You are on page 1of 57

Irfan Arshad 1

Muhammad Irfan Arshad


Roll No: AX846575
Professor Dr. Adnan Riaz
LEVEL: MS (MANAGEMENT SCIENCES)
Date: 25
th
Sep 2014
STRATEGIC MARKETING (8703)
SEMESTER: SPRING 2014
ASSIGNMENT No. 2
(Units: 59)
ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD
(Department of Business Administration)
Irfan Arshad 2
Question 1: Suppose the management of Allama Iqbal Open University wishes to
establish a product-management function covering both new and existing programmes
offered by the university. Develope product planning program in this regard?
Allama Iqbal Open University wishes to establish a product management department to serve
the voice of the students and to better help and understand market needs and future trends.
This function will typically generate an extensive roadmap of new courses and training
programs to gain competitive edge and this product management really will be used
strategically. Since most educational institutions revenues come primarily from their courses
and training programs, you would think that the newly establish product management
function would carefully craft a strategy in close scrutiny of the researchers and that it would
be meticulously aligned with an overarching corporate strategy.
The main objective of a product management function should be to ensure that all courses are
developed that delivers some business value to a specific set of students in order to gain a
certain market share upon a defined corporate strategy. The Market Planning Program for
new Marketing Management Function will describe the market opportunity, profiles the
target students, specifies fee structure, identifies the financial goals, indicates the key
priorities for development and enhancement, and provides a roadmap for delivery for at least
the next four quarters.
The newly established marketing management department get feedback from students,
speaking with the university researchers, obtaining a list of the top technical support issues,
surveying competitor positions and features, and receiving new ideas from faculty, the
product management team has generate a list of possibly hundreds of potential study courses
across the different departments as well as introduction of new departments as well.
StepinvolvedinNewProduct Development Planning
Every entrepreneur knows that productivity is one of the key ingredients for successful
course development for any of the university in Pakistan or abroad. One of the two key
processes in Roberts Rules of Innovation is the New Product Development Process. A
formalized, NPD process also referred to and best practice: the Stage Gate Process is a
must, from simple to sophisticate. The New Product Development process is often referred to
as The Stage-Gate innovation process, developed by Dr. Robert G. Cooper as a result of
comprehensive research on reasons why products succeed and why they fail.
When teams collaborate in developing new innovations, having the following eight
ingredients mixed into your teams new product developmental repertoire will ensure that its
overall marketability will happen relatively quick, and accurately making everyone
productive across the board.
Irfan Arshad 3
Step 1: Generating
Utilizing basic internal and external SWOT analyses, as well as current marketing trends, one
can distance themselves from the competition by generating ideologies which take
affordability, ROI, and widespread distribution costs into account.
Lean, mean and scalable are the key points to keep in mind. During the NPD process, keep
the system nimble and use flexible discretion over which activities are executed. You may
want to develop multiple versions of your road map scaled to suit different types and risk
levels of projects.
Step 2: Screening The Idea
Wichita, possessing more aviation industry than most other states, is seeing many new
innovations stop with Step 2 screening. Do you go/no go? Set specific criteria for ideas that
should be continued or dropped. Stick to the agreed upon criteria so poor projects can be sent
back to the idea-hopper early on.
Because product development costs are being cut in areas like Wichita, prescreening
product ideas, means taking your Top 3 competitors new innovations into account, how
much market share theyre chomping up, what benefits end consumers could expect etc. An
interesting industry fact: Educational institutes will often be compared growth with Services
sectors; therefore, when unemployement is prevailing, never assume that all of your courses
will be productive.
Step 3: Testing The Concept
As Gaurav Akrani has said, Concept testing is done after idea screening. And it is
important to note, it is different from test marketing.
Aside from patent research, design due diligence, and other legalities involved with new
product development; knowing where the marketing messages will work best is often the
biggest part of testing the concept. Does the consumer understand, need, or want the product
or service?
Step 4: Business Analytics
During the New Product Development process, build a system of metrics to monitor progress.
Include input metrics, such as average time in each stage, as well as output metrics that
measure the value of launched products, percentage of new product sales and other figures
that provide valuable feedback. It is important for an organization to be in agreement for
these criteria and metrics.
Irfan Arshad 4
Even if an idea doesnt turn into product, keep it in the hopper because it can prove to be a
valuable asset for future products and a basis for learning and growth.
Step 5: Beta / Marketability Tests
Arranging private tests groups, launching beta versions, and then forming test panels after the
product or products have been tested will provide you with valuable information allowing last
minute improvements and tweaks. Not to mention helping to generate a small amount of
buzz. WordPress is becoming synonymous with beta testing, and its effective; Thousands of
programmers contribute code, millions test it, and finally even more download the completed
end-product.
Step 6: Technicalities + Product Development
Provided the technical aspects can be perfected without alterations to post-beta products,
heading towards a smooth step 7 is imminent. According to Akrani, in this step, The
production department will make plans to produce the product. The marketing department
will make plans to distribute the product. The finance department will provide the finance for
introducing the new product.
As an example; In manufacturing, the process before sending technical specs to machinery
involves printing MSDS sheets, a requirement for retaining an ISO 9001 certification (the
organizational structure, procedures, processes and resources needed to implement quality
management.)
In internet jargon, honing the technicalities after beta testing involves final database
preparations, estimation of server resources, and planning automated logistics. Be sure to
have your technicalities in line when moving forward.
Step 7: Commercialize
At this stage, your new product developments have gone mainstream, consumers are
purchasing your good or service, and technical support is consistently monitoring progress.
Keeping your distribution pipelines loaded with products is an integral part of this process
too, as one prefers not to give physical (or perpetual) shelf space to competition. Refreshing
advertisements during this stage will keep your products name firmly supplanted into the
minds of those in the contemplation stages of purchase.
Step 8: Post Launch Review and Perfect Pricing
Review the NPD process efficiency and look for continues improvements. Most new
products are introduced with introductory pricing, in which final prices are nailed down after
consumers have gotten in. In this final stage, youll gauge overall value relevant to COGS
(cost of goods sold), making sure internal costs arent overshadowing new product
profits. You continuously differentiate consumer needs as your products age, forecast profits
and improve delivery process whether physical, or digital, products are being perpetuated.
Irfan Arshad 5
Question 2:Product life cycle provides an overview of the life stages. However, some
products follow long and stringent life cycle whereas some products have very short life
span. Discuss reasons with appropriate examples from local environment?
Products, like people, are viewed as having a life cycle. The concept of
the product life cycledescribes the stages a new product goes
through in the marketplace: introduction, growth, maturity, and
decline (Figure 111).
2
The two curves shown in this figure, total
industry sales revenue and total industry profit, represent the sum of
sales revenue and profit of all firms producing the product. The
reasons for the changes in each curve and the marketing decisions
involved are detailed next.
Introduction Stage
The introduction stage of the product life cycle occurs when a product
is introduced to its intended target market. During this period, sales
grow slowly, and profit is minimal. The lack of profit is often the result
of large investment costs in product development, such as the millions
of dollars spent by Gillette to develop the Gillette Fusion razor shaving
system. The marketing objective for the company at this stage is to
create consumer awareness and stimulate trialthe initial purchase of
a product by a consumer.
Companies often spend heavily on advertising and other
promotion tools to build awareness and stimulate product trial among
consumers in the introduction stage. For example, Gillette budgeted
$200 million in advertising to introduce the Fusion shaving system to
male shavers. The result? Over 60 percent of male shavers became
aware of the new razor within six months and 26 percent tried the
product.
3
Irfan Arshad 6
Advertising and promotion expenditures in the introduction stage
are often made to stimulate primary demand, the desire for the product
class rather than for a specific brand, since there are few competitors
with the same product. As more competitors launch their own
products and the product progresses along its life cycle, company
attention is focused on creating selective demand, the preference for a
specific brand.
Other marketing mix variables also are important at this stage.
Gaining distribution can be a challenge because channel
intermediaries may be hesitant to carry a new product. Also, a
company often restricts the number of variations of the product to
ensure control of product quality. As an example, the original
Gatorade came in only one flavorlemon-lime.
During introduction, pricing can be either high or low. A high
initial price may be used as part of askimming strategy to help the
company recover the costs of development as well as capitalize on the
price insensitivity of early buyers. A master of this strategy is 3M.
According to a 3M manager, We hit fast, price high, and get the heck
out when the me-too products pour in.
4
High prices tend to attract
competitors eager to enter the market because they see the
opportunity for profit. To discourage competitive entry, a company
can price low, referred to as penetration pricing. This pricing strategy
helps build unit volume, but a company must closely monitor costs.
These and other pricing techniques are covered in Chapter 14.
Figure 112 charts the stand-alone fax machine product life cycle
for business use in the United States from the early 1970s to 2014.
5
As
shown, sales grew slowly in the 1970s and early 1980s after Xerox
pioneered the first portable fax machine. Fax machines were first sold
direct to businesses by company salespeople and were premium
priced. The average price for a fax machine in 1980 was a hefty
$12,700. Those fax machines were primitive by todays standards.
They contained mechanical parts, not electronic circuitry, and offered
few features seen in todays models.
Growth Stage
Irfan Arshad 7
The growth stage of the product life cycle is characterized by rapid
increases in sales. It is in this stage that competitors appear. For
example, Figure 112 shows the dramatic increase in sales of fax
machines from 1986 to 1998. The number of companies selling fax
machines also increased, from one in the early 1970s to four in the late
1970s to seven manufacturers in 1983, which sold nine brands. By
1998 there were some 25 manufacturers and 60 brands from which to
choose.
The result of more competitors and more aggressive pricing is that
profit usually peaks during the growth stage. For instance, the average
price for a fax machine plummeted from $3,300 in 1985 to $500 in
1995. At this stage, advertising shifts emphasis to stimulating selective
demand; product benefits are compared with those of competitors
offerings for the purpose of gaining market share.
Product sales in the growth stage grow at an increasing rate
because of new people trying or using the product and a growing
proportion of repeat purchaserspeople who tried the product, were
satisfied, and bought again. For the Gillette Fusion razor, over 60
percent of men who tried the razor adopted the product permanently.
For successful products, the ratio of repeat to trial purchases grows as
the product moves through the life cycle. Durable fax machines meant
that replacement purchases were rare. However, it became common
for more than one machine to populate a business as the machines
use became more widespread.
Changes appear in the product in the growth stage. To help
differentiate a companys brand from competitors, an improved
version or new features are added to the original design, and product
proliferation occurs. Changes in fax machines included (1) models
with built-in telephones; (2) models that used plain, rather than
thermal, paper for copies; and (3) models that integrated electronic
mail.
In the growth stage, it is important to broaden distribution for the
product. In the retail store, for example, this often means that
competing companies fight for display and shelf space. Expanded
Irfan Arshad 8
distribution in the fax industry is an example. Early in the growth
stage, just 11 percent of office machine dealers carried this equipment.
By the mid-1990s, over 70 percent of these dealers sold fax
equipment, and distribution was expanded to other stores selling
electronic equipment.
Numerous product classes or industries are in the growth stage of
the product life cycle today. Examples include smartphones and e-
books.
Maturity Stage
The maturity stage is characterized by a slowing of total industry sales
or product class revenue. Also, marginal competitors begin to leave
the market. Most consumers who would buy the product are either
repeat purchasers of the item or have tried and abandoned it. Sales
increase at a decreasing rate in the maturity stage as fewer new buyers
enter the market. Profit declines due to fierce price competition
among many sellers, and the cost of gaining new buyers at this stage
rises.
Marketing attention in the maturity stage is often directed toward
holding market share through further product differentiation and
finding new buyers. Fax machine manufacturers developed Internet-
enabled multifunctional models with new features such as scanning,
copying, and color reproduction. They also designed fax machines
suitable for small and home businesses, which today represent a
substantial portion of sales. Still, a major consideration in a
companys strategy in this stage is to control overall marketing cost by
improving promotional and distribution efficiency.
Fax machines entered the maturity stage in the late 1990s. At the
time, about 90 percent of industry sales were captured by five
producers (Hewlett-Packard, Brother, Sharp, Lexmark, and
Samsung), reflecting the departure of marginal competitors. By 2004,
200 million stand-alone fax machines were installed throughout the
world, sending more than 120 billion faxes annually.
Irfan Arshad 9
Numerous product classes and industries are in the maturity stage
of their product life cycle today. These include soft drinks and DVD
players.
Decline Stage
The decline stage occurs when sales drop. Fax machines for business
use moved to this stage in early 2005. By then, the average price for a
fax machine had sunk below $100. Frequently, a product enters this
stage not because of any wrong strategy on the part of companies, but
because of environmental changes. For example, digital music players
pushed compact discs into decline in the recorded music industry.
Will Internet technology and e-mail make fax machines extinct any
time soon? The Marketing Matters boxoffers one perspective on this
question.
6
Numerous product classes or industries are in the decline stage of
their product life cycle. Two prominent examples include analog TVs
and desktop personal computers.
Products in the decline stage tend to consume a disproportionate
share of management and financial resources relative to their future
worth. A company will follow one of two strategies to handle a
declining product: deletion or harvesting.
Deletion
Product deletion, or dropping the product from the companys product
line, is the most drastic strategy. Because a residual core of consumers
still consume or use a product even in the decline stage, product
elimination decisions are not taken lightly. For example, Sanford
Corporation continues to sell its Liquid Paper correction fluid for use
with typewriters in the era of word-processing equipment.
Harvesting
A second strategy, harvesting, is when a company retains the product
but reduces marketing costs. The product continues to be offered, but
salespeople do not allocate time in selling nor are advertising dollars
spent. The purpose of harvesting is to maintain the ability to meet
Irfan Arshad 10
customer requests. Coca-Cola, for instance, still sells Tab, its first diet
cola, to a small group of die-hard fans. According to Cokes CEO, It
shows you care. We want to make sure those who want Tab, get Tab.
7
Four Aspects of the Product Life Cycle
Some important aspects of product life cycles are (1) their length, (2)
the shape of their sales curves, (3) how they vary with different levels
of products, and (4) the rate at which consumers adopt products.
Length of the Product Life Cycle
There is no set time that it takes a product to move through its life
cycle. As a rule, consumer products have shorter life cycles than
business products. For example, many new consumer food products
such as Frito-Lays Baked Lays potato chips move from the
introduction stage to maturity in 18 months. The availability of mass
communication vehicles informs consumers quickly and shortens life
cycles. Also, technological change tends to shorten product life cycles
as new-product innovation replaces existing products.
Shape of the Product Life Cycle
The product life-cycle sales curve shown in Figure 111 is
the generalized life cycle, but not all products have the same shape to
their curve. In fact, there are several life-cycle curves, each type
suggesting different marketing strategies. Figure 113 shows the shape
of life-cycle sales curves for four different types of products: high-
learning, low-learning, fashion, and fad products.
WO EXAMPLES SHOWING PRODUCT LIFE CYCLE OF :
PLC OF MOBILINK
PLC OF LUX
PLC OF MOBILINK:
INTRODUCTON TO MOBILINK Image:Mobilink logo.jpg
Pakistan Mobile Communications Limited, better known as Mobilink GSM, is a telecommunication
service provider in Pakistan. Mobilink is a private limited company. It started operations in 1994 as
the first GSM cellular Mobile service in Pakistan by MOTOROLA Inc., later it was sold to ORASCOM,
Irfan Arshad 11
an Egypt-based multi-national company. Mobilink was awarded the license to operate in Azad Jammu
and Kashmir (AJK) on 27 June-2006. The concession was awarded for a payment of US$ 10 million
[1]. Mobilinks competitive advantage has been its aggressive retail presence.
Mobilink products
Mobilinks products include postpaid INDIGO, prepaid JAZZ. Mobilinks competitive advantage has
been its aggressive retail presence. Mobilinks prepaid product sold under the brand Name Jazz is
widely available in more than 5000+ cities, towns and villages with service code
(0300,0301,0302,0306,0307 and 0308) (a detailed list of the locations is available on the corporate
website). Jazz is the most successful and popular Pakistani brand '. Mobilink another brand INDIGO
is also having good recognition in the market.
The logo of postpaid Indigo PackageThe logo of prepaid JAZZ Package
Mobilink slogan
The Mobilink slogan is reshaping lives (But in TV commercials, (Urdu) HUM BOLAN MUHABAT KI
ZABAN, (English) we speak the language of love.
MOBILINK PLC
INTRODUCTION STAGE
In the initial stage Mobilink was introduced in all the major cities of Pakistan (Karachi, Lahore,
Islamabad etc). There was only one competitor in the tele-communication business that was PTCL,
which provided the line-based connection whereas Mobilink provided the wireless connections to the
customers, so Mobilink was the market pioneers in the field.
MARKETING OBJECTIVES: In the introduction stage the Mobilinks marketing objectives was to
create product awareness among the early adopters and those buyers who are readiest to buy. Their
other objective was to give awareness about wire-less connection to the customers.
MARKETING STRATEGIES: In the initial stage the Mobilink adopted the following marketing mix
strategies:
Product:
In the initial stages, Mobilink offer the GSM service to the customers and also giving the calling
service to the major cities of Pakistan.
Price: They charge the higher price in the initial stages of their product; the reason is that, they want
to recoup development costs quickly. Another reason is that they also want for a high profit margin as
the early adopters buy the product. That is why, not only their sim price was high, but also their
calling charges were high.
Distribution: Their distribution was selective to the major cities of Pakistan because their wire-less
network connection was available in the major cites.
Irfan Arshad 12
Promotion: Promotion was high in the initial stages because the company wants to build the
awareness about the brand. They gave more and more incentives to the early adopters and retailers.
They gave free balances to the early adopters. They also gave free gifts to the retailers.
Advertising: The company spends more money on advertising because of building brand awareness
among early adopters and dealers. Their ads were based on hard cell (giving product awareness).
GROWTH STAGE:
In the growth stage, the Mobilink sales started growing. And the profits also started rising. They have
the market leadership in the field. Instead of the entrance of the UFONE, which had also offered the
wire-less connection. They had expanded their market to the other cities of Pakistan.
MARKETING OBJECTIVES: In the growth stage the Mobilink marketing objectives was to expand
their market to all the big cities of Pakistan and also to expand their network connection to the other
cities of Pakistan. Their other objective is to maximize more market share.
MARKETING STRATEGIES: In the growth stage, they adopted the following marketing mix
strategies:
Product: In the growth stage, they have made the extension in their service. They offer the same GSM
service and the calling service to the major cities with that they offer the calling service to all the cities
where the company had expanded their network connection.
Price: They have made their price lower to some extent in the growth stage, because they want to
make more market share and also the UFONE had lowered down their prices.
Distribution: In the growth stage, the company had made their distribution to the other cities of
Pakistan, because of their expansion in the network connection. Their distribution channel was same
as in the initial stages.
Advertising: In this stage, the company had allocated more budgets to the advertising expenditure,
because of maximizing more market share and also to give awareness to the new market where the
company had made extension in their network connection. Another reason for increasing in the
advertising budget was the entrance of the UFONE.
Promotion: In this stage, their promotional expenditure increased to attract more customers and to
retain the existing customers.
MATURITY STAGE
Mobilink are right now in the maturity stage. Because they have got most of the market share. There
has also been an increase in competition; new companies like TELENOR, WARID also enter into the
market. The Mobil ink had made not only the product modification, but also extend their market and
made changes in their marketing mix.
MARKETING OBJECTIVES: In the maturity stage, the company marketing objectives is to expand
their market to all the cities of Pakistan and also to maximize more profit while defending market
share.
Irfan Arshad 13
MARKEITNG STRATEGIES:
Product: In the maturity stage they have modified the brand, by coming up with new brand JAZZ and
INDIGO.
Price: In this stage they had not as lowered down their price of Sim and the calling charges, like their
competitors (UFONE, TELENOR, and WARID) had done. Because they want to get more of the profit.
Advertising: In this stage, they have made the ads in which they want to portray the image of Mobil
ink with the Pakistan. Recently, they have made the ad in which NAJAM SHIRAZ sung a song Hum
Bolain Mohabbat ki zaban.
Promotion: In the maturity stage, the company is using different promotional strategy to retain the
exisisting customers and to attract the competitors customers.
Distribution: The distribution was intensive in the growth stage, because of expansion in the network
connection.
Promotion: In the maturity stage, the company is using different promotional strategy to retain the
exisisting customers and to attract the competitors customers.
Direct selling : In this stage, the Mobilink marketing managers are also using the direct selling
strategy to get the competitors customers by giving the Sims at discount or at the low rate than the
market.
PLC OF LUX:
INTRODUCTION TO LUX: Soap on stand
GLAMOUR FACTOR
We all want to be pampered, to look and feel great, to enjoy that moment when anything seems
possible. And that's just what Lux offers you on a daily basis at a price you can afford.
Lux is the brand of UNILEVER PAKISTAN LTD. It has been winning hearts of Pakistani consumers
for 50 years. Throughout this time, Lux has been closely associated with many of the most glamorous
and sensual women of the age.
LUX PRODUCTS
Orchid touch Almond delight Energising fruit Aqua sparkle
Orchid touch Almond delight Energising fruit Aqua sparkle
Almond delight: Lux Almond Delight comes with the deep moisturization of exotic Peach, Cream and
precious Almond Oil
Energizing fruit: Lux Energising Fruit incorporates the beauty secrets of Fruit Extracts, rich Milk
Cream and Honey, for a fresh renewed feeling.
Irfan Arshad 14
Aqua sparkle: Lux Aqua sparkle has nourishing oil of Cade and cucumber extracts for a radiant and
clear skin
LUX PLC
INTRODUCTION STAGE
Lux had been launched in Pakistan in 1957. At that time there was only one competitor of Lux, which
was LIFEBUOY. In the initial stages Lux was introduced in the major cities of Pakistan like Karachi,
Lahore etc. In the initial stages Lux was the market challenger in the field. So the marketing manager
came up with different marketing strategies to attract the customers.
MARKETING OBJETIVES: The Lux marketing objectives in the initial stage was to create the product
awareness and to attract the customers towards the product.
MARKETING STRATEGIES: The Lux marketing mix strategies in the initial stages of the product
were based on:
Product: They offer only on product in the market. They did not come up with the differentiated
product.
Price: In the initial stages of the product, they offer the relatively higher price than their competitor
(LIFEBUOY). Because, they want to recover their cost which incurred initially in making the product.
Or another reason was that they have segmented the niche market.
Advertising: In the initial stages, they allocate more advertising budget to advertise the product. So
that more and more customers could be attracted towards the product. In ads they targeted the early
adopters, who were readiest to buy the product.
Distribution: Their distribution was selective and only covers the major cities of Pakistan. Because,
they initially want to get recognition in the major cities of Pakistan.
GROWTH STAGE:
In the growth stage, their sales rapidly started rising. In the growth stage, they have expanded their
market to the other cities of Pakistan. The marketing mangers also make changes in the marketing
objectives and their marketing strategies.
MARKETING OBJECTIVES: In the growth stage, the marketing objectives of the Lux were to expand
their market to the other cities of Pakistan. Another objective was to maximize more market share.
MARKETING STRATEGIES: In the growth stage, company had the following marketing mix
strategies:
Product: In the growth stage, the company had offered the same product in the market.
Price: In this stage, the company had changed their price to some extent because of maximizing the
market share.
Irfan Arshad 15
Advertising: In the growth stage, they had increased their advertising budget as in the initial stages
because of attracting the new customers or to retain the existing customers.
Distribution: In this stage, company had expanded their market to the other cities of Pakistan. Their
distribution channel was the same as in the initial stages of the product.
Promotion :In the growth stage, the company had also used the different promotioning strategies to
attract the new and the exisisting customers.
MATURITY STAGE
Lux is now in the maturity stage, they modified the product by adding some changes in the product. In
this stage, few competitors enter into the market like (SAFEGUARD, CAPRI etc). So the marketing
managers make different strategies to handle the competition. The company has expanded their
market to almost all the cities of Pakistan.
MARKETING OBJECTIVES: The marketing objective of Lux is to maximize more profit while
defending the market share. And to expand the market to all the cities of Pakistan.
MARKETING STRATEGIES: In this stage, Lux marketing mix strategies are based on:
Product: The Lux has made the modification in the product by introducing: Orchid touch , Almond
delight, Energising fruit, Aqua sparkle
Price: The Lux products are now available at higher prices in the market, the reason behind is that the
companys marketing objectives is to maximize more profit.
Distribution: Now Lux products are available in almost all the cities of Pakistan. Their distribution
channel is same as in the initial stage.
Advertising : In this stage Lux advertising has been reduced to some extent because of the more brand
awareness in the minds of customers. Recently, they show the ad in which the Pakistani leading
television and film actress were shown.
CONCLUSION
Some Other Examples of Product Life Cycle:
Set out below are some suggested examples of products that are currently at different stages of the
product life-cycle:
Irfan Arshad 16
PRODUCT LIFE
CYCLE STRATEGIES
Hosts
This is the number of machine addresses on the net as reported by the name servers.Many of these
addresses may not have a machine which responds to them. See the"Replied to Ping" column.
Domains
These are domains such as "mit.edu" or "internic.net". Each domain is
usuallyassociated with some organization, be it a university, company or other group.
Replied to Ping
This is an estimated number of machines that are actually connected to the net
andresponding. This estimate was made by pinging 1% of the hosts and
countingresponses. 'Ping' is a tool to determine if a machine is up.The raw data as follows:
D a t e H o s t s D o m a i n s R
e p l i e d t o P i n g
J a n 9 6 9 . 5 m i l l i o n 2 4 0 , 0 0 0
1 . 7 m i l l i o n J u l 9 5 6 . 6 m i l
l i o n 1 2 0 , 0 0 0 1 . 1 m i l l i o n J
a n 9 5 4 . 9 m i l l i o n 7 1 , 0 0 0
1 . 0 m i l l i o n O c t 9 4 3 . 9 m
i l l i o n 5 6 , 0 0 0 1 . 0 m i l l i o
n J u l 9 4 3 . 2 m i l l i o n 4 6 ,
0 0 0 0 . 7 m i l l i o n J a n 9 4 2 .
2 m i l l i o n 3 0 , 0 0 0 0 . 6 m i l
l i o n O c t 9 3 2 . 1 m i l l
i o n 2 8 , 0 0 0 N A J u l 9 3 1
. 8 m i l l i o n 2 6 , 0 0 0 0 . 5 m
i l l i o n A p r 9 3 1 . 5 m i l l i o
n 2 2 , 0 0 0 0 . 4 m i l l i o n 8
Irfan Arshad 17
Irfan Arshad 18
PRODUCT LIFE CYCLE
STRATEGIESJ a n 9 3 1 . 3 m i l l i
o n 2 1 , 0 0 0 N A
Decline Stage
Eventually sales begin to decline as the market becomes saturated, the product
becomestechnologically obsolete, or customer tastes change. If the product has developed
brandloyalty,
the profitability may be maintained longer. Unit costs may increase with thedeclini
ng production volumes and eventually no more profit can be made.During the decline phase, the firm
generally has three options:

