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Friday, November 22, 2013

MARKETING ORGANISATION DESIGNING


METHODS OF DESIGNING THE
 MARKETING ORGANISATION 

An organisation’s design is a function of the objectives which it has to accomplish, the diversity and complexity of the tasks to be performed and the environment in which the organisation operates. Similarly, a marketing organisation's design is a function of the diversity of products, markets and product/market combinations that it is involved with and its environment comprising competition, technology, socio-economic and legal factors, and the marketing objectives. Depending on the combination of these factors and the relative importance of each, of them in achieving the marketing objectives, you can design an organisation which is suited to your specific requirements. 

Designing an Organisation 

Organisation refers to any system, body or group of people, comprising various sub-systems or parts which are inter-related and or inter-dependent on each other. An organisation may be informal or formal. An informal organisation has no specific objective to achieve. A formal organisation has specific objectives to achieve and that is the very reason for the organisation's existence. Objectives may relate to making profit or there may be no consideration of profit whatsoever. Thus, when we refer to an organisation it can mean a firm or company involved in business, a non-business organisation such as university, hospital, a social organisation such as club, charitable trust, or a government agency. Irrespective of the nature of an organisation, the principles involved in its design are the same. These are:  

Specialisation: The division of labour on the basis of which a particular type (or set) of activity is differentiated from another. Jobs are assigned to individuals on the basis of their specialisation. 

Departmentalisation: The integration of differentiated (or specialised) activities. and grouping of individuals into departments, divisions etc.

Standardisation: The existence of procedures and systems, which help integrate the entire organisation.

Formalisation: The extent to which all procedures, systems and policies are written, so that the organisation becomes independent of the person(s) who founded it and acquires a life-span substantially longer than any one individual.

Centralisation: The level at which authority for decision-making is concentrated. It involves designing formal reporting relationships and information systems, leading to hierarchical levels and spans of control.

Evaluation: Providing systems for appraisal and compensation.

Structure: The total configuration or arrangement of individuals, departments, reporting ' relationships, information flows, span of control, all of which give the organisation its specific 'shape'.  

Given these basic principles, you have many kinds of organisation structures to choose from. In making the choice, you must evaluate the alternative structures on the basis of:  

-          facilitating achievement of objectives and accomplishment of tasks,
-          managerial control, and
-          cost  

What is Marketing Organisation

The principles of organisation apply whether you are designing the entire organisation or a department within it. The three most basic functions necessary for any business organisation are finance, production and marketing. Each of these functions is organised separately. Thus, within the organisation structure of the firm you would have distinct organisations for each function.
Broadly speaking, marketing is concerned with all aspects of the product, pricing, promotion and distribution. All sub-functions or activities relating to these four basic dimensions are included in the marketing function. You have to account for these various activities when designing the marketing organisation.

The structure of a marketing organisation can be studied at different levels, such as overall firm level or divisional level or market level.
There are many ways of organising the marketing department. We shall discuss in detail the four basic methods:


Methods other than these four are either their derivatives or combinations.

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Wednesday, November 13, 2013

MARKETING MIX


MARKETING MIX
 
The marketing mix consists of the following four major activities usually referred to as elements of Marketing mix.

1. Product: activities relating to the product, service or idea to be offered.
2. Price: activities relating to the price to be charged for the product, service or idea.
3. Promotion: activities relating to promotion (advertising, personal selling, sales promotion and publicity, called promotional mix) of the product, service or idea.
4. Place: activities relating to distribution of the product, service or idea (physical distribution and channels of distribution).  

Sometimes marketing research-the systematic gathering of information to solve marketing problems, is also included in marketing mix.  

