Marketing manufacturing interface in Biltepe AS

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MARKETING MANUFACTURING INTERFACE

IN BILTEPE A.$.

MBA THESIS SUBMITTED TO

THE DEPARTMENT OF MANAGEMENT AND

GRADUATE SCHOOL OF BUSINESS ADMINISTRATION OF BILKENT UNIVERSITY

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

I certiiy that I have read this thesis and in my opinion it is fully adequate, in scope and quality, as a thesis for degree of Master of Business Administration.

Assist. Prof. Dr. Murat Mercan

I certify that I have read this thesis and in my opinion it is fully adequate, in scope and quality, as a thesis for degree of Master of Business Administration.

Prof. Dr. limit Berkman

I certify that I have read this thesis and in my opinion it is Hilly adequate, in scope and quality, as a thesis for degree of Master of Business Administration.

ABSTRACT

A CASE STUDY MARKETING MANUFACTURING INTERFACE BILTEPE INC.

A. OGUZ AYIRGA M.B.A. Thesis

Supervisor : Assist. Prof. Dr. MURAT MERCAN

Marketing manufacturing interface in Biltepe Inc. is analyzed by a qualitative research tool in this thesis. The competitive advantages of an organization relies on the coordination between marketing and manufacturing departments. Inadequate coordination between these two departments can be originated from various factors. The study determines the factors that have effect on the marketing manufacturing interface and provides an empirical case study by applying research tool in a manufacturing organization in the advanced construction materials industry. The study also includes analysis of the company related issues which have been scrutinized from a strategic perspective. In the final part recommendations made for future use of both this company and this study.

Keywords: marketing, manufacturing, interface, advanced construction materials, case study.

ÖZET

PAZARLAMA VE ÜRETİMİN KARŞILIKLI GİRİŞİMLERİNDE BİR VAKA BİLTEPE A.Ş.

A.OGUZ AYIRGA M.B.A. Tezi

Tez Yöneticisi: Assist. Prof. Dr. Murat Mercan

Bu tezde, Biltepe A.Ş.'de Pazarlama ve Üretim'in karşılıklı girişimleri niteliksel bir araştırma vasıtasıyla analiz edilmektedir. Bir organizasyonun rekabet avantajları Pazarlama ve Üretim bölümleri arasındaki koordinasyona bağlıdır. Bu iki bölüm arasındaki yetersiz koordinasyon ve uyum çeşitli faktörden kaynaklanabilir. Bu çalışma, Pazarlama ve Üretim'in karşılıklı girişimleri üzerinde etkisi olan faktörleri belirlemekte ve bu araştırma vasıtasını gelişmiş yapı malzemeleri endüstrisinde bir üretim organizasyonuna uygulayark deneysel bir vaka sunmaktadır. Bu çalışma şirket ile ilgili konuların stratejik açıdan yapılan incelemesini de içermektedir. Çalışma, bu şirket tarafından ve çalışmanın gelecekte kullanılması için tavsiyelerle sonuçlanmaktadır.

Anahtar kelimeler: Pazarlama, Üretim, Karşılıklı Girişim, Gelişmiş Yapı Malzemeleri, Vaka.

I would like to express my gratitude to Assist. Prof. Dr. Murat Mercan for his invaluable guidance and supervision throughout this study. I would also like to express my thanks to the other members of the examining committee for their contribution and valuable suggestions.

I would also like to express may special thanks to my lovely family and my friends Fatma Tokat and Yücel Tepeköy for their encouragements during the process of this study.

My thanks also go to Füsun Bakır, Foreign Trade and Finance Manager in Biltepe A.Ş., who helped with pleasure to provide information and to facilitate communication with the personnel.

TABLE OF CONTENTS

l. INTRODUCTION... 1

II. LITERATURE REVIEW... 2

ILL Conflict Between Marketing and Manufacturing...3

II.2. Measurement of Marketing-Manufacturing Interfaces... 6

m . RESEARCH METHODOLOGY...

12

IV. CASE STUDY... 13

r v .l. Industry Analysis of Advanced Construction Materials... 14

rv.1.1. Industry Background... 14

rv.1.2. Advanced Construction Materials... 14

I V.1.3. Customer Potential of the Market... 17

1V.2. BILTEPE INC...19

IV.2.1. The Company... 19

IV.2.2. Products...19

IV.2.3. Capacity and Demand... 21

IV.2.4. Distribution Channels... 23

IV.2.5. Raw Materials and Suppliers... 24

IV.2.6. Technology... 24

rV.2.7.Promotion... 25

IV.2.8 .Export... 26

IV.2.9. Biltepe's Future Expectations... 26

LIST OF FIGURES

FIGURE 1

Areas of Marketing-Manufacturing Interdependency... 9 FIGURE 2

A Typology of Conflict Areas between Marketing and

Manufacturing... 10 FIGUIUE 3

Gaps in the Marketing and Manufacturing Interface at the Operational Level... 11 FIGURE 4

Capacity and Demand Quantities... 22 FIGURE 5

The Consumption Figures for Plaster Boards... 22 FIGURE 6

Current Usage of Plaster Boards According to Region...23 FIGURE 7

The Plaster Board Weights Per Kilogram in the World Market...28 FIGURE 8

Financial Indicators of Biltepe Inc... 30 FIGURE 9

I. INTRODUCTION

Marketing and manufacturing are two functions having paramount significance for a manufacturing company. Marketing and manufacturing oversee the critical activities of strategy implementation. While conflict exists between any business functions, marketing and manufacturing seem to have an especially difficult relationship. In general, marketing focuses on demand stimulation whereas manufacturing focuses on supply regulation.

Marketing and manufacturing are separated in the organization structure because of their very different responsibilities. The marketing organization defines target customer segments, translates customer requirements into product and volume requirements, decides product mix, and establishes pricing, promotion and customer service policies. Manufacturing management decides when and how much to expand capacity, layout and location of facilities, process technology, quality control process, and schedule, inventory purchasing and workforce policies (Hayes and Wheelwright,

II. LITERATURE REVIEW

Marketing and manufacturing frequently seem to have a combative rather than cooperative relationship in the very areas where their interdependency is so high. The interdependence of the two functions highlights the necessity of cooperation required to achive an organization's objectives.

Thampson (1967) has stated that, manufacturing and marketing exhibit "reciprocal interdependency" with an output from one part becoming an input to the other, even though their activities and responsibilities seem to be very different.

