LAST BLOG!!!!!!!!

This is my last Blog of the class AND my college career because this is my last class for my degree!  I will not likely blog again.... ever :(

This week's blog is to focus on "What is Marketing?"

Well, simply said... Marketing is everything and everyone's job.  It is the process by which products and services are delivered in such a way that customers' needs are fulfilled.  Marketing is the link between a company or business' core competencies (product offerings) and the market (buyers) needs.  

All aspects of a corporation have a role in marketing as all job functions can ultimately affect customer satisfaction.  Marketing is also both internal and external... it is external when a company showcases-es its capabilities to the market and internal when  a management team drives its vision down through all levels of the organization.

Marketing an essential element in any business success. In order to be successful, a company must be customer oriented and focus out (third person) towards what the market needs are and how they are best suited to satisfy the need. Companies that are internally focused (1st person) on their own performance and inefficiencies will ultimately fail to satisfy customer needs and ultimately will fail.

Market plans and strategies need to be dynamic and responsive to the world a business participates in.  Plans should be specific enough to be understood but not restrictive and prevent a company from taking advantage of the market changes.

Week 8- The Plan

Week 8: MARKETING PLAN

This week's focus was getting the team together to formulate our group marketing plan.  Just like the real world, our biggest challenge was getting everyone together at the same time and finding a way to effectively communicate.  All of our team members usually meet face to face but for the past week, only one of the four was able to make it to class, the rest of us attended "virtually".  

This presented a real challenge for us and I can honestly say that I find the "on-line chat" method of holding meetings to be extremely frustrating and difficult to follow.... Unlike most students, I hate texting and avoid it as much as possible. That being said, my hat is off to my team-mates who seemed to navigate the "chat" world effortlessly.  I was very impressed with the efficiency in communicating complex ideas.

Our team's approach was to share our individual situation analyis' and review them in detail.  It was very interesting to see the similarities and differences.  I felt that my understanding of the company performance was significantly improved by reviewing my team-mates perspectives.

Our first step towards completing the Marketing Plan was to  agree on a key issues and a mission statement.  Rightly so, there was a lot of dialog at this point because it is the basis of vision, strategy and tactics.  Once this was agreed upon, we all agreed to take a stab at the Market vision and goals.  We the  met and discussed these in detail.  At this point, we had our basic plan and agreed to break up the balance of the report for efficiency and assign different segments to each team member.  We then consolidated our thoughts and generated our report.

Lessons learned:

- give more time for on-line chats

- have agreed upon objectives BEFORE a chat starts

- Leave a lot more time for the group consolidation of the report- here we had an attack of Murphy's law as at 10:45, the person who was assembling the final version, had the document crash and had to re-assemble the consensus material with very little time to spare.

Week 6- Pharmasim Special Incidents

This week's  blog will be dedicated to the incidents in Periods 0,1 and 2 in Pharmasim.  Overall, our team performance has not been very good. We've had two periods of declining Revenue, Sales and Stock Price- at least we're consistent!

INCIDENTS:

PERIOD 0- SOCIAL MEDIA

The President of the Consumer Products Division of Allstar Brands has made it a priority for the coming year to add a more interactive Dimension to their marketing plans, including the incorporation of social media and internet marketing. 

1. Website with interactive blog.
2. Facebook and Twitter.
3. Website with interactive blog
4. Facebook and Twitter 

CHOICE:

We chose option 4- "Facebook and Twitter, and use up to 5% of the advertising budget toward Google Adwords to generate additional awareness and direct people to the Facebook page." 

RATIONALE:

The team consensus was that we felt that neither of these options would yield a significant impact as it is very hard to translate his information into real sales data.  That being said, we felt that the Facebook and Twitter forums tend to get a lot of traffic and would be more likely a place where people "Share" experience which could improve awareness.

OUTCOME:

This decision yielded positive feedback and improved awareness in both periods 1 and 2.  Below is a summary of the results:

Week 1: Social Media Comments for Allround:

I'm satisified. Just tried Extra. Okay deal.Somewhat satisfied. Great for fever! Just tried your product. Good for nasal congestion. Works well for runny nose. Good value! Very easy to find! No trouble finding it. Great for cough! Allround is the best! Just all right for chest congestion. Very good value! Just tried Besthelp

Week 2- Social Media Comments for Allround:

Really good value! Easy to find! Great for fever! Just tried Dryup. Good for nasal congestion. Allround is the best! Okay for chest congestion. I'm satisified.Good value! Okay deal. No trouble finding it.Just tried Besthelp. Fairly satisfied. Great for cough!Works well for runny nose. 

