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Marketing and Innovation

Peter Drucker defines marketing as the unique function that distinguishes a business from other organizations.  It produces the revenue that is the lifeblood of the business.  It is so basic that it can not be considered on a par with other business functions such as manufacturing or personnel, but is a central dimension of the entire organization.  Therefore, responsibility for marketing must permeate all areas of the enterprise.

The purpose of a business is to create customers it can serve profitably.  A business fulfills this purpose by providing a product or service that satisfies a customer need.  The satisfaction of this need provides value to customers for which they are willing to pay.  The customers’ perceived importance of this need determines how highly they value the product or service and what they are willing to pay for it. 

Effective marketing is viewing the company from the outside, from the customers perspective. Customers buy solutions to problems and businesses sell products or services that provide these solutions.  The essence of marketing is linking customers' problems to business products and services.

A business enterprise requires an expanding economy.  It needs growth if it is to attract talent, create job advancement opportunities, and provide new customer satisfactions.  Therefore, innovation- the provision of different economic satisfactions, is the second fundamental function of a business.

Drucker defines innovation as the task of endowing human and material resources with new and greater wealth producing capacity.  It is not confined to separate business functions but extends across all activities of the enterprise.  It provides the means to convert society's needs to profitable business opportunities.

Only marketing and innovation produce revenue.  All other business functions produce costs. 

Symptoms of obsolete marketing and innovation plans and implementation

  • Steady decline in sales volume and/or revenue.

  • Steady decline in profitability and return on investment.

  • Steady increase in customer complaints.

  • Products and/or services offered are essentially commodities with very little differentiation.

  • Price competition dominates sales activity.

  • No new or improved products or services are under development.

Three Sigma's services

The most efficient and effective way to analyze and correct marketing performance is by conducting a marketing audit.  We conduct marketing audits to help business executives evaluate their marketing and innovation functions, discover root causes of problem areas and opportunities for improvement, and identify points of leverage  for future action. 

A marketing audit is an objective, comprehensive and systematic examination of the marketing environment, goals, objectives, strategies, and activities to identify problem areas and opportunities and recommend an action plan and timetable to improve marketing performance.

  • Our audit instruments are constructed from a marketing process developed by Philip Kotler and augmented with the ideas of  Peter Drucker, Raymond Corey, Theodore Levitt, and the Malcolm Balderidge quality assessment.  Each area of marketing is judged using criteria defined by these experts.

  • Prior to implementing a marketing audit, we conduct an interview with the organization's management to determine whether an audit is appropriate and if so, to determine the scope of the audit, the time required and fees.  This pre-audit interview is complimentary except for any out-of-pocket expenses incurred.  This interview can be conducted by phone and e-mail if desired. 

  • The audit consists of a series of questions posed to management and then examining objective evidence that substantiates the responses to these questions.  These answers and objective evidence are evaluated against the criteria in our audit instruments and any deficiencies are documented and prioritized.   

  • We assist in the development and implementation of action plans developed to address the deficiencies and opportunities identified in the marketing audit.

We provide coaching on-site, by phone, or by e-mail, to advise and assist executives implement their marketing plans and innovation objectives.  

We provide follow-up audits to evaluate the effectiveness of corrective actions taken and the current status of marketing improvement efforts.

For executives who choose to improve their marketing performance using their own resources, models and tools are available on this website and can be copied or downloaded free of charge. 

  • We can provide coaching by phone or e-mail to help or facilitate using these models and tools.

Expected results

Marketing and innovation produce revenue for the business.  An effective marketing plan and implementation will generate increased sales revenue and profits.  This should produce the following measurable results:

  • Resumption or continuation of growth in sales revenue, customer satisfaction, and profits.
  • Sustained profits that exceed the enterprise's cost of capital.
  • Steady increase in the business's return on investment.
  • Increased employee retention and recruitment.

Copyright 2002 Three Sigma, Inc.