An investigation of relationship marketing to gain competitive advantage in the Supply Chain Industry: A case study of Dhillon Dairy Ltd.
1.1 Introduction and background
This was a case study approach on relationship marketing in the supply chain through Dhillon Dairy Ltd. Dhillon Dairy Ltd is based in the United Kingdom and is involved the dairy industry. As such it provides dairy food which is perishable in nature. Perishable foods have a short term life cycle. This means that the sales of these needs to be constant and be off the shelves as soon as possible. The dairy industry is a very competitive one. Not only does Dhillon Dairy Ltd have to compete with other British producers but also with other producers from the European Union who also have the rights into the British markets. The market has also become more competitive as it has shrunk due to the current global recession. The consumer spending power has shrunk. As such relationship marketing has become a tool for survival and not another marketing term. It has become a tool for survival which Dhillon Dairy Ltd cannot afford to ignore. The very nature of the British Dairy Industry is very competitive and its consumers are sophisticated due to the numerous choices available to them. There is a wide array of consumer dairy products upon which one can choose from. This chapter served to introduce the reader to the research study; it outlined the research question, its aims and objectives. It gave an introductory overview to all the chapters leading to the chapter’s conclusions.
1.2 Relationship marketing-an overview in the context of the research study
Relationship marketing approaches aim to realize that the buying and the selling agreement between a buyer and seller have the meaningfulness by providing a personalized, holistic perspective to develop stronger and long lasting ties. Alvey (1982) cited in Leonard (1983) noted the use of relationship marketing for the products that face high availability of substitutes in the markets. Relationship marketing was the most cost effective way to maintain one’s clients’ loyalty towards the product and achieve strong sales growth. Gordon (1999) noted that the traditional use of “marketing mix approach” has its limitations to provide constructive framework to assess and develop customer relationships in an industry sector and it should be replaced by the alternative approach of relationship marketing that purely focuses on customers and relationships rather than mundane price, products and Markets. Relationship marketing is also widely known as ‘relationship management’, it is connected to all the aspects of an organization such as its structure, culture, training and goals. Relationship marketing mainly focuses on the employee as a key marketer since he/she is the one who is responsible for the building and maintaining the relationships with the customers. There are various approaches towards relationship marketing, as there cannot be one particular way customer relationships could be built. Some of the most widely used and known approaches are discussed below, these approaches are mainly pertaining to the supply chain industry. These are namely satisfaction, retention, application and internal market. Under satisfaction the relationship marketing depends upon the communication and consumer requirement from existing customers. It usually happens by mutually beneficial exchange and authorization for contact by consumer. The amount of sales relative to that competing companies mainly determine or decide on relative price, quality of goods and services produced or sold through a company along with customer service by keeping particular purpose to customer satisfaction in mind. The group targeted through relationship marketing may be large, accuracy of communication and overall relevancy to the customer remains higher than direct marketing, causes low possibilities generating new leads than direct marketing and is limited to viral marketing for gaining further customers (Kotler et al, 2006). Under retention the main principle of relationship marketing is the preservation or maintenance of customers through different ways, resources and practices to keep track on repeated trade by satisfying requirement for those companies by all the way through mutually beneficial relationship. This method is now used by all companies for means of balancing new customers and opportunities with current and existing customers for means of maximizing profit margin and counteracting the leaky bucket theory of business’ in which new customers gained in older direct marketing and their kind if oriented business were at expenses of the loss of older customers.
Under retention relationship marketing and traditional marketing are mutually broad, private so that there is no need for a conflict between them. As situation varies, a relationship-oriented marketer has more choices to go ahead broadly at the level of practices. Most firms mix together the two approaches to match their portfolio of products and services like their range, collection and overall status into the market (Kotler et al, 2006). Under internal marketing, internal marketing refers to using marketing orientation inside the organization itself. Many of relationship marketing attributes determine what internal customers say and do. The attributes may like collaboration, loyalty and trust. Now a question arise who are the internal customersAccording to theory, every employee, team or department in the company is at the same time act as a supplier and a customer of services and products. An employee obtains services at a point in the value chain, which provides to another employee further along the value chain. If internal marketing is useful and get successful, which result that every employee will provide and receive exceptional services from and to other employees. It helps all employees to understand their importance of their roles and how their role relates to other employees. If this gets implemented well, it can encourage every employee to see the process in terms of customer’s opinion of value added and the organization’s strategic mission. It is claimed that an effective internal marketing program is a requirement for effective external marketing efforts (George, 1990).
1.3 Background and rationale
Companies are increasingly adopting a philosophy called the supply chain relationship marketing, in response to maturing markets, globalization and increased competition. The terms of supply chain relationships view customer relationships as key elements of the organization, which allows companies to maintain and increase sales of larger customers and to improve communication and better coordination of the relationship of buyer and supplier (Johnson and Selnes, 2005). This kind of industrial buyers and suppliers, which are characterized by a relatively long time frames, nonmarket forms of governance and a high level of commitment and trust, have received particular attention from researchers in recent years (Verhoef, 2003; Narayandas and Rangan 2004). These relationships are described as “a permanent basis for competitive advantage” (Day, 2000). But not all these conditions will lead to mutually beneficial results, with some firms in buyer-supplier relationship, both opportunistically with higher profits at the expense of the other side. Moreover, there has been relatively little empirical investigation of the effects of these relations in the field of efficiency and success (Kumar 2000; Hunt et al. 2002). Given these facts and events in mind, a research is scheduled for the study of relationship marketing in supply chain industry inUK – Dhillon Dairy Ltd. In light of the preceding the following were the aims and objectives of the research study.
1.4 The aims and objectives
The aims and objectives were as follows:
To investigate the impact of relationship marketing as way of gaining competitive advantage and achieve profitability in the supply chain industry with reference to Dhillon Dairy Ltd.
To carry out a review of literature linking achieving competitive advantage through relationship marketing and challenges faced by supply chain industry inUK.
To evaluate the way forward for relationship marketing for Dhillon Dairy Ltd in light of the finding.
In light of the preceding and in line with the aims and objectives the following was the research study question
Research study question
To what extent does relationship marketing tool has an impact as a tool in gaining competitive advantage in the context of Dhillon Dairy Ltd
1.5 Overview of the chapters
This study was split into the five traditional chapters that normally structure dissertations and theses. Chapter 1 (this chapter) was the introductory chapter explaining the need of the research, its objective and the logic behind choosing this title. The next chapter (Chapter 2) covered the literature review and also referred to previous such studies which were critically analyzed for their relevance to this research. The review was also used to support the data and empirical analysis of chapter four. Chapter 3 was the research methodology employed for conducting this study. It explains the techniques and tools employed for gathering data, its compilation and interpretation. It covered the Interpretivism paradigm of inquiry. Chapter 4, a key chapter, was devoted to analysis and findings of the study data, both primary and secondary. It unearthed the empirical findings which were conclusively discussed under chapter 5. Chapter 5 presented the conclusions and forwards recommendations. The following were the conclusive remarks for the introductory chapter of 1.
The introductory chapter served to highlight the importance of relationship marketing in customer retention. Relationship marketing has become more important now as the world in global recession. The research study was in light of Dhillon Dairy Ltd’s role in the supply chain in the British dairy industry. It was inductive in nature using the Interpretivism paradigm and the grounded theory methodology. It sought meaning from the data and as such did not wish to test or de-test a theory but sought interpretation and meaning. Relationship marketing emphasizes on customer retention. The next chapter set forth the literature review in line with the research’s study’s aims and objectives.
2. Literature Review
The literature review began with the introduction of relationship marketing as a concept. Various definitions on crisis were given. This chapter also gave various definitions as to the meaning of relationship marketing. The researcher also posited forward their definitions relationship marketing in light of the various academic definitions and the contextual settings of the literature review. Relationship marketing was used as a means concept and not as a test. It was used as a means to an end and not the very end in itself as the researcher did not intend to test or de-test a theory but sought an understanding thorough the inductive means. In the inductive world of reasoning meaning is drawn from the observed world and that meaning is held as an understanding. The inductive world argues that the world outside and its nature of reality is too complex for the human level of understanding. Thus the inductive seeks to grasp and understand the nature of that reality. The research study used the grounded theory approach to understand the interpretivism’s nature of reality of the world in terms of relationship marketing with direct reference Dhillon Dairy Ltd within the realms of the supply chain. As the grounded theory process began in the literature review. This meant that the selection process of the grounded theory began by splitting the literature review in the following two:
This was the beginning of the grounded theory process in the literature review. As the literature review gathered momentum varies patterns and emerging themes formed the coding process that was then realized in the form of questionnaires that were used in the empirical data and analysis of chapter four in light of the research’s study’s aims and objectives. The literature review was set as follows.
The literature review-relationship marketing
To gain the media attention seems to be the motto of the today`s accelerated world this most frequently tends to overlook the vital ingredient of the marketing such as the use of existing relationships with the customers. This is quite ironic to the fact that marketing is mainly based on the relationships with people and their reactions, views and opinions. In late 20th century direct response marketing campaigns were conducted specifically emphasizing on customer satisfaction and retention rather than conservative sales and revenue generation approach. These marketing campaigns evolved a form of marketing called Relationship Marketing that have customer orientated focus and recognizes importance of creating long term loyal customers for an organization. Relationship marketing targets current set of customers rather than penetrating into different segment or diversifying into various sectors. Relationship marketing is the process of attracting, maintaining, and enhancing relationships with key people in the market (De Young, 1998).
It is easier to build long term relationships with the current customers through developing strong bonding amongst current customers rather than diversifying into a different market segment. Relationship marketing is a cost effective tool in terms that it saves costs of creating public awareness, advertising and acquiring new customers. The old marketing mantra for success, namely to have the right product at the right place at the right time, therefore, the supply chain management has become increasingly popular in marketing and management of marketing channels. At the same time, however, also shows that the interaction between the two disciplines.
In markets with a reduction of life and change the balance of power from suppliers to customers by providing information and what they want, when and why. Recently, the active role of clients in the process of creating value has been emphasized (Vargo and Luscha 2004). Indeed more emphasis has been placed upon the value of the goods or services created by the customer and their use, making their own needs. With the use of products or services, the client continues the process of commercialization, the process of creating value.
Marketing strength lies in understanding the forces that influence how customers perceive the value (and gain knowledge of customers), to detect the needs of different customer groups (market and customers), translate them into packs of products and services to meet different needs (personal development products and services) and marketing packages through customer suggestions (price, brand, communications, marketing). An important element of current conceptualizations of the strategic role of marketing is Customer Relationship Management (Zablah et al. 2004). Relationship Management is a process which means that the macro-economic growth and market “information to build and maintain a portfolio” to maximize the benefits of relationships with customers. De Young (1998) argued that relationship marketing was all about maintaining and retaining the relationship with one’s customers that is one’s client. It is all about customer retention. It is all about building constructive relationships with the selected or target audience. This can be viewed as a selective target marketing strategy. All marketing strategies must be in line with and promote the organization’s mission statement. They must promote the goals, aims and vision of the mission statement. De Young (1998) put forward five ideals which are the key to successful relationship marketing:
Effective communication is vital in any business world. As such the right message must be communicated at the right place, at the right time using the appropriate medium.
Know your elected officials.
Here one needs to identify all local municipal and regionally elected officials in one’s area. Collect basic information on their background and interests.
An organized marketing department ensures that all is done on time, at the right place. This means that deadlines and targets are duly met
Develop a communication plan.
This ensures that the target audience for customer retention is reached using the most appropriate and effective medium
Conduct effective legislative visits.
