B2B AND B2C MARKETING :Many clear distinctions can be found between

B2B (business to business) and B2C (business to consumer) marketing. The two categories
employ similar marketing programs such as direct marketing, internet marketing, and
advertising and public relations. But they differ in what these programs say, in the
execution of these programs and the result of the marketing activities. Both B2B and the
B2C employ the same initial steps in developing a marketing strategy. From the point where
you spot who the customer is and why they want to hear your message, the marketing
activities diverge.
Based on relationship building marketing efforts, B2B marketing explicitly caters one
business to another business. Therefore, it maximizes the value of the relationship.
Normally small, focused target market, B2B features a multi-step buying process and longer
sales cycle. Focusing mainly on educational and awareness building activities, its brand
identity is created on personal relationship. The business value determines its rational
buying decisions.
B2C marketing focuses on a group or target consumer in order to disclose, sell or market
services or goods to the community. Its ultimate aim is to change shoppers into buyers as
forcefully and constantly as possible. B2C is product driven and maximizes the value of the
transaction. It usually provides in-house service or maintenance software networks for other
organizations to exploit so as to lift marketing, sales, profits and efficiency. Examples
include marketing sites and anything that targets business holders, decision makers and
managers.
B2C features a large target market, single step buying process and shorter sales cycle.
Repetition and imagery create its brand identity. B2C focuses on merchandising and point of
buying activities including coupons, displays and store fronts. Basically any business that
offers a retail product to the public comes under this type.
A strong brand is essential for both B2B and B2C marketing. In B2C markets, the brand
encourages the shopper to purchase, remain loyal and potentially pay a higher price. With
B2B, it will only help you be considered, not essentially selected. The buyer's emotional
view on the purchase is the bottom line of these two markets. Consumers make purchase
decisions based on security, status, quality and comfort. The buying decisions of business
buyers depend on increasing profitability, reducing costs and enhancing productivity.

Business To Business Marketing provides detailed information on Business To Business

Marketing, Business To Business Email Marketing, Business To Business Marketing
Strategies, Business To Business Internet Marketing and more. Business To Business
Marketing is affiliated with Network Marketing Opportunities.

Concept of marketing:
The Marketing Concepts have evolved during the period of human existence. Chronologically
they are :
1. Exchange Concept
2. Production Concept,
 3. Product Concept,
4. Selling Concept,
5. Marketing Concept,
6. Holistic Marketing Concept.
Now we are required to explain the difference between "PRODUCTION", "PRODUCT" &
MARKETING" concepts. Here they are :
1. Production Concept - This concept is one of the oldest, and suggests that the consumers
will like to buy the products which are available easily, cheaply & widely. So the
marketers must have a mass production facility (efficient production) with low price
( cost efficiency) and make it available very near to the customers (mass distribution).
This concept is adopted when the Company wants to expand.
2. Product Concept - This is the next step of evolution of marketing concepts. It depicts that
customers will go for those products which offer quality, utility, features, performance,
value, benefits, etc. So the marketers must improve the products in an innovative way &
continuously. This is more often accompanied by a suitable pricing, distribution,
promotion (all the 4Ps of marketing).
3. Marketing Concept - This concept was evolved in the 1950s, and for the first time the
attention was shifted to Customers. Instead of concentrating on the Products /
Production / Selling, the business became "Customer Oriented". The "Make & Sell"
philosophy gave way to the "Sense & Respond" philosophy. Instead of finding the right
customer for the product, the marketer now has to find the right product for the customer.
This concept holds the secret of the company being more effective than its competitors in
creating, delivering & communicating superior value to the targeted customers.
-

Customer satisfaction, a business term, is a measure of how

products and services supplied by a company meet or surpass customer expectation. It is
seen as a key performance indicator within business and is part of the four perspectives of a
Balanced Scorecard.
In a competitive marketplace where businesses compete for customers, customer
satisfaction is seen as a key differentiator and increasingly has become a key element of
business strategy.[1]
There is a substantial body of empirical literature that establishes the benefits of customer
satisfaction for firms.

Measuring customer satisfaction

Organizations are increasingly interested in retaining existing customers while targeting
non-customers;[2] measuring customer satisfaction provides an indication of how successful
the organization is at providing products and/or services to the marketplace.
Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of
the state of satisfaction will vary from person to person and product/service to
product/service. The state of satisfaction depends on a number of both psychological and
physical variables which correlate with satisfaction behaviors such as return and recommend
rate. The level of satisfaction can also vary depending on other options the customer may
have and other products against which the customer can compare the organization's
products.
Because satisfaction is basically a psychological state, care should be taken in the effort of
quantitative measurement, although a large quantity of research in this area has recently
been developed. Work done by Berry (Bart Allen) and Brodeur between 1990 and 1998
defined ten 'Quality Values' which influence satisfaction behavior, further expanded by Berry
in 2002 and known as the ten domains of satisfaction. These ten domains of satisfaction
include: Quality, Value, Timeliness, Efficiency, Ease of Access, Environment, Inter-
departmental Teamwork, Front line Service Behaviors, Commitment to the Customer and
Innovation. These factors are emphasized for continuous improvement and organizational
change measurement and are most often utilized to develop the architecture for satisfaction
measurement as an integrated model. Work done by Parasuraman, Zeithaml and Berry
(Leonard L) [3] between 1985 and 1988 provides the basis for the measurement of customer
satisfaction with a service by using the gap between the customer's expectation of
performance and their perceived experience of performance. This provides the measurer
with a satisfaction "gap" which is objective and quantitative in nature. Work done by Cronin
and Taylor propose the "confirmation/disconfirmation" theory of combining the "gap"
described by Parasuraman, Zeithaml and Berry as two different measures (perception and
expectation of performance) into a single measurement of performance according to
expectation. According to Garbrand, customer satisfaction equals perception of performance
divided by expectation of performance.
The usual measures of customer satisfaction involve a survey [4] with a set of statements
using a Likert Technique or scale. The customer is asked to evaluate each statement and in
term of their perception and expectation of performance of the organization being
measured.

Methodologies
This section may contain excessive, poor or irrelevant examples. You can
improve the article by adding more descriptive text and removing less pertinent
examples.

American Customer Satisfaction Index (ACSI) is a scientific standard of customer

satisfaction. Academic research has shown that the national ACSI score is a strong predictor
of Gross Domestic Product (GDP) growth, and an even stronger predictor of Personal
Consumption Expenditure (PCE) growth. On the microeconomic level, research has shown
that ACSI data predicts stock market performance, both for market indices and for
individually traded companies. Increasing ACSI scores has been shown to predict loyalty,
word-of-mouth recommendations, and purchase behavior. The ACSI measures customer
satisfaction annually for more than 200 companies in 43 industries and 10 economic
sectors. In addition to quarterly reports, the ACSI methodology can be applied to private
sector companies and government agencies in order to improve loyalty and purchase intent.
Two companies have been licensed to apply the methodology of the ACSI for both the
private and public sector: CFI Group, Inc.applies the methodology of the ACSI offline, and
Foresee Results applies the ACSI to websites and other online initiatives
The Kano model is a theory of product development and customer satisfaction developed in
the 1980s by Professor Noriaki Kano that classifies customer preferences into five
categories: Attractive, One-Dimensional, Must-Be, Indifferent, Reverse. The Kano model
offers some insight into the product attributes which are perceived to be important to
customers. Kano also produced a methodology for mapping consumer responses to
questionnaires onto his model.
SERVQUAL or RATER is a service-quality framework that has been incorporated into
customer-satisfaction surveys (e.g., the revised Norwegian Customer Satisfaction
Barometer[5]) to indicate the gap between customer expectations and experience.
J.D. Power and Associates provides another measure of customer satisfaction, known for its
top-box approach and automotive industry rankings. J.D. Power and Associates' marketing
research consists primarily of consumer surveys and is publicly known for the value of its
product awards.
Other research and consulting firms have customer satisfaction solutions as well. These
include A.T. Kearney's Customer Satisfaction Audit process[6], which incorporates the
Stages of Excellence framework and which helps define a company’s status against eight
critically identified dimensions.

Improving Customer Satisfaction

Published standards exist to help organizations develop their current levels of customer
satisfaction. The International Customer Service Institute (TICSI) has released The
International Customer Service Standard (TICSS). TICSS enables organizations to focus
their attention on delivering excellence in the management of customer service, whilst at
the same time providing recognition of success through a 3rd Party registration scheme.
TICSS focuses an organization’s attention on delivering increased customer satisfaction by
helping the organization through a Service Quality Model.
TICSS Service Quality Model uses the 5 P's - Policy, Processes, People, Premises,
Product/Services, as well as performance measurement. The implementation of a customer
service standard should lead to higher levels of customer satisfaction, which in turn
influences customer retention and customer loyalty.

Value chain:
The value chain, also known as value chain analysis, is a concept from business
management that was first described and popularized by Michael Porter in his 1985 best-
seller, Competitive Advantage: Creating and Sustaining Superior Performance. A value chain
is a chain of activities. Products pass through all activities of the chain in order and at each
activity the product gains some value. The chain of activities gives the products more added
value than the sum of added values of all activities. It is important not to mix the concept of
the value chain with the costs occurring throughout the activities. A diamond cutter can be
used as an example of the difference. The cutting activity may have a low cost, but the
activity adds much of the value to the end product, since a rough diamond is significantly
less valuable than a cut diamond.
The value chain categorizes the generic value-adding activities of an organization. The
"primary activities" include: inbound logistics, operations (production), outbound logistics,
marketing and sales (demand), and services (maintenance). The "support activities"
include: administrative infrastructure management, human resource management,
technology (R&D), and procurement. The costs and value drivers are identified for each
value activity. The value chain framework quickly made its way to the forefront of
management thought as a powerful analysis tool for strategic planning. The simpler concept
of value streams, a cross-functional process which was developed over the next decade,[1]
had some success in the early 1990s[2].
The value-chain concept has been extended beyond individual organizations. It can apply to
whole supply chains and distribution networks. The delivery of a mix of products and
services to the end customer will mobilize different economic factors, each managing its
own value chain. The industry wide synchronized interactions of those local value chains
create an extended value chain, sometimes global in extent. Porter terms this larger
interconnected system of value chains the "value system." A value system includes the
value chains of a firm's supplier (and their suppliers all the way back), the firm itself, the
firm distribution channels, and the firm's buyers (and presumably extended to the buyers of
their products, and so on).
Capturing the value generated along the chain is the new approach taken by many
management strategists. For example, a manufacturer might require its parts suppliers to
be located nearby its assembly plant to minimize the cost of transportation. By exploiting
the upstream and downstream information flowing along the value chain, the firms may try
to bypass the intermediaries creating new business models, or in other ways create
improvements in its value system.
The Supply-Chain Council, a global trade consortium in operation with over 700 member
companies, governmental, academic, and consulting groups participating in the last 10
years, manages the Supply-Chain Operations Reference (SCOR), the de facto universal
reference model for Supply Chain including Planning, Procurement, Manufacturing, Order
Management, Logistics, Returns, and Retail; Product and Service Design including Design
Planning, Research, Prototyping, Integration, Launch and Revision, and Sales including
CRM, Service Support, Sales, and Contract Management which are congruent to the Porter
framework. The SCOR framework has been adopted by hundreds of companies as well as
national entities as a standard for business excellence, and the US DOD has adopted the
newly-launched Design-Chain Operations Reference (DCOR) framework for product
design as a standard to use for managing their development processes. In addition to
process elements, these reference frameworks also maintain a vast database of standard
process metrics aligned to the Porter model, as well as a large and constantly researched
database of prescriptive universal best practices for process execution.

