Making It Possible

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EXECUTIVE SUMMARY

This report is the result of my findings, observations and experiences

during my project, which I completed successfully in the Customer Services

Center Telephone Exchange Pakistan.

The report is regarding Marketing Plan of PTCL. During this project I

study the current systems of marketing strategies to learn how work is being

done in this organization. So this report is nether neither the view point of

PTCL management nor it is a mere critics on methods of marketing in PTCL.

This report will explain how PTCL market their products & services to

customer, how it is managed and processed to get useful information and how

this information is shared among different offices of PTCL.

In this era computer software has become a driving force. It is the

engine that drives business decision- making. It serves as the business basis

for the modern scientific investigation and engineering problem solving. It is a

key factor that makes a distinction. Software is embedded in systems of all

kinds: transportation, medical, telecommunication, military, industrial,

processes, entertainment, office products, ,.................. the list is endless.

Software is virtually inescapable in a modern world. In the future it will become

the driver for new advances in everything from elementary education to

genetic engineering.

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BACKGROUND

BRIFE HISTORY:

1947:-
To provide Postal and Telecom services a department names
“Pakistan Post and Telegraphs (P&T)” was established in 1947. This
department started its telephone service with only 12346 telephone lines
and seven telegraph offices all over Pakistan. This department continued
its business up to 1962.

1962:-
The proof of this is that as compared to 1947, there Ire 1,185,865
lines in 1990, this tally was reached to 3,159,477 in 1996, and in the year
2000 this figure was 4,039,291and in 2004 this has raised up to
5,500,390 So since its conversion from PTC to PTCL (A private company)
there is almost 74 % increase in the working lines of P.T.C.L.

1990:-
0n 15-12-1990 Telephone and Telegraphs department was
converted into a statuary corporation Pakistan Telecommunication
Company that had its own separate legal identity from Government of
Pakistan.

1996:-

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In the changed international telecom environment it became

necessary to open the local telecom market for foreign competitors so
Pakistan Telecommunication Company was further subdivided into four
separate units in 1996, which are;
1. Pakistan Telecommunication Company Limited (PTCL)
2. Pakistan Telecommunication Authority (PTA)
3. National Telecommunication Company (NTC)
4. Frequency Allocation Board (FAB)

PTCL was incorporated on December 31st 1995 and it commenced

its business on January 1st 1996. The idea behind this was to provide
better services to customers giving chance of starting telecom services to
other companies. This was established to undertake the
telecommunication business formally carried out by Ex-PTC.
P.T.C.L is providing various services to its customers like fix-telephone,
mobile telephone, Internet, lease circuit, VPN and ISDN (BRI & PRI).

2003:-
As telecommunication monopolies head towards an imminent end,
services and infrastructure providers are set to face even bigger
challenges. Pakistan also entered post-monopoly era with deregulation of
the sector in January 2003. On the Government level, a comprehensive
liberalization policy for telecom sector is in the offing.
PTCL is in full awareness of the same, and future policies feature a strong
conviction of healthy competition. The company is in process of
enhancing organizational and business proficiency through vertical
integration and horizontal diversification. At the same time, cross-national
ownerships, operations and partnerships are being evaluated with a view
to developing and diversifying the business.

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Mr. Mohamed Abdulla Ali Bamakhrama

(President & Ceo)

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2 - VISION STATEMENT

To be the leading ICT service provider in the region by achieving

customer’s satisfaction and maximizing shareholders value.

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MISSION STATEMENT

To achieve my vision by having: -

 An organizational environment that fosters professionalism,
motivation and quality.
 An environment that is cost effective and quality conscious.
 Services that are based on the most optimum technology.
 Quality & Time conscious customer. Service.
 Sustained growth in earnings and profitability.

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Corporate Customer Centers

Corporate Customer Centers are a one-point contact facility designed

to give its valued Corporate Customers the maximum convenience with a
personalized and prompt service. These centers will facilitate Corporate
Customers in:

 Provision of end to end communication solutions

 Maintenance support

 Provision of new telephone connections

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has established many Corporate Customer Centers to facilitate its

corporate customers. Currently these centers have been established in
only main cities of Pakistan like Islamabad, Karachi, Lahore, Quetta and
Peshawar. The aim is to provide better customer care through:

 One window operation for all telecom services

 Convenient registration procedure

 Minimum documentations for hassle free registration

 Swift processing of corporate customers request

Services Offered at Corporate Customer Centers:

offers a host of unmatched services suiting the needs of business
organizations.

