May 06, 2009

Marketing In A Recession

Marketing During the Recession

After finishing Marketing Strategy, there are many important points that I've learned and had implemented in the real world in the recent past.  Some of the imperative points that stick include ideas on how to deal during a tough market as well as keeping your "SCA" (sustainable competitive advantage) in tact while the environment may be deteriorating due to forces that are behind your control i.e. economic recession, government pressure.

So what are some of the options to maintain SCA's?  The following points are some of the strategy that should be implemented during tough economic times.

1.  Customize Solution - while many firms worry about how to survive, take advantage of the situation and find windows of opportunity to improve your products/services.  One of the ways to do this would be to take your current customers and ask them what could be improved are or are lacking in the product/service. 

However, keep in mind that if your firm has a low bandwidth on customer support, it is ideal to allocate resources and energies to the more high profile customers in order not to lose efficiency and scale of economies. For example, having worked in a niche electronics market, high level customer support is limited only to the high-margin or huge buyer customers. Smaller customers are given web support and limited access or hours of contact with the technical engineers.

2.  Build stronger customer relationships - It is highly crucial that firms keep close contacts and listen to their customers during the tough times.  By becoming their brand or product extensions,  you will get insights on how they are doing as well as finding additional unmet needs that could be addressed.  By getting insights on your important customers, you have the advantage to drive your own brand and create stronger demands when the market turns around.

3. Focus - going back to point 2, it is imperative to focus energy on well-defined insights then establish appropriate resources to meet those customer requirements.  Perhaps you might find that there's a niche in a new product that haven't been created, it is ideal to do further analysis which could be developed further to enrich your product line breadth.

February 11, 2009

Sign of the Times – Possibly the last automobile plant in Northern California

Writing about web page

Sign of my first "Great Depression" Time

Now that I've completed the exams of Part A in December, I've finally found some time to relax and enjoy some time off. On January 28, 2009, I decided to attend the Nummi (New United Motor Manufacturing Inc.) plant tour. This is something that I've been wanting to do for years but never found the time to do it due to full-time work, then getting pregnant, and finally having a baby etc... (real valid excuses). So, finally that I'm not working full-time and was lucky enough to find nice babysitters (mother and sister), I was able to work on my To-Do List.

At approximately 1 P.M. on Wednesday, I was greeted by a friendly tour guide by the name of Sara Rogers. Around the same time, I met another attendee and we small-talked our way into the plant.

"Isn't it sad that they are ending the public tour program?", I commented.

"It's a sign of the times.", she said.

"What do you do?", I asked.

"I'm a retired firefighter from the Sunnyvale area and I thought I should attend this tour before it ends." she said.

I never got her first name, but we both shared an underlying feeling of dissappointments as we walked into the main room of New United Motors plant in Fremont, California. Along the walls, I see pictures of the plant conveying the historical progression. Starting in 1984 where the Toyota magnate and the American (General Motors) counterpart signed its first bill to revive the dying motor plant, the New United Motor is now known as one of the most productive manufacturing operations in North America according to J.D. Power quality rankings.

Then, I was surprised to learn that the infamous Chevy Nova was eventually produced here. Well, most of us have heard of the "Nova" marketing failure in South America due to its naming convention. I didn't realize it happened just a stone's throw away from where I live. But as the plant developed, it also made successful cash generators such as the Toyota Corollas for the mid-market folks and Geo Prizms for the young adults.

For many of us who don't know the background of the plant, the Toyota and General Motors joint venture was established in 1984 and has grown extensively for the past 20 years. Incorporating Lean Techniques into the corporate philosophy, the venture successfully employs a unionized based workers that never had a strike and provides great economic impact on local economies. Today, the Nummi plant makes approximately 250,000 sedan and 170,000 trucks under name brands such as Pontiac Vibe and Toyota Voltz. However, I am sure these figures will dwindle in 2009 and most likely 2010.

After a brief presentation by our funny tour guide (Sara Rogers), she led us to the actual plant which was compromisingly loud in nature and a bit cold. We got into a trolley and I almost felt like I am in DisneyLand for an adventurous tour. The atmosphere was very much like a huge city warehouse with the maintenance workers riding around their bicycles following a route and suspended conveyor with half-finished sedans/trucks skeletons being moved around to the next department for final assembly. It felt very much like driving around in the street where they also have traffic lights and stop signs so workers can maneuver around in order.

We went through 3 out of the 5 operations site (stamping, body and weld and assembly). The other two were too far or too toxic for us to witness. e.g. body and paint department is logically not a safe area for us to tour due to the chemicals and constant paint activities being done to the cars. The plant showed the efficiency of the Lean Techniques in which workers were reminded constantly about Kaizen(Continuous Improvement) and Team-Work efforts as well as by Japanese signs like Jidoka(autonomation) and Muda(no waste). They have suggestion boxes for the workers and if their ideas get implemented, they earn Jidoka points which later can be translated into real $. In addition, I saw KanBans (signs for replenishments) everywhere which is another continuous effort to make only what is needed (a Just-In-Time philosophy).

Our tour guide lamented about how empty the plant seemed to be compared to just one year ago when the whole area was bustling with many more workers and crates of supplies. She confirmed that starting in 2009, the plant had to shut down 14 days in January and will only work 3 days out of the week in March and 4 days out of the week in April. This means that most of its workers will be sent home earlier. So far, they have resorted on this system instead of laying people off.

While going around the plant, Sara commented how the folks from Pixar Animation Studios came by to check on the robots. They were specifically interested in the robots' motor skills so that they can make their next blockbuster that we all recognized as "Wall-E."

Other cool facts that I learned from Sara:

-NUMMI, under roof is about the size of 118 football fields or 122 Costco's...5.5 million square feet!

-It takes less than 24 hours from Stamping, Body Weld, Paint, Plastics and Assembly for one vehicle to be built.

-The passenger line is about a mile long, it takes about 6 hours for one car to make it from beginning to end, and about every minute a car comes off the line. The truck line is about 1/2 mile long, takes about 4 hours to assemble a truck, and currently about every 2 minutes a new truck comes off the end of the line.

-Last year Nummi built about 347,000 vehicles.

Overall I was glad to have participated in the tour, I highly recommend it if you live close to the East Bay of San Francisco (The tour stops at the end of this month.) It gives a practical learning approach to the Operations class that I took last year which I found very interesting.

More Interesting Facts:

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  • Wow, what a great post about the NUMMI plant tour! I really enjoyed reading it and thought it was ve… by Maureen on this entry


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