Return to Home Page 1997 Simultaneous Marketing Herbig E X E C U T I V E S U M M A R Y The report begins with the introduction in which the concept of simultaneous marketing and simultaneous engineering are discussed. I included the definition and some major points of the simultaneous engineering concept because it is necessary that it interacts and works concurrently with simultaneous marketing in order for a company to reap its full range of benefits. Another reason for including it in the discussion is because both techniques, simultaneous engineering and simultaneous marketing pursue the same goal: "they will extend from the generation of the first idea, or the recognition of the first need, to the arrival of the first product at the first customer" (Barius, 1994). In the second part of the report, the simultaneous marketing tasks and activities are described. The discussion continues with the explanation of the fundamental process strategies for time-based competition. Then, the concept of Quality Function Deployment is defined as well as the importance that this term has when concurrent marketing and concurrent engineering are used. In the third part of the report, I start discussing the future for simultaneous marketing concept and the marketing implications for such concept. Finally, I conclude with a summary and a major conclusion by explaining why the concept of simultaneous marketing is of great importance. I N T R O D U C T I O N Nowadays, companies have developed the capability to create higher quality products and services faster than ever before. Improvements in production quality, cycle time, and customer satisfaction, which constitute efforts to serve the customer better, have modified the competition among businesses. Concurrent marketing involves a competitive environment in which product management, sales, and service groups must interact more rapidly to achieve the overall objectives of the firm. Today, many companies are producing better, faster, and with fewer defects for almost all market segments. However, this is not valuable if the firm is unable to deal with services, markets, and greater assortment of products. For example, by 1992, IBM reduced the time by sixty-seven percent that was needed to produce the mainframe for computers. It also decreased the time for installation from a week to sixteen hours. So, IBM accomplished the goal of cutting production cycle time by fifty percent. But, these achievements were meaningless because IBM did not properly address customer value. This example shows that companies should not only focus on the product or sales, but most important, they most learn more about their customers and how to serve them better to keep them happy and loyal. Quality continues being a basic element for many industries. However, what has become and essential issue for marketing is the concept of simultaneous (concurrent) engineering. Simultaneous engineering encompasses better products, lower costs, and shorter lead times from idea to customer. This can be achieved by combining parallel and integrated activities of experts belonging to different departments. Simultaneous marketing, just like engineering activities, demands the increase of speed to market process radically, and claims for the development of competitive innovations and products concepts, (Barius, 1994). The concept of concurrent engineering has been introduced in many industries in the last years because it calls for the cutting of development time and the increasing competitiveness. Simultaneous engineering tries to bring people together from different departments to work on teams. Individuals working for design, manufacturing, product, and process should get together in order to gain competitive advantage. Simultaneous (concurrent) marketing is the next step, which is the “twin sister” of simultaneous engineering. Many similarities are found between these two concepts; simultaneous marketing and simultaneous engineering both must work in a parallel and integrated way. A great number of industrial firms have revealed fruitful results by employing projects intended to reduce lead times in the innovation process. SIMULTANEOUS ENGINEERING “The simultaneous engineering process, in its true sense, should extend from the generation of the first idea, or the recognition of the first need, to the arrival of the first product to the first customer. This process comprises the identification of an idea , practicable studies, preliminary design, prototype tests, procurement planning, design and investment, procurement, pilot production, production, and delivery to customer,” (Barius, 1994). Simultaneous engineering concept can also be found under different names such as lead time, time to market, lean production, time reduction, concurrent engineering, and parallel engineering. The goal of simultaneous engineering is, as the name implies, to perform tasks simultaneously, instead of completing tasks using the traditional sequential way. The purpose is to reduce the time from the development of an idea to the deliver of the product to the first customer. There are different methods that are used to accomplish short lead time through concurrent engineering. The usual method, however, is to improve the coordination of, collaboration and interaction between the people and functions of product development, design, testing, production development, and production, and be able to make use of market knowledge in the engineering job. The approach generally used by simultaneous engineering is to bring people together into teams for each project, and give them the opportunity to concentrate