Company law recognizes companies as separate legal entity. This means that companies are legal personas bound by law. As such Dhillon Dairy Ltd is bound by the legislative laws ofEnglandandWales. As such it is essential for Dhillon Dairy Ltd to be aware of these laws and the council by-laws as well.
De Young (19980 argued that it was vital to send appropriate newsletters to the target audience Indeed personal visits and written communications must be planned as part of a continuous, year-long dialogue (ibid). He argued that the pictures should be included in these messages as they are more effective. People generally respond more to pictures than endless paragraphs of words and figures. Pictures grab the attention and the imagination of the would-be reader. The mind generally remembers pictures more than words. Visuals are a more effective form of medium. Irani et al (2006) argued that mechanisms for feedback must be built. Specific message stimuli must be taken as a vital ingredient on the consumer perceptions. As such the Dhillon Dairy Ltd must build easier to understand messages and adopt the appropriate medium for the communication means. Indeed focusing on relationships may provide a way to be more effective and efficient with available marketing resources (ibid). They argued that one should use “public value words” that have meaning and strength. As such academic words or phrases that may have been used in the past should be phased out to reach a more urban and needs-focused clientele (ibid). They argued that public relations were important in relationship marketing. They drew this on Grunig’s (2001) that ‘…public relations contributes value to an organization when its communication programs result in quality long-term relationships with its strategic publics–also known as stakeholders” (p 25).
Boldt (1987) argued that relationship marketing was important in the service industry. As such customer retention is vital. Retaining customers is less expensive than acquiring new ones. It can be costly to acquire new ones. It is the profitable customers that need to be retained. Long term relationships are essential and not the short term relationships. Long term relationships are a key asset to any firm. They are part of the assets in the balance sheet. They are part and parcel of goodwill. They increase the value and reputation of a firm or an organizational entity. Boldt (1987) cited De Young by arguing that the process of turning customers into long terms clients involved the following:
This is the most important factor in gaining loyal, long-term clients is PFS (personal, friendly service). Position descriptions and training should place emphasis on the equal importance of technical duties and marketing skills.
This is practice of actively listening to clients and involves learning what clients’ value and providing need-fulfilling services.
This is the practice of rewarding client loyalty through publicized financial incentives (ibid). As such the the key to success is by recognizing the nature of the change and helping one’s clients to adjust to the changes in the socio-economic landscape (ibid). This is true for Dhillon Dairy Ltd asBritainwas officially in recession at the time of writing up this research study. The consumer spending patterns have changed due to the shrunk economic spending power. As such Dhillon Dairy Ltd has to adjust and help its customers adjust to the changes in the economy. It is vital especially now for them to retain their existing clients especially the profitable ones if they are to survive the onslaught of the recession. Lee (1988) put forward five steps in targeting the audience:
identify the target audiences according to mission and goals
select geographic areas
prepare demographic profiles
one must include their lifestyle, psychographic, and behavioral profiles and
identify life events and health status of audience.
Boldt (1987 saw marketing and relationship marketing from Fischer’s point of viewed where marketing was seen as ‘…a combination of activities required to direct the flow of educational programs and services from the higher education institution to the consumer in a form, place, and time, and at a price that is best able to satisfy the consumer’s needs’ (p167). Boldt upheld the six Ps of marketing in this view:
Source: Boldt (1987) p 2
This includes the creation of the appropriate and consistent message or image to the decision makers and the targeted market
The actual location of the market(s)
The targeted market(s) or the end consumers/clients
The competitive price of the product or service
The actual product or service
The market setter or market leader in terms of the changing trends (ibid).
As such understanding market is everyone’s responsibility. The following three serve to guide organizations in light of the above six Ps in order to develop a sound relationships marketing program and thus ensure customer retention:
Clarify one’s mission and identify one’s constituencies
This entails clarifying the organizations goals and objectives in light of the targeted market
Implement an ongoing exchange process with important stakeholders through dialogue and planning
This acknowledges the important role of the stakeholders and the need for their constant involvement and participation
Communicate, promote, and evaluate success with targeted constituencies (ibid).
Marketing is viewed as strategy for giving consumers information about one’s products or services (Maddy and Kealy; 2001). They were of the view that another way of customer retention was through integrated marketing where one becomes involved in the client’s entire strategic planning process and then provide communication solutions and executions. Indeed an understanding of how consumers get information about products and services and how marketers can manage that information for maximum effectiveness is the heart of integrated marketing (ibid). They also that branding and a good brand help in relationship marketing through customer retention. They argued that a brand is a promise of value. This is largely because the effects of image marketing and therefore branding build over time, consistency is critical. Every piece of communication should support the brand and be consistent over time. They argued that consumers are not homogenous and unique as each and every one of them has different taste, different aspirations, different family structures and different incomes. As a result one marketing model for all will not work (ibid). They further noted that relationship marketing is event driven; it is about using marketing techniques in order to retain the customers.
As such it involves the use of methods and tactics in order to develop long term relationship with customers with the view of retaining the latter. As such an organisation must exceed customer satisfaction with the view of retaining them and develop a healthy relationship with their customers. As such the traditional transactional marketing involved the organisation focusing all of its marketing efforts on attracting the customer for one off sales. However customers who are repeat end up spending more as they are happy with an organisations services or products. Customers’ needs and wants are dynamic and change with the market trends and movements. The following are the methods used to monitor customer satisfaction:
General comments (ibid)
In order to retain customers one must keep up to date with the needs of one’s customers. Customer needs do not always remain static and always change. Adapting and changing along with these needs would indeed help the organization develop the relationship it wants with the customer. The benefit will be increased profit, market share and brand awareness (ibid).
Maddy and Kealy (2001) argued that marketing is shifting from push to pull model as consumers are taking control on what they like and how they like it. As such the probability is likely that consumers are now less likely to respond to media driven and market strategies. As such firms are now turning to relationship marketing in order to develop a personal relationship with their clients in order to develop a long term loyal customer base. This entails creativity on behalf of the firm and cost effective strategies. They put forward a new marketing model called the ‘Learning Relationship’ with each customer. They noted that every interaction with the customer is an opportunity for the business to learn more about the former and their individual motivations. It entails learning more about the customer through every stage of their business life cycle. The motivation would be for the customers to stay loyal and faithful to the company. Maintaining a customer database is the key as one can build an understanding of the customer’s behavior and spending patterns. The Learning Relationship is realized through the following stages:
Understanding the visitors behind the visits
Segment customers by their behavior
Creating specific content to meet one’s customers’ needs
Measuring one’s success (ibid)
They argued that a firm must therefore develop and build brand management and recognize and reward customer loyalty. They argued that the firm must reengage the inactive customers. As such the firm must identify customers who have not paid a visit purchase and try and lure them back with offers of discounts amongst other things. They argued that firms must also aim to increase customer loyalty through improving customer service and the increase in up-sell and cross-sell opportunities. This ensures that Relationship marketing works and is successful in maintaining customer retention through the Learning Relationship. They further argued that the traditional marketing model has become obsolete as they world has shifted towards a commoditized view of the world. As such the marketing advantage has moved from the traditional one where success was measured on one’s ability to reach many customers through mass media to that on which that has high levels of insight about consumers’ preference and behavior. They argued that the business model must move from the traditional transactional model to that one where of learning relationships that see customers into a long term relationship with the firm as the source of the competitive advantage (ibid). Hansen and Thurau (2000) argued that relationships with clients or customers must be viewed as capital assets in the balance sheet. They argued that long term relationships are built on personal and social bonds. As such these personal and social bonds must be strengthened through the integration of the customers in the value production process. Retention is viewed in terms of customer loyalty and repeat purchasing behavior. Customer retention leads to increase in profits and cost reduction. Customer satisfaction is viewed from the customers’ emotional and emphatic needs. The element of trust exists where the customer believes and trusts one’s products or services as reliable. Commitment is viewed as an emotional response by the customer in the view of maintaining a long term relationship. This long term relationship is vital for a firm’s survival and success. The price of the product or the service must be reasonable and be competitive. The distribution methods must ensure that the products or services must be nearer to the end consumers or customers. They argued that relationship marketing is dynamic and not static. They noted five phases under relationship marketing life cycle. These are namely awareness, exploration, expansion, commitment and dissolution. They argued that the relationship marketing life cycle is not a deterministic model of prediction as they vary from practice to practice.
Hansen and Thurau (2000) argued that relationship marketing is not only concerned with the outside customers but also with the internal part of the firm. They argued that employee satisfaction and well being is a must for relationship marketing with the outsiders to become a success. Thus internal relationship is a must. This is viewed as internal marketing. Internal marketing is of value in cases where customer service is an essential component of the firm’s economics. This is particularly relevant to the service industry where the performance of an employee is evaluated (for example, hairdressers, mechanics, restaurants). Furthermore the stakeholder view holds the firm accountable to all of those in which it has direct or indirect influence through its activities. Hansen and Thurau (2000) noted that there are three kinds of reference objects in relationship marketing. These are namely the employees, branches and companies and lastly products or brands. As already good relationships with employees are the foundation of any good business model. They are of particular importance in the service industry. They argued that corporate identity of a firm is the degree upon which it is able to communicate with its customers through its branches or companies or subsidiaries. They posited that the key to successful international relationship marketing is the recognition of the various forms of culture. As such firms must be ready to learn and appreciate other different forms of culture and must be willing and adapt to those cultures. They must also acknowledge transnational where the customer and the buyer are located in different countries (ibid). They argued that the larger social and physical difference between the buyer and seller may lead to low levels of trust between the two. They noted that the quality of relationships in transnational is lower than that on the domestic level. They noted that relationship marketing has mainly focused on the suppliers’ side and not the customers’. Little attention has been made on the customers’ willingness to stay committed in the relationship. As such the focus must be shifted and emphasis placed from the customers’ perspective. It is after all the customer that the firm needs. Customers are the engine and the source of survival for any commercial firm. It therefore makes more sense for relationship marketing to be customer orientated per se. They also noted and argued that another aspect of relationship marketing that has been ignored is its practical relevance. Implementation means ‘… the adaptation and modification of a company’s value base, strategies, structures, and reward systems in accordance with the fundamental axioms of relationship marketing’ (ibid; p16). They also argued that firms have tended to ignore the lost customers, the ones who were with the firm for a long time and for some apparent reason decided to leave. As such regain management seeks and complements relationship marketing by focusing on these lost customers.
