Q3: Chapter 8 is devoted to using TOC in
Marketing and Sales. This is something that fascinates me. Could you tell
me a little more? Do you use the approaches that Eli Goldratt describes
or something different? Could you give
an example?
A3: Keep in mind that my book is about TOC for Services, so the chapter you mention covers marketing and sales in a services context. The TOC principles are the same as what you see in manufacturing and distribution, but because the context is different, there are differences in how those principles are applied. For example, traditional TOC doesn’t use standard product prices because they distort the real contribution each product makes to profit. TOC for Services doesn’t use standard service prices for the precisely the same reason. However, unlike consumers of products, who are often satisfied with a product off the shelf; consumers of services far more often expect their service to be customized. There’s a good reason the barber asks how you want your haircut. Indeed, many contracts in Professional, Scientific, and Technical Services are unique to some degree because no two clients have exactly the same requirements. Of course, those differences affect pricing, segmentation, and business value, which are all integral to effective marketing and sales. Indeed, some services deals that look profitable when based on standard prices, actually turn out to be unprofitable when examined with TOC. Fortunately, TOC can also find highly profitable services deals that look unprofitable when viewed conventionally. Thus, anyone familiar with the traditional TOC approach to marketing and sales will recognize the principles covered in this chapter, but some of the implications will come as a surprise, especially to service providers who currently rely on standard prices.
