Direct Marketing and Its Value to an Organisation - Coursework Example

Business Function and Processes [Name] [Institutional Affiliation] [Date] Introduction In the recent years, operation management tools and techniques have emerged as integral in improving performance and enhancing growth and productivity of a firm. Operation management is part of innovation and creativity strategies that companies in this competitive era ought to apply. Leahy (2006) has explored the value of creativity and innovation in business. Leahy upholds that tools of management ought to be creatively thought out and applied so that companies are able to promote competitiveness for their businesses. In the UK, for instance, research has concentrated a great deal on management tools like six sigma, total quality management, lean operations, creativity, and innovation. The main goal of such endeavours is to unearth the best practices that can re-engineer growth, minimise waste, satisfy the customers’ needs, and at the same time make efficient and effective use of the available resources. In the 21st century, most companies are keen on improving their operational excellence. This report examines the value of direct marketing to an organisation. It further explores operations management tools and techniques can be applied in direct marketing to promote operational excellence. Some of the management techniques that have been discussed include the IS Architecture, the Lean and the Six Sigma Management approach. For each management tool, a brief explanation has been given to lay emphasis on the preceding discussion. The functional area chosen for this report is marketing. Given that marketing is a broad field, a specific section in marketing (direct marketing) has been selected to explore how the aforementioned management tools can be applied. In addition to this, the report undertakes to evaluate each of the tools identified. Direct Marketing and its Value to an Organisation In the 21st the art of marketing is an inescapable tool in any business. Manufacturing quality products and packaging them in the store is not sufficient. There is need for continuous marketing to tap and maintain customers. Kotler and Kettler (2009) justify the indispensable need for marketing to any business in the 21st century owing to the availability of the positions of Chief Marketing/Financial. As a means of marketing, direct marketing enables customers to exchange information on a direct basis (Bird 2000). .In direct marketing means of communication that link the customers directly to the businesses are the ones employed. They include; couponing direct mail, direct advertising telemarketing, Email marketing, direct selling and broadcast faxing. As Figure 1 below illustrates, all these concepts are linked to each other and that they all form part of what direct marketing is. Figure 1: Concept of Direct marketing The main purpose of direct marketing is to manage the relationships between the customers and the business in a manner that is tactical (Payne 2006).The proponents of direct marketing are cognisant of the diverse differences that exist among the customers and thus prompting the need for approaches to marketing that meet the needs of the particular customers. The Significance of Direct Marketing to an Organisation Development of Long-term relationship with customers Lesueur (2007) upholds that one of the major significance of direct marketing is that it enhances development of a long term relationship with the customers. A long-term relationship is developed as result of the company investing part of its resources in keeping touch with the customers by providing them with information on new products and services. Note that direct marketing entails keeping customer database. The database has the personal profile of the individual customers as well as their needs and preferences. The aim of keeping such a database is to be able to market the organisation’s goods and services. In the process of keeping in touch with the customers, a long term relationship between the company and the customers is developed. Any organisation is in dire need of developing a long-term term relationship with the customers for a number of reasons. Firstly, it is one sure way of increasing sales of an organisation. As mentioned earlier, manufacturing quality goods and keeping them in store is not a surety that they will give returns. The process of marketing them ensures that the goods and services produced are known and consequently bought by the intended customers. Thus; the operation management process is efficient the input generates profit. In the TQM management system, the goal is to integrate development of quality, its maintenance and improvement among the diverse groups within an organisation(Leach 2000).In addition to this, TQM management process vests a lot of interest in the economy of resources use and customer satisfaction. This goal of TQM is achievable through successful management of customer relationships. Customer loyalty Direct marketing is vital for the organisation if it intends to maintain its customers. Customer loyalty refers to the act of maintaining customers long after their first encounter with the company (Hughes 2003). The elements of direct marketing facilitate exchange of information or transmission of information from the organisation to the customers. The overall effect of this strategy is to keep the customers abreast of the new developments of the new products and services available at the company. There is an aspect of personalisation attached to the direct way of marketing that distinguishes it from indirect marketing. This personalised way of marketing through direct advertisements, text messages, and E-mails help keep and maintain customers since they tend to feel that they are highly valued by the company. Direct Marketing Enables an Organisation Understand the Consumer Psyche Before a company lays down strategies to effect manufacturing of given products it is important that it first analyses the market with a view to understanding what the customers really want (Ingwer 2012).The psyche of the consumers is quite dynamic. What this means is that customers who once enthusiastic about a given product are likely to shift such interest with time. The economic changes as they occur are likely to influence the customers’ psyche in a number of ways. For instance, economic factors such as inflation are poised to impact negatively on the purchasing power of the customers. As discussed earlier, direct marketing gives an opportunity to the company to establish a long-term relationship with the company and in effect helps the company know the customers better. To begin with, direct marketing comprises