only in a certain project at a time without being disturbed. The product manager should be able to communicate with its team, and to identify and understand the problems that could be found in the project. The people participating in the project must concentrate on it from the beginning to the end. External and internal “consultants” intervene in the projects whenever is necessary. A good way to achieve a better integration is by motivating and training people working on the project. Also, it is very important to put together individuals from the different departments including design, procurement, and production in the same room for them to interact with one another. SIMULTANEOUS MARKETING Simultaneous marketing involves all activities that are parallel and integrated to marketing, market knowledge, and services and product distribution. “The principal aim of simultaneous marketing is to contribute to the development of competitive innovations and product concepts, to support decision and development processes at all levels, to facilitate and perform marketing tasks, and to increase the speed to market process” (Barius, 1994). The four main objectives of simultaneous marketing are: A. To reduce the time required for new products to get into the market, or for market innovations by way of simultaneous activities. B. To support concurrent engineering processes and innovation processes. C. To give support to the decision processes of management by assisting it with market and marketing knowledge. D. Finally, to engage in concurrent cooperation in the development and operation of supporting subsystems for law, finance, administration, delivery, fitting, guarantees, service training, and the recycling of products that are already outdated or used. Simultaneous marketing must interact and work with simultaneous engineering in the “industrial innovation projects.” In reality, the simultaneous marketing concept comprises three basic objectives or functions. First, concurrent marketing process should do marketing planning and operations. Second, it must also support and take part in all types of development processes, which should include the process of concurrent engineering. Third, it is essential that simultaneous marketing train and serve the management and other function within the firm. Just like concurrent engineering, simultaneous marketing process will also begin from the creation of the first thought, or the discover of the first need, to the deliver of the first product to the first customer. Simultaneous marketing should not be understood as the concept involving traditional tasks which are accomplished sequentially. By contrast, the concept of concurrent marketing should be viewed as the marketing tasks that are completed simultaneously, consecutively and parallel. These tasks performed should be integrated with activities carried by other departments including product development, design and production. Also, marketing tasks should support the functions of administration, law and finance. Since all companies are different regarding the type of business, product, market, resources, and knowledge, they can include different tasks when using simultaneous marketing. I M P O R T A N C E T O M A R K E T I N G Simultaneous marketing is a very important concept to marketing that should be implemented by companies if they want to survive in today’s complex business environment characterized by increasing competition. During the 1980's, many companies viewed quality as a sustainable competitive advantage. But, in the 1990's this idea has changed. Although quality continues being fundamental for success, it is no longer a factor of unique competitive advantage in many organizations. Instead, industries are mainly focusing their attention to speed and time based competition. Concurrent marketing represents a competitive advantage because few firms have reacted to the new realities of the marketplace. Al l systems, structures, and processes needed to integrate product, service groups, and sales, constitute the key elements required for an organization to succeed and willing to take the lead. SIMULTANEOUS MARKETING TASKS AND ACTIVITIES In the following, some of the tasks and activities are presented based on the market and marketing knowledge within the simultaneous marketing concept. Intuitive Search Concurrent marketing will participate in the first facets of the innovation process. It will begin looking for feasibility studies for a project. This phase is characterized by the creation of ideas and needs, observations, and discussions. Here is where information is processed, where a great number of ideas, thoughts, and opinions are formulated. Intuition is defined as “the immediate learning of knowing of something without the conscious use of reasoning.” This means that although there are many ideas involved at this phase, they are based on reality knowledge, and experience. Few people are involved in the intuitive search. They are in charge of looking for new needs and ideas required to introduced new products and services or improve existing ones. This task is also responsible for searching for new applications of existing products, new target markets, new channels of distributions, new ways to communicate in the marketplace, and new systems of administration for delivery, orders, distribution and finance. Market And Strategic Feasibility Studies Many activities are included in this task such as the interpretation of market information; study of alternatives, substitutes and competition; searching for market volumes, prices, marketing costs; recommendation and assistance to management