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Monday, October 14, 2013

MARKET SEGMENTATION


MARKET SEGMENTATION


Concept of Market : Unless you know the exact market(s) to which your organization wants to cater, your focusing will be wrong and your planning will be faulty and you will fail to develop an appropriate marketing strategy or effort to meet the needs of your target market. To identify the target market let us first define the term `market'. The term market has more than one meaning: 

-          It can be used in respect of the network of institutions like wholesalers and brokers dealing in a product;
-          It can also be used to refer to the nature of demand for the product, as when we speak of the market for soap;
-          The two meanings are related but are physically distinct. Related because without the wholesalers and other institutions, it will be difficult to serve customers (demand).

We are concerned with a `market for' a product. The market for a product relates to the function(s) served by the product. 

THE CONCEPT OF A SEGMENT

Different buyers have different evaluative criteria about what constitutes the right choice for performing the function of a product. As a consequence different offerings will attract different buyers.
 

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Wednesday, October 2, 2013

MARKETING : MEANING AND CONCEPT


What is the meaning and concept of marketing, marketing mix and marketing strategies ?

In USA, 300 college administrators were asked about the meaning of marketing. As many as 90 per cent said that marketing was selling, advertising and/or public relations. It is no wonder that the Americans are bombarded with TV commercials, newspaper advertising, sales calls, etc.

The American Marketing Association defines marketing as follows:

"Marketing is the performance of business activities that directs the flow of goods and services from producer to consumer or user."

The entrepreneur has first to decide what product he should select. This he can do only if he can identify the needs, which require satisfaction among human beings. Once he has identified the need of a group of human beings (called market segment), he can determine the product, which can help to satisfy that need. This is a part of the modern philosophy of marketing or the marketing concept. 

  

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Tuesday, July 16, 2013

GE's STRATEGIC BUSINESS PLANNING GRID


GE’s Strategic Business Planning Grid

General Electric (or McKinsey) matrix uses market attractiveness as not merely the growth rate of sales of the product, but as a compound variable dependent on different factors influencing the future profitability of the business sector. These different factors are either subjectively judged or objectively computed on the basis of certain weightages, to arrive at the Industry Attractiveness Index. The Index is thus based on a thorough environmental assessment influencing the sector profitability. 

Factors determining Industry Attractiveness:



Sl. No

Factors Determining Industry Attractiveness:  

Typical Weightage

1)

Size of market

10%

2)

Rate of growth of sales and cyclic nature of business           

15%

3)

Nature of competition including vulnerability to foreign competition

15%

4)

Susceptibility to technological obsolescence and new products

10%

5)

Entry conditions and social factors

10%

6)

Profitability

40%


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Monday, July 15, 2013

BCG's GROWTH-SHARE MATRIX


BCG’s Growth-Share Matrix
 

BCG’s Portfolio Analysis is based on the premise that majority of the companies carry out multiple business activities in a number of different product-market segments. Together these different businesses form the Business Portfolio which can be characterised by two parameters: 

  1. Company’s relative market share for the business, representing the firms competitive positions; and
  2. The overall growth rate of that business. 

The BCG model proposes that for each business activity within the corporate portfolio, a separate strategy must be developed depending on its location in a two by-two portfolio matrix of high and low segments on each of the above mentioned axes.  

Relative Market Share is stressed on the assumption that the relative competitive position of the company would determine the rate at which the business generates cash. An organization with a higher relative share of the market compared to its competitors will have higher profit margins and therefore higher cash flows. 

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Sunday, July 14, 2013

BUSINESS PORTFOLIO ANALYSIS


BUSINESS PORTFOLIO ANALYSIS
 

Portfolio analysis is an analysis of the corporation as a portfolio of different business with the objective of managing it for returns on its resources. The business may be in the forms of organizational units, such as different subsidiaries or divisions of a parent company or Strategic Business Units (SBUs). 

Thus, portfolio analysis looks at the corporate investments in different products or industries under the common corporate jurisdiction. The corporate manager analyses the future implications of their present resource allocations and continuously evaluates which operations or products to expand or add, and which ones to be curtailed or disposed off, so that the overall portfolio balance is maintained or improved. The focus is on the present as well as the future.
 