Customer retention:Customer Retention marketing is a tactically-driven

approach based on customer behavior. It's the core activity going on behind the scenes in
Relationship Marketing, Loyalty Marketing, Database Marketing, Permission Marketing, and
so forth. Here’s the basic philosophy of a retention-oriented marketer:

1. Past and Current customer behavior is the best predictor of Future customer
behavior. Think about it. In general, it is more often true than not true, and when

it comes to action-oriented activities like making purchases and visiting web sites,
the concept really shines through. We are talking about actual behavior here, not

implied behavior. Being a 35-year-old woman is not a behavior; it’s a demographic

characteristic. Take these two groups of potential buyers who surf the ‘Net:

• People who are a perfect demographic match for your site, but have never made a

purchase online anywhere

 • People who are outside the core demographics for your site, but have purchased

repeatedly online at many different web sites

If you sent a 20% off promotion to each group, asking them to visit and make a first

purchase, response would be higher from the buyers (second bullet above) than the

demographically targeted group (first bullet above). This effect has been demonstrated for

years with many types of Direct Marketing. It works because actual behavior is better at

predicting future behavior than demographic characteristics are. You can tell whether a

customer is about to defect or not by watching their behavior; once you can predict

defection, you have a shot at retaining the customer by taking action.

2. Active customers are happy (retained) customers; and they like to "win." They

like to feel they are in control and smart about choices they make, and they like to feel

good about their behavior. Marketers take advantage of this by offering promotions of

various kinds to get consumers to engage in a behavior and feel good about doing it.

These promotions range from discounts and sweepstakes to loyalty programs and higher

concept approaches such as thank-you notes and birthday cards. Promotions encourage

behavior. If you want your customers to do something, you have to do something for them,

and if it’s something that makes them feel good (like they are winning the consumer game)

then they’re more likely to do it.

Retaining customers means keeping them active with you. If you don't, they will slip away

and eventually no longer be customers. Promotions encourage this interaction of customers

with your company, even if you are just sending out a newsletter or birthday card.

The truth is, almost all customers will leave you eventually. The trick is to keep them active

and happy as long as possible, and to make money doing it.

3. Retention Marketing is all about:

Action – Reaction – Feedback – Repeat.

Marketing is a conversation, as the ClueTrain Manifesto and Permission Marketing have

pointed out. Marketing with customer data is a highly evolved and valuable conversation,

but it has to be back and forth between the marketer and the customer, and you have to

LISTEN to what the customer is saying to you.

For example, let's say you look at some average customer behavior. You look at every

customer who has made at least 2 purchases, and you calculate the number of days

between the first and second purchases. This number is called "latency" - the number of

days between two customer events. Perhaps you find it to be 30 days.

Now, look at your One-Time buyers. If a customer has not made a second purchase by 30

days after the first purchase, the customer is not acting like an "average" multi-purchase

customer. The customer data is telling you something is wrong, and you should react to it

with a promotion. This is an example of the data speaking for the customer; you have to

learn how to listen.

This site and the Drilling Down book are all about how to discover, manage, and listen to

customer data. The data is speaking for the customer, telling you by its very existence (or

non-existence) there has been an action (or non-action) waiting for a reaction.

4. Retention Marketing requires allocating marketing resources. You have to realize

some marketing activities and customers will generate higher profits than others. You can

keep your budget flat or shrink it while increasing sales and profits if you continuously

allocate more of the budget to highly profitable activities and away from lower profit

activities. This doesn't mean you should "get rid" of some customers or treat them

poorly.

It means when you have a choice, as you frequently do in marketing, instead of spending

the same amount of money on every customer, you spend more on some and less on

others. It takes money to make money. Unless you get a huge increase in your budget,

where will the money come from?

For example, let's say you have 1,000 customers, and you have an annual budget of

$1,000. You spend $1 on each customer each year, and for that $1, you get back $1.10 in

profits. That's an ROI of 10%; you got back $1,100 for spending $1,000.

Now, what if you knew spending $2 each year on a certain 50% of customers would bring

back $8 in profits. That's a 400% ROI. Where do you get the extra $1? You take it away

from the other 50% of customers. You spend the same $1,000 total and you make back

500 (half the customers) x $8 = $4,000.

If you always migrate and reallocate marketing dollars towards higher ROI efforts, profits

will grow even as the marketing budget stays flat.

You have to develop a way to allocate resources to the most profitable promotions, deliver

them to the right customer at the right time, and not waste time and money on unprofitable

promotions and customers. This is accomplished by using the data customers create

through their interactions with you to build simple models or rules to follow. These models

are your listening system, like the "30 day latency" model above. They allow the data to

speak to you about the customer.

This site and the Drilling Down book are about teaching you how to build and use these

models yourself in 30 minutes with an Excel spreadsheet. If you want to increase sales

while reducing the costs of marketing to customers, you have to get this book.

Core concept of mkting:

What are the differences and relationships among needs, wants, and demands?
Needs are the basic human requirements. People need food, air, water, clothing, and shelter to survive.
People also have strong needs for creation, education, and entertainment.
The above needs become wants when they are directed to specific objects that might satisfy the need. An
American needs food but may want a hamburger, French fries, and a soft drink. A person in Mauritius
needs food but may want a mango, rice, lentils, and beans. Wants are shaped by one's society.
Demands are wants for specific products backed by an ability to pay. Many people want a Mercedes; only
a few are willing and able to buy one.
Companies must measure not only how many people want their product but also how many would
actually be willing and able to buy it.
Understanding customer needs and wants is not always simple. Some customers have needs of which
they are not fully conscious, or they cannot articulate these needs, or they use words that require some
interpretation. Consider the customer who says he wants an "inexpensive car.". The marketer must probe
further. We can distinguish among five types of needs:
1. Stated needs (the customer wants an inexpensive car).
2. Real needs (the customer wants a car who operating cost, not its initial price, is low).
3. Unstated needs (the customer expects good service from the dealer).
4. Delight needs (the customer would like the dealer to include an onboard navigation system)
5. Secret needs (the customer wants to be seen by friends as a savvy consumer).

The scope of marketing

Marketing people are involved in marketing 10 types of entities: goods, services,
experiences, events, persons, places, properties, organizations, information, and
ideas.
Goods. Physical goods constitute the bulk of most countries’ production and
marketing effort. The United States produces and markets billions of physical goods,
from eggs to steel to hair dryers. In developing nations, goods—particularly food,
commodities, clothing, and housing—are the mainstay of the economy.

Services. As economies advance, a growing proportion of their activities are focused

on the production of services. The U.S. economy today consists of a 70–30 services-
to-goods mix. Services include airlines, hotels, and maintenance and repair people,
as well as professionals such as accountants, lawyers,engineers, and doctors. Many
market offerings consist of a variable mix of goods and services.

Experiences. By orchestrating several services and goods, one can create,

stage,and market experiences. Walt Disney World’s Magic Kingdom is an
experience;so is the Hard Rock Cafe.

Events. Marketers promote time-based events, such as the Olympics, trade shows,
sports events, and artistic performances.

Persons. Celebrity marketing has become a major business. Artists, musicians,CEOs,

physicians, high-profile lawyers and financiers, and other professionalsdraw help
from celebrity marketers.

Places. Cities, states, regions, and nations compete to attract tourists,

factories,company headquarters, and new residents.5 Place marketers include
economicdevelopment specialists, real estate agents, commercial banks, local
businessassociations, and advertising and public relations agencies.

Properties. Properties are intangible rights of ownership of either real property (real
estate) or financial property (stocks and bonds). Properties are bought and sold, and
this occasions a marketing effort by real estate agents (for real estate) and
investment companies and banks (for securities).

Organizations. Organizations actively work to build a strong, favorable image in the

mind of their publics. Philips, the Dutch electronics company, advertises with the
tag line, “Let’s Make Things Better.” The Body Shop and Ben & Jerry’s also gain
attention by promoting social causes. Universities, museums, andperforming arts
organizations boost their public images to compete more successfully for audiences
and funds.

Information. The production, packaging, and distribution of information is one of

society’s major industries.6 Among the marketers of information are schools and
universities; publishers of encyclopedias, nonfiction books, and specialized
magazines; makers of CDs; and Internet Web sites.

Ideas. Every market offering has a basic idea at its core. In essence, products and
services are platforms for delivering some idea or benefit to satisfy a core need.
Satisfaction vs Delight:

• There is strong evidence of positive effects of customer satisfaction on repeat

purchase, retention, loyalty, and profitability.
• However, the 1990s saw some questioning of the value of treating satisfying
customers as a business objective. One explanation is that the rating scales
that researchers commonly use to measure satisfaction do not translate
linearly into desired managerial outcomes, such as repurchase and loyalty.
• Only when satisfaction scores exceed the upper threshold of a customer’s
zone of tolerance does a service experience have a lasting impact by creating
customer delight.
• What is really important to intentions and future behavior is not satisfaction
itself but the emotional response to the experience.
• Although meeting expectations can satisfy, it is the emotional response to a
surprise—whether delight or outrage—that has a real impact on customer
loyalty.
• Cross-sectional consumer behavior research found that the cluster of
consumers reporting the highest levels of surprise and joy were more

satisfied than others.

• Customer delight is conceptualized as an emotional response, which results
from surprising and positive levels of performance. As such, it could provide
an explanation for the observed variation in the intentions and subsequent
loyalty of customers reporting the same level of satisfaction.

