The Insights on Marketing Initiatives Impacting the Bullwhip Effect: Sectoral Study

Abstract

The particular phenomenon of disruption in supply chain in which production is more variable than demand is considered as bullwhip effect. The Bullwhip Effect is immensely studied by the researchers around the world but still it is considered as the unsolved problem. The present study analyzes the impact of different promotion initiatives taken by the firms' belonging to different sectors on the bullwhip effect. The empirical data on marketing expenditure is analyzed from ten major and independent Indian sectors to analyze how marketing initiatives of different sectors are causing the disruption in the supply chain. It has been found that the marketing strategies vary according to the different sectors and the expense incurring in marketing is causing the bullwhip effect. The results are contradicting with the existing theory and it has been analyzed that total marketing expenditure is found to be insignificant in explaining the variability existing in production hence the need of further analysis of marketing expenditure into direct and indirect expenditures arises. The indirect as well as direct marketing expenditures are found to have an impact on the variability in production causing disruption of supply chain and this impact varies from sector to sector. The study attempts to statistically measure this impact.