balance built around customers

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Balance-built Around Customers

Marketing and Fulfillment Structure and SystemsCommunication and Publications Services

2002.12.31

Albert Borrero

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Table of Contents

Overview

The CPS Marketing & Fulfillment Structure

Players and performancesContact management

Marketing and Product ManagementSales and Fulfillment

Out source fulfillment service providersMail orderMarket Segment Distributors/consigneesMass mailing/distribution and shipping

Supply and Resource ChainProduct Development

Structures, Relations and ResponsibilitiesStructureProcesses and activitiesFunctions

Marketing and sales cycleCustomer care cycleFinanceBack office

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Overview

Its not the strongest of the species who survive, nor the most intelligent, but the ones mostresponsive to change.Charles Darwin

Adaptation is the biggest evolutionary revelation the world has ever gone through, andrepeatedly for eons, will go through over again. Beings adapt to an environment. And to

survive, get used to through experience to forces that affect them.

The same revelation applies to successful products. A product undergoes customization

to a force that will sustain it. This force is the marketpeople who buy, believe, or

subscribe to a productbe it ideas, organizations, individuals, goods, or services.

A market is a collective of customers. Different markets have different needs, wants,

aspirations, and held beliefs. These values drive customers in respective segments ofmarkets to engage in a product. And buying the product is fulfillment to meet their

needs, wants, and aspirations.

The Communication and Publications Services structureand peoplerevolves aroundthis mix:

Engaged customer = needs + that is fulfilled + with products

A balance of components in the equation and sufficient elements in any one of the

components dictate the potential result that will drive and sustain enterprise publishing.

Customer-driven activities are important to find these elements. It is an ultimate goal to

gain mastery of the customers needs to develop products that will make it to market.

This paper is one of first steps to gain the mastery.

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The CPS Marketing & Fulfillment Structure

Mans desires are limited by his perceptions; no one can desire what he has not perceived.William Blake

Marketing and fulfillment combined form part of a work structure like a hive. The one primary cell that

provides a foundation with which to build the hive is the Customer. Pluck out the Customer cell. We simply

cannot exist. Have a customer cell and not have all the other cells, the hive will not hold.

The interaction of eventual cells built around the Customer is non-linear and non-sequential butsimultaneous. Develop and market a product that is not customer need-based and the product will flop.

However, package the product by marketing it as something the customermightneed, the product can gainexposure, and couldsell. But without channels to bring the products to customers the cycle of product

fulfillment to customers does not happen.

The processes players perform within each of the functions prop up the cells. Products and systems

balance-built around the customer hold the hive to make honey. The hive is the enterprise. The high

potential to engage customers with creation of products of value to markets will sustain the enterprise.

Players and performancesContact management

Marketing and fulfillment requires management. Not primarily people management, but management ofprocesses, environments, and customers crucial to gain returns for the enterprise. The dimension of the

analogy of the hive depicts this: No honey, no money.

For the structure to hold the enterprise well, necessary set of functions and skills must reside in people or

groups of people who will drive the enterprise:people who will pulse, scope, conduit, and simultaneously

interactwith customers and environments the enterprise operates on and operates in.

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Marketing and Product ManagementWe grow, nurture, and sustain products into brands customers live by.

If there were any other mantra for marketers and product managers beyond growing, nurturing, and

sustaining products, it would be to create brands that live within customers.

There are fundamental differences and similarities between brands and products.

The publication Helpful Insects, Spiders, and Pathogens is a product. This particular title is one of thebetter selling books of IRRI-CPS. The books authoritative and extensive description of rice farmer

friends is a reason for the books success as one perennially reprinted book.

To nurture the publication, reprints can be done over on demand. But to createsustained value, the

publication can be brandedas one volume of a series of Friends of the Rice Farmer, a strap line which

appeals to the current market and an agenda that the Institute supports with integrated pest management

research.

Seeking new markets and adapting to these markets need for such series can potentiallygrow thebrandand

the publications under the brand. In the future, publications will form part of asystem of products directed

at markets with specific appeals.

Sales and FulfillmentWe get products to customers in customized fashion.

How will a product get to its intended customers? Sales and fulfillment of the product to customers starts at

bringing products to where the consumers are or where consumers will likely buy it. Sales channels are a

crucial link to fulfillment.

Present sales channels are yet to be tapped to its full potential. The Bookstore is one. On-line catalog

merchandising is another. It is crucial to explore other ways to create the experiences of the bookstore and

the on-line catalog for the customer lasting and satisfying.

Ifbrands are created without the distribution channels that will fulfill customers, no sales occur.