Customer Delight
To put yourself in touch with the spirit of what the client wants to accomplish is the heart of
the value and principle of "customer delight."
Customer Delight
The most successful businesses have discovered a formula that goes beyond product and
service. Their business is providing delight to their customers by understanding their
specific personal interests, anticipating their needs, exceeding their expectations, and
making every moment and aspect of the relationship a pleasant -- or better yet, an
exhilarating -- experience.
Business Boom in West and Knowing What Customer Wants
Business in the West is booming. One of the reasons is they have changed their opinion
about the customer. Originally the idea was the customer should buy what is sold or
produced. Now they find out what the customer wants and produce it. Sales have boomed.
(MSS)
Your Client's Agenda
Deferring your own agenda to the lead of the client's is a form of the spiritual method of
"taking the other person's point of view." At the mental level it is recognition of their
interests and needs. At the vital level it is an emotional association with their will and intent,
and at the physical level it is to act and do what needs to be done. This is in the descending
scale of conception, perception, and sensation.
Discovering the Client's Needs
If you follow to the nth degree what the client requires, and take appropriate action for
every need, you will be constantly be making new discoveries, which will give you a new
knowledge, widen your horizons, and, as a result, energize you.
After all the True and Full energy is beyond your own self. It is made full through the Other,
including the others around you that you interact and associate with, as well as the Divine
Other above and within which provides ultimate discovery, knowledge, energy, and joy.
Developing the subtle sense to perceive everything the client needs is an important
consideration. As you live more in the depths, that subtle perception will grown, and you
will pick up on even the minutest hints of client needs, which is very likely to be the opening
of their greater needs, and your corresponding great success and joy!
Four Levels of Relating to the Customer to Develop Your Market & Products
There are four levels by which you can relate to the customer. Each successive view of the
customer has more potential than the previous ones to open the market for you.
1. First and most commonly, companies relate to the customer from the point of
view of the product. I have a product to sell. Anyone who buys it is my
customer. Companies with this view have a very limited idea of who their
customers are, what their needs are or how to attract more of them. They
rely on the product to do that.
2. Look at the customer as a member of society. Identify the social
characteristics of the customer and think of ways to meet the needs of
specific social groups.
3. Look at the customer simply as an individual. Recognize the needs and
preferences that any individual would have and cater to them.
4. relate to the customer, not merely as an individual who shares much in
common with everyone else, but as a unique individual who has unique
needs, preferences and identity.
Three Levels of Relating to the Market to Develop Your Market & Products
The market exists at three different levels.
1. At the first level, the market consists of a finite number of recognized needs,
and companies compete to meet those needs. If your company approaches
the market from this point of view, its growth is confined to the already
established needs of the market.
2. At the second level, the market consists of needs which exist, but are
unrecognized by society and companies, and therefore are unmet. Companies
grow by recognizing those unfulfilled needs, creating a general awareness of
them and then meeting them. What are the unrecognized needs in your
industry? What new dimension or incremental improvement can you add to
an existing product or service that will meet a latent need of society or your
customers and create a new market that does not now exist?
3. Not every company can create a new product or a new market. But the third
level of market is open to all. There is in every industry a gap between what
the market actually needs or wants and what companies perceive it wants.
That gap represents fertile untapped ground for any company that can
become more conscious of the market's real wants.
 When is the last time you really and systematically asked your customers
about their preferences? If it was not today or yesterday, perhaps you should
ask again. Put yourself on the other side of the counter and looking at things
from the customer's point of view." The effort required is one of careful
observation, perception, and thoughtfulness.

Business mission: s t r a t e g i c planning - mission

Mission
A strategic plan starts with a clearly defined business mission.
Mintzberg defines a mission as follows:
“A mission describes the organisation’s basic function in society, in terms of the products and
services it produces for its customers”.A clear business mission should have each of the following
elements:

Taking each element of the above diagram in turn, what should a good mission contain?
(1) A Purpose
Why does the business exist? Is it to create wealth for shareholders? Does it exist to satisfy the needs of
all stakeholders (including employees, and society at large?)
(2) A Strategy and Strategic Scope
A mission statement provides the commercial logic for the business and so defines two things:
- The products or services it offers (and therefore its competitive position)
- The competences through which it tries to succeed and its method of competing
A business’ strategic scope defines the boundaries of its operations. These are set by management.
For example, these boundaries may be set in terms of geography, market, business method, product
etc. The decisions management make about strategic scope define the nature of the business.
(3) Policies and Standards of Behaviour
A mission needs to be translated into everyday actions. For example, if the business mission includes
delivering “outstanding customer service”, then policies and standards should be created and
monitored that test delivery.
These might include monitoring the speed with which telephone calls are answered in the sales call
centre, the number of complaints received from customers, or the extent of positive customer
feedback via questionnaires.
(4) Values and Culture
The values of a business are the basic, often un-stated, beliefs of the people who work in the business.
These would include:
• Business principles (e.g. social policy, commitments to customers)
• Loyalty and commitment (e.g. are employees inspired to sacrifice their personal goals for the good of
the business as a whole? And does the business demonstrate a high level of commitment and loyalty to
its staff?)
• Guidance on expected behaviour – a strong sense of mission helps create a work environment where
there is a common purpose
What role does the mission statement play in marketing planning?
In practice, a strong mission statement can help in three main ways:
• It provides an outline of how the marketing plan should seek to fulfil the mission
• It provides a means of evaluating and screening the marketing plan; are marketing decisions
consistent with the mission?
• It provides an incentive to implement the marketing plan

Concept of SBUs::
Frequent reference has been made in this article to the business unit, a unit comprising one or more products having
a common market base whose manager has complete responsibility for integrating all functions into a strategy
against an identifiable competitor. Usually referred to as a strategic business unit (SBU), business units have also
been called strategy centers, strategic planning units, or independent business units. The philosophy behind the SBU
concept has been described this way: The diversified firm should be managed as a “portfolio’’ of businesses, with
each business unit serving a clearly defined product-market segment with a clearly defined strategy. Each business
unit in the portfolio should develop a strategy tailored to its capabilities and competitive needs, but consistent with the
overall corporate capabilities and needs. The total portfolio of businesses should be managed by allocating capital
and managerial resources to serve the interests of the firm as a whole - to achieve balanced growth in sales,
earnings, and assets mix at an acceptable and controlled level of risk. In essence, the portfolio should be designed
and managed to achieve an overall corporate strategy.
Identification of
Strategic Business
Units Since formal
strategic planning began
to make inroads in
corporations in the
1970s, a variety of new
concepts have been
developed for identifying
a corporation’s
opportunities and for
speeding up the process
of strategy development.
These newer concepts
create problems of
internal organization. In a
dynamic economy, all
functions of a corporation
(e.g., research and
development, finance,
and marketing) are
related. Optimizing
certain functions instead
of the company as a
whole is far from
adequate for achieving
superior corporate
performance. Such an
organizational
perspective leaves only
the CEO in a position to think in terms of the corporation as a whole. Large corporations have tried many different
structural designs to broaden the scope of the CEO in dealing with complexities. One such design is the profit center
concept. Unfortunately, the profit center concept emphasizes short-term consequences; also, its emphasis is on
optimizing the profit center instead of the corporation as a whole.
The SBU concept was developed to overcome the difficulties posed by the profit center type of organization. Thus,
the first step in integrating product/market strategies is to identify the firm’s SBUs. This amounts to identifying natural
businesses in which the corporation is involved. SBUs are not necessarily synonymous with existing divisions or profit
centers. An SBU is composed of a product or product lines having identifiable independence from other products or
product lines in terms of competition, prices, substitutability of product, style/quality, and impact of product
withdrawal. It is around this configuration of products that a business strategy should be designed. In today’s
organizations, this strategy may encompass products found in more than one division. By the same token, some
managers may find themselves managing two or more natural businesses. This does not necessarily mean that
divisional boundaries need to be redefined; an SBU can often overlap divisions, and a division can include more than
one SBU. SBUs may be created by applying a set of criteria consisting of price, competitors, customer groups, and
shared experience. To the extent that changes in a product’s price entail a review of the pricing policy of other
products may imply that these products have a natural alliance. If various products/markets of a company share the
same group of competitors, they may be amalgamated into an SBU for the purpose of strategic planning. Likewise,
products/markets sharing a parts of the company having common research and development, manufacturing, and
marketing components may be included in the same SBU. For purposes of illustration, consider the case of a large,
diversified company, one division of which manufactures car radios. The following possibilities exist: the car radio
division, as it stands, may represent a viable SBU; alternatively, luxury car radios with automatic tuning may
constitute an SBU different from the SBU for standard models; or other areas of the company, such as the television
division, may be combined with all or part of the car radio division to create an SBU. Overall, an SBU should be
established at a level where it can rather freely address (a) all key segments of the customer group having similar
objectives; (b) all key functions of the corporation so that it can deploy whatever functional expertise is needed to
establish positive differentiation from the competition in the eyes of the customer; and (c) all key aspects of the
competition so that the corporation can seize the advantage when opportunity presents itself and, conversely, so that
competitors will not be able to catch the corporation off-balance by exploiting unsuspected sources of strength.
A conceptual question becomes relevant in identifying SBUs: How much aggregation is desirable? Higher levels of
aggregation produce a relatively smaller and more manageable number of SBUs. Besides, the existing management
information system may not need to be modified since a higher level of aggregation yields SBUs of the size and
scope of present divisions or product groups. However, higher levels of aggregation at the SBU level permit only
general notions of strategy that may lack relevance for promoting action at the operating level. For example, an SBU
for medical care is probably too broad. It could embrace equipment, service, hospitals, education, self-discipline, and
even social welfare. On the other hand, lower levels of aggregation make SBUs identical to product/market segments
that may lack “strategic autonomy.’’ An SBU for farm tractor engines would be ineffective because it is at too low a
level in the organization to (a) consider product applications and customer groups other than farmers or (b) cope with
new competitors who might enter the farm tractor market at almost any time with a totally different product set of
“boundary conditions.’’ Further, at such a low organizational level, one SBU may compete with another, thereby
shifting to higher levels of management the strategic issue of which SBU should formulate what strategy. The
optimum level of aggregation, one that is neither too broad nor too narrow, can be determined by applying the criteria
discussed above, then further refining it by using managerial judgment. Briefly stated, an SBU must look and act like
a freestanding business, satisfying the following conditions:
1. Have a unique business mission, independent of
other SBUs.
2. Have a clearly definable set of competitors.
3. Be able to carry out integrative planning
relatively independently of other SBUs.
4. Be able to manage resources in other areas.
5. Be large enough to justify senior management
attention but small enough to serve as a useful
focus for resource allocation.
The definition of an SBU always contains gray
areas that may lead to dispute. It is helpful,
therefore, to review the creation of an SBU,
halfway into the strategy development process, by
raising the following questions:

