Marketing Function Is Different in a Six Sigma World

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By R. Eric Reidenbach and Reginald W. Goeke

Six Sigma is changing the way the marketing function in an organization operates today.

Consider the following marketing scenario at a company which manufactures consumer-packaged goods:

During an emergency marketing meeting, the market research division discloses that its Brand X, which has recently lost market share, is rated a poor value by consumers in the targeted market. The challenge from the marketing manager is to identify a solution that will reposition the brand. The assistant manager provides a prototypical marketing solution. First, cut the price of the product. Then, develop an advertising program to convince consumers that the product really does provide the quality and benefits they seek. The new advertising campaign, coupled with the reduced price, will substantially enhance the perceived value of the brand in the marketplace.

Cut price and increase advertising. That was the traditional marketing solution in a world before Six Sigma. So how has Six Sigma changed the way the marketing function operates?

Marketing managers must understand that they have a new set of internal partners for the services they provide. These partners are the Six Sigma Champions and Black Belts responsible for the identification and deployment of Six Sigma projects. Six Sigma projects are directed by the voice of the customer, and the marketing department is the information portal through which customer and market information passes into the organization. So, what type of market information does this new set of internal partners need, and how must that information be provided in order to enhance its utility?

Importance of Strategic Value

Marketing has an important role in providing the strategic focus for the rest of the organization. While it is true that corporate executives provide the direction for overall organizational growth, marketing provides the basis for identifying the competitive arenas. These are the products and markets where the organization will carry out its top-level directives. This functional responsibility is critical because without a strategic focus, any information provided to those responsible for Six Sigma projects will lack sufficient clarity to direct and guide those projects.

Within each of the targeted products and markets, marketing must collect and analyze information in such a way as to clearly identify the key drivers of value and their relative importance and constituent components. This means that the information collected must reflect market as well as customer views, because in many instances Six Sigma initiatives have the dual purpose of attracting new customers while retaining current ones. Analysis of the information must also include the ability to identify the relative impacts of quality and price on customer value perceptions. Absent this analysis, many Six Sigma projects develop an over-reliance on cutting costs and neglect a focus on enhancing the overall quality of products and services. Of course, this also means that both marketing managers and Six Sigma Champions and Black Belts must learn to use the tools of multivariate statistics in order to properly interpret the data.

Understanding the Value of Quality

It is incumbent upon the marketing function to both understand and provide a holistic view of how the market defines the value of quality. This requires expanding the view of how value is created and delivered throughout the entire delivery system of the organization. It is essential to understand that value at the point of production does not necessarily translate into value at the point of consumption. Issues of product support, parts availability, service, warranty and so forth all figure prominently into how customers and markets define and evaluate the value offerings of competing suppliers. Consequently, the value information collected and provided by marketing must identify those factors that are critical to quality (CTQ) throughout the organization's value stream.

The marketing role also should include linking value information from the marketplace to internal processes throughout the organization that create and deliver value. This is the process so critical to the identification of Six Sigma projects, linking the organization's processes (inputs) to competitive performance criteria associated with the CTQs (outputs). The tools used to identify the linkages must allow the organization to set project priorities.

Once Six Sigma projects are under way, an important function in the analysis of information is the development of appropriate tracking metrics to monitor market-perceived changes in value based on changes brought about through Six Sigma projects. Black Belts are expert at the identification and use of appropriate metrics for tracking internal process changes. Marketing should partner with Black Belts to identify and use appropriate metrics to track changes in market perceptions.

Conclusion: A Unique Opportunity

The integration of Six Sigma into an organization provides marketing with a unique opportunity and a challenge to change its traditional role within the organization. No longer just a vehicle for corporate communications, nor even just a repository for customer information, the role of marketing can evolve to capture the voice of the market, interpreting that voice in order to identify value-based CTQs, and enabling a partnership with Six Sigma to use that information. Each organization's competitive value proposition is an important asset to actively manage. Six Sigma provides the toolkit for process improvements. It is up to marketing to bring onboard a "voice of the market toolkit" to drive those process improvements toward value enhancements leading to increased market share and profitability.

About the Authors: R. Eric Reidenbach, a principal and founding partner of Market Value Solutions, has pioneered development of techniques in value analysis, customer retention, value linkages to Lean and Six Sigma. He has extensive experience in marketing research, measurement, instrumentation and modeling. Dr. Reidenbach has a doctorate in marketing. He can be reached at eric@marketvaluesolutions.com. Reginald W. Goeke, a principal and founding partner of Market Value Solutions, has pioneered the development of techniques in the measurement of customer and employee value, inter-industry benchmarking of value management, the strategic deployment of value-based initiatives and the analysis and enhancement of value delivery systems. Dr. Goeke is a former department chairman at Penn State University. He can be reached at reg@marketvaluesolutions.com.

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