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In today's world of superstores, real world and virtual, with declining numbers of independent booksellers,

effective, creative selling and marketing is crucial to survival as a publisher. Just-in-time inventory is a

reality that has dramatic impact on the profitability of our enterprise-publishing program, impact that

extends from the product acquisition and development decision through the sales, marketing, and

fulfillment decisions.

Sales and fulfillment must have ability to mass customize its processes for customers. Take a usual book

inquiry. In a bookstore, the customer has two scenarios: see and buy the book on stock or not get it becausethe book sought is out-of-print. But if a customer can be given option to buy an out-of-print book, a sale is

potentially generated.

The same potential is greatly increased with on-line catalog merchandising. A customer will normally want

to know if a book is still available and how much it will cost to ship it at a desired date. Offering optionwith customer self-driven ordering on the on-line catalog can enhance fulfillment experience.

This can be done with simply prompting customer with what is on stock and if options for print on demandor electronic download is available. Options for pricing are also given together with shipping or delivery

options.

For us as a non-profit, the question of distribution is key: Should we set up our own systems or should we

use other distributor channels? The best alternatives to provide what we need to make our way through thismaze of options is understanding how we intend to run the business and what returns we expect from it.

Out source fulfillment service providers

Global deployment of physical goods is inherent in the business. On-line selling and marketing increase the

demand to move products across the globe. Fulfillment then becomes a far more challenging step of theprocess to deliver with speed.

Satellite service providing is key to match the fulfillment with speed. In one of the two sales channels used

at IRRI, mail order is the most demanding. It requires a chain of processes to make the fulfillment. And

this chain resides in a competency that does not exist with CPS any more.

There are a number of international and local companies that provide this service on a commission and turnkey basis at different service levels.

Mail orderMail order offers presence on a global scale. On-line mail ordering re-defined the speed with which tofulfill these. The sequence of steps to fulfill a mail order via credit card for instance gives customers the

power to drive the business to greater efficiency.

Imagine this. Once offered, on-line purchase with credit card takes only two seconds to make the purchase

and seal the sale. A customer will want to get goods in the same speed as money was taken from him. To

fulfill the order, it has to be matched to the speed of the transaction.

Mail order fulfillment is a highly customized engagement. Variations must be set as rules with different

customer profiles. By offering customer registration, profiles are created, rules that apply are provided, andtransaction processing becomes self-service by customers. Paper work is minimized so is turnaround time.

Market Segment Distributors/consigneesFlexibility in attending to differently profiled customers fulfillment requirements can be addressed with

profiling segment distributors and consignees.

The RiceWorld Shop, in its future state, is one kind of market segment consignee as with local bookstores

in the country. University bookstores are another segment. EarthPrint, an online-based global distributor of

environment-related books is another.

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The key is to be able to profile the market and its demands, tap into all possible distribution channels that

meet these demands, and engage these channels as part of a network of fulfillment.

Mass mailing/distribution and shippingSingle distribution source is thought of as efficient. With distributed global printing and regional hubs,

mailing distribution and shipping become viable with integrated on-line systems linked from one

distribution point to another.

Consider IRRI distribution of publications in the past. Single source distribution requires warehouse space,

personnel, pick-pack-mail operation, distribution re-packing, and administrative and materials costs formailing, courier, utilities, and maintenance. All these components carry overhead across IRRI.

A model to realize multi-source distribution is by integrating the entire publishing processes that includes

distribution. An example is the Hong Kong printed publications for the IRRC in Beijing in September

2002. Almost all printed materials were done in Hong Kong and shipped directly to Beijing.

If multi-source distribution were to be networked across the globe, it can set up to be rippling until

distribution is made to the end recipient. This applies both to printed and bit (digital) products.

Rippling distribution is cascading distribution through channels. One potential avenue for cascadeddistribution is a depository library, which receive IRRI publications. If bit products are made available for

replication by these depository libraries, distribution costs will be greatly reduced. This particularly holds

true with freely distributed materials.

Depository libraries are better poised to ripple the distribution.

The potential of setting rippling network distribution options are vast. It opens options in ways not seen

before with single product modality distributed at a single source.

Supply and Resource Chain

Supply and resource chain concepts are not new. Manufacturing companies have mastered the system ofcontiguously assuring flow of goods raw materials and allied resource into their production methods.

Securing and managing a supply and resource chain into the business stream from product development to

marketing and onto distribution is vital in the fulfillment value chain. Supply and resource chains are

established by identifying core business while isolating business processes that does not highly contribute

to the value chain, or that which is not present as a mastered skill in the process.

