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The 5 S Model:
Vijay Sharma 1
The author can be reached by :- vijaysharma07@gmail.com
Relationship
& Networks Markets Marketers & Prospects
Marketing is the social and managerial process by which individuals and groups needs
and wants are identified and respective product, services or idea is exchanged for a value
to satisfy the needs/demands of the targeted groups/ individual
Marketing Management:
Identifying Marketing Opportunities
Analyzing Marketing Opportunities
Planning Marketing Programs
Managing Marketing Efforts
Value chain:
Firm’s Infrastructure
Technological Development
Support
Activities Human Resource Management
Margins
Procurement ( Purchase of input for primary activities )
Primary Activities
External
Environment
,
Goal Strategy Program
Business Mission Implementation
Formulati Formulation Formulation
on
Internal
Environment
Feedback &
Control
Vijay Sharma 2
The author can be reached by :- vijaysharna@aol.in
Strategic Marketing Process :
Segmentation
o Identifying segmentation variables & segment the market
o Develop profile of resulting segments
Targeting
o Evaluate the attractiveness of the each segment profile
o Select the target segment
Positioning
o Identify possible positioning planks for each target segment
o Select , develop and communicate the chosen positioning plank
o Geographic
Region City / Metro Density (Urban/Rural/ Semi Urban) Climate
o Demographic
Age Gender Family Size Income Class Education
Occupation Social Class Nationality Religion/Race
o Psychographics
Life Style Personality
o Behavioral
Occasion Benefits User Status Usage Rate Loyalty Status
Buyer’ Readiness Stage Attitude towards product
Marketing Mix:
Vijay Sharma 3
The author can be reached by :- vijaysharna@aol.in
Marketing Research Process
Vijay Sharma 4
The author can be reached by :- vijaysharna@aol.in
Quantitative Tools used in Marketing Decision Support System
- Statistical Tools
o Factor Analysis: Utilized to determine few underlying dimensions of large
set of inter-correlated variables.
o Conjoint Analysis: Respondents are asked to rank the various factors as per
their preference, hence utility function & importance of
each attributes are find out.
o Cluster Analysis: Separating objects into specified mutually exclusive
groups such that these are relatively homogeneous.
o Discriminant Analysis: Analysis is done by categorizing a person / object in
two or more categories.
o Multiple Regression: Determines the changing value of dependent value
over the independent values
- Models
o Markov Process Model: Determines the probability of moving from current
state to any future state.
o Queuing Model: Implies to find out the waiting time and length of queue
- Optimization Techniques
o Differential Calculus: Technique to find out maximum and minimum value
associated with the functions.
o Decision Theory: utilized to determine the course of action, which produces
the maximum expected values.
o Game Theory: This allows to determine the course of action which will
minimize the maker’s maximum losses in th efface of the
uncertain competitive environment
o Mathematical Programming: This technique is utilize to find out the values
which would optimize some objective function that is
subjected to constraints.
Vijay Sharma 5
The author can be reached by :- vijaysharna@aol.in
Demand Measurement:
(6x5x3 Matrix) World
India
Region
Territory
Customer Space Level
All Sales
Industry Sales
Company Sales Product Level
Product Line Sales
Product Form Sales
Product Item Sales
Short Run Medium Run Long Run
Time Level
Market Demand : Total volume demanded by the target customer group in a defined geographic area, with
in defined time frame, in specific environment & under a defined marketing program.
Market potential: Limit approached by the market demand, if total industry’s marketing expenditure is
made infinity.
Company Demand: Company’s estimated share in the market demand. Qc = Sc X Q
Total Market Potential: Maximum amount of sales which might be available to all the firms in the
Industry during a given period, defined marketing environment & marketing programs.
Q = npq , where n= total number of buyers, P= price of an average unit, q= avg. quantity purchased
Buying Behaviour
An Expansion Plan:
Individual User Commercial/Industrial Educational/Institutional
Personal Computers
Hardware
software
Vijay Sharma 6
The author can be reached by :- vijaysharna@aol.in
Pricing Strategies:
Price
High Medium Low
High
Premium High-Value Super-Value
Product Quality Medium Over Pricing Medium-Value Good-Value
Geographic Pricing: Discrimination is done on the basis of difference in location viz. city, state, country.
Promotional Pricing
o Loss-Leader Pricing: Here superstores /super markets drop the price of well-known brands
o Special Event Pricing
o Cash Rebates
o Low Interest Financing
o Longer Payment Terms
o Warranties & Service Contracts
o Psychological Discounting: Putting the high priced tag on the item and then providing
rebates
Discriminatory Pricing:
o Customer Segment Pricing: Different customer groups are charged different prices
o Product Form Pricing: discriminate price on the basis of product form/version
o Image Pricing: Same product can be priced differently when packed/ presented differently
o Location Pricing: Discriminate on the basis of strategic locations of outlets, markets
o Time Pricing: Priced are varied on the basis of season, day or hour.
Product Mix Pricing
o Product Line Pricing; Pricing is done on the basis of product line viz- high line, low line etc
Like in Reebok- Prices are different for its product line
o Optional Feature Pricing: When an optional feature if offered along with the main product
Like in Cars- power steering, power windows, child lock etc.
o Captive Product Pricing: When the main product needs extra supply to use it viz. Camera,
needs film and Razors needs blades, Kodak has kept its camera at
low price and make money by selling films, the other camera
manufacturers, which doesn’t sell films has to keep the price high
for their cameras to make same overall profit.
o Product Bundling Pricing:
o Two-Part Pricing: As Telephone Bills are charged - Fix Fee + Usage Amount
o Byproduct Pricing: Some product viz. petroleum, meat products etc. gives byproducts,
hence such products whose byproducts have value for their
customer group has to be priced accordingly.