Consumers Services

 New Telephone connection

 Shifting of Telephone

 Change of Telephone Number

 Change of title / name / transfer of ownership

 Closing of telephone

 Restoration of Telephone After disconnection

 Digital facilities

 ISDN BRI

 CLI

 FAX

 FAQ’s

Basic Services (PSTN Lines)

 Voice
 Data & Video

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 Tele mail (VMS)

Value Added Service

 Calling Line Identification (CLI) service.

 Channel/Stream.

 Collocation.

 Digital features like Call Waiting, Call Transfer etc.

 Digital Subscriber Loop (DSL).

 Integrated Services Digital Network (ISDN)-PRI, ISDN-Tele

Plus.

 Local Leased Circuits (2 Wire/4 Wire).

 Local/Domestic/International Leased bandwidth and point

to point leased lines.

 Payphones/PABX.

 Premium Rate Audio-Text Service.

 Universal Access Number (UAN).

 Universal Internet Number (UIN) - for ISP's Licensed only).

 Voice Mail & Messaging Services.

IN Based Value Added Services

 0800 Toll Free

 Calling Cards Domestic & International

 Premium Rate (0900) & Virtual Private Network Service.

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SHAREHOLDING STRUCTURE:-

paid-up capital is 51 billion Rupees; divided into 3.375 billion

classes "An" ordinary shares (74%) and 1.23 billion class "B" ordinary
shares (26%). The class “A” share is listed on all the three stock
exchanges of Pakistan, while class "B" share have not listed and have
been soled to “Etisalat” a strategic investor. Class "B" share have been
transformed by the government to Etisalat. These class “B” share have
four voting rights against one voting right per class "A" share. The
government, to date, has sold 11.76% equity of in two trenches. One
million vouchers (equivalent to 100mn shares) Ire sold via a local IPO at
Rs.30 per share. Subsequently, another 500mn shares Ire sold in the form
of GDR's to international investors at Rs.55 per share. In 1995, the
government appointed financial advisors for the sale of 26% strategic
stake to a foreign partner.

Then, the services of previous financial advisors have been

terminated and now have its own employees who have worked as a
financial advisor and 26% shares have been sold to Etisalat of UAE with
management control on 18th of June 2005.

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PTCL Subsidiaries
1. Paknet
2. ufone

PTCL Subsidiaries

• Paknet Limited (Paknet)

• Pak Telecom Mobile Ltd. (PTML)

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Promotion in General
Upon the creatures I have made, I am my selves, at last, dependent.
- Johann Wolfgang Von Goethe

Promote yourself but do not demote another. - Israel Salanter

The hope, and not the fact, of advancement, is the spur to industry. -
Sir Henry Taylor

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When I give a man an office, I watch him carefully to see whether he is

selling or growing. - Woodrow T. Wilson

Definitions:-
1. The act of promoting or the fact of being promoted; advancement.
2. Encmyagement of the progress, growth, or acceptance of
something; furtherance.
3. Advertising; publicity.
4. A term referring to methods of bringing a product to public
attention, including advertising, personal selling, sales promotion,
and publicity.
5. Promotion keeps the product in the minds of the customer and
helps stimulate demand for the product. Promotion involves
ongoing advertising and publicity (mention in the press). The
ongoing activities of advertising, sales and public relations are
often considered aspects of promotions.

Importance of Promotion

Promotion keeps the product in the minds of the customer and helps
stimulate demand for the product. Promotion involves ongoing
advertising and publicity (mention in the press). The ongoing activities of
advertising, sales and public relations are often considered aspects of
promotions.

It would be safe to say that most companies engage in some form of

promotional activity every day of the year. Promotion is one of the four Ps
of marketing—price, product, place, and promotion. Promotion is
generally thought of as a sequence of activities designed to inform and
convince individuals to purchase a product, subscribe to a belief, or
support a cause. All of the various tools available to marketing managers
for promotional activities constitute what is known as the promotional
mix.

PTCL Promotional Objectives / Strategies

There are a number of promotional objectives, some of the most common

being

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 Information dissemination.
 Service demand.

 Service differentiation.

 Service highlights

 Sales stabilization.

Regardless of the promotional objective selected, the company's goal

is to inform and convince consumers to buy the product.

Information Dissemination One of the most basic desires of is to

provide information about a Service to potential consumers. Tools
available to an organization for informing potential consumers about a
product include billboards, flyers, Internet Ib sites, magazines,
newspapers, radio spots, and television commercials.