In reality, marketing and manufacturing are interdependent in their purpose and in their daily decision-making. As Hill has noted, "Manufacturing's task is to provide better than the company's competitors those criteria which enable products to win orders in the marketplace." (1989). The organization's interpretation of "order-winning criteria" usually originates in marketing and determines the competitive priorities of the firm. Manufacturing is then responsible for designing and managing a production organization that can perform on the order-winning dimensions.

Unfortunately, previous experiences lead us to conclude the relation between marketing and manufacturing departments is the most problematic of all departmental relationships (Hayes and Wheelwright,, 1984). Shapiro (1977) has identified eight

major areas in which there is strong likelihood of conflict between these adversary functions in an industrial company. As Figure 1 shows, each of the potential sources of conflict represents an area of interdependence between the two groups. While this list focuses on a few, fairly specific kinds of interaction, it captures nicely the distinction between market needs and process technology capabilities.

In these eight problem areas, Shapiro (1977) focuses on such issues as evaluation and reward systems, inherent complexity, and differences in manager orientation/experience/"culture" as the basic causes of friction between marketing and manufacturing. He added that factors such as tecgnology, capital constraints, size of companies and environmental changes could be regarded as complicating factors that add to the basic causes in certain situations.

n .l Conflict Between Marketing and Manufacturing

Grittenden, Gardiner and Stam (1993) present a classification for the conflict areas of marketing and manufacturing. They define three major conflict areas: (1) managing diversity; (2) managing conformity; and (3) managing dependabilty. Figure 2 shows the typology within which major conflicts between marketing and manufacturing are categorized and the related operating objectives for each functional group are described.

1. Managing Diversity:

A key marketing concern is customer satisfaction. Producing a diverse array of products is often a requirement of meeting customer demand. Products vary in shape,

items in a line, the number of different models of product to offer, building to customer specification, modifying existing products, and eliminating/adding products.

Product Line Length/Breadth: Marketing typically wants to sell products consisting of many models and several lines, thus allowing the firm to satisfy the various desires of many customers. On the other hand, manufacturing tends to prefer a narrow product offering consisting of 'no-frills' products. Long production runs, associated with narrow product offerings, allow manufacturing to lower costs because of economies of scale and to spend less time dollars on changeovers. Long production runs, however, go against marketing's desire for variety, since product variety frequently requires stopping the production process to adapt to a different design.

Product Customization: Marketing's inherent desire oto satisfy the customer often leads it to seek product modifications for individual customers. Manufacturing, on the other hand, generally prefers buuilding standard products since even the smallest change affects the production process and the equipment used.

Product Line Changes; Marketers often try adding or deleting products from a product line. There is usually conflict between when marketing wants these product line changes and when manufacturing provides them. Market uncertainty often forces marketing to request immediate changes, a long lead time to get the necessary raw materials, or changes in the production plan. When dropping a product, manufacturing tends to want to use all of the raw materials in stock before suspending production.

While marketing stimulates demand for a product, manufacturing is responsible for making the product available. In the short run, manufacturing manages the transformation process through its production schedule. Over the long run, manufacturing manages the process with decisions concerning capacity and facility planning.

Product Scheduling; Conflict between the marketing group and the production

scheduleris common. Marketing often thinks that output can be increased or decreased immediately and tends to submit imperfect forecasts, accepts last minute orders, and promises short lead times. But the production schedule, once made, can be very inflexible.

Capacity/Facility Planning; At any given time, there are limits to the quantity of

products a firm can produce. Yet to meet sales goals or market share, marketing often wants to accept all orders. However, it typically takes a significant amount of time and expense to make major chnges in a firm's manufacturing capacity, thus creating potential friction between marketing and manufacturing regarding capacity issues.

3. Managing Dependability; 2. Managing Conformity

Managing dependability requires actions by both marketing and manufacturing. Specifically, tension often occurs related to delivery and high standards. However, rapid delivery may mean that the manufacturing has to maintain a large inventory, hurthermore, producing high quality products quickly is not always possible.

Deliveiy; Marketing sees delivery as a part of customer service. Late deliveries are a sign of poor service, resulting in customer dissatisfaction and lost sales. Manufacturing on the other hand, may think that marketing promises unrealistic delivery dates just to get to orders and blames marketing for not consulting the production schedule before making delivery promises.

Quality Control; Marketing frequently expects manufacturing to produce the 'perfect' product, while manufacturing believes that it is doing the best it can, given the complexity of the product, the constant production changes, and the number of the products it is expected to produce.

IT.2 Measurement of Marketing-Manufacturing Interface

A recent research by Akıncı (1993) provided a framework that shows the dimensions of marketing-manufacturing interface at the operational level, reproduced in Figure 3. The factors that affect these gaps were developed as hypotheses in the same study and were classified as industry specific and firm specific factors.

There exists four gaps which are measured quantitatively. These gaps are;

GAPl; The difference between the competitive advantages of the current product profile perceived by marketing and manufacturing people.

GAP2: The difference between the competitive advantages of the current product profile and the product profile that is suitable to market conditions, perceived by the

GAP3: The difference between the competitive advantages of the current product profile and the product profile that is suitable to manufacturing capabilities, perceived by the manufacturing people.

GAP4: The difference between the competitive advantages of the product profile suitable to market conditions and of the product profile that is suitable to current manufacturing capabilities.

in the questionnaires, competitive advantages are stated and each interviewee in the marketing and manufacturing departments rate on a scale from 7 (most important) to 1 (least important) according to the given criteria. These competitive advantages, stated by Hill (1991), are as follows; production according to customer specifications, wide range of products, new product introduction, fast lead times, product reliability and durability, on the time delivery, low price, after sales service, product with modern technology and ability to handle various order sizes. Each interviewee makes two ratings. An interviewee from the marketing department makes the first rating by considering his perception of current product profile's competitive advantages and the other rating by considering the competitive advantage of product profile syuitable to narket conditions. Similarly, an interviewee from the manufacturing department gives the rates by considering the perception of current product profile's competitive advantage and also competitive advantage of product profile suitable to manufacturing capabilities.

In calculating the gaps, the sum of absolute value of the differences between the perceptions is divided by sixty since tha maximum difference from the ten different criteria, each of which is rated on a scalle from 7 to 1 and has a maximum difference

In calculating the gaps,

GAP 1 is equal to division of the sum of the absolute differences in perceptions of the marketing and manufacturing people about the competitive advantages of the current product profile perceived, by sixty.

GAP2 is equal to division of the sum of the absolute differences between the competitive advantages of the current product profile and of the product profile that is suitable to market conditions, perceived by the marketing people, by sixty.

