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FMCG

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  • 1. PDF generated using the open source mwlib toolkit. See http://code.pediapress.com/ for more information. PDF generated at: Mon, 29 Apr 2013 14:26:59 UTC Marketing Start Hope So
  • 2. Contents Articles Fast-moving consumer goods 1 Trade promotion management 3 Category management 4 Marketing management 9 Marketing effectiveness 14 References Article Sources and Contributors 18 Image Sources, Licenses and Contributors 19 Article Licenses License 20
  • 3. Fast-moving consumer goods 1 Fast-moving consumer goods Soft drinks are FMCGs Fast-moving consumer goods (FMCG) or consumer packaged goods (CPG) are products that are sold quickly and at relatively low cost. Examples include non-durable goods such as soft drinks, toiletries, and grocery items. [][1] Though the absolute profit made on FMCG products is relatively small, they are generally sold in large quantities, and so the cumulative profit on such products can be substantial. Fast-moving consumer electronics are a type of FMCG and are typically low priced generic or easily substitutable consumer electronics, including lower end mobile phones, MP3 players, game players, and digital cameras, which have a short usage life, typically a year or less, and as such are disposable. Cheap FMCG electronics are often retained even after immediate failure, as the purchaser rationalizes the decision to not return the goods on the basis that the goods were cheap to begin with, and that the cost of return relative to the low cost of purchase is high. Thus low-quality electronic FMCG goods can be highly profitable for the vendors. Global leaders in the FMCG segment are Anheuser-Busch InBev, Nestlé, ITC, Hindustan Unilever Limited, Reckitt Benckiser, Unilever, Procter & Gamble, Coca-Cola, Carlsberg, Kleenex, General Mills, Pepsi, Gillette etc. Scope The term FMCGs refers to those retail goods that are generally replaced or fully used up over a short period of days, weeks, or months, and within one year. This contrasts with durable goods or major appliances such as kitchen appliances, which are generally replaced over a period of several years. FMCG have a short shelf life, either as a result of high consumer demand or because the product deteriorates rapidly. Some FMCGs—such as meat, fruits and vegetables, dairy products, and baked goods—are highly perishable. Other goods such as alcohol, toiletries, pre-packaged foods, soft drinks, and cleaning products have high turnover rates. An excellent example is a newspaper—every day's newspaper carries different content, making one useless just one day later, necessitating a new purchase every day. The following are the main characteristics of FMCGs: [] •• From the consumers' perspective: •• Frequent purchase • Low involvement (little or no effort to choose the item – products with strong brand loyalty are exceptions to this rule) •• Low price •• From the marketers' angle: •• High volumes • Low contribution margins • Extensive distribution networks • High stock turnover
  • 4. Fast-moving consumer goods 2 ISIC definition The retail market for FMCGs includes businesses in the following International Standard Industrial Classification (ISIC) (Revision 3) categories [2][3] •• ISIC 5211 retail sales in non-specialized stores •• ISIC 5219 other retail sale in non-specialized stores •• ISIC 5220 retail sale of food, beverages and tobacco in specialized stores •• ISIC 5231 retail sale of pharmaceutical and medical goods, cosmetic and toilet articles •• ISIC 5251 retail sale via mail order houses •• ISIC 5252 retail sale via stalls and markets •• ISIC 5259 whole sale goods Supplier industries for FMCGs include •• 1511 meat and meat products •• 1512 fish and fish products •• 1513 fruit and vegetables •• 1514 vegetable and animal oils and fats •• 1520 dairy products •• 1531 grain mill products •• 1532 starches and starch products •• 1533 animal feeds •• 1541 bakery products •• 1542 sugar •• 1543 cocoa, chocolate and sugar confectionery •• 1544 macaroni, noodles, couscous •• 1549 other food products •• 1551 spirits; ethyl alcohol •• 1552 wines •• 1553 malt liquors and malt •• 1554 soft drinks, mineral waters •• 1600 tobacco products •• 2101 pulp, paper and paperboard •• 2102 corrugated paper, containers •• 2109 other articles of paper and paperboard •• 2424 soap and detergents, cleaning preparations, perfumes.like the big supermarkets References [2][2] , p.2 [3][3] , p.3-4 External links • Time To Move To A Circular Economy (http://www.fastcoexist.com/1681309/ with-resources-running-short-its-time-to-move-to-a-circular-economy)
  • 5. Trade promotion management 3 Trade promotion management Trade Promotion Management (TPM) Trade Promotion Management typically refers to one or more software applications that assist companies in managing their complex trade promotion activity. Trade Promotion Management is a challenge faced by most CPG/FMCG companies around the globe. Consumer goods companies spend substantial amounts of time and money—14 percent of revenue, according to an AMR Research study—on promotions with retailers designed to boost revenue or increase/protect market share (or both). Gartner Gartner believes that technologies related to managing trade promotions have never been more relevant, as the average revenue expended by manufacturers for promotions now exceeds 20%. More and more companies are leaving spreadsheets for automated technologies, while others are adding promotion optimization capabilities. Gartner published the "Vendor Panorama for Trade Promotion Management in Consumer Goods" in August 2012. [1] Key functions •• sales forecasting •• Promotion planning and budgeting •• Predictive modeling/optimization •• Promotion execution and monitoring •• Settlement •• Post event analysis Business problems addressed Historically, there have been many solutions to trade promotion management. Commonly, companies use their accounting systems or spreadsheets, but as the complexity of trade increases software solutions have been developed and implemented to fill the needs of companies in various industries including consumer goods, food manufacturing, food service and others. Lack of accurate and timely information to support trade promotion decision-making Trade promotion decisions are often rushed and based on sub-par data. While sales and marketing managers are surrounded by promotion information, questions on retail commitment and product forecast accuracy can hinder the process. Multiple data sources and conflicting needs from various departments further complicate the issue. Inability to plan promotions based on analytics Historical trade promotion data should be analyzed in order to continually improve trade promotions. If a company does not utilize processes and systems that measure trade promotion performance, future trade promotion executions could be less effective than if they’d been planned using past analytical information. Ineffective organization and partner integration Lack of integration both internally and with external partners can hinder trade promotion success. Key elements of organizational integration include standardized metrics, regular information sharing, cross-functional department collaboration, and collaborative processes4. Integration with retail partners is important to executing promotions