Product Demand Another goal of promotional activities is to create

product demand. A company has several promotional options for
fostering product demand. For example, a company may focus on using a
primary demand strategy that concentrates on trying to increase demand
for a general product or service line.

Product Differentiation A common challenge faced by companies is

increased competition, which often results in the market being flooded
with similar products. Consumers may conclude that no substantial
difference exists betIen the products (homogeneous demand) and,
therefore, look for the loIst-priced product to purchase.

Product Highlights have another tool to employ in order to justify a

higher-priced product: A firm can accentuate the product's exceptional
quality in detail to convince consumers that the extra cost is worthwhile.
Highlighting a product's quality might sound easy, but a company must
first develop superior advertisements to promote the product.

Sales Stabilization A challenge that face is inconsistent demand for

their products throughout the year. Reasons for this fluctuation can range
from seasonal demand to changing economic conditions. Most companies
would rather have a consistent demand for their products throughout the
year, since this would allow them to have steady production and
distribution facility operations

PTCL Promotional Mix

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• Marketing managers use different components of the promotional

mix as tools for achieving company objectives—advertising,
personal selling, public relations, and sales promotion. Each
of these elements can be further divided into additional
subcomponents or strategies. The majority of a company's
promotional remises are usually spent on these four elements for a
simple reason: Company perceive these methods as the most
effective means to promote their products. Other specialized
promotional techniques, hoIver, are also used to enhance
promotional objectives.

1. Advertising

Advertising is often thought of as the paid, non-personal communication

used in the promotion of a cause, idea, product, or service by an
identified sponsor. The various advertising delivery methods include:-

• Banners at sporting events.

• Billboards.

• Internet Ib sites.

• Logos on clothing.

• Magazines.

• Newspapers.

• Radio spots.

• Television commercials.

The common forms of advertising of are

♦ Advocacy.
♦ Comparative.

♦ Cooperative.

♦ Informational.

♦ Institutional

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♦ Persuasive.

♦ Product.

♦ Reminder.

♦ Point-of-purchase.

♦ Specialty.

2. Personal Selling:-

Personal selling is considered one of the most effective promotional

techniques because it facilitates interaction betIen consumer and seller.
With personal selling, a salesperson can listen to and determine a
consumer's needs by asking questions and receiving feedback from the
consumer. Furthermore, personal selling activities can generate long-
lasting friendships betIen consumers and sellers that typically generate
many repeat purchases. Personal selling can also occur by means of:-

o Interactive computers.
o Telephone conferences.

o Interactive videoconferencing.

A drawback of personal selling it is high cost.

3. Public Relations

Public relations have been de scribed as building goodwill with a

various publics, including:-

 Consumers.
 Employees.

 Government officials.

 Stockholders

 Suppliers.

The overall goal of any public relations effort is to project a positive

image when dealing with such issues as community and government
relations, employment practices, and environmental issues.

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Consumers. Public relations efforts are extremely important for

maintaining a consumer base. Consumers must believe that they are
buying from a caring, honest, and trustworthy company.

Employees. The most valuable asset a company has is its employees.

Therefore, it is essential that employees believe in their company. Public
relations communications are extremely important in ensuring that
employees receive information about the company before outside media
receive and report the information.

Government officials. Maintaining a positive public image is also

important because government agencies and offices monitor the media
and have regulatory oversight over company activities. Positive stories in
the media obviously help promote a positive image to government
regulators, which reduces the chance of being investigated and possibly
fined.

Stockholders. Another key interest group for that offers publicly

traded securities is the stockholders. If company stockholders generally
receive positive news about a company, they are more likely to maintain
investment, which helps keep the stock price up.

Suppliers. Positive public relations are essential for a company's relation

with its suppliers. Suppliers are most concerned about being paid for the
product they are selling to a company. Since most suppliers are generally
not paid until ten to twenty days after delivery of their product, they must
have faith in the ability of to pay its bills.

4. Sales Promotion

Sales promotions are marketing practices designed to facilitate the

purchase of a product that do not include advertising, personal selling, or
public relations. use sales promotion for a variety of reasons;

 To attract new product users who will hopefully turn into loyal
consumers who keep buying the product.
 To reward existing consumers with a price reduction, thereby
maintaining their loyalty.

 To encourage repeat sales from occasional consumers.

