Marketing Operations Interface Research Articles

Operational analysis of crowdfunding on business: A perspective of product competition

With the emergency expansion of applying crowdfunding as a marketing tool for financing, a creative product, crowdfunding has been treated as a marketing-operations interface model to develop new products. However, the broad questions of whether and how the characteristics of crowdfunding affect product development strategies in the post-funding market have received limited attention in prior literature. In this paper, going beyond the fundraising phase, we propose a product competition model on product quality and price in the post-funding market when crowdfunding is seen as the demand learning tool to update the demand information. By analyzing the interaction between the crowdfunding-related characteristics and the post-funding market, we not only focus on the profit, but also decompose the effects of crowdfunding into profit inflows, demand learning, and price discrimination. The analytical results show that: (i) The competitive advantage in the crowdfunding stage benefits firms since the revealed information about the dominant product quality may increase consumers' willingness to pay. (ii) The effects of price discrimination on the optimal decisions about product quality and price depend on backers'/consumers' type. (iii) AoN mechanism is preferred use for blockbuster-potential products and KiA mechanism is preferred use for long-tail products. The model provides a theoretical underpinning for the recent observation that crowdfunding is seen as a marketing tool for some big firm in the process of developing new product. Our results complement earlier studies in Business Analysis by demonstrating the marketing-operations interface effect of crowdfunding.

Advancing the marketing‐operations interface in omnichannel retail

Advancing the marketing‐operations interface in omnichannel retail

Understanding product returns: A systematic literature review using machine learning and bibliometric analysis

Product Returns (PR) are an inevitable yet costly process in business, especially in the online marketplace. How to deal with the conundrums has attracted a great deal of attention from both practitioners and researchers. This paper aims to synthesise research developments in the PR domain in order to provide an insightful picture of current research and explore future directions for the research community. To ensure research rigour, we adapt a six-step framework - defining the topic, searching databases, cleaning and clustering data, paper selection, content analysis, and discussion. A hybrid approach is adopted for clustering and identifying the distribution and themes in a large number of publications collected from academic databases. The hybrid approach combines machine learning topic modelling and bibliometric analysis. The machine learning results indicate that the overall research can be clustered into three groups: (1) operations management of PR, covering (re)manufacturing network design, product recovery, reverse distribution, and quality of cores; (2) retailer and (re)manufacturer issues including return policy, channel, inventory, pricing, and information strategies; and (3) customer's psychology, experience, and perception on marketing-operation interface. Furthermore, from the content analysis, five potential future directions are discussed, namely digitalisation in the context of PR; globalisation versus localisation in the context of PR; multi-layer (i.e., retailer, manufacturer, logistics provider, online platform) and multi-channel (i.e., online, offline, dual and omni channel) oriented bespoke return policy; understanding and predicting customer return behaviour via online footprints; and customer return perception across the marketing–operations interface.

Performance improvement of supplier-side e-tender-driven marketing process

PurposeConsiderable amount of purchases in business-to-business (B2B) markets make through the tendering process. As technology keeps driving B2B procurement, both the supplier/contractor and buyer firms have settled down in their respective roles in the electronic-tendering environment. Researchers have ignored the supplier-side e-tender-driven marketing process that might lead to substantively successful financial performance. The purpose of this study is to improve the performance of an e-tender-driven marketing process of an original equipment manufacturer (OEM) incorporating the stakeholder's inputs.Design/methodology/approachDiscrete event simulation modelling (DESM) has been used as a methodology to model, analyse and improve the process with the involvement of stakeholders at every stage of the study. Different scenarios are analysed to identify the near-optimal scenario based on agreed-upon key performance indicators.FindingsScenario that incorporated man-power sharing and eliminating avoidable activities gives the near-optimal solution for implementation.Research limitations/implicationsThis study highlights that better insights can be gained by adopting the process-oriented view of the marketing–operations interface. Embracing a stakeholder-based consultative approach gives research a more practical outlook and reduces the gap between theory and practice. Suggestions for further research are provided.Practical implicationsB2B organizations, where lines between marketing and operations are blurred, can improve their marketing processes by implementing operations research tools.Originality/valueThis study provides an attempt to improve the performance of a supplier-side e-tender-driven marketing process of an OEM using the DESM methodology incorporating stakeholder's inputs.