Maintain the product in hopes that competitors will exit. Reduce costs and find newuses for the product.

Harvest it, reducing marketing support and coasting along until no more profit can be made.

Irfan Arshad 19
Discontinue the product when no more profit can be made or there is a successor product.The
marketing mix may be modified as follows:

Product
- The number of products in the product line may be reduced. Rejuvenatesurviving products to make them
look new again.

Price
- Prices may be lowered to liquidate inventory of discontinued products.Prices may be
maintained for continued products serving a niche market.

Distribution
- Distribution becomes more selective. Channels that no longer are profitable are phased out.

Promotion
- Expenditures are lower and aimed at reinforcing the brand image for continued products.
CASE STUDY
Introduction:
Cyber.Net is the largest Internet and Data Communication Network Service Provider
inPakistan. The company offers various services to the corporate and consumer sectors and itis exploring
the possibilities to extend several other unique online services to its over 80,000
valued customers.Since its commencement in March 1997, in the city of Karachi, having its
share of trialsand tribulations, Cyber.Net has made a name for itself as one of the leading
ISP's in thecountry. A group company of the Lakson Group of Companies, Cyber.Net has maintained9
PRODUCT LIFE CYCLE STRATEGIESthe tradition of dedication and service par excellence, which has
been, and continues to be,its motto.Cyber.Net offers Total Internet Solutions for the
business and family alike. With ever expanding horizons, Cyber.Net aims to be
the largest Internet Service Provider in t hecountry with features and facilities like 24-
Irfan Arshad 19
Discontinue the product when no more profit can be made or there is a successor product.The
marketing mix may be modified as follows:

Product
- The number of products in the product line may be reduced. Rejuvenatesurviving products to make them
look new again.

Price
- Prices may be lowered to liquidate inventory of discontinued products.Prices may be
maintained for continued products serving a niche market.

Distribution
- Distribution becomes more selective. Channels that no longer are profitable are phased out.

Promotion
- Expenditures are lower and aimed at reinforcing the brand image for continued products.
CASE STUDY
Introduction:
Cyber.Net is the largest Internet and Data Communication Network Service Provider
inPakistan. The company offers various services to the corporate and consumer sectors and itis exploring
the possibilities to extend several other unique online services to its over 80,000
valued customers.Since its commencement in March 1997, in the city of Karachi, having its
share of trialsand tribulations, Cyber.Net has made a name for itself as one of the leading
ISP's in thecountry. A group company of the Lakson Group of Companies, Cyber.Net has maintained9
PRODUCT LIFE CYCLE STRATEGIESthe tradition of dedication and service par excellence, which has
been, and continues to be,its motto.Cyber.Net offers Total Internet Solutions for the
business and family alike. With ever expanding horizons, Cyber.Net aims to be
the largest Internet Service Provider in t hecountry with features and facilities like 24-
Irfan Arshad 19
Discontinue the product when no more profit can be made or there is a successor product.The
marketing mix may be modified as follows:

Product
- The number of products in the product line may be reduced. Rejuvenatesurviving products to make them
look new again.

Price
- Prices may be lowered to liquidate inventory of discontinued products.Prices may be
maintained for continued products serving a niche market.

Distribution
- Distribution becomes more selective. Channels that no longer are profitable are phased out.