PTCL Special Promotional Activities

Use a variety of sales promotion tactics to increase sales, including:-

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 Advertising specialties.
 Cash refund offers/rebates.

 Contests and sweepstakes.

 Coupons.

 Patronage rewards.

 Point-of-purchase displays.

 Premiums

 Price packs/cents-off deals.

 Samples.

 Trade shows.

Advertising specialties. frequently create and give away everyday

items with their names and logos printed on the items such as bottle/can
openers, caps, coffee mugs, key rings, and pencils. prefer to use
inexpensive handouts that will yield constant free advertising when used
by the recipient.

Cash refund offers/rebates. A cash refund or rebate is similar to a

coupon except that the price reduction comes after the product is already
purchased. In order to receive the cash refund/rebate, the consumer
must send in a "proof of purchase" with the company offer in order to
obtain the refund. Rebates are often an excellent form of sales promotion
for a company to use because a high percentage of consumers will not
send in the forms for the refund.

Contests and sweepstakes. use contests and sweepstakes to

increase the services. As a reward for participating, consumers might win
cash, free products, or vacations. With a contest, participants are
required to demonstrate a skill; for example, entrants might be asked to
suggest a name for a new product, design a company logo, or even
suggest a company name change.

Coupons. Coupons are certificates that give consumers a price savings

when they purchase a specified product. Coupons are frequently mailed,
placed in newspapers, or dispensed at the point of purchase. In addition,
some have coupons generated when an item is scanned at the
register.

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Patronage rewards. Awards provided by to promote and encourage

the purchasing of their products are called patronage rewards.

Point-of-purchase displays. Point-of-purchase promotions can include

displays & demonstrations that take place at the point of purchase. The
cardboard cutouts of popular movie stars that are put next to
merchandise are excellent examples of this method. frequently offer
assistance in assembling and removing promotional displays to
encourage storeowners to use their point-of-purchase displays.

Premiums. A premium is a good offered free or at a low cost to

encourage consumers to use a particular service. can also offer
premiums in the form of reusable containers bearing names and logos in
order to help promote other services. In addition, a company may also
decide to use a self-liquidating premium. The costs associated with self-
liquidating premiums are passed along to consumers through the cost of
product.

Price packs/cents-off deals. Price packs provide consumers with a

reduced price that is marked directly on the package by the manufacture.
can offer price packs in the format of two for the price of one or offer
products such as a V-Phone set and an external antenna in one package
for a lower price than that of the two items purchased separately.
Consumers generally react favorably to price packs because they are
perceived as a real bargain.

Samples. offer free samples of their products. The rationale for

offering a free product sample is to achieve immediate consumer
introduction to the product. Commonly used delivery methods include
mailing the product, passing the product out in stores, or door-to-door
delivery of the product.

Trade shows. hold conventions and trade shows each year to show
off new technology, assess consumer trends, and review other issues
important to the industry. Trade shows provide an excellent
opportunity to promote new services, make new contacts, renew existing
business relationships, maintain or build a reputation, and distribute
promotional materials.

How PTCL promote its services &

products

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Through Internet

Today Information Technology, herein after referred in short as IT, is

touching all of us. It is in the peak of its importance. A country poised to
become the super financial power and the most sought after destination
of the world, is looking forward on IT to play a major role in fulfilling this
dream. None of us have any doubt on this. IT will definitely play the
major role to take my country ahead of all other countries in the
world. Hence use this tactic very Ill.

A View of PTCL web Site

Pakistan Telecommunication Company Limited.

About PTCL
Financial Reports
Subsidiaries
Corporate Information
What's New
Site Map
Contact Us
FAQ's
Media Campaign
Share Registrar

Useful Links
News Centre
PTCL Messaging Service Universal Internet Number Bill Payment Career
Opportunities(new)
Complaints Numbers
Change of Telephone Number ISDN PRI/E1 Policy Tariff
Tenders (new)
Digital facilities
TelePlus (ISDN/BRI) PTCL 17 Invitations (new)

Co Location PTCL 18

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Call Centres

More .... More .... More ....

marketing Go
Search :

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Through Media (Print & Broadcasting Media)

There is a huge variety of media available through which conduct an

advertising campaign.

"An investigation into the relative effectiveness and the relative

costs of using the various advertising media in an advertising
campaign"

spent 1.53% of it’s annually income on media promotion.

