Strategy – where we want to be; concern overall direction; difficult to reverse; rejection of other strategic options; strong personal commitment

Tactics – how we’re going to get there; concern methods of achievement; relatively easy to change; less commitment; run alongside other options

Strategy must be totally marketing integrated, require good analysis of the environment, and adaptable due to feedback of environmental changes, influenced by objectives, resources, competition, the market’s structure and risk-taking.

Questions = market characteristics, the company’s strengths and weaknesses, the firm’s future aims, competitor response and sufficient resources.

Marketing audit – a snapshot of what is happening now; a review of firm’s current objectives, strategies, organisation, strengths and weaknesses, performance in marketing tasks within the 7Ps. It also encompasses the SWOT and PESTEL analyses to provide a clear idea of what needs to be changed to meet the company’s objectives.

Macro-environment – PESTEL = political, environmental, social, technological, economical and legal

Task environment – markets, customers, competitors, distribution, suppliers, facilitators and publics

Marketing strategy audit – mission, objectives, strategy

Marketing organisation audit – formal structure, functional efficiency, interface efficiency

Marketing systems audit –information, planning, control, new product development

Marketing productivity audit – profitability, cost effectiveness analysis

Marketing function audit – products, price, distribution, promotion, sales-force

Tactical planning involves a competitive edge by offering customers something that is unavailable elsewhere. There are three generic strategies:

Cost leadership – keeping costs low, maintain high profits

Differentiation – distinguishing the firm and its products from all competitors

Focus – concentrating in specific segments of the market

The audit is used to appraise the following aspects:

• Internal and external environment
• Organisational SWOT
• Organisational competencies and capabilities
• Organisational resource versus capacity to deliver
• Competitor analysis

An excellent start for objective setting and monitoring progress by focusing management thinking on the firm’s situation before making decisions.

Competitive tactics depend on current product portfolio and competitor activity; Boston Consulting Group matrix evaluates products worth keeping or discarding.

Tactical possibilities are:

• Do something ahead of the competition
• Consult all personnel involved in plans
• Monitor results, but don’t expect instant results
• Make sure your message to everybody is consistent
• Anticipate competitor response

Promotional strategy is influenced by the overall objectives:

Category need – persuading customers this product will meet their need

Brand awareness – fixing the brand and its characteristics in the customers’ mind

Brand attitude – building a favourable attitude in the customers’ mind

Brand purchase intention – a positive connotation from the customer

Purchase facilitation – customers know where to get the product

Setting objectives gives organisation a clear direction. An aim is a general statement about what the organisation wants to do, with no way of measuring it. An objective is a statement of something measurable, and needs to be SMART:

Specific – clearly and precisely stated with a clear boundary

Measurable – some way of knowing the objective has been achieved

Achievable – objectives that can be accomplished

Realistic – aware of the marketing and competitive market, and objections are realistic within constraints of the business environment

Time-bound – a suitable timescale is necessary to enable suitable measurement of the objective

Related posts:

1. Is marketing planning like a journey?
2. Which influences can affect company objectives
3. The influences of new product development

Why do businesses create new products?

New products are developed to accommodate customers as they become more discerning and savvy within the market, which results in them changing their minds and needs.  In a corporate point of view a new product could help outpace the competition, respond to environmental threats and opportunities and accommodate technological changes. Extending the product portfolio prevents sameness and customer boredom, or improves a mature product to extend its life-cycle.

New products open up new markets and replace or significantly broaden the market for an existing product.  An old product can be given a new lease of life by being introduced to a new market, given a different marketing approach or even just packaged differently.

This is the new product development process:

New product strategy – this is when the company examines their current product portfolio, opportunities and threats, and decides whether a new product would fit into their future strategy

Conception and generation of new ideas – a project or venture team will brainstorm specific new product ideas

Screening or evaluation of ideas – the most promising ideas are put forward for development, having been checked first for feasibility and marketability

Concept testing – this is when comments are invited from customers and production engineers to develop the ideas further

Business analysis – this will examine potential profitability and the effects on sales, and how the new product will fit in with the existing products and evaluate possible competitive responses

Product or technical development – once the product is shown to be viable and any engineering aspects have been investigated, a prototype will be developed

Marketing testing – this is when formal marketing research comes into play, and the product is offered to a section of the market to assess the potential and viability

