation, caused by the subjectivity of expert opinion or own preferences of consumers in focus groups. That is why it is proposed to ground the selection of consumers in order to establish partnerships on building dynamic loyalty models that will determine the dependence between the fluctuations of behavior loyalty level and identifying by the company some of its determinants. For this it is may be used methods of correlation and regression analyze (e.g. dependence between the level of consumer commitment and the certain components of the loyalty program or attributes of the proposed goods).

            Moreover it is proposed the widely use of matrix methods, specifically the construction of matrices "number of customers - the duration of cooperation", " procurements dynamics - customer satisfaction", "loyalty type - loyalty components", "the product - the market - the customer", "satisfaction - loyalty "and then on the basis of the matrix to identify strategic alternatives of the company development and customers selection. It makes sense to base the obtaining of numerical values to determine the quadrant matrix on the fuzzy information processing methodology and set theory. With similar methods it is possible to conduct internal consumers rating.

            In summary, it is proposed to reduce the uncertainty and the negative impact of the market environment, to improve competitiveness and operating effect of the company, to engage it into participation in the logistics value creating chains and to form institutional interaction fields based on the concept of marketing partnerships.

         Along with that, such approach requires further researches in two directions, which is theoretical justification of ways of building a separate company management system, acting within the integrated value creating chain, and management organization of enterprise logistics system. Also, it is necessary to detalize the possible types of relations in the marketing system and to set in accordance with tem the multi-objective problem of loyalty program optimization.

References:

1. Christopher Ì. Logistics & Supply Chain Management. – London: Financial Time Prentice Hall, 2011. – 288 p.

2. Handfield  R.B. Supply Chain Redesign. Transforming Supply Chains into Integrated Value Systems / R.B. Handfield, E. L. Nichols. – Prentice Hall PTR, 2003. – 398 ð.

3. Håkansson H. International Marketing and Purchasing of Industrial Goods. – New York: JOHN WILEY & SONS, 1982. – 415 p.

4. Hollensen S. Marketing Management: A Relationship Approach. – London: Financial Times Prentice Hall, 2010. – 698 p.  

5. Kennedy K.N. Implementing a Customer Orientation: Extensions of Theory and Application / K.N. Kennedy, J.R. Goolsby, E. Arnold // Journal of Marketing. – 2003. – ¹4. – Ð67-81.

6. Kotler P. Marketing Management (14th Edition) / P. Kotler, K. Lane . – London: Prentice Hall, 2011. –812 p.

7. Parker B. Introduction to Globalization and Business: Relationships and Responsibilities / Barbara Parker. – London: SAGE Publications, 2005. – 537 p.

8. Rushton A. The handbook of logistics & distribution management / A. Rushton, P. Croucher, P. Baker. – London: Cogan Page, 2010. – 664 p.

9. Seifert D. Collaborative planning, forecasting, and Replenishment: How to Create a Supply Chain Advantage. – New Yourk: AMACOM,  2003. – 432 p.

10. Flingstein N. Institutional Process and Organizational Fields [electronic resource]. – access mode: http://www.sagepub.com/upm-data/56770_Chapter_8_Scott_ Institutions_and_Organizations_4e_2.pdf