Last Post Week 11

            This is my last marketing blog post. Don’t be too sad. This whole blogging experience has made me want to make a crafting/cooking recipe blog. Which will of course join millions, but we will see. Anyways, what we did this week… This week we had to finish up PharmSim team play. We did pretty well, third place! This can be read about in the pervious blog post. Besides this we had to an individual assignment on PharmSim which is basically an advice memo for the “next management” team. You talk about the 4P’s moving forward, what the key successes are for the brands, and how the next team(s) should be organized. I went a little over the two page memo, and as always, probably could of written way more, but wanted to stay close to the page limit. The other assignments for the week were reading the last few chapters of my favorite class resource, Drucker! I love this book, incase you hadn’t noticed, and am seriously considering buying copies for my boss, and my bosses boss. Even though I work in events, we are grouped with our company’s marketing department, and I think they could really benefit from this book. At least benefit more than some book we had to read for a retreat one year about embracing our inner animal, and working with other’s inner animals…talk about a snore fest meets a what the heck is this book.

            So one of the chapters we read had to do with the idea that the quality of the product is not what the company think it is, but rather what the customer values the quality to be. I felt this was similar to Drucker’s argument that that customer is the driver of the value of a product, but contradicted a bit his teachings on how a business must create a customer. Regradless I found the lesson that quality is determined by the consumer and not the supplier a very true point. If a consumer only wants a product to last a short time then they are not going to care as much if it can hold up against hurricane, and thus pay the extra pricing to have what the supplier thinks is a higher quality product. Drucker’s example was bit more simplified than what I am saying. He talked about how there were these valves that the government wanted. Several companies were bidding the for contract to by the main supplier. The different companies used various materials that they though would add quality to the valves, and the valves themselves got very expensive and complicated. One company invested in lower quality materials. Who do you think won the contract? It was the company who made a lower investment in lower quality materials. This is because this was the only company that understood that the government only wanted the valves to pass inspection. This company made sure that all the valves that were sent to the government would pass their inspection, even if it meant throwing out failing valves. The other companies would just send their product over and their valves would fail. As a result the the company that had the simplest valve won the contract because it catered itself to what its consumer consider quality. Drucker also discussed that the quality can be not achieved by looking at the wrong task in the product or service. He used inner city schools as an example. He talked about how schools who succeeded had a different performance task of “enabling those who want to learn to learn”, where as those who were failing though of their task as helping the underprivileged.  The task is still to teach, but how to achieve that task is different and thus there is a difference in quality and ability to complete a task.

            The next chapter was about integrity. Now this is a topic that is drilled into every business student from day one, but yet it seems that there is still problems. “Drucker’s view on marketing integrity are:

1. You can make mistakes that will forgiven by people inside the company and customers and the government outside your organization-but a lack of integrity will not be forgiven.
2. Maintaining your integrity may cost you, but it is worth it.
3. Be true to yourself and to your values and beliefs.” (p. 225)

This chapter was brief, and it talked about different ethical standards that are not always that great in application. He believe Confucian ethics was the best of them all as they deal with relationships and interdependence. Besides the three on views the importance is to do no harm to others, and make sure to always be able to like what you see in the mirror. That is basically the gist of it, and decent advice for everything in life.

            The next chapter was titled “The Dangers of Marketing Professionalism”. Now what my understanding of this chapter is that people can be so focused on that one task of being professional, that they lose sight of the bigger goal. They do not realize that what they are doing is actually a part of the bigger goal. The person that loses sight of the overall goal can end up hurting the business because they are not putting the goals of the organization first. However, I do think that there needs to be a balance with workplace goals and professionalism. I say this because there was an article this week on yahoo that talked about how there is has been an increasing goal of organizations to increase collaboration amongst co-workers by restructuring offices so that there is more collaboration. However, there has been issues that this has decreased professionalism in the workplace and is causing efficiency problems. Here is the article: http://finance.yahoo.com/news/biggest-office-interruptions-224100453.html It just leads me to believe that all though there must be a defined balance between professionalism and company goals as people may become overly committed to them.

            The next chapter talked about not buying a customer. The overall concept of this is that companies should be cautious about their coupons and promotional discounts. If a company offers too many discounts they can end up cheapening their product to a point where customers will only buy when discounts are being given. The company tries to buy the customer, but ends up shooting itself in the foot. This is something I can see myself doing as a consumer with the store The Limited. This store has really great work clothes that are not necessarily over priced. However, I only purchase from them when I can get 50%, buy one get on free, or their clearance is an additional percentage off. If I can’t get any of these deals I don’t buy anything from the store unless absolutely necessary. This includes the clearance items. It the clearance items are not one sale I don’t buy. This absolutely insane but with all the discounts The Limited has offered I know there will be another deal just around the corner. This was pretty much what Drucker was talking about, that by offering all the discounts, and continually offering discounts, can cause a company to accidently cheapen their product and be dependent on these discounts to move product. 

            The last chapter of the book is about how Drucker has passed and if there is a future for his teachings. I think there are as they routed in ancient practices, and even now many students find them beneficial. Will some of his teachings become outdated, of course. However, the meat bones of the teachings will be what remains relevant and good.

            As this course ends, I want to thank you for reading this blog for the last 11 weeks. I hope you were able to learn something about marketing.

3rd Place = Bronze Medal

PharmSim is finaly over after weeks of individual and team play. The final result....Our team finished 3rd! After being in the bottom about midway through the simulation our team was able to battle back and "medal" if you will. We are all very excited about this. Would we have liked to do better, of course, but third is not a bad finish. We also had one of our best periods after the final advance. Our stock went from being the $30's to being the $50's. It was a huge jump. We seemed to do well everywhere else too. We had to deal with an issue of a sales person complaining about how their terriotry was to big and that is why they were doing so poorly verse another sales rep who had a smaller area but was out preforming the first sales rep. We didn't want the second sales rep's hard work and beneficial relationships with their terriorty to be hurt. So we decided to keep the rep's areas as they were. Well the rep that complained ended up quitting. Out group felt bad for a second, but guess what if this was a real person, and they quite everything a complaint wasn't resolved to their statisfaction then they would have a hard time maintaining a job. I do wish we had had a fourth option where we gave the complaining sales rep an assistant or spilt her territory so that a completely new rep was introduced to help her. However, this was not a solution. Wanted to share the good news of 3rd place. Go Team 1!