PERIOD 1- QUALITY ASSURANCE

A batch of Allround is within six months of expiration, and we needed to decide what to do with it. We had the following options:

1. Ship the product and hope that distributors do not return it.
2. Dispose of the whole batch up front and avoid the appearance of trying to dump old product on distributors.
3. Sell the inventory to a jobber 

CHOICE:

We chose to dispose of the whole batch up front.

RATIONALE:

Our feeling was that this was the best option as it had a defined risk.  Customer perception is critical in medicines and it appeared that competition was increasing.  We felt that option 1 wasn't worth the risk and option 3 still carried a risk because the jobbers would only point back to us if there was a quality issue.  Thus disposal was the best option

OUTCOME:

This option cost us $100,000 but there was no negative fall-out in the market with consumers.

PERIOD 2- CANNIBALIZATION:

Allstar needs to consider a line extension of the Allround brand to counter market erosion from increased competition.  It's options are as follows:

1. 12-Hour Multi Capsule
2. Children's Liquid Cold Medicine
3. Cough Formula

DISCUSSION:

Our team hasn't discussed this incident yet so we have not chose an option.  I feel that the best option would be option 1- 12-hour Multi-Capsule.  This is justified by the fact that there is very little competition in this segment and the only competitor (Extra) is performing poorly because it's formulation focuses exclusively on the decongestant formulation.  We should be able to differentiate ourselves in this market because we cover multiple symptoms and have a much stronger brand awareness.  Barrier to entry is low and competition is low making this segment attractive

WEEK 6: PREDICTING THE FUTURE?

To be honest, I am finding all this discussion and review in Marketing techniques and philosophies a bit dry.  So this week, I thought I'd mix it up a bit and try to make things a little more interesting by broadening my view of marketing to encompass human behavior. Below is my attempt to stretch the ideas of Drucker to a greater sense of the world.... I hope you find it interesting at least.

 "You must be the change you wish to see in the world." - Mahatma Gandhi 

"The Best Way to Predict the Future,

 Is to Create It" Peter Drucker

In this week's reading, we learn about Drucker's perspective on predicting the future.  I found it interesting that the two quotes above by two very different men on how to predict and change the future actually have quite a bit in common.  Now, to be sure, I am NOT trying to equate Drucker with Ghandi (a very great man).  I am saying that in these two sentiments, there is commonality and it's very interesting to explore.   Both men studied human behavior and explored their own perspectives there-in.

In Ghandi's statement, I believe that he is trying to say that future change comes about by seriously looking inside and emulating the future state your want to see.  In other words, make the changes in yourself now, and the future will be the result of your current actions.

Similarly, when Drucker is asked how he is able to so accurately predict future events he states:

     “I listen.... to myself.....I simply look out the window and report what I see and what events that have already occurred mean for the future. This simple step of describing the obvious result of previous occurrences gives some the impression that I am predicting the future. The reality is that I am merely stating the obvious...”

Drucker goes on to state that we know only two things about the future:

1. The future cannot be known.
2. The future will be different both from what exists now and from what we expect.

This may sound contradictory but in reality, it is not.  

HOW DO WE PREDICT THE FUTURE?

Most people use past events to predict future events. ie- sales of product "X" have been growing by 10% monthly for the last 3 months, therefore it should continue to grow for the next 6 months.

This is a very tempting approach but at best it is equivalent to driving your car by looking in the rear view mirror.  You only see where you've been, not where you're going.

What Drucker is saying is that current events have set in motion certain forces that will drive future events.  If we can properly study current events, we can do a better job of predicting future outcomes of events set in motion today.

Similarly, Ghandi is saying that a desired future state will not arrive unless we set in motion, today, behaviors that support that future state.

For a company to do a good job of setting a realist goal for it's future, it must as itself 4 basic question:

1. What opportunities does the company want to pursue, and what risks is it willing and able to accept?
2. What are the scope and structure of the organization’s strategy, including the right balance among such aspects as specialization, diversification, and integration?
3. What are considered acceptable trade-offs for a company between time and money and between in-house execution and using a merger, acquisition, joint venture, or some external means to reach its objectives and attain its goals?
4. What is the organizational structure appropriate to the company’s economic realities, the opportunities, and it performance expectations? 

It is only through a thorough study of these questions that a company can craft a future vision that is attainable whether it be in product offering or competitive advantage.

I hope my simple comparison has not offended anyone as I readily acknowledge that the affect that Ghandi has had on humanity is on a much grander scale than Drucker's teaching.  My simple point here is that basic wisdom is at the core of all significant thought and conclusions.