Product DevelopmentProduct development partnered with other institutions or individuals will yield more value to the chain thanwith in-house developed products alone. Partnerships, collaboration among a few exercised, are practiced

only with co-publishing. To create added value to the chain, partnership in product development must cover

relationships with product vendors, consignors, service and support-service providers.

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A whole new thread of value creates a stronger chain with outsource relationships:

Offers benchmarks for in-house capability and capacity. This holds true for eyeing and integrating into

operation techniques, processes, and systems.

Comparative measures of the business performanceresults in both operations and people

Creates shorter time to market products, and makes development nimble, agile, and at will, shift

without over-investing in the development.

Structures, Relations, and Responsibilities

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If the hive were to be built with the customer as the core cell, the sequential creation is driven with

functions and inter-relationships of each function area to another.

The cells between the customer and products are the built of the enterprises structure. The drivers for

building each cell are largely driven by the core cell. These cells are both in-house competencies andoutsource capacities.

The structure starts with a front end. Front-liners scope then take signals of what is crucial to make a

product to the front again. Front-liners, in turn, match the signals to a back end. A simple inquiry of a

product is a signal to get fulfillment systems runningwith or without people intervention. If it were an

order for a book, sales and fulfillment gets to action. But if a series of inquiry or order is analyzed and yield

a proposition that warrants creating a new product or extending a product, product development gets going.

The relation of one cell to another is dynamic. A developed product never ends moving about each function

even when it has hit market. The sustained value we derive from the enterprise is not entirely the creation

of new products but focusing on extensions of products, finding new markets and new product

performance, and getting the products back again to customers.

There are four specific cycles that occur within the front line functions. Each illustrated:

Marketing and sales

Customer care

Finance

Back office

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The CPS Marketing & Fulfillment Systems

Customer Relations Management1 Real Time Customer Membership (local/foreign)2 Direct : Individual and Institutional

3 Internal / External client

Customer Relations Front end Functional Requirements and Features

3.1 Customer registration3.2 Partner/commercial registration3.3 Individual entity registration3.4 Recipients of free distribution registration3.5 Consignees/Distributors/Partners registration

4 Self Service Ordering Real Time (RT) Online Catalog4.1 RT product availability4.2 RT price inquiry

4.3 RT shopping and mailing/shipping calculation4.4 Advanced packing/mailing preference4.5 Advanced shipment/mail status4.6 Order Information and Option4.7 Applied pricing4.8 Relationship rules

5 Real Time Order Processing5.1 Credit Card/Payment processing5.2 E-finance batch processed charge back5.3 Order status5.4 Order tracking5.5 Claims and re-fulfillment

6 General Inquiries

Customer Relations Back end Functional Requirements and Features

7 Customer Value Profile Generation7.1 Customer data7.2 Targeting7.3 Segmenting7.4 One-on-one marketing (direct selling)7.5 Customer value modeling

8 Online Catalog Maintenance

8.1 Catalog merchandising8.2 Active/distributed catalog content providing8.3 SKU (products) information8.4 Packing/Mailing options

9 Catalog performance report generation9.1 Credit Card /Payment transactions report generation9.2 Non card transactions report generation

10 Mailing list

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10.1 Institutional and individual customers10.2 Global Free Distribution10.3 Paying commercial/non commercial customers10.4 In-HQ distribution list

11 General rules setting: Partner/commercial/distribution/Individual

12 Inquiry reply via email and postal mail

Fulfillment Management and Logistics (Back office)

Front end Functional Requirements and Features1. Order notification2. Fulfillment triggers3. Fulfillment verification4. Transaction tracking5. Claims handling6. SKU replenishment notifications

Back end Functional Requirements and Features7. Fulfillment Processing8. On location SKU warehousing and Inventory9. Claims10. Re-fulfillment

Financial and Management Reports1. Payables report

1.1. Credit card transaction fees and commissions1.2. Cash/Tellering (cheques and other non cash remittance)1.3. Consignments/distributorship payments, rebates, and commissions1.4. Internal transaction Credit/Debit posting

2. Collectibles report2.1. Partners/alliances/Consignors2.2. Credit card payments2.3. Remittance report2.4. Point-of-sale receipts

3. SKU/BKU life cycles3.1. Replenishment3.2. Inventory movement3.3. SKU/BKU performances3.4. Performance-driven life cycles of products/services

Distribution1.1. In-HQ distribution1.2. Off-shore global distribution

1.2.1.Distributed processing1.2.2.Single source processing

Point-of-sale transactions1.3. Riceworld shop1.4. Opportunistic channels

1.4.1.Book exhibits

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1.4.2.Road tour sales

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