  • 6. Trade promotion management 4 successfully, as well as maintain strong relationships with retailers over time. Lack of appropriate Key Performance Indicators (KPI) KPIs tell manufacturers and retailers how trade promotions performed relative to their pre-determined objectives. A lack of understanding on what trade promotion data to measure and how to measure performance can hinder the overall process. Manufacturers and retailers will not know what made a promotion effective or ineffective unless they have predetermined data points to measure and analyze. References [1] http://www.gartner.com/id=2143415 Category management The bathroom fittings category in Wal*Mart Category management is a retailing and purchasing concept in which the range of products purchased by a business organization or sold by a retailer is broken down into discrete groups of similar or related products; these groups are known as product categories (examples of grocery categories might be: tinned fish, washing detergent, toothpastes). It is a systematic, disciplined approach to managing a product category as a strategic business unit. [1] The phrase "category management" was coined by Brian F. Harris. [] Category management in a retail context Each category is run as a "mini business" (business unit) in its own right, with its own set of turnover and/or profitability targets and strategies. Introduction of Category Management in a business tends to alter the relationship between retailer and supplier: instead of the traditional adversarial relationship, the relationship moves to one of collaboration, with exchange of information, sharing of data and joint business building. The focus of all supplier negotiations is the effect on turnover of the category as whole, not just the sales of individual products. Suppliers are expected, indeed in many cases mandated, to only suggest new product introductions, a new planogram or promotional activity if it is expected to have a beneficial effect on the turnover or profit of the total category and be beneficial to the shoppers of that category. The concept originated in grocery (mass merchandising) retailing, and has since expanded to other retail sectors such as DIY, cash and carry, pharmacy, and book retailing. [2]
  • 7. Category management 5 Definition of category management (retail) Category management lacks a single definition thus leading to some ambiguity even among industry professionals as to its exact function. Three comparative mainstream definitions are as follows: Category management is a process that involves managing product categories as business units and customizing them [on a store by store basis] to satisfy customer needs. (Nielsen) [3] The strategic management of product groups through trade partnerships which aims to maximize sales and profit by satisfying consumer and shopper needs (Institute of Grocery Distribution) [4] .. marketing strategy in which a full line of products (instead of the individual products or brands) is managed as a strategic business unit (SBU). (Business Dictionary) [5] The Nielsen definition, published in 1992, was a little ahead of its time in that customising product offerings on a store by store basis is logistically difficult and is now not considered a necessary part of category management; it is a concept now referred to as micromarketing. Nevertheless, most grocery retailers will segment stores at least by size, and select product assortments accordingly. Wal*Mart's Store of the Community, implemented in North America is one of the few examples of where product offerings are tailored right down to the specific store. [6] Rationale for category management One key reason for the introduction of category management was the retailers' desire for suppliers to add value to their (i.e. the retailer's) business rather than just the supplier's own. For example, in a category containing brands A and B, the situation could arise such that every time brand A promoted its products, the sales of brand B would go down by the amount that brand A would increase, resulting in no net gain for the retailer. The introduction of category management imposed the condition that all actions undertaken, such as new promotions, new products, re-vamped planogram, introduction of point of sale advertising etc. were beneficial to the retailer and the shopper in the store. A second reason was the realization that only a finite amount of profit could be milked from price negotiations and that there was more profit to be made in increasing the total level of sales. A third reason was that the collaboration with the supplier meant that supplier's expertise about the market could be drawn upon, and also that a considerable amount of workload in developing the category could be delegated to the supplier. [7] Definition of a category The Nielsen definition of a category, used as the basic definition across the industry is that the products should meet a similar consumer need, or that the products should be inter-related or substitutable. [8] The Nielsen definition also includes a provision that products placed together in the same category should be logistically manageable in store (for example there may be issues in having room-temperature and chilled products together in the same category even though the initial two conditions are met). However, this definition does not explain how the process often works in practical retailing situations, where demographic or marketing considerations take precedence.
