Saturday, November 7, 2009
Micro Blogging
The Tactic Of Effective Marketing
Leo Burnett (Pioneer American advertising Executive, 1891-1971)
TYPES OF CONSUMER BEHAVIOR
• Level of Involvement in purchase decision. Importance and intensity of interest in a product in a particular situation.
• Buyer’s level of involvement determines why he/she is motivated to seek information about a certain products and brands but virtually ignores others.
High involvement purchases--Honda Motorbike, high priced goods, products visible to others, and the higher the risk the higher the involvement. Types of risk:
• Personal risk
• Social risk
• Economic risk
The four type of consumer buying behavior are:
• Routine Response/Programmed Behavior--buying low involvement frequently purchased low cost items; need very little search and decision effort; purchased almost automatically. Examples include soft drinks, snack foods, milk etc.
• Limited Decision Making--buying product occasionally. When you need to obtain information about unfamiliar brand in a familiar product category, perhaps. Requires a moderate amount of time for information gathering. Examples include Clothes--know product class but not the brand.
• Extensive Decision Making/Complex high involvement, unfamiliar, expensive and/or infrequently bought products. High degree of economic/performance/psychological risk. Examples include cars, homes, computers, education. Spend alot of time seeking information and deciding.
Information from the companies MM; friends and relatives, store personnel etc. Go through all six stages of the buying process.
• Impulse buying, no conscious planning.
The purchase of the same product does not always elicit the same Buying Behavior. Product can shift from one category to the next.
For example:
Going out for dinner for one person may be extensive decision making (for someone that does not go out often at all), but limited decision making for someone else. The reason for the dinner, whether it is an anniversary celebration, or a meal with a couple of friends will also determine the extent of the decision making.
Categories that Effect the Consumer Buying Decision Process
A consumer, making a purchase decision will be affected by the following three factors:
1. Personal : Unique to a particular person. Demographic Factors. Sex, Race, Age etc.
Who in the family is responsible for the decision making?
Young people purchase things for different reasons than older people.
2. Psychological : here are only a few psychological factors-
• Motives--
A motive is an internal energizing force that orients a person's activities toward satisfying a need or achieving a goal.
Actions are effected by a set of motives, not just one. If marketers can identify motives then they can better develop a marketing mix. Such as the Maslow’s hierarchy of needs.
• Perception--
What do you see?? Perception is the process of selecting, organizing and interpreting information inputs to produce meaning. IE we chose what info we pay attention to, organize it and interpret it.
• Ability and Knowledge--
Need to understand individual’s capacity to learn. Learning, changes in a person's behaviour caused by information and experience. Therefore to change consumers' behaviour about your product, need to give them new information re: product...free sample etc.
3. Social: Consumer wants; learning, motives etc. are influenced by opinion leaders, person's family, reference groups, social class and culture.
product management
2. Outward-facing Product Marketing, in contrast, focuses on presenting to customers (and to the larger marketplace) your messages about how your products solve top customer problems. This is an ongoing, outbound marketing process that is conducted at both strategic and tactical levels. Effective Product Marketing teams continually refocus these messages in light of your new product capabilities, and based on competitive moves by others and on broad market conditions.
(Note, by the way, that many firms -- especially startups -- combine these two functions into one management team. While that can be very appropriate for a small firm, these are still two different functions that must be thought of separately if you are to avoid a revenue trap for New Business Development, as discussed below.)
One way to visualize this distinction is to hold up your hand with all five fingers extended.
Think of these five fingers as the five most important new capabilities that your inbound Product Management team has determined must be included in the next release of your product. All of these top capabilities are important if you are to solve customers' problems as effectively as possible -- and for you to meet and beat competitive pressures.Now close your thumb and the two smallest fingers, extending only two fingers. Think of these as just two of those five problem-solving product capabilities. These should be two key product capabilities that are most likely to immediately "grab the attention" of potential customers. Each of these two product capabilities may be on the "top two" list from a Product Marketing outbound message point of view for a wide range reasons, such as:
The capability is genuinely new -- it solves a well-known customer problem far better than in the past.
It "shuts down" a competitor's claim to equality with you, or to their superiority over you.
You have a solid customer testimonial -- really strong, and published or publishable -- about the importance of this product capability.
Every time you show this capability to a customer or prospect, it brings out great responses such as, "That's just what we need to solve this critical problem."
Role of Marketing in Business
The marketing section of a business needs to work closely with operations, research and development, finance and human resources to check their plans are possible. Operations will need to use sales forecasts produced by the marketing department to plan their production schedules. Sales forecasts will also be an important part of the budgets produced by the finance department, as well as the deployment of labor for the human resources department.A research and development department will need to work very closely with the marketing department to understand the needs of the customers and to test outputs of the R&D section.
Friday, November 6, 2009
selling the wanted thing?
Leadership is now the strongest marketing strategy by Seth Godin
Yelling with gusto used to be the best way to advertise your wares. There was plenty of media and if you had plenty of money, you were set.
Today, of course, yelling doesn't work so well.
What works is leading. Leading a (relatively) small group of people. Taking them somewhere they'd like to go. Connecting them to one another.
I say relatively because there are few products that need everyone in order to succeed. A tiny sliver of the market is enough. Bill Niman used to run Niman Ranch, a cooperative raising meat for fancy restaurants and markets. That was already a sliver of the huge huge market for meat. He moved on to start BN, a 1000 acre farm raising goats for a subset of that subset. It's enough.
It's enough if the tribe you lead knows about you and cares about you and wants to follow you. It's enough if your leadership changes things, galvanizes the audience and puts the status quo under stress. And it's enough if the leadership you provide makes a difference.
Go down the list of online success stories. The big winners are organizations that give tribes of people a platform to connect.
Go down the list of fashion businesses or business to business organizations. Same thing. Charities, too. Churches, certainly.
It's so tempting to believe that we are merely broadcasters, putting together a play list and hurtling it out to the rest of the world. Louder is better. But we're not. Now we're leaders.
People want to connect. They want you to do the connecting.
summary: i would totally agree that right kind of leadership is extremely vital for any company or any business to work and it is very important in designing the marketing strategy.
Ten Effective Tips To Relax
2. Take a break from the activity you are working on and do something different. Sometimes it helps to come back to a stressful task later when you feel more relaxed instead of persevering. If you are at home with small children it is often better to stop when they, and you, become frustrated and take some time out to do something else so everyone can calm down.