1. Press Ads. 2. TV Commercials.

Press Ads

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Media Archives
PTCL Corporate

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Media Archives
PTCL Wireless

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Media Archives
PTCL Calling Cards

Through Banners & Signboards

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Banners & Signboards are very attractive now days, because they are
feasible to every one living in the society. cash this promotion tool
very Ill by spent 0.5% of its income last year on promotion through this
tool.

Through Free Packages

introduces many free packages time to time to attract

the new customers & satisfying the loyal one’s. 1.03% of
its income last year spent by PTCL on free packages. Get
Free Connection is very popular free scheme of PTCL.

Through Easy availability nationwide

is the largest Telecom operating company in Pakistan. The company

motto is to attract customer by providing telecom facilities at their door
step.

Through Eid’s & Special day’s packages

On special occasion like Eid days & special days give

incentive by reducing its call rates to increase tele-traffic to
its consumers.

Through investment in educational

departments (Telecom Sector)

invested in education sector especially in Telecom Sector, which

ultimately increases its good will also those educational sectors, plays an
essential part to promote company services.

Through Relief packages

Recently Earth Quake suffered Pakistan badly.

like other companies helped the suffering people
by providing free telephonic facilities & also
denote a handsome amount in President Relief
Fund, as its motto was You are not Alone.

Through special arrangements in rural areas to increase

tele-density

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As 65% population of Pakistan living in Rural Areas, but they are not able
to use expensive communication facilities. providing cheaper new
connection fees as special arrangement in rural areas irrespective gaining
revenue from these areas.

Through providing backend media to other Telecom

company

providing backend media to other Telecom companies like Fiber &

Satellite Networks having over country wide, other small telecom
companies use this network by paying low charges and this factor
ultimately promote .

Promotion through PTCL bills

is using new & attractive technique of promotion like printed Ads &
Archives on telephone bills.

Through adopting new technologies, people are willing

to use its services & retain as loyal

In the era of global village adopting new technologies especially in IT

field, and people are willing to use its services & retain as loyal plus this
factor attracting the new customers.

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PESTEL ANALYSIS

PEST analysis stands for "Political, Economic, Social, and Technological

analysis" and describes a framework of macro-environmental factors
used in the environmental scanning component of strategic
management. Some analysts added Legal and rearranged the mnemonic
to SLEPT; inserting Environmental factors expanded it to PESTEL or
PESTLE, which is popular in the United Kingdom. The model has recently
been further extended to STEEPLE and STEEPLED, adding Ethics and
demographic factors. It is a part of the external analysis when conducting
a strategic analysis or doing market research, and gives an overview of
the different macro environmental factors that the company has to take
into consideration. It is a useful strategic tool for understanding market
growth or decline, business position, potential and direction for
operations. The growing importance of environmental or ecological
factors in the first decade of the 21st century have given rise to green
business and encouraged widespread use of an updated version of the
PEST framework. STEER analysis systematically considers Socio-cultural,
Technological, Economic, Ecological, and Regulatory factors.

 Political factors are how and to what degree

a government intervenes in the economy. Specifically, political factors
include areas such as tax policy, labour law, environmental law, trade
restrictions, tariffs, and political stability. Political factors may also
include goods and services which the government wants to provide or
be provided (merit goods) and those that the government does not
want to be provided (demerit goods or merit bads). Furthermore,
governments have great influence on the health, education,
and infrastructure of a nation.

 Economic factors include economic growth, interest

rates, exchange rates and the inflation rate. These factors have major
impacts on how businesses operate and make decisions. For example,
interest rates affect a firm's cost of capital and therefore to what
extent a business grows and expands. Exchange rates affect the costs

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of exporting goods and the supply and price of imported goods in an

economy

 Social factors include the cultural aspects and include health

consciousness, population growth rate, age distribution, career
attitudes and emphasis on safety. Trends in social factors affect the
demand for a company's products and how that company operates.
For example, an aging population may imply a smaller and less-willing
workforce (thus increasing the cost of labor). Furthermore, companies
may change various management strategies to adapt to these social
trends (such as recruiting older workers).

 Technological factors include technological aspects such

as R&D activity, automation, technology incentives and the rate
of technological change. They can determine barriers to entry,
minimum efficient production level and
influence outsourcing decisions. Furthermore, technological shifts can
affect costs, quality, and lead to innovation.

 Environmental factors include ecological and environmental

aspects such as weather, climate, and climate change, which may
especially affect industries such as tourism, farming, and insurance.
Furthermore, growing awareness of the potential impacts of climate
change is affecting how companies operate and the products they
offer, both creating new markets and diminishing or destroying
existing ones.