Promotion
- Expenditures are lower and aimed at reinforcing the brand image for continued products.
CASE STUDY
Introduction:
Cyber.Net is the largest Internet and Data Communication Network Service Provider
inPakistan. The company offers various services to the corporate and consumer sectors and itis exploring
the possibilities to extend several other unique online services to its over 80,000
valued customers.Since its commencement in March 1997, in the city of Karachi, having its
share of trialsand tribulations, Cyber.Net has made a name for itself as one of the leading
ISP's in thecountry. A group company of the Lakson Group of Companies, Cyber.Net has maintained9
PRODUCT LIFE CYCLE STRATEGIESthe tradition of dedication and service par excellence, which has
been, and continues to be,its motto.Cyber.Net offers Total Internet Solutions for the
business and family alike. With ever expanding horizons, Cyber.Net aims to be
the largest Internet Service Provider in t hecountry with features and facilities like 24-
Irfan Arshad 20
hour technical assistance, 7 days a week, bestmodem to user ratio preventing busy signals, powerful,
direct connection via satellite to theInternet backbone, firewall security features to safeguard
against hackers. Cyber.Net
with36Mbps bandwidth and 6000+ dialup ports at present is completely geared to
wards providing customers with timely, reliable, superior services and solutions.
Vision for theFuture:
Cyber.Net since its inception has helped launch Pakistanon the technology threshold andconnecting it to the
world. Today it stands tall as the established leader among all ISPs inPakistan with the largest active customer
base and highest number of services to thecorporate and Mass consumer segments. It is poised to further
launch the largest andglobally resonating infrastructure arrangements in Pakistan.The company has taken
aim to further grow with a large scale of products and
services.T h i s i n c l u d e s a p p l i c a t i o n h o s t i n g o u t s o u r c i n g , r e a l t i me s
e c u r e me s s a g i n g a n d collaboration outsourcing for business. All this is backed by the largest
bandwidth and dialup ports by any single ISP in the country and will catapult the corporate and mass
segmentsector into a business lifestyle and convenience that challenges the best in the world.Cyber.Net vision
is that it will become a nationally and internationally acclaimed companyrevolutionizing the way that people
perceive the Internet, and to service their expectations.To achieve this they will ensure that they
deliver excellent Service to all his consumer
andcor por at e cus t omer s , whi l e meet i ng I nt er nat i onal s t andar ds i n s er vi c
e pr ovi s i on. They will always ensure their staff is well trained, accessible and respected,
and that theyare a part of Cyber.Net due to their own choice and pleasure. They will continually
providetraining and guidance to their staff, and ensure that they are always well enough
equippedto ensure their own growth, and the growth of the company. They will do all they
can toensure that as many Pakistanis as possible have access to the Internet
Customer oriented company:
As a customer-oriented company, Cyber.Net offers total Internet Solutions for the businessand family alike
with facilities such as 24-hour, 7 days a week technical assistance, bestmodem-to-user ratio to
prevent busy signals, powerful, direct connection via satellite to theInternet backbone, and firewall security to
safeguard against hackers.10
Question 3:The management of a telecom company wants to increase its tariff rate. The
company is operating in highly competitive environment and losing its customers in
some of geographical areas. What ways would you suggest to the operational managers
to cope with the situation?
After the launch of 3G/4G services in Pakistan, every operator has
adopted a different strategy to capture the market, some operators
have leaned towards data speed caps while others have provided
unlimited speed (depends upon the spectrum they hold). This white
Irfan Arshad 20
hour technical assistance, 7 days a week, bestmodem to user ratio preventing busy signals, powerful,
direct connection via satellite to theInternet backbone, firewall security features to safeguard
against hackers. Cyber.Net
with36Mbps bandwidth and 6000+ dialup ports at present is completely geared to
wards providing customers with timely, reliable, superior services and solutions.
Vision for theFuture:
Cyber.Net since its inception has helped launch Pakistanon the technology threshold andconnecting it to the
world. Today it stands tall as the established leader among all ISPs inPakistan with the largest active customer
base and highest number of services to thecorporate and Mass consumer segments. It is poised to further
launch the largest andglobally resonating infrastructure arrangements in Pakistan.The company has taken
aim to further grow with a large scale of products and
services.T h i s i n c l u d e s a p p l i c a t i o n h o s t i n g o u t s o u r c i n g , r e a l t i me s
e c u r e me s s a g i n g a n d collaboration outsourcing for business. All this is backed by the largest
bandwidth and dialup ports by any single ISP in the country and will catapult the corporate and mass
segmentsector into a business lifestyle and convenience that challenges the best in the world.Cyber.Net vision
is that it will become a nationally and internationally acclaimed companyrevolutionizing the way that people
perceive the Internet, and to service their expectations.To achieve this they will ensure that they
deliver excellent Service to all his consumer
andcor por at e cus t omer s , whi l e meet i ng I nt er nat i onal s t andar ds i n s er vi c
e pr ovi s i on. They will always ensure their staff is well trained, accessible and respected,
and that theyare a part of Cyber.Net due to their own choice and pleasure. They will continually
providetraining and guidance to their staff, and ensure that they are always well enough
equippedto ensure their own growth, and the growth of the company. They will do all they
can toensure that as many Pakistanis as possible have access to the Internet
Customer oriented company:
As a customer-oriented company, Cyber.Net offers total Internet Solutions for the businessand family alike
with facilities such as 24-hour, 7 days a week technical assistance, bestmodem-to-user ratio to
prevent busy signals, powerful, direct connection via satellite to theInternet backbone, and firewall security to
safeguard against hackers.10
Question 3:The management of a telecom company wants to increase its tariff rate. The
company is operating in highly competitive environment and losing its customers in
some of geographical areas. What ways would you suggest to the operational managers
to cope with the situation?
After the launch of 3G/4G services in Pakistan, every operator has
adopted a different strategy to capture the market, some operators
have leaned towards data speed caps while others have provided
unlimited speed (depends upon the spectrum they hold). This white
Irfan Arshad 20
hour technical assistance, 7 days a week, bestmodem to user ratio preventing busy signals, powerful,
direct connection via satellite to theInternet backbone, firewall security features to safeguard
against hackers. Cyber.Net
with36Mbps bandwidth and 6000+ dialup ports at present is completely geared to
wards providing customers with timely, reliable, superior services and solutions.
Vision for theFuture:
Cyber.Net since its inception has helped launch Pakistanon the technology threshold andconnecting it to the
world. Today it stands tall as the established leader among all ISPs inPakistan with the largest active customer
base and highest number of services to thecorporate and Mass consumer segments. It is poised to further
launch the largest andglobally resonating infrastructure arrangements in Pakistan.The company has taken
aim to further grow with a large scale of products and
services.T h i s i n c l u d e s a p p l i c a t i o n h o s t i n g o u t s o u r c i n g , r e a l t i me s
e c u r e me s s a g i n g a n d collaboration outsourcing for business. All this is backed by the largest
bandwidth and dialup ports by any single ISP in the country and will catapult the corporate and mass
segmentsector into a business lifestyle and convenience that challenges the best in the world.Cyber.Net vision
is that it will become a nationally and internationally acclaimed companyrevolutionizing the way that people
perceive the Internet, and to service their expectations.To achieve this they will ensure that they
deliver excellent Service to all his consumer
andcor por at e cus t omer s , whi l e meet i ng I nt er nat i onal s t andar ds i n s er vi c
e pr ovi s i on. They will always ensure their staff is well trained, accessible and respected,
and that theyare a part of Cyber.Net due to their own choice and pleasure. They will continually
providetraining and guidance to their staff, and ensure that they are always well enough
equippedto ensure their own growth, and the growth of the company. They will do all they
can toensure that as many Pakistanis as possible have access to the Internet
Customer oriented company:
As a customer-oriented company, Cyber.Net offers total Internet Solutions for the businessand family alike
with facilities such as 24-hour, 7 days a week technical assistance, bestmodem-to-user ratio to
prevent busy signals, powerful, direct connection via satellite to theInternet backbone, and firewall security to
safeguard against hackers.10
Question 3:The management of a telecom company wants to increase its tariff rate. The
company is operating in highly competitive environment and losing its customers in
some of geographical areas. What ways would you suggest to the operational managers
to cope with the situation?
After the launch of 3G/4G services in Pakistan, every operator has
adopted a different strategy to capture the market, some operators
have leaned towards data speed caps while others have provided
unlimited speed (depends upon the spectrum they hold). This white
Irfan Arshad 21
paper is based on the comparison of the prices of the data
packages offered by the operators. It will facilitate the subscribers
by providing reliable and accurate data regarding the ICT products
and services.
On the one hand, the mobile operators want to make their Data tariff competitive, attractive and also profitable as
to get maximum users, whereas on the other hand, most importantly from a consumers point of view, when you
have a choice between several operators with several packages, making the right choice is a difficult task.
Benchmarking or comparative analysis is the best way of getting an overview of data tariff offered by different
mobile operators. Not only can it provide you with a clearer picture of the packages but it also helps you to decide
the best for you.
Pre-Paid Data Packages
The four mobile operators who got the 3G and 4G
licenses have commercially launched their 3G services
and data packages. There are many packages for the
customers to choose from and it depends upon the users
which package is suitable for them. We have divided the
pre-paid data packages into three categories depending on their usage:
Post-Paid Data Packages
Telecom operators have also introduced data packages
suitable for their post-paid customers as the downloading
is much faster which makes the 3G service more hassle
free and convenient. The post-paid packages are divided
into:
In year 2008, Wang Jianzhou, CEO of China Mobile is anticipating that the new brand is not
only a brand of the Pakistan branch, but also an international brand for China Mobile, which
aims to provide communication among societies. MR. Liu LiDong, Director PMO
states, We are not just mobile operators but information providers for society.
The central idea behind this step is to provide optimized network coverage across
wide range. The combination of continued rapid growth in Pakistan's economy, rising
consumer purchasing power and the acceleration of informatization throughout the country is
driving a tremendous demand for communications and information services.
Irfan Arshad 21
paper is based on the comparison of the prices of the data
packages offered by the operators. It will facilitate the subscribers
by providing reliable and accurate data regarding the ICT products
and services.
On the one hand, the mobile operators want to make their Data tariff competitive, attractive and also profitable as
to get maximum users, whereas on the other hand, most importantly from a consumers point of view, when you
have a choice between several operators with several packages, making the right choice is a difficult task.
Benchmarking or comparative analysis is the best way of getting an overview of data tariff offered by different
mobile operators. Not only can it provide you with a clearer picture of the packages but it also helps you to decide
the best for you.
Pre-Paid Data Packages
The four mobile operators who got the 3G and 4G
licenses have commercially launched their 3G services
and data packages. There are many packages for the
customers to choose from and it depends upon the users
which package is suitable for them. We have divided the
pre-paid data packages into three categories depending on their usage:
Post-Paid Data Packages
Telecom operators have also introduced data packages
suitable for their post-paid customers as the downloading
is much faster which makes the 3G service more hassle
free and convenient. The post-paid packages are divided
into:
In year 2008, Wang Jianzhou, CEO of China Mobile is anticipating that the new brand is not
only a brand of the Pakistan branch, but also an international brand for China Mobile, which
aims to provide communication among societies. MR. Liu LiDong, Director PMO
states, We are not just mobile operators but information providers for society.
The central idea behind this step is to provide optimized network coverage across
wide range. The combination of continued rapid growth in Pakistan's economy, rising
consumer purchasing power and the acceleration of informatization throughout the country is
driving a tremendous demand for communications and information services.
Irfan Arshad 21
paper is based on the comparison of the prices of the data
packages offered by the operators. It will facilitate the subscribers
by providing reliable and accurate data regarding the ICT products
and services.
On the one hand, the mobile operators want to make their Data tariff competitive, attractive and also profitable as
to get maximum users, whereas on the other hand, most importantly from a consumers point of view, when you
have a choice between several operators with several packages, making the right choice is a difficult task.
Benchmarking or comparative analysis is the best way of getting an overview of data tariff offered by different
mobile operators. Not only can it provide you with a clearer picture of the packages but it also helps you to decide
the best for you.
Pre-Paid Data Packages
The four mobile operators who got the 3G and 4G
licenses have commercially launched their 3G services
and data packages. There are many packages for the
customers to choose from and it depends upon the users
which package is suitable for them. We have divided the
pre-paid data packages into three categories depending on their usage:
Post-Paid Data Packages
Telecom operators have also introduced data packages
suitable for their post-paid customers as the downloading
is much faster which makes the 3G service more hassle
free and convenient. The post-paid packages are divided
into:
In year 2008, Wang Jianzhou, CEO of China Mobile is anticipating that the new brand is not
only a brand of the Pakistan branch, but also an international brand for China Mobile, which
aims to provide communication among societies. MR. Liu LiDong, Director PMO
states, We are not just mobile operators but information providers for society.
The central idea behind this step is to provide optimized network coverage across
wide range. The combination of continued rapid growth in Pakistan's economy, rising
consumer purchasing power and the acceleration of informatization throughout the country is
driving a tremendous demand for communications and information services.
Irfan Arshad 22
Irrespective of competitive edge the company wants to maintain strong relationship
with customers by providing value added services. While elaborating market penetration
strategies, Mr Jianzhou suggested introduction of more value-added services, like mobile TV,
mobile music, news, billing for subscribers specially the young population.
"The future of our business and telecommunication is increasingly linked, and our interest
in the telecom field is broad"
Zong is the first International brand of China Mobile being launched in Pakistan on
April5, 2008. It is meant to empower and liberate the people of Pakistan in every nook and
corner of the country.
The core essence of ZONG is to allow people to communicate at will without
worrying about tariffs, network coverage, capacity issues or congestion. It will be supported
by groundbreaking communications, trend setting customer service and an unmatched
product offering, which will redefine rules of the game and establish ZONG as a serious
contender for the number one spot.
The brand would offer its customers with entertaining & innovative value added
services and will empower them by giving a wide variety of products & services.
BUSINESS STRUCTURE:
Marketing
Zong campaign has taken a fresh, bold and humorous approach to marketing. Its
advertisements reveal both the culture of country and feelings of customers. It uses
comparative sales and marketing approaches across multiple customer groups. Within each
area the sales and marketing force are divided among various customer groups to meet their
specific needs.
Telecom industry has contributed a great deal to Pakistans economy and has
called for greatinvestments that lead to a new era of progress. Telecom sector is seeing
extraordinary growth inPakistan. With increasing level s of mobile penetration
Pakistan is fast evolvi ng as one of thetelecom sector's key investment
prospects. Continued market
liberalization is reshaping ther egul at or y envi r onment , cr eat i ng a mor e i nv
es t ment f r i endl y cl i mat e i n t el ecom s ect or of Pakistan. The sector is said to be
growing at a very fast pace on yearly basis. This growth rate of telecom sector is mainly
because of the mobile phone service providers entry in the industry for the last few
years. As of July 2009, the mobile phone subscribers are 95.54 million in
Irfan Arshad 23
Pakistanand, i n f act , s t i l l Paki s t an has t he hi ghes t mobi l e phone
penet r at i on r at e i n t he Sout h As i anregion. Hence, due to the huge
potential in Pakistans mobile phone sector, the industry andcustomers are
experiencing an intense competition, a battle for supermacy in the mobile
phoneindustry, between all mobile phone service providers of Pakistan.Pakistan
telecommunication sector had remained a monopoly for a very long time. However,
thissector has been liberalized with the announcement of Deregulation Policy on 13th July
2003 andexclusivity of PTCL in basi c telephony has been abolished. With all this,
telecom sector of Pakistan is now open for competition. Impact of telecom
liberalization has been tremendous.Access to telecom facilities for common
man has been increased dramaticall y, in addition toimprovement in quality of
telecom services, prices of services has decreased tremendously. PTAhas always been
ensuring that all the telecom operators should be provided with level
playingfield. Number of incentives has been given by the government to further increase
the investment.In this regard the sector has been given the status of industry
whereby subsidies and incentivesgi ven to other industries are now available to
telecom sector al so. Taxes and duties have beenreduced to the minimum in
order to make business viable for the operators for return on their investments.
PTA has reduced all the formalities for acquiring licenses for any servi ces to
itsminimum. In addition, PTA has also reduced royalties and fees of all the licensees and a
simpleand liberal licensing regime has been adopted.
Major competitors:
Heres a brief description of the top mobile companies in Pakistan.At the top is
Mobilink
, the Pakistani unit of Egypt-based telecom company Orascom. It has beenoperating in
Pakistan since 1994.
Irfan Arshad 24
Ufone
, a wholly owned subsidiary of Pakistan Telecommunication Co. Ltd (PTCL), is
nowunder the control of Etisalat group of UAE.
Warid
, owned by the Abu Dhabi group of the United Arab Emirates and sister of Wateen groupis
another cell phone service provider in the industry. Norways
Telenor
, a recent entrant with about a billion US dollar investment in Pakistan has been
doing well, based on its recent earning report. Telenor stock is listed in the Oslo
stock market (TEL) and in US.
Zong
, formerly Paktel, was the latest target of foreign acquisition. After it got acquired by
ChinaMobi l e i t was r ebr anded as Zong and l aunched one of t he mos t
s ucces s f ul and aggr es s i ve campaigns.
The evolution of brand marketing moves in one direction only toward greater complexity. Whether
its the ever-expanding panoply of media or the rising flood of Big Data or the multiplying numbers of
markets with robust middle-class consumer populations, brand marketers must manage ever more
complicated markets well beyond the ken, or even the wildest dreams, of the advertising doyens
depicted in AMCs sepia-tonedMad Men.
Dynamic pricing is one of these modern-day complexities. This is pricing that varies in real-time to
reflect on-going shifts in buying patterns, competitive pricing and contextual factors, and it is the
coming thing in all categories. A Wall Street Journal story reported that online prices for everything
from white goods to childrens clothing to consumer electronics to shoes to jewelry to detergents to
razor blades are in constant flux. The highest price one minute is the lowest price the next. One online
pricing software company, Mercent Corp., says it changes the prices of two million items every hour!
The Internet is the frontier of dynamic pricing, but it is found increasingly in every type of market and
category. A CBS New York story reported that several high-profile New York City restaurants are now
varying menu prices based on time of day or week and demand for reservations.
There is nothing new about dynamic pricing. Hotels and airlines have long done it. Airlines call it yield
management. But new technologies and analytics are now bringing these practices to many other
categories that have never known anything but fixed pricing (albeit, with the occasional promotion or
sale to clear inventory or temporarily boost sales).