September Already, and Only One More Week

    The semester is almost over, and this both scary and exciting. This week was one reading, one video, and all group work. I already briefly talked about our Marketing Revision Plan. We are basically done with it. We are just putting on the finishing touches as of right now. We had wanted it to be done by now, but things come up, and honestly it basically is. The only issues are a section that doesn’t seem to be updated, mentioning some appendices we have in the actually document, and putting our names on it instead of Team 1. They seem like some quick easy fixes. It currently is exactly three pages of reading and then somewhere around 10 pages of appendices. Which is about five appendices. This whole appendix thing has definitely become a friend as it helps you make your point in a short time frame in the meat of the message. I will also say that I thought I knew PharmSim pretty well, but I feel that every time we do an assignment with it, my PharmSim knowledge grows. Hopefully, I have mastered it enough to earn a good grade with my team.

    The reading we did was on managing performance metrics. I definitely wish we had read this article earlier in the semester when we had to submit performance metrics for PharmSim. It would definitely had been helpful in trying to determine metrics for that assignment. The short sum up of that article is that there  are tons of performance metrics that can be used with a company. It is important that the metrics be evaluated yearly as the company grows certain metrics will change. Also, there must be a balance so that a whole picture is formed, without having so many metrics that a company is too bogged down by information and can’t form the picture. Also, the metrics must include all departments so that the picture is better formed. The balance of the metrics is important because if it is soley based say on marketing it could only show that marketing is doing well and not the rest of the company, and also it could show only the good and not the areas that need improvement.

     Our video this week was on variance analysis. This may have helped us earlier in the semester in determining how our company was doing, however, it is something we can use this week and next week. So there is an equation for this and called Net Market Contribution is NMC=MDxMSxSPxCDxM%-ME

MD=Market Demand

MS=Market Share

SP=Selling Price

CD= Channel discounts

MP=margin percent

ME=marketing expenses

This equation brings together volume variance (MD, and MS), margin variance (SP, CD, and MP), and marketing expenses (ME, naturally). The constant of the equation from year to year or from time period to time period is that of the marketing expenses. Everything else a company is looking at how it has changed. The equation can be done the current year and the previous year at least to allow comparison. Or you can do actual results and project results. It is up to the company to decide which one is the better to use.

That pretty much covers it for this week. Next week we should be advancing the last few periods, a class evaluation, an individual analysis memo on PharmSim basically, and our last weekly blog.

Quick Little Update

   Our main focus this week is writing the Pharmsim Strategy Revision Memo. This is a group project, and we basically need to examine our 15 page Pharsim Marketing Plan and Strategy document. Our examinations need to be condensed into 3 pages. Currently we have the SWOT and Key Issues, Strategy implementation assessment, and marketing goals and objectives figured out. Which is great, because we are making some real progress and the document is really coming together.

   It seems certain parts we were already doing like assessing how our strategy was working and why we wanted/had to deviate from our plan. As well as, as talking about goals and objectives we have for our products. It has been hard though fiting everything into 3 pages. It seems we would easily make this a 5 page document with the amount of information we want to put into it. However, we need to limit ourselves. I think our biggest concern is the performance evaluation. We didn't do so well on this in our first plan, so this is a big concern for us. Hopefully this time we hit the nail on the head a bit. We are putting the other parts together tonight, and will be proof reading and putting the final touches on it the next few days. We really want to make sure we aren't doing anything last minute and have enough time to catch mistakes that we missed with the initial plan. Also, so we have more than enough time to do our weekly blog post as well. Busy week ahead.

Week 9 - 6 hours of Group work, 3rd place...the week of 3's!

        This week had more group work than reading, as in no reading just group work. This is fine because my group is pretty cool. Last week we had to submit a strategy, that thing I talked about last blog post. This week we had to implement that strategic plan, and guess what it is a lot easier to think one up (of course based off of analysis of the data), than actually follow it. We tried to follow the plan as best we could, but we had to deviate to maintain competitive in the market. We figure changing the allotment of the budgeted money or percentages for message was more acceptable than say introducing a product we never talked about in our plan.

            We had thought briefly about introducing a child’s medication or even reformulating our product. However, we realized we never even talked about it in our plan, and to do so would have a huge major impact on our plan. Basically, null and voiding it all. After all that hard work on it, and the fact that it would pretty much be negated we figured that doing any of those things would not be too smart. However, and I hope I don’t end up regretting stating this, but we did deviate in other areas though. We realized that our idea of not spending more than $1 million for co-op and point of purchase promotions. We quickly realized point of purchase was something we wanted to put more than $1 million on. So we started pouring some more money into it. We tried to stay conservative, and if there was extra money in the budget we would put some of that money into here. We got frustrated though with co-op. It seemed no matter what we did we had a poor co-op participation. Granted once we introduced our new product of the Allergy non-droswry we realized, aka I realized, I screwed up. We thought it was weird that we had no co-op participation at all for this brand, and then I realized that although did give it money….I forgot to check the boxes of who we wanted to participate in the co-op stuff. Talk about being so brain fried I forgot to do that. Not a good team leader move. At least we all had a decent laugh about it. Which since we were on like hour 5 of 6 (3 hours on Tuesday night and another 3 last night), it was sort of needed. Besides co-op being so annoying because no matter what we did we barely saw the needle change on it, we also found recommendations to be annoying. We tried and tried to better the recommendations with more detailers and what not. However they kept decreasing. So after a while we kind of just became overly frustrated and didn’t give it as much weight as we had originally. All our hard work though did end up paying off as we are now currently in third out of 6 teams. We were like fifth before we started last night so, go us! In fact Brianna texted me this morning to let me know. My boyfriend was a little confused why I was laughing and geekily excited. Guess some competitor-ness came out. We think the first place team may be Dan R’s group, because he supposedly a PharmSim Master. Since a lot of reading has to do with ninja’s this is clearly a good analogy. I wonder if Spotts is the hard master and Dan R is the soft master? (G.I. Joe/ninja world reference)