Product launch and commercialisation – assuming the marketing research is positive, a complete marketing plan is set up with full commitment from the company and the new product is put into production

There are various dimensions to consider with a new product:

Strategic fit – how the product fits in with company’s overall marketing strategy

Technical feasibility – whether the product can be made economically

Customer acceptance – whether the customer likes the product

Market opportunity – the level of competition and the current state of the external environment

Finance performance – whether the product will be sufficiently profitable to be worth launching

New products are perceived as innovative, and here are their perceived attributes:

Relative advantage – the product is perceived to be better than the ones before it

Compatibility – the product has consistency with the company’s existing values, and matches previous experiences and needs

Complexity – the product is easily understood and therefore will be adopted more quickly

Trialability – this is how much a product can be experimented with

Observability – the visible results of innovation

Reinvention – these explore new uses for a product, which in turn leads to creation of new markets

There are three degrees of product innovation:

Continuous innovation – a new product is recognisably derived from a previous product (Dyson, mobile phones)

Dynamically continuous innovation = new ways of solving old problems without making radical changes (DVDs iPods)

Discontinuous innovations = genuine new products that make radical changes (smart phones, computers)

Companies are subject to the innovation strategy:

Offensive – companies who like to lead with innovations and take pride in being first in the market (Apple, Dyson, Sony, 3M)

Defensive – these companies are ‘me-toos’, they usually wait until another firm has produced the product and then produce their own version (drug companies)

Imitative – they produce almost exact copies of another firm’s new products (Warner v Pixel)

Dependent –  these companies are told what to produce by another major organisation, who may be customers or suppliers (responding)

Traditional – these are products that are resurrecting old or traditional ideas (reacting)

Opportunist – these companies are contacted by inventors, and then make and market the new inventions (innovation)

The adoption of innovation produces these types of customer:

Innovators – 2.5% of customers are the first to own a new or the latest product. They dominate the beginning of the product life-cycle

Early Adopters – 13.5% of these customers are open to new ideas, and are eager to adopt new products once they have been in the market for a while. They predominate during the growth phase of product life-cycle

Early Majority – a third of customers wait until product has been available for some time, has been thoroughly tried and tested and all the teething problems have been resolved. They form the early part of the maturity phase of the product life-cycle

Late Majority – the other third of customers who are suspicious of new things, and only buy when the product is well established and the majority of customers have bought the product. They incorporate the latter part of the maturity phase of the product life-cycle

Laggards – the final 18% of customers who are reluctant to buy new products, only buy when it’s absolutely necessary, and usually wait for the big discounts during the decline phase of the product life-cycle

Costs accumulated after changing customers’ attention to new products:

Switching cost – customers will lose money on trading in an old product (cars)

Innovation cost – buying a new product will result in buying more new products that are necessary to go with it (computer and new software)

Newness – this is an important factor in a customer’s decision making process, the new product needs to provide real additional benefits over the old product

A model of adoption of new products:

Awareness – the result of promotional activities

Trial – customers can by low cost item (biscuits) before trying them out, whereas with high cost items (cars) the customer prefers to take a test drive or undergo tasting sessions (new ice-cream flavours)

Adoption – the point when the customer decides to buy product, either as a one off or in their regular shopping patterns.

Related posts:

1. How a product develops through its life-cycle
2. Remember: problem, solution and then product
3. The many aspects of a product

Products are “a bundle of benefits which satisfy a set of wants that customers have”.  There are three key facts here: benefits rather than features, wants rather than needs, and customers, the most important element of a business.

You can break a product down into three aspects: physical (what it looks like), functional (what it does) and symbolic (what it means to the customer and how they associate with it). Primary characteristics are benefits that are common with competitors, whereas auxiliary characteristics are features and benefits that are unique to the product.

A product needn’t just be goods, it can also be an idea, a service, or a combination of all of these. If you’re aiming your product at B2C (business to customer) they’re known as consumer products, and can be divided into convenience (cheap, frequently purchased items), shopping (specific products people shop around for), speciality (planned purchased products) and unsought (sold, not bought, like insurance) goods. B2B (business to business) or industrial products are products that are bought for manufacturing purposes: installations, raw materials, components, equipment, processes; or for the purposes of resale: consumable supplies.

Products can be separated into four levels: core (basic physical product with minimum features); expected or actual (generic product plus some extra expected features); augmented (factors that differentiate the product, such as accessories and benefits, or the difference between one brand and another); potential (all the possible features and benefits ever wanted by the customer).

