State of the Art 249ECR is often considered as a combination of demand-side manage-
ment, also called category management, and supply-side management.
The theory of ECR consists of four strategies regarding the marketing
and logistics processes (Wierenga, 1997):
- category management, which refers to the processes that involve
managing product categories as business units - efficient replenishment, which aims at bringing the right product
at the right time to the right place in the most efficient way - efficient promotions, which relate to the efficiency of sales pro-
motions to retailers and consumers and focus on avoiding exces-
sive stocks and high performing production planning processes - efficient product introductions, which aim at reducing the
chance of failure through intensive collaboration between
retailers and producers
Another concept focusing on the links throughout the chain is called
Value-Adding Partnerships (VAP). The concept originated from contri-
butions to the Functional School, which recognize that each enterprise
has to perform specific functions within the whole of the processing and
distributions processes between the primary producer and the final con-
sumer (Alderson, 1957). Porter (1990) concretized these ideas within the
concepts of the added value chain and the value system. A company’s
value chain consists of all activities such as production, marketing, de-
livery, service and supporting activities that contribute value to the buyer.
Placed within an industry, this value chain is embedded in a larger stream
of activities that together form the value system. It includes suppliers
and the different stages in the distribution channel as well as the ulti-
mate consumer.
Historically, companies at different stages of the system tended to be-
have in an autonomous way and demonstrated adversary, rather than
cooperative behavior toward each other. However, it is increasingly ap-
parent that the overall performance of the system can benefit from in-
ternal cooperation and partnerships. All participants benefit from the
improved performance of the entire system.
Winning customers from competitors cannot only be realized by sav-
ing costs, but also by delivering greater value. A product offering good
value creates consumer satisfaction. The complex idea of quality is
closely related to satisfaction (Kotler and Armstrong, 1991). Quality has
a direct impact on product performance and hence on customer satis-
faction. Quality begins with customer needs and ends with customer sat-