Vijay Sharma 7
The author can be reached by :- vijaysharna@aol.in
Discounts:
Cash Discounts
Quantity Discounts
Functional Discounts: granted by the manufacturer to the trade-channel members on
performing certain functions viz. selling, storing, record keeping etc.
Seasonal Discounts
Allowances:
- Trade in Allowances: Offered when an old item is exchanged for a new one viz. Automobiles
- Promotional Allowances: price reductions or payments are made to channel members to
participate in advertising and sales support practices.
Levels of Channels:
o Zero Level Channel - Direct marketing channel , no intermediary is there between customer & mfr.
o One Level Channel – One selling intermediary such as retailers are there..
o Two Level Channel – Two selling intermediaries viz. wholesaler and retailer
o Three Level Channel – When three intermediaries are there viz. wholesalers-jobbers-retailers
M
C
A Distributor U
N
S
U
T
F Representativ O
A
M
C
E
T Sales Office
Vijay Sharma 8 R
U
The author can beR reached by :- vijaysharna@aol.in
Determinants of Consumer’s Desired Service Output Level:
o Lot Size
o Waiting Queue
o Product Variety
o Service Backup
o Specialty Stores: Keep narrow product line with deep assortment within that line Like –
o Apparel Stores, Sports –goods Stores, Bookstores, Furniture Store
o Departmental Stores: Carry several product lines, each product line is managed as separate
department
o Supermarkets: Relatively large, high volume, low-cost, low margin, self-service outlets -
o Convenience Stores: Relatively small, located near the residential areas
o Discount Stores: Sell standard merchandise on low cost, low margin but on high volume
o Off-Price Retails: Buy at less then regular wholesale price & sell at price lower then retail.
Factory Outlets: Owned and operated by manufacturer, normally carries surplus,
discounted or irregular (seconds) goods.
Warehouse Clubs Sall limited section of branded products and providesd deep discounts to its
members who pay annual membership fees. (Co-operative, govt.-agencies)
o Superstores: Large spaced stores, cater to the customers routine food & non food needs
Combination Stores: Generally keeps two or more diversified product lines viz food and
pharmaceutical items.
Hypermarkets Large combine super market, discount & warehouse retailing practices.
Their product line goes beyond routine food/ non-food articals & include
furniture, appliances, clothing. Bulk display, self-service discount stores
o Catalog Showroom: Sell high mark-up. Fast moving, branded goods at discount price.
Customers order the goods from a catalog in showroom, then pick up
from the merchandize area of the store. (Otto-Burlington Stores)
Vijay Sharma 9
The author can be reached by :- vijaysharna@aol.in
Major Types Of Non-Retailing Options
- Direct Selling
o One-to-One Selling : Sales person contact a single potential customer
o One-to-Many Selling : Sales person goes to a home/host who invites their friends &
neighbors. Sales person demonstrate the product & take orders.
o Multi-level Marketing: A variant of direct selling, in which companies recruit independent
business people who act as distributors for their products. This
distributors then recruit & sell to sub-distributors, who eventually
recruit others to sell their product s to customers. A percentage
of sales realization is distributed to entire sales group, apart from
this he may earn from the direct selling of product to the customers.
(AMWAY’s Network Selling)
- Direct Marketing : Started as mail and catalog marketing, now includes telemarketing,
television, online marketing (e-shopping)
- Automatic Vending : Vending machines are installed to dispense impulse and highly
convenience items viz. cigarette, news paper, hot/cold beverages.
- Buying Service : Type of store-less retailing which caters specific clients usually
employees of large organisations, schools, hospitals, unions &
government agencies. The organisation’s members become the
member of such services and are entitled to buy from the selective
list of retailers/outlets which provides discount to members of
Buying Service. Here retailer will pay a fees to the Buying Service.
- Corporate Chain Stores : Two or more stores commonly owned and employ centrally buying
& merchandising practices for similar product lines. Viz
Warehouse, Weekenders, Mischief, Ebony etc.
- Voluntary Chains : Whole-seller sponsored group of retailers. Bulk buying and
common merchandising practices are undertaken by the chain
members.
- Retailer Cooperatives : Independent retailers set up a centrally buying organisation and
conduct joint promotional efforts
- Consumer Cooperatives : Retail firms owned by its consumers, The resident of a certain
locality contribute money to open up a retail counter which serve
them well and at lower cost.
- Franchise Organization : Contractual association between a Franchiser ( manufacturer,
whole-seller or service organisation) and Franchisee ( independent
business people who buy the right to own and operate on the behalf
of franchiser). Franchise organizations normally sells branded and
high equity articles with high franchiser’s goodwill.
- Merchandising Conglomerate: Corporation which combines several diversified retailing lines and
forms under central ownership. Such organisation do have certain
degree of integration in their distribution & management functions.
Vijay Sharma 10
The author can be reached by :- vijaysharna@aol.in
Direct Marketing Techniques:
- Face-To-Face Marketing
- Direct-Mail Marketing
o Fax mails
o e-mails
o Voice Mails
- Telemarketing
- Catalog Marketing
- Kiosk Marketing (Like Nescafe Coffee, ATM Banking, Condom Distribution, Fountain Pepsi)
- Online Channels
- Network Marketing
Public Relations
- Press Relations
- Product Publicity
- Corporate Communication
- Lobbying
- Counseling ( Advising the management about public issues and product status)
Vijay Sharma 11
The author can be reached by :- vijaysharna@aol.in
Management Concepts
Management is the process of designing and maintaining an environment in which individuals, working
together in groups, efficiently accomplish selected aims.