            So some bumps we ran into. Sales force, we tried to stay with the cap of no more than 5 people added in total, and only add one per every 5% growth increase in a particular segment. We quickly realized that if we have a lot of growth either percentage wise or across several areas we would end up surpassing the 5 people cap.  Then later on we came to another conculsion….we were comparing our sales force to the competition in the marketplace. Sounds like a smart idea. Until we realized oh they all have like 3 brands and at the time we still only had our one of Allround. When we made this realization, we also thought about cutting the sales force drastically. We stopped and thought strageticall though. What would be the hidden costs of cutting a sales force? Also, we wanted to introduce a new product, how far away were we from doing this. Turned out the next period was when we were going to introduce out new product of Allright, so avoid high costs of hiring new people to help sell our new product we kept the sales force as it was with numbers. This was good because when we received the extra budgeted money that was one less worry we had. We could instead focus on using our money for promotions and advertising. Backing up kind of for a second. I found this weir d correlation. We had one of our better periods when our advertising for Allround was around 12 million, and when we did test markets the results wouldn’t change if we altered our advertising, only if we altered our price or promotions. It made me feel like advertising didn’t matter as much as promotions and pricing. This was propabbly because Allround was the market share leader and has a huge brand awareness. So we kind of didn’t worry a lot with advertising money, but when we introduced Allright we spent a lot of time trying to nail done specifics on the advertising. Luckily our plan had a lot of that outlined with percentage of ad messages, and who we wanted to market to. We did end up playing with the numbers a bit as we entered out second period with it as we wanted to go from primary to more reminder as we had already become a bit established.

So some issues we had to overcome. Social media. We had some negative reviews, so we decided to monitor the page and respond to the comments ourselves instead of the other options of deleting, talking to legal, and what not. We ended up getting good reviews. We also decided to no reformulate, and we decided childrens cold would have the least cannibalization. In Period 4 we had to decide what to do with detailing changes. At this point we thought our decisions would impact our budget, so we left enough money to cover the cost of what to do. Our choices where to conduct clinical studies for doctors and pharmacists at $4.0 million, provide training to detailers about side effects, drug interactions, and what not at $1.0 million, update detailing materials used when talking to doctors and pharmacists at $500,000, customize pens and notepads to leave behind after a visit to doctors and pharmacists at $100,000, and add an e-detailing component to the web site for doctors and pharmacists at a cost of $1.5 million. Since we had about 4 million left over in the budget we decided the training, update materials, web site fit our budget and provided the best bang for our buck. We really liked the web decision as our company had social media already. The next special choice we had to make in a different period was that of creating marketing. This time we decided to see if it leaving no money in the budget would keep us from moving on, and it didn’t. Wish we had known that earlier. We could between street preforms, our product in a movie, a race car with our logo, a crossword puzzle, or to have and ad contest. Well we didn’t really see the benefit of street performs, a movie is cool and all but wasn’t something we saw a huge benefit with, race car was a no, and a crossword puzzle seems outdated. At least with an ad contest we could create a buzz and those people would probably be talking about how they were making a commercial for our company and brand thus promoting it further by word of mouth. Our last special incident we had to deal with was with a company saying we were price discriminating and they wants a discount our they would stop selling our product which would cause a loss of 2 million units. That seemed like a really big number until we put it into prospective. We sell over around 114 million units a period/year. So 2 million really isn’t that much. Then we thought about it, if we gave this discount it was like they were trying to black mail us, and was that something we wanted? The answer is no. Especially if other companies found out and then they started doing the same thing. Also, they would lose profit from 2 million units of our product. Not so smart! We sadly only had two options. They were give the discount, or not give the discount and risk losing their business. I would of liked a third option of pulling our business out of their stores, but that wasn’t a choice. So we went with do not give the discount.

            So after 6hours this week of focusing on this project I know we would all love a break and enjoy this labor day weekend. However, we have an assignment due next Friday on this. It is our revised memo, and also what we want to do basically for the last few periods. So we made up assignments with deadlines, will do a check in on Monday, and then hopefully hammer out this memo. It only has to be three pages, but there are lots to talk about within that page limit. So it will probably end up being very condensed and packed again. Hopefully we will earn a good grade though. We earned an 83 on our plan, which after the initial tearing apart we are all a little concerned about what the grade was going to be. So most of us were excited to see the grade be above an 80. We worked really hard on that plan, and with the amount of work we will give our revision memo hopefully we do even better. Time will tell. Here is hoping I covered everything with this blog posts. Reflection blog posts sound easy but sometimes they can be just a cause of concern as regular posts.

Week 8....Home strech

So this week will be a more in-depth look at what we have been doing in PharmSim as a group. It has been a real whirl wind.  We had to our individual situation analysis due Friday the 16^th and then our group marketing plan and strategy due on the 24^th. The individual situation analysis was killer. Not going to lie I had a bit of break down with it, but I got over it. Life is too short. I learned a lot about our company in the situation analysis. I learned that we were the market share leader and had great perception, but our numbers for sales, income and just about everything was slowly falling. Talk about some red flags. However, we have to remember though that in market that started with just 10 products now has recently gone up to 11 products. Granted not each product primarily serves the same illness, but they all draw on the same available market. So out company had a few issues, not huge issues when you put in the correct context but still so issues we needed to figure out.