Customer loyalty brings many benefits to the operating firm or business. Firstly it brings certainty in terms of purchase and thus ensures that element of predictability. This signifies stability and can be evidenced by the customers’ habitual purchase or the customers’ immunity to the competitors’ activities (ibid). They also argued that thus certainty can be achieved through customer feedback and can only be realized through the feedback of those customers who are and have been loyal through the long term and instead of the short-term. Thus certainty can only be attained by long term customers who have established a long term relationship with the firm and have that element of trust between the two entities. They argued that is those long term loyal customers who are prepared to complain that provide the true barometer of the marketing conditions. Those long term customers, who are prepared to complain, fill in the questionnaires and the customer satisfaction surveys are the source of customer retention. They in a way help in building customer satisfaction models (ibid). They held the view that increased feedback would indeed the marketer more scope and more in depth into the market analysis. This process also gives more trust between the two and seals the long term relationship. The firm that is willing to listen to its clients and meet its clients’ complaints, needs and wants is the source and foundation of a true relationship marketing model. They argued that close relationships with customers may be a source of disadvantages in the sense that this may lead to complacency on the firm, carelessness and inactivity on the firm. The quality of loyalty is seen through customer satisfaction. Customer satisfaction is realized when the customer’s needs and expectations are met or are met beyond the expectations (ibid). As such loyalty and satisfaction cannot be treated as one and the same. Loyalty may be missing even if there is customer satisfaction as they may be barriers to the whole process. For loyalty can be bought through such incentives as bonuses, coupons, discounts, price discounts and other monetary offers. Indeed this is different from customer commitment which cannot be bought through monetary means but can only be earned through the long term process. They argued that loyalty is no guarantee for future success especially the bought one the relationship and its ongoing process is determined and influenced by the monetary incentives. Genuine loyalty is the one that counts for its stands the test of time as the customer would be willing to stand by the firm even if it makes a mistake. They asserted that customer loyalty is indeed an asset to the business. As evidenced in the literature review, this assertion has been echoed by other authors as well. Customer retention and relationship management reflect the ‘goodwill’ of an organization or firm. This is a worthy asset which can add to the long term value of an organization. This is particularly true for Dhillon Dairy Ltd as the United Kingdomis still in recession and as such every penny of consuming spending counts. The consumers’ spending habits have to a certain degree been altered by the recession and many dairy firms are going under. Kerrin et al (2003) argued that relationship marketing is easier to understand but harder to do. They argued that successive relationship marketing links the organization with its customers, employees, suppliers, and other partners for the mutual long term benefit. In terms of selling the product relationship marketing starts from the purchase of the product right up to the after sales service. It is individualized in its approach. As such a firm’s marketing program needs to connect the firm with its customers through the careful promotion of its products, price, and place (ibid). The next part of the literature review covered the marketing supply chain in the context of this research study. Relationship marketing and the supply chain are linked together as they all seek to promote customer satisfaction by producing and delivering the right goods or services at the right place, the right quantity and at the price. It is all about customer satisfaction. Customer retention is now a key aspect of any business. Businesses can no longer afford to ignore it. It has replaced the traditional marketing model and has become the source of advantage for any business. Customer retention and relationship marketing is all about satisfying and retaining the profitable customers who are also loyal customers. Businesses desire these aforementioned customers who are faithful and committed to the firm with the view of maintaining long term relationships. Long term relationships bring stability to the organization. Long term relationships also bring in stability and predictability on consumer behavior and spending patterns.
The literature review-the marketing supply chain
Kerrin et al (2003) defined the supply chain as a series of firms that perform activities required to create and deliver a good or service to consumers or the industrial users per se. The supply chain includes the producers, the retailers, and the wholesalers. As such supply chain management refers to ‘…the integration and organization of information and logistics activities across firms in a supply chain for the purpose of creating and delivering goods and services that provide value to consumers’ (p204). They argued that what makes the marketing supply chain unique was its ability to integrate and make full use of the modern day information technology that allows the company to integrate and share information in terms of delivery, price, quality, its specifications, transport scheduling, and inventory and facility management. Indeed this is appropriate for Dhillon Dairy Ltd as it is involved in the perishable foods industry where high turnover is the emphasis as perishables expire if not moved off the shelves on time. Furthermore refrigeration is costly and thus this increases electricity bills. Therefore quick turnover on the perishables is a must in the Dhillon Dairy Ltd as it is in the dairy industry. The Canadian Supply Chain Sector Council (2006) described the role of and the job of a supply chain manager in the following manner:
‘…supply chain, plan, organize, direct, manage, evaluate, and are responsible for the activities of establishments and departments involved in sales and marketing of supply chain services. This includes the identification of opportunities for operational improvements. Management specializations in sales or marketing functions may be present in organizations depending upon the nature, size and complexity of the organization’ (p4).
It can be argued that this definition is multi- national as it encompasses a global reaching definition on the meaning of the supply chain and the role and description of the supply chain manager. It can also fit into the British context. It is an all round definition. This research study took this definition in the light of the study. As seen in the definition supply chain integrates with other department and its role is one that must a strategic fit with the aims and goals of an organization. It must be in line and be aligned to the mission statement. It must be congruent with the mission statement. It then follows that Dhillon Dairy Ltd supply chain must be strategic fit with the organizations’ mission statement, the goals and the objectives. It involves the planning, organization, the evaluation and the evaluation. As seen from the definition it involves working hand in hand with other marketing departments and also the identification of further opportunities in terms of markets, new markets, opportunities and growth. The Council of Supply Chain Management Professionals argued that ‘it encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all Logistic Management activities. Importantly it also includes coordination and collaboration with the channel partners, which can be the suppliers, intermediaries, third party service providers and the customers. In essence Supply Chain Management integrates supply and demand management within and across companies’ (Menzter and Gundlach, 2009; p5).
Market conditions that firms with flexible supply chains are characterized by volatile demand and high demands on the variety (Christopher, 2000). The trend of movement in many industries today pushed lean and flexible supply chain management, in the foreground. In markets where customers perceive little difference between products and the reduction of brand loyalty, time availability is an important factor for success. But the alluring promises of supply chain management, which aims to reduce the overall level of resources required to provide the necessary level of customer service, should not overshadow its limits: the management of the supply chain is an effective balance supply and demand, but not to answer the question from customers as it helps the company to find what the customer perceives as valuable, and how it is perceived customer value can be translated to the value of the proposal for customers. In other words, the effectiveness of the supply chain does not increase the price and customer satisfaction (Rainbird, 2004). Kerrin et al (2003) argued that it is important to link the supply chain with the firm’s marketing strategy. They argued that the modern day supply chain follows the following three steps:
Understand the customer
The firm must understand the customers’ needs and wants according to the segmentation that they belong to. Indeed this can be linked to relationship management and its desire to fulfill its customer retention as a marketing strategy. Understanding these needs and wants as per the market segmentation would enable a firm to have a clear cut and refined view of its customers’ needs and wants. This will help the company in redefining its efficiency in meeting the customers’ needs and wants.
Understand the supply chain
They argued that a company must understand what the supply chain is designed to do well. Supply chains vary as some can emphasize on the delivery and being responsive to the customers’ requirements and some emphasize on the efficiency on supplying the products at the lowest cost.
Harmonize the supply chain with the marketing strategy
The supply chain must work hand in hand with the marketing strategy. They must both complement each. The supply chain could do damage if it does not promote the marketing strategy. As such the supply chain must be redesigned in order to complement the marketing strategy. Another alternative is for the marketing strategy to be redesigned in order to fit into the supply chain. They argued that there is no one best supply chain for the organization. All supply chains are ‘appropriate fit’ for the organizations. They argued that the best supply chain is the one that meets the customers’ needs and wants of the segment being served and thus complements the company’s marketing strategy. They further argued that supply chain managers are often called to make tradeoffs between efficiency and various elements of the supply chain. The logical logistics of a supply chain is to deliver the goods or services on time and efficiently using the minimum costs. Indeed customer service and satisfaction is the central core of any supply chain in terms of time, dependability, communication and convenience (ibid). As such the role of the logistics manager is to balance and meet the aforementioned four and try and minimize the costs at the same time. In the supply chain, time refers the order cycle or replenishment time for a product. The current emphasis on the supply chain is to reduce order cycle time so that the inventory levels of customers may be minimized. Supply chain is the end of it or output which the service is being delivered to the customers (ibid). They argued that every company is a member of one supply chain or another. They viewed the supply chain as ‘…it essentially a series of linked suppliers and customers in which every customer is, in turn, a supplier to another customer until a finished product reaches the ultimate consumer’ (p10). Supply chain managers’ play an important role in the marketing channel and distribution. Their major responsibilities include trucking, airline, shipping, railroad and shipping companies, the freight insurance, the operation of distribution centers, the management of finished goods and inventories and order processing for the sales. In the marketing area there is the ‘push’ and the ‘pull’ strategies. The ‘push’ strategy is a promotional mix that channels the members to encourage them to order and stock a product. The ‘pull’ strategy is directed at the ultimate consumers to encourage them to ask the retailers for the product (ibid). In the former it starts from the manufacturer the consumer. In the latter it starts from the end chain from the end consumer to the manufacturer. McFarland et al (2008) came up with the notion of the supply chain contagion in which they defined it as the spreading or imitation of behaviors from one inter-firm relationship to other inter-firm relationships. They argued that in such cases firms treat other firms in their supply chain as they have been treated themselves. In order words they pass the reflective behavior onto other parties in the supply chain. Sometimes wholesalers or retailers are likely to imitate the behaviors of their suppliers and pass in onto their own customers. They argued that contagion can occur with or without the knowledge of the affected parties. They posited that managers and those on the periphery boundaries of the supply chain should be made aware of the ripple effects that their actions have on the supply chain. They noted that high levels of contagion occur under the conditions of high environmental uncertainty and with higher frequency of contact and greater perceived similarly between the individuals within the realm of the supply chain (ibid). McFarland et al (2008) argued that although contagion may take the form of any number of inter-firm behaviors, one finding they came upon was that the downstream influence strategies used by manufacturers with their dealers were imitated by these same dealers with end customers. They argued that managers and the subsequent boundary-spanning staff who are indeed aware of supply chain contagion effects should be better able to influence the behavior of channel partners strategically and as such realign their own unintended imitation of other organizations within their supply chain.
Kurtz argued that in terms of logistics, a good supply chain needs to be in place. According to Kurtz the supply chain which is also known by the name value chain is defined as ‘…the complete sequence of supplies and activities that contribute to the creation and the delivery of the goods and services…it begins with the raw material inputs for the manufacturing process of a product and then actual proceeds to the actual production activities’ (p12)
As such the final link in the supply chain is held as the movement of the finished products through the marketing channel to consumers (ibid). Kurtz noted that each of the links and the movements along the supply chain are to benefit of the end consumer as the chain enhances the value of the finished product through the various inputs made by the members of the supply chain. Indeed the supply chain seeks to maximize consumer satisfaction as customer satisfaction arises from the perceived value of the finished product by the consumer. As such businesses seek to maximize the customer satisfaction through two ways namely upstream management and through downstream management. The former includes the managing of raw materials, inbound logistics, the warehousing and the storage facilities. The latter involves managing the finished product, outbound logistics, the marketing and sales and customer support and after sales services (ibid). Various methods exist for managing the supply chain. These include high tech radios, frequent meetings. The use of carriers can be used in the supply chain, moving the products or services from the manufacturer right up to the hands of the end consumers. There are two types of carriers namely the private ones and the contract carriers. The former do not as a norm offer their services for hire. They provide transportation services for solely internally generated freight. The latter are the transport for hire and normally do not offer their services to the general public. They offer contractual agreements and operate exclusively for a particular industry, for example for the motor industry, the chemical industry, the furniture and fittings industry. They operate and specialize under their specialist marketing segmentation. They tend to operate under looser regulation when compared to the common carriers (ibid). Indeed the choice of a carrier has a direct effect on the supply chain and the value added towards customer satisfaction and customer retention. Supply managers must evaluate the choice of the carrier in terms of their efficiency and costs and in terms of whether this actually promotes the strategic aims and the objectives of the mission statement.
Menzter and Gundlach (2009) noted that the trend for supply chain and its management gained momentum in the 1980s. Supply chain management involves the logistics, the coordination, the sourcing, the procurement and the conversion. They noted that the principles of the supply chain and the supply chain management share the common disciplines and practices common to the marketing discipline. As such they bridge and form a mutual common of understanding with other marketing disciplines. They noted that the developments in marketing and the growth in new thinking has realized these commonalities and grasped them. Marketing scholars have ingrained the core principles that underlie within the supply chain which holds supply chain and integration as the heart of the management core. Indeed this is two ways as the scholars in supply chain have benefited from the knowledge developed by marketing discipline in general through the recognition that inter-firm and interpersonal relationships can be grown and studied through the study of inter-organizational activities. As such there are indeed mutual benefits for the benefit of both parties. They argued that despite these benefits, the marketing literature and research has not made much progress in the recognition of the interrelationships between marketing and the supply chain management. Brindley (2004) noted that the elements that are apply to relationship marketing can easily be transferred to supply chain management field. Relationship marketing is geared towards customer satisfaction and the market place and is also concerned with other relationships in the supply chain in effort towards the maximization of customer satisfaction (ibid). As such relationship marketing and supply chain management integrate and bind the elements such as quality, customer service and marketing into a brand and also seek to reduce organizational risk.
