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COURSE WORK
MARKETING MANAGEMENT
MB0030
Question No Marks
NAME : KASEREGENYI PAUL AHURA 1
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REG NO : 540910337
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COURSE : MBA
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SEMESTER : 2 7
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BATCH : EVENING 9
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Traditionally, marketing analysis was structured into three areas: Customer analysis,
Company analysis, and Competitor analysis (so-called "3Cs" analysis). More recently, it
has become fashionable in some marketing circles to divide these further into certain five
"Cs": Customer analysis, Company analysis, Collaborator analysis, Competitor analysis,
and analysis of the industry Context.
In company analysis, marketers focus on understanding the company's cost structure and
cost position relative to competitors, as well as working to identify a firm's core
competencies and other competitively distinct company resources. Marketing managers
may also work with the accounting department to analyse the profits the firm is
generating from various product lines and customer accounts. The company may also
conduct periodic brand audits to assess the strength of its brands and sources of brand
equity.
The firm's collaborators may also be profiled, which may include various suppliers,
distributors and other channel partners, joint venture partners, and others. An analysis of
complementary products may also be performed if such products exist.
Marketing management employs various tools from economics and competitive strategy
to analyze the industry context in which the firm operates. These include Porter's five
forces, analysis of strategic groups of competitors, value chain analysis and others.
Depending on the industry, the regulatory context may also be important to examine in
detail.
In Competitor analysis, marketers build detailed profiles of each competitor in the
market, focusing especially on their relative competitive strengths and weaknesses using
SWOT analysis. Marketing managers will examine each competitor's cost structure,
sources of profits, resources and competencies, competitive positioning and product
differentiation, degree of vertical integration, historical responses to industry
developments, and other factors.
Marketing management often finds it necessary to invest in research to collect the data
required to perform accurate marketing analysis. As such, they often conduct market
research (alternately marketing research) to obtain this information. Marketers employ a
variety of techniques to conduct market research, but some of the more common include:
• Qualitative marketing research, such as focus groups
• Quantitative marketing research, such as statistical surveys
• Experimental techniques such as test markets
• Observational techniques such as ethnographic (on-site) observation
Marketing managers may also design and oversee various environmental scanning and
competitive intelligence processes to help identify trends and inform the company's
marketing analysis.
In a downturn, marketing becomes even more important to the company's bottom line,
making a profit. A marketing plan is key to establishing the dimensions of your market,
where you fit according to your product and identifying where a company should focus
its marketing budget to achieve the best overall results.
In a downturn, marketing helps to identify new markets, target new customers and
determine the value of the product. If the product that is currently in production does not
have a substantial customer base of support, if sales are slipping and competition is
securing your former market share. Marketing helps to identify the need for a product
revitalization or reinvention.
Q2.Explain the relevance of BCG matrix and GE matrix with examples
This model is used to identify company’s SBU’s position in the market. This model
identifies the SBU’s strengths weaknesses, opportunities and threats on the basis of
market growth rate and relative market share.
This model is also known as growth share matrix. The origin of the Boston Matrix lies
with the Boston Consulting Group in the early 1970s. It was devised as a clear and simple
method for helping corporations decide which parts of their business they should allocate
their available cash to. Today, this is as important as ever because of the limited
availability of credit.
However, the Boston Matrix is also a good tool for thinking about where to apply other
finite resources: people, time and equipment. Market share is the percentage of the total
market that is being serviced by your company, measured either in revenue terms or unit
volume terms. The higher your market share, the higher proportion of the market you
control. The Boston Matrix assumes that if you enjoy a high market share you will
normally be making money (this assumption is based on the idea that you will have been
in the market long enough to have learned how to be profitable, and will be enjoying
scale economies that give you an advantage).
The question it asks is, "Should you be investing your resources into that product line just
because it is making you money?" The answer is, "not necessarily." This is where market
growth comes into play. Market growth is used as a measure of a market's attractiveness.
Markets experiencing high growth are ones where the total market is expanding, which
should provide the opportunity for businesses to make more money, even if their market
share remains stable.
By contrast, competition in low growth markets is often bitter, and while you might have
high market share now, what will the situation look like in a few months or a few years?
This makes low growth markets less attractive
Definition of axis;
Market Growth rate: the rate at which market is growing.
Relative Market Share: market share of the SBU dived by the market share of the
largest competitor.
Model Components:
Dogs: Low Market Share / Low Market Growth. In these areas, SBU’s market presence
is weak, so it's going to take a lot of hard work to get noticed. Also, you won't enjoy the
scale economies of the larger players, so it's going to be difficult to make a profit.
Cash Cows: High Market Share / Low Market Growth Here, SBU’s are well-established,
so it's easy to get attention and exploit new opportunities. However it's only worth
expending a certain amount of effort, because the market isn't growing and your
opportunities are limited. Here we can say cash cow can be milked.
Stars: High Market Share / High Market Growth Here SBU’s are well-established, and
growth is exciting! These are fantastic opportunities, and you should work hard to realize
them.
