AboutLeo Lingham Expertise I can answer questions on marketing, marketing planning,
product management, advertising, sales promotions, sales planning,
merchandising, direct marketing, and sales management.
Experience 18 YEARS WORKING MANAGEMENT EXPERIENCE IN BUSINESS PLANNING,
STRATEGIC PLANNING, MARKETING, SALES MANAGEMENT, AND ORGANIZATION DEVELOPMENT.
PLUS
24 YEARS OF MANAGEMENT CONSULTING IN STRATEGIC PLANNING,
BUSINESS PLANNING, PRODUCT MANAGEMENT, MANAGEMENT TRAINING,
AND BUSINESS COACHING.
Question 1.explain how a such as GE might be classified by sum business marketers as a user customer but by other an OEM customer?
2.why is the cost of serving a long standing customer for less than the cost of acquiring a new customer?
3.exlain how the use of the sales forecast differs from that of an estimate of market potential?
4.what personal selling strategy would be most appropriate when dealing with an organisational buyer who is an optimizer?
5.describe the roles the internet plays in enhancing supply chain management operations?
6.downstream activities in a firm's value chain create competitive advantages that are largely country-specific.why?
7.brunswick corporation centralises its procurement decisions at the headquarters level.discuss how it would approach purchasing differently than a competitor that decentralises purchasing across various plant locations?
8.compare and contrast the two general procurement strategies employed by the federal government-[a]formal advertising and [b] negotiated contract?
9.describe the major elements that charecterize a market -driven organisation and outline the steps a firm might follow in becoming more market driven?
10.discuss some of the possible objectives a manufacturer of business jet airplanes might have for the internet strategy?
Answer LINCY,
HERE ARE THE ANSWERS FOR 3,4,5,6,9.
OTHER 5 ANSWERS ARE READY,BUT COULD NOT FIT
INTO THE SPACE.
PLEASE SEND THE balance questions back,
so I can send the answers asap.
REGARDS
LEO LINGHAM
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Q.5] : Describe the role the internet plays in enhancing supply chain management operations.
THE INTERNET PLAYS A SIGNIFICANT PART
IN THE SUPPLY CHAIN MANAGEMENT OPERATION.
AT THE TOP END , IT HELPS
1.DEMAND PLANNING/ FORECASTING
-by providing resources for market forecasting,
2.PROCUREMENT
-sourcing of raw materials.
-order placements.
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AT THE BOTTOM END, IT HELPS
THE CUSTOMER SERVICING/ CUSTOMER RELATIONS
MANAGEMENT.
CRM brings in flexibility / reliability/ sensivity into
the customer relationship management.
Customer relationship management (CRM) consists of the processes a company uses to track and organize its contacts with its current and prospective customers. CRM software is used to support these processes; information about customers and customer interactions can be entered, stored and accessed by employees in different company departments. Typical CRM goals are to improve services provided to customers, and to use customer contact information for targeted marketing.
From the outside, customers interacting with a company perceive the business as a single entity, despite often interacting with a number of employees in different roles and departments. CRM is a combination of policies, processes, and strategies implemented by an organization to unify its customer interactions and provide a means to track customer information. It involves the use of technology in attracting new and profitable customers, while forming tighter bonds with existing ones.
CRM includes many aspects which relate directly to one another:
1.Front office operations — Direct interaction with customers, e.g. face to face meetings, phone calls, e-mail, online services etc.
2.Back office operations — Operations that ultimately affect the activities of the front office (e.g.,accounts-billing ,maintenance,planning ,marketing,advertising,finance,manufacturing etc ]
3.Business relationships — Interaction with other companies and partners, such as suppliers/vendors and retail outlets/distributors, industry networks (lobbying groups, trade associations). This external network supports front and back office activities.
4.Analysis — Key CRM data can be analyzed in order to plan target-marketing campaigns, conceive business strategies, and judge the success of CRM activities (e.g., market share, number and types of customers, revenue,profitability ]
Operational CRM
Operational CRM provides support to "FRONT OFFICE '' business processes, e.g. to SALES,MARKETING and service staff. Interactions with customers are generally stored in customers' contact histories, and staff can retrieve customer information as necessary.
The contact history provides staff members with immediate access to important information on the customer (products owned, prior support calls etc.), eliminating the need to individually obtain this information directly from the customer. Reaching to the customer at right time at right place is preferable.
Operational CRM processes customer data for a variety of purposes:
-Managing campaigns
-Enterprise marketing automation.
-Salesforce automation
-Sales management system
Sales (SFA)
Sales Force Automation automates sales force-related activities such as:
-Activity Management: Scheduling sales calls or mailings
-Tracking responses
-Generating reports
-Opportunity management and assessment
-Account management and Target account selling
-Automated sales order processing.