  • 8. Category management 6 The category management 8-step process (retail) The category management 8-step process The industry standard model for category management in retail is the 8-step process, or 8-step cycle developed by the Partnering Group. [9] The eight steps are shown in the diagram on the right; they are : 1.1. Define the category (i.e. what products are included/excluded). 2.2. Define the role of the category within the retailer. 3.3. Assess the current performance. 4.4. Set objectives and targets for the category. 5.5. Devise an overall Strategy. 6.6. Devise specific tactics. 7.7. Implementation. 8.8. The eighth step is one of review which takes us back to step 1. The 8-step process, whilst being very comprehensive and thorough has been criticized for being rather too unwieldy and time-consuming in today's fast-moving sales environment; in one survey only 9% of supplier companies stated they used the full 8-step process. [10] The current industry trend is for supplier companies to use the standard process as a basis to develop their own more streamlined processes, tailored to their own particular products [11] Market research company Nielsen has a similar process based on only 5 steps : reviewing the category, targeting consumers, planning merchandising, implementing strategy, evaluating results. Category captains It is commonplace for one particular supplier into a category to be nominated by the retailer as a category captain. The category captain will be expected to have the closest and most regular contact with the retailer and will also be expected to invest time, effort, and often financial investment into the strategic development of the category within the retailer. In return, the supplier will gain a more influential voice with the retailer. The category captain is often the supplier with the largest turnover in the category. Traditionally the job of category captain is given to a brand supplier, but in recent times the role has also gone to particularly switched-on private label suppliers. [12] In order to do the job effectively, the supplier may be granted access to a greater wealth of data-sharing, e.g. more access to an internal sales database such as Walmart's Retail Link. Governmental concerns about category management Many governments have viewed increased collaboration between suppliers and retailers as a potential source of antitrust breaches, such as price fixing. For example the UK Competition Commission [13] has raised their issues on market distortion in principle. They have also acted on milk price-fixing in Britain. [14] Category Management Association The Category Management Association (CMA) is the global category management community that enables professionals to connect with peers around the world and further their careers with the latest in best practices and certification. Founded in 2004, it is the only organization certifying coursework and individual category management professionals according to recognized industry standards. The Association encompasses a broad range of strategic insights and planning functions including: Category Management, Consumer Insights, In-Store Execution, Merchandising, Space Management, Shopper Insights & Shopper Marketing, Trade Promotion, and Pricing. Highlights
  • 9. Category management 7 The Association features a weekly e-newsletter, Share Groups, resource directories, best practice surveys, and global events, and is the only organization certifying individual professionals and companies based on industry-wide recognized standards. Membership Global members include businesses and individuals from the top consumer goods companies and leading retailers, plus mid-size companies, universities, and solution providers. The CMA collaborates with its members to realize best practices and advance the discipline of category management. Together we solve common problems with innovative solutions. The Association serves as an unbiased, central source for industry information and is unparalleled in its sole focus on category management. Modified category management For MRP-based manufacturing industries, the predominant cost-saving methodology in category management (CM) involves the integration of market intelligence with leveraged spending (for a given category of product or service). In industries where asset operation and preservation bear more significance to the procurement process than do product manufacturing – such as in an MROTemplate:Maintenance,Repair,operations environment – demonstrable benefit can still be achieved with category management but is best approached with some manner of adjustment to CM’s usual processes for analysis and strategy development. The first challenge becomes incorporating analytical processes and value drivers that are largely indigenous to the MRP world in a manner that makes sense to an MRO environment. The second (and no less important) challenge becomes avoiding a trap where the CM processes are perceived to be more important than their outcome – a scenario that can result in significant analytical delay, and even complete process paralysis. An excellent example of an MRO environment warranting adjustment to classical category management is nuclear power generation in the United States, where the adjusted approach to category management has been coined "MCM" – standing for MRO-based Category Management or Modified Category Management. Not only does electricity generation epitomize an MRO-driven environment, the nuclear energy source adds numerous dimensions of supply and procurement complexity – including federal and state regulatory compliance, nuclear industry standards compliance, nuclear-unique system and component design, and a tightly-audited (and very small) supply base, amongst others. Due to the nature and quantity of discrete characteristics native to nuclear power generation, it can easily be argued that nuclear power generation, in and of itself, should be a distinct category of procurement within a category management project. The fundamental adjustment made between the classical category management approach and the nuclear MCM approach is a shift from procurement strategies focused on leveraged spending to procurement strategies embracing nuclear value drivers, technology innovation, risk management, and strategic sourcing. Category management in purchasing Category management can also be applied to purchasing within an organisation. Although the term is the same and there are many similarities with elements of retail category management including the use of similar tools and techniques applied in reverse, the methodology is fundamentally different. Applying Category Management in purchasing benefits organisations by providing an approach to reduce the cost of buying goods and services, reduce risk in the supply chain, increase overall value from the supply base and gain access to more innovation from suppliers. It is a strategic approach that focuses on the vast majority of organisational spend. If applied effectively throughout an entire organisation the results can be significantly greater than traditional transactional based purchasing negotiations. The concept of Category Management in purchasing originated in the late 80's. There is no single founder or originator but the methodology first appeared in the automotive sector and has since been developed and adopted by
