Marketing System :: Business901

Archive for Marketing System

Sep

Summary of the 6-part blog Series using DDMRP

Posted by: business901 | Comments (0)

This is part of my blog series on using the principles of Demand Drive MRP and its five primary components and applying it to marketing. This particular blog is the summary of the series.

These five components work together to dampen, if not eliminate, the unnecessary nervousness of traditional MRP systems and the resulting bullwhip effect in complex and challenging environments. In using this approach, planners will no longer have to try to respond to every single message for every single part that is off by even one day. This approach provides real information about those parts that are truly at risk of negatively affecting the planned availability of inventory. Demand-driven MRP sorts the significant few items that require attention from the magnificent many parts that are currently being managed. Under the demand-driven MRP approach, fewer planners can make better decisions more quickly. This means that companies will be better able to leverage their working and human capital as well as the significant investments they have made in information technology.

The above is from the Orlicky’s Material Requirements Planning 3/E. written by my recent podcast (Is Orlicky’s MRP relevant today? Think DDMRP) guest Carol Ptak and Chad Smith of the Demand Driven Institute.

This exercise of taking the 5 components of DDMRP provides an interesting and innate view of the Lean Marketing perspective. I think specifically it assists in explanation of how to scale the Lean Marketing principles. So often in this world of one to one marketing or marketing singularity we forget to view the enterprise foundational need for marketing to our core customer base. There is so much talk about innovation and early adaptors and they certainly have a role in your marketing structure. However, the core customer group of an established customer is that 68% majority found in the middle of the diffusion curve.

Other companies that keep venturing to the extremities of the curve will continue to compete on price and availability. The organizations that align themselves with similar cultures if so desired will give themselves the opportunity to establish that structure that we identified in Profiling the customer by knowledge gaps. Surprisingly when we go to scale, these factor are seldom different. Establishing your presence through increase knowledge transfer will allow you to dig deeper within the structure of any company. It may take you longer to dig the hole but every shovelful will make it that much more for your competition to overcome.

Effective knowledge transfer seldom occurs without effective collaboration and in today’s world having the right tools in place plays a vital role. Dr. Graham Hill addressed this issue in a blog post, CIO view: Ten principles for effective collaboration where he said:

Companies should start to develop their collaboration capabilities before purchasing collaboration technology. This will ensure that the technology really fits the style of collaboration that has already been developed. The pace of business is getting faster and faster. Today’s competitors may not even have existed a few years ago. Improving effective collaboration is one of the few insurance policies that companies have in these hyper-competitive times.

I encourage you to read Dr. Hill’s entire post. It provides an excellent groundwork for the role of tools in collaboration.

The other blog posts in this series on DDMRP:

What Sales and Marketing can learn from Demand Driven Manufacturing

Posted by: business901 | Comments (0)

“Demand-Driven manufacturing is a manufacturing requires a fundamental shift form the centrality of inventory to the centrality of demand. To be successful, company must be able to sense and adapt to market changes.” – This is from the Orlicky’s Material Requirements Planning 3/E.written by my recent podcast guest Carol Ptak and Chad Smith of the Demand Driven Institute.

Why is sales and marketing the last to adapt to this thinking? Sure, they understand that push marketing does not work and have stopped sending out promotional mailings, feature driven ads and of course they never encourage cold-calling! Or have they? Most ideas for good marketing are investing more money to get someone into their funnel, not to make that time in the funnel a memorable experience.

After reviewing the new book, I saw striking similarities in DDMRP that can directly apply to the sales and marketing process. They are substantially solving the same problem that exist in sales and marketing. It is no longer a market that has excess demand. Our product/service cannot be at the centrality of our sales and marketing process. With lessons learned from D-Logic (The Service-Dominant Logic of Marketing by Stephen Vargo and Robert Lusch) concepts the centrality of our sales and marketing must be the value that is created in the use of our product or service.

