Main marketing objectives- (should be quantifiable)
- Maintain or gain makret share.
- Taget new markets.
- increase brand recongnisition.
- develop new products or services (as a result of market research or technological development).
Internal influences- Finance e.g the expected return or busineses financial position,H.R e.g the skills of the workfource, Ops e.g quality and capacity.
External influences- Competitors actions, technological chanfe, market factors e.g economic change, social change, legislation or consumer needs.
Reasens for anylsying the market:
- Gathering evidence for devising a new strategy.
- Identyfying patterns in sales.
Methods of analysing the market.
Moving averages- plot the underlying trend of sales, the aim is to smooth out figures.
Correlation- an relationship between 2 varibles which can be either positive or negative.
Test market- replicates all elements of a product launch to a specific geographic region/demographic group to judge the viability of the product in the market before a full-scale launch.
Extrapolation- uses an identified underlying trend to predict future sales.when products have short life cycles extraoplation can be mislaeding and unexpected events can have a dramtic impact on sales but are impossible to predict.
Benefits and drawbacks of Market analysis.
- the opportunities of the market.
- what is lickely happen to the market in the future
- what the most significant influences on the market are.
Often relies on bakdata which would mean the past being the same as the future and therefore can be misleading.
Can be bias if the person in charge of the research favours a certain strategy.
The futher into the future the forecasts go the less lickely they are of being accurate.
IT in analysing markets.
- Information can be proccessed quickly.
- information can be used to biuld uop a electronic data base of consumer buying behavior.
- can create detailed profile of a specific costumer which means products and promotions can be targeted more efficiantly.
- information overload, this may slow down decision making as a constant stream of data comes to no desisivie conclusion which may give other more decisive businesses a competitve advantage.
- Data is availabe quickly which could cause decision makers to overreact as data is misinterparted to be a current trend.
Marketing Strategies- low cost versus Differentiat
Low cost- this strategie involves outcompeting other businesses on price to do this the business must lower its own costs e.g move to a chaper location for its head quarters or by economies of scale.
Differentiaiotn- this strategie infolves a business making there products/services seem superior to others on th market this may be done by:
- creating a strong brand image.
- developing a USP.
- patenting a new invention.
the pricing will reflect the exclusivity of product and distrubution will be strickly controoled if possible to maintian image.
Ansoff's matrix- a way of classifying marketing straagies in terms of existing and new products in existing and new markets and the degree of risk invovled in each.
Market penetration- when a firm increases the slaes of its current products to its exitsting costumers or attracts new costumers from competitors in the market.
This strategy relies heavily on using the different element of the marketing mix more effectively.
- creating a loyalty scheme.
- increasing promotional spending.
- giving costumers a greater range of buying options.
- product development- is the strategy of offering new and imporives products to existing markets.
This strategy might include:
- introducing new models of products or services with significant modifications.
- developing related products or services, which market research has indicatedas being part of the buying desisions or costumers.
Market development- finding new markets for existing products either by selling abroad or by identifying a new segmeant of the market.
This stratagy might include:
- targeting a different geographical area, including an over seas market.
- developing new sales channels, such as e-commerce, to attract a new audience.
- targeting a new consumer group.
Difersification- ofering a new product in a new market.
Related Diversification- forward backaward or horizontal integration.
Unrelated diversification- this strategy holds the greatest amount of risk, but also has the potential for the most growth.
stratagies might include
- buying an existing business
- Targeting an already succesful market.
- a new technology developed, there is less risk if there is evidence of significant potential.
Entering international markets
this is a particualy good option for busineeses that:
the uk market is saturated.
the uk market iv very competitve, driving down prices and therfore profits.
where there are opportunuities to achive economies of scale.
the firm has exess capacity.
the additional cost involved are relatively small.
assessing the effectivness of marketing strategies
- The most important consideration is whether or not the strategy has helped the business to achieve it's marketing objectives and therefore its corporate objectives.
- the strategy can be assed in terms of Ansoff's matrix has the strategy achieved any of the 4 quadrants of the matrix.
marketing plans- written details of the activities to be used to carry out the marketing stretegy.
they must include:
- a description of all activities involved.
- a time frame.
- reasen to justify each action.
- marketin objectives.
- situation analysis.
- sales forecast.
- marketing strategies
Strenghtths- what the business is good at and why it is succesful.
Weaknesses- the aspects of the business that could hold back development strategies.
Opertunities- what is happening in the market.
Threats- anything that will constrain the activities of the business.
The marketing budget depends upon:
how much competitors are spending on marketing
the current financial position of the business if trading conditions are difficult, then the money allocated to marketing may be reduced.
back-data.-successful marketing plans from the past can form the bsis of future plans and ay mistakes can be identified .
market analysis provides a piture of the curent sistuation
predtions of about competitor behavior
Internal influences on marekting plans.
- fiance available.
- operationl issues.
- Human resources.
- competitors actions.
- Market condition.
- Technological change.
issues in implementing marketing plans.
- Scheduling key tasks.
- Resoures required.
- The Cost.
1- meeting quality, cost and volume targets. 2innovation. 3efficiency targets. 4-environmental targets. .
internal influences-1.Nature of product. 2.Target market.
External influences- 1.Competitors' performance. 2.Demographics. 3.Demand.
Operational strategies (scale and resource mix)
Choosing the right scale for production-
economies of scale: 1- Specilasation. 2-Risk bearing. 3-Financial. 4-Purchesing. 5-Technelogical
Diseconomies of scale: 1-communication 2-co-ordintion.
