BUSINESS BUYER BEHAVIOUR (INDUSTRIAL BUYER BEHAVIOUR)

The shaping of business decisions by the purchaser of raw materials, components industrial equipment, and services for an organization. the amount of time devoted to the process will depend on a number of factors, including the importance of the decision, the cost to the organization of the decision, the alternative products or sevices available, and the purchasing officer's experience. three situations are recognized:
1) Straight rebuy: a familiar product (eg. stationery or electricity) is bought from a regular supplier.
2) Modified rebuy: looking around for a product with improved performance, perhaps reflecting dissatisfaction with current suppliers.
3) New task buying: thbuyer, on behalf of the organization, s attempting to fulfill a need or solve a problem that has not been previously encountered. The higher the risk factor involved in a purchase(e.g new production equipment, an innovative robotic machine), he larger will be the team forming the decision making unit (DMU) involved.

www.encyclopedia.com

Internet Marketing Techniques-- The Top 10 Best Practices - How to succeed Online?

Whether you are new to the internet business game or you’ve had your own company for years, you want to get the most out of your marketing attempts. If you stick by Internet Marketing Techniques - The Top 10 Best Practices that are listed below, you’ll see huge returns on your efforts.
1. Take care of your customers. This is the essential piece of business that shouldn’t need to be said but unfortunately it does. Lots of people who run their own businesses just don’t put enough thought or attention on their customers.

2. Market articles. Article marketing is huge. Write smart articles that are keyword rich and make sure that you create back links and use a resource box at the end of every article.

3. Use article directories. Once you’ve got well written articles, you need to get them published and out to the masses so that you can begin drawing business and curiosity from prospective clients with your articles. Use the Top Three article directories, to start with.

4. Keywords and key phrases-use them. Make sure that you’re not just writing about a topic, make sure you’re getting people to read the article and come to the site. When you do a little research, you can find the best words and phrases to use. Check out the competition-find out what is working for them and follow their lead. Don’t over use your words; however, you don’t want to chase people off. Make the words flow naturally throughout your articles and site. Keywords and phrases-use them, don’t abuse them.

5. Use blogs. There’s nothing quite as useful as word of mouth advertising and product or site endorsement. Basically, blogs are great big billboards for anything that people want to broadcast. Make sure to hit the blogs heavily to get your company name and site out to the most people.

6. Create personal pages on all social networking sites. There is a lot that you can do with the help of social networking sites. To begin a multi point attack by using these sites, you need to start by creating personal pages on each and every site you possibly can. From your personal pages, you can move on to business pages and then branch out to your niche market keywords and pages.

7. Make sure to rotate keywords and information. You should have fresh information going, don’t change things up too frequently, though. You will be able to figure out a good interval to change your information out after your site is up and running. There’s nothing wrong with keeping your eye on the competition. Follow their lead and make changes that work for you.

8. Get your friends on board. Don’t ask your friends for shameless publicity, no one will want to be your friend if you do this, but make sure that those who know and love your products pass the good word on to others that they know. If someone is looking for something in particular, why shouldn’t your friends drop your name and say hey, give them a try!

9. Make the most of affiliates. Use affiliate marketing to help you get ahead. You can get more hits to your page by having cross linked information and you’ll sell more product when others can sell it for you.

10. Advertise on free or low cost pages. Make sure you get your name in front of as many people as possible by posting ads on free boards or advertising sites that don’t charge you an arm and a leg.

If you follow these Internet Marketing Techniques - The Top 10 Best Practices, you can bet that you will see more traffic and more sales, quickly!

Reference: Scedu.com

Limitations of the Marketing Mix Framework

The marketing mix framework was particularly useful in the early days of the marketing concept when physical products represented a larger portion of the economy. Today, with marketing more integrated into organizations and with a wider variety of products and markets, some authors have attempted to extend its usefulness by proposing a fifth P, such as packaging, people, process, etc. Today however, the marketing mix most commonly remains based on the 4 P's. Despite its limitations and perhaps because of its simplicity, the use of this framework remains strong and many marketing textbooks have been organized around it.

source: http://www.netmba.com/marketing/mix/

Distinguish Between a Wholesaler and Retailer

Wholesaler donates a type of middlemen between the producers and retailers. They generally sell goods and commodities to the retailers, industrial consumers and professional users. There are two types of wholesaler like manufacturer agents and merchant wholesalers.Retailer denotes the last linkage in the channel of distribution between the producers and the consumers.
The following difference between wholesalers and retailers are

Wholesaler:
•It is the first link in the chain of distribution which links between manufactures and retailers.
•The wholesaler trade is conducted in bulk quantities.
•Most of the transactions are effected on the basis of credit.
•The capital requirement of this business is heavy.
•This type of trade deals in specific goods.
•It does not emphasize on proper display of goods.
•It does not experience direct dealing with consumers.
•It avails the economics of bulk purchasing.
•They operate in big cities and towns.
•It does not give emphasis on home delivery facility.
•It does not provide facility.
•It does not provide after sale service.