GAPS is equal to division of the sum of the absolute differences between the competitive advantages of the current product profile and the product profile that is suitable to manufacturing capabilities, perceived by the manufacturing people, by sixty.

GAP4 is equal to division of the sum of the absolute differences between the competitive advantages of the product profile suitable to market conditions and of the product profile that is suitable to current manufacturing conditions.

FIGURE 1.

Areas of Marketing -Manufacturing Interdependency

Capacity planning and long range sales forecasts: Manufacturing needs forecasts of aggregate market demand in order to decide how much capacity to build and what kind of equipment to add. Since forecasts are often wrong, capacity and equipment additions usually do not match demand exactly. When capacity is too low, marketing is faced with lost sales. When capacity is too high, manufacturing is faced with high costs and an underutilized facility.

Production scheduling/short-range sales forecastingrFrequent changes in production schedules may reverberate the system, causing missed shipments, backlogs, and wide swings in inventory levels. On the other hand, quick responses to the special needs of customers may be an important competitive priority.

Inventoiy and delivery: Manufacturing wants to use inventories to smooth production and lengthen runs while marketing wants to use inventories as a way of insuring fast customer delivery.

Quality assurance: Manufacturing may be using quality standards or quality monitoring procedures that do not measure the true parameters of quality from the customer's point of view. When marketing wants to add features and options to product designs, inspections procedures become more complicated and more expensive.

Breath of product line: While marketing wants to provide a broad product line as a way of increasing sales, increasing market share, improving reputation as a full line supplier, and improving customer responsiveness, manufacturing may want to keep the product line narrow as a way of keeping inventory, set-up, and chance over costs down.

Cost control: When manufacturing costs are high, marketing may blame manufacturing for not reducing costs to allow use of flexible pricing as a strategic marketing tool. On the other hand, manufacturing may blame high costs on marketing demands for a broad product line, high quality, and fast delivery.

New product introductions: New products require new processes and new equipment that make the manufacturing operation more complex and difficult to control. However, new products are one of the major tools marketing has for increasing sales and profitability.______________________________ ___________ Source. Shapiro,B.J.,"Can Marketing and Manufacturing Coexist?"

FIGURE 2.

A Typology of Conflict Areas between Marketing and Manufacturing

Area of Conflict Marketing objective Manufacturing objective Managing Diversity:

1 .Product line lenght/ Many and complex Few and simple

breadth models models

2. Product customization Customer specifications " Stock" products 3.Product line changes Product changes Planned, only necessary

immediately; high risk changes; low risk

Managing Conformity:

4.Product scheduling Constant change Inflexible

5. Capacity/ facility Accept all orders Critically evaluate

planning "fit" of orders

Managing Dependability:

6. Delivery Immediate: large As soon as possible:

inventory no inventory

7. Quality control High standards Reasonable control

Source: Crittenden, V.L., Gardiner, L.R.,Stam, A., "Reducing Conflict between Marketing and Manufacturing"

FIGURE 3.

Gaps in the Marketing and Manufacturing Interface at the Operational Level

MARICETING'S- PERCEPTION OF CURRENT PRODUCT PROFILE’S COMPETITIVE ADVANTAGES AGREEMENT DIMENSION GAP I MANUFACTURING'S PERCEPTION OF CURRENT PRODUCT PROFILE’S COMPETITIVE ADVANTAGES

GAP II MARKETING_DIMENSION

MARKETING'S PERCEPTION OF COMPETITIVE ADVANTAGE OF PRODUCT PROFILE SUITABLE TO MARKET CONDITIONS MANUFACTURING

DIMENSION GAP III

PRODUCT DIMENSION GAP IV w MANUFACTURING'S PERCEPTION OF COMPETITIVE ADVANTAGES OF PRODUCT PROFILE SUITABLE TO MANUFACTURING CAPABILITIES

Source: Karabati, S.; Paşa, M., "Pazarlama ve Üretim Birimlerinin Karşılıklı Uyumu", Faculty of Management of Bilkent University, 1993.

m . RESEARCH METHODOLOGY

In this study, the methodology used is a qualitative one in the sense that it is concerned with understanding the factors that influence the marketing and manufacturing interface within a business organization rather than measuring them. (Gordon and Langmaid, 1988) With this particular purpose, a tool was developed within the context of the study to help gather qualitative data within the organization. Questionnaires developed by Department of Management at Bilkent University (given in Appendix 1) are also used in this study to collect quantitative data about the interface.

As the qualitative methodology, a series of interviews constitutes the source of information for this study. The flexible interview structure enables the gathering of in- depth information from each respondent by changing the flow of interview due to the responses in order to reach to the necessary information. One-to-one interview structure was especially beneficial for the study, as businessman often tend to be interviewed alone (Gordon and Langmaid, 1988).

The questionnaires given in Appendix 1 is applied not only to functional managers icluding marketing and manufacturing but also to other members of the departments. The results are used for the measurement of gaps cited earlier (Akıncı, 1993), and for valuable recommendations. In addition, the guide developed by the Department of Management at Bilkent University is utilized for efficient conduct of the discussion.

IV. CASE STUDY

This study examines the producer of plaster and plaster boards which is an element of the advanced construction techniques. Biltepe Inc. is examined in order to decipher her competitive strategies from various aspects of the business life, which are marketing, sales, product line, finance, organization, quality, manufacturing technology. Marketing manufacturing interface within the company is also going to be defined.

In the first part, the industiy, advanced construction materials and techniques phenomena, the customer profile of the advanced construction materials are dealt in detail. The employment level of advanced construction materials and techniques in the market place and market demand for plaster boards as well as the trends in the market place are going to be discussed.

The second part of the study is composed of analyses of the company related issues which have been scrutinized from a strategic perspective. Following is some background information on advanced construction materials industry and Biltepe Inc..

ГУЛ. Industry Analysis of Advanced Construction Materials

rV.1.1. Industi*y Background

With the increase in the world population and the development of civilization, construction has been faster, more cost effective and of higher quality through more national or novel construction methods, techniques, advanced construction materials and improved organization models in order to satisfy the varying and increasing needs of human kind within a reasonable time span and in specified quality.

Advanced construction techniques are classified into three; • Industrialized construction systems and precasting, • Developed traditional systems or mold systems, • Utilization of contemporary construction materials.

ГУ. 1.2. Advanced Construction Materials

Pre-Mixed Concrete:

92 % of Turkish territory is affected by the fault line. Major reasons of earthquake related damages or demolition of buildings is the lower resistance of constructive concrete. However, the adoption of the new technology in concrete production plants; continuos quality control removes variation and failure, maintains standardization.