Functions of Managers :
- Planning
- Organizing Top Level
- Staffing Middle Level Management P O L C
- Leading First Level Supervisors (Lower Level Mgmt.)
- Controlling
P- Planning, O- Organizing, L- Leading, C- Controlling
Vijay Sharma 12
The author can be reached by :- vijaysharna@aol.in
Modern Management Thoughts
Frank & Lillian Gilbreth (1868-1924) : Frank emphasized on the efficiency aspect of the work while his
wife emphasized human aspect oif the work.
Financial
Commercial Security
Managers’
Activities
Technical Accounting
Managerial
- Planning
- Organizing
- Coordination
- Control
Vijay Sharma 13
The author can be reached by :- vijaysharna@aol.in
Henri Mintzberg: Mintzberg identifies ten managerial roles, which are as follows-
- Interpersonal Role
o The Figurehead Role
o The Leader Role
o The Liaison Role
- Informational Role
o The Recipient Role
o The Disseminator Role
o The Spokesperson Role
- Decision Role
o The Entrepreneurial Role
o The Disturbance-handler Role
o The Resource-allocator Role
o The Negotiator Role
Vijay Sharma 14
The author can be reached by :- vijaysharna@aol.in
Planning
Process of selecting mission and objectives and finalizing the actions to achieve them
Type of Plans
- Mission :
- Objectives : Important ends towards which organisation’s & individual activities are directed
- Goals :
- Strategies : Adoption of course of actions to achieve basic long term objectives
- Policies : Statements/understandings which guides manager’s thinking in decision making process
- Procedures : Plans which specifies the required method of handling activities in future
- Rules : Specific required actions & non-actions
- Programs : Arranged format of objectives, policies, strategies, procedures etc. supported with budget
- Budgets : Allocation of resources to achieve goals & objectives.
Steps in Planning :
Vijay Sharma 15
The author can be reached by :- vijaysharna@aol.in
Strategic Planning:
External
Top mgmt. Environmen External
orientation t threats /
opportunity
Inputs
People
Capital
Enterprise Forecast of
profile future Development Evaluation &
Mgr. Skill
environment of alternative Strategic
Tech. Skill
strategies Choice
Purpose &
Objectives Resource Audit Internal Medium Range Planning
Weakness / Short Range Planning
strengths
Implementation
Consistency testing & Control
Contingency Planning
Industry Analysis:
- Competition among companies
- Threat posed by the entries of new companies
Analysis the following five forces : - Possibility oof using substitute product or service
- Bargaining power of customer
- Bargaining power of supplier
Competitive Strategies:
a.) Over all cost leadership strategy
b.) Differentiation Strategy
c.) Focused Strategy : Low cost or Differentiation strategy for a specific group of customers, Product line,
geographical area or other aspect that become focal point of organisations’ efforts)
Decision Making:
- Premising (Anticipating the environment) Organizing:
- Identify Alternatives - Identify & classify the required activities
- Evaluate Alternatives - Grouping of those activities to attain objectives
Qualitative & Quantitative Analysis - Assignment of each group to a manager
Managerial Analysis - Delegation of authorities & responsibilities to mgr.
- Provision for coordination horizontally & vertically
Cost Effective Analysis
-
- Choosing an alternative best suited
Experience
Vijay Sharma 16
Experimentation
The author can be reached by :- vijaysharna@aol.in
Research & Analysis
Modern Decision Making Approaches
- Risk Analysis
- Decision Tree
- Preference Theory
- Decision Support System (DSS)
- Creativity & Innovation
Unconscious Scanning
Intuition Brain Storming
Insight Synthetics
Logical Formulation Out of box thinking
Vijay Sharma 17
The author can be reached by :- vijaysharna@aol.in
organisation Behaviour
Type A Personality :
- Are always moving, eating and walking rapidly
- Feel impatient with the rate at which most of the events take place
- Strive to think do two or more things at a time
- Can’t cope with leisure time
- Are obsessed with numbers, measuring their performance and success
Type B Personality
- Never suffers from the sense of time urgency
- Feel no need to display or discuss their achievements
- Play for fun or relaxation rather then prove their superiority
- Can relax without guilt
Theories of learning
- Classical Conditioning: Ivan Pavlov’s Experiments on dog, The theory infers about a kind of
conditioning in which an individual responds to some stimulus that would
not ordinarily produce such response.
- Operant Conditioning: This theory states that behavior is the function of its consequences &
people learn to get something they want or avoid some hing they don’t
want.
- Social Learning:
o Attention Process: People learn from model only after they recognize and pay attention to
critical factors
o Retention Process: Model’s influence depends on how well person remember his behavior
o Motor Reproduction Process : watching the behavior of model converted in doing
o Reinforcement Process
Halo Effect : Drawing a general impression about an individual on the basis of a single characteristics
Such as appearance, intelligence or sociability.
Values: Basic conviction that a specific mode of conduct or end-state of existence is personally or socially
preferable to an opposite or converse mode of conduct or end-state of existence.
Vijay Sharma 18
The author can be reached by :- vijaysharna@aol.in
Theories of Motivation
- Motivation-Hygiene Theory : The theory states that certain characteristics tends to be consistently
(Fredrick Hertz berg’s Model) related wit the job satisfaction and other to the job dissatisfaction.
