Demand Chain Management: Enhancing Customer Lifetime Value Through Integration of Marketing and Supply Chain Management
The IUP Journal of Business Strategy, Vol.12, No. 3, pp. 7-26, 2015
21 Pages Posted: 30 Dec 2015
Abstract
Marketing combined with dynamic Supply Chain Management (SCM) provides greater flexibility to satisfy customer demand based on the needs of individual customers and their value to a firm. Marketing focuses on demand creation, while SCM on demand fulfillment. To be successful, the organizations not only need to focus on the supply chain, but also on the demand chain. Demand Chain Management (DCM) provides the alignment of demand creation and demand fulfillment processes across functional, organizational and inter-organizational boundaries. DCM can leverage the strengths of marketing and SCM and meet the challenges of customer value creation in today’s marketplace. DCM provides competitive advantage to the firm by enhancing its supply chain’s ability to focus on and respond to changes in customer demands. This paper introduces DCM as a model which combines the strengths of marketing and SCM and provides conceptual frameworks and models for implementation of DCM. It emphasizes the role of DCM in enhancing customer-value creation reflected in terms of Customer Lifetime Value (CLV). It also provides a methodology for measurement of CLV envisaged on DCM initiatives by firms.
Keywords: Demand chain management, Supply chain, Marketing
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