  • 10. Category management 8 organisations worldwide. Today Category Management is considered by many global companies as an essential strategic purchasing approach. Category Management has been defined as “an evolving methodology that drives sourcing strategy in progressive organisations today”. [15] The Chartered Institute of Purchasing & Supply defines Category Management as: "organising the resources of the procurement team in such a way as to focus externally onto the supply markets of an organisation (as against having a focus on the internal customers or on internal Procurement departmental functions) in order to fully leverage purchasing decisions”. [16] Jonathan O'Brien, author of Category Management in Purchasing, defines Category Management as: "the practice of segmenting the main areas of organisational spend on bought-in goods and services into discrete groups of products and services according to the function of those goods or services and, most importantly, to mirror how individual marketplaces are organised. Using this segmentation organisations work cross functionally on individual categories, examining the entire category spend, how the organisation uses the products or services within the category, the marketplace and individual suppliers.", [17] Peter Hunt, partner at ADR International, writes “the term category management can mean different things to different people, so a working definition is needed. A ‘category’ is the logical grouping of similar expenditure items, such as spend on advertising agency services or IT hardware. Category management is the sourcing process used to manage these categories to satisfy business needs while maximising the value delivered from the supply base”. [18] Many public sector organisations have recently adopted category management as a strategic transformation tool. Sir Philip Green, in his “Efficiency Review” of UK government spending, recommended that “centralised procurement [should be] mandated for common categories to leverage this buying power and achieve best practice”. [19] Notes [2] Category Management in Book Retailing (http://www.publishersweekly.com/article/CA169041.html) [3][3] Nielsen Category Management - Positioning Your Organisation to Win, p9 [4] IGD definition (http://www.igd.com/index.asp?id=1&fid=1&sid=6&tid=38&folid=0&cid=125) [5] Business Dictionary Definition (http://www.businessdictionary.com/definition/category-management.html) [6] Store of the Community (http://walmart.nwanews.com/wm_story.php?storyid=35583&section=shareholder) [7] Rationale for Category Management (http://www.catmanplus.com/whatis.html) [8] Nielsen Definition of a Category (http://www.acnielsen.com/news/european/ie/2001/20010201.htm) [9] The 8-step Category Management process (http://www.igd.com/index.asp?id=1&fid=1&sid=6&tid=38&folid=0&cid=125) [10] 9% of supplier companies admit to 8 step process (http://www.igd.com/index.asp?id=1&fid=1&sid=6&tid=38&folid=0&cid=125) [11] Trend for Suppliers to develop Streamlined Cat Man processes (http://catmanplus.com.whatis.html) [12] The role of Category Captain (http://www.catmanplus.com/whatis.html) [13] Competition Commission (http://www.competition-commission.org.uk) [14] Milk Price Fixing (http://news.bbc.co.uk/1/hi/business/7132108.stm) [15][15] "Five Best Practices for Category Management", Justin Falgione et al., Inside Supply Management, August 2008 [16][16] CIPS Knowledge Works: Category Management, July 2007 [17] " Category Management in Purchasing by Jonathan O'Brien, Second Edition (2012), Kogan Page, London, ISBN 978 0 7494 6498 1 E-ESBN 978 0 7494 6499 8 (http://www.amazon.co.uk/Category-Management-Purchasing-Strategic-Profitability/dp/0749464984/ ref=sr_1_3?s=books&ie=UTF8&qid=1348118499&sr=1-3) [18] 'Category management explained", Supply Management, 30 January 2003 (http://www.supplymanagement.com/resources/q-and-a/ 2003/category-management-explained/), accessed 26.5.2011. [19] Sir Philip Green, Efficiency Review by Sir Philip Green (http://download.cabinetoffice.gov.uk/efficiency/sirphilipgreenreview.pdf), accessed 13.6.2011
  • 11. Category management 9 References External links • ECR Community Platform (Category Management) (http://ecr-all.org/blog/category/demand/ category-management-demand/) • CIPS Category Management Model (http://www.cips.org/en/resources/categorymanagementmodel/) • Category Management Association (http://www.cpgcatnet.org/) Marketing management Marketing Key concepts •• Product marketing •• Pricing •• Distribution •• Service •• Retail •• Brand management •• Account-based marketing •• Ethics •• Effectiveness •• Research •• Segmentation •• Strategy •• Activation •• Management •• Dominance •• Marketing operations •• Social marketing •• Identity Promotional contents •• Advertising •• Branding •• Underwriting spot •• Direct marketing •• Personal sales •• Product placement •• Publicity •• Sales promotion •• Sex in advertising •• Loyalty marketing •• Mobile marketing • Premiums • Prizes •• Corporate anniversary •• On Hold Messaging
  • 12. Marketing management 10 Promotional media •• Printing •• Publication •• Broadcasting •• Out-of-home advertising •• Internet •• Point of sale •• Merchandise •• Digital marketing •• In-game advertising •• Product demonstration •• Word-of-mouth •• Brand ambassador •• Drip marketing •• Visual merchandising Marketing management is a business discipline which is focused on the practical application of marketing techniques and the management of a firm's marketing resources and activities. Rapidly emerging forces of globalization have led firms to market beyond the borders of their home countries, making international marketing highly significant and an integral part of a firm's marketing strategy. [1] Marketing managers are often responsible for influencing the level, timing, and composition of customer demand accepted definition of the term. In part, this is because the role of a marketing manager can vary significantly based on a business's size, corporate culture, and industry context. For example, in a large consumer products company, the marketing manager may act as the overall general manager of his or her assigned product. [2] To create an effective, cost-efficient marketing management strategy, firms must possess a detailed, objective understanding of their own business and the market in which they operate. [] In analyzing these issues, the discipline of marketing management often overlaps with the related discipline of strategic planning. Structure Marketing management employs various tools from economics and competitive strategy to analyze the industry context in which the firm operates. These include Porter's five forces, analysis of strategic groups of competitors, value chain analysis and others. [] Depending on the industry, the regulatory context may also be important to examine in detail. In competitor analysis, marketers build detailed profiles of each competitor in the market, focusing especially on their relative competitive strengths and weaknesses using SWOT analysis. Marketing managers will examine each competitor's cost structure, sources of profits, resources and competencies, competitive positioning and product differentiation, degree of vertical integration, historical responses to industry developments, and other factors. Marketing management often finds it necessary to invest in research to collect the data required to perform accurate marketing analysis. As such, they often conduct market research (alternately marketing research) to obtain this information. Marketers employ a variety of techniques to conduct market research, but some of the more common include: • Qualitative marketing research, such as focus groups and various types of interviews • Quantitative marketing research, such as statistical surveys • Experimental techniques such as test markets • Observational techniques such as ethnographic (on-site) observation Marketing managers may also design and oversee various environmental scanning and competitive intelligence processes to help identify trends and inform the company's marketing analysis.