Dynamic pricing is a corollary aspect of Big Data, so it is certain to grow. But there is something
deeper at work, a more fundamental force shaping the future of brand marketing.
Dynamic pricing is more than just greater complexity. It is greater sophistication about managing the
brand marketing mix. There is no advantage in complexity for complexitys sake. Brand marketing has
become more complex because of greater sophistication.
The sophistication of brand marketing is driven by the degree to which competitive advantage
requires advanced methods and tools. This is not to say that building competitive advantage has ever
been easy. It has not. It is simply to say that todays marketplace is much more mature and developed
than ever before, so many of the things that created competitive advantage in the past are now cost-
of-entry table stakes that barely get a brand in the game, much less put it ahead. Add to this the
exponential growth of Big Data about markets and consumers.
Market maturity demands new analysis, and Big Data creates unprecedented opportunities for new
analysis. The combination is vastly greater complexity in service of a vastly greater need for
sophistication. But it is sophistication of a particular sort, one in which competitive advantage is found
by exploiting inefficiencies in the marketplace.
The broader topic of inefficiency has a long, contentious history in economics, with one side arguing
vociferously for the efficiency of financial markets and the other side arguing with equal gusto that
Irfan Arshad 25
money-making inefficiencies abound. There is evidence on each side, but the truth seems to be a
hybrid of both opinions, a hybrid with relevance to brand marketing.
Inefficiencies in financial markets can be things like undervalued companies or more complicated
things like high-frequency trading. Those who spot these inefficiencies first make millions, if not
billions, thus proving the case for competitive advantage from inefficiencies. But the rush by others to
follow suit quickly eradicates any inefficiency, thus proving that markets operate with efficiency. This
cycle of finding one thing and exploiting it, then moving quickly to the next is true of brand marketing,
too.
Every revolution in marketing is remembered for the brands that pioneered it, not the me-too brands
that came flooding in next, rendering that revolution status quo and thus creating a need and
opportunity for the next new thing. Over time, this pattern of an inefficiency peak followed by a
flattening into business-as-usual requires ever more sophisticated innovations because the
inefficiencies become harder to find. Unless brand marketers can find the next set of inefficiencies to
exploit, they are stuck in a parity marketplace with ever-downward pressure on margins.
Dynamic pricing is all about exploiting inefficiencies in pricing. It turns out that there are situations in
which consumers are willing to pay more, and other situations in which consumers would buy if the
price were lower. With flat pricing, brand marketers cant raise prices when such demand is present
nor realize demand that can only be unlocked by lowering prices. This is a classic inefficiency, similar
in concept to the advantage reaped by high-frequency traders.
But the returns on high-frequency trading are now beginning to decline and level out. Separate and
apart from the threat of regulatory curbs, the growth of me-too competitors has begun to smooth out
this market inefficiency. Eventually, the same thing will happen with dynamic pricing in brand
marketing, just as with every marketing innovation in years past.
The key for brand marketers is to know where to look for the next competitive advantage. It is not just
any innovation that comes along, but innovations that exploit inefficiencies in the marketing mix. This
includes the old standbys of time, space, attention and money, as well as new things like energy,
mood, social interaction, contextual nudges and delivery.
For example, Amazon is now pioneering same-day delivery, which is all If competitors are
pricing their products at a lower price, then it's up to the company to
either price their goods at a higher or lower price, all depending on what
they want to achieve.
One advantage of competitive-based pricing is that it
avoids price competition that can damage the company.
Potential disadvantages include that businesses may need to engage in
other tactics to engage customers (if the price is not enough of
an incentive).
Another concern for companies is that this pricing method may barely
cover production costs, resulting in low profits.
Another concern for companies is that this pricing method may only
cover production costs, resulting in low profits.
about a more sophisticated way of exploiting inefficiency in the marketplace. But perhaps 3D
printing will be the next step forward beyond that, yet an even more sophisticated way of exploiting
inefficiencies in delivery, and perhaps even inefficiencies in customer service, warranties and product
updates as well.
Bottom line, whats important to note is that dynamic pricing is about more than pricing; its about
inefficiencies. Thats how to look for competitive advantage in the sophisticated brand marketplace of
tomorrow. Find inefficiencies, exploit them, and then move on quickly to the next.
Irfan Arshad 26
T
ypes
of
Corpor
ate
Irfan Arshad 27
Advert
ising
Image Advertising
Event sponsors
h
ip
Advocacy advertising
Cause-related advertising
A d v e r t i s i n g , t o d a y , i s a l l a b o u t Building
brandsandPositioning brandsin t
h
e mind of t
h
e consumer and notjust communicating about it.
Question 4:Differentiate between advertising and publicity. How can a manager strive
to get positive publicity of the product and how to cope with the situation when product
is experiencing negative publicity?
Irfan Arshad 28
With publicity, always look for the real news story, and a positive spin on things. A real that the
media will be interested. News coverage is more credible for business exposure, and can make a
huge positive difference to the company bottom line. Answer Advertising is the process of letting
the public know of the new product or service or of any alterations to the existing one with the
main aim of offering it for sale to gain profit. Advertising can be done through all sorts of media.
Publicity is informing the world about news events or ground breaking developments in the
company through radio, television, magazines, pamphlets, or newspapers. The publicity is
usually picked up by news or industry related media and is not a paid advertisement.
here's A Difference Between Advertising and Publicity!
Using Advertising and Publicity are very effective methods to promote and create
positive awareness for you and your business. But... there is a clear difference
between Advertising andPublicity. Advertising is something you get by paying for it.
Publicity however, is something you hope youll get. Why? Because publicity can
be generally gained at no cost to you. And... it generally has many times the
credibility of advertising. Heres what we mean:
There are some experts like Al Reis, author of the superb marketing text,
"Positioning: The Battle For Your Mind," that believe a majority of companies
shouldnt waste their money on advertising until they have established name
recognition and credibility through Public Relations and publicity. Others will tell you
that a combination of both advertising and PR are required. But one things for
certain: Every expert agrees, "that you cant just put up your web site, open your
store, offer your service or manufacture a product and then not do anything to attract
customers!"
So... advertising is content you pay for (radio, tv, newspaper, banner advertising,
etc). Publicity on the other hand, refers to free content about you and your company
that appears in the media. Its what others what others say about you. Publicity can
result when an article you write is published, or when information you give to an
editor convinces him/her to feature a story about you or is based on a publicity
release issued by a Public Relations firm you have retained. Over time, these
stories help create a favorable impression of your product or services.
The average person has no real idea of how the media find their stories, but the
prevailing view seems to be that reporters go out and find all of their news. This is
simply not realistic thinking! There just arent enough reporters on the planet to find
every bit of news worth covering. So if you can present your information
convincingly, theres a good a chance that youll gain the interest of the media.
So how can I get publicity for my company? Well...lets deal with the Internet here.
The Internet or World Wide Web, has its own rules about commercialism, and it
usually is disastrous to those who break them. If your press releases, postings or
Irfan Arshad 29
articles are blatant self-promotion or a sales pitch instead of truly useful information
they will be ignored and wont be used. Worse, you risk the negative publicity of
being flamed (you and your company being strongly put down online, or youll
receive quantities of unwanted and negative e-mail). So... heres a simply
philosophy to follow: "Before you put out a public message, play "who cares?" and
ask yourself "why would other people be interested in what I have to say?" or "how
can people benefit from the information I am supplying?" If you cant come up with
solid, positive answers to these questions, then keep working on your publicity
release or article until you do.
Positive And Negative Publicity Strategies Management Essay
In todays world, image and reputation of a business is critically significant
than past due to increased market competition and also, with developed
technologies, the consumers can be more easily evaluate to particular
brand of product or organization. Therefore, it is essential that businesses
and organizations have understanding of the effective and strategy public
relation for healthy and positive new development. Successful public
relation can be give to organization as a good image, and thus publicity is
significant role in terms of successful public relation. Because, publicity can
be helps gain public awareness and build relationship between products
and consumers.
The publicity can be defined in many interpretations. Yet, according to Yale
(1991:2), publicity involves supplying information that is factual,
interesting, and newsworthy to media not controlled by you, such as radio,
television, magazines, newspapers, and trade journals. It can be both
positive and negative to ones business or organization and thus, it is
significant to be aware of what strategies can support to either improve as
a positive or reduce a negative way, rather than just simply analysis how
they are addressed. Due to organization crises frequently result in negative
publicity, threatening the image of the company, the company should have
an effective tactics for reduce the impact (Dean, 2004). Furthermore,
organization need to try achieve positive publicity for enhance their healthy
image and reputation for a successful within market competition. As a
result, crisis management is mostly important tactic, which could be
positive publicity or an overcome in a negative way, and once overcome in
a negative way; publicity has essentially support public relation endeavors.
In this essay will look at both in positive and negative publicity and explain
the strategies which can assist both. Also, it will examine two cases
(Johnson & Johnson and Toyota) of negative publicity, how they reacted to
reduce impacts and which crises management can be support.
Strategic positive publicity tips
Positive publicity is a main issue when organizing new event or product
because it allows to company send a message out to wider audience in
effective way, rather than reach the message personally. In a further
extend, it is normally acknowledged to be more credible and more
influential than company-controlled communications (Wragg, 1981). In this
Irfan Arshad 30
sense, therefore, it is vital to know which strategies can be support to
maintain positive publicity.
Firstly, organization has to become familiar with the wide range of publicity
tools available with them (Wragg, 1981). It can be feature articles, news
releases, interviews, press conferences and special events. Besides, these
days people more familiar with online sources such as online news reports,
blog posts, Facebook updates, YouTube videos and Twitter entries. For
instance, good news may spread to wider audience via online sources and
its may potentially create healthy public image (Lawrence, 2010).
Therefore, select effective publicity tool is most important point that can be
achieve positive publicity.
In addition, the media can be an effective publicity tool if it is used correct
for building healthy image between an organization and the community. As
noted by Wragg (1981:17), the media is one of the main avenuesvalue
of the media in influencing or bringing a message to the notice of the
greatest number of people in the shortest time. With developed
technologies, most of consumers are able to interact with at least one
source of media tool and thus, using effective media is opportunities
organization to communicate with consumers. For instance, consumer may
evaluate what the organization say and what they do via growth of media.
Secondly, organization needs to develop making a publicity plan for
presenting their message to the public via the media. As mentioned by Yale
(1991:13), with a good publicity planning will help the organizations come
out ahead in the competition for space in publications and air time. In a
further extend, the organizations can get a lot of coverage for free if it is
done correctly and sent to targeted media (Yale, 1991). Effective publicity
plan can be including as determine goal of event or product and also
decide what message send to public. It may create public awareness that
the event or product, build a stronger reputation within ones community or
simply to introduce organization to the media and public (Hashemi, 2008).
After knowing organizations goal, it enables to determine right target
audiences which deliver the message to people who will be interest the
message (Hashemi, 2008). Therefore, effective publicity plan is most
important strategic for maintain positive publicity, and its lead to good
image of ones business. As a result positive publicity can be establish and
maintain goodwill and mutual understanding between organization and its
publics (Hasek, 2001). In other words, effective publicity supports public
relation as successfully.
Make lower and prevent negative publicity
Look at the reality; it is really obvious, that one little mistake, rumor or
gossip can make a serious damage ones business image even though the
company is a market leader. This can be regarded as negative publicity.
Irfan Arshad 31
According to Parvesh (2007), negative publicity is the adverse publicity that
an organization may incur due to a particular reason, which may lead to
potentially disastrous consequences. Like this, negative publicity has the
possible to injury corporate image and reputation. this is due to its high
credibility as well as the negativity effect, a tendency for negative
information to be weighted more than positive information in the evaluation
of people, objects, and ideas (Mizerski, 1982 cited by Dean, 2004:193.
Because the media has a preference for reporting bad news (Dennis &
Merrill, 1996), thus companies are more likely to receive bad press rather
than positive press. Furthermore, blog, online forum and talk radio and
uncontrolled media, it is easier than past, to damage organization image
and reputation (Jenness, 2002). Therefore, It is compulsory know that how
to organization can diminish the negative publicity, and get better their
image in the public.
According to Jenness (2002),negative publicity can be the result of a
mishandled crisis. In a further extend, negative publicity is often occurs
due to wrong response from the crisis. Perrier, for example, Perrier was
unable to overcome negative publicity when top management hesitated in
the crisis-solved process. Traces of benzene were found in the companys
bottled water in 1990, however top management reassured the public that it
was necessary to recall contaminated bottles only in North America. The
crisis continued when scientists found benzene in bottled water being sold
in Europe (Broom, Center & Cutlip, 2000:128). Finally, media discovered,
and reported, that benzene-tainted product had been sold all over the world
for months. The media questioned Perriers integrity and concern for public
safety, and the company lost its dominant position in the market place; it
has been unable to rebuild its reputation due to mishandled the crisis
(Jenness,2002). This may suggest that effective crisis management is
necessary for a reduce damage organization image or reputation. Effective
crisis management can be regarded as careful planning, research and
training, which can be overcome negative publicity. As Perrier crisis
publicity suggests that, consumers need honest answer and they need
them fast. Therefore, the company should have good crisis planning for
deal with negative publicity. The plan can be include recall the all the
products and make an apology to public.
Moreover, Berger, Sorensen and Rasmussen (2003:23) suggest that
dedicate a team to keep a sharp eye on all fronts, including the Internet
which involves blog, online forum and search engine ranking. This can be
excellent strategy for prevent from negative publicity. For instance,
negative movie review on the magazine or online forum, it may badly
influence to the movie itself and also production company, because it leads
to lose consumers attention and also possibly to decrease sale a movie
Irfan Arshad 32
ticket. Like this, company need keep look at any comments or
developments that might turn ugly. Although it can never be all-
encompassing, its better to be aware of possibilities than being caught
unawares (Berger et al, 2003:32).
Develop Optimal Communication Plan
In addition, it is necessary develop optimal communication strategy for
reduce negative publicity. For reduce negative publicity, the company may
training about how to communicate with the media press and the public
about the crisis that is happening. As noted by Dean (2004) has developed
a classification of communication strategies that can be employed during a
crisis event to manage the image of the affected organization. The
company need well prepared communication plan for interview or
presentation that open communicate with public in order to protect
organization image by negative publicity. In addition, communicate in web-
site or informal networking can be useful tool for present information as
effectively. Word-of-mouth, for example, it can be powerful tool for positive
publicity or negative publicity, yet generally assumes that negative word-
of-mouth should hurt product success (Berger et al, 2003:26). Therefore,
the company need develop word-of mouth communication in order to
quash rumor or gossip and make consumers more aware or encourage the
product or event. As a result, careful planning, research, and training can
lessen negative publicity and can assist companies control crises.
Is Negative Publicity Can being a Good Thing?
On the other side, according to Berger et al (2003:33), though negative
publicity can definitely hurt sales in some cases, in others, negative may
actually be positive. In a further extend, even though negative publicity can
be damage organization image or reputation, it may occurs positive effect
in some case if the negative image can assist to increase public attention,
overwhelming the negative influences . It suggests that, because negative
publicity can increase product awareness and accessibility; it can
sometimes have a positive influence on product choice and sales (Berger
et al, 2007:3). Due to number of brands are in market place, it is important
that get a consumers awareness in order to successful business. Informal
media or word-of-mouth, for instance, even though they are presents the
products or event as badly, consumers may more inform of their particular
product or event. Moreover, Berge (1990:25) mentioned that a wine
described as redolent of stinky socks, saw its sales increase by five
percentages after it was reviewed by a prominent wine website. Also,
indirect negative publicity can be positive in terms of sales. For example,
when Britney Spears represented as issue maker via media, such as hit to
paparazzi, over binge problem, her new album Circus actually more
increased sales, because the articles also mentioned her new album, and
thus direct positive publicity (Berger et al, 2007:15). Like this, these
examples show that negative publicity can be a good thing in some case.
Irfan Arshad 33
In addition, after effectively overcome and control the negative organization
image and reputation, the organization can regain the consumers trust. In
other words, after found lots of problems from the public, as negative
publicity, the organization may use them as feedback in order to rebuild
their positive image. It may take a long time, however, with resolved
negative image, the organization potentially get a public attention.
Two cases of organization crisis
As a mentioned above, when organization crisis and its damage by
negative publicity, It is important figure out what actually happened, how
the negative publicity that affect the organization and how to manage in
order to solve the crisis. In this part will look at two different examples,
Johnson & Johnson of Tylenol and Toyota Recall, which used different
ways to manage the emergency situations and have different public
opinions.
Johnson & Johnson of Tylenol Scandal
In 1981, Chicago, U.S.A, seven customers who took Tylenol died of
injected poison. In this tragedy, Johnson & Johnson lost their image as
market leader and also huge damage corporate reputation. This suggests
that they might have had no choice without to give up the brand of Tylenol.
Tylenol was the top-selling product by Johnson & Johnson. Yet, after the
crisis, according to Kaplan (1998), the publicity about the cyanide laced
capsules directly caused a nationwide panic and also the company found
itself in a real dilemma. Also, many people said that Tylenol as a brand
could no longer survive in market place. Moreover, the media interpreted
the issue as badly. Therefore, these poisonings made it compulsory for
Johnson & Johnson to launch a public relations strategy immediately, in
order to save the reliability of both their product and corporation as a whole
(Kaplan,1998).
Toyota Recall Crisis
Toyota was play a dominant role in the developing automatic in the world,
with high-quality and high technology lead to Toyotas high credit in market
place. They are reached the best seller between within all vehicles