Analytical CRM
Analytical CRM analyzes customer data for a variety of purposes:
-Designing and executing targeted marketing campaigns
-Designing and executing campaigns, e.g. customer acquisition, cross selling ,up-selling .
-Analysing customer behavior in order to make decisions relating to products and services
(e.g. pricing, product development ]
-Management information system (e.g. financial forecasting and customer profitability analysis)
Analytical CRM generally makes heavy use of data mining and other techniques to produce useful results for decision-making
[Sales Intelligence CRM
Sales Intelligence CRM is similar to Analytical CRM, but is intended as a more direct sales tool. Features include alerts sent to sales staff regarding:
-Cross-selling/Up-selling/Switch-selling opportunities
-Cuatomer drift
-Sales performance
-Customer trends
-Customer margins
-Customer alignment
Campaign Management
combines elements of Operational and Analytical CRM. Campaign management functions include:
Target groups formed from the client base according to selected criteria
Sending campaign-related material (e.g. on special offers) to selected recipients using various channels (e.g. e-mail, telephone, SMS, post)
Tracking, storing, and analyzing campaign statistics, including tracking responses and analyzing trends
Collaborative CRM
Collaborative CRM covers aspects of a company's dealings with customers that are handled by various departments within a company, such as sales, technical support and marketing. Staff members from different departments can share information collected when interacting with customers. For example, feedback received by customer support agents can provide other staff members with information on the services and features requested by customers. Collaborative CRM's ultimate goal is to use information collected by all departments to improve the quality of services provided by the company.
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CRM help it to understand CUSTOMER behavior
The better a business can manage the relationships it has with its customers the more successful it will become. Therefore IT systems that specifically address the problems of dealing with customers on a day-to-day basis are growing in popularity.
An effective CRM systems provides a good understanding of
THE CUSTOMER BUYING DECISION MAKING PROCESS.
Behind the visible act of making a purchase lies a decision process that must be investigated.
The purchase decision process is the stages a buyer passes through in making choices about which products and services to buy. :
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5 STAGES OF CUSTOMER BEHAVIOR
1.problem recognition,
-PERCEIVING A NEED
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2.information search,
SEEKING A VALUE
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3.alternative evaluation,
ASSESSING VALUE
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4.purchase decision, and
BUYING VALUES
----------------------------------------
5.post-purchase behavior
VALUE IN CONSUMPTION OR USE
========================
A. Problem Recognition: Perceiving a Need
Perceiving a difference between a person's ideal and actual situations big enough to trigger a decision.
Can be as simple as noticing an empty milk carton or it can be activated by marketing efforts.
-------------------------------------------
B. Information Search: Seeking Value The information search stage clarifies the options open to the consumer and may involve
Internal search
Scanning one’s memory to recall previous experiences with products or brands.
Often sufficient for frequently purchased products.
External search
When past experience or knowledge is insufficient
The risk of making a wrong purchase decision is high
The cost of gathering information is low.
The primary sources of external information are:
Personal sources, such as friends and family.
Public sources, including various product-rating organizations such as Consumer Reports.
Marketer-dominated sources, such as advertising, company websites, and salespeople
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C. Alternative Evaluation: Assessing Value The information search clarifies the problem for the consumer by
(1) Suggesting criteria to use for the purchase.
(2) Yielding brand names that might meet the criteria.
(3) Developing consumer value perception.
A consumer's evaluative criteria represent both
the objective attributes of a brand (such as locate speed on a portable CD player)
the subjective factors (such as prestige).
These criteria establish a consumer's evoked set
the group of brands that a consumer would consider acceptable from among all the brands in the product class of which he or she is aware
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D. Purchase Decision: Buying Value
From whom to buy
which depends on such considerations
Terms of sale
Past experience buying from the seller
Return policy.
When to buy
which can be influenced by
store atmosphere
time pressure
a sale
pleasantness of the shopping experience.
Do not buy
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E. Postpurchase Behavior: Value in Consumption or Use
After buying a product, the consumer compares it with expectations and is either satisfied or dissatisfied.
Satisfaction or dissatisfaction affects
consumer value perceptions
consumer communications
repeat-purchase behavior.
Many firms work to produce positive postpurchase communications among consumers and contribute to relationship building between sellers and buyers.
Cognitive Dissonance. The feelings of postpurchase psychological tension or anxiety a consumer often experiences
Firms often use ads or follow-up calls from salespeople in this postpurchase stage to try to convince buyers that they made the right decision.
