Many firms have goals of becoming a market-driven organization, and they, therefore, try to be ahead of their competitors, exhort their workers to establish stronger relationships with their clients and establish decisions that are purely governed by their market condition. However, it is not an easy task for the managers of any enterprise as the achievement of this goals can prove to be a daunting task even for seasoned managers. Lack of commitment to the proposed change programs that are usually market centred can result in the misalignment of the company to the evolving market condition. The survival of market-driven firms depends on their marketing strength and organizations that do not have a clear understanding of what market-driven entails risk applying change programs that are not aligned to the present markets. The paper will focus on causes of instituting change process in an enterprise and the application of various marketing tools in the quest of attaining a stable market performance (Drucker School, 2017).
Change process
Despite the valuable guidance provided by the underlying prescription and principles of overall change programs, enterprises should take upon themselves to alter the design of the change programs so that the outcomes will be beneficial to their particular market challenges of attracting, understanding and keeping valuable clients. Marketing is at the centre of the market-driven organizations where the change process is carried out by the marketing strategies employed by the firm. However, the process may adversely be affected by centrifugal and centripetal influences which may result in the misalignment of the enterprise to its core market segment (Frichol, 2017).
Centripetal and centrifugal influences on marketing in a firm
Two forces influence the alignment of an enterprise to its present markets. The centripetal force is an influence that directs the company to look within its walls for guidance on decisions that increases their separation from clients (Cook, 2012). Also, the centripetal influence makes the firm to be insensitive to competitive challenges. The in-house approach to the change process is as a result of the “liability of success” in that excellent financial performance of the company leads to overconfidence, arrogance and a self-righteous stance where the workers of the firm think that they know better than the market. On the other hand, the centrifugal effects of the technology, competitive change and market consistently interfere with the company’s alignment with its market thereby erasing the benefits that accompany such an alliance. Therefore, any company needs to critically assess the forces that affect the change programs that determine the marketing methods applied in the business. Causes of change are determined by the interplay of the two forces (Vessenes, 2015).
Understanding market Orientation
The capabilities approach is an emerging strategic management feature that provides a comprehensive array of methods that are used to structure change programs that improve market orientation. Capabilities are a complex mixture of knowledge and skills that are portrayed in organizational processes that are essential in integrating various functional processes and providing a platform that enables the business to improve and learn continuously (Stein, 2012). Typical examples of the corporate operations include such activities as the development of a new product, order fulfilment and service delivery. There has been a lot of research done to identify organizations that are market driven, measure implications of their bottom-line and understand their operational processes (Martin, 2016).
Capabilities of market-driven enterprises
The capabilities of an enterprise are contained in the “outside-in” processes which direct the delivery and creation of value in the organization. In any market orientation, two capabilities stand out above all others which are customer Linking and Market Sensing (George, 2013).
Customer Linking
An essential characteristic of a market-driven team is the ability to manage and create strong relationships with customers where a two-way communication channel is established which ensure that clients’ needs are addressed separately. Customer relations can offer an opportunity for the business to develop a competitive advantage where the clients become loyal to the firm. The competitive advantage can be achieved through joint planning, close communication, coordination of joint activities, conflict resolution and collective problem-solving.
Market sensing
The technique enables the enterprise to learn the consumers’ behaviour in the market. Also, market sensing allows the firm to acquire data on channel members, competitors with the intention of acting on trends and events in the market. Market-driven businesses are more experienced than the other types of companies because they have adapted to more systematic learning, anticipatory in gathering, utilizing market information, and interpreting.
Enhancing market-driven capabilities
An exhaustive change program that seeks to improve customer linking capabilities and market sensing should possess certain characteristics or elements. The elements include; the utilization of information technology that enables the business to achieve previously impossible things, anticipating the future needs by installing strategies that create customer value and using benchmarking techniques and mapping to diagnosed the current capabilities. Also, other elements such as the bottom-up redesign that is based on forming teams that are tasked with ensuring continuous enhancement of the underlying processes and the top-down guidance from top managers who show a continuing and unequivocal commitment to putting client’s needs before company needs (George, 2013).
Triggers of consistent changes in marketing for a market-driven firm
The triggers include Market disruptions, misalignment of the company to the market, excessive opportunity cost and strategic necessity. The triggers will be explained with by using real life examples of existing companies.
Market disruptions that may interfere with the business model
The effects of marketing disruptions can be well explained thorough The Fidelity Investment firm that researched the retail investment market in 1993 where it discovered many new competitors. The competitors included discount brokers, insurance companies, and customers concentrating on investing in fewer firms, banks, and independent financial advisers. In turn, the investment firm formed a strategy that involved extending and developing deeper relationships with their current customers. The enterprise offered a value proposition that could not be compared with other competitors. However, the strategy could not be applied practically to the field, and it remains in the theoretical stage because the firm had specialised in providing standard services to all customers. However, the firm later developed an efficient change program that solved the issues. The business chose a segment of the client base to nurture while improving their system infrastructure thereby enabling it to serve and identify these attractive segments and restructure main customer processes in retention, acquisition, and optimization (Frichol, 2017).