 Legal factors include discrimination law, consumer law, antitrust

law, employment law, and health and safety law. These factors can
affect how a company operates, its costs, and the demand for its
products.

SWOT ANALYSIS

Strengths

• Largest operational network and infrastructure within ICT

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(Information & Communication Technologies) segment.

• An integrated Monopoly.
• Market leadership in Local loop, Wireless local loop (WLL) and
Fixed telephony.
• PTCL (Ufone) is market challenger in GSM segment.
• Ufone is performing well though Warid and Telenor are tough
competitors. PTCL, Ufone’s profitability increased by 49.2
percent to Rs 977 million in 1H/FY07 as compared to Rs 655
million in the corresponding period last.
• Competitors still depend on PTCL network either directly or
Indirectly.
• Experienced Telecom Resources.

Weakness

• Not been able to nurture its growth around customer

Services oriented strategy.
• Not been able to nurture its growth around customer
services oriented strategy.
• Monopolistic culture has further added to its complexities.
• Packet, the internet service provider arm of PTCL continues
to incur losses due to poor management and lack of
network optimization.
• PTCL-V, the fixed wireless phone service is poor.
• Over employment & low productivity.
• Slow decision making including external interferences.
• Corporate culture akin to government departments
‘
Opportunities

• Low teledensity of Pakistan.

• Have vast infrastructure and real estate assets which can be
Leveraged further.
• Global connectivity reliability has been improved. PTCL is
Expanding the long distance and infrastructure side through
Spreading out two sea-me-we submarine cables.
• Partnership with new entrants in a deregulated environment.
• Scope for efficient/cost effective operations.

Threats
• Increased competition in long distance continues to exert
Pressure.
• VOIP use is increasing despite ambiguous and discriminatory
Policies.
• Exposure to market competition.
• Migration to Cellular Networks.
• Ability to Attract & Retain Quality Professionals.

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• Reduction in International Settlement Rates

Strategies for the different stages of the PLC

Introduction stage of PLC

The need for immediate profit is not a pressure. The product is promoted
to create awareness. If the product has no or few competitors, a skimming
price strategy is employed. Limited numbers of product are available in
few channels of distribution. Advertising differentiates the product. Print ad of
a Printer giving details about its specifications

Growth stage of PLC

Competitors are attracted into the market with very similar offerings.
Products become more profitable and companies form alliances, joint
ventures and take each other over. Advertising spend is high and
focuses upon building brand. Market share tends to
stabilize. Advertising establishes participation with the
marketplace.

Maturity stage of PLC

Those products that survive the earlier stages tend to spend longest in
this phase. Sales grow at a decreasing rate and then stabilize. Producers
attempt to differentiate products and brands are key to this. Price wars
and intense competition occur. At this point the market reaches
saturation. Producers begin to leave the market due to poor
margins. Promotion becomes more widespread and uses a greater
variety of media. Advertising puts price ahead of the
competition.

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Decline stage of PLC

At this point there is a downturn in the market. For example more
innovative products are introduced or consumer tastes have changed.
There is intense price-cutting and many more products are withdrawn
from the market. Profits can be improved by reducing marketing spend
and cost cutting. Defensive advertising or for revitalization.
The Strategy Clock: Bowman's Competitive Strategy Options

The 'Strategy Clock' is based upon the work of Cliff Bowman (see C.
Bowman and D. Faulkner 'Competitive and Corporate Strategy - Irwin -
1996). It's another suitable way to analyze a company's competitive
position in comparison to the offerings of competitors. As with Porter's
Generic Strategies, Bowman considers competitive advantage in relation
to cost advantage or differentiation advantage. There are six core
strategic options:

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Option one - low price/low added value

• Likely to be segment specific.
Option two - low price
• Risk of price war and low margins/need to be a 'cost leader'.
Option three - hybrid
• Low cost base and reinvestment in low price and differentiation.
Option four - differentiation
(a) Without a price premium:
• Perceived added value by user, yielding market share benefits.
(b) With a price premium:
• Perceived added value sufficient to to bear price premium.
Option five - focused differentiation
• Perceived added value to a 'particular segment' warranting a
premium price.
Option six - increased price/standard
• Higher margins if competitors do not value follow/risk of losing
market share.
Option seven - increased price/low values
• Only feasible in a monopoly situation.
Option eight - low value/standard price
• Loss of market share.

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Marketing scenario in 21st century

• Instead of suppliers and customers, there is “us.”