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F. Involvement and Problem-Solving Variations
NO. OF BRANDS EXAMINED
NO. OF SELLERS CONSIDERED
NO. OF PRODUCT ATTRIBUTES EVALUATED
NO. OF EXTERNAL INFORMATION SOURCE USED
NO. OF HOURS/ DAYS SPENT
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Consumers may skip or minimize one or more steps in the purchase decision process depending on
the level of involvement
the personal, social, and economic significance of the purchase
Three characteristics of high-involvement purchase
is expensive,
can have serious personal consequences, or
could reflect on one’s social image.
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Three general problem-solving variations exist in the customer purchase decision process:
Routine Problem Solving
Virtually a habit
involves little effort seeking external information and evaluating alternatives.
Typically used for low-priced, frequently purchased products.
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Limited Problem Solving
Involves the use of moderate information-seeking efforts.
Often used when the buyer has little time or effort to spend.
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Extended Problem
Solving
Each stage of the consumer purchase decision process is used
Considerable time and effort on
external information search and in identifying
evaluating alternatives.
Used in high-involvement purchase situations.
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Involvement and Marketing Strategy
Low and high consumer involvement has important implications for marketing strategy, which differs for products that are market leaders from their challengers.
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SCOPE OF CRM
Business benefits of CRM
Implementing a customer relationship management (CRM) solution might involve considerable time and expense. However, there are many potential benefits.
A major benefit can be the development of better relations with your existing customers, which can lead to:
increased sales through better timing due to anticipating needs based on historic trends
identifying needs more effectively by understanding specific customer requirements
cross-selling of other products by highlighting and suggesting alternatives or enhancements
identifying which of your customers are profitable and which are not
This can lead to better marketing of your products or services by focusing on:
effective targeted marketing communications aimed specifically at customer needs
a more personal approach and the development of new or improved products and services in order to win more business in the future
Ultimately this could lead to:
enhanced customer satisfaction and retention, ensuring that your good reputation in the marketplace continues to grow
increased value from your existing customers and reduced cost associated with supporting and servicing them, increasing your overall efficiency and reducing total cost of sales
improved profitability by focusing on the most profitable customers and dealing with the unprofitable in more cost effective ways
Once your business starts to look after its existing customers effectively, efforts can be concentrated on finding new customers and expanding your market. The more you know about your customers, the easier it is to identify new prospects and increase your customer base.
Even with years of accumulated knowledge, there's always room for improvement. Customer needs change over time, and technology can make it easier to find out more about customers and ensure that everyone in an organisation can exploit this information.
A properly implemented CRM system can bring significant benefits to organizations. But when I talk about a system, I mean the 3 P's, the complete consortium of people (employees, culture), procedures (way of doing business) and programs (supporting applications), not just an application running on a computer.
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Q.4] : What personal selling strategy would be most appropriate when dealing with an organizational buyer who is an optimizer? A satisfier.
THE MOST APPROPRIATE PERSONAL SELLING
STRATEGY UNDER THIS CIRCUMSTANCES
IS ''CONSULTATIVE SELLING STRATEGY''.
People buy from people they trust and who understand their issues. The way a professional develops their relationships with their customers is key to their success. Those who focus on the customer and their needs are more likely to be valued for their advice and trusted.
The Principles of Consultative Selling is based on three core principles:
Focus on the customer
Earn the right to advance
Persuade through involvement
The Principles of Consultative Selling enables
-to Understand the core attitudes and beliefs and place them at the heart of the approach
-to Navigate the steps appropriately
-to Develop and to build more effective relationships with their customers
-to ask intelligent questioning strategies
-to Create compelling ‘intelligent stories’ that will engage a potential customer’s interest
-to help and to understand the needs and involve them in developing appropriate solutions
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Q.3] : Explain how the use of the sales forecast differs from that of an estimate of market potential.
..
THE SALES MANAGER NEEDS THE MARKET POTENTIAL FORECAST FIGURES
FOR HIS RANGE OF PRODUCTS/ IN A GIVEN TERRITORY.
THIS HELPS THE SALES MANAGER .
-to understand the market potential in his country
-to understand the market potential by various regions in his country.
-to understand the market potential by various market segments.
-to understand the current his sales / market share by
regions/ market segments/ by total country.
THIS ALSO HELPS THE SALES MANAGER
-to PLAN the SALES/ MARKET SHARE for his products in his country.
-to PLAN the SALES / MARKET SHARE by various regions in his country.
-to PLAN the SALES / MARKET SHARE by various market segments.
THIS ALSO HELPS THE SALES MANAGER
-to determine his sales planning.
-to determine his product[s] requirements/ forecast.
-to determine his salesforce requirements.
-to determine his distribution methods.
-to determine the channel selection.
-to determine the sales promotions.
-to determine the merchandising plans.
-to determine the types of training requirement for his sales team.
-to set up the performance standard system
-to set up the incentive system for the sales team.
étc etc.