                So thus we started our marketing plan and strategy which was not as intensive as the individual situation analysis, but was still rather intensive. Plus it was during a week when we all had a lot going on. Work this week had multiple events a day that involved turnovers and called for extra hours. Others in the group had orientation activities, and were moving. So we all had major stuff going on, on top of this huge project. So we dove in as much as we could, and we did a good job. Each night, those that could meet did via skype. It took a while to figure out a medium where we could meet, but skype ended up being the go to medium. We meet for hours upon hours trying to make sure we covered everything. We talked about just about everything that we could.

                Key issues were discussed and decided upon by pulling from our individual situation analysis’s and comparing which ones that popped up in all our reports, had a strong case, and from SWOT analysis. Our key issues for our company ended up being low promotion involvement and inefficient advertising, inefficient sales force allocation, declining market share (need to reposition to maintain market leader status), and option to reformulate/add line extension in upcoming periods. We figured these were good key issues that were a little bit more board as so we could address other key minor key issues.

                So our marketing plan and strategy basically centered on these key issues, and mostly on plans to increase market share and expand in upcoming periods. Jennie read the case again and noticed that there will be an option to introduce an allergy medication that is non-drowsy and had previously been a prescription only medication. Therefore no competitor in the market would have a product like this. We all decided that this would be a great opportunity for our company and brand. Especially since allergy takers make the most purchases (around 5 a year), and the markets although small are also not very penetrated as they are about 50% penetrated for all segments. We did discuss talking about reformation but decided that our product is getting great reviews the way it is and has certain competitive advantages such as high doses of almost all ingredients that can be in a multi-cold symptom. Since we don’t want to formulate we tried to figure out how to increase market share with what we got. We came to the conclusion we needed to increase recommendations which means reformatting our sales force. Well that was an issue we wanted to address. So we talked about what areas to increase, others decrease, and a plan with a cap and idea on how to increase our sales force so as to avoid where we are with an incorrect allocation of sales force.

                In increase market share we also discussed our MARKETING! Shocker right? First off, we realized we were really over spending especially with a comparison to competitors. Market share leaders do have spend a ridiculous amount to stay on top, but we all agreed our spending was a little out of line and incorrectly distributed. We wanted to increase our co-op participation. So since there has been such a low parcipation we will spend no more than $1 million each for co-op advertising, and increase attractive promotional allowances to retailers. We really tried to nail out the nitty gritty information and figure out a way to make the little things add up so that we can address our key issues and improve them before they become major problems. We really talked as much as we could out. It was great working with the group. Jennie and Briana did a lot of work. Mike and I did two parts each, and I did the final proof read. It was a good group, and I thought I had learned a lot about our company in my individual anaylsis, but I feel like I have learned even more. The annoying part is that is probably still way more to learn. I am nervous moving forward with the marketing plan and strategy as there are certain curveballs that even though you try to plan for them, sometimes they come from out or nowhere. Hopefully we have accounted for almost anything, and with percentages as bases we can respond easier than having set numbers. Time will tell, here’s keeping our fingers crossed.

Week 7

So this week will be a very short we don't have too much since we have this epic project due tonight at 11pm. I mayself have becoem crisscrossed from looking at everything and second guessing myself. Anywho...we just need to post the 5-7 metrics we think our team should be evaulated on with the Dashboard for PharmSim, and those are:

1. Market Share
2. Perception
3. Trade rating
4. Brand Awareness
5. Customer Satisfaction
6. Net income percentage

7. Stock price

That is it. See you next week!

Week 6 Hump Week

So this is hump week of our 11 week course, and of course the Geico Insurance commercial with the camel in it playing on repeat in my head. For those of you who may live under a rock, please reference this link: http://www.youtube.com/watch?v=kWBhP0EQ1lA

Such funny advertising. Anyways this weeks happenings are both a lot and a little. I ran PharnSim somewhere around three times before the Professor reset it for group use. I did fairly well. I really fooled around with different products and changing the ingredients to the medication. I was a lot of fun, and my stock prices usually ended up being double to triple what I started out with. Granted this isn’t the best measure of success, but I was still impressed I was able to do that. It turned out being a lot of fun.

                Then we started out group play. It was a little difficult to go through two periods in four days. Which I was really surprised about, especially since a weekend fell on those two days. For me I had planned a girls weekend with my best friends from high school who I had not seen in over a year and half, so I was very unplugged. It is funny because we realized we are changing as a target market. Target market was not really the word used, we just talked about how our conversations had changed from looking to go out to different clubs to being more home bodies and talks of wedding stuff. (one my friends, her sister is engaged and is planning everything) We even commented how on facebook how everyone is either getting married or having a kid. Which reminded me of how there are very different target markets and there those that are young people, young families, and what not like in PharmSim. Anyways, I have become a bit off point. We were able to complete the two PharmSim periods as a group. We realized as a group after the first period, that we needed to be more specific with what we wanted to change in the simulation. The second round I was able to chat directly with a group member we were able to figure out a lot of things of the details for the next period. We had to figure out a way to cut our budget as we started off the period in a negative. We looked and realized that our advertising was much more than anyone else. So we cut it enough were we would still be leaders in advertising but yet mostly be out the red for the period with our budget. We did a few other adjustments, and by the end we ended up being in the plus by .7 million. So we decided to just spilt the money in promotions between coupons and trial sizes.

                Drucker came back this week in our reading. I was elated as you can imagine. We had to read chapters 10-14.Basically this was an entire section of the book titled “Drucker’s Marketing Strategy”. Chapter 10 was really eye opening. It was all about how we create the future, and certain parts of if can actually be foreseen. Now Drucker didn’t have a purple room where he consulted a crystal ball or anything, but rather he looked through the “window”.  What is meant by looking through the window is that we need to be observant of what is happening around us. Events that are happening now are going to have ripple effect on the future. Think of the baby boomer, as they go through the life cycle of life a company would have to change to accommodate everything. They are all in the process of retiring so adult living properties would become popular and maybe a good investment, or anything else that that they may like. Even walkers and canes may need to up their production to meet the demand that will be coming its way. However, creating the future can be risky especially certain industries. What a company must do is answer four questions when trying to create the future. These four questions according to Drucker are:

1.       What opportunities does the company want to pursue, and what risks is it willing and able to accept?

2.       What are the scope and structure of the organization’s strategy, including the right balance among such aspects as specialization, diversification, and integration?

