Industrial Marketing is Not a Department

A recurring theme in this blog centers around two ideas: (1) that the practice of industrial marketing cannot be taught in an academic setting, and (2) in industrial most so-called “marketing” decisions are made by general management.

Industrial marketers have a tough job because most learning is obtained on the job. Since the key decisions are often made at higher levels, industrial marketers must constantly strive for consensus and coordination among other functional groups. What industrial companies need, therefore, are not strong marketing departments, but a strong sense of market oriented thinking at all levels.

But thinking has to turn into doing, and most non-marketing people don’t really know what to do. The concepts are easy to understand, but when it comes to every day marketing tactics and marketing-oriented behaviors, it’s difficult for most people to make it happen.

Why? Because effective industrial marketing takes place across functional boundaries. It’s difficult – or impossible – for effective tactics to occur unless top managers are committed to making it work, and simultaneously have the savvy to know what types of activities need to occur. In the day-to-day chaos of running a businesses, it can be extremely difficult for any one manager, let alone a core team of managers, to attain the type of focus needed to sustain this effort.

Yet, lots of companies do it, and so can you. Dr. Jim Hlavacek, educator, consultant and author (his most recent book, Profitable Top-Line Growth for Industrial Companies, American Book Company will be reviewed in a future issue) offers numerous examples of how a company can develop market-oriented thinking. Hlavacek says that industrial marketing, as such, cannot be taught. It has to be learned on the job, in real-time, with real problems. Small to medium-sized companies are generally the most successful.

When we observe what these companies do, what we see are lots and lots of “little things” going on that don’t usually happen in other companies. Market-oriented thinking isn’t a massive restructuring of a company’s culture. It’s more like a dawning of awareness that manifests itself in a series of small changes, that develop over time.

Tips for Improving Market-Oriented Thinking

• Double the number of marketing presentations you make internally. Engage more people in a continuing dialogue about customers and the marketplace.
• Distribute feedback from customers across the organization. Don’t just talk about your own products, but share what customers say about competitor’s products as well.
• As soon as possible, find at least one ally in another organization, and begin implanting your own list of “little things.” As you achieve success, document what you have done.
• Set up a cross-functional team to address these issues
• Set up a benchmarking visit to another company for your top managers.
• Send your team to Dr. Jim Hlavacek’s course, “The Best and Worst Industrial Marketing Practices.”

Little things

• Top management talks to customers regularly
• R&D people talk to customers
• Conduct regular competitor quality panels
• Conduct “competitor game playing,” especially with new entrants
• Customers called back after purchase
• Strip one layer our of hierarchy
• Establish market-focused measures of customer service level performance
• Formal and informal awards for service personnel based on market-focused measures, not just internal measures like cost, yields and headcount
• Focus groups to determine key service dimensions of customer service
• Training of service personnel focused on how to deliver value dimensions, not just how to handle the machinery of the job
• Hire retirees to read and interpret articles in trade journals, then write up the implications of the articles and distribute to front-line personnel
• Customer research to understand financial impact of good customer service
• Require front-line service experience for rotating functional groups
• Establish a “core curriculum” of roles new manager must rotate through to eligible for promotion, that includes sales, customer service, manufacturing, and engineering
• Phantom buyers report on customer service levels
• Top management commitment/involvement to change typical shared values on service
• Key functional managers spend 2 hours per month conducting customer telephone surveys
• Non-sales people sell for at least 3 months in the field
• Functional personnel spend one day/month telemarketing
• Pay salespeople’s spouses to check competitor products & prices
• Conduct customer satisfaction surveys
• Tear down and analyze competitor’s products
• Benchmark performance against competitors
• Survey competitor’s customers
• Top managers spend ½ day per month on the complaint desk
• Production people meet customers
• Marketing and sales people work 3 months for a customer or distributor
• Salespeople spend 1 year in the factory, and must implement a cost reduction or quality improvement idea
• Interview your supplier about your competition
• Give away product in trade for feedback
• Tour competitor’s factories
• Customers design or name product
• Educate customers, distributors
• Calculate your customer’s true costs to purchase, use, and dispose of your products. Compare this cost with the cost of using alternative solutions and competitor’s products.
• Conduct a monthly informal training/feedback session using Internet web conferencing tools.
• Understand the features and benefits of your competitors products well enough to sell them — if you had to.