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METHOD OF MARKET POTENTIAL FORECAST MEASUREMENTS.
Methods Based on Judgment
Unaided judgment METHOD.
It is common practice to ask experts what will happen. This is a good procedure to use when
• experts are unbiased
• large changes are unlikely
• relationships are well understood by experts (e.g., demand goes up when prices go down)
• experts possess privileged information
• experts receive accurate and well-summarized feedback about their forecasts.
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Prediction markets METHOD.
Prediction markets, also known as betting markets, information markets, and futures markets have a long history.
Some commercial organisations provide internet markets and software that to allow participants to predict.Consultants can also set up betting markets within firms to bet on such things as the sales growth of a new product. PREDICTIONS can produce accurate sales forecasts when used within companies. However, there are no empirical studies that compare forecasts from prediction markets and with those from traditional groups or from other methods.
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Delphi METHOD.
The Delphi technique helps to capture the knowledge of diverse experts while avoiding the disadvantages of traditional group meetings. The latter include bullying and time-wasting.
To forecast with Delphi the administrator should recruit between five and twenty suitable experts and poll them for their forecasts and reasons. The administrator then provides the experts with anonymous summary statistics on the forecasts, and experts’ reasons for their forecasts. The process is repeated until there is little change in forecasts between rounds – two or three rounds are usually sufficient. The Delphi forecast is the median or mode of the experts’ final forecasts.
The forecasts from Delphi groups are substantially more accurate than forecasts from unaided judgement and traditional groups, and are somewhat more accurate than combined forecasts from unaided judgement.
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Structured analogies METHOD.
The outcomes of similar situations from the past (analogies) may help a marketer to forecast the outcome of a new (target) situation. For example, the introduction of new products in the markets can provide analogies for the outcomes of the subsequent release of similar products in other countries.
People often use analogies to make forecasts, but they do not do so in a structured manner. For example, they might search for an analogy that suits their prior beliefs or they might stop searching when they identify one analogy. The structured-analogies method uses a formal process to overcome biased and inefficient use of information from analogous situations.
To use the structured analogies method, an administrator prepares a description of the target situation and selects experts who have knowledge of analogous situations; preferably direct experience. The experts identify and describe analogous situations, rate their similarity to the target situation, and match the outcomes of their analogies with potential outcomes in the target situation. The administrator then derives forecasts from the information the experts provided on their most similar analogies.
Structured analogies are more accurate than unaided judgment in forecasting decisions .
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Expert systems METHOD.
As the name implies, expert systems are structured representations of the rules experts use to make predictions or diagnoses. For example, ‘if local household incomes are in the bottom quartile, then do not supply premium brands’. The forecast is implicit in the foregoing conditional action statement: i.e., premium brands are unlikely to make an acceptable return in the locale. Rules are often created from protocols, whereby forecasters talk about what they are doing while making forecasts. Where empirical estimates of relationships from structured analysis such as econometric studies are available, expert systems should use that information. Expert opinion, conjoint analysis, and bootstrapping can also aid in the development of expert systems.
Expert systems forecasting involves identifying forecasting rules used by experts and rules learned from empirical research. One should aim for simplicity and completeness in the resulting system, and the system should explain forecasts to users.
Developing an expert system is expensive and so the method will only be of interest in situations where many forecasts of a similar kind are required. Expert systems are feasible where problems are sufficiently well-structured for rules to be identified.
Expert systems forecasts are more accurate than those from unaided judgement.
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• The field perspective, or “field
assessment,” is based on a rollup
of individual forecasts, providing
management with a bottom-up view
of current market conditions
• The pipeline perspective, or “pipeline
assessment,” is generated by analyzing
opportunities at each stage of the
pipeline, enabling management to
assess sales targets from an aggregate,
top-down viewpoint.
4. CUSTOMERS' END USE EXPECTATIONS FORECAST =$57 mill.
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THE AVERAGE OF THIS WORKING = $57.5 mill.
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METHOD 3
• The historical perspective, or “analytic
assessment,” is based on a comparison
of current pipeline data with historical
trends, allowing the company to apply
knowledge gained from prior periods to
the current forecast.
YEAR 2004 $45mill.
YEAR 2005 $48mill.
YEAR 2006 $51mill.
YEAR 2007 $54mill.
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YEAR 2008 $57mill.
FORECAST
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METHOD 4
Triangulated Forecasting provides a set
of checks and balances that enables
management to quickly identify potential
problems.
Additionally, the analytic assessment
highlights that, at this point in the quarter,
the company’s forecasts are typically
20 percent above final attainment. Taking
all three perspectives into account,
management can quickly recognize that
the company is unlikely to meet its
original forecast unless corrective action
is taken immediately.