3. Listen to relaxing music while you work. Listening to classical or nature music has been shown to lower heart rate and slow breathing. People often report feeling calmer after listening to calming music. Develop the habit of playing music in the background while you work for easy relaxation.
4. Take regular breaks during the day. Spend 5-10 minutes to read something uplifting or humorous, or chat with a friend. Small breaks help to prevent your mind and body from becoming fatigued, a major source of stress.
5. Practice mindfulness. Mindfulness is the ability to be fully aware of the present moment. It is a skill that helps to reduce stress and depression. Learning relaxation techniques is a good way to start learning mindfulness. As you gradually become more aware of your body and subtle changes that occur with relaxation your ability to notice small changes will improve. Start by spending 5 minutes a day just sitting in the quite noticing the sights, sounds and bodily sensations you are having. You can also learn mindfulness through meditation techniques.
6. Change your focus. As people feel more stressed their attention becomes focused on what they believe to be the cause of their stress and they ignore other information. Write down the things that were good about the day. Keep a gratitude journal.
7. Have a hot bath or shower. This will help to get rid of the tension in your muscles which is a normal result of stress.
8. Write down the things that are worrying you. If you are worried it is very difficult to relax easily. Once you have written them down then see how much control you have over them. Can you take any action to solve the problem or are you worrying about things that are out of your control. Worry is a habit that can be helped by learning effective relaxation techniques.
9. Keep things in perspective. Ask yourself ‘how important is it?’ ‘How important will it be in a year’s time?’ Many of the things that cause stress are not important when we look at the big picture.
10. Slow your breathing and purposefully relax your body for quick results. This will be easier if you have learned easy relaxation methods that you can use when you need them. I’ll add more relaxation techniques in a future post
7P's of marketing Mix
The 7Ps of the marketing mix can be discussed as:
Product:
It must provide value to a customer but does not have to be tangible at the same time. Basically, it involves introducing new products or improvising the existing products.
Price:
Pricing must be competitive and must entail profit. The pricing strategy can comprise discounts, offers and the like.
Place:
It refers to the place where the customers can buy the product and how the product reaches out to that place. This is done through different channels, like Internet, wholesalers and retailers.
Promotion:
It includes the various ways of communicating to the customers of what the company has to offer. It is about communicating about the benefits of using a particular product or service rather than just talking about its features.
People:
People refer to the customers, employees, management and everybody else involved in it. It is essential for everyone to realize that the reputation of the brand that you are involved with is in the people's hands.
Process :
It refers to the methods and process of providing a service and is hence essential to have a thorough knowledge on whether the services are helpful to the customers, if they are provided in time, if the customers are informed in hand about the services and many such things.
Physical (evidence):
It refers to the experience of using a product or service. When a service goes out to the customer, it is essential that you help him see what he is buying or not. For example- brochures, pamphlets etc serve this purpose.
Ref: http://itsanentrepreneursworld.com/Sale-Marketing/the-7ps-of-marketing-mix.html?directory=62
Always Remember
- Business has only two functions- marketing and innovation.
- Marketing is what you do when your product is no good.
- No great marketing decisions have ever been made on quantitative data.
Thursday, November 5, 2009
10 tips on successful market entry strategy
10 Tips on successful market entry strategy
PA Consulting’s head of emerging markets Dean White has contributed a recent article to The Times Business Section on how to expand into emerging markets. The article gives a ten point guide on how to overcome the risks that come with trying to expand overseas…
The ten tips in summary are:
- - Research
- - Have an exit plan
- - Choose the right place
- - Everything will be different
- - Take a test run
- - Don’t think like a colonialist
- - Know the rules
- - Relationships are critical
- - Learn from others’ mistakes
- - Employ the right people
MARKETING CONCEPT AND ORIENTATION
It is a fundamental idea of marketing that organizations survive and prosper through meeting the needs and wants of customers. This important perspective is commonly known as the marketing concept.
The marketing concept is about matching a company's capabilities with customer wants. This matching process takes place in what is called the marketing environment.
Businesses do not undertake marketing activities alone. They face threats from competitors, and changes in the political, economic, social and technological environment. All these factors have to be taken into account as a business tries to match its capabilities with the needs and wants of its target customers.
An organization that adopts the marketing concept accepts the needs of potential customers as the basis for its operations. Success is dependent on satisfying customer needs.
What are customers needs and wants?
A need is a basic requirement that an individual wishes to satisfy.
People have basic needs for food, shelter, affection, esteem and self-development. Many of these needs are created from human biology and the nature of social relationships. Customer needs are, therefore, very broad.
Whilst customer needs are broad, customer wants are usually quite narrow.
A want is a desire for a specific product or service to satisfy the underlying need.
Consider this example:
Consumers need to eat when they are hungry.What they want to eat and in what kind of environment will vary enormously. For some, eating at McDonalds satisfies the need to meet hunger. For others a micro waved ready-meal meets the need. Some consumers are never satisfied unless their food comes served with a bottle of fine Chardonnay.
Social and cultural forces, the media and marketing activity of businesses, shape consumer wants.
This leads onto another important concept - that of customer demand:
Consumer demand is a want for a specific product supported by an ability and willingness to pay for it.
For example, many consumers around the globe want a Mercedes. But relatively few are able and willing to buy one.
Businesses therefore have not only to make products that consumers want, but they also have to make them affordable to a sufficient number to create profitable demand.
Businesses do not create customer needs or the social status in which customer needs are influenced. It is not McDonalds that makes people hungry. However, businesses do try to influence demand by designing products and services that are
• Attractive• Work well• Are affordable• Are available
Businesses also try to communicate the relevant features of their products through advertising and other marketing promotion.
Which leads us finally to an important summary point.
A marketing orientated business is one that which has adopted the marketing concept
Changing behaviour by changing yourself? Not the easiest way of doing a great job!
Why do some people eat all the day long? In America some time ago people had 3 meals a day, now they snack anytime. Is it because of hunger? Not very likely, although it does not seem to be. Just as Peter Beger suggests, "read a little bit of Brian Wansink's book Mindless Eating to realize just how much our actions are determined by our environment." Let's return to the question of eating habit, Brian found that:
"...the reasons we eat have little to do with hunger and a tremendous amount
to do with the subtle cues that drive us. For example, if you use a big spoon,
you'll eat more. If you serve yourself on a big plate, you'll eat more. If you
move the small bowl of chocolates on your desk six feet away you'll eat half as
much. If you eat chicken wings and remove the bones from the table, you'll
forget how much you ate and you'll eat more. If you have a bowl of soup that
never gets less than half full, you'll eat more. And the more people you eat
with, the more you'll eat."
