Weaving Marketing into the Fabric of the Firm Chapter Seven Weaving Marketing into the Fabric of the Firm

LEARNING OBJECTIVES Introduce market orientation concept Describe the internal partnerships that must be developed with marketing Discuss how marketing learns

MARKET ORIENTATION CONCEPT What is a Market Orientation Components of Market Orientation How Market Orientation Impacts Performance Spanning Process

What is Market Orientation The systematic gathering of information on customers and competitors, both present and potential The systematic analysis of the information for the purpose of developing market knowledge The systematic use of such knowledge to guide strategy recognition, understanding, selection, implementation and modification A market-oriented firm should - benefit from better marketing programs; be difficult for competitors to identify; be unique

Components of Marketing Orientation Establish a corporate culture where every employee values their customers Listening to the voice of the customer throughout the entire company Developing superior skills to understand and satisfy customers A market orientation must exist in the culture of the organization (part of the values & norms of the organization) A company needs a market orientation in order to learn successfully.

How Market Orientation Impacts Performance Do a better job of market sensing Anticipating market requirements ahead of competition Marketing research is one form of market sensing Can be achieved through listening to the salesforce, observing competition at trade shows, and developing stronger ties with innovative customers and suppliers Be able to develop stronger relationships With customers With channels of distribution

Spanning Process CUSTOMER NEEDS LINKS COMPANY CAPABILITIES Inputs by customers through sales, service, information seeking Spanning activities that provide decision-making information Defined by all organization functions - Spanning processes link the firm’s internal processes with the customer - Market oriented firms must have adequate spanning processes

Outside-in Process Inside-Out Process Spanning Process EXTERNAL EMPHASIS INTERNAL EMPHASIS Outside-in Process Inside-Out Process Spanning Process Market Sensing Customer Linking Channel Bonding Technology Monitoring Customer Order Fulfillment Pricing Purchasing Customer Service Delivery New Product / Service Development Strategy Development Financial Management Cost Control Technology Development Integrated Logistics Manufacturing/Trans- formation Process Human Resources Management Environmental Safety Health and Safety

PARTNERSHIP IN MARKETING Internal Partnering – The process of creating partnerships with other functional areas within the firm Partnerships are characterized by open communication, trust and commitment to the partner. Partners are able to align their goals with the goals of the other Silo structure is with high walls built around the departments and no ability or desire to go between the departments The creation of internal partnerships Internal Partners

Stages of Internal & External Partnering AWARENESS EXPLORATION EXPANSION COMMITMENT ACHIEVING THE SUPRAGOAL: CUSTOMER SATISFACTION

Internal Partners PURCHASING MARKETING MANUFACTURING AND ENGINEERING (R&D) FINANCE

Encouraging Integration in Marketing Operations Develop & Articulate 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 / Organizations Structures

Typical Marketing Organizational Structure MARKETING DIRECTOR SALES PRODUCT DEVELOPMENT MARCOMM MARKETING RESEARCH

Customer Focused Team Structure Sales Account Manager Manufacturing Engineering Engineering Rep Mfg. Rep Customer Shipping Rep Purchasing Agent Shipping Finance Rep Purchasing Finance

HOW BUSINESS MARKETERS LEARN THE THREE-STEP PROCESS 1 INFORMATION ACQUISITION 2 INFORMATION DISSEMINATION 3 SHARED INTERPRETATION Marketing Research Sales and Service Feedback Environmental 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

Tools to Generate New Knowledge COGNITIVE MAPPING Finding links of cause and effect through exploring beliefs and assumptions EXPERIMENTS Research that tests cognitive maps LEARNING LABORATORIES A physical environment set aside for learning through experiments, simulations, models and role playing LEARNING FROM OTHERS Getting knowledge from partners, consultants, seminars, and competitors.

Cognitive Maps—MAP 1 Example: Kinko’s 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 + =

Two Cognitive Maps—MAP 2 Observation Observation Advertising drives awareness Each store has signage or advertising Assumption Observation Conclusion 2 More stores mean more awareness Higher awareness means more business Have more stores in a city =