different types of orientation

1.1 Sales Orientation

An approach to business that centres its activities on selling whatever it can produce, assuming that customers are inherently reluctant to purchase. (Pearson 2008) A sales orientation focuses heavily on selling the products that the company produces. As such it can often have a short-term outlook and focus overly on selling to a customer and not on building a long-term relationship with them. As such this approach is often popular in markets where the ticket item is of high value and with limited repeat purchase potential. Whilst a sales orientation does bare some similarities to a marketing orientation in that both make use of pricing, promotion and distribution skills, the sales orientation differs in that little thought is given to what the customer actually wants. As the sales orientation assumes that salesmanship is required to sell the product it can also be assumed that the products are typically not necessities. A popular example of a sales orientation is in life insurance where overt selling is a common tactic.

1.2 Production Orientation

An approach to business that centres its activities on producing goods more efficiently and cost effectively, assuming that price is the only factor important to customers. (Pearson 2008) As mass production technologies and techniques became pervasive in the 20th century the lure of the production orientation proved too much for many businesses. The focus was on making items more and more efficiently in the belief that the cheapest producer would gain market share. This approach makes a number of assumptions. Firstly that all markets operate on a lowest cost wins methodology, which considering the success of luxury products in many markets is clearly not the case. Secondly it assumes that all customers are the same and delivers the same product to each one with the aim of achieving economies of scale. In many ways governments are a fine example of this orientation, with sectors such as health and education operating largely on a one size fits all methodology. Of course it is worth remembering that production efficiencies remain important, and methodologies such as Total Quality Management, Six Sigma and Lean Manufacturing have given companies the tools to enable highly efficient production of goods and services.

1.3 Product Orientation

An approach to business that centres its activities on continually improving and refining its products, assuming that customers simply want the best possible quality for their money. (Pearson

2008) The product orientation was arguably the first orientation popular in business as it centred on what the company could produce. The obvious example is Henry Ford stating that customers could have any colour model T as long as it was black. The company ruled the roost and produced what it did and a lack of choice led customers to like it or lump it. In the contemporary business environment a product orientation focuses primarily on the quality of the product under the belief that as long as good quality product is sent to market that the demand will always exist. This insular approach to business causes many product led companies to fall behind changing shifts in the marketplace as they fail to notice competitors activities or changing societal shifts. Apple for instance focused too heavily on producing their own personal computer and failed to spot the growing demand in the market for Windows based platforms.

1.4 Marketing Orientation

an approach to business that centres its activities on satisfying the needs and wants of its customers. (Pearson 2008) A marketing orientation is typically found when an entire company practices a customer-focused approach to their activities. So all departments act with the customer in mind, not purely the marketing department. A key element in a marketing orientated company is the use of and collection of knowledge about the customer. If it is to be implemented successfully then all departments must learn to collect and share knowledge about the customer every time they come into contact with that customer. In addition to collecting information about customers collectively, the marketing orientated company must also transmit information to customers collectively, with a common message being communicated by all departments, every time they touch a customer. Kohli and Jaworski (1990) define market orientation in terms of three dimensions: 1. The generation of market information about the needs of customers and external environmental factors 2. The dissemination of such information among organisational departments 3. The development and implementation of strategies based upon this information Amazon.com are an excellent example of a company with a marketing orientation, indeed one may suggest they are an excellent example of a company with a relationship orientation, as they attempt to offer a personalised shopping experience to each of its customers.

1.5 Relationship Marketing

a form of marketing that puts particular emphasis on building a longer-term, more intimate bond between an organisation and its individual customers. (Pearson 2008)

With the onset of advanced IT, and in particular database, solutions the relationship marketing orientation has come into its own under the guise of customer relationship management (CRM). This advance in database technology has coincided with improvements in manufacturing and logistics to enable companies to offer personalised solutions to each customer. The relationship marketing orientation focuses on the long-term relationship with the customer and as such can often only enter profitability several years into the relationship.

However once a relationship has been established with customers it enables the company to target customers far more effectively and therefore become more profitable by providing exactly what the most profitable segment of the customer base requires. Amazon was mentioned in the previous section as a good exponent of relationship marketing. Another excellent company is American Airlines, who use their frequent flyer program to target their most profitable customers and deliver exceptional customer service and value to that segment.

2. Description of orientation at TMN Media

As with many organisations, TMN Media exhibits different orientation traits at both different circumstances and in differing divisions of the company. Each will be explained below but the predominant orientation at TMN Media is the sales orientation, which will comprise the bulk of the following section.

2.1 Recap of TMN Media

As the appendices to this document outlines, TMN Media is primarily an email marketing company and despite the tremendous potential for using email as a means of enabling customer relationship management (Wilson et al, 2002) the predominant view in the email marketing industry is one of making use of the medium for short-term gains (Burston, 2008). The bulk of the companys revenue comes from the sale and management of email marketing services, both to its existing database of subscribers or the email database of clients. The company operates several websites in areas such as cashback shopping and prize draw competitions. These websites are member driven and because they typically provide incentives for subscribing to the site mailing list, and subsequently receiving email newsletters, they provide an active audience for the receipt of commercial emails. In addition the marketing approach at TMN Media relies heavily on obtaining new members for each website rather than on building deeper relationships with existing members. This strategy exists largely for financial reasons as the cost of acquiring new members to the company website portfolio can be managed on the balance sheet as the accumulation of assets (ie the email database) rather than a cost of trade. This subsequently allows profit margins at the company to be extremely high and further entrenches this approach over a more traditional relationship marketing orientation.

2.2 Evidence of the sales orientation at TMN Media

The previous chapter described a sales orientation as focusing heavily on selling the products that the company produces. As such it can often have a short-term outlook and focuses overly on selling to a customer and not on building a long term relationship with them. The view of both the email marketing industry, and TMN Media in particular seems to support this very outlook. Whilst many sectors of the burgeoning online advertising industry have used the advanced tracking mechanisms available to drive up efficiency, email marketing still operates in a kind of black box with accountability quite low, certainly in relation to other forms of online advertising such as pay-per-click and affiliate marketing. Unfortunately TMN Media seem to embody this approach, and whilst it remains extremely profitable in the short/medium term, doubts persist over its longevity as both customers and subscribers demand greater relevance and accountability from email marketing campaigns.

2.3 Short-termism at MutualPoints

The companies flagship website is MutualPoints.com, a website that led the way in rewarding members with rewards for shopping online. Whilst the website was highly innovative and popular in its early days, recent trends in the marketplace have seen competitors overtake it by offering far more rewarding cash back deals to customers. Whereas MutualPoints persists with offering customers 50% cash back deals, newer sites such as Quidco have stolen large chunks of the market by offering 100% cash back.

This change in the competitive marketplace has left MutualPoints in an interesting quandary, as the site continues to enjoy a very large membership of in excess of 1 million members but suffers from a fall in quality of those members. This fall in quality is epitomised by the nature of rewards generated through the site, with in excess of 60% of all rewards earnt via so called quick rewards at websites such as Pricerunner and Kelkoo that provide little value for those companies but help to keep up the appearance of high volume at both MutualPoints and these partners. However the falling quality of these leads does raise serious concerns over the longevity of this approach as advertisers realise the poor quality they are getting from their online advertising through these channels. Attempts have been made recently to engender a greater relationship marketing approach on the website but these attempts are still very much in the minority in comparison to existing strategies. Equally the monetisation of the customer database at MutualPoints takes a similarly short-term view. The site provides incentives for members to open and click through to advertisers via the email bulletins sent out to them and this basic relationship provides very large numbers for advertisers in the basic email marketing metrics of open rate and click through rate. Whilst these metrics remain the predominant units of measurement in the email marketing sector the strategy works very well for the TMN Media company and is extremely profitable to it. However the quality of those clicks for the advertiser is low as there is little inherent motivation for the customer to click through to the advertiser above earning their reward for doing so. Finally the value for the members of the website is low because the offers advertised to them are excessively generic. It has been suggested that untargeted email, even from a known sender, is overwhelmingly thought of as spam (Taylor, 2008), with half of respondants in a Q Interactive and Marketing Sherpa study regarding email to be spam even if it is not of interest to them. So the relationship between MutualPoints and its members is overwhelmingly transactional, with little relationship between the two parties. Customer service is a fine example of this approach, with a low cost call centre used on the sub-continent despite frequent complaints from users about the poor service offered.

2.4 Possible change on the horizon

There are signs however that a change in orientation is being considered, and this will be covered in more depth in the following chapter. The staffing budget at the company is a telling example of the potential change in approach. Whilst the sales team out numbers those in the marketing department by three to one the company has recently employed a marketing director for the first time. The new recruit has the remit of improving the marketing orientation at the company, and to hopefully encourage existing and future web properties to employ greater customisation for each member.

3. Developing a relationship orientation

The previous chapter outlined a number of issues regarding both the short-term success of TMN Media and the long-term positioning of the company in the marketplace. Thankfully there are a number of measures that can be taken to evolve the company towards a relationship marketing

orientation and therefore position the company well for future challenges, whilst maintaining current profitability. Finnegan and Willcocks (2007) outline a number of cultural and psychological contracts within an organisation that are fundamental to developing a successful relationship orientation, including knowledge sharing and company culture. Other advocates of relationship marketing suggest alternatives. Patricia Seybold for instance has advocated the following steps in a number of her studies into relationship marketing (1999 & 2001) 1. 2. 3. 4. 5. Make it easy for customers to do business with you Focus on the end customer for your products and services Redesign your customer-facing processes from the end-customer's point of view Design a comprehensive, evolving electronic commerce architecture Foster customer loyalty-the key to profitability in electronic commerce

In her later work she suggests building a customer flight deck, with the following stages involved in its creation. 1. 2. 3. 4. 5. 6. 7. 8. Create a Compelling Brand Personality Deliver a Seamless Customer Experience Across Channels and Touchpoints Care about Customers and Their Outcomes Measure What Matters to Customers Hone Operational Excellence Value Customers Time Place Customers "DNA" at the Core Design to Morph

For this report however the organisational change model used will be based upon the Three Stage Process of Change model devised by social scientist Kurt Lewin (1951) and developed further by John Kotter (1996). Lewin Unfreeze Change Refreeze Kotter Establish sense of urgency Create guiding coalition Develop vision and strategy Communicate the change vision Empower others to act Create short-term wins Consolidate gains and produce even more change Institutionalise new approaches in the future

3.1 Establish sense of urgency

For successful change to happen in an organisation, the whole organisation has to want to change and creating a sense of urgency is the first step to achieving that. This could be done by raising awareness of poor sales figures or highlighting changes in the marketplace. At TMN Media the

following steps could be taken to create the sense for change. o Identify potential threats, and develop scenarios showing what could happen in the future. For instance use scenarios of competitive threats in the marketplace where greater care over customer satisfaction is given, using the example of the MutualPoints website, where market share has been severely eroded due to innovative competition. o Examine opportunities that should be, or could be, exploited. The web 2.0 landscape provides ample opportunity to expand the existing websites into new customer focused areas whilst maintaining the core competitive strength of email marketing. The lack of competitive movement in this field offers a tangible opportunity to regain market leadership. o Start honest discussions, and give dynamic and convincing reasons to get people talking and thinking. The use of statistics and marketing environment analysis can encourage frank exchange of views between all stakeholders. o Request support from customers, outside stakeholders and industry people to strengthen your argument. By using customers and suppliers to support the need for change would provide significant impetus to the change process. Kotter suggests that for change to be successful it requires 75% of managers to buy into the change required, so this first step cannot be over emphasised.

3.2 Form a powerful coalition

To successfully filter this change throughout the organisation requires the use of influential leadership and visible support from management. This doesnt necessarily have to consist of traditional corporate power bases, but merely a group of influential leaders whose power derides from a variety of sources, including job title, status, expertise, and political importance. At TMN Media this stage would consist of: o o o o Identify the true leaders in the organization, such as the E-Commerce manager. Ask for an emotional commitment from these key people. Work on team building within the change coalition. Check the team for weak areas, and ensure that it has a good mix of people from different departments and different levels within the company.

3.3 Create a vision for change

When the notion of change is first mooted many ideas will be pushed forward to implement the change. The third step of the change model is to harness all of these ideas and focus them into a coherent vision for change. When this vision for change is clear and visible to all within TMN Media it will enable change to occur far more quickly and effectively. Some steps to achieve this may include:

o o o o

Determining the values that are central to the change. Develop a short mission statement for the change. Create a strategy to implement the vision. Ensure the change coalition can describe the vision in a succinct elevator pitch.

3.4 Communicate the vision

Communicating the vision after it has been formulated will determine the success of the change to a relationship orientation. The vision will be competing with day-to-day operational tasks so will need to be bold and clear to get through. Finnegan and Willcocks emphasise the importance of using tacit conversations to deliver this message and the use of conversation will be used in place of large scale corporate meetings. This in combination with walking the walk will form the focal point of communicating the vision: o o o o Talk about the vision often. Openly address concerns. Apply the relationship vision to all aspects of the business. Lead by example.

3.5 Remove obstacles

Hopefully once this stage of the change process has been reached both leaders and staff are beginning to buy in to the change vision so the next stage is to remove obstacles and allow them to implement the relationship marketing orientation. A number of steps can be used to ensure that barriers to change are removed: o o o o Identify change evangelists to deliver the change. Recognise and reward people for change. Identify those that resist change and work with them to establish whats required. Act swiftly to remove barriers to change.

3.6 Create short term wins

Few things motivate change better than seeing success first hand, especially amongst managers eager to see profitability maintained. With a number of short-term targets on the way to meeting the long-term goal this can be achieved and drive the team on through each stage of the change process, with each win motivating staff further. o Choose inexpensive projects early in the process. o Analyse the importance of each goal because failure early on can severely harm the change process. o Reward those that helped attain the goal.

A fine example of this at TMN Media is the implementation of a consumer reviews section on MutualPoints to provide a low cost example of how consumers increasingly want to interact with websites. The project was low cost and delivered in excess of three hundred reviews in the first day of operation.

3.7 Build on the change

Whilst short-term gains are clearly important in building momentum they also run the risk of persuading the company that success has been prematurely achieved. Therefore its important to maintain the long-term vision and understand the principal of Kaizan, or constant improvement as shown so successfully at Toyota (Liker, 2004): o After every win, analyse what went well and improve upon it. o Set fresh goals to build on the momentum. o Freshen up the change team with new members and new ideas.

3.8 Anchor the change in company culture

The final, and arguably the most important, element of any process of knowledge and cultural change is what Nonaka and Takeuchi (1995) refer to as Internalisation, or when knowledge becomes internalised within each employee and becomes habitual and part of the company culture.

The SECI model of knowledge creation shown above emphasises the important aspect of continuous change to ensure that all changes are built upon rather than reneged and this forms the focal point of the actions required in this section: o Talk about progress; tell stories (Brown 2004). o Enthuse about the culture in recruitment decisions. o Ensure original change agents have a legacy at the company.

3.9 Summary
Changing an organisational culture is not an easy process to undertake, but if done correctly can lead to long and lasting success. When you plans are carefully made and built upon the proper foundation, implementing change can be much easier, and the chances of success are much improved. The previous eight steps all play a part in achieving this change and making change and improvement a part of company culture. Only when this is fully engrained can true victory be declared.