Retailer:
•It is the last link in the chain of distribution which links wholesalers and consumers.
•It is conducted in small quantities.
•Most of the transactions take place on cash basis.
•This type of business usually require less capital.
•This type of trade deals in variety of goods.
•It gives a lot of emphasis on proper display and advertisement.
•It always deals directly with the ultimate consumers.
•It does not avail such economies because it does not incur bulk purchase of goods.
•They operate in small villages and in big cities.
•It gives much emphasis on home delivery facility.
•It provides after sale service to the consumers.

Wholesaler are those who buy product from the producer and sell to retailers and retailers are those who sell the product to the customers.Wholesalers are only in bigcities but retailer are also in small villages to sell product to customers.

reference:http://www.rajputbrotherhood.com/knowledge-hub/business-studies/distinguish-between-a-wholesaler-and-retailer.html

Some advertising laws worth knowing

You should know the following laws regarding advertising to avoid damage

Misrepresentation of the product
All descriptive text and photos must give consumers an accurate representation of what they will get. If you are selling frozen ice cream bars, for instance, you can’t show a picture of five bars on the box, if the box only contains four. Nor can you touch up photos to make a product look better or bigger than it is.

No facts about the product can be misrepresented either. Two business owners learned that the hard way when they were fined $20,000 each for claiming Native-American style artwork they sold was made by Native Americans when, in fact, it wasn’t.

Unsubstantiated claims
You must be able to substantiate factual claims with proof that there is a reasonable basis for each one. A New Jersey talent agency, for instance, was fined more than $175,000 over several years for misrepresenting its ability to place children in high-paying modeling and acting jobs. The substantiation must exist before you make the claims.

The fact that someone might be able to realize the benefits you state in your ads, or that one or two individuals have achieved the advertised results won’t suffice when claims lead people to believe that the average purchaser could achieve the touted benefits.

If you make claims such as “recommended by doctors,” or “tests prove” or “leading experts say...” you must have proof that will stand up to scrutiny by experts.

You need a high level of substantiation if you are making health, nutrition, or safety claims. In such cases you need reliable scientific evidence. To provide that, you should have at least one independent double-blind study to support your claim. The study group also should be of sufficient size to provide reliable data.

Fake testimonials
If you use testimonials in your advertising, the people making the testimonial must actually use your product or service. If you pay them for their testimonial that fact has to be disclosed unless the person giving the endorsement is a well-known person or an expert.

Simulations of real situations
If you retouch before-and-after photos, such as showing someone cleaning a floor with one swipe of a mop when it really would have taken five, or use something other than what is stated to demonstrate your product, the facts must be disclosed.

Price and merchandise comparisons
If you use words like “sale,” “reduced,” “$150 value,” you must have actually offered the product at that price for a reasonable period of time.

Similarly, if you say a product you are selling is “Sold elsewhere for $30 more” you must be able to prove that the item actually has been sold at that price. Terms like “special purchase” or “inventory clearance” should be reserved for times when you actually have bought merchandise at a special purchase price or are actually clearing out your inventory.

Warranties and guarantees
You don’t have to advertise a warranty or guarantee, but if you do, you must state the terms and any limitations that apply. If you sell by mail, and will refund the purchase price if a customer is unsatisfied, but not the shipping and handling costs, your guarantee must make that clear too.

Reference: http://www.businessknowhow.com/businessideas/advertising/advertising_laws_you_need_to_know.php

Top Advertising Tips !!!

Here are some tips for a successful advertising campaign

1. Go after your target audience
2. Highlight your competitive advantgae
3. Establish an image
4. You have to spend money to make money
5. Advertise in the right place
6. Dont allow your budget to run your advertising campaign
7. Diversify
8. Don't try to be everything for every one
9. Test your ads in advance
10. Monitor your ads

4 P"s of marketing

http://www.netmba.com/images/marketing/mix/mix.gif

http://www.youtube.com/watch?v=KkBvzS_fJ2g

Market segmentation

A market segment is a group of people or organizations sharing one or more characteristics that cause them to have similar product and/or service needs. A true market segment meets all of the following criteria: it is distinct from other segments (different segments have different needs), it is homogeneous within the segment (exhibits common needs); it responds similarly to a market stimulus, and it can be reached by a market intervention. The term is also used when consumers with identical product and/or service needs are divided up into groups so they can be charged different amounts. These can broadly be viewed as 'positive' and 'negative' applications of the same idea, splitting up the market into smaller groups.