How many habits of yours, some of which you might be obsessed with and want to get rid of, are shaped by your choices and decisions, and not by the environment around? Not many! (You can debate a lot against this paradigm which however doesnot seek to reduce human ability to change, rather addresses it, as in the coming lines.) So let's not just pity ourselves, and be receptive about the condition we are living in, of course this calls for 'being proactive' and creating a change - this time in the "outside". This has great implications not only for us as normal human beings but as well for marketers, spiritual teachers, and a lot of other people.
Just to quote a small example Berger gives on the 'efficiency' of marketers, consider this:
"Marketers already know this. It's why you get so many catalogs over the
year. Of course you could go to their website to shop. Or just use the catalog
you already have on the counter. But no, they'll send you another one two weeks
before Valentine's Day. Or Halloween. Or Christmas. They know when you're
thinking about buying something and they'll make sure that, just as you have
that thought, hey look, a catalog."
Market Positioning
I will apply some of these value propositions to different products and I want your guys feedback on this application.
There is the more for more value proposition which is you get more and you pay more. Its best example is Gillette Mach 3 Turbo. You pay more and you get additional product features.
Then there is the more for less value proposition. Some of the old book shops in Lahore claim that you get the same quality of books there but at a lower price.
There is also the less for much less value propsition. There are some cheap hotels in Lahore which do not offer all the great comforts like other big hotels but these cheap hotels charge much less. What do you guys think about these applications?
Wednesday, November 4, 2009
Two Heads Are Better Than One
Have you ever noticed that when you explain something you've learned in class to a friend, you begin to understand it better yourself? This happens because when you explain, or teach, an idea, you need to actively think it through. And by thinking more deeply about what you've learned and then explaining it to someone else, you begin to understand it better. Studying with others in a small group is helpful to everyone because, as in the example above, you
•Think out loud.
•Share ideas.
•Learn from one another.
As the old saying goes, "Two heads are better than one." While studying alone may work well for things such as memorizing facts, sometimes you'll need to understand complicated ideas. And rather than memorize facts, you'll be required to apply facts to solving problems. Effective study groups involve hashing out lesson materials together—explaining concepts, arguing about them, figuring out why one person's answer differs from another's—and in the process, you learn more than you ever would have studying by yourself. Moreover this activity teach us to be interdependent— habit 4,5 and 6
The Benefits of Study Groups
Group study offers other advantages, in addition to gaining a deeper understanding of class material. These include the following:
Note-taking Reinforcement:
Took horrible notes in X class last week? No worries! A member of your study group can share his.
Sharing Talent:
Each person brings different strengths to a study group, such as organizational skills, the ability to stick to a task, a talent for memorization, and so on.
Covering More Ground:
Three study group members may be able to solve a calculus problem none would have solved alone.
Support System:
Members of a study group often have common goals, such as good grades. The work each person in a group does affects the other members, which results in making the group members supportive of one another.
Socializing:
The It's more fun to study with others. And because it's more fun, you spend more time studying!
Guide Line for Getting a Group Together
How do you put a study group together? How many members should the group have? For how long should you meet? For answers to these questions and more, check out the following study group guidelines:
How Many?
Create a group of four to six people. In a larger group, it's easy for someone to get left out, and smaller groups can too easily get off track.
Who?
Pick classmates who seem to share your interest in doing well in class. Look for people who stay alert in class. John Mitchell, who has researched group work at Central Michigan University, suggests including in your study group "someone who understands the material better than you and someone who understands less." Doing so will provide you with someone who can explain concepts to you and someone to whom you can explain the material.
Where?
Hold study group sessions in a place that is free of distractions and that has room to spread out books, and notes.
How Long?
Study groups should meet for no more than two to three hours at a time. Having a time limit will help the group focus. If you know you only have an hour, you're more likely to stay on task.
When?
If possible, try to meet on the same day and time each week. Treating the study session as you would other activities helps you to keep to a schedule and ensures that everyone will attend.
Getting the Most Out of a Study Group
The greatest benefit of studying with a group of classmates is the support you receive from one another. Here are some tips to help your group get the most out of each study session:
State Objectives or Goals:
Knowing what you want to achieve at each session helps the group stay focused and manage time. At the start of each meeting, a designated session leader should state what the goals are. For example, the session leader might announce, "Today we'll review chapter 7 and discuss the theorems introduced in class on Wednesday."
Be Prepared:.
Before a session, be sure to finish your assigned reading, review notes, and list topics you want to go over. By being well prepared, your group can make the most of your time together by questioning one another on the assigned material
Take Turn Teaching:
When you instruct the group, you not only help the other group members, but also reinforce your own knowledge.
Stay on Topic:
For each session, assign one member to be the taskmaster. This person's job is to steer the group members back to the topic if they begin to drift. Also, schedule five-minute breaks into your study sessions after every half hour or so of work. This allows all the group members to get off-topic chatting out of their systems. By supplementing your individual study with a study group, you can reinforce what you've learned, deepen your understanding of complex concepts, and maybe even make a few new friends. Whoever said learning can't be fun?
Six steps to get "Slightly Famous"
Six steps to get “Slightly Famous”
Some business owners attract clients and customers like magic. They do not cold call or rely on advertising. Yet they're regularly featured in newspapers and magazines and get invited to speak at conferences. Everyone knows their name, and they get all the business they can handle. It's almost as though they were famous. In fact, they are, but not in the way movie stars and athletes are famous—they're just slightly famous. Just famous enough to make their names come to mind when people are looking for a particular product or service. They get more business-not only more, but the right kind of business-and they don't have to work so hard to get it. Want to join them and enjoy this ideal state of affairs, where customers come to you? You can, but it may require a new way of thinking and a new marketing strategy. Although their efforts take different forms, underlying them all are six basic principles.
1. Targeting the Best Prospects Slightly famous entrepreneurs focus their marketing to target the best prospects. Alex Fisenko is known in the world of coffee as "the Dean of Beans." The 60-something coffee expert started his first espresso shop in the 1960s. Since then, he's focused his energies and now sells his expertise on launching a successful coffee business to aspiring entrepreneurs. Alex conducts coffee shop seminars and sells a training course called "Espresso Business Success." His Web site, www.espressobusiness.com, generates thousands of dollars a month in products sales and consulting engagements in the United States, Thailand, South Korea, Belgium, Saudi Arabia and Barbados. "By targeting the best prospects, I now make more money through book sales and consultations than when I ran coffee shops," says Fisenko.