in order to develop projects; advice to management before making and investment or disinvestment, joint ventures, mergers, and strategic alliances. Forecasting The activities involved in forecasting within the concept of concurrent marketing comprises the forecasting of volumes, prices, competition, and products. Many activities take part of this task such as studying the customer values and choices, total quality, segmentation of the market, substitutes and channels of distribution; searching the business marketing environment; analysis of the projects including parties from other areas such as design, production and finance; the creation of tentative alternatives and marketing strategies; and the implications that the new markets would bring resulting from projects. Analysis And Recommendations To Management The concept of simultaneous marketing also include analysis and recommendations to management before deciding on strategies pertaining to many different areas. Some examples of this phase are research and development, channels of distribution, products, substitutes, market, environment, new businesses, investments, and strategic alliances. Integration With Simultaneous Engineering The interaction between simultaneous marketing and simultaneous engineering mainly focuses on the improvement of innovation process, shortness of time to market, reduction of costs, and the development of products that satisfy the needs of the customer. Product Development The activity of product development has been associated with other technological functions such as design and production. Almost all product development activities are performed simultaneously; they are achieved by people working in the same room. When companies complete their activities in a parallel way, it is understood that these companies are employing simultaneous engineering and simultaneous marketing. Feasibility Studies Of Procurement Systems This activity includes the study of alternative strategies to buy material, parts, or finished products, or to create joint ventures and strategic alliances with suppliers. The alternatives concerning procurement should be evaluated from the point of view of the final customer who will ultimately judge the product quality, functionality, appearance, service, training and instruction. The use of procurement alternatives at the beginning of the innovation process can contribute to the reduction of costs, creation of superior quality products, and the shortness of the time to market. FUNDAMENTAL PROCESS STRATEGIES FOR TIME BASED COMPETITION (TBC) As mentioned earlier, quality, although still important to success, it is not longer considered a factor of competitive advantage among the industries of the 1990's. By contrast, businesses are paying more attention to speed and time-based competition which is the goal pursued by simultaneous marketing: “To shorten time to market.” Some companies are already aware of the importance of using time-based competition approach; however, they do not know about the strategies that are needed in order to accomplish the reduction and control of time. The Japanese are taking the lead in adopting the strategies for time-based competition. Today, some American and some European industries are more concerned about the significant advantages that result from implementing time-based strategies. “Time-based competition (TBC) must be a metastrategy which achieves reductions in lead time through changes in the processes and structures used to design, manufacture and deliver products for its customers,” (Carter, Melnyk, Handfield, 1995). Time-based competition is actually being pursued by many companies because it offers them advantages that competitors will find impossible to copy. Presently, companies compete for time-based in two distinctive ways that are fast to market and fast to product. Fast To Market Fast to market involves the reduction of lead time in design, from product concept to production. The importance of time becomes even more attractive to those businesses engaged in the introduction or growth stage of the product life cycle. It represents a form of getting greater profits. For example, results gotten from one study showed that a product that went over the budget by fifty percent but was introduced on time resulted in higher profits than did a product that was within the budget but that was introduced six months late. Also, time-based competition permits companies to take the lead in new markets by introducing products before their competitors and by increasing the number of obstacles for competition to enter the market. The other type of fast to market is that one in which firms are capable to consecutively introduce a larger volume of new products more quickly than their competitors. Fast To Product Fast to product is defined as the speed to which a firm responds to the demands of customer for existing products. Firms are concerned for reducing the lead time that takes from the placing of the order until the product gets to the customer’s hands. By reducing lead times, companies reduce their inventory levels and costs, and improved dramatically their quality and on time delivery levels. TBC AND THE SPECIFIC TOOLS When companies want to implement the concept of time-based competition, they can do it by using different ways. There are some tactics from where companies select when implementing TBC. For example, some of the tactics such as local area networks and wide area networks (LANs/WANs), base on technology to reduce lead times. Others like streamlining and single minute exchange of die (SMED) pay more attention to the processes