• Are customers’ wants well defined and

understood by the industry and is the market
segmented so that differences in these wants are
treated differently?
• Is the business unit equipped to respond functionally to the basic wants and needs of customers in the defined
segments?
• Do competitors have different sets of operating conditions that could give them an unfair advantage over the
business unit in question?
If the answers give reason to doubt the SBU’s ability to compete in the market, it is better to redefine the SBU with a
view to increasing its strategic freedom in meeting customer needs and competitive threats. The SBU concept may
be illustrated with an example from Procter & Gamble. For more than 50 years the company’s various brands were
pitted against each other. The Camay soap manager competed against the Ivory soap manager as fiercely as if each
were in different companies. The brand management system that grew out of this notion has been used by almost
every consumer-products company. In the fall of 1987, however, Procter & Gamble reorganized according to the SBU
concept (what the company called “along the category lines’’). The reorganization did not abolish brand managers,
but it did make them accountable to a new corps of mini-general managers who were responsible for an entire
product line - all laundry detergents, for example. By fostering internal competition among brand managers, the
classic brand management system established strong incentives to excel. It also created conflicts and inefficiencies
as brand managers squabbled over corporate resources, from ad spending to plant capacity. The system often meant
that not enough thought was given to how brands could work together. Despite these shortcomings, brand
management worked fine when markets were growing and money was available. But now, most packaged- goods
businesses are growing slowly (if at all), brands are proliferating, the retail trade is accumulating more clout, and the
consumer market is fragmenting. Procter & Gamble reorganized along SBU lines to cope with this bewildering array
of pressures. Under Procter & Gamble’s SBU scheme, each of its 39 categories of U.S. businesses, from diapers to
cake mixes, is run by a category manager with direct responsibility. Advertising, sales, manufacturing, research,
engineering, and other disciplines all report to the category manager. The idea is to devise marketing strategies by
looking at categories and by fitting brands together rather than by coming up with competing brand strategies and
then dividing up resources among them. The paragraphs that follow discuss how Procter & Gamble’s reorganization
impacted select functions.
Advertising. Procter & Gamble advertises Tide as the best detergent for tough dirt. But when the brand manager for
Cheer started making the same claim, Cheer’s ads were pulled after the Tide group protested. Now the category
manager decides how to position Tide and Cheer to avoid such conflicts.
Budgeting. Brand managers for Puritan and Crisco oils competed for a share of the same ad budget. Now a
category manager decides when Puritan can benefit from stepped-up ad spending and when Crisco can coast on its
strong market position.
Packaging. Brand managers for various detergents often demanded packages at the same time. Because of these
conflicting demands, managers complained that projects were delayed and nobody got a first-rate job. Now the
category manager decides which brand gets a new package first.
Manufacturing. Under the old system, a minor detergent, such as Dreft, had the same claim on plant resources as
Tide - even if Tide was in the midst of a big promotion and needed more supplies. Now a manufacturing staff person
who helps to coordinate production reports to the category manager.
Problems in Creating SBUs The notion behind the SBU concept is that a company’s activities in a marketplace
ought to be understood and segmented strategically so that resources can be allocated for competitive advantage.
That is, a company ought to be able to answer three questions: What business am I in? Who is my competition?
What is my position relative to that competition? Getting an adequate answer to the first question is often difficult.
(Answers to the other two questions can be relatively easy.) In addition, identifying SBUs is enormously difficult in
organizations that share resources (e.g., research and development or sales). There is no simple, definitive
methodology for isolating SBUs. Although the criteria for designating SBUs are clear-cut, their application is
judgmental and problematic. For example, in certain situations, real advantages can accrue to businesses sharing
resources at the research and development, manufacturing, or distribution level. If autonomy and accountability are
pursued as ends in themselves, these advantages may be overlooked or unnecessarily sacrificed.
This article focused on the concepts of planning and strategy. Planning is the ongoing management process of
choosing the objectives to be achieved during a certain period, setting up a plan of action, and maintaining
continuous surveillance of results so as to make regular evaluations and, if necessary, to modify the objectives and
plan of action. Also described were the requisites for successful planning, the time frame for initiating planning
activities, and various philosophies of planning (i.e., satisfying, optimizing, and adaptivizing). Strategy, the course of
action selected from possible alternatives as the optimum way to attain objectives, should be consistent with current
policies and viewed in light of anticipated competitive actions. The concept of strategic planning was also examined.
Most large companies have made significant progress in the last 10 or 15 years in improving their strategic planning
capabilities.
Two levels of strategic planning were discussed: corporate and business unit level. Corporate strategic planning is
concerned with the management of a firm’s portfolio of businesses and with issues of firm-wide impact, such as
resource allocation, cash flow management, government regulation, and capital market access. Business strategy
focuses more narrowly on the SBU level and involves the design of plans of action and objectives based on analysis
of both internal and external factors that affect each business unit’s performance. An SBU is defined as a stand-alone
business within a corporation that faces (an) identifiable competitor(s) in a given market. For strategic planning to be
effective and relevant, the CEO must play a central role, not simply as the apex of a multilayered planning effort, but
as a strategic thinker and corporate culture leader.

Swot Analysis:
SWOT Analysis is a strategic planning method used to evaluate the Strengths,
Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It
involves specifying the objective of the business venture or project and identifying the
internal and external factors that are favorable and unfavorable to achieving that objective.
The technique is credited to Albert Humphrey, who led a convention at Stanford University
in the 1960s and 1970s using data from Fortune 500 companies.

Strategic and Creative Use of SWOT Analysis

[edit] Strategic Use: Orienting SWOTs to An Objective
Illustrative diagram of SWOT analysis
A SWOT analysis must first start with defining a desired end state or objective. A SWOT
analysis may be incorporated into the strategic planning model. An example of a strategic
planning technique that incorporates an objective-driven SWOT analysis is Strategic
Creative Analysis (SCAN)[1]. Strategic Planning, including SWOT and SCAN analysis, has
been the subject of much research.
• Strengths: attributes of the person or company that are helpful to
achieving the objective.
• Weaknesses: attributes of the person or company that are harmful to
achieving the objective.
• Opportunities: external conditions that are helpful to achieving the
objective.
• Threats: external conditions which could do damage to the objective.
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs.
First, the decision makers have to determine whether the objective is attainable, given the
SWOTs. If the objective is NOT attainable a different objective must be selected and the
process repeated.
The SWOT analysis is often used in academia to highlight and identify strengths,
weaknesses, opportunities and threats. It is particularly helpful in identifying areas for
development.

[edit] Creative Use of SWOTs: Generating Strategies

If, on the other hand, the objective seems attainable, the SWOTs are used as inputs to the
creative generation of possible strategies, by asking and answering each of the following
four questions, many times:
• How can we Use and Capitalize on each Strength?
• How can we Improve each Weakness?
• How can we Exploit and Benefit from each Opportunity?
• How can we Mitigate each Threat?
Ideally a cross-functional team or a task force that represents a broad range of perspectives
should carry out the SWOT analysis. For example, a SWOT team may include an
accountant, a salesperson, an executive manager, an engineer, and an ombudsman.

Matching and converting

Another way of utilizing SWOT is matching and converting.
Matching is used to find competitive advantages by matching the strengths to opportunities.
Converting is to apply conversion strategies to convert threats or weaknesses into strengths
or opportunities. [2]
An example of conversion strategy is to find new markets.
If the threats or weaknesses cannot be converted a company should try to minimize or
avoid them.[3]
[edit] Evidence on the Use of SWOT
SWOT analysis may limit the strategies considered in the evaluation. "In addition, people
who use SWOT might conclude that they have done an adequate job of planning and ignore
such sensible things as defining the firm's objectives or calculating ROI for alternate
strategies." [4] Findings from Menon et al. (1999) [5] and Hill and Westbrook (1997) [6] have
shown that SWOT may harm performance. As an alternative to SWOT, J. Scott Armstrong
describes a 5-step approach alternative that leads to better corporate performance.[7]
These criticisms are addressed to an old version of SWOT analysis that precedes the SWOT
analysis described above under the heading "Strategic and Creative Use of SWOT Analysis."
This old version did not require that SWOTs be derived from an agreed upon objective.
Examples of SWOT analyses that do not state an objective are provided below under
"Human Resources" and "Marketing."

Internal and external factors

The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective. These come from within the company's unique value
chain. SWOT analysis groups key pieces of information into two main categories:
• Internal factors – The strengths and weaknesses internal to the
organization.
• External factors – The opportunities and threats presented by the
external environment to the organization. - Use a PEST or PESTLE
analysis to help identify factors
The internal factors may be viewed as strengths or weaknesses depending upon their
impact on the organization's objectives. What may represent strengths with respect to one
objective may be weaknesses for another objective. The factors may include all of the 4P's;
as well as personnel, finance, manufacturing capabilities, and so on. The external factors
may include macroeconomic matters, technological change, legislation, and socio-cultural
changes, as well as changes in the marketplace or competitive position. The results are
often presented in the form of a matrix.
SWOT analysis is just one method of categorization and has its own weaknesses. For
example, it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives. It also presents the resulting lists uncritically and
without clear prioritization so that, for example, weak opportunities may appear to balance
strong threats.
It is prudent not to eliminate too quickly any candidate SWOT entry. The importance of
individual SWOTs will be revealed by the value of the strategies it generates. A SWOT item
that produces valuable strategies is important. A SWOT item that generates no strategies is
not important.

Use of SWOT Analysis

The usefulness of SWOT analysis is not limited to profit-seeking organizations. SWOT
analysis may be used in any decision-making situation when a desired end-state (objective)
has been defined. Examples include: non-profit organizations, governmental units, and
individuals. SWOT analysis may also be used in pre-crisis planning and preventive crisis
management. SWOT analysis may also be used in creating a recommendation during a
viability study.

SWOT-landscape analysis
The SWOT-landscape grabs different managerial situations by visualizing and foreseeing the
dynamic performance of comparable objects according to findings by Brendan Kitts, Leif
Edvinsson and Tord Beding (2000).[8]
Changes in relative performance are continuously identified. Projects (or other units of
measurements) that could be potential risk or opportunity objects are highlighted.
SWOT-landscape also indicates which underlying strength/weakness factors that have had
or likely will have highest influence in the context of value in use (for ex. capital value
fluctuations).

Corporate planning
As part of the development of strategies and plans to enable the organization to achieve its
objectives, then that organization will use a systematic/rigorous process known as corporate
planning. SWOT alongside PEST/PESTLE can be used as a basis for the analysis of business
and environmental factors.[9]
• Set objectives – defining what the organization is going to do
• Environmental scanning
○ Internal appraisals of the organization's SWOT, this needs to
include an assessment of the present situation as well as a
portfolio of products/services and an analysis of the
product/service life cycle
• Analysis of existing strategies, this should determine relevance
from the results of an internal/external appraisal. This may include gap
analysis which will look at environmental factors
• Strategic Issues defined – key factors in the development of a
corporate plan which needs to be addressed by the organization
• Develop new/revised strategies – revised analysis of strategic issues
may mean the objectives need to change
• Establish critical success factors – the achievement of objectives and
strategy implementation
• Preparation of operational, resource, projects plans for strategy
implementation
• Monitoring results – mapping against plans, taking corrective action
which may mean amending objectives/strategies.[10]

[edit] Marketing
Main article: Marketing management

In many competitor analyses, marketers build detailed profiles of each competitor in the
market, focusing especially on their relative competitive strengths and weaknesses using
SWOT analysis. Marketing managers will examine each competitor's cost structure, sources
of profits, resources and competencies, competitive positioning and product differentiation,
degree of vertical integration, historical responses to industry developments, and other
factors.
Marketing management often finds it necessary to invest in research to collect the data
required to perform accurate marketing analysis. Accordingly, management often conducts
market research (alternately marketing research) to obtain this information. Marketers
employ a variety of techniques to conduct market research, but some of the more common
include:
• Qualitative marketing research, such as focus groups
• Quantitative marketing research, such as statistical surveys
• Experimental techniques such as test markets
• Observational techniques such as ethnographic (on-site) observation

Strengths Weaknesses Opportunities Threats

Reputation in Shortage of Well established Large consultancies

marketplace consultants at position with a well operating at a
operating level defined market minor level
rather than partner niche.
level

Expertise at partner Unable to deal with Identified market Other small

level in HRM multi-disciplinary for consultancy in consultancies
consultancy assignments areas other than looking to invade
because of size or HRM the marketplace
lack of ability

• Marketing managers may also design and oversee various

environmental scanning and competitive intelligence processes to help
identify trends and inform the company's marketing analysis.