of collecting customer’s information, recording it, analysing it, as well as keeping truck of the same information. The information provided about the customers thus forms an important base for understanding the customers’ psyche. Being cognisant of the customer’s psyche is important as it will help the company produce goods and services that correspond to the predicted psyche of the customers. Similarly, using the same information about the customers can help an organisation improve on their products and services. How Operations Management Tools and Techniques can Assist in Direct Marketing Operation management is a form of management whose primary goal is to oversee production processes as well as design and control them (Heizer et al. 2001). Note that operation management can be employed to design business operations afresh so that these processes are efficient in the manner in which they use the resources available to produce goods and services. In addition, operations management tools and techniques can be employed to improve performance of an organisation. Marketing is an integral part of making the operations of a company successful and efficient in term of financial performance. Operation management tools and techniques include; The Information Systems(IS) Architecture, Six Sigma, the Lean technique, and TQM. This report analyses how Six Sigma and Lean technique can assist in direct marketing-a branch of marketing. The IS Architecture Management Tool The IS structure is blueprint that indicates the data processing systems, networks are telecommunications are processed. The IS system is often written down. Joubert (2002) likens the idea of constructing an IS to the act of town planning. An IS architecture consist of systems that support the whole IS like database, network and telecommunications components. IS architecture is crucial at this era of great technological advancements and particularly direct marketing that relies heavily on technology. Presence of an IS architecture is important to direct marketing in a number of ways. Firstly, it assists personnel in direct marketing gather, record, analyse data peculiar to the customers. From the data given, direct marketing can be conducted based on the available information. For instance, the IS Data Architecture can help the personnel at the directing marketing or the organisation tell what data has been collected and if it is relevant to the intended use. The IS Data Architecture similarly helps tell how the information was collected, stored and the applications that use the data. Therefore, IS would be indispensable in assisting direct marketing through database marketing and data mining. Critical Analysis of the IS Architecture Operation Technique As discussed earlier, this operations tool gives direct marketing a platform for data mining, data marketing as well tools for conducting communication between the company and its customers among other advantages. However, is has challenges that it poses. One of them is that is an expensive technique especially for SMEs. The cost of installing an IS architecture is relatively high(Topi et al. 2014). The same applies to the cost of its maintenance as it demands expensive expertise to handle. In addition, it is considered as time consuming. Proponents of this management tool have erroneously assumed that all organisations have the necessary funds to install such a tool. It is oblivious of the fact that some businesses have financial constraints at the beginning that might make application of this tool economically unsustainable. Standfield (2002).argues that it is very difficult to measure the effectiveness of such a management tool whose measurability relies on other secondary factors. One cannot give a conclusive report on whether application of the IS structure has been effective in managing the operation of the business. The Six Sigma Management Tool The objective of the Six Sigma is to improve quality of the output processes(Taghizadegan 2006).The Six Sigma approach begins by identifying the causes and defects (or errors) and consequently eliminates them(Moore 2007). .Elimination is done by minimisation of existing variability in both the manufacturing and business level of the organisation. The common methods used in the Six Sigma approach include statistical analytics which generates a structure of employees in the organisation. Worth noting in this approach is the existence of a specified processes whose aim is to cut down the cost and increase the profits. The Six Sigma tool can assist, in a number of ways, in direct marketing. Firstly, this tool can be used by the management team to come up with a cluster of employee who will specifically help in customer relationship development by direct marketing. It is prudent to acknowledge that not all employees, irrespective of their training, are capable of handling customer relationships. Analytical statistics would be employed to develop an infrastructure of employees. This infrastructure will entail the capabilities of each employees and what they can do best in. From the clusters identified, a team to deal and handle matters relating to direct marketing can be generated. The Six Sigma approach is the best tool for both direct and indirect marketing because it vests a lot of interest in techniques that are geared towards voicing the concerns of the customers. In essence it is a customer-oriented management philosophy. In direct marketing it can guide efficiency in the manner in which customer needs are managed. It could also improve the flow of information as well as the interaction between the customers and the organisation. In addition, such a strategy can help the company to engage in lateral communication-that is between organisations. The result of this communication is creation of a healthy competition and a platform for healthy benchmarking. On the other hand, in direct marketing there is often need to carry out an assessment of how the various products and services are doing in the market. Direct marketing should help the company generate a list of strengths and weaknesses. In order to realise this, there is need to apply the Si x Sigma tool. The Six Sigma tool will help the company/organisation to identify defects in the marketing strategies and thus come up with appropriate techniques that would help them company boost its productivity. Direct marketing or any other form of marketing may have faults. This is attributed to the fact that at times it can be very difficult to determine the most appropriate means of marketing for a given audience. More often, a marketing strategy that works best for a particular group can fail to achieve results in another group. For instance, while it may be