related to the design and manufacture of the product. While others, such as team building and alliance building, focus on the integration of the different components of the supply chain to reduce time. The task of this groups is to identify the strategic processes utilized by time-base competition. The process strategies are very important because they link the strategy of reducing lead time and the tools required to achieve this goal. THE KEY STRATEGIES FOR TBC There are seven process strategies that can be used when implementing time-based competition: ---Less of / System Simplification ---As One / System Integration ---Same As / Standardization ---At once/ Parallel Activities ---Watch It / Variance Control ---Better Than / Automation ---More Of / Excess Resources Each of these process strategies uses different techniques and methods to reduce the lead time. Some of these strategies are easier and faster to implement. Others need more time to be implemented and before the benefits can be seen. Less Of / System Simplification This strategy can concentrate its attention to a particular activity like a person preparing an order, or it may focus on a number of combined processes such as the completion of an order fulfillment process. The processes should be detected, documented, analyzed, and simplified. Documentation becomes the first step in the process strategy. It discusses what actually is happening, but not what people think is happening. This procedure identifies the different tasks of a process according to whether they belong to the operation, storage, delay, transport, or inspection group. System simplification tries to solve the problem of lead time by identifying those activities that are not valuable anymore. These activities represent steps that are not longer needed or that are operating inefficiently. Companies should eliminate all those steps that are not adding value to the system. These strategies are essential for time-based competition because they are easier to manipulate, and reduce lead time. As One / System Integration Lead times are greater when processes are arranged sequentially, and when people and when people from different groups are divided by strong wall. The system integration tries to demolish these wall to bring all parties together, so that can communicate to each other. This system strengthen coordination by grouping together people from different departments. System integration also tries to bring together customers, suppliers and the company. Firms that have already implemented the system integration, have noticed that the time required to process orders and to complete designs has been significantly decreased by bringing members from different departments to work in the same room. Total quality management, alliances, and simultaneous engineering are tools related to system integration. Same As / Standardization This process refers that managers should cut and take control over lead times by using the least of the steps required to complete a task. The problem of lead time can be reduced by reusing steps that are standard. For example, by using standard processes, people would not have to do the task twice of designing a complete new product and learning a new process. On the contrary, they will use a process that is already familiar to them. They can concentrate on the designing of a product within the standard process already known. As Once / Parallel Activities This strategy deals with the arrangement of activities within the process; how tasks are going to be located within the process. For each process, activities can be located in the critical path or out of the critical path. Those activities requiring the smallest lead time to complete a project, take part of the critical path. By placing another task in the critical path, the lead time will definitely grow. But, if the same activity or task is added to a path that is not critical, the lead time is not going to increase. The main objective of the parallel activities is to diminish the number of steps that are located in the critical path. However, if the customers believe that such task is not going to contribute any value, then it is rejected or eliminated from the critical path. Watch It / Variance Control The identification of activities having the highest levels of variance is required to control lead times. This activities characterized by having high levels of variances are examined. Finally, managers should eliminate or at least control this variance by finding the possible factors responsible for this and get rid of them. Better Than / Automation The goal pursued when using this strategy is to substitute old and inefficient technologies for new and more competent technologies. New and creative technologies are simply better and tend to reduce time. It has been determined that problems with lead times are associated with technology and not with processes. More Of / Excess Resources A firm having excess resources will have to deal with the problem of increased lead times because of the existence of resource constraints. This strategy focuses on the reduction of lead time by avoiding delays that emerge whenever orders should fight to get access to constrained resources such as manpower, machines, tools, or materials. The last two strategies described are easy to implement. However, using any of these two as a competitive advantage is not recommended because once competitors learn about the process strategies, they can copy them. By contrast, the other five strategies are more difficult to implement but at the same time more difficult to be copied by competitors. The reason for