• Your supply chain is your customer’s customer to your supplier’s

supplier, and you’re all in it together.

What does your customer’s customer want?

• Instead of benefits, there is “resonance.”

• When people can get their needs met from multiple

sources (and

They can), they’ll buy from the source that feels the best.

• Instead of making the sale, there is “building a

relationship.”

• We want a life-long customer that generates referrals.

• Instead of shouting from the rooftops, we craft specific messages

for a specific audience.

• Differentiate, differentiate, and differentiate.

21st Century Marketing the Biggest Change

The hardest part of marketing is harder than ever! It’s harder than ever:

• Much more competition

• Much more messaging

• Much less trust

• Much faster pace

• More technological barriers

– Voice mail, spam filters, iPods, pop-up blockers…

Means you must have a

Clear, correct, consistent, continuous message!

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Suggestions for Improvement

Negative buying experiences are almost always linked to shoddy
customer service. These days it's rare to find good customer support,
even though most businesses claim that they put people first. But
customer service hasn't gone the way of the dodo. In fact, after consumer
groups and the media took potshots at e-commerce sites last year for
leaving customers in the lurch, many businesses started to pay more
attention to the levels of service they provide. Good customer service is
essential for all businesses, and I am suggested as under to for
improvement its promotion strategies…….

1. Commit to quality service. Everyone in the company needs to be

devoted to creating a positive experience for the customer. Always
try to go above and beyond customer expectations.
2. Know your product. Conveying knowledge about products and
services will help you win a customer's trust and confidence. Know
your company's products, services and return policies inside out.
Try to anticipate the types of questions customers will ask.
3. Know your customers. Try to learn everything you can about
your customers so you can tailor your service approach to their
needs and buying habits. Talk to people and listen to their
complaints so you can get to the root of customer dissatisfaction.
4. Treat people with courtesy and respect. Remember that every
contact with a customer — whether it's by email, phone, written
correspondence, or face-to-face meeting — leaves an impression.
Use phrases like "sorry to keep you waiting," "thanks for your
order," "you're welcome," and "it's been a pleasure helping you."
5. Never argue with a customer. You know darn Ill that the
customer isn't always right. But instead of focusing on what went
wrong in a particular situation, concentrate on how to fix it.
Research shows that 7 out of 10 customers will do business with
you again if you resolve a complaint in their favor.
6. Don't leave customers hanging. Repairs, callbacks and emails
need to be handled with a sense of urgency. Customers want
immediate resolution, and if you can give it to them, you'll probably
win their repeat business. Research shows that 95 percent of
dissatisfied customers will do business with a company again if
their complaint is resolved on the spot.

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7. Always provide what you promise. Fail to do this and you'll lose
credibility — and customers. If you guarantee a quote within 24 hrs,
get the quote out in a day or less. If you can't make good on your
promise, apologize to the customer and offer some type of
compensation, such as a discount or free delivery.

8. Assume that customers are telling the truth. Even though it

sometimes appears that customers are lying or giving you a hard
time, always give them the benefit of the doubt. The majority of
customers don't like to complain; in fact, they'll go out of their way
to avoid it.
9. Focus on making customers, not making sales. Salespeople,
especially those who get paid on commission, sometimes focus on
the volume instead of the quality of the sale. Remember that
keeping a customer's business is more important than closing a
sale. Research shows that it costs six times more to attract a new
customer than it does to keep an existing one.
10. Make it easy to buy. The buying experience in your store,
on your web site or through your catalog should be as easy as
possible. Eliminate unnecessary paperwork and forms, help people
find what they need, explain how products work, and do whatever
you can to facilitate transactions.

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SHORT NOTES

SWOT ANALYSIS

Strengths, Weaknesses, Opportunities and Threats (SWOT).

SWOT analysis is a tool for auditing an organization and its environment.

It is the first stage of planning and helps marketers to focus on key
issues. SWOT stands for strengths, weaknesses, opportunities, and
threats. Strengths and weaknesses are internal factors. Opportunities and
threats are external factors.
In SWOT, strengths and weaknesses are internal factors.

For example:
Strength could be:

• Your specialist marketing expertise.

• A new, innovative product or service.

• Location of your business.

• Quality processes and procedures.

• Any other aspect of your business that adds value to your product
or service.
A weakness could be:

• Lack of marketing expertise.

• Undifferentiated products or services (i.e. in relation to your

competitors).

• Location of your business.

• Poor quality goods or services.