Brindley (2004) noted that relationship management and the supply chain management share similar attributes and the means and ways of achieving their goals and objectives. They all purse one goal, which is customer satisfaction. A customer who is satisfied can be transformed into a repeat customer and in the long run a retained loyal customer Relationship management entails the knowledge and understanding of other players in the supply chain with the end goal of customer satisfaction. As such both relationship management and the supply chain management seek to alleviate organizational risks and these risks may be alleviated through the supply chain partnerships. Brindley (2004) argued that the supply chain can longer be seen in linear format of input and output model but now takes a variety of shapes and models. The competitive world of the service industry demands customer relationships and ‘emotional’ relationships if an organization has to survive. The supply chain can concentrate on its effectiveness as a whole as the total supply chain or it can concentrate on the attributes along the chain. The following are the dimensions that a supply chain normally operates under:
Global competitive environment
Customer/consumer attitudes (ibid).
As such new strategies need to be constantly developed if the supply chain has to persist in the ever-changing environmental landscape. The above mentioned contextual factors are never constant as they are dynamic and change with the environment. Thus the supply chain and relationship management must be proactive and not reactive to the changes. It must be adaptable and flexible and be abreast with the changes in contextual settings. The changes in the contextual factors can signify uncertainty and organizational risks. As such the key is to develop new relationships in the supply chain, strategic relationships that promote the organization’s mission statement towards its survival. All firms seek to survive. The nature of these relationships is the foundation stone for new companies and an enhancement for the more experienced ones in the industry. Trust plays an important role. Trust is the foundation and engine of all commerce. Without the element of trust the wheels of commerce can grind to a halt. Trust plays an important role in relationship management and indeed in the supply chain. If trust is broken down along the supply chain, the whole chain can come to a grind, a halt as the linkages would have been broken. This is truer in relationship management. Trust is vital in any relationship building process. Once that trust is broken, the relationship can be hard to rebuild. Long term customers may defect if the trust has been broken down. It is hard to regain the trust of a loyal long term customer if that trust has been breached. It can be costly to win these customers. At the worst they can defect to one’s competitors. A lost customer is a lost business. In addition the ‘word of mouth’ of an unhappy customer can be damaging as they will tell their friends, colleagues and partners in the supply chain or the business circles. This can be more damaging if the customer is a dominant corporate client. Openness and trust are vital in relationship marketing and also in the supply chain management. Brindley (2004) drew upon Morgan and Hunt (1994) who laid emphasis relationship marketing as having four domains or partnerships. These are namely:
The internal partnerships
Brindley (2004) argued that markets with few supply chains can cause problems and disruptions. The fewer the members in the supply chain, the more the risks of disruption. This has a negative impact on relationship marketing and also on customer satisfaction and customer retention in the short and long run. Without the role of risk management, the supply chain may fall if it does not take the elements of risks and risk management into focus. Without this awareness, the supply chain may fall and be less efficient as it will not have taken a risk assessment and risk management into account. This may lead to customer dissatisfaction and customers mat defect to the firms’ competitors who may have a stable and sound supply chain in place which takes into account the element of risks and makes appropriate cover for such contingencies per se. As such the supply chain has human elements which need to be taken into account in terms of risks and risk management. The following are the elements are integral part of risks assessment:
Risk perceptiveness and preparedness
Gender and age influences
As such accepting risks in the supply chain means the acknowledgement of risks, the element of uncertainty and the ways and means that these risks can or could be eliminated. Risks in the supply must be properly taken into account. An organization that does not take these environmental, societal and financial risks into account is mostly likely to be heading towards an untimely downfall. It is likely to face a corporate demise in the short run or in the near long run.
Harland (1996) argued that the principle of networking can improve and complement the supply chain. Companies are no longer independent entities acting in their own business environment. The traditional model of a company has long since been dispersed with. Companies no longer operate in an insular environment. Globalization has made the world into one sphere which is known as the ‘global village’. As such companies now operate in intricate cobweb environment which is independent on each other for survival. Harland (1996) described the supply network as a set of supply chains describing the flow of goods and services from the manufacturer to the end consumer. As such one important part of this networking is the structure. The components of these networks comprise of the actors, the resources and the activities. Harland (1996) drew this on Nishiguchi’s (1994) research on the Japanese companies who have hierarchal their suppliers, namely the first tier or primary supplier or providers who provide the systems rather than the components. This makes the buying companies to be more dependent on the suppliers. The next passages covered the concluding remarks for the literature review.
The literature review set out to review the contemporary literature that covered relationship marketing and the supply chain and supply chain management. The supply chain is known in some circles as the value. Value is added to a product or service along the supply chain starting from the manufacturer right up to the finished product or service as it finally reaches the consumer. The actors or participants in the value chain or supply chain as it is commonly referred as have a vital role to play in this process. Trust and openness play an integral and essential role. If trust is breached the supply chain may collapse. Trust oils the wheels of commerce. It is one of the very foundations of commerce. The actors in the value chain are inter-dependant on each other for survival. The modern day concept of the business no longer operates in an insular isolated and independent corporate environment. It is dependent on other entities for survival. These entities are part and parcel of its supply chain. Customer satisfaction is the ultimate goal of both the supply chain and relationship management. A satisfied or happy customer can be transformed into a repeat customer in form of repeat sales. This in the long run means customer retention. Relationship management and supply chain management are intrinsically interlinked. They use each other and build upon each other’s strengths and goals. The literature review made a linkage between the two and managed to link them as one in terms of their goals, objectives, themes and attributes in light of Dhillon Dairy Ltd. Dhillon Dairy Ltd, is in the dairy industry as its name entails. It is in the dairy industry supply chain within theUnited Kingdomcontext. The literature review mapped out the perimeters and boundaries for this research study. It is from the literature review that the grounded theory process of collecting data began. This was through the coding of the themes that emerged from the literature review. These coding themes were raised in the form of questions that were raised as questionnaires. The literature review supported the data and empirical analysis of chapter four. This made the research study merge the theory with the practical aspects as raised by the questionnaires. This was the originality and strengths of this research study, the merging of the theoretical aspects with the practical aspects. The research study was inductive in approach seeking meaning from the data. In the inductive logic of reason, meaning is sought from the data. The meaning emerges from the data. Data and interpretation of it go hand in hand until mutual interpretation of it is reached and understood. Mutual meaning and understanding of it is the distillation process in the grounded theory process. Saturation is when the condensation and distillation process has reached its final point such that mutual meaning is arrived at. Critics of the grounded theory argue that it is complicated process which results in theories that do not go anywhere and are grounded in data, hence the grounded theory. However one does not have to follow all the rigid process of the grounded but choose its ‘appropriate fit’. The next chapter set out the methodology and methods.
3. Research methodology and methods
This section began with a brief description of the objectives of the research meant to meet with links made to the literature. This helped in explaining the reasons for the research approach adopted. The research philosophy section explains how knowledge is developed in the study and the nature of that knowledge according to the views and beliefs of the researcher in relation to the business and management studies involving human aspects. The researcher’s research philosophy has a direct bearing on the research approach and strategy as well as the data collection methods that are described therein in the section. The section included an explanation of the time horizon selected to perform the research and the sampling methods used. The section concludes by portraying how the research could be classified in terms of research methods used and the general advantages and disadvantages of belonging to the described paradigm. As mentioned above the topic and the questions of research shape the design by means of influencing the selection of the approaches and techniques. This is stated by Maylor and Blackmon (2005) as “a major influence on your research design will be the topic you are studying and the rules for doing research on that topic in general. These rules deal with the logic of the research, and describe what research questions you can ask and what methods you can use to answer them.”
3.2 Research Philosophy
The two main researches are paradigms or philosophies and these two paradigms can be labeled as Positivist and Phenomenological paradigms.
Positivism is a philosophical concept, and refers to a particular set of assumptions about the world and about appropriate ways of studying it. Positivists see ‘society’ as more important than the ‘individual’. Positivism is an epistemological position that advocates the application of the methods of the natural sciences to the study of social reality and beyond. It relies on the deductive laws of ‘cause and effect’. It applies the laws of deduction as it sets to prove or disprove a theory.
The Interpretivism or phenomenological paradigm is based on qualitative data. This is subjective in nature and follows humanistic and interpretative methods. Interpretivists share a view that the subject matter social sciences ‘people and their institutions’, is fundamentally different from that of natural sciences. The study of the social world therefore requires a different logic of research procedure, one that reflects the distinctiveness of humans as against the natural order (Von Wright, 1971). Interpretivists believe that unique and trusting relationships should be established with those being studied so that a true picture of their lives is constructed. It is aimed at capturing the essence of the phenomena and extracting data, which is rich in explanation and analysis, consequently validity is high under such a paradigm (Collis and Hussey 2003).
Guba and Lincoln (1994) held that:
‘…a paradigm may be viewed as a set of basic beliefs or metaphysics that deals with ultimates or principles. It represents a worldview that defines, for its holder, the nature of the ‘world,’ the individual’s place in it, and the range of possible relationships to that world and its parts. The beliefs are basic in the sense they must be accepted on faith and there is nowhere to establish their ultimate legitimacy. Inquiry paradigms define for the enquirers what they are about and what falls within and outside the limits of legitimate inquiry’ (p200).
Wass and Wells (1994) held that:
‘…for positivism, the etic ‘realist’ ontological assumptions are the real world exists independently of subjective consciousness, this latter is irrelevant to explanation; enquiry can converge on reality. The scientific objective is nomothetic with natural science; abstract from subjective idiosyncrasies to cover general laws; replicability generalizability’ (p9).
Hypotheses are tested against data using statistical techniques. The positivist’s methodology is mainly quantitative (Guba and Lincoln, 1998). According to Riley et al, (2000) ‘positivists argue that there exists a real world of social and physical phenomena and this world analyzed in an objective fashion in order to uncover general explanatory laws in an objective and unbiased, value-free manner’ (p10). For positivists reality and the observer are detached and independent of each other and the knowledge of reality is obtained by the measurement of its properties using objective methods. The researcher’s task is to identify ‘fundamental laws’ (Easterby-Smith et al, 1991).
Positivism (‘received view’) has dominated the formal discourse in the physical and social science for some four hundred years whereas post positivism represents efforts of the past decade in a limited way and essentially has the same set of beliefs of positivism (Guba and Lincoln, 1998). Hussey and Hussey (1997) defined ontology as one’s assumption about the nature of reality and epistemology as ‘the study of knowledge and what we accept as valid’ (p76). For post positivist the ontology is ‘critical realism’. Reality is assumed to exist but to be only imperfectly apprehendable because of basically flawed human intellectual mechanisms and the fundamentally intractable nature of phenomena (ibid). The epistemology is modified dualist and objectivist. Special emphasis is placed on critical traditions, thus the findings are compared with the pre-existing knowledge and the critical community (such as professional peers). However replicated findings are probably true (but are subject to falsification). The methodology is modified experimental and emphasis is placed on ‘critical multiplism’ as a way of falsifying (rather than verifying) the data. The methodology may include qualitative techniques (ibid).
