It is notorious that the level of competitiveness has increased significantly in all sectors of the Brazilian economy due to the transformations observed since the mid-90s. From a macroeconomic point of view, in this period we have experienced monetary stabilization, market opening, deregulation and privatization of key sectors. These factors have been fundamental for the changes that are still taking place in Brazilian companies. From this context, customer-related issues have been gaining in importance as market forces have been unleashed from artifices and anachronistic policies.
Increasingly, the logic of competition in the consumer goods sector is based on integration efforts between retailers and industrial companies whose objective is the satisfaction of the final consumer. Ultimately, these improvement initiatives have led to the spatial and temporal shortening of supply chains, where the flow of products has become “pulled” by final demand. All this happening in a competitive environment characterized by permanent change.
As a final result of these transformations, there was a shift in bargaining power between the links in the supply chain, in the “downstream” direction. In a first stage, the displacement of power passed from industry to commerce and, currently, there is a growing movement towards the final consumer.
The factors that determined the transfer of bargaining power are related to the strong movement towards concentration in the supermarket sector observed in recent years and the growing availability of key market information.
In the first case, mergers and acquisitions between supermarket chains meant that the five largest groups now hold more than 40% of the market. The growth in concentration, shown in Table 1, follows a trend that, according to specialists, will continue in the coming years.
With regard to the availability of information, Associação ECR Brasil highlights the fact that supermarkets hold and use key information from the final consumer base to establish product assortments and efficient policies for resupplying goods, promoting and launching products. new products. Thus, the institution of the ECR Brasil movement in 1997, with the main objective of promoting a quick response to the consumer based on information generated by the points of sale, can also be pointed out as a determining factor in the growing bargaining power of commerce with the industry.
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It is in this context that it is imperative for the success of industrial companies that information from the customer base be interpreted, translated and transmitted in terms of service requirements to the retailer. This has led industrial companies to develop competitive strategies based on differentiation through logistic services. These strategies are based on rapid response and determine high levels of efficiency in the physical distribution process between industry and retail trade.
To achieve high levels of efficiency in terms of distribution, the starting point is knowledge of retailers' service needs and the performance of competing industrial companies. In this sense, market research is a fundamental factor for defining competitive and winning logistics strategies. Performance must match the service levels desired by customers, and performance levels that lead to customer satisfaction can vary depending on a wide range of factors.
This article aims to present part of the results of the periodic survey Benchmark – Customer Service (see Table 2), carried out by the Center for Studies in Logistics, which seeks to monitor the expectations and performance of the physical distribution service in the consumer goods industry. consumption in the perception of retailers.
In a country of continental dimensions and marked differences between the different regions, as is the case of Brazil, it is possible to expect that retailers' expectations are not uniform. If so, the way in which retailers assess the quality of the service they receive may differ from region to region, and it is questionable whether companies with national operations apply a distribution strategy that does not take regional differences into account.
Thus, as the research was carried out in five different states, it is intended to demonstrate that the geographic factor is relevant for the correct market positioning of industrial companies in the consumer goods sector, with regard to the physical distribution service. There are three research questions to be answered and discussed in this article, namely:
Q.1 – Do retailers located in different geographic regions have different expectations regarding the service to be provided by the consumer goods industries?
Q.2 – Do retailers located in different geographic regions perceive the overall performance of the consumer goods industries (market practice) differently?
Q.3 – Do retailers located in different geographic regions perceive the performance of consumer goods industries considered best practices differently?
| Table 2 - General information |
| The Customer Service Benchmark survey, carried out periodically since 1994 by the Center for Studies in Logistics, has been sponsored by industrial companies, leaders in their respective sectors. This article is based on the results of the 5th edition of the survey carried out in 1999 in five Brazilian capitals (São Paulo, Rio de Janeiro, Curitiba, Belo Horizonte and Recife) with 599 retailers, considering four categories of products: perishable food, non-perishable food , paper, and hygiene and cleanliness. The methodology evaluates 9 dimensions (operationalized through their respective distribution service attributes): Product Availability, Order Cycle Time, Delivery Time Consistency, Delivery Frequency, Delivery System Flexibility Delivery, Fault Remediation System, Support Information System, Physical Delivery Support and Post-Delivery Support. The presented analyzes focus only on the four dimensions most valued by the interviewees. To verify whether the given answers are significantly different from one region to another, the ANOVA test was used with significance levels of 5 and 10%. |
| Sponsoring companies |
| Gessy Lever Perdigão Sadia Santher improvements Klabin Coca-Cola Union J. Macedo steel wool Santista Foods Ceval Nestlé Johnson & Johnson Corn Products |
RESULTS ANALYSIS AND DISCUSSION
To present the results, the three research questions will be analyzed according to each of the five selected attributes, observing the importance criteria attributed by the interviewed retailers.