Question Marks (Problem Child): Low Market Share / High Market Growth These are
the opportunities no one knows what to do with. They aren't generating much revenue
right now because you don't have a large market share. But, they are in high growth
markets so the potential to make money is there. Here there are two choices, either to
invest heavily to bring it to star position or divest or liquidate from that position.
Question Marks might become Stars and eventual Cash Cows, but they could just as
easily absorb effort with little return. These opportunities need serious thought as to
whether increased investment is warranted.
Key Points
The Boston Matrix is an effective tool for quickly assessing the options open to you, both
on a corporate and personal basis. With its easily understood classification into "Dogs",
"Cash Cows", "Question Marks" and "Stars", it helps you quickly and simply screen the
opportunities open to you, and helps you think about how you can make the most of
them.
Limitations:
As any other marketing theories in the field, the BCG matrix model is not perfect either.
There are according problems of this theory. Some limitations concerning the particular
use of BCG include:
• Only two dimensions – market share and product or service growth rate, are
employed. These are the first limitations
• How to define market and how to get data about market share are also problems.
• High market shares don’t always necessarily lead to profit at all times. It is not the
only success factor.
• Low share or niche businesses can be profitable too, which means in the real
world some Dogs can be more profitable than cash Cows.
• The model cannot reflect the growth rates of the general market and market
growth is not the only indicator for market attractiveness.
• The model also neglects the effects of synergy between different business units.
High
Medium
Low
The GE / McKinsey matrix is similar to the BCG growth-share matrix in that it maps
strategic business units on a grid of the industry and the SBU's position in the industry.
The GE matrix however, attempts to improve upon the BCG matrix in the following two
ways:
Industry attractiveness and business unit strength are calculated by first identifying
criteria for each, determining the value of each parameter in the criteria, and multiplying
that value by a weighting factor. The result is a quantitative measure of industry
attractiveness and the business unit's relative performance in that industry
Industry Attractiveness
The vertical axis of the GE / McKinsey matrix is industry attractiveness, which is
determined by factors such as the following:
• Market growth rate
• Market size
• Demand variability
• Industry profitability
• Industry rivalry
• Global opportunities
• Macro environmental factors (PEST)
Business Unit Strength
The horizontal axis of the GE / McKinsey matrix is the strength of the business unit.
Some factors that can be used to determine business unit strength include:
• Market share
• Growth in market share
• Brand equity
• Distribution channel access
• Production capacity
• Profit margins relative to competitors
The business unit strength index can be calculated by multiplying the estimated value of
each factor by the factor's weighting, as done for industry attractiveness.
The shading of the above circle indicates a 38% market share for the strategic business
unit. The arrow in the upward left direction indicates that the business unit is projected to
gain strength relative to competitors, and that the business unit is in an industry that is
projected to become more attractive. The tip of the arrow indicates the future position of
the center point of the circle.
Strategic Implications
Resource allocation recommendations can be made to grow, hold, or harvest a strategic
business unit based on its position on the matrix as follows:
There are strategy variations within these three groups. For example, within the harvest
group the firm would be inclined to quickly divest itself of a weak business in an
unattractive industry, whereas it might perform a phased harvest of an average business
unit in the same industry.
While the GE business screen represents an improvement over the simpler BCG growth-
share matrix, it still presents a somewhat limited view by not considering interactions
among the business units and by neglecting to address the core competencies leading to
value creation. Rather than serving as the primary tool for resource allocation, portfolio
matrices are better suited to displaying a quick synopsis of the strategic business units.
Q3. What to do mean by MIS? Explain its benefits, types and components?
An 'MIS' is a planned system of the collecting, processing, storing and disseminating data
in the form of information needed to carry out the functions of management. In a way it is
a documented report of the activities that were planned and executed. According to Philip
Kotler "A marketing information system consists of people, equipment, and procedures to
gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to
marketing decision makers."
The terms MIS and information system are often confused. Information systems include
systems that are not intended for decision making. The area of study called MIS is
sometimes referred to, in a restrictive sense, as information technology management.
That area of study should not be confused with computer science. IT service management
is a practitioner-focused discipline. MIS has also some differences with Enterprise
Resource Planning (ERP) as ERP incorporates elements that are not necessarily focused
on decision support.
Any successful MIS must support a business’s Five Year Plan or its equivalent. It must
provide for reports based up performance analysis in areas critical to that plan, with
feedback loops that allow for titivation of every aspect of the business, including
recruitment and training regimens. In effect, MIS must not only indicate how things are
going, but why they are not going as well as planned where that is the case. These reports
would include performance relative to cost centers and projects that drive profit or loss,
and do so in such a way that indentifies individual accountability, and in virtual real-time.
Benefits
Definition: Management Information Systems (MIS) is the term given to the discipline
focused on the integration of computer systems with the aims and objectives on an
organization. It does the following function.