  • 13. Marketing management 11 A brand audit is a thorough examination of a brand’s current position in an industry compared to its competitors and the examination of its effectiveness. When it comes to brand auditing, five questions should be carefully examined and assessed. Thetitive are the business’ prices and costs, how strong is the business’ competitive position in comparison to its competitors, and what strategic issues are facing the business. Generally, when a business is conducting a brand audit, the main goal is to uncover business’ resource strengths, deficiencies, best market opportunities, outside threats, future profitability, and its competitive standing in comparison to existing competitors. A brand audit establishes the strategic elements needed to improve brand position and competitive capabilities within the industry. Once a brand is audited, any business that ends up with a strong financial performance and market position is more likely than not to have a properly conceived and effectively executed brand strategy. A brand audit examines whether a business’ share of the market is increasing, decreasing, or stable. It determines if the company’s margin of profit is improving, decreasing, and how much it is in comparison to the profit margin of established competitors. Additionally, a brand audit investigates trends in a business’ net profits, the return on existing investments, and its established economic value. It determines whether or not the business’ entire financial strength and credit rating is improving or getting worse. This kind of audit also assesses a business’ image and reputation with its customers. Furthermore, a brand audit seeks to determine whether or not a business is perceived as an industry leader in technology, offering product or service innovations, along with exceptional customer service, among other relevant issues that customers use to decide on a brand of preference. A brand audit usually focuses on a business’ strengths and resource capabilities because these are the elements that enhance its competitiveness. A business’ competitive strengths can exist in several forms. Some of these forms include skilled or pertinent expertise, valuable physical assets, valuable human assets, valuable organizational assets, valuable intangible assets, competitive capabilities, achievements and attributes that position the business into a competitive advantage, and alliances or cooperative ventures. The basic concept of a brand audit is to determine whether a business’ resource strengths are competitive assets or competitive liabilities. This type of audit seeks to ensure that a business maintains a distinctive competence that allows it to build and reinforce its competitive advantage. What’s more, a successful brand audit seeks to establish what a business capitalizes on best, its level of expertise, resource strengths, and strongest competitive capabilities, while aiming to identify a business’ position and future performance. Marketing strategy To achieve the desired objectives, marketers typically identify one or more target customer segments which they intend to pursue. Customer segments are often selected as targets because they score highly on two dimensions: 1) The segment is attractive to serve because it is large, growing, makes frequent purchases, is not price sensitive (i.e. is willing to pay high prices), or other factors; and 2) The company has the resources and capabilities to compete for the segment's business, can meet their needs better than the competition, and can do so profitably. [] In fact, a commonly cited definition of marketing is simply "meeting needs profitably." [] The implication of selecting target segments is that the business will subsequently allocate more resources to acquire and retain customers in the target segment(s) than it will for other, non-targeted customers. In some cases, the firm may go so far as to turn away customers who are not in its target segment.The doorman at a swanky nightclub, for example, may deny entry to unfashionably dressed individuals because the business has made a strategic decision to target the "high fashion" segment of nightclub patrons. In conjunction with targeting decisions, marketing managers will identify the desired positioning they want the company, product, or brand to occupy in the target customer's mind. This positioning is often an encapsulation of a key benefit the company's product or service offers that is differentiated and superior to the benefits offered by competitive products. [] For example, Volvo has traditionally positioned its products in the automobile market in North America in order to be perceived as the leader in "safety", whereas BMW has traditionally positioned its brand
  • 14. Marketing management 12 to be perceived as the leader in "performance". Ideally, a firm's positioning can be maintained over a long period of time because the company possesses, or can develop, some form of sustainable competitive advantage. [] The positioning should also be sufficiently relevant to the target segment such that it will drive the purchasing behavior of target customers. [] To sum up,the marketing branch of a company is to deal with the selling and popularity of its products among people and its customers,as the central and eventual goal of a company is customer satisfection and the return of revenue. Implementation planning The Marketing Metrics Continuum provides a framework for how to categorize metrics from the tactical to strategic. If the company has obtained an adequate understanding of the customer base and its own competitive position in the industry, marketing managers are able to make their own key strategic decisions and develop a marketing strategy designed to maximize the revenues and profits of the firm. The selected strategy may aim for any of a variety of specific objectives, including optimizing short-term unit margins, revenue growth, market share, long-term profitability, or other goals. After the firm's strategic objectives have been identified, the target market selected, and the desired positioning for the company, product or brand has been determined, marketing managers focus on how to best implement the chosen strategy. Traditionally, this has involved implementation planning across the "4 Ps" of marketing: product management, pricing (at what price slot does a producer position a product, e.g. low, medium or high price), place (the place or area where the products are going to be sold, which could be local, regional, countrywide or international) (i.e. sales and distribution channels), and Promotion. NowWikipedia:Manual of Style/Dates and numbers#Chronological items a new P has been added making it a total of five P's. The fifth P is politics, which affects marketing in a significant way. Taken together, the company's implementation choices across the 4(5) Ps are often described as the marketing mix, meaning the mix of elements the business will employ to "go to market" and execute the marketing strategy. The overall goal for the marketing mix is to consistently deliver a compelling value proposition that reinforces the firm's chosen positioning, builds customer loyalty and brand equity among target customers, and achieves the firm's marketing and financial objectives. In many cases, marketing management will develop a marketing plan to specify how the company will execute the chosen strategy and achieve the business' objectives. The content of marketing plans varies from firm to firm, but commonly includes: •• An executive summary •• Situation analysis to summarize facts and insights gained from market research and marketing analysis •• The company's mission statement or long-term strategic vision •• A statement of the company's key objectives, often subdivided into marketing objectives and financial objectives •• The marketing strategy the business has chosen, specifying the target segments to be pursued and the competitive positioning to be achieved •• Implementation choices for each element of the marketing mix (the 4(5)Ps)