2. Developing a Unique Market Niche Small businesses with a "slightly famous" strategy establish themselves within a carefully selected market niche that they can realistically hope to dominate. Dan Pointer, for example, is a successful self-publisher who started writing books about parachuting and hang-gliding over thirty years ago. Though it might sound as if his audience would be too small to generate significant sales, he knew his market and where to find them. Best of all, he has the market all to himself! Rather than try to fight for attention in general bookstores, he sold books to skydiving clubs, parachute dealers and the U.S. Parachute Association. He developed a reputation in skydiving circles, and has enjoyed steady sales of his books for more than three decades.
3. Positioning Your Business as the Best Solution Positioning is about identifying a key attribute of your company not offered by competitors and that is clearly valuable to your target market. When Harry Shepherd started his bookkeeping service a few years ago, he realized that he was in competition with dozens of other bookkeepers selling essentially the same thing. To stand out, he mastered a popular accounting program and marketed himself as a "QuickBooks Software Training Consultant." Shepherd went from blending into a sea of look-alike competitors to occupying a compelling market position. He charged higher fees, and he did not have to work as hard to get new clients. Word spread fast among accountants as they referred him to their clients. He even trained other bookkeepers to use accounting software.
4. Maintaining Your Visibility When was the last time your name appeared in print? Yesterday? Last week? A month ago? Just because you remember doesn't mean a potential customer will. To become "slightly" famous, you need to have your message out there, if not continuously, then often enough to keep your name alive in customers' minds. When Bart Baggett decided to make handwriting analysis his career, he embraced the media, and studied newspapers, magazines, and radio and television programs to find out what types of guests were in demand, and then looked for ways to tie his professional abilities to specific media. His strategy paid off. At the height of the O.J. Simpson trial, he sent out a news release about Simpson's handwriting that resulted in several timely media interviews. He later appeared on Court TV to discuss Timothy McVey's handwriting, and was recommended by the director of that program to CNN. A feature in Biography Magazine led to stories in the London Times, the Dallas Morning News, and others.
5. Enhancing Your Credibility The surest way to earn credibility is by establishing yourself as a "recognized" expert with intimate knowledge of your clients, customers and industry. Experts out-position their competitors because they are recognized as knowing more than their competitors. Fred Tibbitts, Jr. founded Fred Tibbitts & Associates to help food and beverage companies reach global markets. He strategically cultivated a reputation in his industry as a well-connected and knowledgeable global beverage-marketing expert who is fluent in all the details of his business. Tibbitts monitors global beverage trends on a daily basis while staying in contact with account managers at hotels and restaurants. He hosts a series of special events, "Fred Tibbitts Spring & Autumn Dinners with Special Friends," in key markets, including Hong Kong, Singapore and New York. Tibbitts also contributes a column to Hospitality International Magazine and numerous industry publications.
6. Establishing Your Brand and Reputation Slightly famous entrepreneurs use their smallness and specialty in ways that corporate giants can't touch. They make sure their brands strike an emotional chord by bringing their business "soul" to the forefront of their marketing. When you meet Dave Hirschkop at a trade show, don't expect to shake his hand. That's because he'll be wearing a straitjacket while standing before a simulated insane asylum to promote his popular line of "Insanity" hot sauces. Dave established his brand by making the hottest sauce possible. Instead of sensual pleasure, he promised pain, even danger. Now, Dave's Gourmet, Inc. steps to the front of the crowded hot sauce category because he embraced a humorous branding strategy that resulted in fiercely loyal customers and great media exposure. When Dave introduced his Insanity Sauce at the National Fiery Foods Show in New Mexico, he made attendees sign a release form before tasting from a bottle that came in a coffin-like box wrapped with yellow police tape. His best, if unintended, publicity coup happened when a show promoter had a minor respiratory problem after tasting his sauce, and banned him from the show. "When people eventually meet me, they expect to find a wild man who wants to burn everything in sight," Dave says, "but I'm just a normal guy with a sense of humor who went into my business and created my brand by accident. It was sort of a joke." The more he personalizes his business, the more people gravitate to his products. "People feel like they know me," says Dave. "We get calls at 3:00 AM on our voice mail saying, 'Dave, man, you burned me!' I think my all-American name helps, but it's really because we use our smallness and specialty in ways that corporate giants can't touch." To enjoy "slightly" famous status, you don't have to be insane. But, you must cultivate a brand identity that will become the guiding star of your entire business. It will ensure that all your marketing efforts pull in the same direction. You'll waste less time, make fewer marketing mistakes, and stand out in an increasing cluttered world.
Marketing and Finance.
Introduction to Financial Statements for Marketing.
How Basic Financial Statements Can Help Shape Your Marketing Plan.
Ron Thomas, Thomas Enterprises, Indianapolis.
Often marketing professionals are criticized since they are viewed as creative and innovative people that tend to spend the company's money without worrying about how effectively or efficiently it is being spent.
You must monitor the efficiency and effectiveness of your marketing activities, as well as other important business functions such as production and the quality of products or services. However since the purpose of a business is to earn a profit, finances had better be one of your marketing foundations.
There are some key financial tools that are essential to this monitoring task. Taken together they provide an overview of the firm's health and future prospects:
1.The Balance Sheet
2.The Income Statement
3.The Cash Flow Statement
It may not be readily apparent to you how financial statements are relevant from a marketing perspective. You may ask - What can these financial statements tell me about my Marketing Plan? First, let me outline each briefly and then elaborate on why they will be so important to you and your future success.
The Balance Sheet.
The Balance Sheet has two main purposes; (1) Listing the assets of your company and (2) Listing the liabilities of your company. Some examples of assets that might appear in a balance sheet are cash on hand, accounts receivable (amounts owed to your firm), furniture, company vehicles, etc. Some examples of liabilities that might appear in a balance sheet are accounts payable (amounts your firm owes to others), loan amounts payable within a year, your equity investments made, etc. In a typical start-up firm, owners' investments may be temporarily shoring up the lack of sufficient accounts receivable.
The Income Statement.
The Income Statement is often called a Profit & Loss Statement. As you might imagine, the income statement provides some hints about how efficient the young firm is being run. Typical components found in an income statement are net sales, the costs of goods sold, the costs of inventory if applicable, and regular expenses such as office rent, payroll, supplies, etc. When both positive and negative finances are displayed on an income statement, key components contributing to profit or loss for the period can be identified.
The Cash Flow Statement.
