Entrepreneurial marketing value chain considerations
EVERYTHING in life belongs to a certain value chain. In fact, that is the way towards identifying or establishing growth patterns of an entrepreneurial business.
Our entrepreneurs desire to be at the top in all areas of doing business, which then calls for a thorough monitoring of their value chains. Marketing as an activity links the business with its current/potential markets, hence becoming a key cog for identity, positioning and fame.
Traditional value chains have of course considered marketing as a factor, but it has been at the end, that is, by following other logistical and operation matters.
In that sense, marketing has not been given its full potential for business turnaround.
In this edition, we revisit the traditional value chain by making marketing stand at its position as the igniter for successful entrepreneurship of this age.
It should be a marketing-led value chain to begin with as we model our production processes/systems.
Most of our entrepreneurs always start with setting up structures, assembling lines, equipment and machinery before marketing what they anticipate to be producing. That is a recipe for disaster.
Some entrepreneurs do a generic marketing research first, which is a good drive towards knowing the customers, but they can even do better, especially using the data gathered during these researches to construct real marketing information.
Lab-testing of a marketing idea is now possible unlike in the past where only qualitative marketing aspects were talked about without measurements and clear points of reference.
Market prototyping and simulations should be part of the initial sequencing of a sustainable value chain, this is through experimenting with reality rather than possibilities.
That is when the entrepreneur starts with a real life niche/segment by knowing the potential customers in terms of their behaviors, level of consumption, responsiveness to market changes, perceived quality levels and other expectations.
The traditional value chain has some primary/core activities (including marketing and sales) and secondary activities.
Inbound logistics has been the igniter of all other sequences where a business is supposed to concentrate on acquiring raw materials, production supplies and looking for perfect supply relationships.
Sure, that is foundational but without marketing playing its leading role first, such an approach can waste entrepreneurial resources.
This is in the sense that we are in a customer-centric era where production should be informed by them rather than the opposite.
As in the production era, there was wastage of capital, land and labour though producing what was not needed by the customers themselves but what producers thought would sell.
The same is happening at the moment as most of our entrepreneurs are on the record of having more stock in their warehouses than sales.
That is a sign of entrepreneurial wastage/loss. When marketing is really considered at the beginning of all, the value chain will be streamlined to profitability rather than tiring capital.
As we further go into the traditional value chain, there is the operations phase which has been considered before marketing and sales.
is a stage where emphasis has been mainly on converting raw materials into finished products.
Our thrust for this edition is to now consider marketing at this stage rather than waiting for the product to be finished and then look for customers.
Since the customers’ tastes and preferences are always changing in the blink a blink of an eye, we have to be engaging with them too at this stage.
Their views, suggestions and voices should lead the way as it is at this same stage where we can further customise our offerings according to their specifications.
Especially in this era of AI where real time data can be retrieved we should be able to avoid mass production by producing the exact quantities and quality needed at that moment.
Also we can go an extra mile to even share in advance of a product/edition the customers are to receive on the market. It takes two to tango.
A market is an interaction of demand and supply thus it is imperative for both parties to be moving with perfectly shared information through a marketing oriented value chain.
The sequence goes on until a point where there is outbound logistics.
That is when the entrepreneur will be working with distribution activities for the products to reach targeted customers.
It has been one of the most daunting tasks by our entrepreneurs as they start from nothing at this stage yet it should be just a simple delivery to the already known owners.
Considering a marketing led value chain helps us to know where the product is supposed to be distributed even before production.
Failure has resulted in our entrepreneurs having dusty products on their shelves and showrooms.
There is a need to go beyond the traditional value chains as they have shown to be lacking in addressing some key marketing matters for improved viability and profitability.
Marketing leads the value chains and should be considered at each and every stage not at the end only. We should re-visit and configure so as to avoid overproduction for wastage through rigid value chains. Till then I leave you to reflect and act.
Business Opinion with Dr Farai Chigora
*Dr Farai Chigora is a businessman and academic. He is the head of management and entrepreneurship at Africa University’s College of Business, Peace, Leadership and Governance. His doctoral research focused on business administration (destination marketing and branding major, Ukzn, SA). He is into agribusiness and consults for many companies in Zimbabwe and Africa. He writes in his personal capacity and can be contacted for feedback and business at fariechigora@gmail.com, www.fachip.co.zw, WhatsApp