Percentage of demand satisfied when taking the order
This attribute concerns the information that the retailer receives when placing the order, regarding the availability of the requested items. It does not refer to the delivery itself. The left side of Table 2 shows high degrees of retailers' expectations for this attribute. The right side of the table shows that none of the tests performed showed a difference in expectations. It is, therefore, an attribute with high expectations, regardless of the geographic location of the interviewee.
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| Note: Each row in the table presents the region interviewed, the average of retailers' responses for the service attribute in question and the indication of significant differences in comparison with the other regions. The statistical test used was ANOVA. The symbol (*) will indicate that, at 5% significance, there is a difference between regions; and the symbol (**) will indicate that this difference exists at 10% significance. This symbology will be used in the other tables. |
Table 3 shows the degree of satisfaction of retailers with their suppliers in general (market practice) for the item under analysis. Although the percentages are high, it can be seen on the right side of the table that retailers in Recife evaluate their suppliers differently than retailers in São Paulo, Curitiba and Belo Horizonte. As suppliers are not the same in all regions or do not use the same practices in all markets in which they operate, it is possible to state that in this item Recife retailers are not as well served as those in other markets where the test indicated the noted differences.
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With regard to the degree of satisfaction with best practices, Table 4 indicates high levels of contentment, with retailers in Curitiba evaluating their suppliers better than their counterparts in Rio de Janeiro, Belo Horizonte and Recife.
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Percent delivered of total order
This attribute refers to the received goods. It is observed in Table 5 that retailers are slightly less demanding in this attribute than in the previous attribute. They accept, therefore, that 7 to 8% of the order may not arrive. The only significant difference noted occurs between retailers in Recife and São Paulo, even at a 10% significance level.
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Table 6 shows that, in general, retailers are satisfied with their suppliers because, in all markets, the average evaluation of the service received equals or exceeds the expected performance shown in the previous table. The left side of Table 6 reveals some significant differences in valuation, mainly São Paulo retailers compared to Rio de Janeiro, Curitiba and Belo Horizonte retailers.
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Table 7, in turn, reveals high levels of retailers' satisfaction with best supply practices. However, there are significant differences (at the 10% level) between the evaluations of São Paulo in relation to Recife and Curitiba. Also in this item it can be said that in each of the markets there is a supplier that comes close to 100% of the complete order.
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The two attributes just analyzed have to do with the Availability dimension. Analyzed separately, they hide important information: What is the undelivered percentage of the original demand? The resulting unavailability considering the percentage not delivered in relation to the original demand, it is possible to conclude that the market practice varies between a minimum of 9,8% (Curitiba) to 16,3% (Recife). This means that when a customer needs to place an order, he can already count that approximately 15% of what he needs will not be received. Evidently this is a mediocre level of service. And what is surprising is that customer expectation is also low. The combination of expectations (tables 2 and 5) shows that the retailer expects to receive between 82,8% (Rio de Janeiro and Curitiba) and 85,6% (Belo Horizonte) of its original order.
When analyzing best practice, there is a huge difference with market practice. The best suppliers miss between 2% (Curitiba) and 4% (Belo Horizonte) of the original order.
Time between ordering and receiving the product
This attribute is the first that reveals some notable differences in expectations. Table 8 shows that retailers in São Paulo are clearly more demanding than others. Perhaps because they are located close to the production sources, expectations are high. On the other hand, it is noteworthy that although Curitiba is the closest market to São Paulo, the expected delivery time is the lowest.
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Turning to market practice, it is observed in Table 9 that the most demanding market (São Paulo) is also where the delivery time is the shortest, exceeding average expectations. The second best delivery time is perceived in Curitiba (less demanding market in this attribute). The left side of the table corroborates that São Paulo retailers better evaluate their suppliers compared to all other regions.
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Table 10 also shows that São Paulo is the market where the best practice, in the customers' opinion, is the best among all the regions surveyed. There are suppliers in São Paulo delivering goods just over 24 hours after receiving the order.
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Percentage of late deliveries
This attribute concerns the acceptance of deliveries after the promised deadline. Table 11 reveals uniform expectations among respondents. On average, everyone accepts a percentage of around 8% of late deliveries. There are no regional differences with regard to expectations. Combining this expectation with what has already been commented on the undelivered percentage of original demand, it can be seen that the retailer is already counting on not receiving approximately 22% of what it originally needed. The implications for merchants are obvious: either they keep a high safety stock or they live with a lack of products in their stores.
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Market practices, as shown in Table 12, are quite different from customer expectations. Of all the attributes analyzed so far, this seems to be the one with the worst performance by suppliers. There are significant differences between various regions. The evaluations of Belo Horizonte and Curitiba present the greatest number of differences in relation to the evaluations in the other regions.