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METHOD 5
Simple moving average
A simple moving average (SMA) is the unweighted MEAN of the previous N data points.
For example, a 5 -YEAR simple moving average of closing SALES is the mean of the previous 5 YEARS ' closing SALES .
If those SALES are YEAR1= 150, YEAR2 = 170, YEAR3=190, YEAR4= 200, YEAR5=210 ,then the formula is
150+170+190+200+210=800/5 = FORECAST = 220
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Q.9] : Describe the major elements that characterize a market – driven organization and outline the steps a firm might follow in becoming more market driven .
MARKETING ORIENTATION
-is a way of conducting business
To be market oriented means, there exists
interrelationships between market orientation, firm innovativeness and innovation performance. Three dimensions of market orientation, namely collection and use of market information, development of market –oriented strategy and implementation of market oriented strategy are measured. Factor analysis is used to validate the measures of market orientation, firm innovativeness and innovation performance. A correlational analysis is performed to determine whether market orientation is associated with firm innovativeness and innovation performance
Market orientation influences firm innovativeness and firm performance. Within marketing, there has been great interest in market orientation as an intangible factor that has an effect on organizational performance. Market orientation is the business culture that produces performance by creating superior value to customers . Organizations must constantly innovate in every aspect of their business operations in order to compete and survive in the competitive market place. A useful interpretation of the marketing concept and a market orientation from a behavioral process is, market orientation as the organization-wide generation of market intelligence pertaining to current and future customer needs, dissemination of intelligence across departments and organization-wide responsiveness to it. IT focuses the values and beliefs market orientation approach encourages
1) continous cross-functional learning about customers’ expressed and latent needs and about competitors’ capabilities and strategies,
2) cross-functionally coordinated action to create and exploit the learning.
The culture including such values and beliefs results in collection and use of market information, development of market-oriented strategy and implementation of market-oriented strategy . Organizational culture is a driver of behavior and only when the culture is defined with commitment to superior value for customers market oriented behaviors manifest themselves in an organization.
Market orientation has been characterized as a culture of the organization that requires customer satisfaction be put at the center of business operations and therefore produces superior value for customers and outstanding performance for the firm . Customer needs and expectations evolve over time and delivering consistently high quality products and services and responsiveness to changing marketplace needs become important for the success of firms . Responsiveness to changing market needs often calls for the introduction of new products and services together with innovation capacity for a firm. Market orientation has also been described as the implementation of marketing activities designed to satisfy customer needs better than competitors are able to satisfy customer needs . While there is some variability in conceptualizations of market orientation, it typically focuses on three components; 1) customer focus, 2) competitor focus and 3) interfunctional coordination . All conceptualizations have an operational focus on information gathering, information dissemination and the ability to behaviorally respond to what is received .
Market orientation can be defined in terms of three dimensions;
1) The generation of market information about needs of customers and external environmental factors,
2) The dissemination of such information among organizational functions and
3) The development and implementation of strategies in response to the information.
These elements include continuous and systematic information gathering regarding customers and competitors, cross-functional sharing of information and coordination of activities, and responsiveness to changing market needs . The organization-wide context of market orientation illustrates the significance of adopting a proactive attitude to doing business and developing a competitive edge and is conceptually different from organizational profiency in performing marketing related activities .
A marketing oriented firm is one that allows the wants and needs of customers and potential customers to drive all the firm's strategic decisions. The firm's corporate culture is systematically committed to creating customer value. The rationale is that the more a company understands and meets the real needs of its consumers, the more likely it is to have happy customers who come back for more, and tell their friends. This process can entail the fostering of long term relationships with customers. In order to determine customer wants, the company usually needs to conduct some form of marketing research . Overall, the marketer expects that becoming marketing oriented, if done correctly, will provide the company with a sustainable competitive advantage .
A MARKET ORIENTED FIRM IS
-CUSTOMER FOCUSED
-COMPETITOR FOCUSED
-DRIVEN BY MARKET RESEARCH
-MARKETING CONCEPT
WHAT A MARKET ORIENTED ORGANIZATION DOES
-Collection and usage of market information is positively correlated with innovation performance
-Development of market-oriented strategy is positively associated with firm innovativeness.
-Development of market-oriented strategy is positively associated with innovation performance
-Implementation of market-oriented strategy is positively correlated with firm innovativeness
-Implementation of market-oriented strategy is positively correlated with innovation performance
-Firm innovativeness is positively correlated with innovation performance
-Collection and use of market information, development of market-oriented strategy and implementation of market-oriented strategy are correlated.
-listens to opinions of customers
-uses customer information to improve quality of products and services
-customer objectives are bases mainly on customer needs
-obtains customer ideas to improve products /services.
-company are trained about customer needs
-values customer input in new product/service planning.