Researchers are guided by their own philosophical beliefs which involve both epistemological and ontological considerations (Benton and Craib, 2001). These considerations in turn shape the research strategy (Bryman, 2004). This is often multistage and typically includes establishing aims and objectives, a literature review and series of methods to collect data, upon with later analysis can take place (Saunders et al., 1997). The epistemological and ontological choices that a research makes are often closely associated. A researcher that chooses to follow as positivist paradigm will likely take an objectivist view towards social phenomena compared with a researcher adopting an interpretivist paradigm, which follows a constructivist stance towards social phenomena.
Researchers have different view on what is considered acceptable as knowledge. This refers to epistemology, of which there are two principal schools: positivism and interpretivist. Ontology describes the view that researchers take towards social phenomena and the role of social entities. It can also be broadly described under two schools of thought: objectivism and constructionism. Positivism adheres to a deductive research approach, which constitutes a process in which the purpose of theory is to generate hypotheses that can be tested and then either accepted or rejected. Like in the nature sciences, it assumes that knowledge is ‘out there’ to be found and described by the facts and causal laws. It is closely associated with an objectivist stance, which infers that social phenomena, such as how an individual reacts to an increase in workload or improvement in wages relative to somebody else, are external facts that social entities (in other words, human beings involved in the process) cannot influence. They can therefore be studied objectively.
On the other hand, Interpretivism adheres to a more inductive research approach, where theory is the result of observations and other findings, not the starting point. It rejects the view that human nature is like the natural sciences and researchers can simply ‘study’ social phenomena, but argued that human nature is highly subjective and that these subjective elements require additional consideration by the researcher when constructing theory. This fits closely with constructionism, which implies the social entities are continually constructing and re-constructing their social realities. As such, the study of social phenomena is a subjective one and can neither be deduced down to laws nor considered definitive (Bryman, 2004).
The choice of epistemology and ontology also guide researchers’ methodology. Whilst researchers can employ both quantitative and qualitative methods, it is more common that quantitative methods are used in a positive, objectivist research paradigm and qualitative methods in an interpretivist, constructionist one. This study is held within a positive, objectivist research paradigm because this fits with the views of the researcher. Saunders et al (2007) described that subjectivist view is that social phenomena are created from the perceptions and consequent actions of social actors and that it is a continual process, in that, through the process of social interaction these social phenomena are in a constant state of revision..
3.3 Research Approach: Inductive Methods
The research could not adopt a deductive approach since the philosophy adopted was not a scientific research philosophy. All of the above reasons made an inductive approach appropriate for the research whereby facts could be discovered and conclusions drawn as a result of analysing the data that was collected. This approach depicts essential characteristic of induction and as described by Saunders et al (2007) theory would follow data rather than vice versa as within deduction. Inductive approach rather concerns humans and the nature of problem they are facing. “Research using an inductive approach is likely to be particularly concerned with the context in which such events were taking place.” “Therefore, the study of a small sample of subjects might be more appropriate than a large number as with the deductive approach.” “In this type of approach, it is more likely to work with qualitative data and to use a variety of methods to collect the data in order to establish different views of phenomena (Easterby-Smith et al. 2008).”
3.4 Research Content Validity Assessment
The content validity of survey instruments is assessed by an overview of the items by individual who is an expert in that field or subject and/or by the individuals from the target population. The individual make their judgments about the relevance of the items and about the assurance of their formulation.
3.5 Research Strategy: Questionnaire
Saunders et al (2007) defined research design as the complete plan of how one goes about answering the research questions. It comprises of the research strategies, data collection and analysis methods and the research project timeline. This research was explanatory in nature. Exploratory research establishes causal relationships between variables (Saunders et al, 2007). The research strategy employed was a questionnaire based approach. This required an in-depth understanding and focus into the research context. As described by Robson (2002) a questionnaire is a strategy for doing research which involves an empirical investigation of a particular contemporary phenomenon within its real life context using multiple sources of evidence. This definition highlighted the fact that a questionnaire is undoubtedly the appropriate approach for the research. At the point of time the research was designed it was anticipated as a situational analysis questionnaire where views of all actors related to the research contexts are examined to gain in-depth understanding of the matter under investigation. Another definition by Walsh (2001) described questionnaire as involving a systematic investigation into a single individual events or situations relating to a single source of interest, that is, the researcher studies multiple effects and perceptions of the respondents to the same subject. All the above explain that the research objectives and situation most certainly lend to this strategy.
Among the strengths of using the questionnaire approach was that it helped gain a rich understanding of the context of the research and the process being enacted (Morris and Wood, 1991). Second, it is suited for objective research as it has a considerable ability to generate quick answers from choices as well as obtain explanatory answers, What and How questions. (Saunders et al, 2007). Finally, questionnaires are a valuable strategy to adopt in research which can also provide further research insights. In conclusion of it abilities, a questionnaire can evaluate, measure, illustrate, and explore the social phenomenon relating to the research. On the down side, questionnaires sometimes make people feel bored as they it doesn’t have any real interaction unless the questionnaire is conducted verbally by the researcher and then responses inked.
The reasons for the other research strategies to be rejected were explained in the following. First, experiment strategy was regarded unsuitable for the research since the purpose was to explore causal links; whether a change in one independent variable produces a change in another dependant variable (Hakim, 2000). Further to its demerits, it is the preferred research strategy for testing hypothesis (Dul and Hak, 2007). This research did not wish to test a hypothesis. Second, the survey strategy was rejected since this is commonly related with the deductive approach to research and is not suitable since this research bears an inductive approach. A deductive approach which does not regard the human thinking process and does not leave much room for alternative explanations and findings is not suitable for the research.
3.6 Sampling method
Non-probability sampling was used to select the subjects to collect data which is termed by Burns (2000) as purposive, purposeful or criterion-based sampling such that a case is selected because it serves the real purpose and objectives of the researcher of discovering, gaining insight and understanding into a particular chosen phenomenon. Probability sampling was rejected since it is not possible to adopt this technique without a sampling frame and also not appropriate in meeting the objectives. Non probability sampling provides an opportunity to select samples using subjective judgement. Therefore, non-probability sampling was selected as best suited for the research strategy used as well as to answer the research questions. According to (Patton, 2002) the sample size when using this technique depends on what is need to find out, what will be useful, what will have credibility and what can be done within available resources. Purposive sampling as described by Saunders et al (2007) enables use of judgement to select cases that will best enable answering the research questions and meet the objectives. As specified above the research is a case study dealing with a small sample size and this enables the researcher to select most informative samples for the study. Based on the requirements of research questions, the selection of cases was based on critical case sampling where a logical generalisation is made from the data collected from the critical cases. In other words, data is collected from the most relevant and important cases.
3.7 Data Collection Methods
3.7.1 Nature of Required Data
The data collected was mainly of qualitative nature and therefore, the data collection techniques and tactics employed was that of a qualitative approach. The research uses more than one technique for collecting data namely questionnaires.
As explained by Robson (2002) a commonly made distinction between interviews is based on the degree of structure or standardization of the interview and as elaborated Saunders et al (2007), interviews may be highly formalised and structured, using standardised questions for each respondent or they may be informal and unstructured conversations. Semi-structured, face-to-face interview gives chance to the respondent to give his or her view regarding the topic based on information they have which might not available elsewhere. That is the reason researcher has chosen semi structured interviews as a data gathering method. During the interview the respondent will be asked a series of probing questions regarding their marketing strategies and customer relationship building (Saunders, et al; 2007). Face-to-face interviews can be carried out at work place, home, outdoors etc. and can be used to question members of general public, experts or leaders, specific segments of society. Interview can be used for both specific or/and general subject. In face-to-face interview interviewer is in good position to judge the quality of the responses of the subject to notice if a question has not been properly understood and to reassure and encourage the respondent to answer (Walliman; 2001).
In Semi-structured interviews, the interviewer has a clear list of issues to be addressed and questions to be answered. The interviewer is prepared and flexible in order to topics to be considered and discussed (Denscombe; 2003). As explained by Robson (2002) questionnaires work well with standardized questions that will be interpreted the same way by all respondents. The researcher did not wish to test a hypothesis. The research was inductive in nature. It used the Interpretivism paradigm. The meaning was drawn from the data. The inductive logic is mainly qualitative in nature. It is not entirely objective and has some elements of subjectivity. Hence great care must taken ensure that the researcher is not and does influence the subject matter. This is to ensure the validity of objectivity of the research is obtained when possible. The deductive approach is mainly quantitative through the laws of cause and effect. In the deductive the element of subjectivity is lessened and the research is assumed to be therefore detached from the subject matter. Qualitative was deemed appropriate for this research for it was quality that was deemed necessary not quantity. In essence the questionnaires were set in line with the aims and objectives of this researched. It was exploratory in nature guided by the realms and perimeters of the aims and objectives. Indeed the empirical data and analysis (chapter five) set out to raise meaning from the data using the Interpretivism paradigm. The interviews also raised the qualitative nature as meaning was directly sought from the source through the means of the interviews.
3.8 Grounded theory
In this method, data collection, analysis, and eventual theory in close relation to one another (Strauss and Corbin; 1998). Grounded theory has become by far the most widely used framework for analyzing qualitative data. Grounded theory is particularly helpful in research to forecast and explain the behavior, to look at and to explain fact which is happening and why, importance is given to developing and building a theory (Goulding, 2002 cited in Saunders et al. 2007). The grounded theory study seeks to generate a theory which relates to the particular situation forming the focus of the study. This theory is grounded in data obtained during the study, particularly in the actions, interactions and processes of the people involved. Grounded theory is both a strategy for doing research and a particular style of analysing the data arising from that research. Each of these aspects has a particular set of procedures and techniques (ibid). It is not a theory in itself, except perhaps in the sense of claiming that the preferred approach to theory development is via the data collected. Grounded theory is normally inductive in nature. The figure below illustrated the cycle of coding, the elementary coding processes:
Source: blindnessandarts.academia.edu/…/Brussels dated 4 July 2009 p10
Grounded theory is anti positivist and believes that theories are man-made and as such evolve. It therefore argues that researchers are not hierarchical and that all researchers’ experiences are valuable (ibid). It is normally used in areas where there is little or no theory in existence. It can use qualitative and quantitative data and in cases where one does not wish to test a hypothesis and in cases where one wants to evolve and take ownership of the theory over the lifetime. Indeed the researcher wished to take further studies after this. This study was the groundwork for future research.
Grounded theory is often presented as appropriate for studies which are exclusively qualitative; there is no reason why some quantitative data should not be included. Glaser and Strauss (1967) made extensive use of quantitative data previously for studies. Thus grounded theory provides explicit procedures for generating theory in research. It also presents a strategy for doing research is systematic and coordinated with flexibility. In this study the grounded theory was used in the literature review. It was raised through the selection of the review in light of the research question and its aims and objectives. The coding was through the set of the questions in the questionnaires in light of the pertinent emerging issues that were raised in the review of the literature. It is not possible to start a research study without some pre-existing theoretical ideas and assumptions. Strauss and Corbin (1998) criticised grounded theory in the sense that difficulties may arise in decided when and what level can the categories be deemed ‘saturated’. They further posited that tensions exist between the evolving and inductive style of a flexible study and the systematic approach of grounded theory (ibid). Its critics argue that it is an intensive process which always leaves the theories grounded in data, hence its name.
The choice of the research methodology and methods is determined by the nature of the research question, its aims and objectives. The researcher did not intend to build or test a hypothesis but sought a case study understanding of marketing through Dhillon Dairy Ltd in the dairy industry supply chain. It was inductive in nature drawing upon the Interpretivism and the grounded theory in its approach. The next chapter was the empirical data and analysis.