What is leverage?

The FOREX deals are accomplished in lots and each lot consists of 100,000 units of any particular foreign currency. To purchase one single lot of foreign exchange is required and that may run into hundreds of thousands of dollars which means the small investors are left out of the fray. For this very purpose the concept of leverage was introduced in the FOREX trade.

Leverage backed with credit, such as a margin account, is very common. Usually the leverage in the margined account is collateralized by the initial deposit made by you in that account. If the value of the trade goes down significantly, the broker may ask you to either deposit more cash, or sell a portion of your holding. Leverage, expressed as a ratio between total capital available to actual capital, is the amount of money a broker will lend you for trading. For example, a ratio of 100:1 means your broker would lend you $100 for every $1 of actual capital. Many brokerages offer as much as 250:1.

Margin requirements and interest vary among broker/dealers. The amount of leverage you use will depend on your broker and what you feel comfortable with. You can get leverage from a high as 1% with some brokers. This means you can control $100,000 with the investment of only $1,000. The broker sets a minimum account size also known as account margin or initial investment. Once you have deposited the required sum you will be able to trade in the FOREX market.

DISTRIBUTING THE PRODUCTS

Some products are marketed most effectively by direct sale from manufacturer to consumer. Among these are durable equipment such as computers, office equipment, industrial machinery and supplies, and consumer specialties such as vacuum cleaners and life insurance. The direct marketing of products such as cosmetics and household needs is very important. Formerly common “door to door products,” these are now usually sold by the more sophisticated “house party” technique.

Many types of products and services now use direct mail catalogs or have a presence on the World Wide Web. Because many people are extremely busy, they may find it simpler to shop in their leisure hours at home by using catalogs or visiting Web sites. Comparison shopping is also made easier, because both catalogs and e-commerce sites generally contain extensive product information. For retailers, catalogs and the Web make it possible to do business far beyond their usual trading area and with a minimum of overhead. More than 95 percent of the leading 1,000 companies in the United States sell products over the Internet.

Television is a potent tool in direct marketing because it facilitates the demonstration of products in use. Direct sale of all kinds of goods to the public via home-shopping clubs broadcasting on cable television channels is gaining in popularity. Some companies also use telephone marketing, called telemarketing, a technique used in selling to businesses as well as to consumers. Most consumer products, however, move from the manufacturer through agents to wholesalers and then to retailers, ultimately reaching the consumer. Determining how products should move through wholesale and retail organizations is another major marketing decision.

Wholesalers distribute goods in large quantities, usually to retailers, for resale. Some retail businesses have grown so large, however, that they have found it more profitable to bypass the wholesaler and deal directly with the manufacturers or their agents. Wholesalers first responded to this trend by changing their operations to move goods more quickly to large retailers and at lower prices. Small retailers fought back through cooperative wholesaling, the voluntary banding together of independent retailers to market a product. The result has been a trend toward a much closer, interlocking relationship between wholesaler and independent retailer.

Retailing has undergone even more changes than wholesaling. Intensive preselling by manufacturers and the development of minimum-service operations, such as self-service in department stores, have drastically changed the retailer’s way of doing business. Supermarkets and discount stores have become commonplace not only for groceries but for products as diversified as medicines and gardening equipment. More recently, warehouse retailing has become a major means of retailing higher-priced consumer goods such as furniture, appliances, and electronic equipment. The emphasis is on generating store traffic, speeding up the transaction, and rapidly expanding the sales volume. Chain stores—groups of stores with one owner—and cooperative groups have also proliferated. Special types of retailing, such as vending machines and convenience stores, have also developed to fill multiple needs. See Retailing.

