Supply chain integration is divided into two dimensions, namely internal integration and external integration. Internal integration refers to cross-functional collaborative processes within the company. External integration consists of the integration of suppliers, the integration of customers and logistics service providers. Sometimes external integration works best if the company has good internal integration. On the other hand, the lack of internal integration is the cause of external integration and the realization of the supply chain. For this reason, the present work aims to investigate the integration between two fundamental functions: logistics and marketing. Both are strategic because their performance directly affects customer satisfaction. Studies investigating this relationship are still limited in number. Therefore, this document aims to examine whether functions share information on processes such as new product development, package redesign, promotions and product returns. The literature, in fact, highlights that the lack of integration leads to an increase in operating, inventory management and transport costs. Through an online questionnaire, this paper analyzes the state of the art in 83 Italian companies. The results confirm the low rate of integration between logistics and marketing not only in small and medium-sized enterprises but also in large companies.

1. Marketing and logistics integration.
Results of an empirical analysis.
Andrea Payaro Ph.D., Anna Rita Papa
P&P Consulting srl
Italy

2. Agenda
• Reasons of this research
• Main issues
• The goal
• Research metodology
• Data analysis and conclusions

3. P&P Consulting
• Practitioners
• Medium large companies
• Logistics and supply chain
management in different industries

4. The issues
• Low customer satisfaction
• Increasing costs
• Transports
• Returns
• Low saturation of load
• Resource allocations
• Overstock / Out of stock
We (Log Mngr) are
not involved in
decisional process!
Weak packaging
Racks display
Overstock
Unsaturation

5. The question
• Are these issues the consequence of low integration between marketing
and logistics?
• Literature provides many papers:
• a company’s internal functions operate like functional “silos” (Ballantyne, 2000, Min
and Mentzer, 2000, Stank et al 1999, Morash et al. 1997).
• Logistics and marketing develop processes targeted to customers satisfaction. To
reach this goal, functions must share information and develop collaborative
behaviour during the following activities:
• research & development (Lynch and Whicker, 2008)
• demand management (Christopher M., 2007)
• sales forecast (Madhani 2012);
• order and warehouse management (Anđelković and Radosavljević 2018);
• packaging design (Vernuccio et al. 2010);
• shipping and distribution (Pogila et al., 2019);
• after-sales services (returns) (Mollenkopf at al., 2007)

6. Our goal
• Does it exist the integration between marketing and logistics ?
• This paper aims to analyse if exists a a collaboration and a common strategy
between two functions
• Our study:
• Search a partner
• Present our target to partner
• Define a questionnaire
• Send the questionnaire to marketing or/and logistics managers
• Collect data
• Verify the existence of integration

7. The research
• A total of 269 companies are identified from the membership list of the AISM - Associazione
Italiana Sviluppo Marketing (Italian Association Marketing Development) – research partner.
• The questionnaire was created in the open platform SurveyMonkey
• 37 questions – close answers – Likert’s scale (1 – 5)
• Invitations were mailed to managers
• This paper recorded a total of 85 responses compiled survey, only 83 were usable
Business turnover Cases Perc.
Less than 10 mln Euro 33 40%
Between 10 and 50 mln Euro 22 27%
Between 50 and 100 mln Euro 8 10%
Between 100 and 300 mln Euro 11 13%
More than 300 mln Euro 9 11%
Business model Cases Perc.
Trading Companies & Distributors 14 17%
Services 16 19%
Manufacturing 53 64%

8. Main results
Critical issues highlighted by
logistics are taken into
consideration by marketing
Cases Perc.
1 – Never 8 10%
2 – Almost never 35 42%
3 – Occasionally/Sometimes 24 29%
4 – Almost every time 11 13%
5 – Every time 5 6%
Marketing and logistics
collaborate to reduce lead time
Cases Perc.
1 – Never 17 20%
2 – Almost never 22 27%
3 – Occasionally/Sometimes 24 29%
4 – Almost every time 10 12%
5 – Every time 10 12%
Marketer knows all logistics
costs related to the products
launched / promotions realized
Cases Perc.
1 – Never 14 17%
2 – Almost never 19 23%
3 – Occasionally/Sometimes 16 19%
4 – Almost every time 24 29%
5 – Every time 10 12%
Marketing constantly monitors
the rate of goods returns
Cases Perc.
1 – Never 17 20%
2 – Almost never 21 25%
3 – Occasionally/Sometimes 23 28%
4 – Almost every time 11 13%
5 – Every time 11 13%
< 20%
< 25%
< 30%
= 41%

9. Conclusions
• Relationships between logistics and marketing are critical
• Most companies (SM and Large enterprises) still do not have processes that allow
a flow of information between functions
• This lack leads to increase inefficiencies which can be summarized in the
following points:
• Increasing lead time.
• Products and packaging are not designed to optimize transport.
• Promotional material and display create expensive operations management.
• Returns are more and more expensive.
Levels of Integration
Business turnover Low Medium High
Less than 10 mln Euro
37 6 9
Between 10 and 50 mln Euro
Between 50 and 100 mln Euro
10 8 13
Between 100 and 300 mln
Euro
More than 300 mln Euro

10. Conclusions
• Literature refers to supply chain management but there are low level
of integration in the company
• Media refers to sustainability, but solutions adopted by companies do
not reduce transports (unsaturation), damages (weak packaging) and
returns.
• Promotional diplays are not designed to reduce logistics costs
(storage, putaway, garbage)
• Usually promotional diplay racks are not designed to reduce retail
oparations (assembly), to re-use, or to simplify the separate waste
collection.

11. Integration: the effects
600 bottles per pallet
750 cl
EPAL – 160 cm high
40 Trucks per year
864 bottles per pallet
750 cl
EPAL – 160 cm high
28 trucks per year

12. Integration: the effects
Rack display
Difficult to move, store and
dismantle
Non reusable - Cartoon box
Reusable plastics container, easy to
transport and store.
Collapsable edge.
Pallet optimization
Project partner

13. Thanks for your attention