4. The empirical data and analysis
This was the empirical data and analysis. As mentioned the research study used the inductive logic of reason through the means of the Interpretivism paradigm using the grounded theory of research. It was a case a study approach through a sampling of thirty Dhillon Dairy outlets sprawled across Greater London. A homogenous questionnaire was sent to these thirty branches. The researcher worked for Dhillon Dairy Branch in theEssexcatchment. This gave the researcher an added advantage in terms of obtaining the data. Furthermore each of the questionnaires had an accompanying cover letter from the researcher’s branch manager approving the research study and the letter appealed for co-operation from the targeted branches as the former was of the view that the research study would indeed be a benefit to the company as entity in terms of relationship marketing and the strategic positioning as well. Twenty branch managers responded to the questionnaire. This was deemed a healthy response from the sampling.
4.2 Grounded theory revisited
Grounded theory procedures are designed to build an explanation or to generate a theory around the core or central theme that emerges from the data. Grounded theory is used to analyze qualitative data (Strauss and Corbin, 1998). The method of study consists of four steps which are explained in the following passages. The first step is open coding and is defined as disaggregation of data into units where researcher needs to identify and code the key point of each sentence of the collected data. These codes are grouped to form concepts which in return forms category after regrouping related to the phenomenon being studied. The researcher needs to find properties relevant to each category and data that can represent the possibilities of each property (ibid). The next step is known as axial coding. This step tries to make connections between categories and subcategories by examining a phenomenon in terms of its properties, dimensions and causal conditions (see Gray, 2004). It includes identifying the core category and other categories that influence the core category. In addition, the actions or interactions that result from the core category, the conditions which influence these and their outcomes are identified. The fourth step is known as selective coding. It is aimed at developing the abstract, condensed, integrated and grounded picture of the data referred (ibid). Strauss and Corbin (1998) criticized grounded theory in the sense that difficulties may arise in deciding when and what level can the categories be deemed ‘saturated’. They further posited that tensions exist between the evolving and inductive style of a flexible study and the systematic approach of grounded theory (ibid). Critics of grounded theory argue that it is an intensive process which always leaves the theories grounded in data, hence its name. The researcher did not strictly adhere to all the rigid stages of grounded but used those that were deemed the ‘appropriate fit’. These were the selection and the coding process as used in the literature review to raise the questionnaires.
As previously mentioned the selection and coding process of the grounded theory started in the literature review. Grounded theory moves from the general to the particular. It is more of a searchlight process as it searches for pertinent themes from a heap of data that can be likened to rubble of ruins. From these ruins it looks for the themes, searches for them in light of the research question, its aims and objectives. It is from this hubris of ruins that the theories are raised. As such from the literature review the following patterns emerged that were selected and coded into questions. Grounded does not have to be followed rigidly as per the stages identified by Glaser and Strauss (1967) or by Strauss and Corbin (1991). It can be argued that grounded can be applied loosely depending on the research, meaning it can be applied in the sense of its appropriate fit in light of the data. The following patterns emerged from the literature review and were formed into questionnaires:
Do you understand what is meant by the term relationship marketing
Do you understand the importance of relationship marketing
Is relationship marketing short or long term strategy
What relationship marketing techniques do you use
Do you view relationship marketing as an expenditure or an asset
Do you view relationship marketing within your branch is in line with the mission statement
Which is important customer retention or the acquisition of new customers
What do you understand by the term the supply chain
Do you understand the importance of the supply chain
Do you understand the linkage between relationship marketing and the supply chain
Where is Dhillon Dairy Ltd’s position in the supply chain
The questionnaires were semi-structured. Depending on the nature of the question some solicited for either a ‘yes’ or ‘no’ response. They all solicited for additional responses from the branch managers as this was qualitative research study in nature.
4.3 The empirical data and analysis
The first question as raised in the literature review sought to find out if the branch managers understood the term ‘relationship marketing’:
Question 1: Do you understand the term ‘relationship marketing?
The response to the above was encouraging as the majority of them were of the view that they understood the term. All of the twenty were of the view that they understood it. How they understood was from different dimensions. However they all shared the common view of the customer being the end key for this term. The responses shared some of the following patterns as sourced from the twenty branch managers:
‘Relationship marketing is all about the customer. The customer is the king. We have to please or customers. A happy customer is a good customer’
Another branch said:
‘The reason why we still exist is because we value our customers. Especially the corporate ones who have been with us for years. We try and keep that relationship special and improve it whenever we can’
Indeed the key word for them was the customer and the value of the relationship with customers. Only one branch included employees as part of relationship marketing. He saw employees as an integral part of the definition as he argued that for relationship marketing to work, Dhillon Dairy Ltd must have good relationship with its employees and not just its targeted customers. It is the employees who are in the frontline, who come into contact with the customer. It is therefore vital for the company to keep their employees happy and satisfied and this in turn would indeed be reflected by the way they treated their customers. Good customer service means good relationship management. This in turn could be translated and realized as long term customers.
Question 2: Do you understand the importance of relationship marketing?
All the questions were interlinked and were not entirely divorced from each. They were structured in such a way that the chain of thinking were interlinked and developed a chain of understanding. This was deemed essential as the research study was qualitative in nature as sought to unearth qualitative views and not quantitative. Relationship marketing is after all, all about quality and not quantity. All of the twenty said that they understood the importance of relationship marketing. The research sought to find out any common emerging themes/responses on the questions. This was in line with the use of the grounded theory methodology as it seeks common emerging themes or patterns in its analysis. The most common linkage on the importance of direct marketing was in terms of customer retention as evidenced by some of the responses in the following passages:
‘It is important in targeting and the selection of the markets in terms of market segmentation and retention’
Another one said:
‘It (relationship marketing) is all about customers coming back. The dairy industry is very highly competitive. Due to the opening up of the markets in the 1980s as part of the Thatcher Reforms we have to compete with other dairy industries from the European Union. We are no longer protected from the outside competition. Also other dairies in other countries in the EU have the added advantage that they are heavily subsidized especially the French. As such they offer dairy products in the U.K at a low price. The EU has only one person in mind, which are its citizens meaning the customers and not the dairy industry producers and suppliers. It is all above the customers and not the fate of the dairy industry. As long as the industry is still afloat, that what matters to them.
Question 3: Is relationship marketing short or long term strategy?
This question produced a mixed bag of results. Thirteen of the branch managers were of the view that it was a short term strategy. The remaining seven held it as a long term of view. This mixed bag is indeed worrying. On the good side it revealed a dual mixed bag. Underneath it revealed the ‘short termism’ approach to business by some of the branch managers. They were only concerned with the short run, maximizing sales in the short run so as to realize quick profits and not the long run. As such they sought to maximize short term profits which in turn led to short term rewards in terms of salary increments or bonuses. This was meant to please their superiors as the formers’ performance was measured in terms of sales and target profits. This it can be argued compromised the long term survival of the firm. This is because customers and the nature of the relationship were held in the short and not in the long term benefit of the firm. As such Dhillon has to re-address this view such that the branch managers have a long term view of the customer relationship and indeed this would mean a long term view of the firm as a whole. Long term view means that the branch managers must sacrifice their personal goals and gains for the benefit of the firm and the whole enterprise. Short termism gives the firm a short term life, a short term asset for its survival and not a long run asset which could indeed secure the firm’s long term survival. Long term relationships bring stability to the organization. Long term relationships also bring in stability and predictability on consumer behavior and spending patterns.
Question 4: What relationship marketing techniques do you use?
This question sought on the understanding of the techniques used. What emerged was that the branches were semi-autonomous and thus were not entirely given free rein on some aspects of the business. This made business sense in terms of cost and control. They were in general given some room to maneuver in terms of the day to day running of the business. The branches were in sense viewed as outlets of the business. They were viewed a points of sales. As such in line with the corporate strategy the branches used homogenous techniques which were standardized across the board. This meant to ensure uniformity and consistency across the branches the same techniques were laid as the template for the organization as an entity. This was to ensure that conformity was realized across Dhillon’s sprawling branches to ensure that there is no confusion from the customers as the techniques were to be same irrespective of the branches. This was meant to ensure that the customers found the same incentives irrespective of which branch they normally visited. It was only the corporate that were given specially treatment and as such were given corporate portfolio. The accounts for these corporate clients were handled by the Corporate Department. These corporate clients were deemed essential business for the dairy firm. For a customer to be held as corporate by Dhillon Dairy Ltd, it meant that a customer’s business to the former was well above ?2 million pounds per year. The standard benchmark was ?2 million pounds for a year to be held as corporate. For these the relationship was personalized as they were deemed to be the key accounts. The management made client visits in order to access their view of the level of the service provided by Dhillon Dairy Ltd. These key customers/clients had signed contracts with Dhillon Dairy Ltd. They were mostly corporate firms and were mostly in the service industry. Thus they needed a constant supply of milk and other dairy products for their staff. Dhillon Dairy Ltd delivered the dairy products onto these key clients’ premises. As such the logistics department made sure that the deliveries were made on time in right quantities at the right place. It was important that these key clients never ran short of dairy supplies. Indeed it could be argued that there is nothing more embarrassing than a shortage of milk for teas and coffees during an important board meeting. Image and presentation count in this modern competitive environment. As such Dhillon Dairy Ltd realizes this as it set up a Corporate Department with its own separate supporting logistic department in place. The Corporate Department key corporate account managers who oversaw these corporate clients sought to maximize their satisfaction. Thus for the key accounts Dhillon Dairy Ltd strategically used its Corporate Department with its key accounts managers and its separate supporting logistics department as the chief marketing technique for these key clients. For non key customers the following standard techniques were rolled across its branches;
Price discounts for larger orders
Special offers for stocks which is nearing its lifeline
These inter alia are viewed as monetary rewards. This meant bought loyalty. This could in way help Dhillon Dairy Ltd in the short run in terms of sales. However bought loyalty can prove to be an expensive exercise in the long run as bought loyalty needs to be constantly rewarding with more enticing rewards if it is stay loyal. This indeed becomes a business liability in long run. Bought loyalty can be liability unlike true loyalty. True loyalty in the customer sense means customers chose to be loyal because they choose and not because they are enticed by the monetary offers which in the day sense can be viewed as bought loyalty. As such loyalty and satisfaction cannot be treated as one and the same. Loyalty may be missing even if there is customer satisfaction as they may be barriers to the whole process. For loyalty can be bought through such incentives as bonuses, coupons, discounts, price discounts and other monetary offers. Indeed this is different from customer commitment which cannot be bought through monetary means but can only be earned through the long term process. They argued that loyalty is not a guarantee for future success especially the bought one the relationship and its ongoing process is determined and influenced by the monetary incentives. Genuine loyalty is the one that counts for its stands the test of time as the customer would be willing to stand by the firm even if it makes a mistake. Customer loyalty is indeed an asset to the business. T rue loyal customers are the customers who have developed a special bond with company just like customers who become attached to a brand and thus become loyal to it. Dhillon Dairy Ltd also uses the customer surveys in the form of questionnaires. These are carried out on a regular basis in order to measure and access the level of customer satisfaction. These are carried on the ‘shop floor’ meaning to that they are carried out at the branches or outlets when the customers visit. The customer database is also used to mail some of the questionnaires to the customers. These will be searching for feedback on the level of customer service and their satisfaction. A happy and satisfied customer is indeed a profitable customer. They are bound to become repeat customers and may recommend Dhillon Dairy Ltd to their friends and working colleagues or other corporate partners in their supply chain. Good customer relationship can be viewed as a priced asset, goodwill in the balance sheet. Good customer relationship or in the context of this research study, good relationship management could indeed be a source of the competitive advantage for Dhillon Dairy Ltd. This is more of particular importance asBritainis still in recession and businesses are competing for the ever shrinking consumers’’ pockets. The spending patterns of consumers have changed. The boom of the late 1990s up 2006 is gone. It is the bust and consumers have changed their spending habits and have prioritized their needs and wants. Milk could still be regarded as a need but other dairy products such as cheese can be viewed as a want, a luxury in light of the present day recession. As such customer retention has become more vital than before especially the profitable ones. It is the profitable ones that keep Dhillon Dairy Ltd afloat. The non profitable ones can help to make it break even in accounting terms. Breaking even in not enough for Dhillon as it needs to release profits in order to pay its stakeholders in name of its employees, suppliers, creditors and its shareholders. It also needs profits in order to plough them back as investment. It needs to constantly reinvest in machinery especially refrigeration and the refrigeration of trucks. Refrigeration is a major expenditure for Dhillon Dairy Ltd as it is involved in the sale of perishable items which need around the clock refrigeration. This means high electricity billing.