-company values market position / share
-prices are determined by customer value
-focuses on markets in which the company have competitive strength
-company planning is around markets
-keeps promises made to customers
-Frequently tries out new ideas /new ways of doing things.
-collects and uses market information
-develops market oriented strategy
-implements market oriented strategy
etc etc
Techniques that firms use to understand the customer include:
Quantitative marketing research -surveys/questionnaire.
Qualititative marketing research - such as; focus groups and advisory panels
Market research and industry research
Face-to-face meetings with customers
Face-to-face meetings with frontline staff - sales reps, clerks, and receptionists
Customer complaints department
Customer hotlines - Web and telephone
Visits to customers' facilities
Frequent user programs and databases
User groups - Beta testing
Conferences
A marketing oriented firm will typically show the following characteristics:
Extensive use of various marketing research techniques
Broad product lines product.
Emphasis on a product's benefits to customers rather than on product attributes
Use of product innovations techniques, such as; brainstorming,concept testing , and force field analysis.
The offering of ancillary services like credit availability, delivery, installation, and warranty
Customer satisfaction and complaint monitoring procedures, including; exit interviews, customer complaints database, and Web and telephone information hotlines.
Organizational structure in which the marketing manager reports directly to the CEO.
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COCA COLA IS ONE SUCH HIGHLY MARKET ORIENTED ORGANIZATION.
COCA COLA , AS A MARKET ORIENTED ORGANIZATION
FOLLOWS MANY OF THE ELEMENTS LISTED ABOVE.
OVER AND ABOVE THAT ,
-coca cola, as an organiztion has a culture that puts ''customer satisfaction''
at the centre of ''business operation''.
and
''produce superior value for customers and outstanding performance for the firm''.
-COCA COLA makes sure that Customer needs and expectations evolve over time and delivering consistently high quality products and services and responsiveness to changing marketplace needs become important for the success of firms
-COCA COLA Responsiveness to changing market needs often calls for the introduction of new products and services together with innovation capacity for a firm. COCA COLA responds readliy.
COCA COLA as market oriented organization has, an increasing interest in the role of use of market information for strategic purposes. External factors such as competition, uncerainty and needs are driving forces for strategic applications of market information . Collection and use of market information enabled by information systems is broadly considered to be a competitive weapon to cope with uncertain and volatile environments. Companies can deal with uncertainty by increasing their information processing capability and by creating interorganizational links between customers and suppliers. Knowledge-based resources and information gathering include specific technical and creative skills as well as integrative and coordinative skills . When customers tastes and rivals’ strategies are dynamic, there is need to redesign or adapt the product. Firm innovativeness described by the development and marketing of innovations is likely to involve market, technology and competitor uncertainty. This means need for new information, technical changes and new organizational arrangements.
COCA COLA'S senior managers are committed to the concept of market orientation and fully understand the role of market information and sound overall intelligence. Strategy formulation and implementation necessitates the active participation and commitment of staff throughout an organization . It has the intelligence-gathering capabilities to keep up with technology development including both formal processes and information systems and informal systems that involve employess and senior managers to have the responsibility to the company to gather, disseminate and interpret technological information . The more informed individuals engage more in problem solving discussions and create significant number of innovation which is associated with the ability to access knowledge from outside the boundaries of the firm and the ability to integrate knowledge across departmental boundaries within the firm.
COCA COLA'S MARKET ORIENTATION
has supported significant innovations that allow it to establish dominant competitive positions, and afford the firm an opportunity to gain en edge in the market.
COCA COLA'S MARKET ORIENTATION
shows the company's relationships between three components of market orientation and firm innovativeness, and innovation performance.
-Collection and use of market information is positively and significantly correlated with firm innovativeness
-Collection and use of market information is positively correlated with innovation performance
-Development of market-oriented strategy is positively associated with firm innovativeness
-Development of market-oriented strategy is positively associated with innovation performance
-Implementation of market-oriented strategy is positively correlated with firm innovativeness
-Implementation of market-oriented strategy is positively correlated with innovation performance
-Firm innovativeness is positively correlated with innovation performance
-Collection and use of market information, development of market-oriented strategy and implementation of market-oriented strategy are correlated.
COCA COLA'S MARKET ORIENTATION FEATURES INCLUDE
Listens to opinions of customers
Uses customer information to improve quality of products and services
Company objectives are based mainly on customer needs
Obtains ideas from customers to improve products and services
Company personnel have adequate information about customers and competitors.
Values customer input in new product/service planning
Company values market position more than financial performance
Prices are determined by customer value
Focuses on markets in which we have competitive strength
Company planning is organized around markets rather than products or services.
Keeps promises made to customers
Responds to customer needs in writing sales contacts
Responds to customer needs in creating terms of trade
Our company frequently tries out new ideas.
