Many companies have adopted and implemented supply chain initiatives, particularly as they globalize their operations. Much of the research and literature focuses on the traditional forward supply chain, but increasingly attention is being drawn to the reverse supply chain. Almost all companies must deal with return products, but very few do it well, or recognize the hidden value in more effectively managing their returns and reverse logistics activities. Marketing and logistics integration has been studied extensively for forward supply chains (see for example, Bowersox et al. 1999; Ellinger et al. 2000; Mollenkopf et al. 2000; Stank et al. 1999; Stank et al. 2001a; Stank et al. 2001b), and research interest is now developing around various aspects of reverse logistics (see for example, Carter and Jennings 2002; Daugherty et al. 2001b; Fleishmann 2000; Mollenkopf et al. 2005; Rogers 2001; Rogers et al. 2002).
However, there has been limited attention to theory-based research in the reverse logistics arena (Carter and Ellram 1998; Daugherty et al. 2001a) and the issue of marketing/logistics integration has been ignored. Yet recent research by Mollenkopf and Closs (2005) suggests that there may be a link between these two functional areas (i.e., marketing and logistics) that remains untapped by most businesses. Marketing strategy and policy decisions can have a significant impact on the type and timing of product returns, which would influence the nature and extent of reverse logistics activities a firm would have to undertake. Yet the nature of the relationship between marketing and logistics as related to returns management and subsequent reverse logistics activities remains unknown.
Phenomenon of Interest
Thus, the current research seeks to better understand the links between marketing and logistics operations at both the strategic and operation levels within firms as they deal with returns management. Returns management refers to the strategic development and managerial implementation of a firm’s returns policy as a marketing tool. The returns policy then has implications for the logistics function within a firm. Logistics is responsible for the physical re-acquisition and movement of the product, and ultimately, disposition decisions relating to any future use or value recovery from the returned product (this is often referred to as reverse logistics). In this proposal “returns management” will be used to encompass the totality of the marketing and logistics decisions and actions as described above. A qualitative study provides an appropriate means for studying a phenomenon about which very little is known. Such an approach is imperative to gain a richer understanding of the phenomenon. A grounded-theory approach (Glaser 1998; Strauss and Corbin 1998) will be used to address the phenomenon of the coming together of marketing and logistics personnel in the returns management process, so as to inform theory development in this important area of business activity.
Returns management is not a phenomenon unique to U.S. firms, but rather faced by virtually all firms globally. National and regional government regulations and cultural values/standards cause these activities to be manifested in different ways. For example, in the international context, some of the current interest in reverse logistics and supply chain activities is being driven by environmental legislation. The European Union’s Waste Electric and Electronic Equipment (WEEE) Directive went into effect in August, 2005(Commission of the European Communities 2003; Geraghty 2003), stipulating that all manufacturers of electrical/electronic equipment are now responsible for ensuring that their products do not end up in landfills.
Advocates of corporate social responsibility have long touted that such corporate behavior should be practiced by all firms. Yet firms usually act in their own best interest. When legislation changes the operating environment as dramatically as the WEEE Directive is doing, companies may be motivated to revise their perception of what is in their best interest, and thereby change their behavior. European companies have long operated with legislation that directs their environmental behaviors. As the European Union becomes increasingly unified, however, some companies may need to rethink their returns management practices. Likewise, U.S. companies that had not previously thought about getting product back at end-of-use or end-of-life must now design and implement reverse channels for their products if they operate in the European Union. This may have implications from a marketing perspective on how companies manage their relationships with their suppliers (regarding product development activities) and with their customers (to ensure product return at the end-of-use or end-of-life). Firms that have paid little attention to product returns in the past may be ill-equipped to handle the scope of the reverse logistics to ensure compliance with the new legislation.
Thus, it is imperative that this study be conducted at an international level, recognizing that different corporate environments may cause organizational members to think and act differently, depending on the broad culture in which they operate. The first stage of research will focus on comparing organizations in the U.S. with those in a similar—but different—environment as found in Western Europe (Italy). The second stage of research will extend the research to a wider horizon within Europe, investigating companies in France, Sweden, Denmark and Poland. The third stage of research will further extend the horizon to Southeast Asia and Pacific Rim countries, where the differences in culture and operating environment become even more pronounced.
The overall research objective is to better understand the nature of marketing and logistics involvement in returns management, taking into account cultural and regional differences that may impact firm behavior.