  • 15. Marketing management 13 Project, process, and vendor management More broadly, marketing managers work to design and improve the effectiveness of core marketing processes, such as new product development, brand management, marketing communications, and pricing. Marketers may employ the tools of business process reengineering to ensure these processes are properly designed, and use a variety of process management techniques to keep them operating smoothly. Effective execution may require management of both internal resources and a variety of external vendors and service providers, such as the firm's advertising agency. Marketers may therefore coordinate with the company's Purchasing department on the procurement of these services. Under the area of marketing agency management (i.e. working with external marketing agencies and suppliers) are techniques such as agency performance evaluation, scope of work, incentive compensation, RFx's and storage of agency information in a supplier database. Reporting, measurement, feedback and control systems Marketing management employs a variety of metrics to measure progress against objectives. It is the responsibility of marketing managers – in the marketing department or elsewhere – to ensure that the execution of marketing programs achieves the desired objectives and does so in a cost-efficient manner. Marketing management therefore often makes use of various organizational control systems, such as sales forecasts, sales force and reseller incentive programs, sales force management systems, and customer relationship management tools (CRM). Recently, some software vendors have begun using the term "marketing operations management" or "marketing resource management" to describe systems that facilitate an integrated approach for controlling marketing resources. In some cases, these efforts may be linked to various supply chain management systems, such as enterprise resource planning (ERP), material requirements planning (MRP), efficient consumer response (ECR), and inventory management systems. References [1] Joshi, Rakesh Mohan, (2005) International Marketing, Oxford University Press, New Delhi and New York ISBN 0-19-567123-6 Further reading • Lenskold, James D. (2003). The Path to Campaign, Customer, and Corporate Profitability by James D. Lenskold (http://books.google.com/?id=-ByzlitSB9QC&dq=Lenskold,+Jim.+Marketing+ROI.+Marketing+ROI:+ The+Path+to+Campaign,+Customer,+and+Corporate+Profitability+By+James+Lenskold). McGraw-Hill Professional. ISBN 0-07-141363-4. Retrieved 2008-11-03. • Patterson, Laura (2008). Marketing Metrics in Action: Creating a Performance-Driven Marketing Organization (http://www.amazon.com/Marketing-Metrics-Action-Performance-Driven-Organization/dp/1933199156/ ref=sr_1_6?ie=UTF8&s=books&qisbn=1225704819&sr=1-6). Racom Communications. ISBN 1-933199-15-6. Retrieved 2008-11-03. • Masi, R. J.; Weidner, C. K, AS (1995). Organizational culture, distribution and amount of control, and perceptions of quality. Group & Organization Management. doi: 10.1177/1059601195202004 (http://dx.doi. org/10.1177/1059601195202004). 2
  • 16. Marketing management 14 External links • Books about Marketing management : , Resources in your library (http://onlinebooks.library.upenn.edu/ webbin/ftl?st=wp&su=Marketing+management), Resources in other libraries (http://onlinebooks.library. upenn.edu/webbin/ftl?st=wp&su=Marketing+management&library=0CHOOSE0) Marketing at Wikibooks Marketing effectiveness Marketing Key concepts •• Product marketing •• Pricing •• Distribution •• Service •• Retail •• Brand management •• Account-based marketing •• Ethics •• Effectiveness •• Research •• Segmentation •• Strategy •• Activation •• Management •• Dominance •• Marketing operations •• Social marketing •• Identity Promotional contents •• Advertising •• Branding •• Underwriting spot •• Direct marketing •• Personal sales •• Product placement •• Publicity •• Sales promotion •• Sex in advertising •• Loyalty marketing •• Mobile marketing • Premiums • Prizes •• Corporate anniversary •• On Hold Messaging Promotional media •• Printing
  • 17. Marketing effectiveness 15 •• Publication •• Broadcasting •• Out-of-home advertising •• Internet •• Point of sale •• Merchandise •• Digital marketing •• In-game advertising •• Product demonstration •• Word-of-mouth •• Brand ambassador •• Drip marketing •• Visual merchandising 'Marketing effectiveness' is the quality of how marketers go to market with the goal of optimizing their spending to achieve good results for both the short-term and long-term. It is also related to Marketing ROI and Return on Marketing Investment (ROMI). Marketing expert Tony Lennon believes marketing effectiveness is quintessential to marketing, going so far as to say It's not marketing if it's not measured. [1] The concept of marketing effectiveness first came to prominence in the 1990s with the publication of Improving Marketing Effectiveness Shaw,R [2] which won the 1998 Business Management Book of the Year Award. In 2006, Ad Age devoted a cover story to the book "What Sticks." [3] (ISBN 1419584332), Authors Rex Briggs and Greg Stuart calculated that marketers waste 37% of their marketing investment. Reasons for the waste include failure to understand underlying customer motivations for buying, ineffective messages and inefficient media mix investment (pg 19-20). What Sticks was named the #1 Book in Marketing by Ad Age [4] and is required reading at leading Universities including Wharton School of the University of Pennsylvania [5] and Harvard., [6] suggesting that the Marketing Effectiveness continues to be an important business topic. Dimensions of marketing effectiveness • Corporate – Each company operates within different bounds. These are determined by their size, their budget and their ability to make organizational change. Within these bounds marketers operate along the five factors described below. • Competitive – Each company in a category operates within a similar framework as described below. In an ideal world, marketers would have perfect information on how they act as well as how their competitors act. In reality, in many categories have reasonably good information through sources, such as, IRI or Nielsen. In many industries, competitive marketing information is hard to come by. • Customers/Consumers – Understanding and taking advantage of how customers make purchasing decisions can help marketers improve their marketing effectiveness. Groups of consumers act in similar ways leading to the need to segment them. Based on these segments, they make choices based on how they value the attributes of a product and the brand, in return for price paid for the product. Consumers build brand value through information. Information is received through many sources, such as, advertising, word-of-mouth and in the (distribution) channel often characterized with the purchase funnel, a McKinsey & Company concept. Lastly, consumers consume and make purchase decisions in certain ways. • Exogenous Factors – There are many factors outside of our immediate control that can impact the effectiveness of our marketing activities. These can include the weather, interest rates, government regulations and many others. Understanding the impact these factors can have on our consumers can help us to design programs that can take advantage of these factors or mitigate the risk of these factors if they take place in the middle of our marketing campaigns.