Using SWOT to analyse the market position of a small management consultancy with
specialism in HRM.[11]

BCG MATRIX:
The BCG matrix (aka B.C.G. analysis, BCG-matrix, Boston Box, Boston Matrix, Boston
Consulting Group analysis) is a chart that had been created by Bruce Henderson for the
Boston Consulting Group in 1970 to help corporations with analyzing their business units or
product lines. This helps the company allocate resources and is used as an analytical tool in
brand marketing, product management, strategic management, and portfolio analysis.[citation
needed]

BCG Matrix:
To use the chart, analysts plot a scatter graph to rank the business units (or products) on
the basis of their relative market shares and growth rates.
• Cash cows are units with high market share in a slow-growing industry.
These units typically generate cash in excess of the amount of cash needed
to maintain the business. They are regarded as staid and boring, in a
"mature" market, and every corporation would be thrilled to own as many as
possible. They are to be "milked" continuously with as little investment as
possible, since such investment would be wasted in an industry with low
growth.
• Dogs, or more charitably called pets, are units with low market share in a
mature, slow-growing industry. These units typically "break even", generating
barely enough cash to maintain the business's market share. Though owning
a break-even unit provides the social benefit of providing jobs and possible
synergies that assist other business units, from an accounting point of view
such a unit is worthless, not generating cash for the company. They depress
a profitable company's return on assets ratio, used by many investors to
judge how well a company is being managed. Dogs, it is thought, should be
sold off.
• Question marks (also known as problem child) are growing rapidly and thus
consume large amounts of cash, but because they have low market shares
they do not generate much cash. The result is a large net cash
consumption. A question mark has the potential to gain market share and
become a star, and eventually a cash cow when the market growth slows. If
the question mark does not succeed in becoming the market leader, then
after perhaps years of cash consumption it will degenerate into a dog when
the market growth declines. Question marks must be analyzed carefully in
order to determine whether they are worth the investment required to grow
market share.
• Stars are units with a high market share in a fast-growing industry. The hope
is that stars become the next cash cows. Sustaining the business unit's
market leadership may require extra cash, but this is worthwhile if that's
what it takes for the unit to remain a leader. When growth slows, stars
become cash cows if they have been able to maintain their category
leadership, or they move from brief stardom to dogdom.[citation needed]
As a particular industry matures and its growth slows, all business units become either cash
cows or dogs. The natural cycle for most business units is that they start as question marks,
then turn into stars. Eventually the market stops growing thus the business unit becomes a
cash cow. At the end of the cycle the cash cow turns into a dog.
The overall goal of this ranking was to help corporate analysts decide which of their
business units to fund, and how much; and which units to sell. Managers were supposed to
gain perspective from this analysis that allowed them to plan with confidence to use money
generated by the cash cows to fund the stars and, possibly, the question marks. As the BCG
stated in 1970:
Only a diversified company with a balanced portfolio can use its strengths to
truly capitalize on its growth opportunities. The balanced portfolio has:

• stars whose high share and high growth assure the future;
 • cash cows that supply funds for that future growth; and
• question marks to be converted into stars with the added funds.

Practical Use of the BCG Matrix

For each product or service, the 'area' of the circle represents the value of its sales. The
BCG Matrix thus offers a very useful 'map' of the organization's product (or service)
strengths and weaknesses, at least in terms of current profitability, as well as the likely
cashflows.
The need which prompted this idea was, indeed, that of managing cash-flow. It was
reasoned that one of the main indicators of cash generation was relative market share, and
one which pointed to cash usage was that of market growth rate.
Derivatives can also be used to create a 'product portfolio' analysis of services. So
Information System services can be treated accordingly.[citation needed]

Relative market share

This indicates likely cash generation, because the higher the share the more cash will be
generated. As a result of 'economies of scale' (a basic assumption of the BCG Matrix), it is
assumed that these earnings will grow faster the higher the share. The exact measure is the
brand's share relative to its largest competitor. Thus, if the brand had a share of 20 percent,
and the largest competitor had the same, the ratio would be 1:1. If the largest competitor
had a share of 60 percent; however, the ratio would be 1:3, implying that the organization's
brand was in a relatively weak position. If the largest competitor only had a share of 5
percent, the ratio would be 4:1, implying that the brand owned was in a relatively strong
position, which might be reflected in profits and cash flows. If this technique is used in
practice, this scale is logarithmic, not linear.
On the other hand, exactly what is a high relative share is a matter of some debate. The
best evidence is that the most stable position (at least in FMCG markets) is for the brand
leader to have a share double that of the second brand, and triple that of the third. Brand
leaders in this position tend to be very stable—and profitable; the Rule of 123.[1]
The reason for choosing relative market share, rather than just profits, is that it carries
more information than just cashflow. It shows where the brand is positioned against its
main competitors, and indicates where it might be likely to go in the future. It can also
show what type of marketing activities might be expected to be effective.[citation needed]

Market growth rate

Rapidly growing in rapidly growing markets, are what organizations strive for; but, as we
have seen, the penalty is that they are usually net cash users - they require investment.
The reason for this is often because the growth is being 'bought' by the high investment, in
the reasonable expectation that a high market share will eventually turn into a sound
investment in future profits. The theory behind the matrix assumes, therefore, that a higher
growth rate is indicative of accompanying demands on investment. The cut-off point is
usually chosen as 10 per cent per annum. Determining this cut-off point, the rate above
which the growth is deemed to be significant (and likely to lead to extra demands on cash)
is a critical requirement of the technique; and one that, again, makes the use of the BCG
Matrix problematical in some product areas. What is more, the evidence,[1] from FMCG
markets at least, is that the most typical pattern is of very low growth, less than 1 per cent
per annum. This is outside the range normally considered in BCG Matrix work, which may
make application of this form of analysis unworkable in many markets.[citation needed]
Where it can be applied, however, the market growth rate says more about the brand
position than just its cash flow. It is a good indicator of that market's strength, of its future
potential (of its 'maturity' in terms of the market life-cycle), and also of its attractiveness to
future competitors. It can also be used in growth analysis.[citation needed]

[edit Critical evaluation

The matrix ranks only market share and industry growth rate, and only implies actual
profitability, the purpose of any business. (It is certainly possible that a particular dog can
be profitable without cash infusions required, and therefore should be retained and not
sold.) The matrix also overlooks other elements of industry. With this or any other such
analytical tool, ranking business units has a subjective element involving guesswork about
the future, particularly with respect to growth rates. Unless the rankings are approached
with rigor and scepticism, optimistic evaluations can lead to a dot com mentality in which
even the most dubious businesses are classified as "question marks" with good prospects;
enthusiastic managers may claim that cash must be thrown at these businesses
immediately in order to turn them into stars, before growth rates slow and it's too late. Poor
definition of a business's market will lead to some dogs being misclassified as cash bulls.
As originally practiced by the Boston Consulting Group,[1] the matrix was undoubtedly a
useful tool, in those few situations where it could be applied, for graphically illustrating
cashflows. If used with this degree of sophistication its use would still be valid. However,
later practitioners have tended to over-simplify its messages. In particular, the later
application of the names (problem children, stars, cash cows and dogs) has tended to
overshadow all else—and is often what most students, and practitioners, remember.
This is unfortunate, since such simplistic use contains at least two major problems:
'Minority applicability'. The cashflow techniques are only applicable to a very limited number
of markets (where growth is relatively high, and a definite pattern of product life-cycles can
be observed, such as that of ethical pharmaceuticals). In the majority of markets, use may
give misleading results.
'Milking cash bulls'. Perhaps the worst implication of the later developments is that the
(brand leader) cash bulls should be milked to fund new brands. This is not what research
into the FMCG markets has shown to be the case. The brand leader's position is the one,
above all, to be defended, not least since brands in this position will probably outperform
any number of newly launched brands. Such brand leaders will, of course, generate large
cash flows; but they should not be `milked' to such an extent that their position is
jeopardized. In any case, the chance of the new brands achieving similar brand leadership
may be slim—certainly far less than the popular perception of the Boston Matrix would
imply.
Perhaps the most important danger[1] is, however, that the apparent implication of its four-
quadrant form is that there should be balance of products or services across all four
quadrants; and that is, indeed, the main message that it is intended to convey. Thus,
money must be diverted from `cash cows' to fund the `stars' of the future, since `cash
cows' will inevitably decline to become `dogs'. There is an almost mesmeric inevitability
about the whole process. It focuses attention, and funding, on to the `stars'. It presumes,
and almost demands, that `cash bulls' will turn into `dogs'.
The reality is that it is only the `cash bulls' that are really important—all the other elements
are supporting actors. It is a foolish vendor who diverts funds from a `cash cow' when these
are needed to extend the life of that `product'. Although it is necessary to recognize a `dog'
when it appears (at least before it bites you) it would be foolish in the extreme to create
one in order to balance up the picture. The vendor, who has most of his (or her) products in
the `cash cow' quadrant, should consider himself (or herself) fortunate indeed, and an
excellent marketer, although he or she might also consider creating a few stars as an
insurance policy against unexpected future developments and, perhaps, to add some extra
growth. There is also a common misconception that 'dogs' are a waste of resources. In
many markets 'dogs' can be considered loss-leaders that while not themselves profitable will
lead to increased sales in other profitable areas.

Marketing plan:

A marketing plan is a written document that details the necessary actions to achieve one
or more marketing objectives. It can be for a product or service, a brand, or a product line.
Marketing plans cover between one and five years.
A marketing plan may be part of an overall business plan. Solid marketing strategy is the
foundation of a well-written marketing plan. While a marketing plan contains a list of
actions, a marketing plan without a sound strategic foundation is of little use.

The marketing planning process::

The marketing process model based on the publications of Philip Kotler. It consists
of 5 steps, beginning with the market & environment research. After fixing the
targets and setting the strategies, they will be realised by the marketing mix in step
4. The last step in the process is the marketing controlling.

In most organizations, "strategic planning" is an annual process, typically covering just the
year ahead. Occasionally, a few organizations may look at a practical plan which stretches
three or more years ahead.
To be most effective, the plan has to be formalized, usually in written form, as a formal
"marketing plan." The essence of the process is that it moves from the general to the
specific; from the overall objectives of the organization down to the individual action plan
for a part of one marketing program. It is also an interactive process, so that the draft
output of each stage is checked to see what impact it has on the earlier stages - and is
amended.