company, and also build good reputation during last 40 years (Edmund,
2010). It suggests that Toyota be covered in media as positively, and its
lead to maintain their good image for a long period. Though, recently the
negative publicity around the Toyota company as fast and quick due to
acceleration problem. Toyota got a lot of complains about the acceleration
and they eventually has recalled eight million vehicles worldwide, including
a total of six million in the U.S., because of acceleration problems.
Consumers may keep away from Toyota brand because they might be
thinking that Toyota is not safe and reliable anymore. Like this, the
company suffers from the very serious credit crisis, as noted by Horrel
Irfan Arshad 34
(2010), the long-term loss of reputation could be the real knockout punch
for Toyota. After that, it seriously damaged Toyotas high-quality image in
the public.
Different reaction between Johnson & Johnson and Toyota
The first different between two companies is how honestly they react from
the crisis. According to Dean (2004), Johnson & Johnson handled a
disastrous crisis amazingly well in 1982 and the companys reaction
remains as a model for effective media relations. They let customers know
about this awful incident via the media instead of concealing the fact.
Contrary, even though Toyota already found the problem early time, they
denial for the reputation and conceal the problem, which do not take any
responsibility of the issue. Therefore, the public view began to turn away
from Toyota (Horrel, 2010).
In addition, another different point between two companies is that how
actively the take action toward the crisis. After cyanide was discovered in
some capsules of Tylenol, a product used by an estimated 100 million
people, Johnson & Johnson decided to cooperate fully with the media. It
immediately announced a recall of all Tylenol packages in both U.S. and
foreign markets. They decide not use the all the recalled products even
though after results proved that there was no problem in the manufacturing
procedure (Kaplan, 1998). However, even Toyota recalled a mounts of
vehicles in 2009, the problem still existing and recall increased occurs.
Eventually, on January, 2010, Toyota decide stop to producing the recalled
model. Their reputation gets serious damage at the same time.
The last thing which different between two companies is that lack of
sincerity to customers. Tylenol put lots of endeavor into regain trust of the
public. The companys decisions, which were based on the business
principle of being socially responsible, earned Johnson & Johnson praise
from the media. According to Dean (2004:197) the company received
additional positive press coverage when it subsequently introduced its new
tamper-resistant packaging. Although not being able to control media
coverage of the situation, Johnson & Johnson was able to gain positive
publicity because the company had an open communication plan and knew
what to do during a crisis (Kaplan, 1998). Therefore, Johnson & Johnson
got a good image, which involves the company considers customers
safety, and quickly recovered their reputation in an effective way. On the
other side, Toyota still struggling with the crisis and respond to lessen
impact with the CEOs apologies to the public, the purpose is reducing the
negative publicity as much as possible. Yet, it seems to be hard to rebuild
their reputation as before. As like, determination that a firms actions or
inactions are directly responsible for a tragic event is likely to severely
affect consumer regard for the organization (Dean, 2004:201). As a result,
Irfan Arshad 35
two cases show that crisis can be huge damage to organization image, yet,
with well-organized strategy, the crisis could be solved and rebuild the
positive reputation.
.
To conclude, publicity can be assist organization image and reputation
either as positively or as negatively. Therefore, it is important to understand
the strategies that can be employed to assist both. By understanding of
them, the organization can be maintain positive publicity for develop their
healthy image, on the other side; they also enable to make lower negative
publicity in order to reduce and prevent organization image. As mentioned
above, two cases (Johnson & Johnson and Toyota) shows that how the
negative publicity has affected the organization in terms of image and
reputation. Especially, when organization is in a crisis, it would be help to
rebuild good image if they using publicity as effectively. As a result,
publicity has essentially supported public relations endeavors, because
publicity allows achieving public awareness and building relationship
between products and consumers. Therefore, once organization uses
positive strategies in order to gain a good image, it can be actually
supported public relation in effective way.
Its hard to predict, and even harder to handle appropriately. It may come in the form of a
Google Alert, a phone call inviting comment, or an email from a customer or colleague.
You, or your company, is being criticized in public.
Some say theres no such thing as negative publicity, but most businesses whove been
on the receiving end of harsh coverage or public criticism would disagree. Yet the way
you handle a negative story can make all the difference.
How do you respond without fanning the flames of a negative situation?
Negative Publicity Tip #1: Weigh your response.
Dont hide. In most cases, a failure to react will be construed as a tacit admission that
the charges are true, so an appropriate response is usually advisable. Yet there are
exceptions. If the criticism isnt credible (a rumor or Internet troll), theres no need to
dignify it. In a high stakes situation where the facts arent yet clear, say so.
Negative Publicity Tip #2: Dont overreact.
Its easy to be emotional and use inflammatory or defensive language when attacked,
especially if things get personal. Recently a client drafted a lengthy post on his business
Irfan Arshad 36
site refuting slanderous accusations resulting from an intellectual property dispute. We
convinced him that the post might raise more questions than it answered, particularly for
customers with no knowledge of the situation. It pays to seek objective advice.
Negative Publicity Tip #3: Ask for equal time.
Most legitimate websites or news sources will let you have your say in response to a
negative story. Insist on your right to set the record straight. Dont threaten or bully;
appeal instead to the journalist or bloggers sense of accuracy. No one wants to get it
wrong.
Negative Publicity Tip #4: Use facts and figures and cite third
party sources.
A convincing response is usually one that invokes objective facts or statistics. Where
possible, invoke third parties. Past recognition, company ratings and recommendations,
or even satisfied customers will help you state your case.
Negative Publicity Tip #5: Let your advocates defend you.
If you have trusted customers or partners who are willing to be quoted or post comments
in your defense, by all means, let them. The essence of reputation is what others say
about you in public.
Negative Publicity Tip #6: If appropriate, apologize.
If your company has made an error, offer a prompt and sincere apology. Avoid weasel
words like, Were sorry if anyone was offended. Take responsibility, and more
importantly, take steps to make amends.
Negative Publicity Tip #7: Generate positive content where
possible.
Once the storm passes, help push down negative or unflattering stories or comments
with fresh, positive, and highly searchable content. Step up your blogging; offer to guest
post on an industry site; get quoted in a trade publication or site.
Negative Publicity Tip #8: Ask yourself, is this an
opportunity?
Irfan Arshad 37
Sometimes public criticism is actually a gift in disguise. It can be a chance to fix a
problem or improve a product or service offering. If appropriate, thank your critic and
take advantage of the opening to tout the fix.
When Is Bad Publicity Good?
In a new study from Stanford Graduate School of Business, researchers say in some cases negative
publicity can increase sales when a product or company is relatively unknown, simply because it
stimulates product awareness.
STANFORD GRADUATE SCHOOL OF BUSINESSIn 2009, after months of scathing media reports
of cars that could accelerate out of control, Toyota had an extremely expensive problem on its hands.
Recalls, fines, and plunging sales resulted in losses to the auto manufacturer in the neighborhood of
$2 billion. But bad news isnt always bad for business. After the movie Borat made relentless fun of
the nation of Kazakhstan, Hotels.com reported a 300% increase in requests for information about the
country, and a wine described as "redolent of stinky socks" by a prominent website saw its sales
increase by 5%.
In a new study from Stanford Graduate School of Business, researchers say in some cases negative
publicity can increase sales when a product or company is relatively unknown, simply because it
stimulates product awareness.
"Most companies are concerned with one of two problems," says Alan Sorensen, associate professor
of economics and strategic management at the business school and one of the authors of the study.
"Either theyre trying to figure out how to get the public to think their product is a good one, or theyre
just trying to get people to know about their product. In some markets, where there are lots of
competing products, theyre more preoccupied with the latter. In that case, any publicity, positive or
negative, turns out to be valuable."
Looking at 240 fiction book titles reviewed by the New York Times, investigators found that positive
reviews, not surprisingly, always increased sales by anywhere from 32 to 52%. For books by
established authors, negative reviews, also not surprisingly, led to a 15% decrease in sales.
For books by relatively unknown authors, however, negative publicity had the opposite effect,
increasing sales by a significant 45%. Follow-up studies affirmed the reason: Even bad reviews drew
attention to works that otherwise would have gone unnoted. Moreover, the "negative" impression bad
reviews created seemed to diminish over time.
In another study, participants read book reviews that were either positive or negative, on books
penned either by well-known or new authors. Some participants were asked immediately to rate how
likely they would be to purchase such books, while others were given an unrelated task and later
asked if they would buy the book.
For well-known books, negative publicity resulted in less likelihood of purchase, whether participants
reported their preferences right away or after a delay. However, for unknown books, the negative
publicity did not affect the likelihood of purchase after a delay.
Irfan Arshad 38
"This suggests that whereas the negative impression fades over time, increased awareness may
remain, which can actually boost the chances that a product will be purchased," explains Sorensen,
who authored the study with Jonah Berger, PhD 07, now a faculty member at the Wharton School,
and alumnus Scott Rasmussen, BA 03, a Stanford undergraduate economics and mathematics
undergraduate at the time the research was being conducted.
The research indicates that new entrants may have little to lose when it comes to publicity of any kind
the key is simply to get seen. "Smaller [motion picture] producers," the authors write, for example,
"may want to allow, or even fan, the flames of negative publicity." Indeed, bad press, they suggest,
may even serve as a form of direct marketing that can "slip under the radar" and be unrecognized as
such. Brand names, on the other hand, have more at stake, as McDonalds saw when a rumor
circulated that it used worm meat in its hamburgers: Sales decreased by more than 25%.
Might the virulence of the negative PR have bad effects, no matter what? When might scandals
unrelated to the quality of the product about the CEO or star associated with it be advantageous
or disadvantageous? How exactly does publicity influence word of mouth, memory, and exposure to
products? Such questions, say the authors, may offer interesting avenues for future research.
Question 5: Marketing strategies and functions have proved to be the key elements in
overall success of the products and organization. However, some small and medium size
organizations in Pakistan do not have any marketing department. If you have to
develop a marketing department for water purifiers, how would you proceed? Explain
in detail.
First and foremost, make sure you have an adequate budget to accomplish your marketing
goals. And that you have the support of the most senior mangement in your firm, as well as the
sales force.
Make a decision about whether marketing support (design, copy writing, etc) will be outsourced
or done in-house, and again that you have the budget to support these initiatives.
Make sure that you build a trusting relationship with your sales force. Listen to what theyre
needs are and help them achieve their goals through better marketing. But you may have to
explaing to them why things might work better with a marketing spin than their old way, and
expect some people to be afraid of change.
Irfan Arshad 39
And if you decide to outsource creative, feel free to get in touch with me. : ^ ) Best of luck and
feel free to follow-up with any additional questions.
Read more: http://www.marketingprofs.com/ea/qst_question.asp?qstid=6579#ixzz3EOQHTTP9
The Difference between Marketing and the Marketing
Department
The Difference between Marketing and the Marketing Department
Marketing and the Marketing Department are two different things. Marketing might best be defined as all
organized efforts, activities and expenditures designed to, first, acquire a customer and, second, maintain a
customer. (It should be added at a profit.) The Marketing Department is a unit of organization, traditionally
charged with carrying out specific tasks that are deemed to be "marketing" (such as advertising, market
research).
This distinction is not merely semantic. As the definition would suggest, customer-acquisition and customer-
maintenance efforts go beyond the organizational boundaries of the Marketing Department. When all
departments know and understand their role and importance in the marketing process, the functions of marketing
work better. The Marketing Department works better.
Usually, the role of marketing is viewed from the inside of an enterprise looking out to the marketplace. In many
instances, the marketing function should provide the perspective of the marketplace looking in.
Critical marketing functions include:
1. Identifying the important constituencies within the marketplace. Yes, there are customers and prospects, but
there are also groups that set rules and regulations, influence or recommend, establish barriers, service the
product after the sale, review the product. All of these groups and more are constituencies that play a role in the
successful marketing of a product or service.
2. Identifying and valuing specific target purchaser/user groups for the product. (Also known as target audiences
or market segments.). Marketing should answer the questions focusing on who will be a likely prospect, who will
be the best customer. Keep in mind that within the target audience there may be groups that will be readily
obvious as "end users" but there may also be groups that specify, recommend, purchase, service, pay for;
without a great stretch of the imagination, they may all be considered customers or prospects.
3. Communicating with the marketplace. This function may involve traditional communications disciplines (public
relations, advertising, sales promotion, face to face selling) along side new disciplines (the Internet). Each target
audience segment within the marketplace may play a different role in the success of marketing so different
techniques or disciplines may be required to communicate effectively. Objectives need to be set for each
discipline used and for each audience group or segment that is targeted.
4. Conducting transactions with the marketplace. Most people think of marketing activities as advertising or
promotional events -- very visible, very costly. But other interactions are part of the marketing process and should
be viewed as such. (Here is where the outside-in perspective of marketing plays a vital role.) Order processing is
not just an inventory transaction, but a marketing one as well the timely delivery of a product in good condition
goes a long way in helping establish a positive attitude about the company and provides another reason for the
end-user to purchase again and to recommend the company and its products to others. Payment processing is
not just a financial transaction; it is an important element in the marketing process payment is what is given in
exchange for the item that will satisfy a need (or an itch). Shipping the product is not just the act of putting
something in a box and handing it over to UPS; it is a marketing transaction as well satisfaction with the
product or the company is never higher than when the box or envelop is just about to be opened.
5. Obtaining on-going feedback from the marketplace. An important function of marketing is to measure the
performance of the enterprise in its efforts to acquire and maintain customers. What does it cost to acquire a
customer? What does it cost to obtain the second order or purchase? Establishing performance metrics is often
an afterthought in the planning process and, in many instances, superficial.
Irfan Arshad 40
Market share is but one measure of marketing performance. Share of Customer is equally, if not, more important:
if a customer purchases 100 units/year from enterprise A but purchases 500 units /year in total, enterprise A
has a Share of Customer of 20%. How much effort should be expended to increase Share of Customer? Or, how
much should be spent to maintain the customer at that level?
Obtaining feedback also means understanding the environmental conditions that the enterprise operates in, the
product is marketed in. Spending on research is essential to direct the development of a product or service and
the development of communications messages necessary to acquaint potential customers with the product or
service, instill in them positive feelings about the product or service and motivate them to purchase.
Marketing Departments need to be open minded. Marketing Departments often fall into the trap of thinking they
already know all the answers and all of the questions. In fact, many Marketing Departments are just as
isolated from the marketplace as the third-shift maintenance group. Constant dialogue with all of the component
elements of the marketplace is one way to avoid missing opportunities or missing problems before disaster
strikes.
Marketing versus the Sales Department
The selling function is an important element of the overall marketing process. Many organizations establish a
separate sales function, apart from other elements of the marketing process. This is often a sound business
strategy but can lead to a chasm between Sales and the other marketing elements. Even when both are
contained within a unified Marketing Department, separate sales and marketing groups often create the situation
where they have competing views of the marketplace, competing objectives and competing priorities
(e.g.,budget, prestige).
One area that often creates the opportunity for jurisdictional disputes and other serious problems is lead
generation. In many instances, some component of the Marketing Department is responsible for developing leads
and then turns them over to the Sales Department. "Discussions" over the timing and quality of leads are a top
topic at almost all Sales-Marketing joint meetings.
Make sure that planning and execution of plans are always coordinated, and that all programs are integrated
across both marketing and sales efforts.
Developing an Initial Marketing Plan
A marketing plan and a business plan are not the same thing. Marketing plans should cover all elements of the
marketing process in great detail. Business plans should highlight the major marketing initiatives, their costs and
potential.
Obviously, all plans should contain objectives, strategies and tactics, budgets and timetables, but the real first
order of any marketing plan is to describe the product or service being offered for sale. Not by its chemical or
physical properties but how the end user will be encouraged to see, feel and react. The product or service has to
appear to be different (and better) than other similar products. (This is called "positioning" and there is a great
book all marketers should be familiar with: Positioning: The Battle for Your Mind by Al Ries and Jack Trout.)
Another primary task of the marketing plan is to define the target audience for the product or service. Many, if not
most, marketers define their target audiences in demographic terms males, 18-34 years of age, high school
graduates, or CFOs and CIO, purchasers versus end users. There are other ways of defining or segmenting
the target audience. Life style or psychographics are often mentioned in the next breathe after demographics.
But, there are still other ways to segment the target audience and, perhaps the most important of all, "reasons for
needing or wanting" the product. This last one is not as easy to uncover as the others, but well worth the effort:
selling messages based on the motivations underlying purchase will always be more successful than messages
based on less "intimate" factors.
Profitable versus Non-Profitable Customers
What is a customer worth? How many sales dollars will each customer generate initially, over a two or three
year period, over a lifetime. How much profit will each customer generate?
Customer analyses appearing in trade or general purpose publications often cite "the average customer". First,
there is no such thing as an average customer. Second, if there were average customers, satisfying them would
be the quickest road to ruin. All customers are not equal. The 80-20 rule or some variant is alive and well in most,
if not all, marketplaces.
Life-time value is a concept that is widely written about. If we examine the purchases of a customer over the life
of his or her relationship with a marketer we can determine a historical value. Past behavior, however, cannot be
Irfan Arshad 41
assumed to continue well into the future: consumers change their behavior with a high degree of regularity in
some product categories; they change their minds, attitudes and feelings about a particular product; their needs
change so they change their purchase behavior; the marketplace offers new, better or different products to satisfy
their needs.
Recognize that customers move through various stages in their relationship with a particular company or product.