Challenges at the marketing–operations interface in omni-channel retail environments

To compete in today’s omni-channel business context, it is essential for firms to co-ordinate their activities across channels and across different stages of the customer journey and the product flow. This requires firms to adopt an integrative approach, addressing each omni-channel design decision from a dual demand-side (marketing) and supply-side (operations) perspective. However, both in practice and in academic research, such an integrative approach is still in an immature stage. In this article, a framework is developed with the following key decision areas: (i) assortment & inventory, (ii) distribution & delivery and (iii) returns. These affect both the customer journey and the product flow. As a consequence of the resulting interdependencies between the firm’s functions, addressing the issues that arise in the three decision areas requires an integrated marketing and operations perspective. For each of the areas, the key decisions that affect or involve both the customer journey and product flow are identified first. Next, for each decision, the marketing and operational goals and the tensions that arise when these goals are not perfectly aligned are described. The opportunities for relieving these tensions are also discussed and possible directions for future research aimed at addressing these tensions and opportunities are presented.

Sales and Operations Planning: The effect of coordination mechanisms on supply chain performance

Sales and Operations Planning (S&OP) is a means of facilitating cross-functional coordination, such as across the marketing-operations interface, but adopters of S&OP have not all benefited from S&OP to the same extent. This paper investigates the effect of S&OP on supply chain performance using the perspective of coordination and contingency theories. A structural equation model was developed in which six S&OP coordination mechanisms were hypothesized to contribute to improved supply chain performance. The model was tested using a global survey of 568 experienced S&OP practitioners. Our results indicate that Strategic Alignment and Information Acquisition/Processing are the mechanisms that most significantly enable superior S&OP outcomes. However, we find that a highly formalized S&OP Procedure inhibits supply chain performance. Furthermore, using a contingency theory perspective, increasing firm size and increasing experience in S&OP amplify the negative effect of a standardized S&OP Procedure upon supply chain performance. Our results suggest that organizational bricolage may be a coordinating mechanism of effective S&OP programs and that managers should empower ambidextrous S&OP teams to maintain balance using self-governing event-driven processes. This paper makes a novel contribution to the S&OP literature by providing evidence of a theoretical construct (organizational bricolage), which may trigger a re-evaluation of the efficacy of prescriptive S&OP procedures that have been advocated by some researchers and practitioners.

Dynamic Control of Product Innovation, Advertising Effort, and Strategic Transfer-Pricing in a Marketing-Operations Interface

We develop a dynamic control model of a monopolist composed of two profit centers, e.g., an operations department in charge of the product innovation and a marketing department controlling advertising effort as well as the retail price. Meanwhile, knowledge accumulating in product innovation and advertising effort which lead to reducing the corresponding investment cost is considered. The customer inverse demand function depends jointly on the quality level as well as the product goodwill which can be improved by product innovation and advertising efforts. Our results show that the learning rates of product innovation and advertising effort affect the product innovation and advertising effort investments level. In addition, compared with the administered transfer-pricing, the negotiation between the two departments results in a lower transfer price as well as a higher retail price. In the meantime, the advertising effort is lower while the quality improvement effort is higher. What is more, higher profits to both departments and the firm can be brought about by the negotiation means.

Peer-to-Peer Crowdshipping as an Omnichannel Retail Strategy

Crowdshipping is an emerging operations model proposed to tackle the last-mile delivery problem for online and omnichannel retailers in urban markets. Major retailers such as Amazon and Walmart, as well as start-ups such as Instacart and Deliv, have adopted or experimented with variants of crowdshipping models. Peer-to-peer crowdshipping, i.e., using in-store customers as a resource to deliver online orders), carries important implications on the marketing-operations interface for omnichannel retailers: on the one hand, it offers the opportunity to improve last-mile delivery efficiency (the efficiency effect); on the other hand, it provides an additional tool for the retailer to price discriminate between the online and in-store channels (the pricing effect). We model an omnichannel retail network's pricing decision for its online and in-store channels, and consumers' decisions on purchase, channel choice and participation in crowdshipping. Contrasting two reimbursement modes for crowdshipping, i.e., reimbursing shopper-deliverers their incurred delivery costs or providing an additional premium as a (cross-channel) subsidy, against a store-operated delivery model, our analysis reveals that the potential benefits of crowdshipping to the retailer and consumers depend upon the interactions between the aforementioned efficiency and pricing effects. In particular, whether the efficiency effect benefits the firm depends on the availability of shoppers with low value of time; whereas the pricing effect benefits firms selling high-end products. The impact on consumer surplus of the two effects, however, depend on spatial store density. All in all, peer-to-peer crowdshipping can lead to significant win-win outcomes in dense urban markets for high-end items.

