Lean Marketing & Product Development

Posted on April 26, 2016 by Walter McIntyre

Lean Marketing and Product Development by Walter McIntyre

Lean principles apply to any process based operation. I cannot think of any process that does not have non-value added components in it that create the opportunity for waste production. In fact, by definition, a non-value added component in a process is waste.

Let’s take marketing for example and do something called lean marketing. Please remember that in a post of this size, I am leaving a lot to the imagination. Some businesses have marketing programs that start with the product/service and move outward to the customer. They call this customer focused because they do eventually think about the customer. This is not all bad because the customer is a part of the equation. The problem with this approach is that it is self-limiting. In effect, it allows the product/service to define the target customers and, as a result, becomes growth limited by this boundary. This is the waste of missed opportunity

To balance the marketing equation, the business needs to also think in the opposite direction. That is, starting with potential customers and moving to the product/service. In this approach the potential customers defines the product/service and, as a result, is not limited by an artificial customer segment boundary.

In more detailed terms, in the product first scenario, the business defines the product/service, the price, and how it will be delivered. Once these definitions are made, the business promotes the product or service to a targeted customer segment. As you can see, the product/service is defining the targeted customer. In a lean marketing program this is phase two, not phase one.

In the customer first scenario, the business connects with potential customers across multiple segments and establishes what the customer’s value (are willing to pay for), customer cost (price they are willing to pay), and how they expect the product/service to be delivered. Here the potential customer is defining the product. In lean marketing, we would now go the product/service side of the equation and build out to the customer.

Additionally, every business needs to realize that with the internet and social media, potential customers can easily compare products and services across multiple suppliers. This means that they can easily find the product or service that best fits their wants/needs. By using the product/service to define the customer, the business self-eliminates from non-targeted potential customers.

If instead, the business first allows potential customers to define the product/service (phase one), the product/service can be tailored to fit different customer segments (phase two). This in turn allows the marketing program to be tailored to target multiple customer segments. This tailoring takes advantage of the internet and social media by addressing the specific needs of different customer segments.

I look at this as an application of Deming’s “Plan-Do-Check-Adjust” cycle. Define the potential customer’s needs, apply what you learned to the product/service, evaluate market effectiveness, and use the evaluation to find improvement ideas. This process is like a wheel that continually turns over and over again throughout a product/service life cycle. The result is better performance and a longer product/service life cycle by way of waste reduction.

As a final note, this approach is synchronized to the development process. The PDCA cycle, focusing on the customer first, will help to prevent misunderstandings (waste) and missed targets (waste) because the customer becomes a key part of the development process. The more times the PDCA wheel is turned in a development project, the more input the customer will have, the less likely the development team will miss the target. The target in this case is the right product/service being delivered to the customer at the targeted project cost and profit margin.

Content vs Context

Posted on September 2, 2011 by Walter McIntyre

Whether you are involved in a Six Sigma Project or just talking with friends we are bombarded with information that has two components. These are content and context. One is raw information about the “what” and the other is supporting information about the “why”.

Here is an example. A young man from Philadelphia shot and killed another man about a year ago. This is content. The fact that he did this, as a soldier, in a fire fight in Afghanistan is context. Content, as mentioned above, gives you the raw information and context helps you interpret the content.

When you grasp the importance of the relationship between content and context, you also begin to understand why listening skills are so important. As content information reaches your brain, contextual data is telling you how to interpret it. As good listener will be critically analyzing the information to determine its believability, relative importance, the deliverer’s purpose, the meaning behind the words and what information is missing.

Marketers use contextual information to try to spin your interpretation of content information on everything from products and services to politics. Knowledge that this is happening and dealing with it appropriately is key to your personal success. Do you remember the Ivory Soap by line that stated that their soap was “99 % Pure”? This is context without content. The question you should ask is 99% pure what?

In a Six Sigma project, contextual data is critical to drilling down to root causes. For example, simply pointing out that there is an increase in the defect rate of a manufacturing process is the content. Finding out that the defect rate spikes on the midnight shift when it is raining is the context. The drill down process can be represented mathematically as y=f(x)+f(x)+f(x)… . The progression from f(x) to f(x) is accomplished through the use of contextual information.

In sales, content information might be described as what product or service a shopper wants to purchase. Contextual information would be the shopper’s story, their buying motivation, budget and important product or service requirements. What this means is that as a business, you differentiate yourself from your competitors by way of context. The shopper can get the “what” from other sources. Context determines why they should get the product or service from you.

Basic Marketing

Posted on August 19, 2011 by Walter McIntyre

Marketing is one of those subjects that can be discussed at the “inch deep/mile wide” or “mile deep/inch wide” levels with reasonable efficacy. This will be one of the inch deep/mile wide versions.
In this post I am breaking marketing down into four questions that lead to action by you the marketer.

1. What are the target markets?
Look at what you are trying to sell and match that to the markets that have the greatest potential to produce customers. Using the shotgun or “if I build it they will come” approach is a waste of time and money. Instead target those markets where you could have a productive conversation about your product or service.

2. Who are the players/mavens in the target markets?
Once you know what markets to target, research is needed to determine who the players and mavens are in each market. This would include what associations, network groups, etc. operate there? Google is a great place to start. To be successful you need the name and contact information for high potential individuals and organizations.

3. Build a collaterals tool set.
Some may call this a Press Kit or Marketing Kit. No matter what the name, it is simply a set of documents, mailers, email templates, and ticklers that you can give to potential customers.
The kit can either be generic enough to fit all needed markets or adaptable for specific markets. This decision is really product or service specific, with an eye on what will catch the attention of prospects in the specific market. I would recommend:
• A one page value proposition piece that is glossy on heavy stock. The template for this can also be an email piece.
• You and your business’s resume. This needs to be professionally done on good stock. Not fancy, but solidly professional.
• A document containing reviews and testimonials.
• A tickler that is useful to your prospect after you leave. Ink pens and note pads are good.
• A document that describes specifically how your product or service can be of value to the prospect.

4. Delivery
You only get one chance to make a good impression. Don’t waste it by not being prepared. You need to look like your prospect’s vision of professionalism, understand your prospect’s business and why your product or service is valuable to them, and don’t try to sell them anything…Yep, that’s what I said. No one likes to be sold, but everyone likes to buy. With that knowledge in mind, seek to help your prospect and the sale will come.

Requirements vs Delighters

Posted on January 11, 2010 by Walter McIntyre

Requirements are those service or product characteristics that the customer requires in order to satisfy their needs. When the business fails to meet these requirements, the customer will not be satisfied. The result is a lost business opportunity. The analysis of these requirements will eventually lead us to customer critical to quality (CTQ) issues.

On the other hand, delighters are those aspects of a product or service that delight the customer when present, but are not required. For example, hotel customers did not expect a free continental breakfast in the past. By providing customers with this service, some hotel chains were able to gain a competitive advantage.

This practice leads to customer expectation. Once exposed to a delighter, the customer can, and usually does, come to require these delighters. In other words, the delighter becomes a requirement. In addition, as is typical with customer satisfaction issues, requirements tend to escalate. For example, where customers were once delighted with a free continental breakfast selection of donuts, juice and coffee, some are now expecting prepared foods.

Finally, customer requirements tend to increase in number and complexity. Once a requirement gets set in a customer’s mind, they do not typically to go away. For this reason, businesses need to plan the rollout of delighters and measure their impact. There is no rest for the business that wishes to gain and keep market share.

Walter McIntyre Lean Six Sigma