• Damaged reputation.

In SWOT, opportunities and threats are external factors.

For example:

An opportunity could be:

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• A developing market such as the Internet.

• Mergers, joint ventures or strategic alliances.

• Moving into new market segments that offer improved profits.

• A new international market.

• A market vacated by an ineffective competitor.

A threat could be:

• A new competitor in your home market.

• Price wars with competitors.

• A competitor has a new, innovative product or service.

• Competitors have superior access to channels of distribution.

• Taxation is introduced on your product or service.

Porter’s five forces

1. Existing competitive rivalry between suppliers
2. Threat of new market entrants
3. Bargaining power of buyers
4. Power of suppliers
5. Threat of substitute products (including technology change)

Typically this five forces model is shown as a series of five boxes in a

cross formation, item 1 being central.
Porter's Five Forces model can be used to good analytical effect alongside
other models such as the SWOT and PEST analysis tools.
Porter's Five Forces model provides suggested points under each main
heading, by which you can develop a broad and sophisticated analysis of
competitive position, as might be used when creating strategy, plans, or
making investment decisions about a business or organization.
Porter is also known for his simple identification of five generic
descriptions of industries:
1. Fragmented (eg, shoe repairs, gift shops)
2. Emerging (eg, space travel)
3. Mature (eg, automotive)
4. Declining (eg, solid fuels)
5. Global (eg, micro-processors)

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And Porter is also particularly recognized for his competitive 'diamond'

model, used for assessing relative competitive strength of nations, and by
implication their industries:
1. Factor Conditions: production factors required for a given
industry, eg. skilled labour, logistics and infrastructure.
2. Demand Conditions: extent and nature of demand within the
nation concerned for the product or service.
3. Related Industries: the existence, extent and international
competitive strength of other industries in the nation concerned
that support or assist the industry in question.
4. Corporate Strategy, Structure and Rivalry: the conditions in
the home market that affect how corporations are created,
managed and grown; the idea being that firms that have to fight
hard in their home market are more likely to be able to succeed in
international markets.

BCG Growth-Share Matrix

Companies that are large enough to be organized into strategic business

units face the challenge of allocating resources among those units. In the
early 1970's the Boston Consulting Group developed a model for
managing a portfolio of different business units (or major product lines).
The BCG growth-share matrix displays the various business units on a
graph of the market growth rate vs. market share relative to competitors:

BCG Growth-Share Matrix

Resources are allocated to business units according to where they are

situated on the grid as follows:

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• Cash Cow - a business unit that has a large market share in a

mature, slow growing industry. Cash cows require little investment
and generate cash that can be used to invest in other business
units.
• Star - a business unit that has a large market share in a fast
growing industry. Stars may generate cash, but because the market
is growing rapidly they require investment to maintain their lead. If
successful, a star will become a cash cow when its industry
matures.
• Question Mark (or Problem Child) - a business unit that has a
small market share in a high growth market. These business units
require resources to grow market share, but whether they will
succeed and become stars is unknown.
• Dog - a business unit that has a small market share in a mature
industry. A dog may not require substantial cash, but it ties up
capital that could better be deployed elsewhere. Unless a dog has
some other strategic purpose, it should be liquidated if there is little
prospect for it to gain market share.

The BCG matrix provides a framework for allocating resources among

different business units and allows one to compare many business units
at a glance. However, the approach has received some negative criticism
for the following reasons:

• The link between market share and profitability is questionable

since increasing market share can be very expensive.
• The approach may overemphasize high growth, since it ignores the
potential of declining markets.
• The model considers market growth rate to be a given. In practice
the firm may be able to grow the market.

Ansoff’s Matrix
To portray alternative corporate growth strategies, Igor Ansoff presented
a matrix that focused on the firm's present and potential products and
markets (customers). By considering ways to grow via existing products
and new products, and in existing markets and new markets, there are
four possible product-market combinations. Ansoff's matrix is shown
below:

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Ansoff Matrix

Existing Products New Products

Existing
Market Penetration Product Development
Markets

New
Market Development Diversification
Markets

Ansoff's matrix provides four different growth strategies:

• Market Penetration - the firm seeks to achieve growth with

existing products in their current market segments, aiming to
increase its market share.
• Market Development - the firm seeks growth by targeting its
existing products to new market segments.
• Product Development - the firms develops new products targeted
to its existing market segments.
• Diversification - the firm grows by diversifying into new
businesses by developing new products for new markets.

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