Stages are not tied to any particular calendar or precise chronology, but rather a customer-internalized set of
logical and emotional reasons. Attempt to identify those stages and then set realistic estimates for behavior for
those stages. While harder to do then trend-lining the past, valuing customers in this fashion allows a better
match between marketing expenditures and sales.
Finding the Right Customers
A common mistake many start-ups make is that they overestimate the size of their target market. While millions
of individuals or businesses may have a theoretical need for your product or service, very few will ever purchase.
There is such a thing as the "wrong" customer and while it is very difficult to differentiate in advance a wrong or
right customer, the importance of proactively managing the customer relationship is critical to long term success.
Examples of potentially wrong customers: customers who respond only to promotions (buy "on deal"), customers
who are only 50-60% loyal, customers who purchase only once.
Some consumers (businessmen and housewives alike) are known as "early adaptors". These individuals are the
first in their boardroom or on their block to purchase your product. They are critical for success, but they probably
wont be your best, long-term customers.
How to Select & Work with An Advertising Agency
Over 100 years ago, John Wanamaker, a Philadelphia merchant, observed that 50% of his advertising dollars
were wasted, but he didnt know which 50%. Recent examples of marketing burn rates and subsequent business
model failures would suggest that Wanamakers 50% has crept up to about 80-90%.
Ad agencies primarily concentrate on the communications aspects of marketing: creating messages aimed at
your primary target audiences to motivate them to behave the way you would like them to behave i.e.,
purchase for the first time, purchase over long periods of time, be brand loyal, upgrade every year, etc.
Always keep in mind that ad agencies make money by spending yours.
In the agency selection process, guard against your emotions taking over (dont fall in love with the agencys
work done for other clients) and clouding your judgment. Remember that you are committing dollars to a third
party to invest as they see fit.
Some thoughts on selecting the right agency:
1. Do your homework, be prepared to work hard. Be very specific and sure of what your communications needs
are. Interview as many agencies as your time will allow. Ask them questions that get them out of their canned
presentations as quickly as possible.
2. Dont rely on reputation alone. Dont rely on the recommendations of CEOs and board members. Talk to
people who deal with the agency everyday, who work with them, are frustrated by them, are pleased by them.
3. Demand that the team that will work day to day on your business be the ones that pitch your business. After
you sign the contract, you may never see the chief creative officer or strategy guru again. Remember, most day
to day functions between you and your agency are carried out by junior staffers. Find out if they can think
independently, stand up for their beliefs, LISTEN, react quickly. See if they quickly pick up on your business and
not try to shoehorn your business into how they work for their other clients.
4. If you dont like the people, dont hire the agency no matter the reputation or what they promise they will do
for you.
5. Dont get enamored with the creative the agency shows as examples of their work. The "creative product" is
the result of a process, a process of conceptualizing, clear thinking, understanding, interpretation and, then,
communicating.
6. When you visit an agency for the first time and see a wall full of awards for creative excellence, do a quick
about face and head for the elevators. There are a lot of examples of award-winning ads and commercials that
Irfan Arshad 42
did absolutely nothing for the clients sales and profits. Attention on winning awards produces work that is often at
odds with the marketing and communications needs of the advertiser.
7. Be wary of claims of "we can do it all for you." Agencies often make the claim that are fully integrated, that is,
they are excellent at advertising, one-to-one marketing, database development, public relations. Be skeptical. In
many instances, sister divisions within agencies are distant strangers and have poor working relationships
they often compete with one another.
8. Set up a multistage or multi-step process. First, you want to see how they work. Second, you want to see how
they think. Third, you want to see the results of steps one and two.
9. Never abdicate your marketing responsibilities to the agency. Agencies are quick to talk about partnership but
they seldom share to the same degree in the risks of a wrong decision.
Help your agency perform at the highest level. Transmit to the agency what you know about the product, the
marketplace, the selling process. Share your objectives and your expectations. Give them clear assignments and
tell them how they will be judged. Then let the agency do what it does best develop communications. Dont
write copy. Dont second guess. Judge the agencys output on whether or not it satisfies the communications
objectives and follows the communications strategies.
Keys to the Marketing Budgets
Ask yourself two questions. How much must I spend to acquire a customer? How much is available to me to
spend to acquire a customer? There used to be a rule of thumb in the mail order business that might help with
these questions: one-third of the selling price covers the cost of the product, one-third covers overhead and
profits, and the remaining third is for acquiring the customer. While not precise, it certainly frames the issue.
When launching a new product (or a new company) keep in mind that you get only one chance to get it right. You
need spend enough to position the product or brand in the minds and hearts of the target audience and then
motivate a sufficient number of them to purchase.
Marketing Research: Boon or Boondoggle
Research is an invaluable tool for successful marketing. Research provides direction and guidance, but not
necessarily concrete answers to specific questions. Unfortunately, a lot of research investment dollars are wasted
either the information obtained is misleading or just plain wrong.
What should you research? Research can help you understand your target audiences reaction to your product or
service. It can help you decide whether your concept is viable and can provide a gross indicator of sales
potential. It can help with the final design of the product or service the features. Research can help with how
you communicate the benefits of the product or service to your target audience, and finds ways to differentiate it
from others already on the market.
Write yourself a Learning Plan? The plan should represent an on-going commitment to finding out what
information you need to drive your business forward, to help you make better decisions, to effectively spend your
limited resources, to constantly improve your product or service. The Plan should embrace the idea of an on-
going process, and not a one-shot, annual effort or a series of one-shot projects when the need arises. Get in the
habit of entering into a dialogue with all major constituencies in your marketplace, including the competition, in
order to spot opportunities and to learn what your customers really want and need.
A word or two about Focused Group Interviews: they are an overworked form of research. They are relatively
cheap, easy and quick to execute and, therefore, are used to answer a wide range of questions. When
entertaining the idea of using Focused Groups keep in mind one thing: do you really want to bet your company or
your future on ten, twenty or thirty people that you know very little about, have met for only one hour, and have
very little idea if they really represent your best customer target audience, or even know what they are talking
about?
One of the most rewarding research efforts you can mount in the early stages of product or service development
is to uncover the motivations underlying your target audience behavior: why people will buy your product. Called
"Right Brain" research, the techniques attempt to identify the emotional reasons for behavior the facilitators as
well as the barriers.
Research is essential. Plan wisely.
Customer Relationship Management
Irfan Arshad 43
Customer Relationship Management (CRM), also known as One-to-One Marketing, Relationship Marketing,
Database Marketing, has become an industry unto itself and is made more complicated than it really needs to be.
Successful marketers practice good customer relations as a matter of course without giving it a special name.
Purchasing CRM software without a commitment to the primacy of customers (their importance, value) is a waste
of money.
CRM is about using information from your existing customer base to 1) sell more to your best customers, and 2)
to find new customers with the same qualities as your best existing customers. It should be obvious that it costs
more to generate the first purchase from a new customer than it does to generate the second purchase from an
existing customer.
To manage customer relationships you need a marketing database.
Criteria for an Effective Marketing (Customer) Database
A marketing database is, first, a repository of bits of information arising out of your relationship with your
customers. It is made of many table of similar data (purchase history, demographics, lifestyle, service history,
etc.) stored in such a way as to make analysis quick and easy.
Database software can run on almost every computing platform. Database functionality can range from simple
record keeping up to decision making ala expert systems. Need determines functionality determines the cost of a
marketing database; databases can cost from a few thousand dollars to several million.
Plan your database so that it can evolve or grow as its required functionality is identified. Start with only the
functionality you need but plan on "upgrading" on a regular basis.
The most common function of a database is that of providing a list of who to contact a mailing list (e-mail or
snail-mail).
The next use of the database is segmenting the total base into relevant groupings of like customers (heavy,
medium and light users; corporate versus individual customers; families with and without children; first-time
buyers versus repeat customers, CEOs of companies with more than $10 million in annual sales and those with
less than $10 million, etc.) Segmentation is the key to understanding your customers because you can alter how
you view them, how you think of them. And, segmentation facilitates more effective communications by tailoring
the message to the unique audience.
The keystones of knowing your customers so that you can maintain and grow a mutually profitable, long-term
relationship rests on two key pieces of information: what they buy and why they buy it. Most databases address
the first and ignore the latter.
Populating the database with information from customers should be governed in part by a Learning Plan (what
information must I have to drive the business forward, to make better decisions).
Strict measures of database performance must be planed from the outset
In the first of a five-part series, we look at how you can design a comprehensive and strategic
marketing plan for your start-up.
Its been more than a year now since I moved from Adobe to the world of start-ups. The year spent as
a start-up marketer has been rather rich with experiences and learning. Of these, an important aspect
was, what does one need to achieve in the first month?
Why the first month, you ask? While some consulting firms and merger and acquisition (M&A)
scenarios favor a "first 100 days" approach, start-ups or small and medium enterprises (SMEs) might
find it too long a period for assessing progress. Business indicators may vary wildly in a matter of 100
days. So for a new marketer, the first 30 days or four weeks or one month is a better unit for
measuring progress and setting immediate targets.
Speaking in a broad way, here are the activities I would recommend marketers complete in the first
month:
Irfan Arshad 44
All forms of research needed for marketing strategy and planning.
Spell out the marketing strategy and set the overall tone and direction.
Create a plan for the next year with a focus on the next one to two quarters.
Background Research
This should ideally take about a week or two to complete. The marketing strategy and plan greatly
depend on this stage. Some of the key aspects of research will include:
Web analysis: This is mostly about getting set up with Google Analytics if the company hasnt
already. And if it has, gather some important information such as geographic, demographic, and
device origins of your visitors; the pages they spend most time on, how frequently they return, and
what sources do they come in from (channels as well as referring domains). Knowing your
audience, the quality of your existing Web content, and keywords will help you make a good start
toward understanding what needs to be done next.
Competitor research: Well, of course! Getting to know the competition from a marketing
perspective is important. Here are the parameters I usually go by: overall positioning, marketing
pillars, product(s)/solution(s), key features highlighted, other marketing material available online,
and specific things about the website (design/content) that really stood out.
Sales cycle: The marketer must ensure they gain an understanding of the sales cycle. This will
include typical profiles of end-users, buying decision makers, typical pitch, tipping point,
challenges, reasons for win/loss, sales life cycle and its length.
Product understanding: You have to see a demo on day one! And while going through it, you
form impressions of a typical use case. Also, thinking of the product as a potential buyer as
opposed to a marketer or seller helps communicate better in the subsequent period.
Market trends: This helps develop an understanding of the space in which the product and the
company operate. This helps the marketer make connections between the product strategy and
what the market in general expects from the product.
Company objectives (short and long term): It helps if the business objectives are deliberated and
documented well before one joins. The objectives can begin at a company level and then be
cascaded to every function, and eventually (in more mature circumstances) to all individuals. Many
start-ups now use the Objectives and Key Results (OKR) methodology made famous by Intel
and John Doerr, and more recently by Google and LinkedIn. Having the company, sales, product,
and customer service OKRs helps the marketer create his own (annual/ quarterly/ monthly/)
OKRs.
Completing all of the above should ideally require one week of dedicated effort. By the second week,
the marketer will have to be prepared with a first version of his marketing strategy (which I will cover in
my next column).
I will enumerate the following in the next four columns in this five-part series:
Column #2: Marketing strategy formulation, which includes OKRs, overall product positioning,
messaging pillars, and brand identity.
Irfan Arshad 45
Column #3: Marketing plan from a content perspective.
Column #4: Marketing plan from a targeting/campaigns perspective.
Column #5: Other aspects of the marketing plan, such as corporate communication, team
structure, hiring, establishing marketing processes, etc.
I look forward to your comments to this approach. It has worked for me over the past year and I am
sure others have adopted other interesting methods. Tell me some of your ideas!
Market and Marketing Environment
Markets in the developing countries are characterized to a large extent by the very
limited purchasing power of the average consumer. A wide range of consumer goods vie
for the buyers money and preference, which is more often oriented to the cheapest. In
turn, the enterprises compete to produce at the lowest cost in the market, sacrificing the
quality aspect. The result is a market that views domestic products as vastly inferior to
foreign-made ones. Faced with this disadvantage and despite import controls imposed
by the government, the small and medium firm finds itself always on the defensive. It has
to prove that the quality of its products is, at least, comparable to that of the imported
competing brands.
In recent years the small firm has to contend with the shift from import controls to import
liberalization in many developing countries. This could bring about intense competition
resulting in price cutting.
A variety of laws at the national and local levels also constrict the operations of the small
business. These laws range from price control to regulatory measures that prescribe
mandatory registration and payment of fees. However, the rural FB-SSE is not too
affected by this as the regulatory agencies are concentrated mostly in the urban centers.
At the international level, small firms are faced with increasing protectionism in the
markets of the developed world. Strict product and quality standards have been
prescribed making it doubly difficult for small firms to penetrate the market. The long
distances also translate into higher shipping costs making their products less
competitive. Finally, the large volume demands and consistent high quality deter the
small firms from serving this market.
However rarely can the FB-SSE cater to this market. In a study of the marketing aspects
in the Philippine Island of Palawan, it was found that none export their products. Most
(67.3%) of the enterprises in the province sell their products within their respective
municipalities due to transportation difficulties and excessive cost, 27.3% extend their
market beyond their respective locations. These enterprises are mostly based in growth
municipalities where transportation and trade links are available. About 10.7% have
markets in Metro Manila, the capital.
Focussing on FB-SSEs, it can be seen that their market is quite small and price
conscious. At a certain stage of development, the FB-SSEs have a monopoly over this
small market but as the country develops, more of the rural areas are opened up to
products of national companies with a nationwide distribution system. The FB-SSEs
have to find a market niche in such a situation like making specialized products
Irfan Arshad 46
(approaching crafted goods) or by becoming subcontractors to large enterprises. The
Palawan experience showed that limited knowledge of the demand and supply behavior
of potential industries in the area and the failure to develop products with comparative
advantages in markets outside the area pose constraints to the development and
expansion of rural-based industries.
Features of the internal marketing systems account for most of the issues in markets
and their development pertain to the ability of the small firms to reach out to the market
with the right product at the right time with the right price at the right place. The capability
of the small enterprise is based on the strength and weaknesses of its internal systems.
A recent study (Regional) conducted by the University of the Philippines Institute for
Small-Scale industries (UPISSI) on the marketing factors in small enterprises in the
Philippines covered 241 enterprises in four major regions of the country and producing
both consumer and industrial goods. The study is a useful reference point in identifying
the main issues. More importantly, the insights from the UPISSI-Palawan Integrated
Area Development Program (PIADP) Rural Enterprise Development Project as well as
results of the evaluation of government support programmes for small and medium scale
resource-based industries one region done by the Natural Resources Management
Centre (NRMC) will be most useful.
Entrepreneur
The regional study showed that more than half of the entrepreneurs obtained a college
education of which most of the courses pursued were in business and engineering. More
than half of the entrepreneurs had no educational background in marketing. Two out of
three entrepreneurs had worked previously before going into business. In almost all of
the cases the entrepreneurs first had wage employment in the same line of business
they eventually went into. What these data suggest is that the small entrepreneur gains
his marketing knowledge through experience rather than education. This is supported by
the data from Palawan which showed that only 29.1% of the enterprises had a college
education while a majority (67.7%) had previous work experience. The issue that is
raised is whether an entrepreneur is prepared to handle the marketing functions of the
enterprise.
We must consider that the small entrepreneur does not have the resources to hire
marketing specialists and therefore the marketing strategies and programmes must
come from him. The observation has been made that the entrepreneurs need to know
how to sell, how to design products, how to compute costs and how to undertake market
research. Should the government provide the marketing planning structure for him or
should training programmes be established to give the entrepreneur the marketing
knowledge and skill?
Marketing Organization
In the Regional study around 56% of the respondents organized a separate marketing
department to take full responsibility for some or all of the firms marketing activities
while another 27% had marketing set-ups that undertook only the selling tasks. In the
Palawan study, the fact that only 2.5% of the labor force are in marketing/sales indicates
the low priority to this area although this is still an improvement over the number during
the year the business started.
Irfan Arshad 47
It is clear that market development cannot proceed without the appropriate marketing
organization. In the light of the limited human resources of the small enterprise to
undertake needed marketing activities, the issue arises whether the assistance could be
provided by government and industry associations to the entrepreneur in setting up his
organization or whether this two could establish a marketing organization either an
association or cooperative for a number of FB-SSEs.
Table 18: Breakdown of responsibilities in small-scale enterprises (1982)
Marketing Arrangements
A majority (78%) of the small and medium enterprises employed direct marketing and
22% were engaged in non-direct marketing arrangements such as sub-contracting, joint
venture, purchase agreement and integrated operations. In Palawan, direct selling was
fully utilized. Cash on Delivery (C.O.D.) is the most common (90.4%) term of sale, with
credit (24.1%) cash advance (11.8%) and installment (7.1%). The high C.O.D. rate
reflects the need of FB-SSEs for arrangements that will provide them cash for continued
operation. There are instances when middlemen provide the FB-SSEs with their input