Half of the investments in Turkish economy are in the construction sector. Pre-mixed concrete has been essential in the sector, especially in large cities.

15 % of concrete produced are supplied by the pre-mixed concrete industry and the rest is produced at the construction sites. This in turn, causes the pre-mixed concrete consumption per capita to slack at 10 m^ while in 1992, Europe and US. consumed 1.75 m pre-mixed concrete per capita.

Aerated Autoclaved Concrete:

Until 1990, Turkish Ytong, Istanbul has been the sole producer of aerated autoclaved concrete. After that, Cimentas Aerated Autoclaved Concrete Factory, Izmir; Betopar Aerated Autoclaved Concrete Factory, Gebze in 1991 have been established and with the inclusion of Martu, Mardin which was established before but never started production. Four companies compose this section of the advanced construction materials industry. Production method is much the same in all countries, overlooking a few details.

Plaster Boards:

A plaster board is a construction element which is mass produced in the shape of smooth- surfaced boards, two faces covered with carton and inside of the board filled with plaster, in special or standard sizes.

Plaster is mixed with various chemicals and water to prepare the mortar. The two faces of the board are covered with a carton which is highly resistant and formed of long fibers. The carton gives strength to the board and enables the board to be cut precisely.

Three usage areas are identified :

1- lnside Wall: Plaster boards are mounted on constructive sheet metal profiles for the production of inside walls after the concrete structure of the building is completed. The joints of boards are filled with appropriate type plaster to prepare smooth surfaces ready for painting.

2- Suspension Ceilings: Galvanized metal sheet profiles are connected to present ceiling via sticks fixed. The metal profiles are coated with plaster boards.

3. Diy coating: Inside walls constructed with conventional construction elements like bricks are coated with plaster boards.

That plaster boards are fast and necessitate no further plastering, speeds up the completion of the buildings. The lightness of plaster boards and the support profiles enables the cost efficiency of the construction system and accelerates production. Construction cavities in the plaster board and the suspension ceiling systems alleviate the installation of clean and waste water pipes and the power system. The installations can be interfered from any point without any damage, when necessary. The surfaces of the material are appropriate for painting, papering and any decorative applications. Plaster boards are materials which are used in a dry environment and do not necessitate much cleaning efforts. The walls built through the system are thin which increases the net usage area. The lightness of the system relative to conventional methods saves steel and cross-section area of the concrete frame which keeps the building erect. Walls and ceilings can be disassembled when needed.

rv.1.3. Customer Potential of the Market

Potential customers of construction can be classified into three. These groups are discussed along with their properties.

a) Public Administration and Public Legal Persons

These institutions manage their construction activities through the OiFicial Decree of Bidding, even though the financial source is not the general budget. This, in turn, keeps them within the scope of the unit price mechanism of the Ministry of Public Works. However, The elements of the advanced construction techniques are not comprised in that frame. The public institutions cannot make use of advanced construction technologies. Especially two public entities; T. Emlakbank and Mass Housing Administration take advantage of using private bidding methods, not being bogged down with the official decree of bidding and make use of advanced technologies and succeed in their operations. Sufficient financial sources and standardization of the hoouses constructed account for part of their success.

b) Private Real and Legal Persons

The two subtitles; services and industry constitute the basic customer potential of advanced construction materials. Services sector builds plazas, grand hotels, tremendous trade centers, majestic administration buildings, mass dwelling sites where industry builds factories of all sizes, administration buildings and store rooms and advanced construction techniques are employed to a large extent by the two sectors. The last 10 years have witnessed the mentioned phenomenon. That the private real

and legal persons favor advanced construction technologies is an indication of how they value time and money.

c) Cooperatives

Housing cooperatives and business cooperatives are the sub-groups of the title. From 1988 on, when the mass dwelling credits were trivialized and especially after 1991, when the mass housing fund was joined to the general budget, cooperatives rely solely on the payments of the members by 80%. The situation prevents the cooperatives from the "rapid construction - rapid payment" model. They employ conventional construction methods which match their financial structures.

Among the business cooperatives, the most wide-spread and serious ones are Small Industry Cooperatives. A great many of them are supported by the Ministry of Industry financially. A small portion is managed by own efforts. The latter which is the smaller band of cooperatives is made up of partnerships which can make decisions separately and independently, favoring advanced construction techniques to start their businesses as soon as possible. However, the former cooperatives supported by the Ministry of Industry, even though no subjected to the official decree of bidding, are required to operate within that scope. In addition, the ministry credits granted are small in size which keeps the pace of the projects at a minimum. The construction of the workshops take very long time, sometimes the son being able to run the business which the father intended to as he took part in a cooperative.

IV.2.1. The Company

Biltepe Inc. was established in 1987 by the top management of Bilkent Holding, as the first company in Türkiye producing plaster boards. During their visits to USA the board of directors of Bilkent Holding recognized the plaster board technology and decided to establish a plant producing plaster boards in Türkiye to get benefit of the potential market. As the General Manager of Biltepe mentions, no feasibility analysis and no market research have been done to determine the potential market. However, the performance of Biltepe demonstrates the fact that this was not a wrong decision.

The company is fully automated in the production process. Because of this, the number of employees is not much when compared with the companies of the same size. Currently, 104 people are employed in Biltepe. Administrative personnel consist of around 35 people. The rest is support and production staff Only 7 people exist in the production unit. The top management people seem to be flexible in their jobs, and seem to be in teamwork behavior, although everyone again is in the need for general manager approval in certain cases.

IV.2.2. Products

Biltepe Co. Produces two categories of products which use gypsum as their main input; plaster boards and powder plaster.

Plaster Boards:

A plaster board contain paper and plaster as its main input. It is formed of a board of plaster coated with paper at two faces. Plaster Boards serve two main purposes in the constmction market:

• Decorative purposes

• Heat '& Noise Insulation purposes

In Turkey, as the insulation has not yet received considerable attention, so plaster boards are mainly used for decorative purposes.

Plaster Boards are used at various areas of application in buildings, as; for inside walls, dry coating of walls, at suspension ceilings.

There is a great potential market for plaster boards, since plaster boards have the following distinctive advantages: They are;

• inflammable • insulative

• light in weight (8.5 kg/m^) • easy to assemble

• easy to process & maintain

• hygienic(prevents reproduction of bacteria)

Powder Plaster:

Powder Plaster is produced from gypsum. There are various types of powder plasters produced at Biltepe Co.; categorized according to their usage purposes:

Filling Plaster for plaster boards; is used to fill the cavities at the joints of the plaster

boards after used.