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Table 13 shows that the best practice in each of the markets, in the assessment of retailers, exceeds average expectations. In São Paulo and Curitiba, these assessments are significantly different from those found in almost all other regions. It is necessary to remember that the best practice ends up “feeding” the expectations of future performance, penalizing the evaluations of those suppliers that do not strive to improve their service levels.
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Number of deliveries per month from the same supplier
The number of deliveries is an attribute highly valued by retailers because the frequency of receipts reduces the need for safety stocks in addition to reducing the necessary storage space in stores. Table 14 shows that São Paulo and Belo Horizonte have average expectations of 9 monthly deliveries or approximately one delivery every 3 days. The left side of the table shows that expectations in these markets are significantly different from those found in other markets. The same occurs between Rio de Janeiro and Curitiba.
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Table 15 shows that Rio de Janeiro is the only region where the average market practice is lower than the average expectation. On the other hand, the assessments that retailers in São Paulo and Belo Horizonte make of their suppliers in general are significantly different from the assessments made by merchants in other regions. On the other hand, the joint observation of tables 12 and 15 shows an interesting fact. Where the frequency of deliveries is lower (Recife and Curitiba), the percentage of late deliveries is lower. This fact suggests that the greater the frequency of deliveries, the greater the possibility that orders will not arrive complete.
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The results shown in Table 16 reveal that in all markets best practice exceeds average performance expectations. On the other hand, with the exception of the test between Recife and Curitiba, all the others show significant differences between the evaluations made by the retailers. São Paulo, the most demanding market for this service item, has the best delivery frequency. Furthermore, as seen in the previous table, market practice is better than the best practice found in other markets, matching only the best performance found in Belo Horizonte.
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CONCLUSION
Of the five attributes discussed in the work, it is possible to state that in three of them there is uniformity between the expectations of retailers: in the two attributes related to Availability (percentage of demand satisfied when the order is taken and percentage delivered of the total order) and in the percentage of late deliveries. In the first two cases everyone's expectations are uniformly high and in the third case retailers are generally more lenient and expect an on-time delivery rate of around 92%. However, the combined effect of performance expectations on these three attributes reveals that Brazilian retailers, regardless of their location, are aware that they cannot expect too much from their suppliers. The combination of the three attributes means the percentage received considering the original need. The average expectation is to receive approximately 76% of the initial need.
In the two remaining attributes (time between ordering and receiving the product and frequency of deliveries) notable differences in requirements were observed between the regions, with São Paulo emerging as the most demanding market.
Although restricted to five attributes (but the most important from the perspective of the interviewees), this information implies that a company may not want to use a single customer service strategy in all markets. There are attributes in which it would be indicated and in others it would mean falling short of the expectations of some and, for others, unnecessarily using resources in aspects not valued by customers.
Exact knowledge of customer expectations, region by region, allows the nationwide supplier to establish its distribution policies at the local level. Your expectation of success, in this case, is more likely to happen. A unique set of procedures at the national level assumes uniformity in the expectations of customers in all the regions in which it operates. Research results have shown that, on several attributes, this is not true.
If there was some uniformity of expectations in some attributes, the same cannot be said in relation to the evaluation of the service received in the five regions surveyed. In all attributes there was some type of difference between the evaluations, with emphasis on the attributes time between the order and the delivery of the product, percentage of late deliveries and frequency of deliveries.
With regard to best practices, the results reveal that in all regions and in all attributes, there are brilliant performances. There are also regional differences in ratings by retailers on this item. It should be noted here that each respondent was asked, in each attribute, to identify the supplier with the best practice. Due to regional differences and possibly the already commented decision of some nationally active suppliers not to offer the same level of service in all regions, local suppliers (with less national exposure) are indicated as having better performance (best practices) than those more known.
As previously mentioned, this article considered data obtained in 1999, but the research that generated the data has been going on since 1994. During this period, it has been observed that retailers' expectations have been increasing, despite the analysis of the 1999 data attention, in some cases, to low levels of expected service. The increase in expectations is partly due to the fact that the final consumer is more demanding and because the performance of some suppliers has also been improving over time. The heightened competition leads to a virtuous cycle of increased expectations as positive experiences raise the benchmark. For suppliers, this means that their performance in certain attributes that could previously be a differentiator becomes a basic condition for survival (from an order-winning criterion to a qualifying criterion for competing).
The increase in demands at all links in the chain translates into pressure for greater efficiency and more services with better quality levels. It is a virulent process of transmitting service requirements along the entire supply chain.
In the case of relationships between companies belonging to the same supply chain, what determines success is the incessant search for competitiveness through efficient operations by offering products and services that have value from the customer's point of view. Just as end consumers have different needs, retailers also have unique characteristics due to different factors, such as geographic, cultural and economic. Being prepared to provide a logistical service that takes these factors into account can be the key to success.
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