The activities of a company and its effectiveness in the market place also depends on what the other competing companies are doing. Therefore, the portfolio analysis takes into consideration such aspects as the company’s competitive strengths, resource allocation pattern and the industry characteristics.
 

Portfolio analysis is primarily concerned with the balancing of the company’s investments in different products or industries and is useful for highly diversified multi-product companies operating in a limited market. The different subsidiaries or strategic business units have to be balanced with respect to the three basic aspects of running the business: 

  1. Net Cash Flow
  2. State of Development
  3. Risk 

Portfolio analysis is one of the methods to assist managers in evaluating the strategy. Let us now discuss different types of Business Portfolio Analyses.
 

Display Matrices  

The purpose of analysis is to optimally allocate resources for the best total return, with focus on the corporate strategies. Many different approaches involving different display matrices have evolved over the years, with the common objective of successful diversification. Some of the common display matrices are: 

  1. Strategic Planning Institute’s Matrix
  2. Arthur D. Little Company’s Matrix
  3. Hofer’s Product/Market Evolution Matrix

 

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Saturday, July 13, 2013

EVALUATION OF STRATEGY

EVALUATION OF STRATEGY
 
Strategy evaluation is the last stage of the strategic management process and comes after strategy formulation and implementation as shown below :
  
STRATEGY           –– STRATEGY                 –– STRATEGY
FORMULATION         IMPLEMENTATION        EVALUATION
 
An organization can have one of the best formulated and implemented strategies but if the evaluation of these are not done, they become obsolete over a period of time. Therefore, it becomes important to have an effective evaluation system so as to help the organization to achieve its objectives.  
 
The evaluation process involves the control mechanism, which helps in taking corrective actions. we are going to discuss the qualitative aspects and the portfolio analysis so as to develop a complete understanding of evaluation and control.
 

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Monday, July 8, 2013

STRATEGIC CONTROL PROCESS

STRATEGIC CONTROL PROCESS 

With the completion of the strategy implementation the organization looks forward to achieving the desired goals and objectives. It is necessary, however, to introduce the process of strategy evaluation and control in the early stages of implementation to see whether the strategy is successful or not and to carry out mid-course corrections wherever necessary. There are several reasons why a strategy may not lead to desired results. The external environment may not actually follow a trend as was expected at the time of planning the strategy. The internal changes within the organization such as the organizational systems consisting of structure, policies and procedures may not reflect harmony with the strategy. After a while, the top management of even middle level managers may find it difficult to exercise a substantial degree of control over operating systems. The unexpected moves of the competitors might create major gaps in the strategy. Thus the list of such factors will require a continuous evaluation and control of strategy. 


The evaluation of the strategy of an organization can be done qualitatively as well as quantitatively. The quantitative evaluation based on data and is possible through post facto analysis to detect whether the content of strategy is working or has worked. However, qualitative evaluation call also be done by addressing the question: Will it work? The qualitative evaluation can thus be done before activating plans of change. The qualitative evaluation and control or strategy is a real time process. The performance of strategy is monitored and corrective actions are taken. The basic aim of any organization is to achieve its goals. But to achieve the goals, the organization faces lots of hurdles. To overcome these hurdles, it is necessary for any organization to have a sound strategic control process. The word meaning of 'control' itself means 'to regulate' or 'to check'. This means that the top management needs to keep check on how well the strategy is being implemented to achieve the objectives of the organization. For example, if the business is not giving 1.esu1ts as expected, it may be necessary to increase promotional efforts, or revise the product policy, or as a last resort, the firm may pull out of a particular business.
 