Marketing planning aims and objectives

Behind the corporate objectives, which in themselves offer the main context for the
marketing plan, will lay the "corporate mission"; which in turn provides the context for
these corporate objectives. In a sales-oriented organization, marketing planning function
designs incentive pay plans to not only motivate and reward frontline staff fairly but also to
align marketing activities with corporate mission.
This "corporate mission" can be thought of as a definition of what the organization is; of
what it does: "Our business is …". This definition should not be too narrow, or it will
constrict the development of the organization; a too rigorous concentration on the view that
"We are in the business of making meat-scales," as IBM was during the early 1900s, might
have limited its subsequent development into other areas. On the other hand, it should not
be too wide or it will become meaningless; "We want to make a profit" is not too helpful in
developing specific plans.
Abell suggested that the definition should cover three dimensions: "customer groups" to be
served, "customer needs" to be served, and "technologies" to be utilized [1]. Thus, the
definition of IBM's "corporate mission" in the 1940s might well have been: "We are in the
business of handling accounting information [customer need] for the larger US organizations
[customer group] by means of punched cards [technology]."
Perhaps the most important factor in successful marketing is the "corporate vision."
Surprisingly, it is largely neglected by marketing textbooks; although not by the popular
exponents of corporate strategy - indeed, it was perhaps the main theme of the book by
Peters and Waterman, in the form of their "Superordinate Goals." "In Search of Excellence"
said: "Nothing drives progress like the imagination. The idea precedes the deed." [2] If the
organization in general, and its chief executive in particular, has a strong vision of where its
future lies, then there is a good chance that the organization will achieve a strong position
in its markets (and attain that future). This will be not least because its strategies will be
consistent; and will be supported by its staff at all levels. In this context, all of IBM's
marketing activities were underpinned by its philosophy of "customer service"; a vision
originally promoted by the charismatic Watson dynasty. The emphasis at this stage is on
obtaining a complete and accurate picture.
In a single organization, however, it is likely that only a few aspects will be sufficiently
important to have any significant impact on the marketing plan; but all may need to be
reviewed to determine just which "are" the few.
A "traditional" - albeit product-based - format for a "brand reference book" (or, indeed, a
"marketing facts book") was suggested by Godley more than three decades ago:
1. Financial data—Facts for this section will come from management
accounting, costing and finance sections.
2. Product data—From production, research and development.
3. Sales and distribution data - Sales, packaging, distribution sections.
4. Advertising, sales promotion, merchandising data - Information from these
departments.
5. Market data and miscellany - From market research, who would in most cases
act as a source for this information. His sources of data, however, assume
the resources of a very large organization. In most organizations they would
be obtained from a much smaller set of people (and not a few of them would
be generated by the marketing manager alone).

It is apparent that a marketing audit can be a complex process, but the aim is simple: "it is
only to identify those existing (external and internal) factors which will have a significant
impact on the future plans of the company." It is clear that the basic material to be input
to the marketing audit should be comprehensive.
Accordingly, the best approach is to accumulate this material continuously, as and when it
becomes available; since this avoids the otherwise heavy workload involved in collecting it
as part of the regular, typically annual, planning process itself - when time is usually at a
premium.
Even so, the first task of this annual process should be to check that the material held in the
current facts book or facts files actually is comprehensive and accurate, and can form a
sound basis for the marketing audit itself.
The structure of the facts book will be designed to match the specific needs of the
organization, but one simple format - suggested by Malcolm McDonald - may be applicable
in many cases. This splits the material into three groups:
1. Review of the marketing environment. A study of the organization's
markets, customers, competitors and the overall economic, political, cultural
 and technical environment; covering developing trends, as well as the current
situation.
2. Review of the detailed marketing activity. A study of the company's
marketing mix; in terms of the 7 Ps - (see below)
3. Review of the marketing system. A study of the marketing organization,
marketing research systems and the current marketing objectives and
strategies. The last of these is too frequently ignored. The marketing system
itself needs to be regularly questioned, because the validity of the whole
marketing plan is reliant upon the accuracy of the input from this system,
and `garbage in, garbage out' applies with a vengeance.
•
○
 Portfolio planning. In addition, the coordinated planning of the
individual products and services can contribute towards the
balanced portfolio.
 80:20 rule. To achieve the maximum impact, the marketing
plan must be clear, concise and simple. It needs to concentrate
on the 20 percent of products or services, and on the 20 percent
of customers, which will account for 80 percent of the volume
and 80 percent of the profit.
 7 P's: Product, Place, Price and Promotion, Physical
Environment, People, Process. The 7 P's can sometimes divert
attention from the customer, but the framework they offer can
be very useful in building the action plans.
It is only at this stage (of deciding the marketing objectives) that the active part of the
marketing planning process begins'. This next stage in marketing planning is indeed the
key to the whole marketing process.
The "marketing objectives" state just where the company intends to be; at some specific
time in the future.
James Quinn succinctly defined objectives in general as: Goals (or objectives) state what is
to be achieved and when results are to be accomplished, but they do not state 'how' the
results are to be achieved.[3] They typically relate to what products (or services) will be
where in what markets (and must be realistically based on customer behavior in those
markets). They are essentially about the match between those "products" and "markets."
Objectives for pricing, distribution, advertising and so on are at a lower level, and should
not be confused with marketing objectives. They are part of the marketing strategy needed
to achieve marketing objectives. To be most effective, objectives should be capable of
measurement and therefore "quantifiable." This measurement may be in terms of sales
volume, money value, market share, percentage penetration of distribution outlets and so
on. An example of such a measurable marketing objective might be "to enter the market
with product Y and capture 10 percent of the market by value within one year." As it is
quantified it can, within limits, be unequivocally monitored; and corrective action taken as
necessary.
The marketing objectives must usually be based, above all, on the organization's financial
objectives; converting these financial measurements into the related marketing
measurements.He went on to explain his view of the role of "policies," with which strategy is
most often confused: "Policies are rules or guidelines that express the 'limits' within which
action should occur."Simplifying somewhat, marketing strategies can be seen as the means,
or "game plan," by which marketing objectives will be achieved and, in the framework that
we have chosen to use, are generally concerned with the 8 P's. Examples are:
1. Price - The amount of money needed to buy products
2. Product - The actual product
3. Promotion (advertising)- Getting the product known
4. Placement - Where the product is located
5. People - Represent the business
6. Physical environment - The ambiance, mood, or tone of the environment
7. Process - How do people obtain your product
8. Packaging - How the product will be protected
(Note: At GCSE the 4 P's are Place, Promotion, Product and Price and the "secret" 5th P is
Packaging, but which applies only to physical products, not services usually, and mostly
those sold to individual consumers)

In principle, these strategies describe how the objectives will be achieved. The 7 P's are a
useful framework for deciding how the company's resources will be manipulated
(strategically) to achieve the objectives. It should be noted, however, that they are not the
only framework, and may divert attention from the real issues. The focus of the strategies
must be the objectives to be achieved - not the process of planning itself. Only if it fits the
needs of these objectives should you choose, as we have done, to use the framework of the
7 P's.
The strategy statement can take the form of a purely verbal description of the strategic
options which have been chosen. Alternatively, and perhaps more positively, it might
include a structured list of the major options chosen.
One aspect of strategy which is often overlooked is that of "timing." Exactly when it is the
best time for each element of the strategy to be implemented is often critical. Taking the
right action at the wrong time can sometimes be almost as bad as taking the wrong action
at the right time. Timing is, therefore, an essential part of any plan; and should normally
appear as a schedule of planned activities.Having completed this crucial stage of the
planning process, you will need to re-check the feasibility of your objectives and strategies
in terms of the market share, sales, costs, profits and so on which these demand in
practice. As in the rest of the marketing discipline, you will need to employ judgment,
experience, market research or anything else which helps you to look at your conclusions
from all possible angles.

[edit] Detailed plans and programs

At this stage, you will need to develop your overall marketing strategies into detailed plans
and program. Although these detailed plans may cover each of the 7 P's, the focus will vary,
depending upon your organization's specific strategies. A product-oriented company will
focus its plans for the 7 P's around each of its products. A market or geographically oriented
company will concentrate on each market or geographical area. Each will base its plans
upon the detailed needs of its customers, and on the strategies chosen to satisfy these
needs.
Again, the most important element is, indeed, that of the detailed plans; which spell out
exactly what programs and individual activities will take place over the period of the plan
(usually over the next year). Without these specified - and preferably quantified - activities
the plan cannot be monitored, even in terms of success in meeting its objectives.It is these
programs and activities which will then constitute the "marketing" of the organization over
the period. As a result, these detailed marketing programs are the most important, practical
outcome of the whole planning process. These plans therefore be:
• Clear - They should be an unambiguous statement of 'exactly' what is to be
done.
• Quantified - The predicted outcome of each activity should be, as far as
possible, quantified; so that its performance can be monitored.
• Focused - The temptation to proliferate activities beyond the numbers which
can be realistically controlled should be avoided. The 80:20 Rule applies in
this context too.
• Realistic - They should be achievable.
• Agreed - Those who are to implement them should be committed to them,
and agree that they are achievable. The resulting plans should become a
working document which will guide the campaigns taking place throughout
the organization over the period of the plan. If the marketing plan is to work,
every exception to it (throughout the year) must be questioned; and the
lessons learned, to be incorporated in the next year's planning.

Content of the marketing plan

A marketing plan for a small business typically includes Small Business Administration
Description of competitors, including the level of demand for the product or service and the
strengths and weaknesses of competitors
1. Description of the product or service, including special features
2. Marketing budget, including the advertising and promotional plan
3. Description of the business location, including advantages and disadvantages
for marketing
4. Pricing strategy
5. Market Segmentation

[edit] Medium-sized and large organizations

The main contents of a marketing plan are:[4]
1. Executive Summary
2. Situational Analysis
3. Opportunities / Issue Analysis - SWOT Analysis
4. Objectives
5. Strategy
6. Action Program (the operational marketing plan itself for the period under
review)
7. Financial Forecast
8. Controls
In detail, a complete marketing plan typically includes:[4]
1. Title page
2. Executive Summary
3. Current Situation - Macroenvironment
○ economy
○ legal
○ government
○ technology
○ ecological
○ sociocultural
○ supply chain
4. Current Situation - Market Analysis
○ market definition
○ market size
○ market segmentation
○ industry structure and strategic groupings
○ Porter 5 forces analysis
○ competition and market share
○ competitors' strengths and weaknesses
○ market trends
[5]
5. Current Situation - Consumer Analysis
○ nature of the buying decision
○ participants
○ demographics
○ psychographics
○ buyer motivation and expectations
○ loyalty segments
6. Current Situation - Internal
○ company resources
 financial
 people
 time
 skills
○ objectives
 mission statement and vision statement
 corporate objectives
 financial objective
  marketing objectives
 long term objectives
 description of the basic business philosophy
○ corporate culture
7. Summary of Situation Analysis
○ external threats
○ external opportunities
○ internal strengths
○ internal weaknesses
○ Critical success factors in the industry
○ our sustainable competitive advantage
8. Marketing research
○ information requirements
○ research methodology
○ research results
9. Marketing Strategy - Product
○ product mix
○ product strengths and weaknesses
 perceptual mapping
○ product life cycle management and new product development
○ Brand name, brand image, and brand equity
○ the augmented product
○ product portfolio analysis
 B.C.G. Analysis
 contribution margin analysis
 G.E. Multi Factoral analysis
 Quality Function Deployment
[6]
10.Marketing Strategy - segmented marketing actions and market share
objectives
○ by product,
○ by customer segment,
○ by geographical market,
○ by distribution channel.
11.Marketing Strategy - Price
○ pricing objectives
○ pricing method (eg.: cost plus, demand based, or competitor indexing)
 ○ pricing strategy (eg.: skimming, or penetration)
○ discounts and allowances
○ price elasticity and customer sensitivity
○ price zoning
○ break even analysis at various prices
12.Marketing Strategy - promotion
○ promotional goals
○ promotional mix
○ advertising reach, frequency, flights, theme, and media
○ sales force requirements, techniques, and management
○ sales promotion
○ publicity and public relations
○ electronic promotion (eg.: Web, or telephone)
○ word of mouth marketing (buzz)
○ viral marketing
13.Marketing Strategy - Distribution
○ geographical coverage
○ distribution channels
○ physical distribution and logistics
○ electronic distribution
14.Implementation
○ personnel requirements
 assign responsibilities
 give incentives
 training on selling methods
○ financial requirements
○ management information systems requirements
○ month-by-month agenda
 PERT or critical path analysis
○ monitoring results and benchmarks
○ adjustment mechanism
○ contingencies (What if's)
15.Financial Summary
○ assumptions
○ pro-forma monthly income statement
 ○ contribution margin analysis
○ breakeven analysis
○ Monte Carlo method
○ ISI: Internet Strategic Intelligence
16.Scenarios
○ Prediction of Future Scenarios
○ Plan of Action for each Scenario
17.Appendix
○ pictures and specifications of the new product
○ results from research already completed