3.       What are considered acceptable trade-offs for a company between time and money and between in-house execution and using a merger, acquisition, joint venture, or some external means to reach its objectives and attain its goals?

4.       What is the organizational structure appropriate to the company’s economic realities, the opportunities, and it performance expectations?

It is important that companies always be evaluating themselves, their markets, their product ventures, and coming up with contingency plans. To do this a company must know it’s specific purpose and its mission.

                If a company does not know what its business is then it will fail, especially with marketing. Without definition the business could end up spending time, money, and resources on projects that are in apporiobate instead of opportunities that are better suited. Knowing what your business is will help you determine where to apply your business successfully. Once a business knows what it is there must be commitment. Commitment is huge! It proves how important the goal is and are most likely to go more all out for reaching the goal than if it is down played and considered not important. Think of a big game against your rival. You are more likely to go all out verse a game that you know you are going to win against the opponent. Commitment also shows that the leader will not quit. If a leader will not quit then people will follow. When I recruit I often am asked the question if the head coach is going anywhere, and I often tell recruits that she is not as she has a family here and her husband works in the same department. I see this wave of relief on recruits when I tell them this, especially those that have gone through several coaches in their high school career. They want a committed leader that won’t quit. When making up a strategy it most have three aspects. These are physical resources, intelligence or knowledge, and have the correct attitude or moral values. These three aspects must work together for success. There are five proven techniques that will help apply commitment to marketing as it is very important. These five techniques are”

1.       Think through the goals until they are clear and definite

2.       Make a public commitment

3.       Promote your goals and objectives

4.       Expect and deal with the dragons (obstacles)

5.       Adjust your marketing strategy and tactics but not the objectives

Basically it comes down to really know the company, what direction it needs to be headed, accounting for as much as possible that could go wrong, and keep reviewing everything periodically.

                Marketing will always be impacted by what is going on in the world. Some changes will have more weight than others but there are five certainties that every marketing strategy must take into account in the foreseeable future and those are:

1.       The collapsing birthrate in the developed world

2.       Shifts in the distribution of disposable income

3.       New definitions of performance in an organization

4.       Global competitiveness

5.       The growing incongruence between economic globalization and political splintering

When making a marketing strategy a marketer must consider the 4P’s as well as the environmental or situational variables, and then take these five certainties into account.

                What a company must also do is not be afraid of abandoning profitable products. Listen everything has a lifecycle, that was one of the main lesson from Lion King was it not? The whole circle of life thing. Sometimes a profitable product just is not profitable any more. According to Drucker every three years an organization should challenge everything it is about, their products, and just everything to figure out if they would still be doing what they were doing if they were already doing do it. Also, abandonment should be considered an opportunity. When a project is abandoned then resources can be redirected and a new successful product or service can be the champion of the company. Once a product or services is determined to be abandoned a company should come up with a plan. The “how” to abandon is just as important the “what” and should be treated with the same respect. A company must come up with a plane regarding the resources, tools, money, and everything that went to the product and figure out how to redistribute it or how to abandon it.

 

                The last thing that we read about with Drucker was how selling and marketing and could even be considered adversarial. It is often believe that good selling can overcome bad marketing. However, marketing when done correctly can actually help enhance selling at a fraction of the effort. Good marketing can help sellers target the correct market to sell too, verse trying to sell ice to an eskmo. To get back on track Drucker suggests looking at three points:

1.       Strategy first

2.       Strategy determines tactics

3.       Good tactics are not only complementary to each other but they are synergistic

Strategy of a company is really important and it will help determine where a company will go and how to not only market but also sell. When marketing and selling work together on tactics, they will be unstoppable. However if they remain adversarial the company will not reach its full potential. Alright that is all for now.

 

Week Five

Hello All! So this week has been interesting. I went through an entire session of PharmSim. I think I did pretty well. I tried to launch a new product during some rounds, but my stock kept dropping for the next couple of rounds. Also, I had a hard time trying to split my money between both products, so I dropped my product. As soon as I did, my stock price started increasing.

One topic we read about was buying behavior of consumers and customers. Consumers make decisions in one of three categories. The different categories are nominal, limited, and extended. Each one has different levels of purchase involvement. Since consumer behavior cannot be neatly tied into a specific category, the reading talked about how it is better to think of it a scale. Sort of like the spectrum of light scale. Here I have demonstrated this scale from the scale that is used from the spectrum of light. (Time to add some color to my blog)

Purchase involvement on a product is basically how much time a consumer or customer spends thinking about purchasing the product. The larger the item, how many risks involved with making the wrong purchase, and the product’s significance to the consumer’s life are just some of the reasons that there would be a high involvement in regards to purchasing a decision. Right now I have a high purchase involvement with buying a kitchen table. We currently have one from my boyfriend’s family. It is the table that everyone gets when they first move into a place, and then return once they buy their own. We live in a very small one bedroom apartment, so we need maximize on space while staying in small budget. So we have been looking at different tables that could help us. We found this almost perfect one at Costco. It was only $200 which is very much within our budget, and it has “bookcase” like legs. Kind of like this one:

However, as much as it maximizes storage and space, it also is about a foot longer than we like, because if we buy it then only one person can be in the kitchen at a time. We found another table we like where it is expandable, but since my boyfriend is going back to school and I am in grad school we will need a table that is sturdy and can hold all out books and laptops. My books are pretty light, but he is going for civil engineering technology and I really rather doubt his books will be light. Since we can’t find anything that meets both our size and budget requirements, we have turned to pinterest. We have found out how people have made their own project tables from cubicle book cases. So we have researched where to get bookcases, what size we want, when to purchase (tax free weekend on August 10^th), and how to do this table. Turns out, right now and knock on wood, that if we make this table we could end up only spending about $100. Good thing my boyfriend is in construction. If he was not then we would be doing something else.