Stucco Plaster; is applied to briquette and aerate concrete surfaces for heat and noise

insulation.

Tile Cast Plaster; is used by tile producers for shaping the mud in the tile casts and

provides strength and flatness in the produced tiles.

Ceiling Decoration Plaster; is used for ceiling decoration as well as for ordinary

construction.

IV.2.3. Capacity and Demand

The plaster board capacity of the company is 15.000.000 m^ anually. Plaster production capacity is currently 20.000 ton/year. The plaster production capacity will be increased to 300.000 ton/year this summer together with the new facilities being established. (See Figure 4). The total domestic demand for plaster is currently 400.000 ton/year. Biltepe was able to supply 21.000 ton/year (over capacity) of this total demand.

The total sales of Biltepe for plaster boards was 5.000.000 m^ in 1994. The total sales for 1995 is 7.000.000 m^ (which includes a 2.000.000 m^ purchase from Israel). Biltepe expects demand in 5 years to increase to 2.000.000 ton for plaster and 30.000.000 m2 for plaster boards.

FIGURE 4

Capacity and Demand Quantities

P r o d u c t C u r r e n t B ilte p e B ilte p e C a p a c ity F u tu r e (5 -y e a r)

D e m a n d S u p p ly 1995-1996 D e m a n d

1994 1994 E x p e c ta tio n

P la ste r 4 0 0 .000 tons 21.000 tons 300.000 tons 2.0 0 0 .0 0 0 tons

P la ste r B o ard 5.00 0 .0 0 0 щ 2 5.00 0 .0 0 0 m 2 15.000.000 m 2 30 .0 0 0 .0 0 0 m 2

Source; Finance Department of Biltepe Inc., 1996.

Turkish consumers are new to plaster boards and their benefits. It has been 5-6 years since Biltepe has introduced them to the market. Therefore it is taking time to get people to know about this product and use it. In luxurious hotels and luxurious houses plaster boards were used 5-6 years ago as decorative material. In recent years it is being used as suspension ceilings. The main usage in walls is not spread yet.

FIGURE 5

The Consumption Figures for Plaster Boards

C o u n tr y T o ta l C o n su m p tio n P e r c a p ita d e m a n d

U S A 2 .6 0 0 .0 0 0 .0 0 0 m 2 10 /person

E u ro p e 6 0 0 .0 0 0 .0 0 0 m 2 3 /person

T u rk ey 5.00 0 .0 0 0 m 2 0.1 /person

Source: Marketing Department of Biltepe Inc., 1996.

The demand when looked at from the regional perspective is highest in the Marmara region which makes up more than 75% of the total demand in Turkey. The below figure gives a visual view:

FIGURE 6

C urrent Usage of Plaster Boards According to Region

Source: Finance Department of Biltepe Inc., 1996.

rV.2.4. Distribution Channels

There are currently 103 dealers which sell Biltepe products. All of these dealers have personnel which are trained in installation of plaster boards. Biltepe does not sell its products directly to any domestic customer who apply to them, other than its dealers, even in cases of large amounts of purchase. Only in case of export oriented purchasers (either direct foreign or domestic exporters) they accept orders from non-dealers.

The company does not want to increase the current number of dealers because they do not want to deal with too many, as it further gets unmanageable. They want their own dealers to find themselves their own sub-dealers.

The main raw materials for both plaster and plaster board products is gypsum which is obtained from Bala 80 km far away from Ankara. The current cost is 400TL/kg (of which half is transportation cost to Biltepe). Recently they were working with numerous suppliers in the same region. Now they are working only with a single supplier. Although Biltepe has its own mine in the region, they are not operating it. By using a single supplier they are able to have more consistent quality. It is easier for them to control the quality from a single supplier.

Other raw materials are paper and styrohor (foam) which come as imported material. Plus starch, natural gas and electricity.

The best quality gypsum mines in the world are located in Turkey and Spain. Their white color is a good quality characteristic.

ГѴ.2.6. Technology

Technology used in the plaster board production is German. Since the process is already known, they don't buy know-how related to the process. The technology for the plaster production unit (the new investment which will increase capacity to 300.000 tons/year) is US. They do not have any R&D efforts for the current process and this gives them cost advantage with respect to their European competitors. Only 7 people are working in the main production unit which is highly automated. A total of 40-60 people are working in the production department (who do other carrying

production unit they do not increase the number of employees. They have obtained ISO 9002.

IV.2.7. Promotion

Commercials on TV are given by barter. Biltepe decorates the TV shows by using plaster boards, in return for commercials ( i.e. Miss Turkey and Best Model of 1994- 95 programmes). They benefit from this greatly, since it would cost them about 5-10 times more if they had paid in cash. In this way they get a chance to commercialize there product on TV shows and get the ALCIPAN brand into customers minds.

ALt^IPAN is a registered trademark which they are trying to impose like a brand which gives its name to the product category. They are taking the advantage of being the first in the Turkish market.

Biltepe is also giving advertisements to sector magazines and journals. They have had a survey conducted by PIAR to determine the awareness of plaster boards among architects. The result was 65% aware in the year 1992. Today this percentage has increased to 95%.

Their short term strategy is to promote and impose the AL^IPAN brand to the market. Their next step is to promote plaster products. In these promotions, the most important target for Biltepe are the foremen who are the direct users, not the retailers or even the customers take up such importance. Their promotions will directly include the foremen starting in April-May (which is the start of the season).

The biggest handicap in exporting plaster boards is the high cost of transportation especially by ground. Export is most feasible by ship. Biltepe is currently exporting its plaster boards to Israel, Russia, Central Asian Turkish Republics, Dubai. Export costs to Europe are mainly the transportation costs excluding the cost of board, (to Germany for example) by ground, it is 1.5 times of the domestic price of plaster board. For this reason it is not competitive in these places at those prices, although the domestic price is competitive with respect to foreign domestic prices. One of the reasons of this price advantage comes from the fact that Biltepe doesn't have R&D costs, which European producers do.