Transporting and warehousing merchandise are also technically within the scope of marketing. Products are often moved several times as they go from producer to consumer. Products are carried by rail, truck, ship, airplane, and pipeline. Efficient traffic management determines the best method and timetable of shipment for any particular product.
link:microsoft encarta

Service , Marketing and Building Relationship

Marketing efforts once focused primarily on the selling of manufactured products such as cars and aspirin. But today the service industries have grown more important to the economy than the manufacturing sector. Services, unlike products, are intangible and involve a deed, a performance, or an effort that cannot be physically possessed. Currently, more people are employed in the provision of services than in the manufacture of products, and this area shows every indication of expanding even further. In fact, more than eight in ten U.S. workers labor in such service areas as transportation, retail, health care, entertainment, and education. In the United States alone, service industries now account for more than 70 percent of the gross national product (GNP, the total of all goods and services produced by a country) and are expected to provide 90 percent of all new jobs by 2012.

Services, like products, require marketing. Usually, service marketing parallels product marketing with the exception of physical handling. Services must be planned and developed carefully to meet consumer demand. For example, in the field of temporary personnel, a service that continues to increase in monetary value, studies are made to determine the types of employee skills needed in various geographical locations and fields of business. Because services are more difficult to sell than physical products, promotional campaigns for services must be even more aggressive than those for physical commodities.


In the past, most advertising and promotional efforts were developed to acquire new customers. But today, more and more advertising and promotional efforts are designed to retain current customers and to increase the amount of money they spend with the company. Consumers see so much advertising that they have learned to ignore much of it. As a result, it has become more difficult to attract new customers. Servicing existing customers, however, is easier and less expensive. In fact, it is estimated that acquiring a new customer costs five to eight times as much as keeping an existing one.

To retain current customers, some companies develop loyalty programs such as the frequent flyer programs used by many airlines. A marketer may also seek to retain customers by learning a customer’s individual interests and then tailoring services to meet them. Amazon.com, for example, keeps a database of the types of books customers have ordered in the past and then recommends new books to them based on their past selections. Such programs help companies retain customers not only by providing a useful service, but also by making customers feel appreciated. This is known as relationship building.
link:microsoft encarta

Multi-level marketing (MLM)

Multi-level marketing (MLM), (also called network marketing) is a term that describes a marketing structure used by some companies as part of their overall marketing.
The structure is designed to create a marketing and sales force by compensating promoters of company products not only for sales they personally generate, but also for the sales of other promoters they introduce to the company, creating a down line of distributors and a hierarchy of multiple levels of compensation in the form of a pyramid.
The products and company are usually marketed directly to consumers and potential business partners by means of relationship referrals and word of mouth marketing.

Criticism of MLM
The Federal Trade Commission (FTC) issued a decision, In re Amway Corp., in 1979 in which it indicated that multi-level marketing was not illegal per seen the United States. However, Amway was found guilty of price fixing (by requiring "independent" distributors to sell at the low price) and making exaggerated income claims.
The FTC advises that multi-level marketing organizations with greater incentives for recruitment than product sales are to be viewed skeptically. The FTC also warns that the practice of getting commissions from recruiting new members is outlawed in most states as "pyramiding". In April 2006, it proposed a Business Opportunity Rule intended to require all sellers of business opportunities—including MLMs—to provide enough information to enable prospective buyers to make an informed decision about their probability of earning money.
In March 2008, the FTC removed Network Marketing (MLM) companies from the proposed Business Opportunity Rule:
The revised proposal, however, would not reach multi-level marketing companies or certain companies that may have been swept inadvertently into scope of the April 2006 proposal.
Another criticism of MLMs is that "MLM organizations have been described by some as cults (Butterfield, 1985), pyramid schemes (Fitzpatrick & Reynolds, 1997), or organizations rife with misleading, deceptive, and unethical behavior (Carter, 1999), such as the questionable use of evangelical discourse to promote the business (Hopfl & Maddrell, 1996), and the exploitation of personal relationships for financial gain (Fitzpatrick & Reynolds, 1997)."
MLM's are also criticized for being unable to fulfill their promises for the majority of participants due to basic conflicts with Western culture. There are even claims that the success rate for breaking even or even making money are far worse than other types of businesses: "The vast majority of MLM’s are recruiting MLM’s, in which participants must recruit aggressively to profit. Based on available data from the companies themselves, the loss rate for recruiting MLM’s is approximately 99.9%; i.e., 99.9% of participants lose money after subtracting all expenses, including purchases from the company.” In part, this is because encouraging recruits to further "recruit people to compete with [them]"[leads to "market saturation."
Similar claims regarding profits have been stated by The Times ("The Government investigation claims to have revealed that just 10 per cent of Amway’s agents in Britain make any profit, with less than one in ten selling a single item of the group’s products.", high level "Emerald" Amway member Scheibeler ("UK Justice Norris found in 2008 that out of an IBO [Independent Business Owners] population of 33,000, 'only about 90 made sufficient incomes to cover the costs of actively building their business.' That's a 99.7 percent loss rate for investors." ](case referred to is BERR vs Amway (Case No: 2651, 2652 and 2653 of 2007) which does list this as one of the points of objection ability: "c) because of the requirement that an IBO pay a joining and renewal fee and the likelihood that an IBO would purchase BSM there was a certainty that the Amway business would cause a loss to a large number of people (to the extent that out of an IBO population which exceeded 33,000 only building their business).") and Newsweek (where it is stated based on MonaVie's own 2007 income disclosure statement "fewer than 1 percent qualified for commissions and of those, only 10 percent made more than $100 a week.)"
"In the USA, the average annual income from MLM for 90% MLM members is no more than US$5,000, which is far from being a sufficient means of making a living (San Lian Life Weekly 1998)"[
"While earning potential varies by company and sales ability, DSA says the median annual income for those in direct sales is $2,400.

