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

Week 1

Well this is my first ever blog and my first ever blog post!  Luck are you readers who are reading this and getting the benefit watching me take my baby steps here.  This blog is part of my very last class (an elective) in my Engineering Management degree that I started many, many years ago.  I have no doubt that at 49, I'm the oldest student in the class and I look forward to learning from my classmates.  I am also not ashamed to admit that not only have I never posted a blog... I have never even READ a blog before, so this is un-chartered territory to me.  I hope to make these posts more interesting as I get more experienced.

So, WHAT IS MARKETING?

the common misconception is just that marketing is just advertising and sales.  While it is true that marketing has aspects of advertising and sales as elements, these are just functions or tasks withing the bigger scope called marketing.  From my perspective, marketing is more of a philosophy by which a business works while advertising and sales are tasks that support it.  Marketing is a process by which you establish your business' offering and capabilities, as the solution to your clients' needs. There are three main objectives in marketing as follows: 

VALUE: 1st and most importantly, know your clients.  Identify the value that you have to offer your client base. Identify what their needs are. Identify how you can fill their needs within your product portfolio or business offerings.  This, many times, requires redesign and or new product development. 

COMPETITION: secondly and just as important, a marketing focused business must know it's competition, their offerings and how they are satisfying your potential client base.  A good strategy for creating value is differentiation.  You can only be "Different" by knowing what the competitor looks and acts like

STRATEGIC PLANNING: Once you have the ability to get to know your clients and competitors, a good marketing focused company can then create a strategic plan that applies its customer and competition knowledge towards enhancing real value in the marketplace.

The most marketing plans are  plans that are created with the help of cross-functional members of the organization.  Successful plans are also implemented cross-functionally to ensure that all levels of the organization are focused on creating value