According to Hertzberg Satisfaction and Dissatisfaction are not
always opposite to each other, but opposite to ‘satisfaction’ is ‘no
satisfaction’ and opposite to dissatisfaction is no dissatisfaction’
- ERG Model : Three groups of core needs Existence, Relatedness & Growth
- McClelland’s Theory of Need: This theory focus on the following three important needs which
determines the degree of motivation-
a. Achievements Need
b. Power Needs
c. Affiliation Need
Vijay Sharma 19
The author can be reached by :- vijaysharna@aol.in
- Cognitive Evaluation Theory :
Intrinsic Motivators Factors : Achievements, Responsibilities, Competence
Extrinsic Motivator Factors : High Pay , Promotion, Good Supervision,
Pleasant Working Conditions
This theory suggest that introduction of extrinsic reward, such as
high pay, for work effort that had been previously intrinsically
rewarded (viz. due to the pleasure associated with the content of the
work itself) would tend to decrease the overall level of motivation.
- Goal-Setting Theory: This theory advocates that difficult & challenging goal leads to
higher motivational & performance outcomes.
- Reinforcement Theory: Behavior is function of its consequences & any consequence when
resulted in favorable outcomes then it increase the probability that
the same behavior will be repeated.
- Equity Theory: Individuals compare their job inputs and outcomes with those of
others and then respond in a way to eliminate any inequality.
- Expectancy Theory: The strength of a tendency to act in a certain way depends upon
the strength of the expectation that the act will be followed by a
given outcome and that will be attractive enough for the individual
to reinforce his behavior.
The theory focus on following three relationships-
Effort-Performance Relationship
Performance –Reward Relationship
Reward-Personal Goals Relationship
Vijay Sharma 20
The author can be reached by :- vijaysharna@aol.in
Theories of Leadership
- Cognitive Resource Theory :A Leader obtains effective group performance by first making
effective plans, decisions and strategies and then communicating them
through directive behavior.
- Contingency Model (Fiedler’s Model):Effective group performance depends upon proper match
between a leader’s style of interacting with subordinates & degree to
which situation gives control and influence to the leader
i.) Leader Member Relationship ii.) Task Structure
iii) Position Power
- Leader Member Exchange Theory: LMX Theory- This theory states that because of pressures, the
leaders establish special relationship with a small group of their
subordinates, these individuals make up the in-groups, these are
trusted and are more likely to get privileges.
- Attribute ional Theory: This theory suggest that leadership is merely an attribution that
people makes about the individual, that means people characterized
leaders as having traits such as intelligence, outgoing personality,
strong verbal skill, aggressive, understanding, industriousness etc.
Vijay Sharma 21
The author can be reached by :- vijaysharna@aol.in
Power:
i.) Coercive power : Power based on fear
ii.) Reward Power : Derived by the ability to distribute awards, which others view as valuable.
iii.) Legitimate Power : Power resulted by the position held by the person in the hierarchy of org.
iv.) Expert Power : Influence based on special skills or knowledge
v.) Referent Power : Power derived from the possession of desirable resource or personal trait
Organisational Structure:
Work Specialisation
Departmentalization
Key factors to be consider Chain of control
Span of Control
Centralization & Decentralization
Formalization
Types of structures:
Simple Structure Bureaucratic Structure Team Structure
Matrix Structure Virtual Structure
Structure Technology
Change option in an organisation:
People Physical Setting
Levin’s Model:
Levin’s three step model represents the change process which take
place in an organisation under organizational development process.
Present State
Driving Forces
Time
Action Research:
Diagnosis
Analysis
Feedback
Action
Evaluation
Vijay Sharma 22
The author can be reached by :- vijaysharna@aol.in
Project Management
Feasibilities
Financial Feasibility: Cost of Project, Means of Finance, Estimated Sales/Production,
Cost of Production, WC, Profitability, Break-even Analysis,
Cost Structures
Technical Feasibility: IP& OP, Process, Technology, Plant location, Plant layout
Raw material availability, Work Schedules, Process Charts
Marketing Feasibility: Market Potential, Level of Competition, Entry Barriers, Customer
Demand and Expectations, Advt. Media, Distribution & logistics
Social Feasibility : Cost of rehabilitation, Pollution cost, Effect on Social Network etc.
Market Forecasting :
Moving Average Method Ft+1=S1+S2+S3+S4+….Sn/n Man
Trend Projection y=a+bx Money
Exponential Smoothing Method Ft+I=Ft+aet a=smoothening Parameter, et =Error Machine
Delphi Technique Material
Leading Indicator Method Methods
End User Method Projected O/p x Consumption Cofficient = Required quantity
Visual Curve Fitting Method
Past Sales Data
Experience
2.) Benefit Cost Ratio (BCR) : BCR=Present Value of Benefits /Initial Investments
If BCR >1 accept the proposal
3.) Internal Rate of Return (IRR): Here the factor ‘r’(Discounting Rate of Return) is found out which
make the NPV of the project equals to zero.
Vijay Sharma 24
The author can be reached by :- vijaysharna@aol.in
4.) Accounting Rate Return (ARR):
Since M/c A has early payback period (3Years) as compare to M/c B which has Payback period of 4Year, M/c A is preferable
over M/c B.
Vijay Sharma 25
The author can be reached by :- vijaysharna@aol.in
Means of Finances:
Share capital : Raised in form of Equity Capital and Preferential Capital, the equity capital generally
doesn’t carries fixed rate of dividends, while Preference Capital which is contributed
by the Preference Shareholders, carries fixed rate of dividends.
Term Loans : Provide by FI’s ,in form of Rupee term Loans and Foreign currency Term Loans
Debenture Capital : Raised in form of Non Convertible/Convertible, Partially Convertible Debentures
which carries fixed rate of interest and maturity period.
Deferred Payments: Credit facility passed over by the suppliers of raw material, machinery etc.
