Uncovering the Essential Insight about Market Driven Management
When you are selling a product in the market, then it has to offer value to the customers. The biggest problem is that most of the people who have capital are more focused on building factories and do not pay any attention to marketing management. However, this is surely not the appropriate approach to secure your future in the professional world. The good news is that the things have now changed in the recent years and the attempt to acquire customer satisfaction is redefining the focus and the scope of business firms. Market-driven management now shapes the goals of most of the well-established firms.
Exploring the concept of Market-Driven Management
Well, the term Marketing Driven Management tends to adopt this broad approach towards marketing. This approach incorporates the operational and strategic elements of the marketing discipline. This term focuses on the fact that market orientation concept is far more significant than the functional roles of the marketing departments. Moreover, when the management is market-driven, then it emphasizes that the customer satisfaction is the key responsibility of every member who works in an organization. Moreover, the customer value is the only fool-proof way through which the company can attain profits.
Comparison between Outside In and Inside Out firms
There are two approaches that exist in the business world nowadays. One is Inside Out approach and the other one is Outside in. The Inside out approach is more of a traditional perspective. It believes that the strengths and the capabilities of the organization will be able to produce a secure future. The Outside in perspective believes that customer value plays a crucial role in the success of a company.
Interestingly dramatic contrasts exist between a market-driven company and the one following the Inside out approach. The thinking and the action of a firm with an Outside-In approach commence with a complete understanding of the requirements and the application of the market segments and the customer groups they cater. These organizations take the pain to conduct an in-depth study about the customer performance. They also make it a point to document the performance of the customer. This way such organizations can determine their weaknesses and strengths in their respective market niche.
Moreover, the management of the Outside-In organizations also compare the existing capabilities as per the changing market requirements. These organizations are more than willing to adopt the changes for serving the attractive market segments. These firms also make an effort to bring about an improvement in their costs so that they can provide greater value to their targeted customers.
The Outside In firms tends to work together as cross functional teams for ensuring that all key decisions, priorities, and activities are synchronized for serving the application needs or the market targets.
Now let us compare the working of Outside In organizations with those following the Inside Out rule. These firms are led by generalizations about their competitors. They never feel the need for making the side by side comparison of the features, lifecycle costs and market position of the competitors. The Inside Out organizations are quite defensive about their status, and they do not reciprocate to anything that tends to challenge the culture of their firms.
The key functions of the Inside Out firms tend to operate independently rather than being aligned with the target market requirements. Moreover, even the goals of the sales team of the Inside Out organizations are short-term. They have aggressive market strategies that are just focused on getting the short-term market orders. The team of the Inside Out firms is not focused on understanding the customer issues and solving them.
The lifecycle of an organization that is market-driven
Now that we have understood the major difference between an Inside out and an Outside In firm, it is also important to understand the life cycle of a market-driven organization. When the founder witnesses a niche opportunity he tends to focus on it better than the competitors. Such firms have a technically disciplined team. This is why the team tends to put in the collaborative effort for the implementation of the idea. Moreover, the team is allowed to give in their ideas for further development.
The management portrays the approach that users and the immediate customer are the bosses. This is why when the product is introduced in the market all the members of the organization are on high alert. The team is proactive and responsive as well. All the members of a market-driven organization tend to respond to the customer needs with urgency. This way the company makes progress to the next step. When the management witnesses the fact that their current products are doing good, then they tend to introduce new products in the market.
New countries and new segments are added in their domain. The management comes up with a strategy to invest in equipment and plants. At the same time more organizational levels, controls and structure policies are added. This is how a market-driven organization tends to continue its journey of success.
The Profitable Growth Diagnostic of an organization
It is vital to discuss the future line of action of an organization to continue its journey of success.
- Coming up with out of the box ideas to establish a strong bonding with the customers
Now that you have understood the fact that the customer is the priority in market-driven management, so there need to be practical steps in this regard as well. An organization should have trained teams that should travel to the end users for discovering the unarticulated customer requirements. When the team communicates with the customers directly, then they will be able to get knowledge of many issues that no survey forms can reveal.
However, before conducting the customer interviews, the team should also conduct research about those needs of the customers that have not been addressed so far.