Exploring the antecedents of marketing-operations interface quality and competitive aggressiveness

The purpose of the study is to develop a model on Marketing Operations Interface Quality (MOIQ) and Competitive Aggressiveness (CA). The model is developed by establishing the relationship between MOIQ and CA with Enacting Organisational Environment (EOE), Management Support (MS) and Human Resource Management Development (HRDM). The study is conducted by a structured survey questionnaire on 413 managers related to manufacturing organisations in India, employed in both private and public-sector firms. The data were analysed using structural equation modelling. The results of the study indicated goodness of fit of the model having independent variables Enacting Organisational Environment, Management Support and Human Resource Management Development. The dependent variables of the model were Marketing Operations Interface Quality and Competitive Aggressiveness.

Exploring the antecedents of marketing-operations interface quality and competitive aggressiveness

The purpose of the study is to develop a model on Marketing Operations Interface Quality (MOIQ) and Competitive Aggressiveness (CA). The model is developed by establishing the relationship between MOIQ and CA with Enacting Organisational Environment (EOE), Management Support (MS) and Human Resource Management Development (HRDM). The study is conducted by a structured survey questionnaire on 413 managers related to manufacturing organisations in India, employed in both private and public-sector firms. The data were analysed using structural equation modelling. The results of the study indicated goodness of fit of the model having independent variables Enacting Organisational Environment, Management Support and Human Resource Management Development. The dependent variables of the model were Marketing Operations Interface Quality and Competitive Aggressiveness.

A dynamic marketing-operations interface model of new product updates

Two critical success factors for nearly any firm are the introduction of new products and the integration of the marketing and operations functions within the business enterprise. The series of products being considered are associated with sequential non-disruptive innovations in technology, but disruptive in fashion. The study presents a model that integrates and builds upon the popular dynamic Bass model for new product diffusion in marketing and the Wagner and Whitin dynamic lot-sizing model, a seminal model in operations management. The end result is a model that simultaneously determines the optimal timing for the introduction of new product generations, pricing, production timing and produced quantities. This model is then used to examine the impact of variations in marketing and operations parameters on both optimal profit and optimal product lifecycle length. The study finds that larger profit and a faster pace of new product introductions are generally associated with faster diffusion, lower price elasticity, larger market potential, lower new product introduction cost and more costly consumer products.

Effect of cross-functional integration between operations and marketing on negative critical incidents

Negative critical incidents (NCIs) stemming from dissatisfaction with product or services bring the relationship between the firm and its customer into focus. It should be in the benefit of the firm to manage the number of NCIs. We investigate specific triggers of NCIs and study the role of marketing–operations interface in minimising their frequency. The discussion presented in the article is based on theoretical analysis and exploratory empirical research. It was found that firms that are part of industry where new products/services are introduced more frequently are expected to experience more frequent NCIs. A strong intra-organisational interface between marketing and operations functions has a moderating effect on this adverse relationship. One counter-intuitive insight obtained was that the complexity of processes delivering product/service may not be a cause of NCIs, but the reverse can be true in some cases. The sample investigated had representation from service and manufacturing sectors as well as important industries within them. The results, however, could be specific to India. The moderating role of cross-functional integration between marketing and operations in reducing NCIs is also investigated for the first time.

Strategic transfer pricing in a marketing–operations interface with quality level and advertising dependent goodwill

Determining an appropriate transfer price is of importance to a firm composed of divisional profit centers since it significantly affects decision-makings of each profit center and then the firm׳s profit. In this paper, we investigate the effects of negotiated and administered transfer pricing on the profits of each center and the firm based on a differential game involving an operations department and a marketing department within a firm. The operations department is responsible for the quality improvement of a particular product and sells this product to end customers through the marketing department who controls the retail price and advertising effort. Our results suggest that compared with the administered transfer price, the negotiation between the operations department and the marketing department leads to a higher transfer price, and then a higher retail price, lower advertising effort and higher quality improvement effort. What׳s more, the decentralized departments can be coordinated by a committed dynamic transfer price of the operations department, and both departments and the firm can benefit from this coordination.