- sub serves managerial function
- collects stores , evaluates information systematically and routinely
- supports planning and control decisions
- Includes files , hardware , software , software and operations research models
It Facilitates planning
In Minimizes information overload
MIS Encourages Decentralization
It brings Co ordination
It makes control easier
MIS assembles, process , stores , Retrieves , evaluates and Disseminates the information
Types
Management information systems are those systems that allow managers to make
decisions for the successful operation of businesses. Management information systems
consist of computer resources, people, and procedures used in the modern business
enterprise. The term MIS stands for management information systems. MIS also refers to
the organization that develops and maintains most or all of the computer systems in the
enterprise so that managers can make decisions. The goal of the MIS organization is to
deliver information systems to the various levels of corporate managers. MIS
professionals create and support the computer system throughout the company. Trained
and educated to work with corporate computer systems, these professionals are
responsible in some way for nearly all of the computers, from the largest mainframe to
the desktop and portable PCs.
Components
Components of MIS:-
1) Marketing Research System (MRS)
2) Marketing Intelligence System (MIS)
3) Internal Record System (IRS)
4) Decision Support System (DSS)
Q5. Explain the consumer buying decision process with respect to new product.
Give example?
This model is important for anyone making marketing decisions. It forces the marketer to
consider the whole buying process rather than just the purchase decision (when it may be
too late for a business to influence the choice!)
The model implies that customers pass through all stages in every purchase. However, in
more routine purchases, customers often skip or reverse some of the stages.
For example, a student buying a favourite hamburger would recognise the need (hunger)
and go right to the purchase decision, skipping information search and evaluation.
However, the model is very useful when it comes to understanding any purchase that
requires some thought and deliberation.
The buying process starts with need recognition. At this stage, the buyer recognises a
problem or need (e.g. I am hungry, we need a new sofa, I have a headache) or responds to
a marketing stimulus (e.g. you pass Starbucks and are attracted by the aroma of coffee
and chocolate muffins).
An “aroused” customer then needs to decide how much information (if any) is required.
If the need is strong and there is a product or service that meets the need close to hand,
then a purchase decision is likely to be made there and then. If not, then the process of
information search begins.
A customer can obtain information from several sources:
The usefulness and influence of these sources of information will vary by product and by
customer. Research suggests that customers’ value and respect personal sources more
than commercial sources (the influence of “word of mouth”). The challenge for the
marketing team is to identify which information sources are most influential in their
target markets.
In the evaluation stage, the customer must choose between the alternative brands,
products and services.
Low involvement purchases (e.g. buying a soft drink, choosing some breakfast cereals
in the supermarket) have very simple evaluation processes.
The black box model shows the interaction of stimuli, consumer characteristics, decision
process and consumer responses.[1] It can be distinguished between interpersonal stimuli
(between people) or intrapersonal stimuli (within people). The black box model is related
to the black box theory of behaviourism, where the focus is not set on the processes
inside a consumer, but the relation between the stimuli and the response of the consumer.
The marketing stimuli are planned and processed by the companies, whereas the
environmental stimuli are given by social factors, based on the economical, political and
cultural circumstances of a society. The buyers’ black box contains the buyer
characteristics and the decision process, which determines the buyers’ response.
The black box model considers the buyers response as a result of a conscious, rational
decision process, in which it is assumed that the buyer has recognized the problem.
However, in reality many decisions are not made in awareness of a determined problem
by the consumer.
Information search
Once the consumer has recognised a problem, they search for information on products
and services that can solve that problem. Belch and Belch (2007) explain that consumers
undertake both an internal (memory) and an external search.
The implications of this process help develop an effective promotional strategy, and
select which sources of information are more effective for the brand.
Information evaluation
At this time the consumer compares the brands and products that are in their evoked set.
How can the marketing organization increase the likelihood that their brand is part of the
consumer's evoked (consideration) set? Consumers evaluate alternatives in terms of the
functional and psychological benefits that they offer. The marketing organization needs
to understand what benefits consumers are seeking and therefore which attributes are
most important in terms of making a decision.
Purchase decision
Once the alternatives have been evaluated, the consumer is ready to make a purchase
decision. Sometimes purchase intention does not result in an actual purchase. The
marketing organization must facilitate the consumer to act on their purchase intention.
The organisation can use variety of techniques to achieve this. The provision of credit or
payment terms may encourage purchase, or a sales promotion such as the opportunity to
receive a premium or enter a competition may provide an incentive to buy now. The
relevant internal psychological process that is associated with purchase decision is
integration. Once the integration is achieved, the organisation can influence the purchase
decisions much more easily.
Internal influences
Consumer behaviour is influenced by: demographics, psychographics (lifestyle),
personality, motivation, knowledge, attitudes, beliefs, and feelings. Consumer behaviour
concern with consumer need consumer actions in the direction of satisfying needs leads
to his behaviour of every individual depend on thinking
External influences
Consumer behaviour is influenced by: culture, sub-culture, locality, royalty, ethnicity,
family, social class, reference groups, lifestyle, and market mix factors.