There are four elements of a product: branding – the product’s personality, describing expected quality, performance and reaction from the customers. It is described as a ‘lens’ through which customers see the product, and through which marketers promote. Product lines and product ranges – a product portfolio is necessary if a company produces more than one product. These may be broad (a wide range) or deep (many variations). Packaging – design makes a product more desirable, noticeable, and informative of the product’s benefit. It should also protect the product, be convenient for distribution purposes, and help promote the product apart from competitors. Service support – a service element could consist of after-sales assistance or support helplines. It contributes to added value, and can differentiate from competitors.

There are five variables of service marketing:

Intangibility – services that cannot be touched or viewed (and therefore difficult to perceive)

Inseparability – services that cannot be separated from the provider or got from elsewhere (provided at the same time as the client is receiving it, like a consultation or online search)

Heterogeneity – services with a lack of sameness, or a standard service that varies with each delivery (services that involve people who have different needs, or adapted to suit separate scenarios)

Perishability – services that cannot be stored for later provision (such as nontransferable flight tickets or a cruise)

Ownership – service purchase that does not transfer ownership of the property (it is bought first, then produced and then consumed, like food in a restaurant)

Related posts:

1. The influences of new product development
2. How a product develops through its life-cycle
3. Why should your business have a list?

I have such a lot to learn for my first exam for my CIM Marketing course. The only way I can not only remember the facts, but to understand the true meaning means I have to blog about them. So here is a version of the Marketing Mix.

The Seven Ps are derived from the functions of the marketing audit. To the uninitiated this is meaningless, I know, so let’s put it in the context of a restaurant that serves fine food.

Product = the food. This restaurant is well known for its exceptionally good food, and people come from far and wide to sample it. The restaurant knows it can sell its food to many customers, and will strive to maintain the quality, plus providing new and seasonal variants.

Place = the restaurant. Obviously this is the establishment where the food can be sourced, served and eaten. It will contain enough seating during busy periods, and will be where the distributors will deliver the raw ingredients and other commodities that go towards what the restaurant provides.

Price = how much it costs. The reputation of this food and the restaurant commands high prices. This is calculated to be the correct value for the food that is served, and satisfies the kind of clientele that is willing to pay for it.

Promotion = the incentives that market the restaurant and its food. The restaurant may be full at the weekends, but special mid-week or early bird offers will provide more covers to make the business viable. The restaurant’s reputation will also ensure word-of-mouth referral and other awareness methods.

These 4 Ps are known as the physical elements of the marketing mix, because they are tangible and can be touched; even promotion is apparent through leaflets and coupons advertising their special offers, and price is the monetary value that is exchanged.

People = the waiters, chefs and cleaners. These are the people who are involved in the marketing process, such as serving the customers, cooking the food and cleaning up afterwards, as without them the restaurant would fail to exist. In this case it does not represent the customers.

Processes = the methods of providing the service. How the restaurant is managed is paramount to a good business, as unless everyone involved knows what their functions are to ensure the smooth running of the establishment, none of the customers will receive good service, or the excellent food they expect, or a clean and respectable place to eat it in.

Physical Evidence = the ambiance and décor of the restaurant. The environment of a business, especially which provides a good experience for its customers, is vital to ensure consistency, continuity and good practice. This includes the staff’s uniforms, table linen, plates and cutlery, restaurant’s decoration and style of the menus, all relevant to continue the reputation of the establishment.

These last 3 Ps are the service elements of the marketing mix, because they represent the intangible side of the business. Service cannot be termed as a touchable commodity, it is what makes or breaks a business, establishes its reputation, style and value, and when performed correctly can ensure continued and escalated success that can be developed to a higher realm.

Related posts:

1. Combine price and quality to attract customers
2. Is marketing planning like a journey?
3. Marketing planning process

I’ve had some very interesting Twitter discussions about how Virgin advertise their ‘fibre-optics’ broadband. At least four people told me that Virgin were doing false advertising – they do not bring fibre-optics to your home. There are fibre-optics laid in our street (we remember it well; the first summer after we moved in in 1995, there was a drought and the poor rowan tree outside our house died because its roots had been severely damaged by the fibre-optics installers. It was never replaced by the Council), but these are not continued onto our houses.