The components of an income statement can be turned into a Cash Flow Statement. The main work of a Cash Flow Statement occurs in the first column. It starts with a snapshot of your beginning cash balance. Next, it itemizes the amount of each source of income on a line of its own. The beginning cash balance plus the sum total of all income sources is totaled for your Available Cash Balance.
Next, simply make a grand total of all outgoing cash. Now, after subtracting the Total Cash Out Flows from the Available Cash Balance you will arrive at the Ending Cash Balance for the first month. To see how the cash "flows", simply move the Ending Cash Balance to the top of the next months' column and enter the figure as Beginning Cash Balance. Complete these steps, entering in the appropriate dollar amounts across from each source of income and expense and you will be in a position to monitor your cash flow.
What can a Balance Sheet, Income Statement and Cash Flow Statement tell you about your Marketing Plan? Perhaps your original owners' equity is too committed to capital to launch an expansive marketing campaign. Past results may show advertising had to be scaled back due to insufficient inventory. You may not have funds to sustain a long term marketing strategy.
In summary, a company's financial statement tells what has occurred and provides data to aid you in making informed projections for the future. Monitoring them may lead to the appropriate revisions in your marketing strategy.
Aim at the end is profitability so marketing definitely has a important relation with finance.
Reference: www.marketingteacher.com
Benchmarking.
Introduction to Benchmarking.
Benchmarking relies upon a comparison between the activities of your own organization and those of another. Originally benchmarking was used in manufacturing operations where one process could be compared and contrasted with another.
Think about it in basic terms – you measure a piece of wood along your bench. You keep one end of the wood level/flush with the end of the bench and cut a notch in the bench itself with your chisel at the other end. Then you place other pieces of wood in the same location – the shorter ones you reject and the longer ones you cut down. A benchmark is a measurement tool.
Xerox is commonly cited as the original proponent. More recently the definition has broadened to include all business processes, competitive advantages, performance and strategies (Prasnikar et al 2005)
Basic types of benchmark.
Competitive or Industry/sector benchmarking enables an organization to compare its performance with competitors trading in the same industry or sector.
Best-in-class benchmarking is similar to industry or sector benchmarking. However managers would compare their organization to the market or sector leader i.e. the best-in-class.
Internal or historical benchmarking is the internal procedure for comparing results from past performance to current or forecasted performance.
Functional or external benchmarking involves comparing your business activities with those of companies from other industries/sectors with similar processes.
Collaborative benchmarking involves two phases; firstly between two voluntary collaborators within a sector, then secondly between the two collaborators and a party outside the current sphere of competition. Of course this is better suited to the public sector e.g. hospitals, police services since commercial rivals are unlikely to collaborate in this manner.
Benefits of benchmarking (Gift 1996)
- It is an effective approach for achieving operational change. Benchmarks are the catalyst that moves an organization to higher levels of performance.
- Since customer requirements are so rigorously defined, benchmarking improves customer orientation.
- It focuses upon the processes that improve results - not simply results.
- Performance measures are often improved as a result of benchmarking.
- Decision making improves because the organization has enhanced customer knowledge, process focus, and performance measures.
- Benchmarking improves innovation and creativity since self-imposed barriers to success are removed.
Potential pitfalls with benchmarking.
- Benchmarking needs to be supported and driven by senior leaders.
- Prerequisites (such as organizational structure, processes) need to be in place.
- Conducting benchmarking for the wrong reasons can be problematic e.g. to produce data - ignoring processes and insights gained into practices that produce benchmarks.
- Selecting the wrong benchmarks.
- Selecting the wrong benchmark partner.
- Not gaining management support for plans resulting from benchmarks.
Marketing benchmarking.
When applying benchmarking techniques to an organization’s marketing activities you are essentially comparing one or a number of your company’s marketing activities to those of another part of the business, a competitor or a business that operates in another industry. Vorhies and Morgan (2005) used the following marketing benchmarks in their research:
- Pricing
- Product Development
- Channel Management
- Marketing Communications
- Selling
- Market Information Systems
- Marketing Planning
- Marketing Implementation
Essentially they focus upon the marketing mix, marketing information, planning and operations. Each of these could be sub-divided and new factors introduced e.g. Customer Relationship Management (CRM) – to suit your own organization’s marketing strategy.
Very important phenomena that marketers use and is a vital tool in successful marketing.
Reference: www.marketingteacher.com
Marketing Budget
Financial Statements for Marketing
Ron Thomas, Thomas Enterprises, Indianapolis.
Failure to properly cost and budget your marketing plan could lead to problems. While insufficient funding for such items as equipment or staffing may immediately come to mind when budgeting for the whole business, it's the lack of a properly constructed marketing budget that dooms many marketing plans and campaigns. A marketing budget is the marketing plan written in terms of costs.
Marketing Budget
A marketing budget is an estimate of projected costs to market your products or services. A typical marketing budget will take into account all marketing costs e.g. marketing communications, salaries for marketing managers, cost of office space etc. However much of the budget is concerned with marketing communications e.g. public relations, website, advertising, etc. Both are considered here.
The costs in a marketing budget will be allocated according to the campaign and the media to be utilized. Some prior research will be necessary for the cost estimates to be as realistic as possible. This is called advertising or marketing communications research.
Helpful Pre-budgeting Research
- 1. Industry and Market Research
- 2. Competitor Analysis/SWOT
- 3. Internal marketing performance records e.g. marketing metrics, marketing controls.
- 4. Marketing Audit.
Knowledge of key industry and market factors must be taken into account when developing your marketing plan. Your plan will also be influenced by researching your competition. You will want to allot funding in a way that exploits the weaknesses of your competitors and emphasizes your strengths.
Other information that can guide your spending plan is found in your internal records. What advertising expenditures have proven successful for your business? For example, you can review internal records and determine the return on investment of your advertising dollars. A periodic examination of the performance of these records may lead you to drop certain media that have not proven fruitful.
Typical general marketing expenses:
- Advertising agency commissions
- Salaries for marketing managers
- Salaries for marketing support e.g. marketing assistants.
- Office space
- Fixtures and fittings
- Travel costs
- Other direct and indirect marketing costs, including marketing communications costs (see below).
Typical marketing communications costs:
- Personal Selling
- Public Relations
- Printing
- Mailing
- Website Development & Hosting
- Brochure Design
- Advertising
- Television Advertising
- Radio Advertising
- Direct Marketing
- Newspaper Advertising
- Proposal Development/bid submittal
- Networking
- Event Attendance
- Sales Promotion
- Many other marketing communications tools.