Incentive Sources : Support provided by government or its agencies in form of Seed capital assistance,
tax exemption
Miscellaneous Sources viz. Unsecured Loans, Public Deposits , Leasing and Hire & Purchase Schemes
Cost of Capital :
Vijay Sharma 26
The author can be reached by :- vijaysharna@aol.in
Break Even Analysis :
Fixed Cost
Break Even Point:
(In Units) Unit Selling Price – Unit Variable cost
Fixed Cost
BEP (In Rupee): x Expected Sales Realization in Year
Sales Realization –Variable cost
Fixed Cost
BEP (In Volume): x Expected Production in the Year
Sales Realization-Variable Cost
Example:
A= Sales Realization ( 180,000 Units @ Rs. 150/-) : 2,70,00,000/-
B= Variable Costs : 1,20,00,000/-
i.) Raw Material : 81,00,000/-
ii.) Consumable Stores : 20,00,000/-
iii.) Power fuel Water : 10,00,000/-
iv.) Selling Expenses : 9,00,000/-
Vijay Sharma 27
The author can be reached by :- vijaysharna@aol.in
Time Value of Money :
Example: Find Present Value of 1000 recievable after 20 year hence, k=8 %
PV= 1000 PVIF8,20 = 1000x..214=214/-
Present Value of an Annuity : Suppose we are getting 1000/- for coming 3 years, discounting rate is10%
Present Value can be described as : 1000(1+.10)-1 + 1000(1+.10)-2+ 1000(1+.10)-3 = 2,478.8/-
Where as 1000(1+.10)-1 is amount realized after the end of first year, similarly 1000(1+.10)-2 is the amount realized
after the end of second year and 1000(1+.10)-3 is the amount realized after the end of third year. The cumulative
sum will not be equal to 3000/- as it seems but it will be less then that, this is so because every year value of rupee
falls(depreciated) which is denoted by discounting factor (as in this case by 10%)
Example: The Present Value of 4 year annuity of Rs. 10,000/- discounted at 10% will be :
10,000x PVIFA10,4 = 10000x3.170 = 31,700
Change of demand of a commodity with respect to the change in its price, it depicts the responsiveness of
the demand to variation in the price.
Change of demand of a commodity with respect to the change in the income of the community, it depicts
the responsiveness of the demand to the variation in income.
Vijay Sharma 28
The author can be reached by :- vijaysharna@aol.in
MIS
Characteristics of MIS :
Management Directed Ease in utilizing the data/information
Management Oriented Distributed data processing
Integrated Heavy planning element
Database Information as resource
Subsystem concept
MIS Plan :
o Corporate Guidelines
o Objectives and Mission of Organisation
o Plans, Strategies, Policies, Programs & Procedures
o Resource Allocation (Man, M/c, Material, Money, Methods)
o Budgeting
Classification of Reports :
According to contents : i.) Comprehensive ii.) Summary iii.) Excerpt
According to time : i.) Status ii.) Historic iii.) Predictive
According to regularity : i.) Periodic ii.) Adhoc
Vijay Sharma 29
The author can be reached by :- vijaysharna@aol.in
Dimensions of information:
Business Dimension: Unstructured Inexact
External Future
Non-programmed
Vijay Sharma 30
The author can be reached by :- vijaysharna@aol.in
Business process re-engineering:
Customer Power
Information Power
6 Forces which have stimulated the Business : Global Investor Power
Power of Market Place
Power of Simplicity
Power of the Organisation
Changes in Attributes due to BPR :
BPR Plan
Develop the business vision and objectives of the process
Select the process to be redesign - Priority Approach
- Critical Success factor
Understand and measure the existing process - Data Flow Diagrams
- Entity Relationship (ERD)
- Structured System Analysis & Design SSAD
Redesign the process and develop the prototype - Process Maps
- Benchmarking
- Creativity & Out of Box thinking
Implement the redesigned process
Evaluate and Appraisal
Continuous Process Improvement
BPR Model :
Diagnostic Phase - Process Analysis - Process Selection - Process Design- Evaluation-Appraisal
BPR Rules :
Generalized are preferred over Specialist
Information can be shared
Simultaneous use of decentralization and centralization techniques
Things speaks about their where about
Decision making is part of job
Effective contact as compare to personal contact with buyer/supplier
Vijay Sharma 31
The author can be reached by :- vijaysharna@aol.in
Entrepreneurship:
Classification of Entrepreneur:
According to type of business : Trading, Industry, Agricultural, Retailing, Services
According to Technology desired : Technical, Non-technical, High/low Tech., Professional
According to Growth : Growth, Super Growth, Under Growth
According to Stage of development : First Generation (Innovative) , Classical, Modern
According to Area : Rural, Urban
According to Gender/Age : Men, Women , Young, Old, Middle Age
According to motivation : Pure (for personal satisfaction) , Induced, Motivated
Vijay Sharma 32
The author can be reached by :- vijaysharna@aol.in
Advertising
Advertisement Agencies
HTA ( J.W. Thomsons) Chetra Burnet
Lintas McCann Erickson
O&M (Ogilavy & Mather) Trikaya Grey
Mudra Maa Bozzel
FCB Ulca (Foot Cone & Belding) TBVA Anthem
Redifussion DY&R ( Dentsu Young & Rubicam) Clarion
RK Swamy-BBDO Contract
Percept Pentagon
Ambiance Enterprise Nexus
Everest
Facilitating Agencies
Implimientation Social & Legal Constraints
Vijay Sharma 33
The author can be reached by :- vijaysharna@aol.in
Action Oriented Communication: Hierarchy of effect of advertising -
Retail Advertising Brand Awareness
Cooperative advertising Brand Comprehension
Reminders Brand Image & Brand Personality
Point of Purchase Material Brand Attitude
In- Store Advertising Association of feeling with brand
Merchandising Environment Purchase Action
Vijay Sharma 34
The author can be reached by :- vijaysharna@aol.in
Message Strategies & Tactics
Message Strategies: This denotes the efforts put-in by the ad maker so that the advertisement can gain the
attention of the target audience
1.) Attention & Comprehension: Believability, Likability & Communicability
Brand Loyalty
Name Awareness Brand Equity
Perceived Quality
Brand Association
Proprietary Brand Assets
Brand Recall
Brand Awareness
Brand Recognition
Brand Knowledge
Attributes#
Type of Brand Association Benefits*
Brand Image Favorability of Brand Association Attitudes
Strength of Brand Association
Uniqueness of Brand Association
# Product Related & Non-Product Related Attributes
* Functional Benefits, Experiential Benefits, Symbolic Benefits
Brand Image
Market Growth Margins
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Massage Tactics
Physiological needs Feature of a Massage:
Safety need - Style (Form of ad.)