Reverse logistics innovation, institutional pressures and performance

Purpose– The purpose of this study is to draw on several perspectives rarely used in reverse logistics (RL) research – such as sustainable development, the natural resource-based view and green innovation – to examine the relationship between RL innovation and environmental and economic performance while incorporating institutional theory to verify how institutional pressures moderate these relationships.Design/methodology/approach– A questionnaire survey is used to investigate Taiwan's electrical, electronic and information industries, as well as maintenance and retail stores selling computers, communications and consumer electronics. First, a hierarchical regression analysis is used. Next, moderating relationships are examined along with the related regulatory, competitor and customer pressures.Findings– The results indicate that RL innovation is positively associated with environmental and economic performance. Moreover, three institutional pressures positively moderated the relationships between RL innovation and environmental performance. However, investment in greater RL innovation under higher-level institutional pressures did not always enhance economic performance.Research limitations/implications– Reverse logistics innovation comprises five components, one of which is cross-functional integration, the process of obtaining information from marketing, production and logistics managers about how their firms created the marketing-operations interface to better handle RL. However, we obtained RL innovation information only from individual respondents. In addition, this study focuses on the economic and environmental aspects of RL activities. Future studies should apply the RL perspective on social sustainability to probe RL issues from sustainability's environmental, social and economic points of views.Practical implications– Contrary to the conventional wisdom that RL imposes costs, reduces productivity and curbs competitiveness, this study finds that RL innovation can enrich environmental and economic performances, indicating that firms with more innovative RL capabilities yield more sustainable outcomes for environmental protection, social responsibility and economic performance.Originality/value– This study contributes to the RL literature by applying multiple perspectives – including sustainable development, the natural resource-based view and green innovation – to explore the relationship between RL innovation and performance while using institutional theory to probe the moderating effects of institutional pressures on RL innovation and performance.

Focus on Authors

Focus on Authors

Transfer pricing in a dynamic marketing-operations interface

A transfer price mechanism is proposed to coordinate the strategies of the marketing and operations functional areas operating in a dynamic interface environment in a decentralized firm. Marketing and operations are strategic decision-makers in a differential game, in which marketing has price and advertising and operations has production as control variables, and advertising goodwill and production backlog are state variables. A constant transfer price is entered into the objective functionals for marketing and operations, and subgame perfect feedback strategies are derived for price, advertising, and production as functions of the state variables. The feedback strategies allow a solution for the dynamic system involving goodwill and backlog, and the total payoff to the firm, the sum of the payoffs to marketing and operations, is determined as a function of the transfer price. Finally, for certain parameter conditions an interior maximum of the payoff function is achieved, and the optimal transfer price is identified.

Contributors

Contributors

A differential game model of the marketing-operations interface

In the development of their dynamic strategies, the marketing and operations functions within a firm have differing objectives, and conflict between the two functions is common. The strategic interdependence involving marketing and operations decisions is modeled as a noncooperative differential game. Demand is assumed to be a function of price and advertising goodwill, and marketing controls price and advertising to maximize its discounted stream of revenue net of advertising costs. Backlogging is allowed, and operations controls production to minimize its discounted stream of production and backlog costs. A feedback Nash equilibrium is derived for the game, which allows a solution of the system of differential equations for goodwill and backlog, and is analyzed to study the nature of the dynamic strategies for price, advertising, and production.

Creating value through returns management: Exploring the marketing–operations interface

Managing the return flow of product is increasingly recognized as a strategically important activity that involves decisions and actions within and across firms. We focus specifically on returns management at the marketing–operations interface, by utilizing the conceptualization of customer value and its related drivers. In order to explore the phenomenon of returns management across a multi-disciplinary, managerial spectrum, a qualitative research methodology relying on individual managers’ perceptions was chosen to generate depth of understanding given the limited current understanding of the research topic under consideration. Our results suggest that functional integration at the marketing–operations interface can lead to better alignment of corporate resources and thus create higher levels of customer value. We also found the external business environment to impact how and why a firm creates customer value through the returns management process. Overall, our results suggest that when returns management is recognized as a matter of a firm's competitiveness, the joint role of operations and marketing is imperative to success.

A Review of Marketing-Operations Interface Models: From Co-Existence to Coordination and Collaboration

Marketing and operations are two key functional areas that contribute to the success of a firm. By acquiring and analyzing information regarding customers and competitors, marketing can be viewed an external-focused functional area that determines “what” kind of products (or services) a company should provide through “which” channel at “what” price. By viewing this marketing plan as the “demand” from an internal customer, operations is by-and-large an internal-focused functional area that examines “how” to deliver this demand by using internal or external resources. Due to their inherent roles and responsibilities, coordination and collaborations between marketing and operations areas can be difficult in practice. As such, the conflict between marketing and operations arises when the operation’s “supply” does not meet the marketing’s “demand.” Over the last two decades, researchers have developed different quantitative models to examine the issue of coordination/collaboration in the context of marketing operations interfaces. The intent of this paper is two-fold. We present a unified framework for classifying various marketing-operations interface models that may serve as a guide to navigate through the sea of research articles in this important area. Also, by examining some missing gaps, we discuss some topics for potential future research.