Nominal decision making is the one where you think the least when buying a product or have the least involvement when making a decision. For example, you need a bottle of water at work you go to the vending machine and get one. The interesting part about nominal decisions is that a decision about a product could of once had a more involved decision making process, but if you really liked the product and became brand loyal, then you would just repurchase without a lot of involvement. Think of your cellphone. You most likely did a lot of research on the perfect one, and when it came to upgrade you may have gotten your phone that was upgraded. I know my iPhone is due for an upgrade soon, and I will most likely just upgrade to the iPhone 5 from my iPhone 4. I know it, have been satisfied, and am brand loyal to this company and product. When I bought a new computer, I just bought another HP because my last one had been so great. I knew right off the bat I wanted another HP laptop.

Limited decision making is the middle of the road in the spectrum. It is a little more extensive than simple, but nowhere near that of extended decision making. The way it was described is sort of as if there is only one decision factor or very few that go into a consumer or customer buying a product. So it could be quality, product availability, style, price, color, it could be anything. It is the job of the marketer to figure out what is the leading decision maker and market it to that.

Extended decision making is very in-depth. A customer or consumer considers both internal but also mostly a lot of researched external alternative. My table example is probably a good example, or that of buying a house, or car. This is also where post purchase dissonance comes into play. Have you ever made a purchase and regretted it somehow? If a purchase has one of these four factors the most likely you feel a strong post-purchase dissonance:

1.       The decision’s permanence

2.       The cost of the decision

3.       The importance of the decision in your life

4.       The difficulty of choosing between options

I myself go through post-purchase dissonance whenever I make a high involvement/extended decision. I took a trip to England for Christmas to visit my sister, and there have been several times where I wish hadn’t because I wish I still had the money. However, I had a great time and all I had to do was pay for the plane ticket. Or when I bought my new computer. My other one worked, but had power cord socket had issues and it was also 6 years old. Since I was starting graduate school I didn’t want to be in the middle of huge a product and my computer die. So I bought a new one. There are times that I wish I hadn’t bought it, but then I remind myself it was for bettering my education. Ways companies can avoid this is by using advertisements that highlight how great their product is get new customers and reassure those that have purchased. Companies also will make direct contact with the customers after they buy to thank them, and follow up on satisfaction.

                What are influences on customer/consumer behavior? Well external factors are huge, they consist of culture, values, social class, reference groups, and opinion-leaders. We have already talked about culture and values in other blog posts. Social class is where a customer/consumer is categorized in society based on education, income, and occupation. Reference groups are groups that influence behavior in a certain situation. So when I worked at a different company, everyone was into Lululemon. So that influenced me to start buying there so I could better fit in. I can’t afford much, but I can afford headbands! And head bands were a big thing at my work (I was an Assistant Women’s Lacrosse Coach in New Hampshire). So boom! When I needed a head band that is where I got it.

Opinion leaders are people who constantly research product and brand specific  information and share what they find with others. I have a friend who always has the newest technological gadgets. So whenever I look into purchasing a new gadget, and by this time it is not new, I tap into his expertise. He is my opinion leader when it comes technological gadgets.

                Sometimes marketing can be different due to what a company does business with. You maybe asking yourself what not who? Well this is because some companies sell business to business (B2B), and not necessarily business to consumer (B2C). There are several difference in business marketing. They are the individual roles of the buying center, evaluative criteria, buying situations, business ethics, and customer service. A buying center is made up the person who suggests the company to buy from (initiator), the people who decide what is needed (influencer or evaluator), the people who filter unwanted companies (gatekeepers), and those that decide (decider), purchase (purchaser), and use the product (user). Most evaluative criteria for sales has to with quality of the item, the service of the company that provides the item, and the price of the item. Very similar to how general consumer make decisions on products. Buying situations can be a new buy which is a first time buy, straight rebuy which is the same exact order as last time, or modified rebuy which the customer makes a few changes to the order. Business ethics is well sort of self-explanatory. Who wants to do business with an unethical company? Of course customer service is huge when dealing with business to business marketing.

                We also talked about market segmentation. There are five ways to segment a market. They are geographic, demographics, psychographics, benefits sought, and usage rate. Geographic segmentation if when a market is broken down into sections by climate, density, market size, world or states. So you would want to sell most of your snow shovels in New England where is a ton of snow in the winter and not in the south where there is little to no snow. Demographic segmentation is based on age, income, gender, ethnic background, and family life cycle. Psychographic segmentation is based on personality, motives, and lifestyles. Benefit segmentation is based on segmenting groups by the benefits that the consumer/customer  using the product or service. Usage-rate segmentation is based on how much of the product a customer uses or consumes. Usage-rate segmentation generally has the 80/20 Principle associated with it. The 80/20 rule is that the 20% of your customers make up 80% of the demand for a product or service.

                Our chalk talk this week was based on benefit ladders. Every product has benefits that it provides. The example used in the chalk talk was that of a drill. The benefit of drill is that it makes the holes you want. Benefits have physical attributes, economic benefits, intangible attributes that are perceived or psychological, and emotional benefits. The ladder’s first step is product benefits (what are the characteristics, features, specific measurable of the product), then functional benefits (what does the product actually do for the customer, what is the unique value of the product), and followed by emotional benefits (what are the dominant feelings produce by or associated with the possession of or use of the product). For our PharmSim application one could construct a benefit ladder for the product Allround. The product benefits is the product helps people with their cold symptoms through a certain make up of chemicals/ingredients. The functional benefits are that relieves cough, congestion, and other cold symptoms. Lastly, the emotional benefit of Allround is that it is a trusted brand name product verse a generic brand.

                When I purchase OTC cold remedies I look for the medication that I am most familiar with and that offers the benefits. I grew up on Robitussin. It tastes AWEFUL! In fact I know I am really sick if the thought of “oh this stuff isn’t too bad” enters my mind. When I go shopping for cold medication I look for the kind of Robitussin that has most of my symptoms listed that it helps.  My boyfriend makes decisions based on what symptoms he has and what knows is a good brand. With OTC Cold medications there isn’t much cognitive dissonance because I am so sick I can’t think.