The evidence is proven because the Virgin repairman had to go out to a box in the road to reconnect our broadband again and all those sloppily laid wires around our house does suggest that it was, what @cyberdoyle suggests: “its fibre to the cabinet. #fttc – it should mean fibre to the community, but it doesn’t, it means copper/coax to the home” and “coax cable? Cable is #fttc, only fibre to the home is real fibre connection”, and @neilfairbrother says: “In my view yes. If they are not delivering fibre optic to your door then it’s not fibre optic broadband“, whereas @AdrianHiggs proudly announces: “We’re on Virgin Media. IIRC we have fibre optic to the edge of our property, maybe even to the wall box”.

Anyhow, back to what’s happening here. I discussed the above with my husband last night, and he said he wasn’t bothered as long as our megs went up. We tested them and they had increased from a maximum of 1mg to 9.98mgs – a big improvement, no wonder my emails were downloading so fast! This was one of the main reasons why we signed up to use fibre-optics, the telephone installers in the past who laid the aluminum wires had, of course, no idea that their economies would cause so much trouble with future technology.

Then, to add insult to injury, in this morning’s post, we received Virgin’s ‘Welcome Pack’ brochure about what to do before converting to fibre-optics. The date on the letter was 12 days ago, and had arrived 6 days after the event. With no blame on the Post Office, I suggest it wasn’t even posted until after our installation had taken place – “Oh, we haven’t sent them this, perhaps we should”! In it we found more evidence that Virgin had misunderstood our reasons for converting to fibre-optics: it spoke about “our new home” and getting new telephone numbers and email accounts. This would have raised alarm bells and we would have had time to confirm Virgin’s intentions before installation had taken place, thus preventing this fiasco of disruption of our telephone number and destruction of our old virgin email accounts.

Let’s see what else Virgin will dredge up out of the mire to inconvenience us further…

Related posts:

1. Virgin’s lack of customer service continues
2. Virgin and this customer was not satisfied

The story regarding my Virgin fibre-optics installation has not been concluded. In fact it has got worse!

We had our broadband working well during the weekend, but on Monday it packed up altogether. Surely it couldn’t be a result of my first blog on the subject – Virgin couldn’t be that small minded (hopefully) and anyhow, this blog doesn’t have that large a readership to make a difference in the blogosphere…

So, the Virgin chaps came back again yesterday (my husband took another day off to stay in for them). The good news is that after tracing the fault back to the connection box in the street, which was apparently overstuffed with too many wires, our broadband connection was installed.

The bad news is that Virgin failed to understand that we wanted to transfer from our existing Virgin broadband connection to use a fibre-optics account – it seems they are only geared up to people wanting to start a Virgin account from new, or to upgrade an existing fibre-optics account. Before we signed up we were told we could keep our old telephone number and keep our existing email addresses, our criteria for agreeing to undergo the transaction.

But what happened is not only has our existing telephone number not been reconnected (this won’t be resolved for another week!), our existing Virgin emails accounts have been cancelled. All our virgin.net accounts were destroyed! The annoying thing is that if we had undergone this operation only a couple of months before, we could have had our old accounts reinstated, but no, only the new virginmedia.com accounts can be used now.

So we have had all the hassle of creating new email accounts, have battled to get them accepted by our various email accounts on our computers, and now have the daunting task of changing all the sign up criteria on all the online activities we have that used the old email address. The trouble is, I have no idea how many use this information – I’ve had my virgin.net account since I can remember, and have used it willy-nilly as my default email all over the net!

Basically we were totally misinformed about being able to keep our existing contact details. We have been thoroughly inconvenienced from the very beginning with the shoddy installation procedure, and now we haven’t been able to continue our old functions we were promised would happen. No telephone number, and no continued email accounts! Certainly not what I would call customer service…

Related posts:

1. Virgin disorganisation evidence continues
2. Virgin and this customer was not satisfied
3. Do you have just one kind of customer?

We got fibre-optic broadband from Virgin installed on Friday. A necessary requisite, since the ordinary telephone system used in West Reading consists of aluminum wires rather than the more effective (and expensive) copper versions that enable a more efficient broadband service. We now have broadband speeds up to 20meg, compared to the dismal dribble we were experiencing before.

But why am I not satisfied? I should be, now that my internet works at lightening speeds, my emails download in a trice, we can buy or transfer our finance on the web without the possibility of a crash during the transaction, and many more benefits – but no, I’m incensed by the fibre-optics installers who came to our house to fit everything.

