Sunday, December 26, 2010
Wednesday, December 22, 2010
According to Berry and Parasuraman (Marketing Services: Competing through quality), Internal marketing is attracting , developing, motivating, and retaining qualified employees through job-products that satisfy their needs. It is the philosophy of treating employees as customers.
Although the concept of internal marketing seems like another version of human resource management, there is much more than just attracting and retaining good employees. According to Professor Philip Kotler, marketing activities within the company is equally important as marketing activities outside the company.
According to Kotler, there are two perspectives to internal marketing. One perspective is the coordination within the marketing department. The various marketing functions like sales , advertising, product development etc should act as a single unit focusing on delivering the best to the customer. The second perspective is the interaction between the various functions like Production, Finance , HR etc. Internal marketing’s role is to ensure that the entire organization is able to come together for a common business objective.
While many literature focus on the usefulness of internal marketing on the marketing function, internal marketing have a strong strategic importance which is often overlooked.
There are many advantages of internal marketing. These advantages vary with the nature of the business that firms are in. Internal marketing has a strong impact on the customer satisfaction in service industries. In most of the service businesses, the consumption of the service product happens at the service factory. Research has proved that the way in which the employees are treated have a direct impact on the way customers are treated.
There are businesses which are human resource oriented like software firms which will find internal marketing a very powerful tool for marketing as well as strategy. Such marketing programs targeting the employees will have strong effect on the overall efficiency of the employees.
The internal marketing initiatives will also have a ripple effect on the ability of the organization to attract and retain the employees. In this highly networked world, internal marketing can generate very high positive word of mouth publicity about the working environment in the company which can attract new talents to the organization.
Firms venturing into Internal Marketing have to look at the concept at different levels. There has to be emphasis on key focal points like branding, communication, training, motivation and transparency.
With regard to branding, Internal Marketing is closely linked to corporate branding. Corporate brand has more relevance in internally than a product brand. Employees should be thrilled by the corporate brand rather than the product brand. Hence marketing communication targeting employees should be aimed at building corporate brand equity rather than product brand equity. Brands like Infosys, TCS, Unilever etc not only attract prospective clients but also new talents to the company. Working for a reputed corporate brand is a powerful non-monetary reward for the employees.
Firms venturing into internal marketing should create a robust internal communication infrastructure which is a vital pre-requisite to any such program. Free flow of relevant information within the organization is very vital in this context. The success of the internal marketing program lies in the employees being able to internalize the brand promise, company values and develop customer orientation.
For example, the employee in the finance department should understand the implication of fast payment/bill processing on the overall business of the firm. Materials department should understand the importance of efficient procurement on the overall business strategy of the firm. The understanding of cross linkage of various departments and its impact on the customer will be the biggest takeaway of a successful internal marketing program.
Another important prerequisite of a successful internal marketing program is the internalizing of organizational culture among the employees. Firms like Marriott, Apple, Microsoft, Infosys, TCS, GE thrive because the employees are torch bearers of the organizational culture. Such internalization will happen only through a robust internal marketing program. For example, in Infosys, founders like Narayana Murthy , Nandan Nilekeni had the wisdom to understand the importance of developing a highly ethical , performance oriented culture. These organizations have a strong internal structure that is responsible for teaching this culture to the employees.
Top Management Responsibility
In most of the organizations, the task of internal marketing is not clearly defined. Most often this function is handled by the Human Resource Department. The thinking is that HR department is best suited for dealing with employees in matters regarding motivation, training and development etc. Like product marketing, internal marketing is also a very important function to be left to any functional department. In my personal opinion, top management is responsible for internal marketing. Firms like GE, Zappos, Google ,3M has CEOs taking the full responsibility of internal marketing.
In this highly competitive environment, internal marketing is a tool that can differentiate an organization from its peers. It is time for organization to understand its importance and start investing in it.
Originally Published in Adclubbombay.com
Thursday, December 16, 2010
Saturday, December 11, 2010
Indian companies are not well known for innovation. In comparison with the global counterparts, Indian firms have so far shied away from investing in innovation. That is the reason why India cannot boast of an iPod or a Google. It is not because India is lacking in brilliant minds. Indians are an inevitable part of the R&D initiatives of most of the global firms. Infact most of the global firms have their R&D centres in India to take advantage of the human potential available.
Despite having brilliant minds, it is highly disheartening to see Indian firms lagging behind product innovations. One of the primary reasons is the reluctance of Indian corporate heads to invest in creating an innovation culture. When Indian firms begin to invest in creating an innovation culture, markets witness the launch of products like Nano, Tata Ace or a Mahindra Scorpio.
One of the primary requisite of creating an innovation culture in an organisation is the top management involvement. Any breakthrough innovation can happen only if there is a strong commitment from the senior leadership of the company. Senior managers should be able to instil a sense of ownership in the mind of the employees if they want to create an innovation culture. The leadership should take care to erase the fear of failure which is most detrimental to the creation of a culture that promotes open innovation.
Managers must also remove the myth that innovation is always expensive. We are living in an era where most of the brilliant dollar ideas are created by people working with very limited financial resources. When organizations embrace an innovation culture, the cost of creating innovations begins to reduce drastically.
There are three critical investments that companies need to make in their quest for creating an innovation engine. The first investment is in the culture, second investment is people and the third investment is in the time.