The strategic control process is closely related to strategic planning process. Figure-1 represents the relationship between strategic planning and strategic control process. The process consists of three phases, which are as follows:  

  1. Evaluation criteria;
  2. Performance evaluation; and
  3. Feedback

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Saturday, July 6, 2013

CORPORATE CULTURE & LEADERSHIP


CORPORATE CULTURE AND LEADERSHIP
 

Each organization has its own way of dealing with corporate problems and do have their own organizational structure. The culture of the organization very much depends on the behaviour of the employees. If the employees have a strong commitment towards their organizations, the organization is said to have a strong culture and vice versa. For example, Infosys—one of top companies in the area of IT in India - can be said to have a strong organizational culture. This is reflected in its annual results.
 

It is not easy to have a strong culture in the organization. Lot of it depends on how the leaders of the organization handle their employees. Looking at this discussion, we can infer that ‘corporate culture’ is the values and beliefs accepted and practiced by all the employees of the company. To have an appropriate corporate culture, the strategy of the organization should match with it. In this section we would stress more on the role of leaders in shaping the culture of the organization and will discuss the role of leaders in handling the employees.
 

When it comes to handling people, the total personality of a leader comes into play. Managerial effectiveness is the management terminology for leadership. It is well to remember that this truth is applicable at all the levels of management—Junior, Middle and Senior. The ‘Katz Model’, shown in Figure-1 shows the relevant value of management skills at various levels. Although there have been some minor changes in the original design, it clearly shows that Human Relation Skill is consistently the biggest component at all the levels of management.
 

Figure-1 : Katz Model—Skills of an Effective Manager
 
 
 

A leader in any organization has to handle people in the following three directions: 

a) The first—is downwards—his/her own team which he has to build as an effective and cohesive group motivated to achieve the coals of the organization.

b) The second—is lateral, which involves winning the support and cooperation of colleagues over whom the leader has no control, but who have an important functional relationship with the group/organization headed by the leader.

c) The third-is a purposeful, constructive and harmonious relation with the higher authority under whom a leader functions-the boss.
 

Human nature: In order to handle people effectively it is useful for a leader to understand human nature. There are a large number of theories about it. For developing leadership potential it is useful to focus our attention on two concepts which have a lasting and practical value for learners. 


Once people are convinced that s/he is a person who knows them well and s/he truly cares about them then they would do anything for the leader. However, it requires a very major effort to know people and know them better than even their own mother, effort in terms of time, attention and genuine interest in people.
 

The difference between ‘indulgence’ and ‘caring’ should be clearly understood. Indulgence means excessive gratification-giving material things-money, conveniences and so on. Indulgence, by and large, spoils the recipients. Caring, on the other hand, is a matter of attitude—it is a quality based on unselfish love. Consequently, caring is a matter of heart and not related to material resources. A skill that often helps a leader to know and care for his/her people is the skill of communication.
 

Communication : To know people: The ability to know people is the starting point to handle them and communication skill plays an important role in this ability. These help a leader TO TELL what s/he wants done. However, some essential features of this skill relevant to knowing and handling people need discussion.

 

Most of the strained and fractured relations can be traced to the mutual breakdown of communications between individuals in a family, group, community, countries and even among the community of nations. One starts seeing only the uglier side of others and it leads to alienation. The ability to communicate, on the other hand, puts human relations on an even keel by removing misperceptions and misunderstandings. The ability has two sides:
 

The skill of expression; and

The skill of listening.
 

The Skill of Expression 

The skill of expression does not merely mean gift of the gab or cleverness with words. For a leader the skill of expression is a vehicle to generate trust. Verbal expression counts for only 30 per cent in this skill, the balance 70 per cent is the body language—expression in the eyes, conviction in the tone, the sincerity in the posture, and generally, the vibrations that a person conveys. Body language communicates the total personality of a leader, and its effectiveness depends, entirely on the strength and balance of the “Universal Inner Structure of Effective Leaders”. In genuine expression there can be no pretension. Spontaneity, straightforwardness and sincerity are far more effective than sheer command over the language.
 

