1. Chapter 7 Weaving Marketing into the Fabric of the Firm

2. Learning Objectives Describe the role marketing plays in creating and maintaining a learning organization. Describe the internal partnerships that must be developed with marketing. Illustrate the partnering process for various internal partnerships. List the skills that are needed by marketing managers to build internal partnerships.

3. The Fabric of the Firm Organizational Culture – is the collectively held values, ideology, and social processes embedded in a firm.

4. “Weaving Marketing into the Fabric of the Firm” it means that marketing should be such an integral part of that culture that marketing activities are not identifiable with just one department but are part an parcel of the activities of virtually every employee. Implementing the marketing strategy becomes the responsibility of everyone, not just the marketing or sales department.

5. Market Oriented Companies Market Orientation defined as superior skills of understanding and satisfying customers. When a firm has a market orientation, it is more likely to be financially successful and superior in many areas of performance, such as product development. What is Market Orientation?

6. A market orientation is the principle cultural foundation of the learning organization. By cultural foundation, we mean that a market orientation must exist in the culture of the organization, and that such an orientation should be part of the values and norms of the organization. A company needs a market orientation in order to learn successfully.

7. How Market Orientation Impacts Performance? Market-driven companies, or those with a strong market orientation, are superior in two important ways.

8. First, market-driven companies do a better job of market sensing, or anticipating market requirements ahead of competition. The second important difference is that market-driven companies are able to develop stronger relationships with their customers and their channels of distribution.

9. Market sensing is the gathering of information from the market. Market research is one form of market sensing, but market sensing can be achieved through listening to the sales force, observing competition at trade shows, and developing stronger ties with innovative customers and suppliers.

10. “Increased profit is one outcome, although increased market share does not necessarily follow a market orientation. That higher profit is due to the better pricing and product development that occur because of market orientation.”

11. . Spanning processes- processes that link internal processes with the customer. New product development is one such spanning process, as it links market requirements with internal processes such as manufacturing.

12. Internal Partnering to Create a Market Orientation Internal partnering – is one spanning process that, when done well, can result in managing such conflict so that it has a positive effect on the firm. Internal partnering, or creating partnering relationships with other functional areas can also serve to carry market requirements to those managers in charge of internal processes.

13. Internal Partnering Carries the Voice of the Customer Alternatives to Internal Partnering Internal versus External Partnering

14. Internal Partners The business marketing manager interacts with many parts of the firm.

15. What is Marketing Manager? A marketing manager is anyone on the marketing and sales management team, so we include marcum marketing communications) managers, sales managers, product managers, and others who serve as managers in the marketing function.

16. Marketing managers work with many areas of the firm, including: Manufacturing Shipping Finance, Information systems Engineering

17. Manufacturing There are three types of marketing manufacturing situations that represent the range of customization: make to stock, make to order, and engineer to order.

18. Make-to-stock situation, marketing supplies forecasts of demand and manufacturing makes enough to handle that demand. The company then draws on inventory to fill orders as they come in. There is no customization at all. Make to order- means that manufacturing or production begins making the product after receiving an order.

19. Engineer to order- is complete customization, with the product designed from scratch to meet the customer’s needs. In these situations, engineering is a key partner with manufacturing.

20. Marketing managers must recognize manufacturing’s responsibilities when making promotion plans, creating product line extensions, and making other marketing decisions. Marketers who have developed partnerships with manufacturing can coordinate promotion schedules to fit manufacturing schedules and vice versa.

21. Further, the stronger the partnership, the greater the communication between marketing and manufacturing, which should result in greater success in a stronger market orientation in manufacturing

22. Finance It is the finance department’s responsibility to manage the company’s cash flow, which includes setting prices at a level that contributes to profit, whereas it is marketing’s responsibility to reflect the value a product delivers in its price. Finance may also have responsibility for determining credit terms.

23. Such terms would include when a customer has to pay as well as finance charges for overdue payments. Credit policies such as who gets credit are also part of the responsibility of the finance department. Strong credit policies may narrow the list of potential customers greatly, whereas loose credit policies may risk too much of the company’s capital.

24. Purchasing Purchasing plays an important role in the product development process. The function of purchasing is to watch the company’s purchasing dollars by developing policies and procedures that carefully husband those dollars..

25. Purchasing, therefore, relies on the marketing manager to present the customer’s definition of quality in a way that enhances the purchasing process, whereas the product development part of marketing relies on purchasing to meet the customer’s cost needs.

26. “The marketing manager’s responsibility is to see that the customer’s needs are met in a way that enables the company to meet its overall goals. At the same time, however, the marketing manager has to recognize that unless a firm is market-oriented, there may not be motivation for other managers to follow the marketing manager’s recommendations.”

27. PARTNERSHIPS IN MARKETING Partnerships must also be formed within the marketing department. Integrating Marketing Efforts Clear Strategic Decisions Personnel Stability Compensation Organizational Structure

28. Integrating Marketing Efforts Clear Strategic Decisions Personnel Stability- Relationships take time to build. Compensation Organizational Structure- The structure of the organization can enhance or inhibit the ability to create internal partnerships.

29. Organizational Structure—Marketing Partners Marketing is usually organized into four functional groups: sales, product development and management, marcum, and marketing research. Organizing by marketing function is called a functional structure.

31. How Marketing Learns? Business marketers learn through three processes: information acquisition, information dissemination, and shared interpretation.

32. The tools of learning: Cognitive Mapping Experiments Learning Laboratories Learning from Others A Commitment to Learning

33. What is cognitive mapping? Cognitive Mapping - is a learning tool that is used to explore mental structures of beliefs and assumptions. In one respect, cognitive mapping is used to draw one’s theories; the map is a diagram of cause-and-effect streams..

34. Cognitive maps are useful for identifying the limits of one’s understanding. Each link between a cause and its effects can be considered for what it really is—a tested conclusion or an untested assumption

35. Experiments - the act of conducting such an investigation or test. Experiments are a form of marketing research that test cognitive maps. What is Experiment?

36. Benchmarking is one method of learning from others and includes examining the processes of others in order to copy what can be used at home.

37. 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

38. Negotiation is a method of decision making that is used to resolve conflicts; it is important for the marketing manager to develop skills that enhance the use of this method.

39. Shane Bihag Shaly Mae Clavite Princess Diana Dayap Jenevie Ib-Ib Sylveth Baes Group Members