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M&DC Operations Management  : Marketing Function

 

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Marketing Phases & Activities

 

   

Definitions

Economic Value Added® (EVA)

A management and incentive system for increasing the value of companies.

A business creates value if it generates EVA’s that increase from year to year. Calculation:

EVA = Operating Result  - Capital Costs

Review all Marketing Resources

  1. Product Line

  • Product portfolio

  • Product Mix

  • Product grouping

  • Product three years performance

  • Product growth and market share

  • Product growth / share matrix

  • Product classification to Stars, Cash Cows, Wild Cats, and Dogs

  • Product profitability

  • New products status

  1.  ‎Manpower
    (DIRECT SELLING / MARKETING / SUPERVISION / MANAGEMENT)
    CAN DO FACTORS

    • Physical Condition / Personality.

    • Background / Language / Experience.

    • Communication / Listening Skills.

    • Discipline / Confidence / Attitude.

    • Observation / Analysis / Creativity.

    WILL DO FACTORS
     

    •  Stability / Loyalty / Maturity.

    •  Team Spirit / Responsibility acceptance.

    •   Leadership / Decision-making.

    •   Enthusiasm / Perseverance / Self-motivation.

    •   Commercial Sense

  2.  MARKETING TOOLS
    SAMPLES

    • Quality / Quantity.

    • Handling / Storage.

    • Proper Use

    LITERATURE   

        o Quality / Quantity.
       
    o Handling / Storage.
     
      o Proper Use and Control.
    OTHER PROMOTIONAL MATERIAL

    • Conference and Meeting Material.

    • Giveaways.

  3. TO REVIEW ALL SALES & MARKETING PROCEDURES

    STARTEGY

    Overall company strategy and objectives.
    Marketing short and long term plans.
    Product marketing plans / themes / segmentation.
    Product promotion messages.
    New products launching strategies. 

    METHODS

    Marketing direct and indirect approaches.
    Types of sales meetings (face to face / group / ...etc.)
    Time management and Territory coverage.
    Allocation of sales personnel to areas.
    Products, Customers, and Areas priorities and budgeting.
    Promotion cycle plans, and call frequency.
    Logistics and transportation policies.

     COMMUNICATIONS

    - CHANNELS OF COMMUNICATION
       Within the marketing department.
       With other company departments.
    - REPORTING
       Application / Interview / Recruitment / Evaluation.
       Sales / Activity / Appraisal.

     CONTROLS

    - Setting performance standards and controls.
    - Sales targeting and analytical reviews.
    - Timely progress checking formats.
    - Incentive and motivation schemes.
    - Corrective measures for defective performance

    III- TO DEFINE NEEDS AND AREAS FOR IMPROVEMENT

    Change of concepts and procedures.
    Re-engineering of operations.
    Re-assigning of duties and responsibilities.
    Training and development needs.

    SALES & MARKETING ACTION PLAN A C T I O N P L A N

    I- INTERVIEWS WITH SALES & MARKETING PERSONNEL AT ALL LEVELS, IN ORDER TO:

    A- ASSES THEIR ABILITIES.

    - Personal quality.
    - Product knowledge.
    - Sales techniques.
    - Attitude and behavior
    - Enthusiasm and sense of responsibility.
    - Leadership skills.

    B- DEFINE THEIR NEEDS

    - Responsibility re-assigning.
    - Promotional needs.
    - Motivational needs.
    - Medical / technical training & development.
     

    C- REVIEW THE WORK ENVIRONMENT.


    - Cooperation and team work.
    - Business policies and procedures.
    - Time and territory Management.
    - Products and target audience periodical coverage.
    - Sufficiency of marketing tools.


    D- CHECK REPORTING & EXPENDITURE.

    - Daily, weakly, and monthly sales reporting.
    - Monthly activity reports at all levels.
    - Group meeting assessment reports.
    - Monthly expense reports at all levels.

    E- REVIEW APPRAISALS & INCENTIVE PLANS.

    - Monthly and quarterly appraisal reports.
    - Evaluation reports for new recruits.
    - Incentive plans review.
     

    F- REVIEW STANDARDS & CONTROLS.

    - Review of work plans and standards.
    - Periodical sales analysis compared to set plans.
    - Review of rewarding and punitive actions,
      with an eye on standard performance.