Customs Union allows the costs of plaster boards to drop even further since 45% of the cost of a board is due to imported paper. Yet, Customs Union has little or no effect on both European plaster board producers and Biltepe as transportation is costly across land. There is a good chance only for shipping the products to coast countries. Export is done both by Biltepe itself and by exporters (which may be a dealer or non­ dealer) who want to export Biltepe products.

rV.2.9. Biltepe’s Future Expectations

The company targets consumption per capita to be 1 m^/person in 5-10 years. For plaster this target is 2.000.000 tons total consumption in 5 years. Their main target usage is to have plaster boards applied in division walls (in which Turkey is not using yet widely). Therefore they are trying to get into mass housing projects. In order to

every year. They are aware that they will not be able to expand the usage of their products unless someone is able to apply them. Commercials would not help alone! Their main challenge is in changing the mentality of Turkish consumers so that they understand the benefits (heat and noise insulation) of these plaster boards. Their strategy aims at decreasing the time for this change of mentality by increasing the number of trainees for plaster boards per year. The current trained people per year is 650/year. Their short term target is to increase this number to 2000/year. They believe that advertisements will not be effective unless foremen know how to apply them. The expert installation is important for keeping up a good quality image of the product. Therefore, they want these boards to be installed only by qualified foremen. ALCIPAN's success is directly related with the success of these foremen applying it. Therefore, they are giving critical importance to training qualified foremen.

IV.2.10. Additional Facts

In the domestic market ABS, a plaster and plaster board manufacturing company, has its main production facility in Golbasi having a production capacity of 225.000 tons of plaster/year. They currently hold the largest share in the plaster market. In Autumn 1995 they opened up their plaster board production facility which has a capacity of 12-13 million m^/year.

In Europe there are three main plaster board producers which are dominating the market. They are continuously taking over plaster board producing companies to produce under their name. They have also offered to takeover Biltepe and ABS. But both have rejected.

FIGURE 7

The Plaster Board Weights Per Kilogram in the World Market

Counti*y Weight per kg

USA 7.5 kg/m^

Turkey 8.5 kg/m2

Europe 10 kg/m2

Source; Manufacturing Department of Biltepe Inc., 1996.

Turkish plaster boards are considered to have the most desirable weight, its significance is on the optimim weigth in order to decrease the weigth on the buildings. Biltepe has accomplished in making 8.5 kg/m^ the TSE standard.

IV. ANALYSIS

This chapter aims to analyze the findings of the interviews carried out at Biltepe A.§. from the point of view of the marketing - manufacturing interface. Interview scripts are in Appendix 3. Besides, the findings of the quantitative tool developed by Management Department of Bilkent University applied in Biltepe A. §. are examined. The factors that have an influence on the interface are grouped and discussed under following sub-headings.

rV.l. Financial Analysis

When we consider the inventory turnover ratio of Biltepe, we see that it is well above the non-metal mine industry averages between 1991-1993. The firm is operating well below its capacity and is able to satisfy the orders without manufacturing to stock and, therefore, avoids the opportunity cost of holding inventoiy.

Biltepe has very low debt ratios, both long and short term, with respect to the industry averages. The financial power of the Tepe group is a great advantage for Biltepe. Biltepe is also able to get credits easily from banks at prime rate with the advantage of acting within Tepe group.

The rate of return on assets & equity and profit margin ratios shows that Biltepe has increasing her profitability between the years 1991-1993. The profitability of Biltepe is above the industry averages. What is interesting is that the income from operations is 2/3 of the net income in 1993. Biltepe has generated profits from activities other than the operations, such as repurchasement agreements, exchange in 1993.

Biltepe has been continuously investing to increase her capacity for plaster at her existing plant since 1993. The financial crisis in 1994 has not prevented the firm from her investment efforts. The financial ratios of the firm was above the industiy averages till 1994. If the financial situation (profitability) of the firm for 1994 is observed , the firm may be concluded to be performing bad, but this is due to the investment spending continued during the crisis. The company has no problem in collecting its Accounts Receiveable. Its Accounts Receiveable turnover ratios are above the industry averages during the years 1991-1993. ( See Figure 8).

FIGURE 8

Financial Indicators of Biltepe Inc.

1991 1992 1993

Profitability Biltepe Ind.

aver.

Biltepe Ind. aver.

Biltepe Ind. aver.

ROA(operalions) 0.18 0.154 0.175 0.185 0.248 0.215

RO A (N et In c o m e A fte r Tax) -0.092 0.084 0.157 0.088 _{0.332 0.151}

ROE(operations) 0.306 0.297 0.218 0.353 0.273 0.384

R O E (N e t In c o m e A fte r Tax) 0.157 0.162 0.196 0.168 0.366 _0.271

Profit margin -0.084 0.008 0.191 0.079 0.304 0.129

Total assets turnover 1.1 1.04 0.82 1.12 1.09 1.17

A /R turnover 14.02 5.83 11.53 5.74 29.18 5.87 Inventory turnover 13.05 4.41 5.51 4.99 7.46 5.1 Risk Liquidity Current ratio 0.92 1.43 2.5 1.44 3.87 1.43 Q uick ratio 0.53 0.72 1.65 0.77 1.95 0.86 D ebt

Short term liab./Total Liah. & stock, eq.

0.31 0.37 0.16 0.42 0.076 0.39

Long term liab./Total Liab. & stock, eq.

0.1 0.117 0.042 0.11 0.018 0.107

rv.2. Industry Analysis

Threat of Enti-y:

a) Economies o f Scale: The initial fixed costs constitute most of the capital required to establish such a plant. Hence increasing production reduces fixed cost coverage. Therefore, economies of scale is an important factor for the plaster and plaster board industries. Currently there is no major competitor for plaster boards, thus profit margins are not low. The potential entrance will force the industry to operate on lower profit margins, as a result the firms are to be forced to achieve economies of scale. If not, they are going to encounter with cost disadvantages.

b) Product Differentiation: Specialty plaster and plaster boards can be considered as

differentiated products in construction industry. Their initial costs are higher than the substitutes. Since customers mainly take care of the quality of plaster and plaster boards, the potential entrants should produce high quality products. Both decorative and insulation usage of these products will base their customer loyalty on high perceived value.

c) Capital Requirements: A 15 million squares meter annual capacity of plaster boards requires 20 million DM of initial investment. For the technology used is ready, there exists no R&D costs. However, the companies to enter into plaster and plaster boards industry should take care of the expenditures on heavy advertising and promotion to establish a brand image.

d) Cost Disadvantages Independent o f Size: There is no cost disadvantage related with proprietary technology, and R&D activities. However, most important cost disadvantage is related with learning curve effect. The number of qualified workforce in the industry is not sufficient. Therefore, the potential entrants will face quality problems due to unqualified workforce and learning curve effects.

e) Access to Distribution Channels: The companies already in construction sector have easy access to distribution channels. However, the firms planning to enter from different industries will have problems in accessing channels.