Operational strategies (scale and resource mix) co
The optimal mix of resources:
Advatages- less human error, easy workforce planning, greater speed of output.
Disadvantages- high initial capital outlay, less flexibilty, lack of initiative.
Advatades- good flexibilty if stadd are multiskilled, creates jobs, can offer tailor made goods/services, opertunity to introduce Kaizen.
Disadvantages- labour related probles (see H.R), ppossible workforce shortages, high H.R costs.
operational strategies (invoation)
R&D process- 1- idea genereation. 2.idea screening. 3.concept testing. 4.developing ideas. 5.business analysis. 6.product development.
Advantages of invoation- 1.developing USP can increase competitiveness +mean the business can charge premium prices. 2.can gain a reputation for being innovative. 3. can improve efficiency of production process.
Disadvantages of being invoative- 1.uses a lot of time and resources with no guarentee of success. 2.loss of focus on core objective/function. 3.brand/reputation at rick of damage.
impact of innovation on marketing, H.R and Finance.
Marketing- will need to design effective marketing mix to achieve sales targets. Financial- will need to create R&D budget + look at potential profit. H.R-workforce planning issues + staff opportunity to contribute
Operatianl stratagies (location)
Methods of making location detions. 1. Quantitative e.g captial costs, labhour costs, transport costs, S.R potential, government grants and investment aprasails..
2. Qualitative e.g safety, Space to expand, ethical considerations, I.T infastructure.
benefits of optimal location- it is lickley to blance.
quantitative factors+qualitative factors
allowing for the optimum saled revenure available for a loacation.
Operatianl stratagies (multi-site/international lo
Advantages and disadvantages of a multi sight loacation:
Advantages- convenence for consumers, delegation of athority, lower transport costs. less risk of supply dispruption to production based companies.
Disadvantages- Coordination problems, loss of control from senior managment, if location to close then possibilyty of cannabilism.
Advantages and diadvantages of internail locations:
Advantages-cost reduction. econimic groth/market potential, goverment support avoidance or trade barriers.
Disadavantages- communication barriers, cultural differences, costumers service levels, supply chain concerns and ethical considerations.
opersational strategies(Lean production)
Critical path analysis.
Benefits- ensures mangment all think through the plan, aids financial planning as fincance knows when certain areas of the business will need capital, allows for easy allocation of reasources e.g staff, desision making tool and planning tool.
Drawbacks- based on estimeates+depends on acuracyof estimates, as project deleops must be altered and updated.
opersational strategies (Lean production)
Kaizen- continouse improvement, empowers staff because they are consulted more.
Just-in-time- reduces waste by limtiing restricting holding at each stage of the production porcess risky if if supply chain is long or there is bad communication may also have high intial captial cost as I.T and staff training may need to be improved.
Time-based-managment- reduced unproductive time staff trained in number of task sto be flexible in the production process, This means products are marketed faster hightened ability to react to change in consumer tastes or market conditions.
H.R obkectives- 1.mathching workforce size,skills and location to business needs. 2.minimising labhour costs. 3-making full use of workforce potential. 4-mainting godd employer/ employee relations.
internal and external influences on h.r objectives.
Internal- corporate objectives. The attitudes and beliefs of senior managers and the type of product.
external- economic climate, price elasticity of demand of the product, employment legistlation
strenghts-motivated workforce, biulds good reputation, good employe knowladge
weakneses-costly, can be difficult and expensive to alter workforce which means surplus capacity if demand falls as relies heavily on permanent staff.
strenghts- enable business to cost minimse, makes it easy to adapt the size of workforce as employess can just be dismissed, allows managers to retain control.
Weakeneses- can create bad rep for business, can create corraltion with pay and output, labour turnover could become high and employees could become demotivated.
components of a workforce plan
1.the number of employees and there skills 2.the age of employees 3.an anylisis of lickley changes in demand. 4.an anylisys of factors affecting the supply of labour 5.actions needed to aquire desired workforce.
internal and external influences on workforce plans.
internal- corporate plans, operations plans, financial constraints marketing plans.
external- sales forecasts, wage rates, technelogical development, changes in legislation and demorgrphic change.
Work force plans continoued.
issues in implementin workforce plans- can effect corporate image, costly in training and recriuting redundanci payments.
the value of useing workforce plans- enanbles a business to adapt its workforce size, and utilize its employees.
factors determening chioce of organisational structure-
Centrlisation- improves motivastion achievment and recognition through working, reduces work load of senior managers
delayering- involves taking away a layer of the organisational structure, improves communication to top mangers can loose high level skills if get rid of managers but getting rid of mangers will mean the most cost reducd.
flexible workforce- rising the number of temp staff, part-time working, outsourcing
Matrix structure- task orientated
communication with employees-
good comincation- makes it easyer to implement change, encourages commitment, ensures employees are all working towards the same objective.
works council- works council are usualy ellectedware workers and mangment meet to discuss issues.
methods of avioding and resolving industrial disputes.
1.Cost minimisation 2.R.O.C.E targets 3.Cash-flow taregts 4.Shareholders returns.
Internal and external influnces on financial objectives-
internal- owners, sector, characteristics of firm.
External- competitors actions and economic conditions.
Analysing Balance sheet.
Analysing income statment
sing financial data for comparison?
interpreting published acounts.
interpreting published acounts
interpreting published acounts
interpreting published acounts
value and limitations of ratio analysis