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Customer-Oriented Marketing at Thermos
Thermos is the company made famous by its Thermos bottles and lunch boxes. Thermos also manufactures cookout grills. Its competitors include Sunbeam and Weber. To become a world‑class competitor, Thermos completely reinvented the way it conducted its marketing operations. By reviewing what Thermos did, you can see how new marketing concepts affect organizations.
First, Thermos modified its corporate culture. It had become a bureaucratic firm organized by function: design, engineering, manufacturing, marketing, and so on. That organizational structure was replaced by flexible, cross‑functional, self‑managed teams. The idea was to focus on a customer group—for example, buyers of outdoor grills—and build a product development team to create a product for that market.
The product development team for grills consisted of six middle managers from various disciplines, including engineering, manufacturing, finance, and marketing. They called themselves the Lifestyle Team because their job was to study grill users to see how they lived and what they were looking for in an outdoor grill. To get a fresh perspective, the company hired Fitch, Inc., an outside consulting firm, to help with design and marketing research. Team leadership was rotated based on needs of the moment. For example, the marketing person took the lead in doing field research, but the R&D person took over when technical developments became the issue.
The team’s first step was to analyze the market. Together, team members spent about a month on the road talking with people, videotaping barbecues, conducting focus groups, and learning what people wanted in an outdoor grill. The company found that people wanted a nice‑looking grill that didn’t pollute the air and was easy to use. It also had to be safe enough for apartment dwellers, which meant it had to be electric.
As the research results came in, engineering began playing with ways to improve electric grills. Manufacturing kept in touch to make sure that any new ideas could be produced economically. Design people were already building models of the new product. R&D people relied heavily on Thermos’s core strength—the vacuum technology it had developed to keep hot things hot and cold things cold in Thermos bottles. Drawing on that technology, the engineers developed a domed lid that contained the heat inside the grill.
Once a prototype was developed, the company showed the model to potential customers, who suggested several changes. Employees also took sample grills home and tried to find weaknesses. Using the input from potential customers and employees, the company used continuous improvement to manufacture what became a world‑class outdoor grill.
No product can become a success without communicating with the market. The team took the grill on the road, showing it at trade shows and in retail stores. The product was such a success that Thermos is now using self‑managed, customer‑oriented teams to develop all its product lines. 1. How can Thermos now build a closer relationship with its customers using the Internet? 2. What other products might Thermos develop that would appeal to the same market segment that uses outdoor grills? 3. What do you think the Thermos team would have found if it had asked customers what they thought about having consumers put the grills together rather than buying them assembled? What other questions might Thermos place on its website to learn more about customer wants and needs?
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