Summary of the Marketing Budget
Marketing budgets ensure that your marketing plan or campaign is realistically costed. Some pre-budget research into your industry and market, your competitors and your business's historical marketing metrics helps marketing managers make a more informed calculation. You should cost out all general marketing and marketing communications expenses. You could also work in conjunction with an accountant to make sure that the figures are complete and realistic.
Budgets are always very important in businesses and therefore marketing also needs a budget for it to be successful both in the short and in the long run.
Reference: www.marketingteacher.com
Tuesday, November 3, 2009
Marketing Philophies
Marketing philosophies
Production philosophy . . . is production (product) oriented. It implies a good product will sell itself, or "we don't need a sales department because we can sell everything we can produce".
Sales philosophy . . . says, "our capacity exceeds our orders and we don't want to reduce production, so lets find some new customers".
Marketing department philosophy . . . says "let's find new customers for our products but not produce more than we can sell, and lets make adjustments to production, prices, and products to keep everything in balance".
Marketing concept philosophy . . . says, "let's identify and meet the buyers needs and wants, consistent with our company's long term mission, and our business objectives".
Societal marketing philosophy . . . says, "let's continue to meet the market needs, and our business objectives, but do so in a way that also enhances the well being of society".
Marketing philosophy comparison
Marketing department vs. marketing concept
The marketing concept philosophy
Defines the firm's mission in terms of benefits and satisfaction it offers, rather than in terms of products it makes and sells.
Emphasizes two way communications to identify customer needs - then develops markets and products to satisfy their needs. Gone is the emphasis on one-way communications to persuade people to buy products already made.
Requires both long and short range planning to achieve profit by meeting customer needs. Gone is the exclusive focus on short range planning to achieve volume sales, volume objectives.
Emphasis is on total systems integration of all departments to achieve profit goals. Gone is the exclusive focus on the efforts of individual departments and sales forces
Sales executives think in these terms
1. Sales volume rather than profit
Increase current sales
Achieve commission and bonus
2. Short run rather than long run
Think only about today's products, markets, customers and strategies
Don't think about product/market expansion strategies over the next 5 years
3. Individual customers rather than market segments
Knowledgeable about individual accounts
Less interested in developing strategies for market segments
4. Field work rather than desk work
Prefer to sell to customers instead of developing plans and strategies and plans of implementation
Marketing executives think in these terms
1. Profit planning
Plan sales volume around profits.
Plan product mix, customer mixes and marketing mixes to achieve profit
Plan with acceptable risk
2. Long run trends, threats and opportunities
How to translate these into new products and markets
Use to develop strategies to assure long term growth
3. Customer types and segment differences
Determine ways to offer superior value to the most profitable segments
4. Good system for market analysis, planning and control
They are comfortable with numbers and working out financial implications of marketing plans
Marketing is
"PROCESS OF PLANNING"
"SATISFACTION OF PEOPLE NEEDS AND WANTS"
"CREATE AND KEEP THE CUSTOMER"
"PROCESS OF PREDETERMINING CONSUMER DEMAND"
"CENTRAL ORGANIZATIONAL FUNCTION"
the article has been taken from the website http://infbprpros.tripod.com/marketingphilosophy.html
Azhar Naseer Daniel
Components of the marketing plan
The Marketing Plan is often a complex and diverse document that examines many areas. For most plans the key components found in the document include:
·Organizational Mission – Represents the guiding force of an organization by identifying the long-run vision for what the organization hopes to achieve. The mission comes from the top leaders of the organization and often remains unchanged for many years.
·Objectives – Reflects what the organization expects to achieve with its marketing efforts. As with the mission, objectives also flow from the top of the organization down to the marketing department. Objectives can be in the form of financial goals (i.e., profits) or marketing goals (e.g., achieve certain level of market share).
·Marketing Strategy - Achieving objectives requires the marketer engage in marketing decision-making, which indicates where resources (e.g., marketing funds) will be directed. However, before spending begins on individual marketing decisions (e.g., where to advertise) the marketer needs to establish a general plan of action that summarizes what will be done to reach the stated objectives.
·Tactical Programs – Marketing strategy sets the stage for specific actions that will take place. Marketing tactics are the day-to-day actions that marketers undertake and involve the major marketing decision areas. As would be expected, this is the key area of the Marketing Plan since it explains exactly what will be done to reach the organization’s objectives.
·Marketing Budget – Carrying out marketing tactics almost always means that money must be spent. The marketing budget lays out the spending requirements needed to carry out marketing tactics. While the marketing department may request a certain level of funding they feel is required, in the end it is upper-management that will have final say on how much financial support will be offered.
Sources and Entrance of new competitors
Here are some useful information about new competitors
The most common sources of new competitors are:
- Companies competing in a related product/market
- Companies using related technologies
- Companies already targeting your prime market segment but with unrelated products
- Companies from other geographical areas and with similar products
- New start-up companies organized by former employees and/or managers of existing companies
The entrance of new competitors is likely when:
- There are high profit margins in the industry
- There is unmet demand (insufficient supply) in the industry
- There are no major barriers to entry
- There is future growth potential
- Competitive rivalry is not intense
"Marketing takes day to learn. Unfortunately it takes a lifetime to master"
Philip Kotler, 1931 -, US marketing guru
Factors in the 'wider environment' which influenced Daewoo's marketing decisions prior to UK launch in 1995.
Daewoo discovered, through their robust information gathering surveys, as well as environmental scanning that the demographic profile of new car purchasers, both current and potential, was changing. This was mainly in areas such as gender and age. It was however cultural influences which played one of the strongest contributory factors in Daewoo's rise to glory. Beliefs and attitudes about the established car sales market allowed Daewoo to exploit major failings by the 'establishment' to provide the 'whole product package' many people wanted. Even a modest shift away from the 'norm' of new car purchasing could allow many peoples beliefs and attitudes to be changed in Daewoo's favor.
'Environmental scanning is the acquisition and use of information about events, trends, and relationships in an organization's external environment, the knowledge of which would assist management in planning the organization's future course of action'.
Technical influences, certainly with regard to new technology, did not play a major role in Daewoo's marketing strategy. They were essentially offering a competent but unexciting range of vehicles, none of which were at the cutting edge of technology. Neither did they introduce new, advanced features in their cars; everything was available to all of Daewoo's competitors.
What Daewoo did introduce was a radical mix of extras, CD players, air-conditioning, free insurances and breakdown cover, as well as computers to provide instant answers to availability queries. As Sony had done when they re-invented the audio cassette player as the portable Walkman in the 1980's, Daewoo used old technology packaged into an exciting new product.