Misalignment of the company to the market
When a company loses its connection with its market, it risks being exposed to financial problems that result from the erosion of its market share. Such a firm will gradually fall into debts and increasing operational costs. The effects of the misalignment are higher when the enterprise is market-driven. At this point, the company needs to change its marketing strategy so that its continued decline can reduce. An example of a business that faced the misalignment was the Sears Roebuck which was a dominant retailer in the U.S. Sears had a marketing strategy that harmonized its products with the changing needs of suburban homeowners. After 1986, the company started losing touch with its market thereby leading to a massive financial loss of $3.9 Billion. Additionally, it experienced a decline in its market share and customer satisfaction ratings. The operational cost gradually increased as there was little return on investment. The company started to lose clients to competitors such as discounters like Target and Wal-Mart and favourite retailers such as The Limited (Englus, et al., 2016).
Within 100 days of his arrival, Arthur Martinez who was appointed to run the retail group after its problems made some sales and marketing changes that temporarily fixed the issues. The changes included the dissolving of the hundred-year-old catalogue, closure of 113 stores that were unprofitable and pulling out their investment from the financial-services business. The above changes were successful in creating a temporary survival strategy. However, the business needed a long-term plan that would involve all the stakeholders and motivate the dispirited workers who were eager to see improvements in the firm’s performance. Martinez sought a long-term solution by focusing on “the softer side of sears” and introduced a new label of cosmetics and apparels. In his words, the new head of the firm summarized the challenges he faced: “A turnaround is a financial recovery. A transformation is much more. It’s all about changing the approach and structure to the business and re-educating our people to feel comfortable outside a command-and-control environment” (Shaker, 2008)
Strategic necessity
An enterprise may change its strategies such as shifting from a manufacturing company to a retail firm or a combination of the two. Also, some business acquires or merge with others and sometimes a change in the strategy is needed to conform to the new business environment. For instance, Eurotunnel a project-based company built a tunnel below the English Channel, and after completion of the project, the firm had to change its structure to operate the channel and generate profit. A change in the company’s structure was not enough as it needed a total change in all its processes and structure. For the firm to earn money and control costs, it needed to become efficient in serving, retaining and attracting clients that could compete with the established airline and ferries services. The management of Eurotunnel realized that their bloated costs could lead to a projected unacceptable and huge losses and they made changes within the firm to cut the expenses. In addition to the cost-cutting exercise, the company further focused their efforts on revenue generation (Shaker, 2008).
The proposed changes began by organizing around processes and customers and remove the old functional structure. The tunnel was to be used by various modes of transportation which included rail and road. Therefore, the business developed different strategies and teams for the rail, truck and tourist travel arrangements. A group was created and given the full support of the top management to apply changes. Consequently, the business was transformed into an elaborate architecture that involved over 1000 people who were spread over eighty-five teams. Since the company was market driven, its priorities were guided by the customer inputs in that the teams dealt with every detail of the firm from the introduction of a club-service to timetable planning. The decisions made by the groups were based on the client’s feedback which in return resulted in the creation of services that had value to customers thereby increasing the company’s presence in the market (Frichol, 2017).
Excessive opportunity costs
By 1991, Owens Corning, a manufacturer of glass composites, roofing materials, and fibreglass insulation was suffering from a bunker mentality, accumulated a lot of debt and overwhelmed by court cases on the use of asbestos. Despite running an enterprise that had a capital-intensive fibre making process that was only profitable when there was a high demand for the fibreglass and cyclical sales, the managers of the company had a sensible product orientation. The builders market was composed of suppliers of materials who were unreliable, and there was little information of about the market trend. The home improvers’ encountered challenges especially from unreliable contractors (Steeland, 2017). The clients were not able to differentiate between various brands, and the building materials were secondary. Contractors and builders were disappointed when materials arrived late, and their schedule could not be met which resulted in additional costs. Owen Corning realized that the market needed a one-stop shopping location that could provide all the needs of builders. However, the firm had significant gaps in its product line, and its balkanized service and sales pattern was not able to provide customers with a complete catalogue of products. Therefore, the firm needed to overcome challenges in the flow of information to and from customers (Frichol, 2017).
Conclusion
Many companies have transformed into market-driven enterprises. Competition among firms has led to the architectural change of the market with the customer being at the centre of all the marketing strategies. Change programs are a valuable tool that can be used by firms to implement market changes that focus more on the customer. These programs offer direction on the path to take by providing prescriptions and principles that can be followed. However, companies should use the structure provided by the change program as a building block for a customized marketing strategy that marches with their goals and objectives while also aiding in understanding, attracting and retaining valuable clients. Marketing is at the centre of the market-driven organizations where the change process is carried out by the marketing strategies employed by the firm.