II- COLLECTION AND ANALYSIS OF CURRENT & HISTORICAL MARKETING DATA, IN ORDER TO:

A- CHECK PERFORMANCE.

- Company image.
- Company overall performance.
- Internal and external strong versus weak points.
- Product current sales performance analysis.
- Product current market share.
- Product profitability & contribution to income.
- Sales & revenues.
- Marketing plans.
- Manpower and indirect sales activities.
- Effectiveness of distribution channels.

B- COMMENT ON PAST RESULTS.

- Historical (3 years) sales data analysis.
- Major past sales achievements.
- Marketing plans, and their role in getting results..
- Promotion material and tools.
- Manpower status, turnover, and promotion opportunities.
- Product life cycle analysis.
- Product sales growth and Growth/Share analysis.
- Manpower allocation and territory assigning.
- Productivity per head.
- Managerial strategies, policies, and concepts.

C- POINT OUT FUTURE GROWTH POTENTIAL.

- Projected growth potential for current product list.
- Product repositioning.
- Product re-launching.
- New competitive strategies.
- Reshaping of products and samples
- Fresh looks to marketing methods.
- New promotional ideas and techniques.
- Examination of products in the company pipelines.
- Enhancing manpower productivity.
- Manpower motivation and development.
- Full support to the marketing efforts.
 

2.4 ROJECT 31: ‎Development of a Marketing Strategy & Plan‎

A. Objectives

The objective of the project is to develop a Strategic Marketing Strategy & Action Plan to assist the company in developing   its business for both local and international markets (development of an international penetration strategy). The plan should access the expansion into other segments.

B. MAIN PHASES & ACTIVITIES

This project is based on intensive fieldwork plus office study to examine therefor the company should appoint a counter part (team) to participate in fieldwork and liaison officer (the Company's team leader) to facilitate and coordinate different fieldwork.
The following steps are recommended for a thorough, organized, and Marketing Strategy & Plan:

B.‎1 CURRENT SITUATION FINDINGS & OBSERVATIONS

Assessment of each of the company's functional areas & their operational activities, identifying constraints and clarifying       areas where performance improvements.
Describe the nature of the market segment in which the company operates.
Provides a summary information concerning the opportunity reached for the company in both local and export markets.
Take into consideration the Particularities of Egyptian Private Pharmaceutical companies The Diagnostic Study will cover.

FIGURE M-1 DIAGNOSTIC STUDY FINDINGS & OBSERVATIONS

B.‎2 REVIEW & ASSESS VISON, MISSION & STRATEGIC OBJECTIVES

Review with Top Management the company's Vision, Mission, CSF, Strategic Objectives, to assess the following:
Management Commitment
Validity (Measurable, with Time span)
Feasibility
Their effect on Marketing Strategy
 

B.‎3 REVIEW & ASSESS CORPORATE STRATEGY

  •  The Objectives of this stage is to:

  • Assess the Current health of the organization with the existing Portfolio

  • Define the desired Portfolio to achieve strategic objectivesDefine discrepancies (Gap) between current & desired

  • Determine how to overcome these discrepancies

  • This phase includes three main tasks:

1. Assess Industry ‎‎Attractiveness (Fig. M-2) with respect to

Entrance of huge number of players into the market
Power of suppliers
Power of Customers
Industry Structure

Study growth rate of the company's main products in relation to their PLC (early, late... etc)

 

FIG. M-2 INDUSTRY ATTRACTIVENESS SUMMARY


INDUSTRY NAME ………………………………………DATE…………………………
 

   

ATTRACTIVENESS ISSUE

CIRCLE DEGREE OF

ATTRACTIVENESS

HIGH  ……………     LOW

WEIGHT

FACTOR

TOTAL

VALUE

 

CUSTOMER STATURE AND STABILITY………….

10   9   8  7  6   5  4   3   2   1 

5%

 

ENERGY REQUIREMENTS (ABSENCE OF)………

10   9   8  7  6   5  4   3   2   1 

6%

 

ENVIRONMENTAL DAMAGE (ABSENCE OF)………

10   9   8  7  6   5  4   3   2   1 

3%

 

GROWTH RATE OF INDUSTRY……………………..