                Our company makes B2B purchasing decisions. We buy skirts and products from other companies. We base our purchase decisions on where we have ordered from before, price, budget, and urgency of need. Our budgets have been shrinking each year, so that has forced us to look at other vendors. We have tried to avoid this with our skirts as the colors have to be the exact same, and sometimes companies have a different tint to their colored products. But for work shirts we have looked for cheaper places, or even the clips we need for our tables. We don’t experience much cogitative dissonance with events, or at least with my experience. Most groups want to come back. Those who may not have liked their event here though we try to figure out why, and make notes for next year if they decide to come back.

Ok so I think this shall be it. Sorry for the long post. Hope you found it informative.

Week 4

Week 4 of the 11 week class is here or basically gone. It seems like it is flying by. I am going to try and make this blog post quick and sweet as possible as it appears I have fallen victim the summer cold. So I promised I would tell you all about PharmSim explorations. My past week didn’t really let me get to experiment too much, but I definitely plan on going overboard this weekend and next week. I did get some time in PharmSim though. I played around with all sorts of different numbers and I actually increased my stock price. So I am going to take that as I did something right. I really tried to maximize my budget as much as possible, and tried to focus on increasing money to areas that would have more reach such as giving more money towards a Walgreens type store verse a mom and pops drug store.

This week’s reading had no Drucker, much to my despair as it is always easier to talk about that book than other book. I think this is because it has so much more thought provoking concepts in it. We had to ready two chapters out of our “Analysis for Marketing” text book by Donald R. Lehmann and Russell S. Winer. The two chapters were Chapter 2 on Defining the Competitive Set, and Chapter 4 on Competitor Analysis. Something I definitely took away from Chapter 2 is that a company needs to stay open to what could be or become competition. A diet coke doesn’t just compete with another diet cola it competes with other diet sodas, other beverages, ice cream, fast food, and other products that could impact a consumer’s decision to purchase diet coke. However, a company can be overcome with who to consider is competition. So a company must compete with companies that are more direct competitors and similar form competitors. So a diet cola should take into account other diet drinks and beverages in general as well. That is pretty much the rough gist of chapter 2. I will say when thinking about who could be competitors is definitely overwhelming.

Chapter 4 was competitor analysis. Enable for a company to make a good marketing strategy the company should think about what its competitors are doing and how that may impact their marketing strategy. If a competitor is about to launch a similar product maybe the company wants to consider launching their product sooner to obtain the lead on the market. There are four things that a competitor analysis involves. These are:

1)      Assessing competitor objective

2)      Determining competitor’s current strategies

3)      Evaluating competitors capabilities

4)      Forecasting competitor’s future strategy

There lots of sub categories to each one, but the general gist is that these four things have to considered when making one’s own marketing strategy. It would be almost suicidal not too.

However when you read the article “How to Write a Competitor Analysis” by Michael Knowles he actually list five components to a competitor analysis. His five components are:

1)      The company’s competitors

2)      Competitor product summaries

3)      Competitor strengths and weaknesses

4)      The strategies used to by each competitor to achieve their objectives

5)      Market Outlook

This list is very similar to the list provided in the book. The overall theme is to KNOW YOUR COMPETITION! If a company does not know their competition how will they be able to stand out from competition with their product to win over or keep their market share? Your company will not be able to compete unless your company is mindful of this. Now competitors, depending on your business, can be from anywhere on the globe. Competitors can be right next door or they can across the globe. As technology has grown, the reach on companies to consumers has also grown. Now a small local shop could end up competing with a large company from China or England. The internet has really changed how companies compete with eachother. One way to compete, as I sort of already talked about, is that of product differentiation. Differentiation is a huge way companies can compete with their competition on similar products. Part of the reading this week talked about a party store and how they compete with cheaper stores from all over the world. However, they are able to compete because they offer more products on their online store than their in their physical store, and also to offer personalization their party decorations which is something their competition doesn’t do, or do it at a higher price point. They were able to differentiate their product, and eventually succeed. At the end of the day, the message of this week was KNOW your competition  inside and out, and figure out how compete against them by exploiting a weakness. Time to go back to bed, this sick student needs some rest.

Week 3 - So much to cover, So little time....!