Measurement of progress
The final stage of any marketing planning process is to establish targets (or standards) so
that progress can be monitored. Accordingly, it is important to put both quantities and
timescales into the marketing objectives (for example, to capture 20 percent by value of the
market within two years) and into the corresponding strategies.
Changes in the environment mean that the forecasts often have to be changed. Along with
these, the related plans may well also need to be changed. Continuous monitoring of
performance, against predetermined targets, represents a most important aspect of this.
However, perhaps even more important is the enforced discipline of a regular formal review.
Again, as with forecasts, in many cases the best (most realistic) planning cycle will revolve
around a quarterly review. Best of all, at least in terms of the quantifiable aspects of the
plans, if not the wealth of backing detail, is probably a quarterly rolling review - planning
one full year ahead each new quarter. Of course, this does absorb more planning resource;
but it also ensures that the plans embody the latest information, and - with attention
focused on them so regularly - forces both the plans and their implementation to be
realistic.
Plans only have validity if they are actually used to control the progress of a company: their
success lies in their implementation, not in the writing'.

Performance analysis
The most important elements of marketing performance, which are normally tracked, are:

[edit] Sales analysis

Most organizations track their sales results; or, in non-profit organizations for example, the
number of clients. The more sophisticated track them in terms of 'sales variance' - the
deviation from the target figures - which allows a more immediate picture of deviations to
become evident.
`Micro-analysis', which is a nicely pseudo-scientific term for the normal management
process of investigating detailed problems, then investigates the individual elements
(individual products, sales territories, customers and so on) which are failing to meet
targets.
[edit] Market share analysis
Few organizations track market share though it is often an important metric. Though
absolute sales might grow in an expanding market, a firm's share of the market can
decrease which bodes ill for future sales when the market starts to drop. Where such
market share is tracked, there may be a number of aspects which will be followed:
• overall market share
• segment share - that in the specific, targeted segment
• relative share -in relation to the market leaders
• annual fluctuation rate of market share

[edit] Expense analysis

The key ratio to watch in this area is usually the `marketing expense to sales ratio';
although this may be broken down into other elements (advertising to sales, sales
administration to sales, and so on).

[edit] Financial analysis

The "bottom line" of marketing activities should at least in theory, be the net profit (for all
except non-profit organizations, where the comparable emphasis may be on remaining
within budgeted costs). There are a number of separate performance figures and key ratios
which need to be tracked:
• gross contribution<>net profit
• gross profit<>return on investment
• net contribution<>profit on sales
There can be considerable benefit in comparing these figures with those achieved by other
organizations (especially those in the same industry); using, for instance, the figures which
can be obtained (in the UK) from `The Centre for Interfirm Comparison'. The most
sophisticated use of this approach, however, is typically by those making use of PIMS (Profit
Impact of Management Strategies), initiated by the General Electric Company and then
developed by Harvard Business School, but now run by the Strategic Planning Institute.
The above performance analyses concentrate on the quantitative measures which are
directly related to short-term performance. But there are a number of indirect measures,
essentially tracking customer attitudes, which can also indicate the organization's
performance in terms of its longer-term marketing strengths and may accordingly be even
more important indicators. Some useful measures are:
• market research - including customer panels (which are used to track
changes over time)
• lost business - the orders which were lost because, for example, the stock
was not available or the product did not meet the customer's exact
requirements
• customer complaints - how many customers complain about the products or
services, or the organization itself, and about what

[edit] Use of marketing plans

A formal, written marketing plan is essential; in that it provides an unambiguous reference
point for activities throughout the planning period. However, perhaps the most important
benefit of these plans is the planning process itself. This typically offers a unique
opportunity, a forum, for information-rich and productively focused discussions between the
various managers involved. The plan, together with the associated discussions, then
provides an agreed context for their subsequent management activities, even for those not
described in the plan itself.

[edit] Budgets as managerial tools

The classic quantification of a marketing plan appears in the form of budgets. Because these
are so rigorously quantified, they are particularly important. They should, thus, represent an
unequivocal projection of actions and expected results. What is more, they should be
capable of being monitored accurately; and, indeed, performance against budget is the
main (regular) management review process.
The purpose of a marketing budget is, thus, to pull together all the revenues and costs
involved in marketing into one comprehensive document. It is a managerial tool that
balances what is needed to be spent against what can be afforded, and helps make choices
about priorities. It is then used in monitoring performance in practice.
The marketing budget is usually the most powerful tool by which you think through the
relationship between desired results and available means. Its starting point should be the
marketing strategies and plans, which have already been formulated in the marketing plan
itself; although, in practice, the two will run in parallel and will interact. At the very least,
the rigorous, highly quantified, budgets may cause a rethink of some of the more optimistic
elements of the plans.

Marketing Plan
The information for this article was derived from many sources, including Michael Porter's book
Competitive Advantage and the works of Philip Kotler. Concepts addressed include 'generic' strategies
and strategies for pricing, distribution, promotion, advertising and market segmentation. Factors such
as market penetration, market share, profit margins, budgets, financial analysis, capital investment,
government actions, demographic changes, emerging technology and cultural trends are also
addressed.

There are two major components to your marketing strategy:

• how your enterprise will address the competitive marketplace
• how you will implement and support your day to day operations.
In today's very competitive marketplace a strategy that insures a consistent approach to offering your
product or service in a way that will outsell the competition is critical. However, in concert with
defining the marketing strategy you must also have a well defined methodology for the day to day
process of implementing it. It is of little value to have a strategy if you lack either the resources or the
expertise to implement it.

In the process of creating a marketing strategy you must consider many factors. Of those many
factors, some are more important than others. Because each strategy must address some unique
considerations, it is not reasonable to identify 'every' important factor at a generic level. However,
many are common to all marketing strategies. Some of the more critical are described below.

You begin the creation of your strategy by deciding what the overall objective of your enterprise
should be. In general this falls into one of four categories:
• If the market is very attractive and your enterprise is one of the strongest in the industry you
will want to invest your best resources in support of your offering.
 • If the market is very attractive but your enterprise is one of the weaker ones in the industry
you must concentrate on strengthening the enterprise, using your offering as a stepping stone
toward this objective.
• If the market is not especially attractive, but your enterprise is one of the strongest in the
industry then an effective marketing and sales effort for your offering will be good for
generating near term profits.
• If the market is not especially attractive and your enterprise is one of the weaker ones in the
industry you should promote this offering only if it supports a more profitable part of your
business (for instance, if this segment completes a product line range) or if it absorbs some of
the overhead costs of a more profitable segment. Otherwise, you should determine the most
cost effective way to divest your enterprise of this offering.
Having selected the direction most beneficial for the overall interests of the enterprise, the next step is
to choose a strategy for the offering that will be most effective in the market. This means choosing
one of the following 'generic' strategies (first described by Michael Porter in his work, Competitive
Advantage).
• A COST LEADERSHIP STRATEGY is based on the concept that you can produce and market a
good quality product or service at a lower cost than your competitors. These low costs should
translate to profit margins that are higher than the industry average. Some of the conditions
that should exist to support a cost leadership strategy include an on-going availability of
operating capital, good process engineering skills, close management of labor, products
designed for ease of manufacturing and low cost distribution.
• A DIFFERENTIATION STRATEGY is one of creating a product or service that is perceived as
being unique "throughout the industry". The emphasis can be on brand image, proprietary
technology, special features, superior service, a strong distributor network or other aspects
that might be specific to your industry. This uniqueness should also translate to profit margins
that are higher than the industry average. In addition, some of the conditions that should exist
to support a differentiation strategy include strong marketing abilities, effective product
engineering, creative personnel, the ability to perform basic research and a good reputation.
• A FOCUS STRATEGY may be the most sophisticated of the generic strategies, in that it is a
more 'intense' form of either the cost leadership or differentiation strategy. It is designed to
address a "focused" segment of the marketplace, product form or cost management process
and is usually employed when it isn't appropriate to attempt an 'across the board' application
of cost leadership or differentiation. It is based on the concept of serving a particular target in
such an exceptional manner, that others cannot compete. Usually this means addressing a
substantially smaller market segment than others in the industry, but because of minimal
competition, profit margins can be very high.

Pricing
Having defined the overall offering objective and selecting the generic strategy you must then decide
on a variety of closely related operational strategies. One of these is how you will price the offering. A
pricing strategy is mostly influenced by your requirement for net income and your objectives for long
term market control. There are three basic strategies you can consider.
• A SKIMMING STRATEGY
If your offering has enough differentiation to justify a high price and you desire quick cash and
have minimal desires for significant market penetration and control, then you set your prices
very high.
• A MARKET PENETRATION STRATEGY
If near term income is not so critical and rapid market penetration for eventual market control
is desired, then you set your prices very low.
• A COMPARABLE PRICING STRATEGY
If you are not the market leader in your industry then the leaders will most likely have created
a 'price expectation' in the minds of the marketplace. In this case you can price your offering
comparably to those of your competitors.
Promotion
To sell an offering you must effectively promote and advertise it. There are two basic promotion
strategies, PUSH and PULL.
• The PUSH STRATEGY maximizes the use of all available channels of distribution to "push" the
offering into the marketplace. This usually requires generous discounts to achieve the
objective of giving the channels incentive to promote the offering, thus minimizing your need
for advertising.
• The PULL STRATEGY requires direct interface with the end user of the offering. Use of
channels of distribution is minimized during the first stages of promotion and a major
commitment to advertising is required. The objective is to "pull" the prospects into the various
channel outlets creating a demand the channels cannot ignore.
There are many strategies for advertising an offering. Some of these include:
• Product Comparison advertising
In a market where your offering is one of several providing similar capabilities, if your offering
stacks up well when comparing features then a product comparison ad can be beneficial.
• Product Benefits advertising
When you want to promote your offering without comparison to competitors, the product
benefits ad is the correct approach. This is especially beneficial when you have introduced a
new approach to solving a user need and comparison to the old approaches is inappropriate.
• Product Family advertising
If your offering is part of a group or family of offerings that can be of benefit to the customer
as a set, then the product family ad can be of benefit.
• Corporate advertising
When you have a variety of offerings and your audience is fairly broad, it is often beneficial to
promote your enterprise identity rather than a specific offering.