Bargaining Power of Suppliers:

The main suppliers are domestic and there are more than 3 suppliers for each raw material except one of them. There is only one supplier of Stric Acid in Turkey and relations of Biltepe with this supplier is very well. Only paper is imported from numerously available European suppliers. Switching a supplier does not alter fixed costs. There is no threat of forward integration of suppliers, but Biltepe can go into backward integration for some of the raw materials like gypsum. ABS, the main competitor of Biltepe in plaster powder production, has gone backward integration in production of gypsum. There is no threat of forward integration of suppliers except gypsum producers. Nevertheless, gypsum producers will have great difficulties in raising the necessary capital.

As a result, it can be said that suppliers have no bargaining power upon Biltepe. On the contrary, Biltepe is powerful against most of the suppliers.

Bargaining Power of Buyers:

For plaster boards, Biltepe currently is the leading firm. Selling plaster boards of Biltepe is profitable to the retailer. Retailers are free to offer whatever price they want. Thus, buyers except Emlakbank have no bargaining power for plaster boards. Emlakbank is a veiy powerful buyer of boards and have bargaining power to some extent. Because, it buys plaster boards in considerable amounts of volumes from Biltepe.

In plaster powder, ABS is the market leader and most foremen prefer ABS’s powder. There are also lots of firms producing plaster powder. Moreover, Biltepe’s plaster powder is not a differentiated one. Hence, buyers have bargaining power on plaster powder. There is no threat of buyer’s backward integration.

Threat of Substitutes:

There is no substitute of plaster boards when used for decorative purposes. None of the decorative materials give the advantages that plaster boards provide. When used for insulation purposed aerated autoclaved concrete and ytong may be considered as a substitute. But, plaster boards are superior in many aspects to these like ease of installation, cost, and lightness.

Determinants of Competition:

There are several factors that determine the intensity of competition.

Both construction sector and plaster industry within the sector have been growing. According to Biltepe’s estimations the growth of plaster boards market will be greater than the sector’s growth. This growth attracted ABS and ASTAS, and it is likely that there will be others. Company reputation and brand image are among the important factors which are effective in consumer’s behavior.

Entry and exit barriers are not so important for plaster powder production. But entering into and exiting from plaster board production is a lot more challenging. Buyers have no switching costs for plaster powder.

Considering these, it can be said that there is strong competition in plaster production. And, in the near future the competition in plaster boards production is going to be fierce.

rV.3. Competitor Analysis

The competitors can be divided into two categories in terms of product groups: Plaster powder and plaster boards.

For plaster board production Biltepe has no current competitor. In the future ABS and ASTAS are expected to reach almost the same production capacities of Biltepe. Biltepe, being the first in the market and having a strong reputation due to Tepe Group, bears an initial competitive advantage against potential entrants. ABS and

ASTAS first produced plaster powder, then entered into board production, whereas Biltepe first started board production then started producing powder.

ABS is the industry leader in plaster production. According to the surveys with retailers, most of the foremen prefer ABS plaster powder. Because, ABS is the first and most credible company in this business. Most of the foremen’s perceived value is high when they use ABS’s powder plaster. With this good reputation and substantial power ABS has the tools for market development and has the power to deter potential entrants. However, despite these strengths, ABS has also some weaknesses. It is mainly a family company and it has no institutionalized organizational structure. In another words, the business is done in a traditional manner there.

ASTAS and ENTEGRE are the other main competitors and they produce specialty plaster powder. When they are compared with Biltepe and ABS it can be said that they are not so strong in terms of their financial power, organizational structure and production volumes and access to the channel. Therefore, the threat of entry of these firms is not as great as the threat of entry of ABS.

Although the competition is strong in plaster powder production, there exists no price war in the market. A possible price war will be harmful for both the market and the companies in the business.

IV»4. Marketing Manufacturine Interface in Biltepe

The interviews indicated that they share a common perception about the marketing manufacturing interface and they believe in the importance of this interface in

marketing should carry the customers' perception about the products to the factory and also it should follow the trend of the market. Both marketing and manufacturing managers are agree on that marketing -manufacturing interface is the flow of information from market to production that conveys to suppliers and the efficient flow of the feedback from suppliers and production to customers through marketing channel.

IV.5. Production Planning and Sales Forecast

Production planning and sales forecast, which is a potential problem area for marketing and manufacturing interface, is not the problematic subject in Biltepe A.§.. Managers of both departments stated that they have never faced such a problem, since they are the only firm in the industry. Therefore they know the market demand and potential demand increase in their products. The demand match the available capacity and equipment.

The production of plaster boards shows a learning curve effect. Initially, Biltepe has encountered problems in the process and as time passed they learnt how to tackle these problems and a great progress has been achieved. This gives another competitive advantage for Biltepe.

Tepe Group has a very good reputation in the businesses that it is involved. Biltepe, as one of the companies in the group, also bears the same strong image. Al9ipan is the

brand name of plaster boards that Biltepe produces. This name has been used as a synonym for plaster boards. Even after the other firms’ entrance to the board market,

Besides its advantages in cost, case of application and hygiene, plaster boards have the utility of sound and heat insulation. Biltepe is among a few companies that produce special plaster powder which possesses decorative as well as insulation properties.

The products have a slightly higher cost of initial investment than conventional methods, but the pay off is much higher, a situation which is decisive in the consumption volumes of these products. Only when there is widespread appreciation of insulation materials, and the merits of insulation which apparently is absent in Turkey.

At present, plaster boards and plaster powder are marketed through the decorative advantages they provide. However, the emphasis on insulation would create a means of higher value delivery to the customer. That potential can be activated by managing change in the environment towards the direction where insulation materials and insulated buildings are favored, which is a task to transcending the capacity of Biltepe.

IV.6. Quality Assurance

Biltepe has spent great efforts to improve the quality in the company. As a result of these efforts, it applied for ISO 9002 and got it in the first inspection. ISO 9002 has empowered the company’s export abilities. None of its competitors currently have ISO 9002 certificates. Manufacturing and marketing people define quality as total "customer satisfaction". Manufacturing manager especially emphasizes the importance of quality rather than the quantity gained through production. He also adds that their production is highly in conformance with ISO 9002 measures. Most important quality factor according to marketing manager's point of view is reliability rather than price

related issues. This supports the idea that marketing and manufacturing people’s perception of quality do not differ and have a common definition of quality.

