Waste in Auto Marketing
Guest Post By Mike Thelen:
I received an interesting piece of “junk mail” this morning. What caught my attention and provoked me to open it was simply that it was from Honda and my Lean obsessive-ness engaged.
Now, I know Honda isn't necessarily using the TPS philosophy, but I understand that they do have their own system based on similar principles. Correct or not, that belief was the motivation that kept me from simply discarding the mail unopened. Upon opening the envelope (aside from noting it had a fancy, matte finish that added no value to the customer but surely cost more), I was immensely disappointed.
Let me begin by providing necessary background information. I live on a farm in South Dakota. It is 20 miles to the nearest population worth noting (24,000 people). It is 180 miles to any city over 100,000 people. The vast majority of people in this region of the US share the same scenario. This is also the heart of 4×4 country and it is October…less than 30 days from our first expected snowfall. People in the ‘Great Plains', as this region is described, are also more traditional in nature (conservative or down-to-earth are perhaps better definitions.)
With this in mind, I was expecting a Lean-thinking organization to gear its marketing campaign (based on the customer, right?) toward one of two factors for this region. It would focus on either the Honda Truck/SUV product line or on the excellent gas mileage of Honda cars. Which did I receive?
I thought the latter. The mailer was focused on the Honda Accord. Naturally, I scanned the materials for the infamous MPG Ratings. Instead, I found that the Accord comes with 3 engine choices delivering (motor-heads forgive me if I'm not accurate, I've already thrown the mailer away) roughly from 175 hp to 265 hp (horsepower for you non-automotive types). The mailer provided torque, performance, and other details as well. However, there wasn't one mention of fuel economy throughout several sheets of paper. The mailer did inquire as to when I may be in the market for a new vehicle. I guess that was an attempt at customer focus.
Some might say, “yeah, but you're thinking about Honda now!” when questioning the effectiveness of the marketing. However, even though I'm thinking Honda, I'm not thinking of BUYING Honda. Instead, I'm thinking about how the mailer has completely turned me AWAY from Honda since they really don't understand my needs.
Perhaps I'm being a bit harsh on Honda. After all, the “Big Three” aren't sending me junk mail. Maybe they're using that money to get them through contract negotiations, as I see the UAW has just walked out of Chrysler. Either way, waste is waste. More importantly, waste is not limited to the shop floor. In Honda's case, marketing waste will keep them from building my next vehicle (perhaps creating manufacturing waste in the process?)
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Toyota needs lots of work in marketing too. I bought a Toyota a few years ago. I get identical junk email often several times a month from different Toyota dealers. Obviously Toyota sold or gave my name and address to multiple dealers and they all send me the same stuff. Which is pretty much all useless.
I received a fancier piece just recently – this time from Texas (my guess is a national send this time).
It would not be tough to send the same junk and provide several contact dealers. And if one dealer thought they “owned” you it wouldn’t be tough to say that if one dealer has a relationship (you bought stuff from them…) and other dealers do not that the first can block other marketing. Of course this wouldn’t be necessary if it was really one system being optimized but since the current situation is competing dealers trying to optimize their results rather than focusing on Toyota overall and the customer then we get what is pretty much seen by everybody: manufacturing improvement going incredibly well – other things like dealers are not that different from any other company that doesn’t have a systems thinking focus.
Toyota is doing great stuff but they still have so much more to do better. Which might make you happy if you are Ford… but maybe you should worry more instead because Toyota is far from running out of problems. We all know would make Ohno very unhappy if Toyota could not see problems to fix were to happen. And also it means you can’t aim at catching up to where Toyota is today. By the time you do they will have improved many of the problems they have today.
Mike, Curious Cat,
Over in the UK I moved from introducing lean in operational environments to work in marketing to learn why every time we leaned a process the marketing teams kept developing products that didn’t conform. The reality I found was that most marketeers didn’t understand that customers place different values of the benefits they get from the features of a product or service i.e. they don’t understand the value chain of the end customer. Consequently they don’t major communication on the parts of the product/service that create the most value, hence your comments about engine size v mpg. This is even more damming as the marketeers fail to understand the value placed on their products/servcies so fail to understand how elastic their prices may be and believe me it is often upward, having encouraged a company to double its prices to consumers in four years and seeing twice as many customers come on board, surely a contradiction you would think! Then the marketeers don’t employ techniques to reduce waste in the operationalisation of their marketing plan i.e. direct marketing techniques are often ignored. So in the UK direct mail campaigns (often referred to as junk mail) offering credit cards will run with response rates of >0.5% using lean techniques I have managed to achieve a 200% improvement on this. This has been my direction for the last two years and I am convinced that at the junctions of lean thinking, six sigma, systems thinking and market research lies the answers on how companies can develop products with the right features/ benefits, at the right price with redundant features removed and benefits maximised. These can the be pass onto operational enviroments designed to produce them to the expectation of the customers with minimal waste.