I wasn’t here (being a work) so I left my husband in charge (he had the day off). First of all there was the misinformation that we had moved house and needed a new number. This should have been clarified by the sales rep before the visit was arranged, rather than mere assumption. We now have two numbers while the situation is resolved, and I have to run upstairs to answer the old phone, meanwhile the answerphone is ineffectual.

Then we wanted the broadband connection to go to the office upstairs. Grumbles from the installers about this, as it required them to divert the wires around the house. (We had done the same thing internally with our old BT wires, apparently they couldn’t undertake the same route.) The result was a sloppy system of wires that are totally unprotected from the weather and inefficiently fixed to the external wall with inadequate hooks, meanwhile they managed to snap in half a climbing hydrangea I was cultivating on our north wall. (Not pleased.)

Then they had to drill a hole in the wall into our office to bring the broadband wires inside. With no consultation as to where the best place was, they (so it seemed) took pot luck with where the office was, and now we have a connection in the middle of our wall, rather than tidily in the corner. If they wanted to move the desk that was ‘in the way’, they only had to ask my husband to do it. The result was as sloppy as the wires outside.

Why is it that a company like Virgin, which is a multi-international organisation, cannot organise a simple fibre-optic system installation into someone’s home without making a complete pig’s ear of the situation. Customer satisfaction there is not. The workmen should be aware of different scenarios, they should ask beforehand if the location of their masonry work was satisfactory, applicable or practical, they should be better equipped to train wires around a house (or better still inside the house), and they should not leave their ladders behind when they leave!

Related posts:

1. Virgin disorganisation evidence continues
2. Virgin’s lack of customer service continues
3. Do you have just one kind of customer?

I’ve gone back to school again. Getting a qualification in the subject I work in seemed imperative if I am to do justice to my boss’s clients, so I’ve signed up to do the Chartered Institute of Marketing (CIM)’s Professional Certificate of Marketing at Bracknell and Wokingham College.

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The Americans and the Scots seem to have got their summer holidays right.  The former break up in June for two months, the latter break up at the beginning of July to return in the middle of August.  Even the Australians follow the same pattern (end of December until beginning of February – work it out.) This means time off from school is concentrated at the best time of the year: more sunshine, longer days, less rainfall…

And what do the Brits do? Children suffer at school when the days are long, the weather is good and the temperature is high.  And as soon as term’s ended these poor kids are turfed out to holiday in an environment of continuous cloud, heavy rain, shorter days, cool mornings and evenings, nights too cold to go camping in – just at a time when the year is turning back into autumn. Why is this?

I know it’s a throwback from during WWII when everyone, children included, were needed to help bring in the harvest. This busy time of year was usually a race against time and the weather to bring in the results of the growing season, especially when the harvest machinery was pretty basic, inefficient and required as much hands-on as could be found.

But today it is different. There are huge combine harvesters that do the job much more efficiently. Also, fields are sown earlier to spread the harvest more evenly throughout the growing season.

And the weather is changing. This is the third August we have had with lousy weather. Gone are the sultry days of the 1970s when August ‘scorched’ in the high 70s, or even the 1980s in the low 80s. Say hello to our highest temperatures closer to the solstice, lowering as the sun dips towards the equinox. The world is changing, but not the school holidays.

Isn’t it time that the educational powers that be woke up to the 21^st century and changed the school year to reflect the weather patterns of our new millennium?

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I heard on the radio a headline from an Edwardian newspaper, and it made me laugh. It was so complicated, academic and theoretical. That was a time when things were slow, ponderous and laborious, people had time to stop, think, read, measure up an argument, consider a concept and cope with long-winded titles designed to explore an idea, present a scenario, put forward a point, all carefully constructed within a by-gone language and mind-set.

And today’s world is poles apart; we are forever rushing about, ideas are caught, processed and discarded, information slips through our fingers in lightening speed, responses are immediate, poignant and focused, trends and news come and go in a twinkling of an eye, the media where these concepts are placed, produced, published and processed changes rapidly, archives fill up fast with old stuff maturing at an alarming pace, the internet and social media grows incredibly fast at such a rate that would be inconceivable to the Edwardians.

It’s amazing that in just 100 years mankind can evolve into something so totally different.

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