Six Sigma Approach to Marketing Leadership : 4Ps + DMAIC = $$$
Marketing is a cognitive - emotive effort involving defining methods of identifying customer needs/problems & solving , delivering , profiting from the value exchange. Classically the intangibles involved in conceptual analysis and design cannot foresee the problems involved in being a barrier to complete problem solving. From drawing board to pilot, from pilot to production , from delivery to realisation > marketeres encounter challenges of anticipating change , time , competition , environment and consumer expectations. The vastness of coginitve-emotive thinking matched with a desire to perfect the solution is always a worrying aspect for a marketer. Here the creative maketer takes help of available tools to make his task of value formation , delivery and exchange rational, logical and simple. One such imaginative tool is using DMAIC analysis for marketing.
Six Sigma enables companies to improve the marketing’s strategic, tactical and operational processes as a way to enhance the top line to drive revenue. By applying Six Sigma to marketing you can develop a lean efficient marketing workflow, identify leading indicators of growth and become proactive about performance improvement. Measurement of performance is one of the five fundamental phases in the Six Sigma methodology. Once you begin measuring marketing performance, you can begin to make modifications and improvements. Six Sigma provides both a methodology for process improvement and a way to prove its value. These additions are above and beyond the “traditional” Six Sigma approach to cost reduction.
Six Sigma has two methodologies: DMAIC and DMADV. DMAIC is used to improve existing business processes and DMADV is used to create new process or product designs that result in more predictable, mature, and defect free performance. Each methodology includes five steps which we will mention here; however, for the purpose of this article we focus on the DMAIC process.
DMAIC includes five steps: define roles, goals, and deliverables consistent with customer demands and the organization’s strategy; measure current performance and processes, and collect relevant data for future comparison and improvement, analyze the relationship and causality factors; improve the process to eliminate defects; and control and correct any variances before they result in defects and thereby improve performance. The five steps for DMADV include: define the goals of the design activity, measure and identify the critical quality, product/process capabilities, analyze to develop and design alternatives to determine the best design, design the process and verify the design. The purpose of these two methodologies is to create a data-driven, systematic approach to solving business problems that will have a positive impact on customers.
DMAIC refers to a data-driven quality strategy for improving processes, and is an integral part of the company’s Six Sigma Quality Initiative. DMAIC is an acronym for five interconnected phases: Define, Measure, Analyze, Improve, and Control. These five phases are dynamic in their existence of an organisations pursuit of a directed goals. DMAIC provides a good framework for organisations to board a semblance of sanity amidst the turbulence of disruptive entropies internally and externally. In many ways it emancipates any troubles with a probabilty based menu of outcomes. DMAIC ensures organisations resources are naturally optimised and gives a reassurance of plenty when there is a real scarcity . It is a guiding hand in balancing organisation goals against time and perspective. DMAIC enables organisations to define metrics direct or enabled to market problems and achieve best fit solutions to achieve market leadership
DMAIC (Continous Improvement of Process ) < > DMADV (Re Engineering Existing Attributes)
A marriage of a structured / cerebral program of DMAIC versus an effervescent amorphous ensemble which is marketing makes for interesting possibilties. Marketing provides a drive towards customer excellence and empowers organisations to be tidal in their nature , while DMAIC provides a direction and necessary force for the nature of organisation to crystallize and take effect. The very nature of the two contrasts in being and effect indicate that organisations need a level of maturity in understanding and preparing for a convergence of divergence.
In the design of structures , marketing driven organisations are phased on revenue streams which are living close to consumer demand , they look to quickly ramp up a deiverable solution so that the pace of of the 4Ps is faster than the demand curve and competition ; thriving to achieve premiums and market dominance . With DMAIC , organisations can look to have a framed approach to all the 4Ps with marketing taking precedence in driving change and DMAIC providing in the intensity to find the optimum solution.
When it comes to Product , the marketer will look to have an inclusive approach to provide customer "Delight" .However "DELIGHT" comes at a cost and at the risk of obsolesence by competition.