- Tone (Rational, emotional, +/-Ve
Human Needs : Social needs - Words
Esteem needs - Format (Size, Color, Illustration)
Self-actualization needs
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Copy Testing
- Order of Merit Test
- Paired Comparison Tests
Pre-Testing - Portfolio Test [Dummy ads+ Regular ads]
- Magazine Test
- Direct Questioning
- Sales Experiment Test
- Perceptual Mapping
- Physiological Measures: Eye camera, Pupillometrics, Psychogalvano Meter
- In-House Projector Test
- Live Telecast Test For Broadcast Media Ads.
- Theater Test
- Penetration Test:
a.) Recognition Test: N- Noted, RM- Read Most , SA- Sean Associated
b.) Mc-Grown’s Formula:
Post Tests Readers/Rupee= (Noted % )x( Mag’s Primary Readers)
Space Cost
c.) Gallop –Robinson Test: Respondents are queried regarding whether
they read a particular issue of magazine or not, if read then they are asked
certain questions regarding the advertising published in the issue, if
respondent succeed in satisfying the investigator ‘Proved Name
Registration’ PNR is allotted.
- Progress Test:
a.) Netapps Method : Ratio of Reader purchase & non-reader purchase
b.) Purchase Behaviour: Coupons, Trade Inquiries
c.) Sales Results Test
d.) Attitude Test
- Recall Test: Day After Recall Test (DAR)
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Media Strategies & Tactics
Media Strategies :
Setting Media Budgets : - Percentage of sales method
- All you can afford method
- Competitive Parity Method
- Objective & Task Method
Media Tactics:
Media Schedule: It specifies how budget should be spent, it generally includes the specifications of
following four type of media factors-
a.) Media Class : Type of media such as Electronic Media viz. Television, Radio and Print
Media viz. News Papers, Magazines, Billboards etc.
b.) Media Vehicle: This provides immediate environment to the ad, Like within the media
class television which program to be choose ( as News, Weather
Forecasting News, Movies, Serials etc.) and with in Print media which
type of magazine to be choose as Vogue, Time, Gladrags, India Today,
Business India etc.
c.) Media Option: This is detailed description of an advertisement and specifies the
characteristics viz. Size (Full Page, Half Page), Length ( 15Sec., 30
Sec., 60Sec.) , Color (Black & White or Four Color) or Location
(inside Front Cover, Back Page, or Interior Location)
d.) Scheduling & Timing: This specifies how media options would be scheduled over the
time viz Continuous, Pulsing
Total GRP for a 3 showings in a time slot with 12 Rating =36 GRP
commercial which 4 showings in a time slot with 4 Rating = 16 GRP
run 17 time in a week 10 showings in a time slot with 9 Rating = 90 GRP
Total GRP for week = 142 GRP
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Reach: It refers to number of people/households, which will be exposed to an advertising schedule at
least once over a specified period of time viz a month. ( the duplication of exposure of ad will
be counted one like if a house hold is able to see an ad 17 times in a specified time then also it
will be counted as one house hold) in other words we can say reach of an ad determines the
number of households which were able to see a commercial at least once in a specified period
of time.
Frequency: It refers to the number of times some one sees an ad within a specified period of time i.e.
how much time a house hold or a person is exposed to a advertising schedule.
Concentrated
Continuous
Intermittent
Media Plan:
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Sales & Distribution
Advertising
Price
Distribution Influence
Packaging Sales
Product Features
Competition
Consumer Taste
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Market planning :
Pricing: Ex-factory price Distribution: Packaging
Taxes & Duties Transportation Arrangement
Trade Margins Channel of Distribution
Discounts Role of Distributors, Wholesaler
Final Price Role of retailers
Sales Promotion:
Consumer Promotion Dealer Promotion
Symbols Dealers Loaders:
Demonstration & Hand on experience - Merchandise deal
Coupons - Price deals
Samples - Gifts & Travels
Price Packs Dealers Coupons
Money Refund Offers POP Promotion:
Premiums & Gifts - Dealers Sales Contests
Travels - Dealer Stock Display Contest
Sweep Stakes Exhibitions
Subsidized Financing Publicity
Public Relations
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Sales Compensation Methods: - Salaried holidays /Leaves
- Straight Salary - Education / Medical/ Insurance
- Straight Commission + Bonus & Fringe Benefits - Finance
- Automobile & Accommodation
- Combination - Club Memberships/ Entertainment
- Golden Handshake
- Retirement Plan
Job Analysis:
Job Specification
Job Analysis
Sales Training:
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Sales Budget: Mechanism of control
Instrument of planning
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International Business Management
EPRG Model
Ethnocentric
Polycentric
Regiocentric
Geocentric
Methods of Entering into Foreign Market:
- Indirect Export ( Though export agencies or export houses)
- Direct Export
- Licensing
- Joint Venture
- Forien Direct Investment
Marketing Research
Marketing Research
Promotion Distribution
- Copy Design - Location
- Media selection - Channels
- Compensation - Policies
- Control
Le Plan & Cadre : France’s government planning on national scale, which helps to coordinate the plans of
individual industries and companies.