this is that such strategies need to change the processes in order to reduce lead time. Automation and excess resource strategies only actually modify the existing processes. QFD: A POWERFUL TOOL FOR NEW PRODUCT DEVELOPMENT Quality Function Deployment (QFD) is one of the various marketing strategies that takes part of the development phase of the simultaneous marketing activities. It is important to develop products and services faster; however, quality and customer satisfaction should not been left out of the game. Concurrent Product / Manufacturing Process Development (CP/PD), that are philosophies of the simultaneous engineering, represent significant progress to the product and that product’s total development process. CP/PD performs in a environment in which all key functions, (marketing, purchasing, finance, suppliers, product engineering, and manufacturing engineering) are involved from the generation of the first idea through product initiation and customer satisfaction evaluation. If CP/PD is effectively put into effect, it can decrease the time to market, better respond to market changes, develop products of higher quality, reduce product costs, decrease investment requirements, and diminish the risk of the product. QFD has been adopted by some firms because it offers them three basic competitive advantages. First, it enables firms to reduce the development time, which will in turn reduce their costs and allow them to improve response to market changes. Second, QFD allows companies to improve companies to identify those resources that better provide customer needs. Third, QFD helps companies to improve communications so that factors that are crucial to the success of the product do not get dropped mistakenly. If companies want to get full benefits, they should use it in combination with an entire CP/PD program. QFD works in conjunction with this program by recognizing and communicating needs for customers and transforming those needs into anticipated product characteristics. Then, a number of product alternatives are evaluated and compared to the characteristics of the product obtained from the customer. Also, alternatives for manufacturing and assembly are evaluated. This process is required to ensure that the product developed meets the customer’s expectations and that it is produced fast and efficiently. QFD converts customer needs into process features; and process features are then converted into production controls. In fact, QFD is very important because it allows people from the production department to know the impact that their job has to customer satisfaction. INDUSTRIAL EXPERIENCE I would like to end this part of the report by giving an example of one company that is presently using the simultaneous marketing and simultaneous engineering. This company have experienced meaningful benefits by employing these two concepts. In 1994, interviews were carried in thirty-two important industries located in Sweden, Italy, and Japan. All of these companies are characterized for using an advanced technology and marketing. The vast majority of these firms employ marketing and marketing knowledge simultaneously. It is from here where the concept of simultaneous marketing evolves. High Voltage Switchgear Components The ABB High-Voltage Switchgear Components Division reduced the time for heavy high-voltage switchgear from the beginning of projects for new products to the beginning of sales from forty-two months to eleven months. The basic factor that contributed to this achievement was a close and continuous communication and integration among different departments including marketing, customer adaptation of design, and production, all of them product oriented teams. The teams are able to focus on one project at a time without being disturbed. M A R K E T I N G I M P L I C A T I O N S Simultaneous marketing is being and will be for sure a key element in future’s competitive environment. This business environment demands a new and more coordinated practice in which product, sales, and service are of significant importance. "Concurrent marketing is both a challenge and an opportunity for companies competing in the twenty first century: a challenge because market developments in many industries require new types of flexible integration in customer contact activities, and an opportunity because few firms have yet perfected the structures, systems and processes needed for concurrent marketing capabilities" (Cespedes,1994). In order to develop these marketing capabilities, firms should go beyond those slogans such as "keep close to the customer" or "more communication and lots of cross functional teams." Firms for the future should understand how important are those forces that make the coordination costs of simultaneous marketing extremely basic for many firms. They also should continue finding ways to specialize and get more expertise in performing parallel and consecutive activities. Firms that will like to succeed in the future’s competitive environment will have to start using the concept of simultaneous marketing and get rid of "one size fits all" approaches that are hardly successful. These approaches or practices such as nonparticipation of front-line marketing staff, are the causation for the failure of many industries. A great number of companies continue focusing in technology and quality improvement in order to succeed. Even though they continue being critical issues for success, they represent temporary competitive advantage in today’s environment. Customers are demanding even more than that. They are now looking for suppliers that will be willing to offer them