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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 NEEDS TO COMPANY CAPABILITIES CUSTOMER NEEDSLINKS COMPANY 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 INTERNAL AND 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 PROCESS Outside-in Process Inside-Out Process Cost Estimation and Pricing Billing and Payment Order Scheduling Order Entry And Prioritization Order Generation Order Planning Postal Service Order Fulfillment Exhibit

INTERNAL CORPORATE PARTNERS PURCHASING MARKETING MANUFACTURING AND ENGINEERING (R&D) FINANCE Exhibit

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 FUNCTIONAL ORGANIZATION STRUCTURE MARKETING DIRECTOR SALES PRODUCT DEVELOPMENT MARCOMM MARKETING RESEARCH Exhibit

Exhibit 7-5 CUSTOMER FOCUSED TEAM STRUCTURE Customer Sales Account Manager Manufacturing Shipping Finance Finance Rep Purchasing Agent Purchasing Engineering Rep Engineering Mfg. Rep Shipping Rep 7-11

HOW BUSINESS TO 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 Exhibit

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’s 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

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 INTERNAL PARTNERING 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