Daewoo stayed ahead of the competition by providing a fresh angle on customer service and offering products which made them stand out as different from their competitors.
Economic :
The economic environment has many areas which will affect the marketing strategy of a company. Types of markets, types of competition, at what stage the business cycle is, both within the industry and in the national economy as a whole. Inflation rates, international exchange rate, levels of unemployment and the disposable income of the targeted customer groups should all influence the marketing strategy. One also needs to consider this on a global basis as well as within the target country.
Daewoo erupted onto the UK car market at a time when interest rates had risen 1% on the previous year, and the CBI was asking for interest rate drops to support manufacturing industry. Disposable income was still rising and consumers felt that times were fairly good, having suffered the high interest rates of the late 80's and early 90's.
Daewoo would certainly have had to consider who this 'feel good factor' applied to when they chose their target market. Disparity in wealth between the rich and poor in the UK had widened. These divides affect attitudes, priorities and in particular the ability to consider the purchase of luxury products such as new cars.
All of the above issues will have influenced the 'marketing mix' which Daewoo applied to their target segments.
Political and Legal :
It is impossible for any legitimate business to not be affected by political and legal influences. At its most basic level, companies need to comply with a wide range of laws. These include Health and Safety legislation Employee rights Consumer protection law Legislation governing selling practices Advertising standards Local bye laws Environmental protection laws.
Many of these laws have been updated and added to in recent times. Minimum wages, laws regulating working hours, discrimination law and strengthening of consumer protection etc have all happened in recent times. In 1995 some of these regulations did not exist but it was still vital for Daewoo to comply with existing legislation. Operating in different countries, with differing legislation means that companies must ensure compliance with a wide range of political and legal protocols. For Daewoo, UK vehicle safety legislation would certainly have needed monitoring from a very early stage in their strategy. Daewoo would have needed to consider all the relevant legislation and codes of practice to make sure that the economics of their plan made it a viable proposition.
Steve Jobs' 2005 Stanford Commencement Address
Source : http://www.youtube.com/watch?v=UF8uR6Z6KLc
Monday, November 2, 2009
NESTLE marketing and sales
We want Nestlé products to be within reach for every single Pakistani. Yet nutritional value and quality remain the most essential ingredients in all our brands.
Over the years, food products have evolved from mere commodities to a statement of lifestyle. As consumers get more health and quality conscious, consumer empowerment surges.
We continue to play our part in facilitating this revolution by launching value-added products such as CERELAC, NESTLÉ Raita, NESVITAand NIDO NNS and many other dairy and non-dairy products. Consumers can avail many of our products with branded active benefits that no competitor product offers.
Nestlé brands are designed to suit your lifestyle and your needs. You can take advantage of the best nutrition in a way that is suitable for your tastes and lifestyle.
For instance, you can purchase NESTLÉ Juices in several different sizes depending on your needs: a personal-sized 200 ml for on-the-go consumption, or a litre pack for your fridge.
All our key brands are equipped with the Nutritional Compass that ensures all the nutritional information about the product is accessible thanks to our user-friendly nutritional labelling and guidelines.
We're proud to be among the only companies in Pakistan to venture outside the commercial mode of communication, offering programmes catering to better child nutrition and good parenting.
We have developed an intensive distribution strategy that brings our products to your door, through effective communication, door-to-door sampling, and exciting consumer promotions.
We focus especially on Pakistan's smaller towns, where activities such as town storming, distribution drives and intensive distributor training ensure that products are easily accessible and visible, giving us a strong competitive edge.
Our widespread global network presents opportunities to learn from innovative techniques used in faraway countries. Pakistan has contributed in a big way towards this by introducing Nestlé NESTLÉ PURE LIFE to the world. Pakistan’s favourite water is now available all around the world!
SWOT of Nestle
Nestle’s LC1 division has many strengths. Their first is that they have a great CEO, Peter Brabeck. Brabeck emphasizes internal growth, meaning he wants to achieve higher volumes by renovating existing products, and innovating new products. His explanation of renovation is that “to just keep pace in the industry, you need to change at least as fast as consumer expectations.”(Hitt, 2005) And his explanation of innovation is “to maintain a leadership position, you also need to leapfrog, to move faster and go beyond what consumers will tell you.” Brabeck has led Nestle into a position to better achieve the internal growth targets with his. Another strength that Nestle has is that they are low cost operators. This allows them to not only beat the competition by producing low cost products, but by also edging ahead with low operating costs.
The main weakness of the LC-1 division of Nestle is that they were not as successful as they thought they would be in France. The launch in France was in 1994, but since the late 1980s, Danone had already entered the market with a health-based yogurt. The second weakness is that LC-1 was positioned as too scientific, and consumers didn’t quite understand that LC-1 was a food and not a drug.
Nestle also has multiple critical resources. They have a great research and development team. James Gallagher and Andrea Pfeifer were the masterminds behind the research on the La-1 cultures in the LC-1 yogurt. They were also the two that decided on selling LC-1 as a functional food. This enabled Nestle to position the product in a way that differentiated it among the other products in the market. They also have four pillars that Brabeck, Nestle’s CEO has identified he believes will help their internal growth worldwide. These are operating excellence, innovation and renovation, product availability, and communication. One opportunity that Nestle has is that health-based products are becoming more popular in the world, including in the United States. Consumers are |
becoming more health conscious, and realize that living longer isn’t only by luck and genetics. LC1 has not been introduced in the United States yet. Nestle also has an opportunity of being even a larger market leader in Germany with LC-1. Within two years of launching the product in Germany, they had captured 60% of the market. This was due to the fact that they differentiated the product, and Germans simply preferred the taste. Another opportunity of LC1 is that, because they are a market leader, they can introduce more health-based products in Germany.
A threat to Nestle is the fact that some markets they are entering are already mature. Danone had an established leadership position in the yogurt market in France. Since Danone was the first to arrive in the market, they have always been the market leader there. Also consumers in France liked the taste of LC-1, but researchers believe they did not repurchase the yogurt because they preferred the taste of Danone products better. Another threat to Nestle is that there is intense competition in the United States yogurt market. General Mills’ Yoplait division is the leader in the yogurt market in the United States. Yoplait has been the leader for years and is constantly innovating new health products.