successful to conduct marketing through social media among the youths this may not work for adults who use the social media less often. Therefore, the role of the Six Sigma technique in this regard is to unearth the faults and defects in the use direct marketing with a view to coming up with marketing tools that more efficient. Critical Analysis of the Six Sigma Management Tool As mentioned earlier ,use of the Six Stigma approach is customer oriented. Besides, it employs various methodologies like the DMADV AND DAMAIC as well any new approaches. However, it is important to note that is has several weaknesses if applied. For instance, the Six Sigma Management Tool does not recognise the intangible benefits of a project(Adams et al. 2003).It lays a lot emphasis on financial gains and ignores other unseen benefits. For instance, if a marketing strategy (within a given period)fails to generate expected financial returns but goes to generate important information that can be used to foster future growth, that given marketing initiative is considered a failure. The second weakness lays its philosophy of customer management. This philosophy does not give so much attention to the changing society owing to great technological advancement. Its core interest is vested on the customers with little interest to the changes that occur in the immediate environment where the customer lives in. This view would adversely affect direct marketing it largely relies on the use of technology to market its products and services. For example, it would be a challenge for the organisation to determine the suitable mode of communication with the customers if they don’t keep in touch with the customers. To overcome the challenges brought about by the use of Six Sigma it would be prudent to consider a few strategies. In the implementation process, the organisation should focus on the needs of the customers in all the stages. Careful attention should also be accorded to the societal changes and in particular the use of technology. The next thing to do is to consider the intangible benefits. The Lean Technique The Lean strategy shares a few similarities with the Six Sigma but slightly varies in the sense that it centres its interest in doing away with wastage and unnecessary steps in the production process. Lean technique encourages full employee involvement and teamwork in the production process(Fullerton and Wempy, 2009).In the Lean theory value is defined as any given process or action that the customer is willing to pay for. In evaluation of the production process, Lean proposes a number of tools to help determine waste. Waste in the production process range from overproduction, excess motion, and production of goods that do not meet the needs of the consumers. Just like the Six Sigma the Lean approach assist direct marketers detect errors in the marketing process. In addition, it would assist detect flaws in the production process that often cause overproduction or waste. Direct marketers can also apply the Lean approach in direct marketing to manage the staffs who handles customers. Given that much emphasis is given to time wastage by the Lean approach, direct marketers in an organisation would benefit from the tool, spent time available profitably to serve and handle customer complaints. Critical Analysis of Lean Management Technique One major weakness of Lean management technique is that it has a rather contradicting definition which makes it rather cumbersome for most organisations to implement (Shah and Ward, 2007), this can be a hazardous situation if implemented (Pettersen, 2009).An organisation applying this tool of operation management is poised to encounter various challenges. One of them is employee’s motivation. Lean assumes that all employees are intrinsically motivated and that they would easily understand the basic concepts of this approach. This thought is not only erroneous but also catastrophic to the organisation. Detert e et al.(2000) recognise that a majority of the employee would be intrinsically motivated to be involved fully in the management process but a myriad of factors at work prevent them from doing so. Lean management technique has been criticised heavily for leaning so much on the waste minimisation and improvement. This incessant focus makes the organisation to be obsessed with waste management and improvement to an extent that it causes stress on the employees. As a result of Lean management process, the workplace becomes too clinical and impersonal. Workers thus are often under stress to perform. While pressure on the employees at times may help achieve higher financial returns it is hazardous at the same time (Klein, 1971). In the end, such stress causes slow growth, inefficiency, and lack of productivity. On the other hand, overemphasis on zero errors and minimal wastage is unrealistic. Everyone is cognisant of the fact that human beings are susceptible to making errors in the production process. Being too keen on errors exerts unwanted pressure on the staff. Proponent of this approach ought to be flexible and admit that at times the external environment can cause unwarranted waste or delay that will certainly affect the production process. Conclusion In conclusion, the report has examined the concept of direct marketing to an organisation. It further explores operations management tools and techniques can be applied in direct marketing to promote operational excellence. Some of the management techniques that have been discussed include the IS Architecture, the Lean and the Six Sigma Management approach. For each management tool, a brief explanation has been given to lay emphasis on the preceding discussion. The functional area chosen for this report is marketing. Given that marketing is a broad field, a specific section in marketing (direct marketing) has been selected to explore how the aforementioned management tools can be applied. In addition to this, the report undertakes to evaluate each of the tools identified. From the report it is clear that there is no one management tool that is sufficient. In application of any of them by the organisations, there is need to examine its strengths and weakness and come up with ways that the weaknesses in them can be surmounted. References Adams, C. al.2003). Six Sigma deployment. Amsterdam, Butterworth-Heinemann. Bird, D. (2000). Commonsense direct marketing. London, Kogan Page.. Detert, J.R., Schroeder R.D., & Mariel, J.J. (2000). A framework for linking culture and improvement initiatives in organizations. Academy of Management Review. Fullerton, R.R., & Wempe, W.F. (2009). Lean manufacturing, non-financial performance measures, and financial performance. 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