Our company seeks out new ways to do things.
Our company is creative in its methods of operation
Our company is often the first to market with new products and services.
Relative to other products of our firm, this one has a better return on investment
Relative to our competitors’ products, this one has a better return on investment.
MARKET ORIENTED ''COCA COLA'' SHOWS THE TYPICAL
MARKET ORIENTED CHARACTERISTICS LIKE
· Face-to-face meetings with customers
· Face-to-face meetings with frontline staff - sales reps, clerks, and receptionists
· Customer complaints department
· Customer hotlines - Web and telephone
· Visits to customers' facilities
· Frequent user programs and databases
· User groups - Beta testing
· Conferences
Extensive use of various marketing research techniques
· Emphasis on a product's benefits to customers rather than on product attributes
· Use of product innovation techniques, such as; brainstorming, concept testing, and force field analysis.
· The offering of ancillary services like credit availability, delivery, installation, and warranty
· Customer satisfaction and complaint monitoring procedures, including; exit interviews, customer complaints database, and Web and telephone information hotlines.
· Organizational structure in which the marketing director reports directly to the CEO.
OTHER COCA COLA'S MARKETING ORIENTATION FEATURES ARE
Re-orient culture and attitudes. The first and most challenging step is re-orient thinking toward market-driven pricing and prioritized customer needs rather than just technical requirements as a basis for product development. This is a fundamental change from the attitude in most organizations where cost is the result of the design rather than the influencer of the design and that pricing is derived from building up a estimate of the cost of manufacturing a product.
Establish a market-driven target price. A target price needs to be established based upon market factors such as the company position in the market place (market share), business and market penetration strategy, competition and competitive price response, targeted market niche or price point, and elasticity of demand. If the company is responding to a request for proposal/quotation, the target price is based on analysis of the price to win considering customer affordability and competitive analysis.
Determine the target cost. Once the target price is established, a worksheet is used to calculate the target cost by subtracting the standard profit margin, warranty reserves, and any uncontrollable corporate allocations. If a bid includes non-recurring development costs, these are also subtracted. The target cost is allocated down to lower level assemblies of subsystems in a manner consistent with the structure of teams or individual designer responsibilities.
COCA COLA'S MARKET ORIENTATION HELPS TO
manage the Product Development Resources
New Product Development Body of Knowledge
New Product Development Glossary
Principles of Integrated Product Development
IPPD Definition and Tenets
Product Development Training
Product Development Metrics
COCA COLA'S MARKET ORIENTATION HELPS TO
Improving the Product Development Process
Benchmarking Best Practices to Improve Product Development
Benchmarking for Product Development
Characterizing and Improving the Product Development Process
Control Your Process with Stage-Gates and Design Reviews
Optimizing Cost, Risk & Time-to-Market with a Gate Review Process
Guidelines for Reengineering Business Processes and Procedures
Implementing Integrated Product Development Practices: Lessons Learned
Improving Time-to-Market Through Planning and Resource Management
Reengineering the Product Development Process
A Strategic Approach to Product & Process Development
Product Development Strategic Orientation
Critical Chain Method of Project Management
Systems Engineering
Product Launch
Configuration Management & Engineering Change Control
COCA COLA'S MARKET ORIENTATION HELPS TO
Portfolio Management, Pipeline Management & Project Management
Portfolio Management
Improving Time-to-Market Through Planning and Resource Management
Critical Chain Method of Project Management
Use Overtime as a Last Resort
Kill Canceled Projects
COCA COLA'S MARKET ORIENTATION HELPS TO
Customer Focus and Product Planning
Customer-Focused Development with Quality Function Deployment (QFD)
Quality Function Deployment: What, Why & How?
Integrating QFD and FAST
Product Definition
Quality Function Deployment (QFD) Methodology
QFD & Target Cost Case Study
Steps for Performing QFD
Voice of the Customer (VOC)
Focus Groups
Customer Interviews
Assessing the Feasibility of a New Product
Concept Development and Selection
Aligning Technology Development with Customer Needs
COCA COLA'S MARKET ORIENTATION HELPS TO
Product Development Organizational Issues
Building Effective Product Development Teams
Enabling Product Development Teams with Collocation
Management Leadership: A Prerequisite for Improving Product Development
Team Leader Responsibilities
Team Charter
Team Groundrules
Effective Team Member Communication
Effective Meetings
Consensus Decision-Making
Collaboration
COCA COLA'S MARKET ORIENTATION HELPS TO
Design Optimization
Achieving Target Cost / Design to Cost Objectives
Design-to-Cost
Target Costing
Value Analysis and FAST
Design for Manufacturability (DFM) Imperative
Design for Manufacturability Guidelines
Design for the Life Cycle (Testability, Reliability & Maintainability, etc.)