10   9   8  7  6   5  4   3   2   1 

17%

 

HUMAN RESOURCE SKILL AVAILABILITY………..

10   9   8  7  6   5  4   3   2   1 

10%

 

INFLATION POTENTIAL (ABSENCE OF)…………..

10   9   8  7  6   5  4   3   2   1 

8%

 

PROFITABILITY OF  INDUSTRY………………………

10   9   8  7  6   5  4   3   2   1 

22%

 

PUBLIC ACCEPTANCE AND NEED…………………..

10   9   8  7  6   5  4   3   2   1 

4%

 

SIZE OF INDUSTRY………………………………….

10   9   8  7  6   5  4   3   2   1 

15%

 

TECHNOLOGY ACCESSIBILITY…………………….

10   9   8  7  6   5  4   3   2   1 

10%

 

TOTAL INDUSTRY ATTRACTIVENESS:

100%

 

 

 

2. Assess ‎‎Competitive ‎‎Position

Explore the company’s value added chain i.e. Product Development, Customer Service, Manufacturing, Order getting, Distribution & After Sales
Study Market position through customer purchasing criteria: Price, Quality, Availability, After Sales Service.

 

FIG. M-3 COMPETITIVE POSITION SUMMARY


INDUSTRY NAME………………………………………………………….DATE……………………
 

 

COMPETITIVE ISSUE

 

CIRCLE DEGREE OF

STRENGTH

STRONG                       WEAK

WEIGHT

FACTOR

TOTAL

VALUE

 

DISTRIBUTION ABILITY FOR PRODUCTS SERVICES

LABOUR UNREST (ABSENCE OF)

MANAGERIAL COMPETENCE AND DEPTH

MARKETING AND SALES ABILITY

MARKET RAPPORT AND UNDERSTANDING

MARKET SHARE

PHYSICAL RESOURCE QUALITY AND AVAILABILITY

PRODUCTIVITY OF WORK FORCE

QUALITY OF  PRODUCTS/ SERVICES

TECHNOLOGY AVAILABILTY AND EMPLOYMENT

10    9    8   7   6   5   4   3    2   1

10    9    8   7   6   5   4   3    2   1

10    9    8   7   6   5   4   3    2   1

10    9    8   7   6   5   4   3    2   1

10    9    8   7   6   5   4   3    2   1

10    9    8   7   6   5   4   3    2   1

10    9    8   7   6   5   4   3    2   1

10    9    8   7   6   5   4   3    2   1

10    9    8   7   6   5   4   3    2   1

10    9    8   7   6   5   4   3    2   1

4%

8%

6%

18%

7%

25%

4%

8%

11%

9%

 

 

TOTAL COMPETITIVS STRENGTH;

100%

 

 

3. Prepare ‎Business Portfolio Matrices Four Business Portfolio Matrices could be prepared:

Historical Portfolio to identify direction & momentum currently enjoyed by the organization.
Current Portfolio to describe the present Situation
Projected matrix will forecast the future position assuming all factors remain constant.
Desired Portfolio represents its ambitions

 

 

 

…………………………..‎Competitive position‎……………………………….

 

 

Very Weak

Weak

Moderate

Strong

Very Strong

Total

…………………….Industrial Life Cycle Stage………………….

Development

 

%

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

 

 

 

Growth

 

%

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

 

 

 

Competitive Adjustment

 

%

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

 

 

 

Maturity

 

%

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

 

 

 

Decline

 

%

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

 

 

 

 

%

 

 

 

Total

%

%

%

%

%

100%

 

PRODUCT LIFE CYCLE
In general, products pass through a " l i f e cycle" of recognizable stages often referred to as "market development", "growth", "maturity", and "decline". These are illustrated in Figure I.
In the market development stage, a new product is f i r s t offered for sale. Companies typically support the introduction with large promotional outlays to create awareness and recognition.
Product literature must be developed, and the sales force educated. Technical problems often plague new products, and must be resolved. Market segments will respond to the new product at different rates. OEM customers may purchase a small quantity
for evaluation before committing to use large volumes in their merchandise. End users, on the other hand, may produce a more immediate demand or, vice versa.
In the growth stage, the product demand continues to grow, and sales expand - usually accompanied by steady promotion. Competing products may begin to appear and product differentiation is developed. New distribution channels may be
created and expanded.
During the product maturity stage, growth slows and sales flatten. The market becomes saturated, with most sales made to existing customers.
Promotion and advertising is typically reduced to a "maintenance" level, while efforts are concentrated on intensifying product distribution.

