Marketing Capabilities and Inclusion of Bakery Suppliers in Supermarkets: a Case of Nairobi Metropolitan

Abstract

Past studies have recognized that as the number of supermarkets in Africa is growing, supplier access to supermarket is becoming difficult as the suppliers are required to meet certain specific standards in order to access supermarkets. Therefore supermarkets have certain specified criteria which the suppliers are required to meet in order to supply their goods to supermarkets. This study investigated marketing capabilities which enable suppliers’ to access supermarkets. The marketing capabilities the study sought to investigate are: Customer Relationship Management, Packaging, and Market sensing and Networking. A supplier’s capability determines his access to the market provided by supermarkets. This is as a result of the standards set by supermarkets. Therefore it is easier for suppliers to access other retailers rather than supermarkets. Owing to this, a competitive environment has been created among suppliers. Therefore this study sought to examine the how marketing capabilities influence suppliers access to supermarket. Using a mixed methods approach the study examined the role of marketing capability on access to supermarkets by suppliers’ in Nairobi metropolitan with a special focus on bakery suppliers. The study has established that marketing capabilities play a critical role in a supplier’s access to supermarkets, the more superior marketing capabilities of a supplier; the easier it is for a supplier to access supermarkets. CRM as a marketing capability not only aids suppliers to access supermarkets but also ensures that they continue supplying supermarkets, the size of the shelf space allocated to suppliers depends on the speed at which their goods move, the price margin of their goods and payment of the shelf space by the supplier. The study shows that the most important criteria supermarkets use to select suppliers are product quality, return policy, product reliability and legal certification. The study further established variations in the way the supermarkets viewed reliability of the supplier and product promotion as criteria for selection of cake suppliers. The big supermarkets did not put so much emphasis on the reliability of the supplier as they assumed that in regards to power relations, the suppliers need the supermarkets more than the supermarket need them therefore they would definitely do whatever they could to ensure that they are reliable. On the other hand the medium supermarket is so strict on reliability. In regards to product promotion, two supermarkets, (one big, one medium) selected suppliers on the basis of product promotion on the other hand for the other big supermarket product promotion was not important.