General Mills has been a strong competitor of Nestle and they are not short of experience and strength. One strength that they have is their brand recognition. One of their main goals has been to deliver brands that consumers trust and value and they have succeeded. Another strength they have is their distribution. Yoplait is distributed to more stores in the United States than any other brand of yogurt. This is one of the reasons why they have been the market leader in yogurt for so long. Another strength that General Mills has is the fact that consumers simply know Yoplait is healthy. Yoplait is the only leading brand of yogurt to offer vitamin D and this vitamin is especially important for adult women.(Yoplait.com) It is not just a coincidence that Yoplait has vitamin D, but they have purposely added this vitamin to target female consumers.
General Mills also has some weaknesses. They fact that they are the market leader in the United States may be hindering them from innovation. They have been producing Yoplait yogurt for many years, and have offered a series of new products in the past few years in the nutrition department. Most of these products however, are very common, and are widely offered in the United States. The health food industry in the United States has been booming and General Mills does not offer enough products in the smaller niche markets. They have not entered into many unknown areas because of their success in the yogurt market.
An opportunity General Mills has is that its Yoplait division is so successful. Yoplait is the only division of General Mills that is currently earning a profit. They have a large market share over their main competitors in the yogurt market. Another opportunity that they share with Nestle is that the health-based and nutritional food market is booming. They are continually releasing and marketing new products in these markets and they will continue to do so while the market continues to yield profits.
Importance of Marketing Planning
A company has to have an overall company mission which defines what the company is all about and what makes it unique. For example, is the firm concerned with selling consumer goods (B2C), weapons, heavy machinery (B2B), etc.? Remember it is important not to suffer from marketing myopia, and this is why a business must be defined in terms of a need that is being satisfied and not an existing product. The mission statement will also define the culture, values, and philosophy of the firm. The mission statement provides direction for a firm so that employees, customers, suppliers, investors, and other stakeholders know what the the organization is about and where it is headed. If done well, it also serves to motivate and inspire employees. A good mission statement considers the needs of all stakeholders and makes it clear that the firm is not only concerned about profit. A large number of papers and books have been written about corporate social responsibility (CSR). More will be said about CSR in later chapters.
Companies then must have objectives that tell the company where it should be heading, i.e., give it further direction. Objectives are often in terms of return on investment (ROI), market share, and/or profit. The next step is to have a strategy.
As you know, developing a marketing strategy involves two steps: (1) selecting a target market and (2) developing the best marketing mix (the 4 P’s) to satisfy this target. Finally, the tactics are much more specific and provide more precise details about such matters as, say: where should I advertise? When should I run the ads? How will I get distribution in certain types of stores? etc. In effect, the tactics describe how to achieve the strategies. Resources that are required to implement the tactics are budgeted.
Companies should analyze and track what their competitors are doing. It is important to know the strengths, weaknesses, objectives, and strategies of the competition.
The marketing plan is an important document used by companies for planning. It is a road map and surveys the business environment, describes problems, threats and opportunities in the industry, contains a marketing strategy, and has financial projections/budgets. Do not confuse a marketing plan with a business plan. A marketing plan is concerned more with strategy whereas a business plan is more concerned with financial information. The primary purpose of a business plan is to raise money from venture capitalists or bankers; the primary purpose of a marketing plan is to provide direction for a company. The marketing plan is an integral part of the business plan.
Best Jobs in America
A natural business year is the period of 12 consecutive months (or 52-53 consecutive weeks) ending at a low point of an organization’s activities. For example, a school district will have a natural business year of July 1 through June 30, since classes for the school year end in early June.
A retailer’s natural business year might be the 52-53 consecutive weeks ending on the Saturday closest to each February 1. This is a low point of activity as it follows the retailer’s holiday season and its January clearance sales. The 52-53 week periods (instead of 12 month periods) will result in an equal number of Saturdays in most of the natural business years (as well as in the 13-week quarters and in the 4-5 week months).
Many companies have a natural business year of January 1 through December 31. On the other hand, some companies are required by government regulations to end their accounting years on December 31, even though it is not the end of their natural business year.
The term fiscal year is associated with companies having financial reporting years that do not end on December 31.
Customer Relationship Management (CRM)
Customer Relationship Management (CRM) refers to the methodologies and tools that help businesses manage customer relationships in an organized way.
For small businesses, customer relationship management includes:
- CRM processes that help identify and target their best customers, generate quality sales leads, and plan and implement marketing campaigns with clear goals and objectives;
- CRM processes that help form individualized relationships with customers (to improve customer satisfaction) and provide the highest level of customer service to the most profitable customers;
- CRM processes that provide employees with the information they need to know their customers' wants and needs, and build relationships between the company and its customers.
Customer relationship management tools include software and browser-based applications that collect and organize information about customers. For instance, as part of their CRM strategy, a business might use a database of customer information to help construct a customer satisfaction survey, or decide which new product their customers might be interested in.
Cultrual factors on buyer
buyer behaviour - cultural factors
Cultural factors have a significant impact on customer behaviour.
Culture is the most basic cause of a person’s wants and behaviour. Growing up, children learn basic values, perception and wants from the family and other important groups.
Marketing are always trying to spot “cultural shifts” which might point to new products that might be wanted by customers or to increased demand. For example, the cultural shift towards greater concern about health and fitness has created opportunities (and now industries) servicing customers who wish to buy:
• Low calorie foods
• Health club memberships
• Exercise equipment
• Activity or health-related holidays etc.
Similarly the increased desire for “leisure time” has resulted in increased demand for convenience products and services such as microwave ovens, ready meals and direct marketing service businesses such as telephone banking and insurance.
Each culture contains “sub-cultures” – groups of people with share values. Sub-cultures can include nationalities, religions, racial groups, or groups of people sharing the same geographical location. Sometimes a sub-culture will create a substantial and distinctive market segment of its own.
For example, the “youth culture” or “club culture” has quite distinct values and buying characteristics from the much older “gray generation”
Similarly, differences in social class can create customer groups. In fact, the official six social classes in the UK are widely used to profile and predict different customer behaviour. In the UK’s socioeconomic classification scheme, social class is not just determined by income. It is measured as a combination of occupation, income, education, wealth and other variables:
| Class name | Social Status | Occupational Head of Household | % of UK Population |
| A | Upper middle | Higher managerial, administrative or professional | 3 |
| B | Middle | Intermediate managerial, administrative or professional | 14 |
| C1 | Lower middle | Superiors or clerical, junior managerial, administrative or professional | 27 |
| C2 | Skilled working | Skilled manual workers | 25 |
D | Working | Semi-skilled and un-skilled manual workers | 19 |
| E | Those at lowest level of subsistence | State pensioners or widows, casual or lower-grade workers | 12 |