Setup
Independent, unsalaried salespeople of multi-level marketing, referred to as distributors (or associates, independent business owners, dealers, franchise owners, sales consultants, consultants, independent agents, etc.), represent the company that produces the products or provides the services they sell. They are awarded a commission based upon the volume of product sold through their own sales efforts as well as that of their down line organization.
Independent distributors develop their organizations by either building an active customer base, who buy direct from the company, or by recruiting a down line of independent distributors who also build a customer base, thereby expanding the overall organization. Additionally, distributors can also earn a profit by retailing products they purchased from the company at wholesale price.
This arrangement of distributors earning a commission based on the sales of their independent efforts as well as the leveraged sales efforts of their down line is similar to franchise arrangements where royalties are paid from the sales of individual franchise operations to the franchiser as well as to an area or regional manager. Commissions are paid to multi-level marketing distributors according to the company’s compensation plan. There can be individuals at multiple levels of the structure receiving royalties from a single person's sales.

Legitimacy
MLM businesses operate in the United States in all 50 states and in more than 100 other countries, and new businesses may use terms like "affiliate marketing" or "home-based business franchising". However, many pyramid schemes try to present themselves as legitimate MLM businesses.
Because pyramiding (getting commissions from recruiting new members including "sign-up fees") is illegal in most states, to remain legitimate in the U.S. a company that uses multi-level marketing has to make sure commissions are earned only on sales of the company's products or services if they cross state boundaries. If participants are paid primarily from money received from new recruits, or if they are required to buy more product than they are likely to sell, then the company may be a pyramid scheme, which is illegal in most countries.
New salespeople may be asked to pay for their own training and marketing materials, or to buy a significant amount of inventory. A commonly adopted test of legality is that MLMs follow the so-called 70% rule which prevents members "inventory loading" in order to qualify for additional bonuses. The 70% rule requires participants to sell 70% of previously purchased inventory before placing new orders with the company. There are however variations in interpretations of this rule. Some attorneys insist that 70% of purchased inventory should be sold to people who are not participants in the business, while many MLM companies allow for self-consumption to be a significant part of the sales of a participant.
The European Union's Unfair Commercial Practices Directive explicitly includes self-consumption as legitimate.
In a 2004 United States Federal Trade Commission (FTC) Staff Advisory letter to the Direct Selling Association states:
Much has been made of the personal, or internal, consumption issue in recent years. In fact, the amount of internal consumption in any multi-level compensation business does not determine whether or not the FTC will consider the plan a pyramid scheme. The critical question for the FTC is whether the revenues that primarily support the commissions paid to all participants are generated from purchases of goods and services that are not simply incidental to the purchase of the right to participate in a money-making venture.
In a 2007 Wall Street Journal interview, FTC economist Peter Vander Nat stated, "If people are buying because they want to use a company’s products, those sales can count as retail."
The FTC offers advice for potential MLM members to help them identify those which are likely to be pyramid schemes.

