Cummins Vis-a-Vis P&G
Concepts like STP and Marketing Mix are not much useful in understanding the difference. What is of use the "marketing process" framework : the 5 fundamental marketing processes. It
immediately becomes clear what the differences are because each company
runs its processes very differently:
- MARKET INTELLIGENCE PROCESS :
Cummins has few customers and they do not really need a separate market
research function to get to know what the customer wants : its
customers are quite vocal and upfront about their needs. Many people
from Cummins are in touch with their customers every day. On the other
hand, almost everybody in P&G is far removed from the actual
customers and they need a significant market research function to bring
"Customer Voice" inside the organization and also to seek feedback from
their customers on their various plans.
- STRATEGY FORMULATION PROCESS
: This process consists of using the market intelligence to decide whom
to serve, with what, and how to do it sustainably. This process for
Cummins is relatively straightforward because its customers will convey
and commit - what they want and how they want it - in an unambiguous and
clear manner. For P&G it is much more tricky - its millions of
customers will neither be forthright about the specifications of what
they want (lay customers cannot write out specifications) nor will they
commit to buying anything.
- CUSTOMER FULFILLMENT PROCESS
: In P&G this is an expensive process consisting of developing the
products, manufacturing the stock, distributing it to various towns and
advertising to create an awareness. And after all this, it may be
entirely possible that the products turns out to be wrong, inventory
requirement forecasts may be wrong, the stock may be extra in some towns
and short in some other towns. This is unlikely in Cummins since the
customer gives in writing what products he wants, in what quantities and
when.
- GO TO MARKET PROCESS :
This consists of REACHING (locating, prospecting, accessing and
contacting the potential customers), COMMUNICATING (presenting,
objection handling), SELLING (Negotiating, Closing, Transacting,
collecting), SERVICING ( installing, training and handholding) and
AFTERMARKET ( preventive and breakdown maintenance, reconditioning,
up-gradation, disposal). Since P&G has millions of customers, they
are forced to standardize the products and aim for mass market and hence
price their products low. Cummins has only a few customers and hence
they can even explain and sell complex products.
- CUSTOMER SATISFACTION PROCESS : Under this comes the process of handling complaints and the process of regular monitoring. In P&G this is handled by the market research department but for Cummins this is handled by the sales and service function.
The main differences in B2C and B2B markets are in how they connect and engage with their customers.