So it is week three of the eleven week graduate marketing class I am taking and therefore another blog needs to be put up. We talked about all sorts of things from marketing environment, income statements, market research, market analysis, and etc. Basically the general theme of this week was there are a lot of different components to marketing than just making a pretty advertisement for a product or service.                 A marketer and company for that matter, has to really look everything from the market they are in or trying to penetrate, and their target market for their product or service. When looking at a market for a company’s product or service the company/marketer should think about their culture, values, attitudes, and beliefs. These four factors greatly affect a consumer’s behavior towards buying a product or service. To do a quick break down of these factors, culture is the behavior and beliefs of a group. Values are the basically beliefs or code of conduct for people. Attitudes are people’s manner and behaviors towards products. Beliefs are what people believe in. So if a company’s product is a green product, the company will then want to market their product to people who care about the environment and want to do their part in lessening their environmental impact.                 Ok this is great information to know, but how does a company reach consumers? Well they develop a strategy, and more specifically a Marketing Strategy. The marketing strategy is a plan that a marketing department or company develops that details how a company’s products or services will be marketed and/or present to their consumers or potential consumers. There are several external factors that impact this strategy. These are Social, Legal, Economic, Political, and Technological factors or SLEPT for short. It’s a very cute acronym that will help me, and hopefully you, remember these factors better. So let’s define these SLEPT components better. Social is the demographic information of an area. I was recently watching this bar rescue show the other day and the rescuer talked about how in the area of one bar there was 13,000 potential customers that would are in the age range of 21-34 that are single and like R&B music. It was an R&B bar that was not drawing in a crowd. Clearly there was a market for it, but the bar wasn’t bringing them in.                    Legal means the state and federal regulations on an industry or business. Such as with the bar, it can only promote itself to 21+ year olds because it is illegal to sell to minors. Economic influences circles around the state of the economy and its impact of the consumer. If the economy is doing poor, then consumers are not going to have disposable income to purchase the company’s products or services. In the case of the bar rescue, there was 13,000 potential consumers that did have the purchasing power to go the bar up to three times a week, but next to none were coming. Political influence is the “P” of SLEPT. Meaning if a company has political views that could make it appealing or not appealing to potential consumers. Think of Chick-fil-a that has been recently in the news. They are a Christian company that is not supportive of homosexuals. Because of their views, certain consumers and groups for that matter will not eat at a Chick-fil-a now since they have taken certain public political stances in regards to peoples sexual orientation. The last of the SLEPT influences is that of T or technological influences. Companies have to stay up with technological changes especially considering how fast technology has changed and is changing. This for second about your shopping experience maybe around Christmas time. Say there is a product at a store that you want to buy for that special someone, if you go to the clerk and ask them to see if it is at a neighboring  store they say they can’t look that up, how are you going to feel? I know I would feel disappointed that they do not have the technology to look this products availability up in other stores like most stores now a day's can. What would make me feel even more disappointed as a consumer is if the store I want to buy something from doesn’t even have a website that I could try and order the product from. If the company doesn’t have one or any of these options then the company isn’t staying up to date with technological advances and would eventually go out of business. Going back to the bar rescue show, one of the reasons the bar was doing so bad was that it had not stayed up to date, and its sound system was really bad which kept it from being a good bar/club site. Something that is not part of SLEPT is that of competitive influences. A company has to research and study its competitors to make sure they stay competitive. If they do not say competitive then they run the risk of falling behind to their competition. If another company is doing something to “steal” their customers, it should be looked into because maybe those customers can be “stolen” back with a few adjustments.                       So generally I talk about Drucker and his teachings with Cohen. Really this book should be the bible of marketing, but I'm sure there other books that are just as compelling. We only had to read two short chapters in Drucker this week. Some of it was the same old same old that all the research in the world can be done on a product and a market, but sometimes it is wrong. A marketer has to keep a healthy balance of using both research and intuition. If a marketer ignores their gut feelings, sometimes they miss out a major opportunity. Beside market research, Drucker also talked about how a product needs to be defined by the customer and not the marketer. This was definitely an eye opening statement, as you sort of see the relation in real life but until the statement is made you never realize that is what is happening. Kind of like looking at a fuzzy picture and you sort of see what it is and then someone says what the picture is and bam it comes into focus. Now Jen in class talked about this in her discussion question. Her question was "Drucker states that "A product or service is defined by the customer, not the marketer". I can see (especially from the examples used in the text) how this statement could certainly hold true for a product and some services. However, I'm not quite sure how the customer would define services provided in the healthcare field, since some of them are so specific to certain health conditions/disease states." Now, I totally agree with her that certain products or services lend themselves to be redefined according the customer. I mean isn't that what pinterest is all about redefining products (or just being crafty but stick with me I'm trying to make a real life tie in). I will say though to Jen that although I think it is harder for the health field, I do think it still happens, and my one example that pop's out in my mind is Viagra. It was supposed to be heart medication, and then people realized it could do some good for another area of the body. Now it is a widely sold product for men. (If you don't know what Viagra is Google it.) Also, people use certain medical creams to help with certain beauty routines. I think I had a roommate once that used hemorrhoid cream for the black bags under her eyes. Not my cup of tea, but she swore by it.                    Another thing we had to do this week was look at two classmates’ blogs and comment about them. One person's blog that I want to comment on is Brianna's. When I started reading her blog I didn't realize it was the blog submission for week 3, but I am glad it was because it was really helpful. In her blog she named another student's blog that had been helpful to her when using PharmaSim. This is a blog I will definitely be checking out. She also talked about how nervous she was to use PharmSim, which was reassuring to hear because I have been rather nervous to use PharmaSim, and have been sort of avoiding due to being so nervous. Hearing about how someone else was so nervous and was able to overcome that was reassuring.                    The classmate that Brianna found a lot of good information on PharmaSim was Randall's blog. It was definitely a very helpful blog! First of he has run the program at least twice...I have yet to move forward in the simulation. So that was very reassuring to see.  He talked about how it easy to run a company into the ground, which is good to know for when I run the simulation as the first go around I probably will. He also gave tips as to what to make sure to not lose sight of when running the simulation. One example is that of inflation, and market share. All very helpful tips as I go forward and try to overcome my hesitation of using the PharmaSim.                    So now that I am about to embark on really diving into PharmaSim, if nothing else to figure out what we need to for this blog which is…add up how much all the reports will cost if you are to purchase them all. Which since I am so inexperienced in this world of marketing I will have to heavily depend on. So I am of course in period 1 because I am so nervous to go beyond that. But after I do this requirement I will most likely start playing with it and be much further along next week which I will then talk about. So I copy and pasted the report purchases for period 1 here:                                              Report Purchases - Period 1                                                      Market Research Purchases Report Cost   Purchase Survey $ $100,000 Operating Statistics $ $45,000 Sales Force $ $20,000 Advertising $ $35,000 Promotion $ $35,000 Channel Sales $ $25,000 Pricing $ $20,000 Shopping Habits $ $15,000 Shelf Space $ $25,000 Recommendations $ $20,000 Conjoint Analysis $ $100,000 There is a much better way to show this then this simple copy and paste, but for the sake of time, as I have writing this blog by bits and pieces every day, this is the best way I know how until I can experiment with that as well. So all the reports together cost $440,000 (I did the math twice so it should be right). Considering my budget is over 34 million, this $440,000 is relatively small. It is somewhere around 1.29% of my budget. This is a no brainer to purchase all this information. It is less than 2% of your budget that could help make the product even more successful. Pretty small investment that could end up having huge results. Well this is it for this week’s blog post.