THE IMPORTANCE OF MARKETING TO ENGINEERS
1
Introduction
One of the underlying problems of relatively poor British
industrial performance has been the lack of the recognition of
the synergy that exists between the engineering and management
disciplines. Traditionally engineers and scientists in the UK
have seen themselves only as inventors or creators o f systems and
have left businessmen to worry about the possibility of their
commercial exploitation. Very many British technological ideas
and scientific breakthroughs which should have rightly benefitted
Britain commercially have gone elsewhere, in the main US and
Japan, where people had been more adventurous and commerciallyminded enough to commercialize them. Engineers have thought of
themselves as engineers only and nothing more. This state of
affairs has not fostered cross-fertilization between the creators
on the one hand and those with the capital and acumen to
commercialize the creations on the other.
This is a shortened version of a colloqiem paper that articulates
the importance of training engineers in management and marketing.
2
The Engineer: Who is he and What Role Does He Play in Society?
The role and importance of the engineer in a modern world can
hardly be overemphasized. The engineer is a designer, a builder,
a creator, a developer. In fact, he is the pivot around which
civilisation revolves. A close look at some of the various
structures and products/processes made available by engineers bridges, motorways, railways, buildings, aircrafts, television
sets, computers and motor cars, to name a few - only serve to
lend credence to the importance of civil, mechanical, aerospace,
electrical/electronic,
biomedical
and
other
engineering
It is impossible to imagine a
professions in today's world.
world without these or their creators - engineers. The creation
of these goods and services is the initial stage of the supply
or business system while their purchase and consumption
constitutes the demand. The interplay of this supply and demand
is referred to as the market.
3
Business System and Purpose
In the most basic form, the definition of a business is a "system
that satisfies needs" at a profit. In very simple terms, the
concern of business, and many other organisations, is to obtain
a reward from an idea and the task of management is t o determine
and direct how this is done. Basically, management determines
what is to be produced, where i t is to be sold and where the
facilities are to be located. The importance of "management" in
the business system, therefore, cannot be overemphasized. A
typical business system is shown in figure 1.
"Design" is
concerned with what the product or service contains, what its
dimensions are, what i t is made from and how i t meets the
requirements of the market.
"Production engineering" is
concerned with developing how the components of the product or
service are made and assembled. "Production, Distribution and
Support" functions are concerned with when operations are
0 1996 The Institution of Electrical Engineers.
Printed and published by the IEE, Savoy Place, London WCPR OBL, UK.
31'1
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performed.
The role of management is to manage the inputs to the business
system and help transform the inputs into outputs in the most
efficient way.
The manager is thus an enabler, coach and
counsellor as well as leader, entrepreneur, communicatorp
planner, coordinator, organiser and controller. In the words of
Stafford Beer, a great thinker on the subject of management,
managers undertake the "science and profession of control"
(Stafford Beer, 1959, 1967). The aim of "management", therefore,
is to achieve bu'siness objectives which in the main comprise:
greater customer satisfaction,
higher quality of product,
lower operating costs,
shorter lead times, and,
corporate survival and growth.
As consumers become more discerning and demand increasingly
higher quality products and services s o will business success
depend increasingly on firms ability to satisfy these wants.
Many firms - including very large blue chip companies - have
either disappeared o r lost considerable ground in the market as
a result of their failure to anticipate changing customer
needs/expectations and meet them.
One can mention numerous
examples including Pan American Airways, British Leyland and ICL
in the UR before i t was taken over by Fujistu. On the contrary,
other firms have prospered simply as a result of anticipating
customer needs and satisfying them. Companies like Compaq in the
PC industry and British Airways after privatization are examples
in point.
The requirements for business success have changed dramatically
from those of yesteryears. The post-war period to the mid-1970s
was to all intents and purposes one of relative stability, with
only a small gap between the best and worst performing firms.
From the mid-l970s, however, the world of business turned
turbulent. Several reasons account f o r this, but a discussion
o f these is beyond the scope of this present work. The result
of this turbulence has been that the gap between the best and
poor performing firms has widened considerably, with a falling
average
Since the early 1 9 8 O s , several firms have collapsed or been taken
over while some have moved up the performance ladder and new ones
formed. A close examination of these firms reveal that there is
a number of attributes that determines success o r failure in
today's firms. These attributes are tabulated belowSuccess Criteria/Attributes of Today's Firms.