  • 18. Marketing effectiveness 16 Factors driving marketing effectiveness 1. Marketing Strategy – Improving marketing effectiveness can be achieved by employing a superior marketing strategy. By positioning the product or brand correctly, the product/brand will be more successful in the market than competitors’ products/brands. Even with the best strategy, marketers must execute their programs properly to achieve extraordinary results. 2. Marketing Creative – Even without a change in strategy, better creative can improve results. Without a change in strategy, AFLAC was able to achieve stunning results with its introduction of the Duck (AFLAC) campaign. With the introduction of this new creative concept, the company growth rate soared from 12% prior to the campaign to 28% following it. (See references below, Bang) 3. Marketing Execution – By improving how marketers go to market, they can achieve significantly greater results without changing their strategy or their creative execution. At the marketing mix level, marketers can improve their execution by making small changes in any or all of the 4-Ps (Product, Price, Place and Promotion) (Marketing) without making changes to the strategic position or the creative execution marketers can improve their effectiveness and deliver increased revenue. At the program level marketers can improve their effectiveness by managing and executing each of their marketing campaigns better. It's commonly known that consistency of a Marketing Creative strategy across various media (e.g. TV, Radio, Print and Online), not just within each individual media message, can amplify and enhance impact of the overall marketing campaign effort. Additional examples would be improving direct mail through a better call-to-action or editing web site content to improve its organic search results, marketers can improve their marketing effectiveness for each type of program. A growing area of interest within (Marketing Strategy) and Execution are the more recent interaction dynamics of traditional marketing (e.g. TV or Events) with online consumer activity (e.g. Social Media). (See references below, Brand Ecosystems) Not only direct product experience, but also any stimulus provided by traditional marketing, can become a catalyst for a consumer brand "groundswell" online as outlined in the book Groundswell. 4. Marketing Infrastructure (also known as Marketing Management) – Improving the business of marketing can lead to significant gains for the company. Management of agencies, budgeting, motivation and coordination of marketing activities can lead to improved competitiveness and improved results. The overall accountability for brand leadership and business results is often reflected in an organization under a title within a (Brand management) department. 5. Exogenous Factors - Generally out of the control of marketers, external or exogenous factors also influence how marketers can improve their results. Taking advantage of seasonality, interests or the regulatory environment can help marketers improve their marketing effectiveness. Notes [2] Shaw, R. Improving Marketing Effectiveness — the methods and tools that work best, Economist Books, 1998 ISBN 1-86197-054-4 [3] Jack Neff New Book Reports 37% of All Advertising Is Wasted (http://adage.com/article/news/book-reports-37-advertising-wasted/ 110937/), Ad Age, Aug 2006 [4][4] Ad Age, Book of Tens, Dec 18, 2006 [5] Course Syllabus (http://marketing.wharton.upenn.edu/programs/syllabus-pdf/Spring2008/mba/mktg755.pdf) [6] Course Syllabus (http://isites.harvard.edu/fs/docs/icb.topic236904.files/ISMTE1123_Spring2008_Syllabus.pdf) References • Powell, Guy R., Return on Marketing Investment: Demand More From Your Marketing And Sales Investments (2003) RPI Press. ISBN 0-9718598-1-7 • Lenskold, James, Marketing ROI: The Path to Campaign, Customer, and Corporate Profitability (2003) McGraw-Hill. ISBN 0-07-141363-4 • Farris, Paul W., Bendle, Neil T., Pfeifer, Phillip E. and Reibstein, David J., Marketing Metrics: 50+ Metrics Every Executive Should Master (2006) Wharton School Publishing. ISBN 0-13-187370-9
  • 19. Marketing effectiveness 17 • Schultz, Don E., Measuring Brand Communication ROI (1997) Assn of Natl Advertisers. ISBN 1-56318-053-7 • Ambler, Tim., Marketing and the Bottom Line (2004) FT Press. ISBN 0-273-66194-9 • Aspatore Books Staff, Improving Marketing ROI: Leading CMOs on Adding Value, Calculating Return on Investments, and Creating a Financial Impact (2006) Aspatore Books. ISBN 1-59622-434-7 • American Productivity & Quality Center, Maximizing Marketing ROI (2001) American Productivity Center. ISBN 1-928593-57-7 • Lilien, Gary L., Rangaswamy, Arvind, Marketing Engineering (2004) Trafford Publishing. ISBN 1-4120-2252-5 • Briggs, Rex, Stuart, Greg, What Sticks: Why Most Advertising Fails and How to Guarantee Yours Succeeds (2006) Kaplan Business. ISBN 1-4195-8433-2 • Thaler, Linda Kaplan, Koval, Robin, Marshall, Delia, Bang! Getting Your Message Heard in A Noisy World (2003) Doubleday Publishing. ISBN 0-385-50816-6 • Mann, Don, Brand Ecosystems, the relative harmony among all marketing elements that support brands (2008) • Li, Charlene & Bernoff, Josh Groundswell (2008) •• Kotler, Philip.; Kevin Lane Keller (2006). Marketing Management, 12th ed.. Pearson Prentice Hall. ISBN 0-13-145757-8. Further reading • Laermer, Richard; Simmons, Mark, Punk Marketing, New York : Harper Collins, 2007. ISBN 978-0-06-115110-1 (Review of the book by Marilyn Scrizzi, in Journal of Consumer Marketing 24(7), 2007)