Along with this, government has identified few elite universities which supplies
cadre ‘managerial elite’
Authority & Codetermination: German managerial style in which labour members participate in the
managerial and supervisory practices. The labour is granted membership in the
Supervisory Boards and Executive Committees of certain large corporations.
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Inhwa: Korean style of management which emphasis on harmony, the organisations are hierarchical with
family members on the key positions. ( Autocratic/ Paternalistic Leadership style)
Theory Z: Japanese believe on giving lifetime employment and consensus decision making.
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Product Brand Management
Potential Product
Augmented Product
Expected Product
Basic Product
Core Benefits
Product Classification:
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Product Mix Decision:
Width of Product Mix: No. of different product lines viz. for P&G –5
Length of Product Mix : Total number of items in the product mix, ForP&G-25
Depth of Product Mix: How many variants are offered in each product line, viz.-A detergent comes in
three sizes and two formulations (mild & concentrate) then depth will be 2x3=6
Consistency of Product: Mix: the degree of closeness between the product lines.
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NPL Practices :
Positioning Strategies:
- Concept Statement
Product Attributes
- Product Screening
Problem-Solution Plank
- Business Analysis
Customer Class
- Product Development & Testing
Occasion
- Test Marketing
Competitive
Product Class Disassociation
Price-Quality Ratio
Differentiation Strategies :
Product : Product Attributes, Functioning, Uses, Aesthetics, Size, Shape, Distribution
Services : Finance, ASS, Installation, Training, Guarantee
Personnel : Courtesy, Responsiveness,
Image : Logo, Punch Line,
I/P
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Definitions:
Bran Image : Totality of impression about a brand [ Aura, Reputation, Symbolic Meaning ]
Brand Equity : Psychological Differentiation, value received by customer in terms of Logo, Symbol,
Brand Name, Punch Line
Brand Loyalty: Feeling of confidence which reduce the dissonance in the mind-set of customer
Brand Strength : Brand’s ability to associate itself with positive motives (Gel- Colgate, Balm- Zandu)
Brand Personality: Human characteristics of brand [Intangible assets + Symbolic Value + Outer face of Brand]
Brand Perception :
Brand Positioning : Package of benefits for a specific target segment, Giving a distinct image in the
mind set of customer, Functional attributes to place brand in a specific market
Brand Repositioning: Endeavor to fulfill following objectives
New market /customer exploration
To curb falling sale
To stabilize the image
For competitive advantage
To cope up with new market situation
Client’s worries:
Reliability & Failure Frequency
Customer’s worry about Downtime duration
Cost of maintenance and Service
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Business Policy & Strategic Management
Customer Group
Alternative Technologies
- Mission :
- Objectives : Important ends towards which organisation’s & individual activities are directed
- Goals :
- Strategies : Adoption of course of actions to achieve basic long term objectives
- Policies : Statements/understandings which guides manager’s thinking in decision making process
- Procedures : Plans which specifies the required method of handling activities in future
- Rules : Specific required actions & non-actions
- Programs : Arranged format of objectives, policies, strategies, procedures etc. supported with budget
- Budgets : Allocation of resources to achieve goals & objectives
Types of Planning:
Strategic Management:
Business Definition,
Mission, Purpose & Objectives
- Environmental Appraisal
- Organisational Appraisal
Implementation of Strategies:
- Project Implementation
Strategic Alternative & Choices
- Procedural Implementation
- Structural Implementation Evaluation o f Strategies
- Functional Implementation
- Behavioral Implementation
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Organisational Capability Profile:
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Strategic Alternatives:
Grand Strategies
- Stability strategies : Incremental improvement of functional performance
- Expansion Strategies : Broadening of scope in terms of Customer groups, customer functions &
alternative technologies
- Retrenchment Strategies : Reducing the scope of either of its customer group, customer function
or alternative technologies
- Combination Strategies : Mixture of stability, expansion and retrenchment strategies
Modernization strategies
- Technological up-gradation : to improve productivity, efficiency & lowering the cost
- R&D
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Turnaround, Divestment, Liquidation Strategies
Turnaround:
Strategy to ‘reversing the negative trend’ in terms of profits, cash flow, market share,
physical facilities and to become competitive in market and curb the mismanagement.
Divestment:
It’s a rehabilitation or restructuring plan which refers to the sale or liquidation of
- a portion of business
- a major division
- Profit center
- SBU
It is generally applied when turnaround strategy proved unsuccessful.
Liquidation:
Taken-up as the last option, which involves closing down of firm, selling its assets. The liquidation
end up the serious consequences viz. loss of employment, termination of opportunities and stigma of
failure
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Strategic Choices
This is the set of techniques which helps the strategist to take strategic decision with regards to the
individual product line or business of an organisation’s portfolio.
Experience Curve
The experience curve correlates the unit cost of the product, market share of the firm and other
aspects with the firms experience in the field
It states that unit costs decline as the firm accumulates experience in terms of cumulative volume
of production.
This curve results from number of factors viz. Learning Effects, economy to scale, product
redesign & technological improvements.
Introduction Decline
BCG Matrix
High
Stars Question Mark
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GE Nine Cell Matrix
Strong Average Weak
Invest / Expand
High
Select / Earn
Industry
Attractiveness Medium
Harvest/ Divest
Low
A
Development Each circle depicts one
B business viz. Business
Growth A , B, C, D & E .