Successful firms
Poorlv-uerforming firms
Do the Right Things
Are customer-driven
Have a competitor "look"
Fast/flexible ,
Have strong leader
Do Things Right
Are product-driven
Have an internal "look"
Slow/inflexible
Have management structure
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Have good internal communication
Have poor internal
communication
The best performing firms tend to be "customer neurotic", always
keep a tap on the competition and have 8 strong leadership. In
today's business, the top man is becoming increasingly important,
as examplified by successful companies like Body Shop, GE and
ABB. In these firms, the chairmen/chief executives are the main
drivers of change and strategy. Whi1.e the factor:; in the table
above are all important for success, i t is the emphasis on
customer focus that is supreme.
4 The Engineer, New Product Development and Marketing
Business systems depend on the development of both consumer and
industrial products to meet the demands of the market. This
requires a lot of effort and large amounts of money in soms
cases. Some large projects like the development of a nuclear
power plant may cost billions o f pounds in money terms, require
a lot of time and effort and generate a lot of frustration. Yet
a substantial proportion of attempts to develop new products and
processes fail. Millions of pounds and much effort have gone
into products which failed either because the target customers
were not mentally prepared to receive the product or that there
was no assessment of the likelihood of their custom in advance.
The responsibility for this opportunity cost falls on managers
and is due in a large measure to the lack of marketing or the
recognition of its proper place in the provision of goods and
services.
An important attribute, therefore, in successful
innovations is the ability of the innovating firm to achieve
acceptability of the product in the marketplace and i t is in this
that MARKETING has pride of place. A scientist/engjneer may have
a brilliant scientific idea which may be quite technically
feasible and yet may prove unsuccessful to market. The fourchannel stereo and the 8-track car stereo are examples in point.
Also, the u s e of a superior technology per se may not conjure
market success, as the case of the Betamax video recording system
vis-a-vis the VHS system shows. To the engineer, and indeed his
firm, this is wasted money and effort and frustration. To the
society at large, this represents a missed opportunity to use
resources better.
The fact that "customer focus" is the most important determinant
of business success is supported by several leading authors,
among whom Peter Drucker has pride of place. Drucker states that
"there is only one valid definition of business purpose: to
It is the customer who determines what
create a customer.
business is. What the business thinks i t produces is not of
first importance, especially not to the future of the business
and to its success. In fact, what the customer thinks he/she is
buying, what he/she considers ''value" is decisive. The customer
determines what a business is, what i t produces anid whether it
will prosper.
The first test of any business is not the
maximisation of profit but the achievement of sufficient profit
to cover the risks of economic activity and thus avoid loss.
Customers are the foundation of a business and their purpose of
The importance of Marketing in
existence" (Drucker 1 9 9 1 ) .
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business is due to the fact that i t is the segment of the
management
practice
that
deals
with
company-customer
relationships.
5 Marketing
Success ?
- What
is i t and What Role Does it' Play in Business
Marketing is a powerful force in today's advanced societies. It
is everywhere. We are all affected by it: in the shops, on the
radio/TV, in the streets, etc. What is more, each of us pays for
marketing. When we buy a product, part of the money we spend
goes to cover promotional, packaging and research costs. I t is
responsible for creating demand, products and jobs. Each day is
filled consuming products and services made available by an
elaborate and extremely sophisticated marketing infrastructure.
By satisfying consumers, marketing raises their standard of
living and quality of life.
So what is marketing?
Most people would say that marketing is
selling or advertising. True, marketing includes these but is
more than these. The American Marketing Association defines
marketing as "the process of planning and executing the
conception, pricing, promotion, and distribution of ideas, goods
and services to create exchanges that will satisfy individual and
organisation objectives". Put simply, marketing is the process
of identifying and satisfying customer needs and wants with goods
and services profitably.
Today's marketing is considerably different from that of the
1 9 5 0 s and 1 9 6 0 s .
Over the years, there has been a growing
realisation of marketing's importance to profitability and
business success (PIMS). Technological developments since the
1 9 5 0 s have led to more readily available goods in the
marketplace. As a result, conditions gradually changed from a
sellers' to a buyers' market. This marked the genesis of the
sales era where business philosophy became focused on selling
existing products, although these were not necessarily exactly
what customers wanted.