requirements but arrange to be paid with the production at an agreed price. This usually
results in a lower profit margin for the entrepreneur. The issue that arises is whether
government either directly or through the banking system can provide financing for
working capital which would allow these firms to provide credit and increase sales.
Product Characteristics
The total market for most types of products of small and medium enterprises covered by
the Regional study is quite heterogenous. The lack of homogeneity may have been
brought about by differences in buying habits of customers, the ways in which the
product is used, motives in buying or some other factors. A majority concentrated their
marketing efforts toward the domestic market. Significant export activities were found in
the food processing, wearing apparel, wood and wood products sectors and electronic
products manufacturing. A number of small and medium enterprise firms served the
export market in one region.
Competitive Strategy
Competition was experienced by 92% of the small and medium enterprises and was felt
strongly by one region and Metro-Manila based firms covered in the Regional study. The
enterprises encountered varying degrees of competition among themselves. More firms
(47%) considered it stiff and only 20% said competition was slight. The food (44%),
garments (47%) and wood industries (64%) were among the major sectors perceiving
strong competition. Metal fabrication firms (55%) experienced moderate competition
while paper and paper products (60%) found competition slight. Competition tended to
be confined within a locality (i.e., city, municipality or province). Next to intra-industry
competition, two other sources of competition were nationally distributed products and
imported goods.
The areas of competition were more on pricing (82%) and product quality (54%). More
food processing firms experience competition in terms of product quality. The food
processing industry is composed of traditional and technologically advanced firms.
Those engaged in home-based processing suffer from low quality and those with better
equipment come out with higher quality products. To a lesser extent, competition in the
Irfan Arshad 48
wood and non-metallic industry was based on the ability to deliver on time, production
volume, sales network and capital sourcing. Less than 10% of the small and medium
enterprises experienced competition in the area of technology, and market research.
Some firms were competitive because they have a wide range of contacts in the market.
Usually, these companies depend upon strong business or political connection in the
community as a means to obtain orders for their enterprises.
In the face of the competition, small and medium enterprises utilized their strengths
against their competitors. Their competitive advantage lay in lower price but reasonable
product quality. Some industries also made it a point to please their customers before
and after a sales deal such that they were able to maintain their clientele: this was done
by being flexible in meeting customers specification and providing good customer
relations and after-sales service. It was mentioned earlier that those firms achieving less
than 50% of their marketing objective attributed their low performance to competition.
These firms either had limited resources or lacked the capability to meet the competition.
A more healthy competition could be brought about if there is a relatively even
distribution of market information. Approaches could be identified, like using the radio
network or holding of market familiarization seminars in the countryside.
Distribution Channels
In the regional study the major market for small and medium enterprises has been the
final consumers. Around 83% of them sold directly to domestic consumers. However,
64% of these firms did not deal exclusively with this channel but also sold to local
retailers and merchants, institutional users, agents and industrial buyers. Enterprises in
Palawan sell directly to household consumers (69.5%), institutional users (15%),
retailers (21.1%) and wholesalers (26.4%). In the export market, 31% of export-oriented
firms tapped agent/brokers, followed by direct consumers, merchants and to a lesser
extent. Industrial buyers and retailers. Most firms sold all their goods through agents or
brokers.
The small and medium enterprises claimed they were often very strict in delivering on
time because meeting deadlines was deemed a critical factor in maintaining good
relationships with their distributers or users. Firms under non-direct marketing
arrangements asserted they met delivery schedules while those in the food processing
industry often extended their deadline. Further, failure to meet delivery dates has
reportedly not had ill consequences for nearly half of the firms. For the others, the
penalties included cancellation of orders and reduction in volume ordered. The issue
that surfaces here is what appropriate distribution channel to utilise considering the
market being served, the product being sold and the level of expertise of the small
enterprise. Also whether the government should intervene to assure that FB-SSEs at a
certain level of development can penetrate the Metropolitan if not the export market.
Pricing
The pricing strategies commonly used based on the regional study, were cost-oriented,
competition-oriented and demand oriented. Under cost-oriented pricing, mark-up pricing
was most popular because of simplicity and ease to use. Going rate was adhered to by
firms who were keen on meeting competition. This strategy was used extensively in the
garments industry. Food firms offered quantity or cash discounts to induce customers to
buy in bulk. Demand-oriented pricing such as price discrimination was used by some
food firms and commonly found in export-oriented firms. In general, an attractive
Irfan Arshad 49
package and a higher price were fixtures in export goods while locally distributed
products would have simple packaging and would be set at a lower price per unit. In
developing countries government sometimes issues regulations as price controls which
affect the firms ability to set appropriate prices. However this is more true or more
enforceable in the urban than in the rural areas.
Advertising and Promotion
Aside from developing the product, pricing it right and making it easily available to the
consumers, small enterprises also promote their products. The main objective of these
firms in promoting their products is to inform their buyers about their product and to
stimulate a demand for them. Some intended simply to sustain the interest of the buyers
in the product while others have the higher goal of substantially increasing their share of
the total market.
The promotion mix employed by the small companies varied depending upon the need
of the individual firm and its capability to shoulder the corresponding costs. Generally, a
combination of two or more approaches was used by the firms in all industry subsectors.
Personal selling was the most widely used promotional tool prior to making a sale.
Typified by an oral presentation of a product to a prospective buyer, it is the cheapest
and the simplest approach. Another means by which a product gets known to a
customer is through word of mouth testimonial. This however does not constitute a
deliberate effort on the part of the entrepreneur to promote his product because it is
purely voluntary on the part of the customer.
The other approaches used were samples, store displays, billboards/store signs,
telephone canvass and direct mail. Other promotional tools utilised by more progressive
firms were advertisement placements in magazines, journals/newspapers, radio and
television spots as well as participation in fairs. In Palawan, personal selling was top at
45.9 % followed by word-of-mouth by 45.4%. Considering the limited resources and
expertise, small firms in their advertising and promotion come up with material which
may not meet market demand. Some form of assistance in drawing up programmes and
preparation of even such simple things as brochures may be required for FB-SSE that
are breaking into locations outside their immediate vicinity.
Information Network
Entrepreneurs usually gather information on such marketing factors as: product
characteristics, total market, distribution, consumers, competitors and government
regulations. The information gathered updates them and helps them to adjust their
operations to the current market situation. Among the survey respondents, 74.7% were
in one way or another involved in getting data, the most common of which being the
prices of products, consumers buying habits and the competitors areas of strength. It
had been mentioned earlier that market research was only a very minor function of the
small firm. The orientation of market research was to determine customer needs and the
degree to which the firm was satisfying them. Since most firms claimed that they
gathered information and they were market-oriented, this could be a casual type of
market research.
Direct contact with people provided vital marketing information to entrepreneurs. Thus,
the leading source of information was the consumer. Other sources included suppliers,
salesmen, competitors, middlemen, news releases and trade publications.
Irfan Arshad 50
Some entrepreneurs (25%) did not gather information on marketing factors, arguing the
absence of a need for it in doing business. This could mean that a) the manufacturer
claimed to know everything that is necessary in running a business, b) his firm occupied
a quite stable position in the industry, or c) he ran a small company with simple
marketing requirements. It could also imply an attitude on the part of the entrepreneur of
taking on the challenges as they come. Another reason was the lack of time to attend to
gathering information. Other reasons were the unavailability of the required information,
lack of access to the source of information, lack of money to undertake the activity and
uncertainty as to what data may be helpful to the enterprise. Again, it may be necessary
to have government support in identifying market information needs and making this
available to the enterprise.
Infrastructure and Support Facilities
While the regional study showed that small and medium firms indicated a minimal
requirement for infrastructure and support facilities in marketing their products, this was
not the case for Palawan.
For the larger segment of the small enterprise sector, the requirement for such support
hardly exists due to their limited geographical coverage, small production volume, fast
turnover of products, adequate facilities of the firm itself and simple marketing
procedures. Those firms that wanted to expand required these facilities. Among those
who mentioned a need, the requirements were mostly for trucking and
warehouse/storage facilities and for collection points and handling equipment.
A look at the internal marketing systems of the FB-SSEs raises the issues of the
appropriate marketing strategies, pricing, marketing organization, competitive strategies,
product market, distribution channels, advertising and promotion, information network
and infrastructure and support facilities for the small firm. To a great extent this
marketing system cannot operate well without the proper production, financial and
administrative systems. More importantly, in a situation where the firm does not have the
internal resources to adequately address itself to the demands of the market, to what
extent should assistance be given to it? And which sector should provide the help - the
government or the private sector through industry associations? It may be helpful to see
how in the Philippines such questions have been answered.
Marketing Assistance for Small and Medium Enterprises
In the area of marketing for domestic firms, a number of measures have been
implemented that appear to lay down the necessary policy and infrastructure
environment. Generally these thrusts seek to: (a) improve the efficiency and cost-
effectiveness of local manufactures, and (b) promote their exporting capabilities.
An integrated export development strategy concentrating promotion efforts on seven
non-traditional exports namely: electronics, garments, furniture, fresh and processed
foods, gifts and housewares, footwear and leathergoods, was conceived and
implemented. In support of these development thrusts, institutional projects have also
been undertaken to improve the marketing of products. These include among others, the
Market Encounter Program which brings together regional suppliers, producers and
national buyers; Best in the World Program where foreign product specialists are
brought to the Philippines to help local manufacturers in product development and
Irfan Arshad 51
adaptation; and the Golden Shell Award which is given to exporters who have made
outstanding achievements in international markets.
Measures towards the simplification of export procedures and documentation have been
adopted under the auspices of the Commission on Export Procedures. Likewise, rules
and regulations on the monitored or regulated imports as well as procedural
requirements on importation have been liberalized. The Philippine Exporters Foundation
Inc., a non-stock, non-profit organization was created in October 1984, to mobilize the
private sector in the promotion, development and diversification of export products and
services, improvement of product quality and provision of skills through training. Its
establishment affirms the governments commitment to encourage private sector
participation in this national development thrust.
Trade promotion has been developed mainly to bring suppliers and buyers together.
Domestic trade facilitation involves the provision of marketing consultancy to retailers,
producers, traders and exporters; and the dissemination of information through
product/market/geographical profiles. Price stabilization focuses on essential
commodities with special attention given to the calamity-stricken areas under the
Calamity Reactuib Programme. Other programmes in trade promotion include the
implementation of Philippine National Standards through a system of Product Standard
certification; the protection of consumer interest through periodic checking and
surveillance visits to check company compliance with product standards, rules and
regulations; the provision of technical consultancy services to domestic and export
industries in support of their developmental needs; and intensive information
dissemination regarding the fundamentals and significance of metrication and
standardization.
The responsibility of marketing support to the small and medium enterprise sector is
vested in the Ministry of Trade and Industry (MTI), its cooperating agencies (i.e., Bureau
of Small and Medium Industries (BSMI), Bureau of Foreign Trade (BFT), Bureau of
Domestic Trade and National Cottage Industries Development Authority (NACIDA), and
its attached agencies (i.e., Philippine International Trading Corporation (PITC), Center
for International Trade Expositions and Missions, Inc. (CITEM), Design Centre
Philippines.
Through the years, these agencies have collaborated and coordinated with one another
or carried out marketing projects on their own. Their functions do overlap in a number of
instances (i.e., market research dissemination, trade fairs, trade missions, display
centers, marketing consultancy, among others), but this seems better than to allow gaps
in the delivery of support assistance. A welcome development has been the involvement
of the private sector through the Philippines Chamber of Commerce and Industry, the
Philippine Exporters Foundation, Inc. and the Accredited Trading Companies, among
others, in the development of small and medium enterprises. The sector has been
involved in helping industries diversify and develop their products and services as well
as in organizing them into trade or industry groups.
Experience of Small and Medium Enterprises on Marketing Assistance
Marketing assistance is extended to the small and medium industry sector largely by
government institutions. The impact of such assistance, in general, can be gauged from
the entrepreneurs awareness of these existing programmes and the agencies carrying
them out. Compared with the more direct forms of assistance, (e.g., credit financing),
Irfan Arshad 52
marketing assistance is less commonly known to small and medium entrepreneurs. Only
about 29.5% of entrepreneurs in the regional survey were aware that such forms of
assistance existed.
Apparently, there is little relationship between awareness about these programmes and
the enterprises proximity to Metro Manila where the concerned government agencies
actively pursue their assistance activities with some remote entrepreneurs outranking
those closer to the National Capital Region (NCR) in awareness of marketing
programmes.
Awareness of marketing assistance schemes also involves knowledge of the agencies
promoting them in the different localities. In one region, NACIDA was more prominent for
extending marketing support. Entrepreneurs in another region were more familiar with
the activities of the Centre for International Trade Expositions and Missions Inc.
(CITEM), Small Business Assistance Center (SBAC) and the Bureau of Foreign Trade
(BFT). CITEM was known for its trade fairs and market encounters involving participants
from the regions. Similarly, in the Metro Manila area, CITEM ranked high in familiarity
among entrepreneurs though second to NACIDA while in yet another region, it was
SBAC which was widely known.
Only a small number of entrepreneurs in the regions knew of private organizations
extending marketing support. These private groups are mostly industry associations
based in Metro Manila. By industry, awareness of marketing assistance was highest in
the wearing apparel, wood and food processing industries in descending order of
cognizance. Awareness of marketing assistance could also be a function of the attitudes
of the entrepreneurs aside from the promotional efforts of the implementing agencies. As
will be discussed later, quite a number of entrepreneurs were indifferent to marketing
assistance and saw no pressing need to be helped.
Less than half (43.7%) of small and medium entrepreneurs who were aware of
marketing assistance sought the services. Generally, the nature of assistance requested
ranged from information about buyers, suppliers, sources of raw materials, and product
designs, to direct participation in trade fairs and seminars.
Most were interested in participating in trade fairs. A few entrepreneurs claimed to have
actually been invited to join the fairs. Near the capital, where the percentage of
awareness was fairly low at 40%, the type of assistance asked for was mostly in
promotion as in advertisement placements and displays, followed by assistance in
exporting. In some cases, entrepreneurs might be more aware of available assistance
but few of them sought it. Basically, they wanted to be assisted in sourcing of raw
materials, product design and market research. In one region, although manufacturers of
wood and wood products scored low on awareness of assistance programmes, they had
a higher proportion of those who applied for it especially with regard to participation in
trade fairs and product design.
However, the highest number of establishments which availed of the assistance came
from urbanised regions (up to 86 %). Considerable interest in availment was shown
when it came to participating in trade fairs and seminars. Promotion and information
assistance received little attention and application for them was low. In the food
processing industry, some 87.5% of the applications were granted compared to 80% in
the wearing apparel and 66.7% in the wood industries.
Irfan Arshad 53
The previous discussions lay the ground work for recommendations on forest-based
rural small scale enterprises (FB-SSE) markets and their development. A general role for
government is obviously maintainance of a supportive economic environment as well as
law and order in rural areas. Specific recommendations related to markets and
marketing are as follows:
1. Markets: There seems to be a need for some government or private organizations to
link rural FB-SSEs with better and larger markets initially in terms of supplying market
information, giving publicity to FB-SSE products, and later in the actual movement of
commodities. This should be accompanied by consolidation of production either through
cooperative associations of small firms or by having the small firms perform as
subcontractors of larger organizations whether private or governmental. It may also be
necessary to create a central unit for each subsector or activity type which could source
market information and orders, then parcel these out to the FB-SSEs.
2. Support Infrastructure: The FB-SSEs should be given almost a cocoon of support
infrastructure in terms of training, information, technical consultancy, marketing and
financial assistance as well as hard infrastructure in terms of roads, bridges and ports (in
island countries).
3. Law and policy: Laws and regulations at the national and local levels should be
facilitative of the development of these enterprises rather than be restrictive. Even taxes
and other fees should be kept at a minimum to encourage the setting up and formal
registration of such firms.
4. Firms Development. Most of the FB-SSEs which function as gatherers of raw
materials for other small or large enterprises should be helped towards becoming initial
processors of these raw materials and eventually into the ultimate producers. This will
require the continuous training of the entrepreneur in managerial skills and the provision
of financing and other functional assistance.
5. Product Design. FB-SSE entrepreneurs must be guided in product design either by
making available copies of such specifications through mobile design facilities or by
fielding design specialists in the countryside. This should be coupled with a training
programme.
6. Entrepreneurship Development: There is a need to set up an appropriate training
programme in all enterprise facets, including marketing.
7. Expanded Government Assistance: In general, government efforts to extend
marketing assistance should be maintained and expanded to reach particularly the FB-
SSEs in the regions. In this respect a network of government assistance units at the
lowest political level may be more relevant than one at a regional or national level.
In many companies, marketing departments turned into a kind of catch-all: they do lots
of tasks that in most cases are not related in any way to each other.
A common situation is that a task arrives to the company and this question arises:
Would this correspond to the purchasing department? No.
Irfan Arshad 54
Would this correspond to the sales department? No.
Would this correspond to the accounting? No.

