Lean is Marketing

Posted on August 21, 2012 | in Defects, Inventory, Kanban, Lean Tools, Lean Wastes, Manufacturing, Overproduction, Small Business, Sponsorships, Toyota Way, Transportation, Waiting | by

marketing four 4 p product price place promotion lean blitz consulting

The essence of marketing is the identification of needs a customer aims to have satisfied and providing a solution that will satisfy those needs within four specific categories – the right product at the right price, at the right place in the right manner (promotion).

The ideal Lean operation is structured so that production is generating items customers require at the optimal cost and as efficiently as possible, and providing it to them when they want it in the manner they want it.

Those definitions are nearly identical, aren’t they?

Let’s look at each of the four P’s of marketing and how Lean can impact them.

Product: It only makes sense to produce items the customer wants. Why would you make something that doesn’t satisfy their needs? So often companies have great ideas for products they think will do well and they turn around and try to sell them to customers. Why not collect customer requests and feedback and begin developing products that meet those requests and feedback? By making product the customer doesn’t want or doesn’t meet the customer needs, it can lead to defects, excess inventory building up and waiting around on shelves, excess transportation to move unwanted product around, and overproduction.

Price: One of the key points of negotiation in any transaction is price. If your production facility isn’t able to make the products cheaply enough many sales transactions could be lost. Lean tools can be applied to identify costly waste activities and drive them out of the processes. This increase in efficiency could help drop the product costs and make products more competitive in the marketplace.

Place: When I think about “place” I consider where, when, and how much. You don’t want to make more of a product than the customer wants (again, overproduction) and you don’t want to make it too early or too late. Producing solutions when the customer wants it and not too far before or after is ideal – too early means you could have spent your operator time working on more urgent matters, and too late means you made a promise you weren’t able to fulfill.

Promotion: It certainly helps if you can communicate to your potential customer that your company and your product is capable of satisfying their needs when they want, where they want, in the manner they want.

Marketing is built around customer needs first instead of a company making a product and simply going out and selling it. This suggests more of a pull system and letting the customer select what works best for them (ideally choosing your product) as opposed to forcing the product on the market in a push manner. If you remember, a pull system is one of the lean tools and is also one of the principles of The Toyota Way.

(If you want to learn more about lean in sales and marketing, I’d advise you to check out Joe Dager’s work at Business901.com.)

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3 Responses to “Lean is Marketing”

  1. Hi Chad

    Nice piece that shows even basic marketing can be linked to and benefit from Lean thinking though there are some areas that you could have added that show how non Lean thinking is adding cost to a product without adding anything to the price you will get.

    Adding an unwanted extra in order to increase its supposed value actually does not work buyers could careless in the end and will switch to a competitor that leaves them out. Take something as simple as a frig. Over the past few decades icemakers have become a common place feature in most frigs, and every year they just kept getting bigger, until recently LG actually asked their customers if they wanted them that big, what they found was that most customers did not, they instead preferred having the extra space for other uses and they did the same with dozens of other features and products. By simply asking their customers what they really wanted instead of assuming the industry norm was correct has allowed them to boom in a tough established industry. STOPPING and taking the time to actually find out what is wanted before making it can go a long way to reducing costs and making your product actually worth the price you want not to mention what it does for the profit line.

    Promotion can actually be rather simple and very low cost if you actually are meeting people’s needs instead of trying to convince them they want something they really do not need.

    • Chad Walters says:

      Hi Robert –

      I suppose a follow-up post could be named “Non-Lean is Non-Marketing.”

      Excellent note about LG being a solid example of producing what the customer actually wants instead of simply getting customers to buy what’s made. There are tools within the Lean and Six Sigma toolkits where customer requirements can be collected and applied, but apparently so often these tools aren’t being used appropriately.

      Chad

  2. Pingback: Goodbye, Unwanted TSA Naked Body Airport Scanners! | Lean Blitz – Do it better.

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