- Understanding the market segmentation
The management of an organization needs to have a clear perception regarding how the customers fit into each of the market segments. This is why the organizations need to have detailed insight into a segments value chain as well. Next, they should compare the information they gather from the end users and their research regarding a certain value chain.
- The fool-proof strategy
There are times when an organization has the idea and a talented team as well. However, they fail to execute a market-driven approach because they fail to compel the employees to deliver on time. The deadlines for a project need to be firm so that the employees can understand the seriousness of the situation. This approach can help to avoid a laid back attitude in the employees. The organization needs to introduce incentives for both the customers and the employees to make things work.
The incentives will encourage the employees to strive hard to achieve their goals, and the customers will remain excited about the product. The strategy of a successful organization also focuses on smart money saving approaches that do not compromise the quality of any of the processes.
- Aligning strategy with the business plans
When a company comes up with a strategy to execute the market-driven approach, then the business plans needs to be implemented accordingly. The business plan should be designed to keep into consideration the future growth of the organization as well.
Steps towards Industrial Value Creation
Now it is time to look at certain steps that will contribute to marketing management in a much efficient way.
Step 1: The technical team needs to narrow down the market segments. They have to identify the information rich contacts and figure out the lead companies as well. This means addressing other important elements of value chain apart from the end-users. This includes the dealers and the system integrators.
Step 2: The organizations need to indulge in internal and external collaboration for designing proprietary solutions. This includes developing and protecting the proprietary trade secrets.
Step 3: The firms need to make use of field and side by side lab comparisons to figure out how each of the new features can benefit the company in percentages. This comparison should be made with the current solutions and features offered by the product.
Step 4: The conversion of the benefits should be calculated using value calculators. The percentages need to be converted into the money made. Secondly, a reduced downtime is also termed as saving for the customer. The organization should calculate the total economic savings on an immediate basis and in the long run as well.
Step 5: Now the end users need to know the value that they will receive from the external and the internal launches as well. The best way to communicate this perspective to the users is through testimonials and technical papers. Trade shows and website can also prove to be valuable in this regard. The value pricing also needs to be communicated to the end users. This way a firm can multiply the buying influences as well.
Step 6: Hazard free product design is an essential element of the market driven approach.
Step 7: The firm should have the potential to retain and attract the right people as well. The companies need to invest on coaching the potential employees. The exit interviews need to be planned well so that the employee can share results and this can promote the growth of the company.
Step 8: The company management should encourage a learning organization to implement the market driven approach. This means bringing about cultural change and introducing new mindset. Moreover, it is essential that a firm should be willing to learn from the product development mistakes that have been made in the past. This can be the first step towards better marketing management.
Exploring management consulting and its benefits
Now there are times when an organization fails to live up its performance standards despite a lot of effort. This is the time when management consulting can be the best refuge for a firm. This is a practice that is helping the organizations in improving their performance. This practice focuses on identifying the potential issues in the organization when a firm fails to manage this on its own. The interesting part is that when a firm consults a management consultant, then he can come up with new ideas to address the existing issues in an organization. Let us understand the role of a management consultant with a practical example.
Lasse Lund Manager of Deloitte customer management service could win 2013 consultant performance award. This is how he shared his insight about his specific job.
“I am fascinated by working with different customers on different projects – and very much enjoy the momentum and excitement we create in the organizations we work with. I like being in the middle of all the different pieces that need to come together. For example, an issue comes up, and you think, ‘I haven’t seen that before, I need to pull in the right people from the right teams, I need to put in place the right processes and I need to get the right technology in place to fix that issue.”
This is why it is essential that a company should not turn its back on its potential flaws. Once the management consultant gives the necessary recommendations, then the firm should align its strategy with those recommendations to get the best results.
Words of wisdom for all new entrepreneurs
When an organization starts its journey, then the management needs to work hand in hand with the employees. Awareness about the niche and the product is the key to success. Otherwise, there are chances that the growth of a company will eventually become stagnant. A market driven approach ensures the fact that a company does not only profit but also prevents the organization from potential losses. The losses have a negative impact on the company and the psyche of the employees as well. Thus it is time to welcome market-driven approach with an optimistic bent of mind.