Creating an innovation culture is the primary requisite for all firms aiming to build their business on innovation. This is perhaps the most difficult investment to make. Once the innovation becomes a part of the culture, it can be further strengthened using processes. For example in 3M, 25% -30% of the revenue should come from new products introduced within five years. To facilitate this process, technical employees are allowed to spend 15% of their time on projects of their choice.
Another vital investment is on the people. Management must understand that it is people who drive innovation. How ever robust be the process, without highly motivated people, process may achieve little. Firms focusing on innovation undoubtedly take care in selecting and retaining highly motivated employees. The new kids on the block like Twitter, Facebook is attracting bright talents because of their unique approach to work. Google has become one of the most preferred places to work because of their penchant for creating a unique work environment.
Another vital investment that firms have to make is with respect to time. Creating an innovation culture cannot happen overnight. This is a long process and each firm should discover their own DNA of innovation. Time is the investment that the leadership has to make if they want to build the innovation culture into their organizations. Innovation cannot be initially managed over quarters. The management should first establish an innovation budget and encourage the employees to invest that budget into product development or improvement. It will be easy if these budgets are initially spent on product improvements rather than breakthrough products or new products. Once the entire team begin to understand the seriousness of the innovation drive, more and more serious innovations will follow.
It is important for the senior management to tolerate failure. It is impossible to innovate without tolerating failure. And the fear of financial loss is the greatest inhibition for firms venturing into creating an innovation based business model. An open communication channel between the innovation leaders and the senior management is a necessity to avoid such financial loses. Managers should be encouraged to speak their mind about the viability of a particular idea or a project.
Originally Published in Adclubbombay.com
Wednesday, December 08, 2010
Sunday, December 05, 2010
Wednesday, December 01, 2010
Marketers are faced with a highly challenging task of balancing short-term and long-term strategies for the brand. In a highly competitive market, marketers often get deluged in activities which are tactical in nature. In doing so, brands may lose focus on pursuing its vision.
There are many reasons behind the manic run behind short-term gains for the brand. The major culprit is in trying to manage the brand from quarter to quarter. Pressured to show positive growth in every quarter, managers are seldom given time to analyze the long term implications of their marketing activities.
At some point in time marketers need to pause and take stock of the brand’s path to future. Great brands are never built in 3 months. It takes years of focused work and investments. Although marketers are willing to invest now, they expect a positive ROI within a short span of time.
Whether the brand is new or old, marketers need to periodically assess and evaluate the path towards the future. The following questions will help the brand managers to check whether the brand is treading in the right direction.
1. What is your brand vision?
It is critical for brands to have a long term game plan. The plan will help serve as a guideline that will help future managers to devise action plans and continue in the right direction.
2. What needs of customers that your brands satisfy?
Marketers must be able to clearly articulate the customer needs and wants that the brands aim to satisfy. These needs and wants may change over time; hence marketers need to periodically review whether the brand is currently relevant in the customer’s life. The brand should also be able to appeal to the new demands of the consumers. Regular evaluation of this parameter will keep the brand in tune with the changing consumer mindset.
3. What is your brand’s core strength?
Brands needs to have a “ WoW” factor if it is aiming for long run profitability. Marketers needs to constantly search for the “WoW “factor and keep inventing more and more of these “ WoW” factors.
4. What values does the brand represent?
Brand values represent the core foundation upon which brand strategies are made. According to Professor Kevin Lane Keller, Brand Values are those set of abstract associations that characterize the 5 to 10 most important aspects or dimensions of a brand. Brand values serve as the basis for brand positioning. Marketers have to identify and internalize these core values and periodically check whether the brand is aligned to these values.
5. Will the customers relate to those brand values?
Not only that the marketers should identify brand values, they need to check whether those brand values are relevant to consumer’s life. Sometimes consumers may not relate to the brand’s core mantra. It is in this situation where the brand may feel disconnected with its target audiences. Periodical review of the brand’s connection with the target market is critical to long-term survival.
6. Is the brand relevant to a customer’s life?
Successful brands stay relevant in the consumer’s life. Marketers should be able gauge whether the brand is relevant to the customer. Managers should constantly keep in touch with the customers to understand how the brand is helping them in their life.
7. Is the brand’s promise sustainable over time?
Markets are dynamic and consumer taste and preferences change drastically over time. Hence while developing the brand’s core mantra or promise, managers should also devise a process to determine whether the brand’s promise is sustainable over time. The brand also needs to evaluate its promise in comparison with its competitors.
8. Is your brand flexible?
There will be situations where the brand may have to reinvent itself. New opportunities may force the brand to venture into related as well as unrelated categories. Marketers should build some amount of flexibility in the brand architecture so that it is possible for the brand to venture into other categories.
9. Does the brand create excitement in the market?
Iconic brands are exciting. These iconic brands not only excite the customers but also the employees. A crucial question in the brand’s quest for excellence is whether the brand is able to create a sustainable level of excitement in the market. Creating excitement in the market is not easy and it cannot be done overnight. Marketers need to invest a lot if they want to create a high level of excitement in the market.
10. Is your brand engaging the customers?
The final question for the managers is about customer engagement. We are living in the experience economy. Consumers pay for experiences rather than for products. To understand the customer’s expectations and deliver those experiences, brands needs to constantly engage the consumers. Technology has enabled marketers to directly interact with the customers in multiple platforms. Managers should check regularly whether the brand is engaging with the customers through the various available platforms.
Originally Published in Adclubbombay.com
Originally Published in Adclubbombay.com