The Skill of Listening 

The skill of listening means understanding and knowing the other person. It has been found that this part of communication skill is even more important, but, unfortunately less prevalent. Listen with ears and observe body language with eyes. Even nature has a design in the listen talk ratio. It gives two ears to a person, but only one mouth.
 

Listening has three ingredients. The first, of course, is the physical process of hearing what the other person is saying; this involves attention. Comprehending what the person is saying is the second ingredient, and demands undivided attention. Looking out of the window, or attending to routine papers while listening are signs of inattentiveness. Remembering what you listen is the third ingredient of this skill and, naturally, comes about only if a leader hears and comprehends what is said. The ability to listen attentively and with sympathy in which a leader shows signs of warmth, makes the other person feel that s/he is an individual and not merely a faceless part of the machine. It helps generate trust in the team. Above all, ‘listening to the body language with eyes’ gives a leader an opportunity to really know his people and their characteristics. 

Experience shows that effective communication means: 

50 per cent listening;
25 per cent speaking;
15 per cent reading;
10 per cent writing.
 

The operative part of Leadership capability lies in the ability to handle people in a manner that they give their best for a cause, organization and the task in hand. This capability depends on the strength and balance of TO BE in a leader—his/her Universal Inner Structure of Effective Leadership. Reinforcing this structure is within the reach of anyone who applies himself to this exciting endeavour with SINCERITY and WILL POWER till transformation takes place. Even while one is making an effort to improve the source of leadership a few practical hints to handle people will be of value to anyone who desires to be more effective. 


Handling people working for a leader 

Self-control : No team captain can hope to control and inspire his/her team unless s/he learns to control and discipline himself. This is a difficult task, but without it there is little chance for a man to become a successful leader. It requires a certain amount of philosophical outlook and frugality which is often associated with aristocrats and saints. Self-control does not only add to the leadership potential, it also is a source of great happiness. 

Success and Failure : It is a basic trait of human nature that an individual ascribes successes of an organization to the part played by him/her, and blames failures on the system. On the other hand, a good leader gives credit to his/her men for successes and takes responsibility for failures. This approach binds men together in a collective effort to work for the organization. 

Setting Targets : It is useful to let individuals themselves set targets for work. In this event not only are they likely to meet these targets, but even surpass them. 

Correcting Mistakes : A leader has often to correct the people who falter, show traces of weakness or fail. It is better to say “This is not what is expected of a person of your calibre and ability” rather than words to the effect “what else one could expect from a clot like you”. The first approach enhances a man’s self-respect even in failure. The second approach makes him your enemy. 

We and not you : A good leader always projects himself/herself as a part of the team and invariably talks in terms of “We” and not “You”. 

Accessibility : It is a leader’s responsibility to ensure that s/he is accessible. S/he should institutionalise the time and place for meeting the members of his team. Tragedies and illnesses are a frequent occurrence in human life. A good leader makes it a point to find time for seeing men who are afflicted to who have difficult problems to tackle. Visiting them, in case they are hospitalised, should also be a matter of priority time allocation. You win lasting commitment from people thus handled. 

Anger : A good leader does not lose his/her temper. However, righteous anger is very different from uncontrolled rage and should not be suppressed. However, special care should be taken to uphold the honour and dignity of an individual in the presence of his colleagues and family members. 

Recognition : Good and effective leaders have used the human urge for recognition with telling effect to foster interpersonal bonds with their people and to motivate them. They have scrupulously used the principle of ‘praise in public and reprimand in private’ to create an organizational culture in which people work ‘much beyond call of duty’ to maintain excellence in their organization. The real basis of making individuals feel like heroes is, of course, genuine care and unselfish love by the leader for his people. 

In the ultimate analysis, handling people is a matter of attitude. It is expecting the utmost from them while caring for them completely. It is possible only if a leader can create an atmosphere in which there is free communication. Tolerating shirkers and parasites in the name of “being human” does a great deal of damage. Fortunately, such people are few and far between, and must be dealt with strictly.
 

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