Question 5: Do you view relationship marketing as expenditure or an asset?
This question sought to further explore the question as set by question three which asked the branch managers on whether they saw relationship marketing in a long or a short term. In that question thirteen of the branch managers saw it as short-term and the remaining seven saw it as long. The researcher sought to see if there was any variance or coloration between the views they expressed on question 3 and question 5. To recap the following was the question and the response on 3.
Is relationship marketing short or long term strategy?
The results on this were as:
Relationship marketing-short term strategy137
Relationship marketing-long term strategy713
In view of this question and its response the following question was put forward to the respondents:
Do you view relationship marketing as expenditure or an asset?
The results on the question were as follows:
There was a clear coloration on the answers for question 3 and question 5. Those who viewed relationship marketing as a short term strategy also viewed it as an expenditure, a day to day business expenditure. As such this meant that they did not place much emphasis on relationship marketing and regarded it as an ordinary expenditure. As such it was bound to be ignored and be lost in the maze of other day to day expenditure. However this was in sharp contrast to question 2 where all the managers (20) acknowledged the importance of relationship management. As such the analysis unearthed that whilst all the twenty realized the importance of relationship marketing thirteen treated it as short term expenditure. This is paradox, whilst recognizing its role but at the same time rendering it to a short term day to day expenditure.Those (seven) who viewed it as a long term expenditure made economic and business sense as they also viewed it as a long term asset. This could help in customer retention and this retention could promote and enhance the value of goodwill of Dhillon Dairy Ltd.
Question 6: Do you view relationship marketing within your branch is in line with the mission statement?
In overall Dhillon Dairy Ltd as an entity viewed relationship marketing as a key strategic objective in promoting the mission statement which envisaged Dhillon Dairy Ltd as one of the leading dairy companies in the U.K. This was its long term vision. As such it follows that Dhillon Dairy Ltd saw relationship marketing as a long term process, a long run and not a short run. As such the overall corporate goals and vision were not in line with some of the interviewed branch managers. This was evidenced by the interviewees’ responses as some of the managers viewed it as a marketing expenditure (13) and also viewed it a short term strategy. This view was not in line with the mission statement. As such goal congruence is a must if Dhillon is to survive the long run. The branch managers (13) should realign their views on relationship marketing is viewed as a long term asset and also as a long term strategy in order to enhance and promote and enhance the company’s strategic goals and its strategic fit in the market place. The thirteen branches came to self actualization and self reflection on question 6 when they realized that they were not in line with the organization’s corporate goals, its aims and objectives as far as relationship marketing was concerned. The interviewees were granted anonymity as such and were therefore free to express themselves. This worrying revelation falls upon Dhillon as an entity to readdress. One way might be to send the branch managers on relationship marketing exercise and some short courses on strategic management and organizational awareness. Indeed this is one of the strengths of the interpretivist’s paradigm in the sense that it is dialogic and dialectic enabling the researcher and the researched to become intrinsically interlinked. This dialogue is dual as it seeks interpretation and meaning. Its inductive nature means that meaning is drawn and raised from the data. There is a constant dialogue between the data and its interpretation, the interpretation and the data such that mutual understanding is achieved. This ironically reflects the grounded theory process of the induction. It is the grounded theory in process, in action. The research study was qualitative in nature looking for qualitative answers, qualitative meaning. Relationship marketing is after all qualitative in nature. The aim of relationship marketing is customer satisfaction and customer satisfaction is all about quality service and not quantity.
Question 7: Which is important customer retention or the acquisition of new customers?
The results of this question were as follows:
Acquisition of new customers13
This results were on this question were predictable as evidenced by the responses from the previous six questions. The previous questions revealed that the thirteen branches managers were of the view that relationship management was expenditure and was viewed in short run terms, a short term strategy. As evidenced by the research study this was a ‘short-termism’ view that disposed of the long run view. It was therefore not surprising that the same thirteen opted for the acquisition of new customers as short terms goals that yielded immediate profits was their ultimate goal. This was in sharp contrast with the other seven who viewed relationship marketing as a long term goal, an asset and a long term strategy which was in line with Dhillon’s overall mission statement, its goals and objectives. As such it was fit that they saw ‘customer retention’ as important as it is the long term goal of relationship marketing and indeed that of Dhillon Dairy Ltd. Some of the comments on those on the favor of customer retention were as follows:
‘The more customers we get the better the business. We worry about gaining new customers, bringing in new business. That is the emphasis. Existing customers are happy and most of them have been with us for years. We need more money in order to get paid. Everybody is getting laid off because of the recession’
Another one said:
‘Off course we need new customers to bring in new business. We need that extra revenue. Dairies are falling under because of the recession. New customers mean we add new business on top of the existing customers. We have mortgages to pay and as such one has to think fast in order to survive. That extra penny brought in from new customers now means a lot. We cannot afford to concentrate on the existing customers as a vehicle for driving the businesses’.
Question 8: What do you understand by the term the supply chain?
This was integral question that sought as it provided the linkage between relationship management and the supply chain in terms of marketing. It sought to analyze in light of the preceding, the branch managers’ awareness of the supply chain and relationship marketing as both sought customer retention and customer satisfaction. Indeed these questions were interlinked and followed a chain of thought on the understanding of relationship management and the supply chain in light of Dhillon Dairy Ltd as these are interlinked in the sense that the former uses the latter as one of its tool in order to maximize customer retention and customer satisfaction. All the twenty branch managers understood the concept of the supply in relation to their jobs as jobs. They mostly linked it to the nature of their jobs. The majority noted that they were more of a depot than a branch. The actual processing of the dairy products was actually undertaken on the farms owned by Dhillon Dairy Ltd. It is from there that they are transported as finished products into the branches. This saved more in processing time and transportation costs. In a sense Dhillon Dairy Ltd was the producer, the wholesaler and in some cases the retailer. The producer was the farms that Dhillon Dairy Ltd owned. The livestock that Dhillon Dairy Ltd owned produce the dairy products which are then processed into finished perishables at source. The branch managers are the wholesalers who then dispatch these dairy products to its corporate clients. They are also the retailers in the sense that they also sold the dairy products to the non-corporate clients as well. It was indeed a good sign that they understood the concept of the supply chain and that they saw it from their work point of view and thus were able to match the theoretical aspects of it with their practical work situation. They clearly understood their position and role within Dhillon Dairy Ltd marketing supply chain
Question 9: Do you understand the importance of the supply chain?
This question was also linked to the other questions. As such it sought to seek whether the twenty branch managers or depot branches understood the concept and importance of the supply chain. The majority in a near sense, all of them said they did understand the concept of the supply chain. They viewed it terms of a relationship. As such as drawn from question 8, Dhillon’s supply chain was not really long. It was short as Dhillon was the producer, the wholesaler and the retailer in its supply chain. As such they noted that their supply chain was unique as it involved mostly the employees and the customers. They argued that it was important to have cordial relationships with other employees in the supply chain as they are also Dhillon employees as well. The customers were regarded as the very end of the supply chain, the chain was acknowledged that it served and was used as a means to an end, the end being the customer satisfaction and customer retention. Some of them linked the importance of the supply chain to the strategic aims and objectives of Dhillon’s mission statement and argued that the supply chain must promote the aims and objectives of the mission statement. It must be strategic fit to the mission statement. The supply chain, if not appropriate fit must readjust and realign itself to the mission statement. The mission statement is the dominant of the two and Dhillon’s supply chain must promote the mission statement.
Question 10: Do you understand the linkage between relationship marketing and the supply chain?
This question produced a mixed bag of results. Thirteen said they did understand the term in the sense that both of them had customer retention in mind. Relationship marketing used the supply chain in its quest for customer retention. The thirteen noted that it the former used the other as another tool to be used for customer satisfaction and customer retention. It became apparent that there was a gap in understanding on the remaining seven in the sense that they understood both terms on their own. They understood their importance but could not manage to link the two together as one in terms of their aims and objectives. Thus Dhillon’s senior management must ensure that this link is made apparent and clear for the overall benefit of the firm, the employees and its stakeholders. In a nutshell, the similarities between the two must be realized and known in order for Dhillon to fully realize its potential through its branch managers within the dairy industry.
Question 11: Where is Dhillon Dairy Ltd’s position in the supply chain?
This question was linked to all other questions on the supply chain. It summarized Dhillon’s chain on the supply chain. It was a continuation of question 8, 9 and 10. The branch managers managed to link their position in the supply chain in relation to their jobs. They were the view that in most cases they were the wholesalers as they catered for the corporate clients who placed their orders in bulk. In some cases they said that they became the retailers when they catered for non corporate clients who did not normally purchase in bulk. It was in a sense a dual role in the supply chain both as the wholesaler and sometimes as the retailer. They noted that the Dhillon supply chain was mostly internal in the sense that Dhillon was the producer (manufacturer), the wholesaler and the retailer. It was an internal supply chain whose externality was through the customers’ purchase of its products. It was worth noting that they linked their position in the supply chain in light of their jobs as branch managers.
4.4 Room for discussion
The data analysis produced a mixed bag of results. Dhillon was unique in the sense that it was the producer, the wholesaler and the retailer. As such it had the key advantage in the sense that it procured and processed everything from within the firm. As such it could operate at a low cost and pass these as low prices to the consumers. As such it had the control of its supply chain. This was a chief advantage in the sense that it could manage and control its own supply chain. It could manipulate its supply chain in line with the market. It could re-align its supply chain in line with the market changes. That was an important advantage as it could alter the supply chain in line with the environment changes. The major disadvantage was that it had no external source to rely upon if one of chains in the supply chain was disrupted or broke down. This meant that if one element in the supply chain was disrupted (say its dairy farms) the whole supply chain would be affected. This was not good news as it had no external links in its supply chain. As noted Dhillon’s supply chain was mostly internal, the external being the end consumers, it customers.
As noted this supply chain was both strong and vulnerable. The majority of the branch managers did display a fair knowledge on the meaning of customer relationship, its importance, supply chain and its importance. They understood the underlying principles beneath these.
What was worrying was the short-termism approach of some of the branch managers as far as relationship marketing was concerned. Some of them viewed relationship marketing as a short term strategy that sought to increase the branch profits. They also viewed it a day to day expenses and not as a long term asset. As such they were after short term gains and sacrificed the long term gains. They were in favor of customer acquisition instead customer retention. As such they were in view of the maximization of short term profits. This was not in line with Dhillon’s corporate objective which sought customer retention and customer satisfaction. As such their goals and objectives were not in line with those of Dhillon. Dhillon viewed customer retention through relationship marketing from a long term prospective and not the short term. Dhillon as an enterprise viewed this as an asset a long term asset and not as a short term. It can be argued that Dhillon viewed this as long term goodwill. Satisfied customers become repeat customers. It enhances and builds on the reputation of the business and this reputation is translated as goodwill in the balance sheet. Dhillon realizes this importance as evidenced by the empirical findings. The following are the conclusions.