Week 3

THE DEVIL IS IN THE DETAILS!

Boy is that an understatement!  This week we reviewed a broad range of topics and a TON of detail.  All I can say is that after reading over 150 pages of assigned texts, watching 4 chalk talks, 11 videos, a three hour class (more like 5 for me because my internet connection kept crashing), reading the questions AND blogs submitted by my classmates so I could include these in my blog.... I think I can absolutely say that there are alot of details to cover this week and it's a bit overwhelming.  

THE READING:

     So, where to begin?  Let's start with the reading.  I'll confess that reading is my weakness.  Between my job responsibilities and keeping up with e-mails, reading is difficult to get motivated for.  This week's reading culminated around being able to create a Marketing Plan.  Lehman Chapter 3 starts with a reviewing how to complete an Industry Analysis.  It is essential for a Marketing Manager to understand the factors that affect the Industry he/she is participating in order to decide whether or not the industry is attractive enough to participate. Lehmann goes on to describe a "Market Analysis" that he terms "Category Attractiveness Analysis". He breaks down the factors into three main groups: Aggregate Factors- factors that are related to the product itself; Category Factors- factors related to external influences such as competitors, suppliers and buyers; and Environmental Factors- external influences related to things like technology or regulatory factors. Below is a summary of impact  of Category factors on Attractiveness.  Not all firms find the same factors attractive as this is influenced by each firms unique business as it is valuable to review these factors with your firm's goals and objectives in mind.

	High	Low
Aggregate factors:
Category size	+	-
Category growth	+	-
Stage in product life cycle	-	+
Sales cyclicity	-	+
Seasonality	+	-
Profits	+	-
Category factors:
Threat of new entrants	-	+
Bargaining power of buyers	-	+
Bargaining power of suppliers	-	+
Current category rivalry	-	+
Pressure from substitutes	-	+
Category capacity	-	+
Environmental factors:
Technological	-	+
Political	-	+
Economic	-	+
Regulatory	-	+
Social	-	+

Chapter 6 in Lehmann goes on in great detail to discuss how to create a Market Forecast.  This starts with understanding Market Potential and then requires a firm understanding of the importance of forecast accuracy. 

The concept of Forecast Accuracy is discussed by my classmate, Ashley Les, when she asks:

  

"Uncertainty is a part of marketing forecasting but uncertainty is also found in other parts of a company too.  In relationship to other aspects of companies, where does marketing uncertainty rank in the sense of the biggest impact to the company if the forecast was really off?"

This question is insightful as she is implying that a plan is only as accurate as it's forecast.  A good Marketing Manager will find the way to manage accuracy without taking too long to generate timely forecasts.

The texts on Drucker wen on to discuss "How to Do Marketing Research the Drucker Way" and "Exploiting Demographic Change".  The Drucker text seems to be very popular in these blogs so I won't discuss it much. However, I did find on question asked interesting.  Brian Michaud reviews Chapter 16 in which he states: 

        

".....Drucker put a significant emphasis on not necessarily the total population, but more on the age distribution and the make-up of that population  .... Can anyone else think of such a specific example of a company advertising directly to one demographic or one target market?"

This question is interesting because it seems to me that most memorable ads are noticed because they effectively market to a demographic.  An obvious one would be the Axe deodorant ads.

 These Ads are obviously targeting young single men with the message that if you use their product that the girls will fall all over you.  See the attached article for reference  

http://www.businessinsider.com/axe-advertising-unilever-brandwashed-2011-10

Even my pre-teen son (who barely sweats) was convinced to buy this product so it is an effective ad, even to pre-teens.

THE BLOGS:

    I also spent a decent amount of time reading my classmates blogs this week.  In Megan MacKenzie's Week 2 Post: "Marketing Help or Self Help?", she discusses the "8 principles of leadership": 

1. Maintain Absolute Integrity
2. Know your stuff
3. Declare your expectations
4. Show uncommon commitment
5. Expect positive results
6. Take care of your people
7. Put duty before self
8. Get out in front. 

I have always believed strongly in these principles.  I think that even the best marketing plans will fail without good leadership.  I completely agree with Megan when she states:

"......that marketing is leadership and vice versa" 

However, good Leadership alone is not enough.  One needs a good vision or mission statement.  This is where Kelvin's Week 2 Post: "The Marketing Plan" supports Megan's.  In it Kelvin reviews: 

“5 Most Important Questions you Will Ever Ask About Your Organization.” 