Demand Drive MRP is focused around critical parts called strategically replenished parts. It has five integral components that are:

Strategic Inventory Positioning
Buffer Profiles and Level Determination
Dynamic Buffers
Demand-Drive Planning
Highly Visible and Collaborative Execution

I intend to break each of these components down in future blog posts to demonstrate the viability of this thinking. It is not meant to replace an existing sales and marketing structure. It had not been used and is pure conjecture on my part. However, it offers some interesting parallels that are worth considering. I encourage listening to the podcast with Carol and Chad, Is Orlicky’s MRP relevant today? Think DDMRP and even their earlier ones listed on the podcast page as they set the stage for this discussion.

This blog series will show how a DDMRP process can reduce dramatically the uncertainty in response levels required and sort the important responses needed. If this can be done we may be on a path that efficiencies and increased effectiveness is possible in sales and marketing. It’s interesting to note that DDMRP does not replace but leverages technologies like Theory of Constraints and Lean.

Many times in my discussions of mirroring the customer buying process and building the appropriate value stream and response, we have a tendency to consider a one to one marketing approach. Looking at the value stream through the glass of DDMRP it answers the question of a more complex and larger environment.

How outdated is your sales channel structures? Are you segmenting by products or geographically? Or Direct Sales and Distribution? Or even Online and Offline? Once someone is in the sales funnel are they classified be level of interest such as A,B,C? Or level of opportunity? Maybe you consider past, present or new? Or in new marketing circles we are discussing early adaptors, earl majority, etc.? Or the buzz words like Influencers and Enablers? How do you decide? Or for that matter, do any of them work?

The three will-known rules of forecasting have always limited the sales and marketing world:

Forecasts are always in error.
The more detailed a forecast, the more error will be realized.
The further into the future the forecast goes, the more error will be realized.

Most experienced sales and marketing are aware of these shortcomings and the wide array of sales and marketing processes. Most believe that it still comes down to beating the pavement. Can that be changed?

First, you must answer: How do you manage variability and volatility in today’s market? The book starts out by saying, “Experts in variability and volatility tend to be less enterprise focused and more specific event focus. Variability must be considered in relation to its impact across a holistic system. All variation does not have the same impact. Reducing variability does not necessarily improve the overall process. There are places where it must be protected against in order to keep the system stable and effective.”

Can we protect key portions of our sales channels? Can we reduce variability and volatility in sales and marketing? Seems like a tall order. However, if it is being done in the supply chain based on a forecast that sales and marketing is forecasting, why can’t we improve our forecasting by considering the same five steps with a slightly different view:

Strategic Inventory Positioning: Position our organization to learn from our customers.
Buffer Profiles and Level Determination: Profile the customer and our knowledge gaps
Dynamic Buffers: Flexibility within teams to self-organize autonomously
Demand-Drive Planning: Use of a system that promotes better and quicker transfer of knowledge at the execution level.
Highly Visible and Collaborative Execution – Why change this?l

Our exploration has started.

Is your marketing firm having this conversation with you?

Posted by: business901 | Comments (0)

Essential concepts in the new way of thinking about marketing is that customers are always co-creators of value. It’s the way that the customer sees value, whether it’s in the physical good, or if it’s in a service or a combination of both of those and if they don’t see a benefit to them they’re not going to engage with you.

Is your marketing firm or department having this conversation with you? Are words like SD-Logic, Service Dominant, Co-Creation, Value in Use, Customer Decision Making Process, Experience Economy, etc. part of your normal marketing conversation. If not, you may need to re-consider your marketing communication efforts.

The Video is from University of Queensland Business School. With dual accreditation from the world’s two pre-eminent education accrediting bodies, and a 5 star rating for its MBA program, University of Queensland Business School is among the ranks of elite global leaders. It was the first business school in Australia to meet the high standards of the world’s most influential accrediting bodies – the US-based AACSB International and Europe’s EQUIS accreditation.