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Product planning a. What products are the company going to design or MEMO for the selected customers? Targeting this market? 3. Pricing b. What are the product features uniquely c. How will the product be packaged? A. Pricing Is a quantitative expression of the value of the product to the customer. With the use of the product. B. Pricing should be designed like a feature consistent c. What will you charge for and How much? D. How will the customer pay and when? See also the discussion of the Price/Features matrix 4. Place a.
Which channel, direct, wholesale or retail channels best moves and livers the product and Its benefits to the selected market? 5. Promotion a. Positioning: What is the message that states the purpose and benefits of the product in the market and how it competes? Selling: Direct or indirect through others? B. C. Communications How will people be informed about your product, showing them how it can be useful, and persuading them to buy it? What role should branding play? D. Support and Service How does the customer get help If needed to make the product work and replacing or repairing it when it’s broken?
Decision Making unit and the Decision Making Process The actual selling process breaks down into two components called the decision making unit (DIM) and the decision making process (DUMP). The DIM) decision making unit The DIM) consists of all of the people who will play a role In the decision to purchase a product. The marketing mix program must understand the needs of each of these individuals and find a way to communicate the marketing message to each of them. These people are typically identified as: Buyer – the person who actually issues the check. For example the purchasing agent, or the individual consumer) Decider – the person or group that actually says this Is who helps the decider decide, I. E. The press, analysts, peers, evaluation groups User – the individual or group who actually uses the product and derives benefit from it The decision making process (DUMP) The people included in the decision making unit (DIM) interact to make the purchasing decision. The (DUMP) is a description of this interaction. By understanding this process a salesperson can best understand who, how, and when to work on getting the customer order.
For example: A company has decided to pick a workstation standard The engineering UP will make the decision. Since the standard affects all software engineers within the company, an evaluation team is formed to make the recommendation. The evaluation team hires a consultant to research alternatives. The consultant has great influence due to his strong technical background. Recent magazine articles are also reviewed. After a few months, the evaluation team makes a recommendation and the UP R;D decides to accept it and go ahead. The purchasing manager is asked to negotiate the best deal.
The salesperson for the winning workstation company was n top of and influenced every person at every stage of the decision making process. Boston Consulting Group (BCC) Matrix is a four celled matrix (a 2 * 2 matrix) developed by BCC, USA. It is the most renowned corporate portfolio analysis tool. It provides a graphic representation for an organization to examine different businesses in it’s portfolio on the basis of their related market share and industry growth rates. It is a two dimensional analysis on management of Sub’s (Strategic Business Units).
In other words, it is a comparative analysis of business potential and he evaluation of environment. According to this matrix, business could be classified as high or low according to their industry growth rate and relative market share. Relative Market Share = SUB Sales this year leading competitors sales this year. Market Growth Rate = Industry sales this year – Industry Sales last year. I The analysis requires that both measures be calculated for each SUB. The dimension of business strength, relative market share, will measure comparative advantage indicated by market dominance.
The key theory underlying this is existence of an experience rev and that market share is achieved due to overall cost leadership. BCC matrix has four cells, with the horizontal axis representing relative market share and the vertical axis denoting market growth rate. The mid-point of relative market share is set at 1. 0. If all the Sub’s are in same industry, the average growth rate of the industry is used. While, if all the Sub’s are located in different industries, then the mid-point is set at the growth rate for the economy. Resources are allocated to the business units according to their situation on the grid.
The four cells of this matrix eve been called as stars, cash cows, question marks and dogs. Each of these cells represents a particular type of business. Lox 0. 1 x I Figure: BCC Manta industry. They may generate cash but because of fast growing market, stars require huge investments to maintain their lead. Net cash flow is usually modest. Sub’s located in this cell are attractive as they are located in a robust industry and these business units are highly competitive in the industry. If successful, a star will become a cash cow when the industry matures. 2.
Cash Cows- Cash Cows represents cuisines units having a large market share in a mature, slow growing industry. Cash cows require little investment and generate cash that can be utilized for investment in other business units. These Sub’s are the corporation’s key source of cash, and are specifically the core business. They are the base of an organization. These businesses usually follow stability strategies. When cash cows loose their appeal and move towards deterioration, then a retrenchment policy may be pursued. 3. Question Marks- Question marks represent business units having low relative market hare and located in a high growth industry.
They require huge amount of cash to maintain or gain market share. They require attention to determine if the venture can be viable. Question marks are generally new goods and services which have a good commercial prospective. There is no specific strategy which can be adopted. If the firm thinks it has dominant market share, then it can adopt expansion strategy, else retrenchment strategy can be adopted. Most businesses start as question marks as the company tries to enter a high growth market in which there is already a market-share.
If ignored, then question marks may become dogs, while if huge investment is made, then they have potential of becoming stars. 4. Dogs- Dogs represent businesses having weak market shares in low-growth markets. They neither generate cash nor require huge amount of cash. Due to low market share, these business units face cost disadvantages. Generally retrenchment strategies are adopted because these firms can gain market share only at the expense of competitor’s/rival firms. These business firms have weak market share because of high costs, poor quality, ineffective marketing, etc.