1. What is our mission?

2. Who is our customer?

3. What does our customer value?

4. What are our results?

5. What is our plan?

A good Marketing plan needs a good Leader and a good Leader needs a clearly defined mission.  Reviewing these questions is a big step towards defining your mission and beginning a sound marketing plan.

PHARMISM SIMULATION:

     Well, I can honestly say that with all the other work (and Oh yeah, regular life), that my play time in the simulator suffered.  I had hoped to improve this week but my stock is still falling.  I now know that I need to take advantage of the market research and feedback that's available and form a strategy to address the concepts uncovered.  To date, my decisions have been mostly random to test out the simulator and to learn by experience.  This is actually not to different than many businesses in the real world unfortunately.  In the lecture  we were asked to summarize the Total cost of All Research vs. Total Marketing Budget.  In my simulator, the total Marketing Budget is $31M as shown on the "Budget Allocation" chart.  The Research is made up of the following reports:

Report                    Cost

Advertising               $35

channel sales           $25

pricing                     $20

shopping habits        $15

Sales force              $20

Promotion                $35

Shelf Space             $25

Recommendations    $20

Cojoint                   $100

Purchase Survey    $100

Total                     $395

NOW WHAT?

Now it's time to absorb all this learning and apply it!  I hope to make some real progress in Pharmasim this week... even if I have to start all over!

Week #2

This week’s focus of study was on Mission Statements/Business Plans, SWOT Analysis, Market Orientation and getting familiar with the Pharmism Simulator.  For this week’s blog, I will focus on Mission Statements and round up with some learning from the simulator.

MISSION STATEMENTS:

Before a company begins to create a Marketing Strategy it must first have a mission statement that can serve as a foundation for any marketing plan.   Most companies have mission statement and if you look closely at them you will see many similarities.   You can find mission statement carved in wood or stone and hanging on the walls of conference rooms and sales rooms across the country (and the world).  Unfortunately, the quality and value of a mission statement is not measured by the beauty of its plaque or calligraphy but instead by how well it articulates the purpose of the business’ existence.  A clear, well stated mission statement will enable a clear well stated marketing strategy which will in turn yield improved business performance.

Some of the problems encountered when developing a mission statement are:

1. They are incomplete:  Mission statements need to capture not just the reason you are in business but the main value you are offering the market

2. They can be too vague:  there is nothing wrong with using “big or impressive words but it is easy to fall into the trap of “wordsmithing” or crafting a mission so much that the true meaning is lost.

3. The mission statement is not motivational: a good mission statement needs to motivate those who read it to action that supports the mission

4.  Mission Statements can be non-distinctive: a good mission statement should set your business apart from competition by highlighting the value you bring to the market

5. Some Mission Statements are too reliant on superlatives: being the best is great but a mission statement needs to be clear on how to know you’re the best. 

6.  Mission Statements can be too broad:  here again, a 50,000 ft view is only helpful if you can still see where you’re going from that height

I then decided to focus on mission plans I am more familiar with.  My business is small and therefore lacks a documented plan (yes I know.... a MAJOR shortcoming) so Instead I decided to focus on a different job I have- Water and Sewer Commissioner for Springfield.  Here we do have a documented mission statement as follows:

Our mission is to provide an adequate uninterrupted, high-quality supply of water to our customers, to collect and treat wastewater, and return clean water to the environment. While fulfilling our mission we strive to:

• Conserve and protect our reliable, high-quality water supply for present and future generations
• Meet or surpass public health standards, environmental standards, and support fire protection
• Operate, maintain, improve and manage our water and wastewater infrastructure in a cost-efficient manner
• Manage finances to support Commission needs and maintain reasonable water and wastewater rates
• Maintain an adequate, safe and professional workforce
• Understand and respond to customers’ expectations for service

This Mission Statement is clear and specific. but I found it interesting that the customer is mentioned last, almost as an after-thought.  I feel the statement os too broad and in-distinctive... it could apply to any community and does not take into account our specific needs.  So while we get good marks for having a written and specific Mission statement, there is definitely room to improve.

Now on to the Pharmism Simulator.  

Key Learnings:

1. the Simulator is not a simple tool- you can't just "wing-it", you need to do your homework... trust me, I tried!
2. It takes more than Price- I first tried playing games with only adjusting price- this alone doesn't work.  By the 5th period your share price plummets
3. You can't Advertise your way out of a hole- I tried focusing only on advertising.  This resulted in more and more money spent and market share still dropped
4. Value alone isn't enough- I did focus groups to play up the value and this alone didn't work
5. Conclusion- I think an integrated approach with a clearly thought out Marketing Plan that focuses on value and price should yield better business performance.  This will be my next attempt... we'll see how it goes