The diameter of circle
Product’ Market C depicts the size of
Evaluation Shakeout industry while the
Stage black portion depicts
D the market share of
Maturity that business in the
respective industry.
Decline E
Competitive Position
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Industry, Competitor, SWOT Analysis
Forces of competition
Suppliers’ Bargaining Power within the industry due to Buyers’ Bargaining Power
rival firms
These five forces determines the intensity of the industry competition and profitability
SWOT Analysis
Operational Control:
- Setting Standards of Performance Financial Techniques
Economics
- Measurement of Performance - Financial Analysis
- Analyzing Variance Evaluation Technique - Zero Base Budgeting
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Taking Corrective actions 56 MBO
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Strategic Control: Strategic Momentum Control
- Premise Control - Responsibility Control Centers
- Implementation Control Evaluation Techniques - Underlying Success factors
- Strategic Surveillance - Generic Strategies
- Special Alert Control Strategic Leap Control
- Systems Modeling (Computer)
- Strategic Field Analysis
- Strategic Issue Management
- Scenario
Operational Control:
- Setting Standards of Performance Financial Techniques
- Measurement of Performance - Financial Analysis
- Analyzing Variance Evaluation Technique - Zero Base Budgeting
- Taking Corrective actions MBO
Memorandum of Understanding
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Leadership : Commitment towards the work
- Socio-economic status Technical background
- Higher level of education Strive for the Excellence
- Realistic self-concept Flair of technical skills
- Realistic goals Think ahead of time
- High frustration level Good interpersonal skills
- Ability to express hostility tactfully
- Ability to accept success and failures
- Ability and willingness to communicate with others
- Willingness to work for the group rather than for individual
Golden Principles:
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Emotional Intelligence:
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Economics
Total Utility :
If a consumer consume three commodities and utility derived from these three
commodities are Ua, Ub, Uc than total utility will be-
Tu= Ua + Ub + Uc
Quantity
MU
Law of Diminishing Marginal Utility
Demand Curve
Law of Demand:
The demand for a commodity increase when its
P3 price decrease while other things remain
constant, similarly the demand decrease with
increase in price of commodities.
MU/Price
P2
P1
Price Demand curve
MU
Q1 Q2 Q3 Quantity
Quantity
Factors Behind Demand Curve:
P3 - Substitution Effect
- Income Effect
Price P2 - Utility Maximization Behavior
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D1 D2 D3
Shift In demand curve
Price
Budgetary Line:
M/Px
Quantity of X [Qx]
Equilibrium of Consumer
M/Py
Qy
Budget Line
Demand curve
M/Px
Quantity of X [Qx]
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Income & Substitution Effect on the Price:
Income effect results from the increase in the real income due to decrease in the price of
commodity, While Substitution Effect emerges due to consumer’s tendency to substitute the
expensive goods from cheaper goods.
Substitution Effect : PE – IE = SE
X1X3 - X2X3 = X1X2
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Demand
Elasticity of Demand
Price Elasticity of Demand: Percentage change in the demand as the result of one percent change in the
price of commodity
ep = Q x P
P Q
Income Elasticity of Demand: Responsiveness of the demand to the change in the income
Q x I
ei =
Q
ea S
= x A
S S- Sales , Adverting Expenses
Cross Elasticity :
Percentage change in the demand of Tea
ec = Percentage change in the price of coffee
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Price Elasticity & Total Revenue :
TR= Q.P
Total Revenue
Quantity
e>1
Price/MR
e=1
e<1
Demand Curve
Quantity
Marginal Revenue
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Theories of Economic Growth
Harrod-Domar Model:
Growth rate Yt / Yt is equal to the output\capital ratio (k) time the constant propensity to save (s)
Yt / Yt = k . s
Neo-Classic Theory:
Y b [K] (1-b)L T
------ = ------------- + -------------- + ------------
Y K L T
Here b and (1-b) represents the responsiveness of output to the change in the K and L
Trough
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Theories of Production
Production Function
Q= F ( K. L)
Q= Quantity Produced, K= Capital, L= Labour
Law of Production:
Short Run Law: In short run input-output relationships are studied with one variabl input
keeping others constant. This is known as The Law of Variable Proportions. While in long
run all the inputs are considered as variables, these relations are studies under
Law of Return to Scale.
Q= - L3 + 15L2 +10L
Well for example if L=5 than Q= 5 x 5 x 5 + 15 x 5 x 5 + 10 x 5 = 300
No. of workers Total production Marginal Product Average Product Stage of Production
1 24 24 24
2 72 48 36
Increasing &
3 138 66 46
Constant Return
4 216 78 54
5 300 84 60
6 384 84 64
7 462 78 66
8 528 66 66 Diminishing Return
9 576 48 64
10 600 24 60
11 594 -6 54
Negative Return
12 552 -42 46
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National Income Concepts:
National income is the money value of the end result of all economic activities in the nation.
While ‘National Income at Factor Costs’ depicts the sum of National Income + factor earnings
i.e. earnings in form of factor payments-wages, salaries, interests, rents, earning of self-employed.
(This sum is further adjusted for the indirect taxes and subsidies)
Accounting Relations:
- Net Product Method: Here entire national economy is considered as the aggregation of producing units.
Step1: Estimate the gross value of domestic output in various branches of production
Step 2: Determine the cost of material & services used & depreciation on the physical assets
Step 3: deduct the costs and depreciation to obtain the net value of the domestic output.
- Factor Income Method: Here national economy is considered as combination of factor owners & users.
Under this method the NI is calculated by adding up all the incomes accruing to the basic
factors of production used in producing the national product, these factor of productions are
classified in to Land, Labour, Capital & Organization
National Income: Rents+ Wages+ Interests+ Profits
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