Database Reference
In-Depth Information
enterprises the ability to interact
One to One
with individual customers and the ability to produce
in response to individual customer requests.
The mass marketing and customized marketing approaches are organized very differently.
The mass marketing approach anticipates customer needs and defines solutions before interacting
with the customers, while the customized marketing approach involves developing a process that
allows interaction with each individual customer One to One to define his or her need and then
to customize the delivered solution in response to that need. Each type of marketing requires a
different type of organization.
When the inflexibilities are because of natural causes beyond control of the enterprise, com-
petitors will not be able to gain a responsive edge and, hence, competitive advantage. However, to
the degree that inflexibilities are institutionally caused by organizational structure, processes, or
strategies, the inflexibility is self-inflicted, and the enterprise should definitely be liberated from
such inflexibilities to make it customer responsive. True customer centricity is reflected in the
enterprise transitioning from providing customers a range of choice offerings to providing solu-
tions to the specific needs of the customers; until the organization becomes customer centric, the
emphasis will be on the offering, not on the responsiveness. In the offering-based approach, when
the range of offerings is small and demand is relatively stable, enterprises can focus on produc-
ing and mass marketing more new offerings and rely on the customer attending to the best of
these offerings. As against this, in the customer-responsiveness-based or customized marketing
approach, rather than merely proliferating the number of offerings, enterprises focus on meeting
individual needs of the customers.
Whereas offering-based enterprises are characterized by
top-down management
, customer-
responsive organizations are
bottom-up management
oriented. As the response is guided by prior
organizational experience that is embodied in the best-practice guidelines that are readily avail-
able to all the frontline workers, the delivery is necessarily effective and efficient. Customer-
responsive enterprises are knowledge based rather than plan based. This knowledge base consists
of knowing how to divide the envisaged work into tasks, identifying individual delivery units
capable of performing it, assigning the work/tasks, and monitoring activities to ensure that the
tasks are completed as per agreed requirements. Unless the knowledge is captured, it will only
be available to those who have experienced it or learned about it. Because it is modifiable, rather
than a plan, the captured knowledge becomes a list of
best practices
to guide responses to requests
in the future. Conditional best-practice guidelines specify the processes required for diagnosing
needs and developing customized delivery plans. We discuss the development of best practices
in Section 1.2.2.1.2 “Best-Practice Guidelines Management”.
1.
Advantages of customer responsiveness
: The various advantages of customer responsiveness are
a. Improving the fit between the customer's need and what the enterprise delivers
b. Increasing profits through customer retention
c. Increasing profits by reducing costs
d. Making the enterprise more change capable
Responsiveness reduces costs for the providers by reducing capital costs, making planning
activities more efficient and effective, and increasing capacity utilization. Section 1.2.2.2.3
“Economics of Customer Responsiveness” looks at several aspects of costs associated with
customer responsiveness.
2.
Responsiveness reduces costs
: But can an enterprise be more responsive at reduced cost? Yes! In
a career spanning about four decades, Taiichi Ohno spent years fine-tuning the principles
for controlling costs that became the foundations of the world famous Toyota Production