Distribution
You must also select the distribution method(s) you will use to get the offering into the hands of the
customer. These include:
• On-premise Sales involves the sale of your offering using a field sales organization that visits
the prospect's facilities to make the sale.
• Direct Sales involves the sale of your offering using a direct, in-house sales organization that
does all selling through the Internet, telephone or mail order contact.
• Wholesale Sales involves the sale of your offering using intermediaries or "middle-men" to
distribute your product or service to the retailers.
• Self-service Retail Sales involves the sale of your offering using self service retail methods of
distribution.
• Full-service Retail Sales involves the sale of your offering through a full service retail
distribution channel.
Of course, making a decision about pricing, promotion and distribution is heavily influenced by some
key factors in the industry and marketplace. These factors should be analyzed initially to create the
strategy and then regularly monitored for changes. If any of them change substantially the strategy
should be reevaluated.

The Environment
Environmental factors positively or negatively impact the industry and the market growth potential of
your product/service. Factors to consider include:
• Government actions - Government actions (current or under consideration) can support or
detract from your strategy. Consider subsidies, safety, efficacy and operational regulations,
licensing requirements, materials access restrictions and price controls.
 • Demographic changes - Anticipated demographic changes may support or negatively impact
the growth potential of your industry and market. This includes factors such as education, age,
income and geographic location.
• Emerging technology - Technological changes that are occurring may or may not favor the
actions of your enterprise.
• Cultural trends - Cultural changes such as fashion trends and life style trends may or may not
support your offering's penetration of the market

The Prospect
It is essential to understand the market segment(s) as defined by the prospect characteristics you
have selected as the target for your offering. Factors to consider include:
• The potential for market penetration involves whether you are selling to past customers or a
new prospect, how aware the prospects are of what you are offering, competition, growth rate
of the industry and demographics.
• The prospect's willingness to pay higher price because your offering provides a better solution
to their problem.
• The amount of time it will take the prospect to make a purchase decision is affected by the
prospects confidence in your offering, the number and quality of competitive offerings, the
number of people involved in the decision, the urgency of the need for your offering and the
risk involved in making the purchase decision.
• The prospect's willingness to pay for product value is determined by their knowledge of
competitive pricing, their ability to pay and their need for characteristics such as quality,
durability, reliability, ease of use, uniformity and dependability.
• Likelihood of adoption by the prospect is based on the criticality of the prospect's need, their
attitude about change, the significance of the benefits, barriers that exist to incorporating the
offering into daily usage and the credibility of the offering.

The Product/Service
You should be thoroughly familiar with the factors that establish products/services as strong
contenders in the marketplace. Factors to consider include:
• Whether some or all of the technology for the offering is proprietary to the enterprise.
• The benefits the prospect will derive from use of the offering.
• The extent to which the offering is differentiated from the competition.
• The extent to which common introduction problems can be avoided such as lack of adherence
to industry standards, unavailability of materials, poor quality control, regulatory problems
and the inability to explain the benefits of the offering to the prospect.
• The potential for product obsolescence as affected by the enterprise's commitment to product
development, the product's proximity to physical limits, the ongoing potential for product
improvements, the ability of the enterprise to react to technological change and the likelihood
of substitute solutions to the prospect's needs.
• Impact on customer's business as measured by costs of trying out your offering, how quickly
the customer can realize a return from their investment in your offering, how disruptive the
introduction of your offering is to the customer's operations and the costs to switch to your
offering.
• The complexity of your offering as measured by the existence of standard interfaces, difficulty
of installation, number of options, requirement for support devices, training and technical
support and the requirement for complementary product interface.

The Competition
It is essential to know who the competition is and to understand their strengths and weaknesses.
Factors to consider include:
 • Each of your competitor's experience, staying power, market position, strength, predictability
and freedom to abandon the market must be evaluated.

Your Enterprise
An honest appraisal of the strength of your enterprise is a critical factor in the development of your
strategy. Factors to consider include:
• Enterprise capacity to be leader in low-cost production considering cost control infrastructure,
cost of materials, economies of scale, management skills, availability of personnel and
compatibility of manufacturing resources with offering requirements.
• The enterprise's ability to construct entry barriers to competition such as the creation of high
switching costs, gaining substantial benefit from economies of scale, exclusive access to or
clogging of distribution channels and the ability to clearly differentiate your offering from the
competition.
• The enterprise's ability to sustain its market position is determined by the potential for
competitive imitation, resistance to inflation, ability to maintain high prices, the potential for
product obsolescence and the 'learning curve' faced by the prospect.
• The prominence of the enterprise.
• The competence of the management team.
• The adequacy of the enterprise's infrastructure in terms of organization, recruiting capabilities,
employee benefit programs, customer support facilities and logistical capabilities.
• The freedom of the enterprise to make critical business decisions without undue influence from
distributors, suppliers, unions, creditors, investors and other outside influences.
• Freedom from having to deal with legal problems.

Development
A review of the strength and viability of the product/service development program will heavily
influence the direction of your strategy. Factors to consider include:
• The strength of the development manager including experience with personnel management,
current and new technologies, complex projects and the equipment and tools used by the
development personnel.
• Personnel who understand the relevant technologies and are able to perform the tasks
necessary to meet the development objectives.
• Adequacy and appropriateness of the development tools and equipment.
• The necessary funding to achieve the development objectives.
• Design specifications that are manageable.

Production
You should review your enterprise's production organization with respect to their ability to cost
effectively produce products/services. The following factors are considered:
• The strength of production manager including experience with personnel management, current
and new technologies, complex projects and the equipment and tools used by the
manufacturing personnel.
• Economies of scale allowing the sharing of operations, sharing of production and the potential
for vertical integration.
• Technology and production experience
• The necessary production personnel skill level and/or the enterprise's ability to hire or train
qualified personnel.
• The ability of the enterprise to limit suppliers bargaining power.
• The ability of the enterprise to control the quality of raw materials and production.
• Adequate access to raw materials and sub-assembly production.
Marketing/Sales
The marketing and sales organization is analyzed for its strengths and current activities. Factors to
consider include:
• Experience of Marketing/Sales manager including contacts in the industry (prospects,
distribution channels, media), familiarity with advertising and promotion, personal selling
capabilities, general management skills and a history of profit and loss responsibilities.
• The ability to generate good publicity as measured by past successes, contacts in the press,
quality of promotional literature and market education capabilities.
• Sales promotion techniques such as trade allowances, special pricing and contests.
• The effectiveness of your distribution channels as measured by history of relations, the extent
of channel utilization, financial stability, reputation, access to prospects and familiarity with
your offering.
• Advertising capabilities including media relationships, advertising budget, past experience,
how easily the offering can be advertised and commitment to advertising.
• Sales capabilities including availability of personnel, quality of personnel, location of sales
outlets, ability to generate sales leads, relationship with distributors, ability to demonstrate
the benefits of the offering and necessary sales support capabilities.
• The appropriateness of the pricing of your offering as it relates to competition, price sensitivity
of the prospect, prospect's familiarity with the offering and the current market life cycle stage.

Customer Services
The strength of the customer service function has a strong influence on long term market success.
Factors to consider include:
• Experience of the Customer Service manager in the areas of similar offerings and customers,
quality control, technical support, product documentation, sales and marketing.
• The availability of technical support to service your offering after it is purchased.
• One or more factors that causes your customer support to stand out as unique in the eyes of
the customer.
• Accessibility of service outlets for the customer.
• The reputation of the enterprise for customer service.

Conclusion
After defining your strategy you must use the information you have gathered to determine whether
this strategy will achieve the objective of making your enterprise competitive in the marketplace. Two
of the most important assessments are described below.
Cost To Enter Market
This is an analysis of the factors that will influence your costs to achieve significant market
penetration. Factors to consider include:
• Your marketing strength.
• Access to low cost materials and effective production.
• The experience of your enterprise.
• The complexity of introduction problems such as lack of adherence to industry standards,
unavailability of materials, poor quality control, regulatory problems and the inability to
explain the benefits of the offering to the prospect.
• The effectiveness of the enterprise infrastructure in terms of organization, recruiting
capabilities, employee benefit programs, customer support facilities and logistical capabilities.
• Distribution effectiveness as measured by history of relations, the extent of channel utilization,
financial stability, reputation, access to prospects and familiarity with your offering.
 • Technological efforts likely to be successful as measured by the strength of the development
organization.
• The availability of adequate operating capital.

Profit Potential
This is an analysis of the factors that could influence the potential for generating and maintaining
profits over an extended period. Factors to consider include:
• Potential for competitive retaliation is based on the competitors resources, commitment to the
industry, cash position and predictability as well as the status of the market.
• The enterprise's ability to construct entry barriers to competition such as the creation of high
switching costs, gaining substantial benefit from economies of scale, exclusive access to or
clogging of distribution channels and the ability to clearly differentiate your offering from the
competition.
• The intensity of competitive rivalry as measured by the size and number of competitors,
limitations on exiting the market, differentiation between offerings and the rapidity of market
growth.
• The ability of the enterprise to limit suppliers bargaining power.
• The enterprise's ability to sustain its market position is determined by the potential for
competitive imitation, resistance to inflation, ability to maintain high prices, the potential for
product obsolescence and the 'learning curve' faced by the prospect.
• The availability of substitute solutions to the prospect's need.
• The prospect's bargaining power as measured by the ease of switching to an alternative, the
cost to look at alternatives, the cost of the offering, the differentiation between your offering
and the competition and the degree of the prospect's need.
• Market potential for new products considering market growth, prospect's need for your
offering, the benefits of the offering, the number of barriers to immediate use, the credibility
of the offering and the impact on the customer's daily operations.
• The freedom of the enterprise to make critical business decisions without undue influence from
distributors, suppliers, unions, investors and other outside influences.

Mktng process::::
Process is another element of the extended
marketing mix, or 7P's.There are a number of
perceptions of the concept of process within the
business and marketing literature. Some see
processes as a means to achieve an outcome, for
example - to achieve a 30% market share a
company implements a marketing planning process.
Another view is that marketing has a number of
processes that integrate together to create an
overall marketing process, for example -
telemarketing and Internet marketing can be
integrated. A further view is that marketing
processes are used to control the marketing mix,
i.e. processes that measure the achievement
marketing objectives. All views are understandable,
but not particularly customer focused.
For the purposes of the marketing mix, process is
an element of service that sees the customer
experiencing an organisation's offering. It's best
 viewed as something that your customer
participates in at different points in time. Here are
some examples to help your build a picture of
marketing process, from the customer's point of
view.
Going on a cruise - from the moment that you
arrive at the dockside, you are greeted; your
baggage is taken to your room. You have two
weeks of services from restaurants and evening
entertainment, to casinos and shopping. Finally,
you arrive at your destination, and your baggage is
delivered to you. This is a highly focused marketing
process.

Booking a flight on the Internet - the process

begins with you visiting an airline's website. You
enter details of your flights and book them. Your
ticket/booking reference arrive by e-mail or post.
You catch your flight on time, and arrive refreshed
at your destination. This is all part of the marketing
process.
At each stage of the process,
markets:
• Deliver value through all elements of the marketing mix. Process,
physical evidence and people enhance services.
• Feedback can be taken and the mix can be altered.
• Customers are retained, and other serves or products are extended
and marked to them.
• The process itself can be tailored to the needs of different
individuals, experiencing a similar service at the same time.
Processes essentially have inputs, throughputs and
outputs (or outcomes). Marketing adds value to
each of the stages. Take a look at the lesson on
value chain analysis to consider a series of
processes at work.

legal notice