This period was characterised by
aggressive selling tactics.
As time went on, many firms realised that efficient production
and "hard sell" did not assure customer satisfaction and business
The realisation of the importance of customer
success
satisfaction in business success in the emerging highly
competitive business environment led to the marketing era, where
firms emphasize customer needs fulfilment and customer
satisfaction as the criteria f o r business success. Indeed, i t
was during this era that marketing came to be viewed as a
utility-creating activity, in being responsible for creating and
providing time, place and possession utilities directly and form
utility indirectly.
a
6 The Role of Engineer-managers in Business Success
Having articulated the importance of marketing in business
success, the point is now reached where we pose the most
important question, "What has engineers got to do with
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'Ma-keting', indeed 'Management'?" Put differently, why should
tht engineer study the subject of management?
I wish to argue here that not only is i t necessary fclr engineers
to well-versed in the art of management, they do have the unique
ability to do s o . Although several reasons can be advanced, I
will cite the three most important. Firstly, engineers spend
more of their working lives "managing" than directly practising
their specialisation. Most engineers take on leadership of teams
and management of sections of their business within ten years of
their career. Secondly, the disciplined and analytical training
that engineers undergo equip them to better undertake the
preparation for the tasks required of managers. That engineers
make excellent managers is supported by research.
Thirdly, businesses are basically systems whose structures are
A few of the
in many ways similar to engineering systems.
similarities will lend credence to this.
(i)
organisations have a tendency to maintain the status auo.
They exhibit resistance to change just as the "inertia" o f
physical systems (Newton's first Law of Motion).
(ii)
the pattern of growth, maturity and decline of business
systems (industry/product life cycles) tend to be similar
to real life cycles.
(iii) a business system has to be designed to operate in an
environment subject to constant change just as engineering
systems. In engineering systems subject t o undesirable
change,
feedback
systems
monitor
chan,ge agents
continuously and apply corrective mechanisms.
Such
feedback systems are as important to the mana,gement of a
company as they are to the orderly and expected
performance of a machine or plant.
7 Tha Challenges and Opportunities for Engineers
Engineering and management training in an ever-changing and
increasingly technically complex world are not necessarily
"either/or'' but one where the latter is complementary to the
former.
Although some of the traditional UK degrees have
incorporated some management modules, there is general agreement
that the engineer-manager requires more management iskills than
is provided. It is not surprising, therefore, that top managers
have to supplement their early training with further studies.
In the UK, as in other Anglo-Saxon countries, albeit t o a lesser
degree in the latter, engineers have found themselves in lower
echelons of the corporate managerial ladder.
This is very
different from, say, Germany where engineers hold top positions
in their companies and command a lot of respect. The positions
o f UK engineers vis-a-vis their liberal arts counterparts have
been a source of resentment and constant grumble. The fact of
the matter, however, is that little, if any, will be achieved by
this constant moaning by engineers about the usurpation of top
management positions by lawyers and accountants, if they
(engineers) continue in their shortcomings.
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While engineers tend to be verywell educated, engineering skills
alone do not meet the demands of the market. A s pointed out
above, product- (or, science-) driven firms are not likely to be
around for long. This realisation has been the basis of calls
from UK industry and others (policy makers) for changes in the
training of engineers in higher education. Engineers probably
have better basic strengths than any other professional groups
to handle the pursuit of today's business goals.
Customers are getting better educated, more discerning and more
demanding. Customers are changing and s o are their requirements.
But this is where engineers are advantaged. By their training,
they are used to changing systems - changes in potential
difference, in temperature, in speed, in stresses, etc.
Engineering control systems continuously monitor changes and make
corrective adjustments. While not exactly the same, similar
analytical approaches are required to meet the ever-changing
needs of business.
This presents a challenge to engineers.
Happily, i t is not one that they cannot face squarely. Engineers
can meet quality demands, eliminate wasteful activities through
design for quality, indeed design with only one goal in mind satisfying the customer. What is required is an appropriate
orientation.
References:
Drucker, P ( 1 9 9 1 ) Management, Butterworth.
Payne, A et al (1996) Management for Engineers, Wiley.
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\ /iiiiiq\
Figure 1
Corporate
Business functions
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