1Y.7. New Product Introduction

Developing a new product is first realized by marketing department through their market research. Marketing tries to satisfy its customers by making modifications where necessary in existing models or they can propose manufacturing of a new model. Marketing manager has stated that the demand for new product introduction generally searched by the marketing department and left to newly formed R&D department in order to define the necessary specifications of the new product. After the introduction of the idea of new product development, marketing, manufacturing and R&D departments work collaboratively.

rv.8» Breadth of Product Line

Both marketing and manufacturing departments are proud of their products' perception within the market and they state that they have good facilities to improve an existing product or to release a new product to the market. Both managers also state that they have some special project related to new product innovation and these projects will come true in a short time. Powder plaster is produced from gypsum. In addition to plaster board, there are eight kinds of plaster powders produced at Biltepe A.$., satin stucco plaster, filling plaster for plaster boards, stucco plaster, tile cast plaster, and ceiling decoration plaster are some of them.

Although both marketing and manufacturing managers claimed that personnel is evaluated according to performance, there is no formal and well established personnel appraisal system. The current approach is subjective. Manufacturing manager says that their personnel are motivated and happy with their working conditions in the company. Personnel are evaluated through their conformity with the corporate culture. He also states that from time to time they reward their personnel when they deserve this.

rV.lO. Stability of Indiistiw

Advanced construction materials industry is defined as stable by both the marketing and manufacturing managers. A regular and standard increase in the market has been observed by the marketing department.

IV .ll. Oreanizational Climate

The organization of Biltepe is not hierarchical. Each employee has the right to make suggestions to improve the process. The attempts to establish TQM in the company also supports a flat organizational structure.

Biltepe has a well established organizational structure, clearly defined finance, marketing and production functions and a flexible decision making phenomena. This gives advantage to Biltepe because its main competitors are mainly family companies and do not have this type of institutionalized structure.

The organization is very flat at Biltepe. There exists no formal organizational chart. Instead organizational divisions are given as follows:

Production Marketing Quality Procurement Commercial Financial

Project and Maintenance Administrative

Human Resources

The general manager doesn’t exist in this scheme. The organizational divisions are considered to be very interrelated. But actually it is clear that there is great dependency to the general manager in most situations. So what is seen on paper as a flat organization actually gets a belly fatness since all divisions show great dependency to the general manager. But on the other hand the strategic decisions come from down-to-bottom. That is all divisions prepare their own strategic goals and submit them to the general manager for approval. Then these submissions are all gathered in a single booklet so that all divisions know about the other divisions’ goals.

In Biltepe :

• Training of newly admitted workers are done through experienced workers. • Job training is an essential part of job recruitment.

Marketing activities that Biltepe perform can be classified as follows:

• Advertisements in TV, newspapers and professional magazines

• Training of foremen on the usage of the product and by this way increasing the number of foremen able to apply plaster boards.

• The articles published in professional magazines and newspapers to increase the consciousness fo r' Al9ipan'.

• Fair activities of both Biltepe and retailers • Local/regional activities performed by retailers

Biltepe claims that the effect of advertising on sales is lower than expected.

The plaster powder and plaster board that the market demands are high quality ones. Therefore, the price is a secondary factor in buyer's perceived value. Biltepe offers high quality plaster boards. It has difficulties in plaster powder because according to public opinion, ABS's product is the higher quality one. And actually ABS is better than Biltepe in terms of plaster powder quality.

TV. 13. Measurement of the Gaps in Marketing-Manufacturine Interface in Biltene inc.

The results of the questionnaires applied in marketing and manufacturing departments of Biltepe Inc. are given in Figure 9. Marketing people have given the most importance to 'after sales servive' as the competitive advantage of both current

'fast lead times' is ranked as the least important competitive aspect of the current products and products that best suit to marketing capabilities by the marketing people.

Manufacturing people have ranked 'production according to customer specifications' as the first and product reliability and durability' as the second important competitive aspects of current product profile. Manufacturing people have given the most importance to 'production according to customer specifications' that its competitive advantage of product is suitable to its machinery. Both groups have ranked 'low price' as the least important competitive advantage of current and ideal product profiles.

The gaps of the interface for Biltepe Inc. is given in Figure 10. Gaps in the marketing manufacturing interface of Biltepe were calculated as given below;

GAP I GAP II GAP HI GAP IV

11.7 % 16.7 % 9.6 % 17.1 %

Here it is observed that GAP I and GAP III have the lowest ratings. This shows that the difference between the competitive advantages of the current product profile perceived by marketing and manufacturing people are quiet low compared to GAP II and GAP IV. It is seen that by observing the lowest rating in GAP III, it can be said that there is not much difference between the competitive advantage of the current product profile and the product profile that is suitable to manufacturing capabilities. Gap III shows that marketing department in a sense takes into account the product specifications in new product introduction.

II in between the competitive advantage of the current product profile and the product profile that is suitable to manufacturing capabilities, perceived by the marketing people. Gap IV (17.1%) is related with the product dimension. It is observed by GAP IV that the highest difference between the competitive advantage of the product profile suitable to market conditions of the product profile that is suitable to current manufacturing capabilities.

FIGURE 9

Results of the Sui*vey Applied at Biltepe Inc. (average ratings)

COMPETITIVE ADVANTAGE PC PS MC MS

Production according to customer specs. 6.75 7.00 5.00 6.00

Wide range of products 5.25 6.00 6.00 6.00

New product introduction 5.00 5.50 7.00 5.00

Fast lead times 6.00 5.00 6.00 5.00

Product reliability and durability 7.00 7.00 7.00 5.00

On time delivery 6.50 5.50 6.00 7.00

Low prices 4.25 4.25 4.00 4.00

After sales services 5.25 4.50 6.00 7.00

Product with modern technology 6.25 7.00 7.00 5.00

Ability to handle various order sizes 6.25 5.50 6.00 5.00

PC: Manufacturing's perception of current product profile's competitive advantage

PS: Manufacturing's perception of competitive advantage of product suitable to its machinery MC: Marketing's perception of current product profile's competitive advantage

FIGURE 10.

Gaps in the Marketing and Manufacturing Interface in Biltepe Inc.

MARICETING'S PERCEPTION OF CURRENT PRODUCT PROFILE’S COMPETITIVE ADVANTAGES AGREEMENT DIMENSION 11.7% MANUFACTURING'S PERCEPTION OF CURRENT PRODUCT PROFILE’S COMPETITIVE ADVANTAGES

16.7% MARKETING_DIMENSION MANUFACTURING_DIMENSION 9.6%

^ MARKETING'S PRODUCT PERCEPTION OF DIMENSION COMPETITIVE ADVANTAGE OF PRODUCT PROFILE . SUITABLE TO MARKET 17.1% CONDITIONS MANUFACTURING'S PERCEPTION OF COMPETITIVE ADVANTAGES OF PRODUCT PROFILE SUITABLE TO MANUFACTURING CAPABILITIES