  • 20. Article Sources and Contributors 18 Article Sources and Contributors Fast-moving consumer goods  Source: http://en.wikipedia.org/w/index.php?oldid=552151043  Contributors: ADude, AbigailAbernathy, Afa86, Alan Liefting, Alvin-cs, Anilkarat, Argyll Lassie, BlackKnight, Bluerasberry, Bsw123, Busy Stubber, CBM, Carlosayam, ClanCC, Cperkes, Crazysane, Cretog8, Crocodile Punter, Deli nk, Dqd, DrKiernan, Dreadgod, Dynamicfirst, Earth, Eastlaw, EdiTor, Elm-39, Emdee, Empty Buffer, Florian Blaschke, Fratrep, Gavin.collins, Gjs238, Gutza, Haeinous, Hydrargyrum, Isnow, JamesBWatson, Jotdeh, Joyous!, Julesd, Karlhauth, Karmela, Kkm010, Kotniski, Kuru, LOL, Lightlowemon, Martin451, Materialscientist, Max rspct, Meters, Misterx2000, Mondo one, NeonMerlin, Nitinmaurya89, Nopetro, Office.ecr, Oneiros, OwenBlacker, Oxymoron83, Pamri, Pdinodia, Phangan, PhiLiP, Postdlf, Radagast83, Richardcavell, Rjwilmsi, Robert Catesby, Rodrigopaz, Sadads, Sameer.siddhanti, Senthapkt, SpeedyGonsales, Ssr, Steinsky, Synecticsgroup, Techwik, TheParanoidOne, Timmyjamesuk, Tony1, Turgan, Twim, Usagduyu, Utcursch, Vipinhari, We hope, WikiPuppies, Woohookitty, Xyzzyplugh, 214 anonymous edits Trade promotion management  Source: http://en.wikipedia.org/w/index.php?oldid=551673335  Contributors: Bearcat, Darkwind, DragonflySixtyseven, Klberbert, Kuru, Malcolma, Raellerby, Rjrnicholass, Roaminggnome1234, Ronreed, SmudgeCinder, Synecticsgroup, TKC11, Tpm expert, 11 anonymous edits Category management  Source: http://en.wikipedia.org/w/index.php?oldid=552548039  Contributors: Aaron Simmons, AccipeHoc, Alansohn, Alynna Kasmira, Arknascar44, Azurfrog, Belovedfreak, Ben White, Bender235, Bill Belt, BobKilcoyne, CMKG, Can't sleep, clown will eat me, Categoryanalyst, Centrx, ChrisCork, Christopher Connor, Cogiati, Conti, Cpgcatnet, DrSCM, EagleFan, Editorlc, Edward, Erpert, EurekaLott, Fmjohnson, Futureobservatory, Galoubet, Gogecko1, Guy M, Guðsþegn, Hwilly, Jnassour, Joeretail01, John of Reading, JonathanOB, Kateshortforbob, Kuru, Marcstrauch, Martinlc, Michael Devore, Nbumbic, Office.ecr, PKT, Pbirkbeck, Pearle, Peterleech11, Planesnboats, Positivepurchaser, RainbowCrane, Regregex, Rjwilmsi, Robertvan1, SQL, SchreiberBike, Sean Whitton, Sorsoup, SortaQuiet, Stevearens, SueHay, SueNicholls, Tanjulchik, TheJJJunk, Victorhache, WikHead, Woohookitty, X96lee15, Xs935, 61 anonymous edits Marketing management  Source: http://en.wikipedia.org/w/index.php?oldid=550534685  Contributors: 2A01:388:201:5381:E986:ECD0:F6AE:3863, Abkumsingh, AdnanSa, AdultSwim, Alansohn, Alexf, ArchonMagnus, ArielGold, Arpabr, Atpco, BRUTE, Begewe, Berkmr, Bizguy84, Bknilu, Boing! said Zebedee, Bonadea, Brandon5485, CIreland, Cander0000, Capricorn42, Cheolsoo, Chevymontecarlo, Chistiana George, Ciphers, Ckatz, Cntras, CommodiCast, Coster34, DanielBowling, Danim, Darth Panda, Denisarona, Disdero, Drowzy, Durin, E2eamon, Edward, Ehheh, Electriccatfish2, Emesee, Empty Buffer, Epbr123, ErikNY, EsheleD, Fairsing, Falcon8765, Faradayplank, Fayenatic london, Firsfron, Fjmustak, Florent1024, Funandtrvl, Gandalfgrey, Gary D, Geniac, Grochim, GuyRo, Hallows AG, HeatherMKCampbell, Heroeswithmetaphors, IceKarma, Igoldste, Inflammation, Isanisa, ItsZippy, J.delanoy, Jahoor, Jclemens, JoelWhy, Jojit fb, King of Hearts, Kingpin13, KnightRider, Kuru, Lawsonstu, Liface, Maj IIM, Marek69, Materialscientist, Maurreen, McGeddon, MikeLynch, Mild Bill Hiccup, MrOllie, Mxn, Mydogategodshat, Navneetsrivastava, Nramesh31, Nunquam Dormio, Offthewoll, Ohnoitsjamie, Opsbalajin, Pearle, Pgreenfinch, Philip Trueman, PigFlu Oink, Plasticup, Prestinesumagang, Prodman121, Puffin, Quantpole, Rbenyon, Reetawowfactor, Rettetast, Rjwilmsi, Roleplayer, Ronz, Sanda, Sayantanam1900, SchreiberBike, Sitush, Smalljim, Srknet, Synecticsgroup, Syrthiss, T-borg, Tetraedycal, The Evil IP address, The Thing That Should Not Be, Tmonzenet, Tolly4bolly, Tommy2010, Tony1, Topbanana, TwoMartiniTuesday, Van helsing, VinnyMendoza, Viridae, Whpq, WikHead, Wikidemon, Zithan, Zundark, 227 anonymous edits Marketing effectiveness  Source: http://en.wikipedia.org/w/index.php?oldid=550267789  Contributors: AndrewHowse, Andycjp, Anna512, Brand Mojo, ChrisUK, Contributor29wiki, Director126, Disdero, Emitchell62000, Evh23devon, Flowanda, Gioto, Gmilhem, GuyRo, Idea Farm, Javierito92, Kuru, Mabdul, Magioladitis, MrOllie, Natalie Erin, Plinkit, RHaworth, Ronz, Shadowjams, Steve simple, Tedder, Uktopmba, Wikiklrsc, Woz2, Zithan, 30 anonymous edits
  • 21. Image Sources, Licenses and Contributors 19 Image Sources, Licenses and Contributors File:Soft drink shelf.JPG  Source: http://en.wikipedia.org/w/index.php?title=File:Soft_drink_shelf.JPG  License: Public Domain  Contributors: Original uploader was SMC at en.wikipedia Image:Bathroom category.jpg  Source: http://en.wikipedia.org/w/index.php?title=File:Bathroom_category.jpg  License: GNU Free Documentation License  Contributors: Skier Dude, Xs935 Image:8-step-process.gif  Source: http://en.wikipedia.org/w/index.php?title=File:8-step-process.gif  License: Public Domain  Contributors: xs935 Image:Marketing Metrics Continuum.svg  Source: http://en.wikipedia.org/w/index.php?title=File:Marketing_Metrics_Continuum.svg  License: Creative Commons Attribution 3.0  Contributors: Zithan (talk). Original uploader was Zithan at en.wikipedia file:Wikibooks-logo-en-noslogan.svg  Source: http://en.wikipedia.org/w/index.php?title=File:Wikibooks-logo-en-noslogan.svg  License: logo  Contributors: User:Bastique, User:Ramac et al.
  • 22. License 20 License Creative Commons Attribution-Share Alike 3.0 Unported //creativecommons.org/licenses/by-sa/3.0/

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