TOC EXPERT^®
Market Assessment

With the uncertainty in the economic environment, there is an unprecedented pressure on companies to find new and innovative ways to increase their sales while maintaining profitability. In other words, the constraint of most organizations today is in marketing and sales’ ability to influence the decisions and choices that customers make. Unlike the operations side of our businesses where we have found it unacceptable to work without having well-defined and tangible processes, we continue to expect marketing and sales to influence customers’ decisions and choices without equivalent processes that we can all see and touch. Without such well-defined and tangible processes, how do we evaluate the effectiveness of marketing and sales, or the processes that we depend on for generating sales? You may be asking yourself if it's even possible to transform what marketing and sales does into well-defined and tangible processes that we can see, touch and manage.

How many times have we heard complaints from our customers about not receiving what they needed, or that our prices were too high? Customers are really interested in buying those things that either solve their problems or satisfy their needs. If your current strategy does not clearly link your product or service offering as a solution to your customers’ problems or satisfying their needs, don’t expect your customers to have consistent positive experiences with your company.

Once organizations realize this, they can begin looking at the products and/or services they offer to determine how well they solve those problems or meet those needs, and make any needed adjustments until they have what the Theory of Constraints (TOC) calls an “UnRefusable Offer” (URO) to the market. Having a URO is not necessarily sufficient to get customers to buy, nor buy at the “right price.” Organizations must also ensure they have the ability to effectively market and sell the URO, and to deliver it. Missing any one of these pieces will have dire consequences in today’s market conditions.

TOC has a well-defined, tangible process for better understanding customers’ problems and needs, quantifying bottom line value and for creating a URO. More importantly, it has a well-defined, tangible process for effectively marketing and selling, and for effectively delivering on a URO. All of these things can be accomplished quickly, without undue risk and while creating a reliable platform from which to seize the opportunities of tomorrow.

Is your approach for marketing and sales not cutting it? Is your team fresh out of ideas? Are you tired of the idea that the only way to retain customers is to trim costs? The TOCExpert^® Market Assessment is about taking a short timeout to explore the opportunities created by an integrated market strategy backed by prudent tactics, and the resulting impact they have on the organization’s bottom line.

(For a more detailed introduction to the Theory of Constraints (TOC) see the white paper on The Theory of Constraints and its Thinking Processes.)

Format
The TOCExpert^® Market Assessment is a three part process:

Part One
Background information about the business and its operations is gathered via a dialogue between the TOC Expert and a selected representative(s) of the organization’s management team. This information includes the organizational structure, size, products, product-related services, product flow, current customer base, an understanding of the current supply chain(s) the organization participates in as well as their relative position within the supply chain(s), size of the market(s) served and an estimate of market share, an understanding of the competition and the current general business situation.

Part Two
A determination is made as to whether or not there is sufficient potential bottom line value in the existing market offer(s) to warrant further refinement of the offer, and/or addressing the issues preventing adequate sales. This consists of a two-day meeting with the management team and other key personnel representing all business functions. The meeting proceeds by:

1. Outlining the existing markets and customers that are served by the organization’s present market offerings,
2. Clarifying what the markets’ or customers’ needs are and the problems that are being addressed by the organization’s current offerings,
3. Developing the cause-effect relationships that show how well the organization’s current offerings address the needs or problems of the customers,
4. Determining the bottom line value to the customers of the existing offerings, i.e., quantifying the current value proposition(s),
5. Highlighting areas for improving the current offerings; including missed opportunities, elements of the offerings that prevent additional sales, and overlooked details that block additional sales, and
6. Identifying what changes need to be made to improve the existing market offerings so that they better solve the problems and satisfy the needs of the customers or markets,
7. Defining entirely new market offerings.

The meeting then continues with the TOC Expert describing how the organization would align marketing, sales and operations around the revised or new market offering(s). As the desired relationships between the links of this supply chain become clearer, so, too, does the path to realizing the predicted bottom line results for the markets and its customers. Assuming sufficient bottom line value is identified, the TOCExpert^® Market Assessment continues on to Part Three.

Part Three
The outcome of Part Three is agreement of the management team and key personnel that the proposed market offerings and supporting tactics are viable (i.e., implementable) and that their corresponding bottom line values can be realized. Part Three consists of short meetings, interviews and/or discussions with the TOC Expert, key managers and selected customers to gather additional information about the problems/needs identified in Part Two along with their bottom line value, and to discern the details needed to flesh out and more fully develop a viable market offering(s) and supporting tactics.

The time and effort required to gather the necessary data/information, flesh out the offering(s) and tactics, and prepare the findings is a function of:

• The level of understanding the organization has about the customers’ problems/needs,
• The need to verify customers’ specific problems/needs,
• The size and structure of the organization, and
• The need to further verify and quantify the bottom line value for both the company and the customers.

Part Three concludes with a one-day meeting during which the management team, key personnel and the TOC Expert review the data/information gathered, the resulting market offering(s) and tactics, and the bottom line value of the change.

Outcome
The outcome is an agreement of the management team and key personnel on the market offering(s), supporting tactics and expected bottom line impact. Next steps are discussed as appropriate.

Duration
The timeframe for Part One and Two of the TOCExpert^® Market Assessment is approximately three days, however, this can vary based on the specifics of the organization. At the conclusion of Part Two, an estimation of the time necessary to complete Part Three will be presented. In most circumstances, Part Three takes several weeks of elapsed time.

For more information, contact us at info@goldratt.com or by calling our Client Relations Department at 1-800-394-GOAL or 1-203-624-9026.