Then this must be a task for the marketing department.
However, a company without a marketing department or at least a department in charge of
marketing is unconceivable. All companies are being aware that they need to get their
message to the client through the marketing department.
If its that important, how come ends up being a does it all department? What are the real
duties of a marketing department?
In this post youll find 10 tasks that are the responsibility of the marketing department. All of
them have a crucial importance in ensuring the survival of your company.
# 1. Listening to customer needs
To establish a marketing strategy, its necessary to get closer to the clients and listen in order
to find out what their needs are. Its a marketing department task, to plan the necessary means
for receiving customer feedback:
Company Internal Channels: Create surveys or capture information of the sales team and
customer support (departments closest to the customer) that may be relevant to enhancing or
redirecting the marketing strategies in the future.
Channels outside the company: Perform searches and create actions in social networks that
help to better understand the needs of users, in order to convert them into customers.
# 2. Track trends and monitor competition
Similar to the previous point, its important to know the position of the company with
respect to the market and the competition. Thats why from marketing, you must watch
the competition to learn what they do best or to identify their mistakes in order to avoid
falling into them.
Irfan Arshad 55
# 3. Work and transmit brand values
Conceptually, a brand is a representation of the feelings that the products, services and
company shares show. The marketing department is responsible for creating and
disseminating images, messages, ideas that best communicate the brand values.
Additionally, you must ensure that all company departments convey these messages in a
consistent and unified way.
# 4. Coordinate efforts with those of the marketing
partners of the company
Around the businesss marketing there are lots of contributors: publishers, designers,
journalists, consultants The work of these contributors must be aligned with the objectives
of the company, and is the department itself who should control it to do so.
# 5. Innovate
Customers need to be surprised, and every day, given the higher offer, they are more
demanding with this. The marketing department should work on new promotions, affiliate
programs, customer retention techniques, improvements in the conversion of their messages
and actions
Its not a matter of inventing entirely different disruptive actions; youll find innovation in the
small details and in the continuous improvement.
# 6. Communicate with the rest of the company
A company is a chain of members pursuing a common goal: to fulfil its mission and
maximize its profits, while respecting the principles of business ethics.
A chain is as weak as its weakest link. It doesnt matter that the commercial or production
department are doing an impeccable job, if the marketing department fails, the entire
company will fail and the efforts of other departments will be in vain. That is why the
marketing department must ensure that their actions are aligned with the overall objectives of
the company and that they report the work they are doing.
Irfan Arshad 56
# 7. Help improve sales processes and customer
As mentioned above, its the responsibility of the marketing department to know the users
and especially the customers feelings.
A good way for better knowing the customer is that all departments that have more direct
contact with the customer shall be working with the empathy maps.
# 8. Manage marketing budgets
Like any other department, the marketing department should be able to plan its budget for the
next years activities, stretching it in order to make the most of it.
# 9. Calculate the ROI (return of investment) of
companys actions
Marketing activities are an investment of time, money and effort. As an investment, every
action should be measured in order to check whether they meet the intended objectives
and in order to compare a certain action with others. Faced with questions as: Should I
invest in telemarketing; social media; traditional media? The answer is unique: measure them
all and choose based on the numbers.
# 10. Define strategic marketing plans
The most cost-effective strategies are those that are planned for the long term. To do so, you
must draft a document setting out the objectives to be achieved in the following months; the
actions that are to be undertaken; the strengths of the company; the competition; the target
markets In addition, these strategic plans must also be aligned both with the strategic plan
of the company and with other departments plans.
At the end of the day, planning is the only way to achieve the set objectives.
The reality
By reading these 10 obligations, youll be thinking how can I find time for that?
Irfan Arshad 57
If you glance at what takes more time in your business, surely youll find that repetitive tasks
with little added value occupy the most. For this reason its important that you remove these
tasks from roots, otherwise youll fail to accomplish the tasks that a marketing
department should really dedicate its time to: reach, attract and retain customers.
Marketing Department should be responsible for. His answer came as a list:
1. Focus on the Customer
2. Monitor the Competition
3. Own the Brand.
4. Find & Direct Outside Vendors.
5. Create New Ideas.
6. Communicate Internally.
7. Manage a Budget.
8. Understand the ROI.
9. Set the Strategy, Plan the Attack, and Execute.
Because we like to focus on brand stuff, here's what Rob has to say about #3:
"The perceptions and feelings formed about an organization, its products / services, and its performance
is what is known as its brand. The Marketing Department is responsible for creating meaningful
messages through words, ideas, images, and names that deliver upon the promises / benefits an
organization wishes to make with its customers. Furthermore, the Marketing Department is responsible
for ensuring that messages and images are delivered consistently, by every member of the
organization."
Not a bad start. And for the most part, yes, he is right.
Read the rest of Rob's points here.
Rob's list is a great first step for any marketing department that finds itself needing to define its
functions clearly. Let's take it one step further though, with this second list, which should best serve
marketing departments that have already accomplished all nine of Rob's recommendations and are
looking for the next step in their evolution:
1. Befriend your customers.
2. Become your market. (Don't just monitor the competition. Rewrite the rules. Set the pace. Lead.
Outdistance your competition. Make them copy you. Force them to up their game.)
3. Breathe your brand.
4. Recruit and direct outside vendors.
5. Foster Innovation.
6. Simplify your internal communications. Then simplify them again. And again. And again.
7. Strategize as if your budget had been slashed in half. Deliver as if your budget had been twice what it
actually is.
8. Make your ROI completely clear to your clients and everyone in your organization.
9. Observe, adapt, strategize, anticipate, plan, execute. ... and be ready to improvise at a moment's
notice.