services and support, before and after the sale, besides of providing them with excellent technology and high quality. Those companies that have decided to adopt the simultaneous marketing concept should be conscious that concurrent marketing requires individuals from different departments to work together on different "non-routinized" activities. Today, manufacturers of hard goods are more concerned about who their customers are; they want to know more about them and have a closer contact with them in order to satisfy their needs appropriately. It seems that everybody is now looking for more information about their customers, reorganizing their entire operations from a product to customer, and trying to deal with contact strategy. About four years ago, very few companies were doing much, however, companies of today are more interested in growing. One of the barriers encountered by many firms is that they have hard times is thinking up or formulating a strategy. Almost every large company in America has a director of database marketing. These people are "building databases;" but, the problem is that they do not know what to do with them. However, they have already started formulating creative ideas. In the future, companies having their strategies well defined, will be in an excellent position. Companies not having a clear strategy will have a hard time competing with rivals. Specialists state that many companies have difficulty in adopting integrated marketing practices because they face an organizational structure problem. Firms are usually vertically organized preventing individuals to work in an integrated way or parallel. Some companies say that they have not implemented time saving techniques, such as concurrent engineering and concurrent marketing, because they do not have the budget, the expertise, or the management approval. Some specialists suggest that concurrent engineering and concurrent marketing are an expensive idea and that they do not recommend it. They say that these techniques incur a lot of cost into a job. However, other experts assure that although both, simultaneous engineering and simultaneous marketing, require heavy original investments, the results are great offering unique competitive advantages for companies adopting such techniques. Finally, companies should take advantage of simultaneous marketing. This approach encourages companies to eliminate the traditional system and to focus more on the client’s best interests. Whenever companies make a decision, they should do it thinking on their most valuable customer needs. CONCLUSION Today’s industries have been able to produce products and service of higher quality more quickly than ever before. Progress in the basic areas including production quality, cycle time, supply chain arrangements, and customer information have contributed to the development of a more sophisticated competitive environment. In such environment, simultaneous marketing demands a more frequent and faster interaction between product management, sales, and service groups. In order to get most of the benefits from simultaneous marketing concept, a specialist should supervise all cross functional activities, coordination, and the implications that this management change would bring. Since few companies are reacting to this changing and more competitive environment, simultaneous marketing represents a key advantage. Over the last twenty years, American manufacturing has gone through a change better characterized as "Cheaper, Better, Faster." In the 1960's, companies focused most of their attention to cost and availability (inexpensive). In the 1980's, customers were demanding higher quality, so firms changed their emphasis to quality (better). Today, marketing researchers have demonstrated that companies are changing their emphasis to that of time (faster). Some firms, have already adopted the concept of simultaneous marketing. Such firms assure that by using it, all integrated marketing groups working for such companies now know how to do their jobs and have become experts in performing their functions. They are able to simplify manufacturing, save time, and improve quality levels. The evidence is strong that when all operators have decided to develop a high quality product and they are listened by top management, ninety-five percent of employees will get involved in the task. However, it is in the hands of management to design a product that meets the requirement of quality, service and time involved in order for this to work. The term of Quality Function Deployment (QFD) is an important tool when used by a cross-functional team in a Concurrent Product/Manufacturing Process Development (CP/PD) environment. QFD has the responsibility of ensuring that all needs of customers are identified and considered, that the communication between the different business groups is increased to its maximum, that all work is performed concurrently, and that all significant development problems are identified and solve quickly. Briefly, companies would not be able to implement any simultaneous engineering or simultaneous marketing strategy without using QFD. The major conclusion is that marketing activities that are performed simultaneously can contribute significantly to the shorten of the time to market, from years to months, from months to weeks, and from weeks to days. This goal can be accomplished during the phases of development and operation. In the phases of development it is essential for companies be fast and the first to introduce their product into the market to gain competitive advantage. 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