Finally, during product decline, demand f a l l s .This may be brought on by competitive actions, a change in buyer preferences, or technological obsolescence.
Promotional expenditures are generally shut off, and the product is removed from the market. Replacement sales to existing customers, however, may continue for some time.
The life cycle curve for an industry (for example 8 bit microprocessors) is the sum of all individual product contributors. These individual product curves may differ in their shape or timing from the industry curve, which is relatively
fixed by total supply, demand, and technology.
Firms will vie for dominant market share and p r o f i t a b i l i t y . Those enjoying a market leadership position are able to influence the shape of their product life cycles and, in particular, to extend the growth and maturity phases.

PROJECT PROFITABILITY
To evaluate the p r o f i t a b i l i t y of an investment requires an estimate of all cash flows over the life of the project. The "Net Present Value" of these cash flows must be positive when discounted at the firm's required rate of return, or it should
not be undertaken.
Companies in the electronics and computer industries typically require about a 25% return on investment in new projects.
Also to be considered is that projects have varying degrees of risk.- The systematic risk of a consumer electronic product--a video game, for example--may be considerably greater than that of a small business computer. Projects with a higher risk will require a higher return (40% or 50% for example) to compensate. Firms should e x p l i c i t l y consider the risk on a new product
offering, and should adjust their required return accordingly. I

The net present value of a project is the sum of all future cash flows (both inflows and outflows) discounted by the required rate of return.
It represents the amount an investor would be willing to pay today in exchange for all futurecash flows over the life of the project.

 

The product life cycle and net present value concepts are powerful tools for evaluating new product proposals. For each proposal, the following steps may be followed:

I. Estimate the shape and duration of the Product Life Cycle.
2. Analyze all cash flows associated with development, manufacturing, and sale of the product.
3. Evaluate the risk of the project, and adjust the required return accordingly.
4. Compute the Net Present Value of the cash flows.

If the NPV of the project is positive, the product is expected to earn a return equal to or greater than that required for

p r o f i t a b i l i t y , and should be undertaken.

source: A LIFE CYCLE MODEL OF NEW PRODUCT PROFITABILITY, Kenneth Deemer Data Systems Design, Inc.
Santa Clara, CA

 

 

 

 

B.4 REVIEW AND ASSESS CURRENT MARKET SEGMENTS

Assess current market segments
Identify new market potential that the company may penetrate both locally and internationally
Develop Action plan for each market segment

FIG. M-5 INDUSTRY SEGMENT ANALYSIS‎

 

 

B.5 SWOT ANALYSIS

Develop an analyses the company’s Strengths, Weaknesses, Opportunities & Threats for Major Sub-sector and all steps of Value Chain
Develop an implication chart and identify means of overcoming the apparent weaknesses taking into consideration the        particularity of the Egyptian Private pharmaceutical industry.

FIG. M-6 SWOT ANALYSIS‎

Sub-sectors

Strength

Weakness

Opportunity

Threats

Raw Materials

 

 

 

 

Processing

 

 

 

 

Marketing

 

 

 

 

Transpiration

 

 

 

 

Technology

 

 

 

 

 

B.6 SALES ACTION PLAN

Develop sales plan based on:

  •  Segmentation analysis

  •  Potential new segments, proposed action plan

  •  Results of SOWT analysis

  Review Sales Action Plan with senior management team & obtain their approval

B.7 DEVELOPMENT OF AN INTERNATIONAL SALES NETWORK AND REFERRAL SYSTEM

Develop an International Sales Network And Referral System based On Sales Action Plan & The Company's  Opportunities According
• Review Plan with senior management team & obtain their approval

B. 9 Develop. Strategic Marketing Plan‎

    Develop sales plan based on:

     Review Strategic Marketing Plan with senior management team & obtain their approval

B.10 Develop. An e-business strategy‎

•      Develop sales plan based on:

  •  Segmentation analysis

  •   Potential new segments, proposed action plan

  •   Results of SOWT analysis

•      Review Sales Action Plan with senior management team & obtain their approval

 

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