Using DMAIC , organisations prioritse on the core needs , match it with operational and production constraints and look to achieve a best fit of output. Creative organisations come up with a menu based approach of product lines varying from Base Case to Premium , thereby ensuring an optimised business opportunity. DMAIC drives a cost benefit analysis which quantifies value delivered to customer , such focus ends in a sweet spot being identified . Existing in this sweet spot enables enterprises to gain maximum revenue and benefits from their efforts. Cost of effots is reduced vis a vis returns and resulting benefits of the product-market fit spill over into the downstream 3Ps. The world's best selling smart phone is a study in adoption of a structured approach to product design. With the theory of the applausible thumb being the driver of change , the design variable calibrated a best fit around it and gave a best solution . The same resulted in a fast product adoption , rapid viral growth and market dominance.
Pricing driven by a marketer thrives on a philospohy of entry pricing to penetrate the market , achieve premiums as demand grows and stabilze above the cost of capital once the demand saturates. Driven by DMAIC , pricing thrives on a sanitised product lifecycle cost ensuring maximising earnings across the product lifecycle , here apart from consumer behaviour the marketer looks to balance returns by including creative reduction of production and distribution costs , providing interesting delivery models which enable the demand and quantity variancevery close to the consumer and gets better returns than conventional pricing. European automobile majors have a unique philosophy where they are standard in design and produce in volume at strategic plants globally for export. 3 shift operations of large plants invested in anticipation of demand ensure that fixed costs are absorbed fast , depreciation costs are negated quickly and the company looks to earn from transfer pricing to each layer of the distribution. The problem of pricing was looked at a scale larger than the territory of existence , only possible because the right control variable of scale , quality control was balanced against achieving a cost advantage by sweating the fixed assets beyond convention.
Promotion is the life line of a marketer where wider canvases, budgets and creativity have no limits. The cola giants have prided themselves in outdoing each other in giving amazing , clever creatives. The soccer world cup , the largest televised event in mankind drives competition amidst the rival sets of companies in FMCG and consumer goods space to provide innovative advertisements . But is this sustainable , what are the costs involved, where do the means reach a limit. DMAIC drives a sustainable cost based approach , costs of consumer accquisition have become a buzzword of promotions. Organisations are looking to create brands that are local , reach out to a particular group rather than go global. A point and shoot approach is replacing a spray and pray approach . Take the case of a global processed water brand which went viral with the clever use of celebrities and social media. The brand took water an everyday product made it into a brand with a large dose of cerebral communnication. The result was stunning when a large cola brand acknowledged the effort with a large buyout of the brand . DMAIC drives communicatio by focussing the brand communication with a direct connect to consumer demand and behaviour ; no mere carpet bombing here.
Place or distribution is an expensive phase in marketing . With real estate being an escalating resource globally , the place of existence of the marketing effort being every where is very expensive and difficult to control. Large distribution is linked to space costs , retention costs , inventory costs at distance stock points, obsolesence which contribute to large overheads. The DMAIC solution is an interesting approch which prioritises market size , ease of access and ease of existence. Here resources are concentrated in pockets of intensity with an approach to avoid being spread too thing. Shadow areas are clearly marked out and market intensity in such areas are kept in mind for future , while the present is addressed using available resources for high intensity market performance in focussed markets. The results are validated by the apprach of American Pharma companies which have a significant presence of representatives in select territories of population intensity and almost neglient presence in others. The strategy goes by the name "Micro Market" strategy and is result of an organised thinking approach.
In the pace for consumer mind and revenue leadership , organisations can derisk their business by taking refuge in tried and tested realm of operations. The blitz of marketing guided by the steady hand of DMAIC excellence model is a wonderful tool to drive results at lower costs . The days of getting there somehow are replaced with getting there in time and at defined cost . DMAIC is a effective tool to make the promised land of market sucess more accessible. As a marketer ......
Keep thinking differently ! Keep winning Differently .....