McGraw-Hill/Irwin Copyright © 2009 by the McGraw-Hill Companies, Inc. All rights reserved.

Chapter 7

Weaving Marketing into

the Fabric of the Firm

COMPONENTS OF MARKET ORIENTATION

1. Establish a corporate culture where every

employee values their customers

2. Listening to the voice of the customer

throughout the entire company

3. Developing superior skills to understand and

satisfy customers

7-3

LINKING CUSTOMER NEEDSTO COMPANY CAPABILITIES

CUSTOMER NEEDS LINKSCOMPANY

CAPABILITIES

Inputs by customers through sales, service, information seeking

Spanning activities that provide decision-making information

Defined by all organization functions

OBJECTIVE: TO ALIGN EACH PARTNER’S GOALS

7-4

• Market Sensing• Customer Linking• Channel Bonding• Technology Monitoring

Outside-in Process

•Financial Management• Cost Control• Technology Development• Integrated Logistics• Manufacturing/Trans- formation Process• Human Resources Management• Environmental Safety Health and Safety

•Customer Order Fulfillment• Pricing• Purchasing• Customer Service Delivery• New Product / Service Development• Strategy Development

Inside-Out Process

Spanning Process

INTERNAL EMPHASISEXTERNAL EMPHASIS

Exhibit 7-1

USING INFORMATION AS A SPAN

7-5

STAGES OF INTERNALAND EXTERNAL PARTNERING

AWARENESS

EXPLORATION

EXPANSION

COMMITMENT

ACHIEVING THE

SUPRAGOAL:

CUSTOMER SATISFACTION

7-6

USING INFORMATION AS A SPAN

• Marketing

• Customer Linking

• Channel Bonding

• Manufacturing Transformation

• Financial Management

• Integrated Logistics

OUTSIDE-IN PROCESSOutside-in Process

Inside-Out Process

Cost Estimation and Pricing

Billing and Payment

Order Scheduling

Order EntryAnd

Prioritization

Order Generation

Order Planning

Postal Service

Order Fulfillment

Exhibit 7-2

7-7

INTERNAL CORPORATE PARTNERS

PURCHASING

MARKETINGMANUFACTURING AND

ENGINEERING(R&D)

FINANCE

Exhibit 7-3

7-8

ENCOURAGING INTEGRATION IN MARKETING OPERATIONS

DEVELOP AND ARTICULATE CLEAR STRATEGIC DECISIONS THAT WILL BE IMPLEMENTED

PURSUE PERSONNEL STABILITY TO ENHANCE LONG TERM RAPPORT

LEVEL THE BUDGET AND COMPENSATION PLAYING FIELD THAT SUPPORTS MARKETING EFFORTS

ESTABLISH CLEAR AND FORMALIZED COMMUNICATION / ORGANIZATION STRUCTURES

7-9

TYPICAL FUNCTIONALORGANIZATION STRUCTURE

MARKETING DIRECTOR

SALES PRODUCTDEVELOPMENT

MARCOMMMARKETINGRESEARCH

Exhibit 7-4

7-10

Exhibit 7-5

CUSTOMER FOCUSED TEAM STRUCTURE

Customer

Sales

AccountManager

Manufacturing

Shipping

Finance

FinanceRep

PurchasingAgent

Purchasing

EngineeringRep

Engineering

Mfg. Rep

ShippingRep

7-11

HOW BUSINESS TO BUSINESS MARKETERS LEARN

THE THREE-STEP PROCESS1

INFORMATION ACQUISITION

2INFORMATION

DISSEMINATION

3SHARED

INTERPRETATION

Marketing Research

Sales and Service FeedbackEnvironmental Scanning

Competitive Intelligence

Accounting Systems

Information Systems

Experiments

Benchmarking

Joint Venture

Lead Customers

Organizational Memory

To:

Marketing Management

Senior Management

Manufacturing

Engineering and R&D

Finance

Through:

Brainstorming

Planning

Other Processes

Exhibit 7-7

7-12

CREATING NEW KNOWLEDGE:THE TOOLS

• COGNITIVE MAPPING• Finding links of cause and effect through exploring beliefs and

assumptions

• EXPERIMENTS• Research that tests cognitive maps

• LEARNING LABORATORIES• A time and space that is set aside for sharing and learning through

experiments, simulations, models and role playing

• LEARNING FROM OTHERS• Getting knowledge from partners, consultants, seminars, and

competitors.

7-13

COGNITIVE MAPS—MAP 1

Example: FedEx-Kinko’sObservation Observation Observation

More competitors means less business per store

Kinko’s stores compete with each other when located in the same city because of free delivery service

+ = Have fewer stores in a city

Exhibit 7-8

7-14

TWO COGNITIVE MAPS—MAP 2

Advertising drives awareness

Assumption Conclusion 2

Each store has signage or advertising

More stores mean more awareness

Higher awareness means more business

Have more stores in a city

Assumption Observation

=

Exhibit 7-8

Observation

7-15

IMPORTANT INTERNALPARTNERING SKILLS

• FINANCE AND ACCOUNTING SKILLS -helps communicate with other managers and make better decisions

• QUESTIONING AND LISTENING -helps understand needs of others

• NEGOTIATION –helps resolve conflicts

• ANALYTICAL SKILLS –helps apply meaning to numbers

7-16