4.5 The conclusions
Inasmuch as the empirical data and analysis it made to explore the nature of relationship marketing and the supply chain in light of Dhillon it produced a mixed bag of results. This was natural and expected as the research study used the inductive logic of reason where meaning is inferred from the data. In the Interpretivism paradigm meaning is drawn from the data, it is drawn from the data. This was the nature of this research study is it did not intend to test or detest a hypothesis. It was Interpretivism in nature such that there was constant dialogue between the researcher and the researched. That dialogue consisted of the semi-structured questionnaires filled in by the twenty branch managers. This dialogue was strengthened by the literature review. As such this research study combined the theoretical aspects as found in the literature review of chapter two and the practical findings of this present chapter. The following chapter was the overall conclusions and recommendations for this research study
5. Conclusions & Recommendation
5. 1 Introduction
This was the last chapter of this research study. It presented the overall conclusions and findings of this research study. It presented the conclusions on the chapter one (introduction) which led to the conclusions of chapter two (the literature review), then chapter three (methodology and methods), then chapter four (empirical data and analysis) and finally this one. In a sense all this chapters were interlinked to each other. Chapter one introduced the reader to the research study and its aims and objectives. Chapter two provided the literature review in terms of the aims and objectives under chapter one. It was more of a continuation of chapter one. Chapter three provided the methodology and methods. It was more of continuation of chapter two. This time it was the literature review on the methodology and methods. Chapter four was the empirical data and analysis. It used the elements of chapter three in its analysis. It also used chapter two to support it. All this led to this final chapter. This chapter was structured as follows: the first part was the conclusions. The second part was the recommendations and these were followed by any opportunities for further research.
5.2 The conclusions
In light of the conclusions the research’s three aims and objectives are herby recapped. The first was to investigate the impact of relationship marketing as way of gaining competitive advantage and achieve profitability in the supply chain industry with reference to Dhillon Dairy Ltd. The second was to carry out a review of literature linking achieving competitive advantage through relationship marketing and challenges faced by supply chain industry inUK. Lastly it was to evaluate the way forward for relationship marketing for Dhillon Dairy Ltd in light of the finding. All these aims and objectives have been met in line with the research study question which was in the following manner: to what extent does relationship marketing tool has an impact as a tool in gaining competitive advantage in the context of Dhillon Dairy Ltd?
The research study set semi-structured questionnaires which were directed to the Dhillon Dairy Ltd’s branch managers. Twenty branch managers responded on the condition of anonymity. The researcher worked for the company and this gave the added of inner insight into the company as well as ease of access of data. As such the researcher and the researched were interlinked in the sense that the former worked for the latter. This tied in with Interpretivism paradigm as in it the researcher and the researched are interlinked as the paradigm is dialectic and dialogic. It was a mutual interpretation. The grounded theory was used in the empirical analysis. It set the coding process in the literature review on the emergent themes that arose on the review of relationship marketing and the supply chain. The grounded theory was loosely used in appropriation to the situational context. This is further supported by Denzin and Lincoln (1998) who argued that different strategies make perfect sense. It was a dual inductive process of the Interpretivism paradigm and the grounded theory. The research study revealed that the branch managers did understand the concept and tools of relationship marketing. They did understand it concept as well. The research revealed that whilst they did understand the concept, they were of the view that the company focused its relationship marketing on the corporate clients. The corporate clients were those who brought substantial business to Dhillon Dairy Ltd. As such the company had a dedicated department that dealt with these corporate key accounts and also had its own separate logistics department to support it. Some of the managers were of the view that relationship marketing was a tool for the short run benefit of the company and to be precise, a benefit to their own branch. They were in view of the short run profits of their branches. They sought to maximize their branch’s short term profits. In a sense a short run increase in branch profits can be viewed as good performance for that branch. Good performance comes with rewards, an increase in the reward benefits and incentives. This increase can come through the means of huge end of the financial year bonuses, increase in pay and promotional perks. This is what some of the branch sort for in the short term. As such borrowing Immanuel Kant’s maxim, these branch managers used relationship marketing as a means to an end, the end not being Dhillon as an entity, the end was these branch managers’ short term needs. This was not in line with the company as it saw relationship marketing as a long term process, a long term strategic goal which aimed at customer satisfaction and customer retention in the long run.
The company viewed relationship as the strategy to gain competitive advantage over its competitors in the long run through customer satisfaction and customer retention in the long run. It sought to satisfy these customers through their segmentation and in the form of the key accounts corporate clients. It set up a department dedicated to these key corporate clients and sought to retain them in the long run and ensure their loyalty. In accounting this term long loyalty is viewed as part of the goodwill. It is an asset in balance sheet. The organization also realized this and as such treated relationship marketing as an asset and not as a liability. This was in sharp contrast to some of the branch managers who saw relationship marketing as a short term strategy to increase their branch profits. As such they saw relationship marketing as a day to day expenditure under the operating expenses and not as an asset. They treated it as an ordinary expenditure that was written off against the sales. This was not in line with company’s overall strategy. In fact they were also in favor of customer acquisition and not customer retention. They were the view that the former brought in extra revenue whilst the latter brought in the usual levels of revenue. They were in favor of seeking more and more clients. These clients, they argued brought in more revenue. However these clients, it can be argued were only temporary and did not last long with the company as these managers were not in favor of customer retention. They were only in favor of generating more and more customers for their branches. This meant that the customers were unlikely to have their needs and wants met. This meant that they were unlikely to be satisfied by the level of service they got from these branch managers. As such they would have a short term life with the company. This reflected badly on the company’s corporate image as an entity. An unhappy and unsatisfied customer will not recommend Dhillon Dairy Ltd to their friends or colleagues. That customer is likely to comment to their counterparts with negative reviews on Dhillon Dairy Ltd. This meant that the company lost business and potential future business as a result of this short term view by some of its branches managers. As such this meant that the development and increase in the key corporate accounts clients was hampered as well as some of the lost customers could have had the potential of being one of the key corporate accounts.
The majority of the branch managers knew what the supply chain meant, its importance and Dhillon’s position in the supply chain. However a substantial majority failed to link the relationship between relationship marketing and the supply chain. The former uses the latter as one of its marketing tools used to maximize customer satisfaction and customer retention. Both relationship marketing and the supply chain aim at the maximization of customer satisfaction and customer retention. Thirteen of the branch managers failed to identify this link. It was intriguing as these thirteen understood relationship marketing, its importance, the supply chain and its importance. It can be argued that when one stands to analyze the situation further from the Interpretivism paradigm, these thirteen who failed to provide the linkage were the same who were in favor of customer acquisition and not customer retention. As such they could not provide the link of customer retention and customer satisfaction as they suffered from ‘short termism’. As such they would not see this linkage as they are short term orientated and not the long run. Indeed this displayed that there was a gap of understanding. This gap had to be re-addressed by Dhillon’ Dairy Ltd’s top management in light of these thirteen branch managers. These branch managers’ ‘short-termism’ would cripple the long term strategy of Dhillon as it saw relationship marketing as a tool for competitive advantage through the maximization of the customer satisfaction and customer retention. Dhillon Dairy Ltd held this as a long term strategy and not as a short term strategy as held and viewed by some of these branch/depot managers. This was a worrying revelation that this research study unearthed. As such Dhillon Dairy Ltd has to re-address this situation with the immediacy and emergency it deserves as it is top urgent and concerns the future vital well being of the organization as a corporate entity. The true nature and depth of this short termism across its branches/depots was yet to be fully comprehended as these thirteen branches were a sample presentation of the Dhillon Dairy Ltd branches/depots. It was hoped that this short-termism was confined to the thirteen branch managers but this possibility was statically impossible as the thirteen were a representative of over a hundred branches of Dhillon Dairy Ltd. The numbers were likely to be over and not confined to the thirteen branch/depot managers. It is a matter for Dhillon to urgently re-address it will soon or latter cripple the organization as an operating entity. In light of the preceding the following were the recommendations:
The following were the subsequent recommendations:
5.3.1 Long term view
The branch managers across all the branches needed to be re-aligned in their way of thinking such that they realize that relationship marketing is a long term objective and not a short term objective to achieve personal goals. As such the branch managers’ goals must in line with the organizational goals and promote the goals of the organization as an operating entity and not the personal goals of the individual. It is vital that Dhillon Dairy Ltd re-addresses this as a matter of urgency if it is survive as an operating and viable commercial entity.
5.3.2 Customer retention versus customer acquisition
Customer acquisition is part and parcel of any ongoing commercial enterprise in order that in remains as healthy ongoing concern customer retention should not be ignored otherwise the efforts of the former would be in vain. Relationship marketing seeks to maximize customer satisfaction and retention and uses the marketing supply as one of its tools in seeking competitive advantage as its leverage. The emphasis should therefore be on customer retention. It was up to Dhillon’s top management to ensure that this view is encompassed across the board and the entity as a whole in line with its corporate strategy
5.3.3 Relationship marketing as an asset/investment
It should be treated as such and not as a day to day expenditure. This would ensure that the branch managers hold it as a long term strategy in the form and part of the goodwill realized through customer retention as its competitive advantage tool. This will be in line with Dhillon’s overall corporate strategy and objectives
5.3.4 Integrate within the supply chain
Dhillon Dairy Ltd’s supply chain is internal and fixated within the organization. The only external part of it is its end customers. As such any breakdown in any elements of its supply chain would cripple the organization. As such it is deemed necessary that it should have a back up plans or have any outsource alternative if one of the chains in the supply chain breaks down.
5.3.5 Strategic supply chain alliance
As such Dhillon could also form a strategic supply chain alliance with another firm in the dairy industry. This alliance would indeed help Dhillon in case its own internal supply chain breaks down. This would serve as a strategic back up plan
5.4 Opportunities for future research
This was a template for future. It is hoped that the future would seek ways and means upon which Dhillon Dairy Ltd could find and source a strategic supply chain alliance as a framework of back up for its own internal supply chain
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The following is the list of questions on relationship marketing and the supply chain in light of Dhillon Dairy Ltd. You must state your views in the following manner; either a yes or a no. Please include comments as much on your views if you feel it is necessary in order that your opinions and sentiments can be fully understood. This questionnaire will be treated with the utmost confidentiality and names will not be disclosed. They would only be disclosed with your consent and approval (this in line with the Data Protection Act 1998). Thank you for your cooperation.
Question 1: Do you understand the term ‘relationship marketing?
Yes or No
Question 2: Do you understand the importance of relationship marketing?
Yes or No
Question 3: Is relationship marketing short or long term strategy?
relationship marketing-short term: Yes or No
relationship marketing-long term: Yes or No
Question 4: What relationship marketing techniques do you use?
This is an open ended question. Please state the type you use and any give any additional comments:
Question 5: Do you view relationship marketing as expenditure or an asset?
relationship marketing-expenditure: Yes or No
relationship marketing-asset: Yes or No
Question 6: Do you view relationship marketing within your branch is in line with the mission statement?
Yes or No
Question 7: Which is important customer retention or the acquisition of new customer?
Customer retention: Yes or No
Acquisition of new customer: Yes or No
Question 8: What do you understand by the term the supply chain?
This is an open ended question. Please state the type you use and any give any additional comments:
Question 9: Do you understand the importance of the supply chain?
Yes or No
Question 10: Do you understand the linkage between relationship marketing and the supply chain?
Yes or No
Question 11: Where is Dhillon Dairy Ltd’s position in the supply chain?
This is an open ended question. Please state the type you use and any give any additional comments: