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Customer Manufacturing Update |  |
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Dear Mitchell, Here is your June Customer Manufacturing Update. This month we're writing about another one of Ishikawa's Seven Tools of Quality: The Check Sheet.
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Ishikawa taught that 90% of business process problems could be solved with seven tools. Before you jump into a full blown six-sigma program, consider what these seven powerful tools can do for you. This month's white paper is about Check Sheets. This is probably the simplest of Ishikawa's tools to learn to use. And yet provides tremendous power.
Dr. Pepper Snapple Group was freed from the confines of Cadbury last year and has been making up for lost time. In reading about them, there are lots of things to be impressed by and cheer about. They are focused on getting R&D close to the customer. Now there's a novel concept. With an R&D budget 20x smaller than Pepsi's they have to get it right more often. Being close to the customer usually helps. We were especially impressed with an idea they came up with to get kids to drink more juice. They found that parents were watering down Mott's Apple Juice to cut back on calories. So they reduced the sugar by 40% and kept all the nutrition. Big win for everyone Mitch has been a fan of Dr. Pepper for a long time and discusses one of their critical mistakes in his book, It's Not Rocket Science: Using Marketing to Build A Sustainable Business. We love they are back in the thick of it. And, when it comes to advertising they seem to be getting some good advice. Their ad agency chief was quoted as saying, "Coke and Pepsi, all they have to do is remind you why you like the brand. Dr. Pepper has to tell you why you should drink this more." What are you doing to make sure you continue to learn from your customers?
As readers of, It's Not Rocket Science: Using Marketing to Build A Sustainable Business know, the world doesn't really need more than two suppliers of anything. Circuit City learned that lesson the hard way when they collapsed in January of 2009. Best Buy and Wal-Mart appeared to be sufficient. However, there is often room for a smart new player who understands we don't need the same thing again. Enter Hhgregg. Readers in the MidWest of the U.S. will recognize the name. The rest of our U.S. readers may soon learn about this electronics retailer. Founded in 1955, Hhgregg is taking the opportunity to expand in this down market and, in many cases, right into the closed Circuit City locations. Given that the electronics retail landscape is littered with failed companies from Circuit City, to Crazy Eddie to Good Guys, why do the folks at Hhgregg think they can succeed? Differentiation, of course. It was hard to tell the difference between Circuit City and Best Buy at the end. Stores like Fry's are clearly different from Best Buy and its stores thrive. What is Hhgregg's focus? Hhgregg provides 280 hours of training to their sales people and pays them on commission. They are expected to KNOW about the products they sell and to take an approach to helping the customer buy what's right for them, not to push products onto the customer. With highly trained sales people, they can sell more of the higher priced products because they can explain the difference to the customer. They tend to focus on the higher end products. They have smaller stores and are more focused. Not quite as focused as the old Magnolia (now part of Best Buy's in-store high-end boutique), but still more focused with much less space for DVDs and CDs. Will they succeed? We don't know. However, they have been around for over 50 years and seem to be pretty smart folks that are not trying to be a "me too." That we like.
A few months ago in Business Week there was an interesting article about Dells' Do Over. The focus of the article was on "How Michael Dell is trying to change almost everything about the company he founded." Why? Because their business model will not get them where they seem to want to go. A while back we wrote an article about business models, "Is Your Business Model Right for Tomorrow's Market," which you might find interesting. You can read it for the first time or again, and in context of what is going on at Dell, we suspect you will gain valuable insight.
We appreciate any feedback you can provide to help us make sure these Updates give you value each month. Feel free to respond to this e-mail with any comments or suggestions for future topics or ways we can make these Customer Manufacturing Updates more valuable to you.
Thank you for your interest, and if we can provide
any
additional assistance in sales, marketing, strategy, or
innovation to help you increase your sales,
let us know.
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