Sales and Marketing Applications

Your sales and marketing efforts should walk hand-in-hand with your other business processes. After all, one of the goals of each is building competitive advantages. Basically, all of the goals associated with operations are also goals for marketing. Let's go through the elements of a marketing plan and the operations issues that correspond.

Market and Customer Research
In your marketing plan you research the market and your target audience. You identify their needs and psychographic profiles. You want to identify what makes them buy one product instead of another one. Now put on your operations hat. This is the information you need in order to plan and produce the products that the market wants and at the right price and quality. By working closely with marketing and studying the market research, you can assist in the development of new products, as well as the refinement of existing ones.

Cross-communications: Make sure you are both:

• defining the same market segment and target audience
• coordinating information gathered in market research efforts so both of you get the information you need
• use the technology available to you to communicate these issues and any changes that may be noted over time

Products and Processes
In the area of new product development, operations really needs to work closely with marketing because it really requires more than just deciding to produce a new product. There are many considerations that you should both be involved in. These include:

• The timing between product conception and delivery -- If it's a seasonal product this can be critical.
• The method of manufacturing may dictate pricing beyond what the consumer will pay.
• Is it likely that there will be frequent changes to the specifications of the product?

Cross-communications:

• Determine what role both marketing and operations will play in the design phase.
• Try to design the product jointly for better communications about limitations of production and other issues.
• Debug the production process before the product is marketed.

Productivity and Price Competition
The less waste you have in the production process the lower your cost and the better the price for your customers. This, in turn, creates a better competitive pricing situation for marketing. With this in mind, operations should be involved when pricing is being set for the product by marketing. Considerations for pricing for both operations and marketing include:

• Are the productivity levels in line with expected customer demand?
• Is the production process being evaluated and analyzed for improvement and reduction in overall production cost?
• Is pricing being set by marketing using data from operations?
• Are promotions and special pricing offers being scheduled into production?

Cross-communications:

• Are savings engineered into the production process being passed onto the customer, or does market research indicate that this isn't necessary?
• How and when is operations involved in pricing?
• Establish cross-functional teams to study the pricing issue.

Quality and Promotion Competition
Since the necessary quality of the product is dictated by the market, operations must work with marketing to assure production at the quality level that the target market requires. It is up to operations to improve the quality of the production process in order to offer the product at the best price (as discussed above). At the same time, marketing is establishing promotional messages and strategies based on the assumed quality of the product. There has to be a meeting of the minds when working on these issues.

Cross-communications:

• Make sure operations and marketing have a consistent view of the quality level you must have.
• Hammer out the positioning of the product through established teams that include operations and marketing.

Time and Distribution Competition
The responsiveness your business has to its customers' needs and demands is another area in which marketing and operations need to work cooperatively. You can bet that if your competitor can supply the product more quickly and more conveniently than you can then that's where the target market will buy it. If operations and marketing work together to establish the production time and coordinate the scheduling of the product with the delivery needs of your distributors, then you can optimize the competitive edge found in timing and distribution channels.

Cross-communications:

• Establish clear goals with both marketing's distribution efforts and operation's timely delivery of the product in mind.
• Establish a system for providing flexibility to your customers both from a timeliness and delivery standpoint.

The primary goal of operations working with marketing is to produce a product that will beat out the competition. Production and operations plays an important part in determining the competitive advantages the product will have and marketing must capitalize on that edge in order the sell the product. By having established teams that include members from both groups, you'll have a much better chance of creating and marketing a product that is a success.

In the next session, we'll discuss issues that operations must deal with concerning the facility, the people in it, and the environment.