Design for the Environment
Advanced Product Quality Planning
Design for Six Sigma
Process Capability for Product Design
Robust Design Through Design of Experiments
Reducing Variation During Design
Variability Reduction
Quantifying Variability Using Contributions from Taguchi
Failure Modes and Effects Analysis
Anticipatory Failure Determination (AFD)
Mistake-Proofing Design
COCA COLA'S MARKET ORIENTATION HELPS TO
Product Development Technology
Design Automation Requirements to Support Integrated Product Development
NPD Process Tools
Product Data Management
Collaborative Computing Technology
Rapid Prototyping
Product Configurators
Computer-Aided Process Planning
Standard for the Exchange of Product Model Data (STEP-ISO 10303)
Product Structure and Bills of Material
Automating Product Development with PD-Trak
Q.6: Downstream activities in a firm’s value chain create competitive advantages that are largely country – specific. Why?
VALUE CHAIN
Primary Value Chain Activities:
Inbound Logistics:
The receiving and warehousing of raw materials, and their distribution to manufacturing as they are required.
Operations:
The processes of transforming inputs into finished products and services.
Outbound Logistics:
The warehousing and distribution of finished goods.
Marketing & Sales:
The identification of customer needs and the generation of sales.
Service:
The support of customers after the products and services are sold to them.
Supporting Activities:
Infrastructure of the firm:
Organizational structure, control systems, company culture, etc.
Human resource management:
Employee recruiting, hiring, training, development and compensation.
Technology development:
Technologies to support value-creating activities.
Procurement:
Purchasing inputs such as materials, supplies, and equipment.
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Use the value chain model to define a firm's core competencies and the activities in which it can pursue a competitive advantage:
Cost advantage: Better understanding and reducing costs
Differentiation: Focus on those activities associated with core competencies and capabilities
Cost Advantage and the Value Chain
1- reduce the cost of individual value chain activities
2- reconfigure the value chain.
A- Define the value chain is define via a cost analysis, by assigning costs to the value chain activities.
B- Accounting reports are studied in order to modify or reallocate costs and produce value creating activities.
1- Reduce the cost of individual value chain activities
10 cost drivers related to value chain activities:
Economies of scale
Learning
Capacity utilization
Linkages among activities
Interrelationships among business units
Degree of vertical integration
Timing of market entry
Firm's policy of cost or differentiation
Geographic location
Institutional factors (regulation, union activity, taxes, etc.)
Differentiation and the Value Chain
Increase Uniqueness- Changing any part of the value chain.
procurement of inputs that are unique
distribution channels that offer high service levels
several drivers of uniqueness:
Policies and decisions
Linkages among activities
Timing
Location
Interrelationships
Learning
Integration
Scale (e.g. better service as a result of large scale)
Institutional factors
Reconfiguring value chain for uniqueness.
Forward integrate - perform functions that once were performed by customers.
Backward integrate- have more control over its inputs.
Implement new process technologies or utilize new distribution channels.
Develop a novel value chain configuration that increases product differentiation.
Technology and the Value Chain
Can impact competitive advantage by incrementally changing the activities themselves or by making possible new configurations of the value chain. To the extent that these technologies affect cost drivers or uniqueness, they can lead to a competitive advantage.
Used in both primary value activities and support activities:
Inbound Logistics Technologies
Transportation
Material handling
Material storage
Communications
Testing
Information systems
Operations Technologies
Process
Materials
Machine tools
Material handling
Packaging
Maintenance
Testing
Building design & operation
Information systems
Outbound Logistics Technologies
Transportation
Material handling
Packaging
Communications
Information systems
Marketing & Sales Technologies
Media
Audio/video
Communications
Information systems
Service Technologies
Testing
Communications
Information systems
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VALUE CHAINS CHANGE IN INTERNATIONAL CONTEXT.
A. Two key factors in the in the international context.
1.institutional and cultural factors play a larger role.
2.economic factors vary to a greater extent across
country borders.
ALTER THE IMPORTANCE OF BOTH THE
PRIMARY / SUPPORT ACTIVITIES.
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B.source of international comparative advantage.
1.transport.
2.labor , capital and materials.
3.tariff and government policies.
4.culture
5.comparative scale /scope and learning.
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C.source of international competitive advantage.
1.economies of scale.
2.economies of scope.
3.economies in learning.
-production learning ---cost decline with experience.
-demand learning --- proximity to the customers, means better
knowledge of customer needs.
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4.flexibility
a.production shifting.
b.tax arbitrage.
c.information transfer -technology and joint demand learning.
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5.bargain power
a.with respect to buyers
b.with respect to government.
c.with respect to suppliers.
d.with respect to competitors.
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