Compensation plans
Companies have devised a variety of MLM compensation plans over the decades.
§ Unilevel plans This type of plan is often considered the simplest of compensation plans. As the name suggests, the plan allows a person to sponsor one line of distributors, called a "frontline." Every distributor the person sponsors is considered to be on that sponsor's frontline and there are no widths limitations, meaning there is no limit to the amount of people one can sponsor in the frontline. The common goal of this plan is to recruit a large number of frontline distributors and then encourage them to do the same. This is due to the fact that commissions are normally paid out on a limited depth, which typically means sponsor can earn commissions on sales between 5 and 7 levels deep.
§ Stairstep Breakaway plans this type of plan is characterized as having representatives who are responsible for both personal and group sales volumes. Volume is created by recruiting and by retailing product. Various discounts or rebates may be paid to group leaders and a group leader can be any representative with one or more down line recruits. Once predefined personal and/or group volumes are achieved, a representative moves up a commission level. This continues until the representative's sales volume reaches the top commission level and "breaks away" from their up line. From that point on, the new group is no longer considered part of his uplink’s group and the multi-level compensation aspect ceases. The original up line usually continues to be compensated through override commissions and other incentives.
§ Matrix plans this type of plan is similar to a Uni-Level plan, except there is also a limited number of representatives who can be placed on the first level. Recruits beyond the maximum number of first level positions allowed are automatically placed in other down line (lower level) positions. Matrix plans often have a maximum width and depth. When all positions in a representative's down line matrix are filled (maximum width and depth is reached for all participants in a matrix), a new matrix may be started. Like Uni-Level plans, representatives in a matrix earn unlimited commissions on limited levels of volume with minimal sales quotas.
§ Binary plans: A binary plan is a multilevel marketing compensation plan which allows distributors to have only two front-line distributors. If a distributor sponsors more than two distributors, the excess are placed at levels below the sponsoring distributor's front-line. This "spillover" is one of the most attractive features to new distributors since they need only sponsor two distributors to participate in the compensation plan. The primary limitation is that distributors must "balance" their two downlink legs to receive commissions. Balancing legs typically requires that the number of sales from one down line leg constitute no more than a specified percentage of the distributor's total sales.

referance: wikipedi.org/wiki/Multi-level_marketing

What is Network Marketing?

It is a form of business in which you can make a small investment and through sheer tenacity achieve staggering levels of financial reward and personal freedom.I believe Robert Kiyosaki summed it up nicely; it really is thebusiness school for people who like helping people!

for more detail visit www.network-marketing-works.com/

consumer banking in pakistan

hey guys..although this isn't "really" related to marketing but thought i share it this article with u! its on consumer baking n Pakistan and how it has increased over time ..
Over the last 5 years, Pakistan witnessed a phenomenal growth of consumer banking. This unprecedented development has followed privatization of nationalized banks, banking reforms brought about by the State Bank of Pakistan and an increasingly marketing-oriented approach primarily aimed by banks at a large urban consumer base.
Be they large or small bank, multinational or local, each one of them is geared towards making its mark in an already competitive environment that is the outcome of consumer banking. Multinational banks such as ABN AMRO, Citibank and Standard Chartered have the support of the knowledge base and funds of their foreign principals which made them first to introduce products, services and innovative technologies to their consumer base.
Hot on the heels were the newly privatized banks, UBL, HBL and MCB which have embarked in consumer financing activities in not just big cities but smaller ones too, by virtue of their huge branch network. In doing so, they have generated huge volumes of business while at the same time driving down the prices of the products they offer. For instance, in 2002, HBL’s consumer banking portfolio was worth less than a billion rupees. By the end of 2004, it is worth Rs. 17 billion. Similarly, since 2003 when it was privatized, UBL has launched 12 to 14 new products and according to its Deputy Chief Executive M.A.Mannan, each one of them has been a market leader on month-to-month acquisition volume. And where the local banks such as Soneri, Askari and Union lack in technology, they make up by offering similar services at a much lower costs in our urban centers.
While the foreign banks have played the pipers’ role when it comes to introducing new products, they have targeted the same segment which may be one of their limitations in this area. On the other hand, industry experts predict that the real growth will come from local giants such as the UBL, HBL and MCB which have the necessary experience and knowledge of customizing products to specific local preferences.
Prodigious Advertising
One factor that has led to an incredible upsurge of consumer financing products has been the drastic reduction in the qualification benchmarks for premium products such as credit cards. For instance, back in the 1990s when consumer banking was still in its undeveloped phase, only three banks were offering credit cards and they were all multinational concerns. That was the time when the size of the total portfolio was a mere 200,000 cards. The scene all of a sudden changed when Bank Al Falah launched a no fee credit card and its consumer base ballooned to 100,000 new consumers. The success of no fee credit card was followed by low interest packages on automobile loans and home loans. Things would never be the same again.
Today, by investing prodigiously on advertising and sales promotion efforts, banks have created awareness about their product menus in a huge way. Now personal loans have longer tenures and posses easy payment options, along with many other inducements. Yet with so many banks offering the same product, how does one bank differentiate its portfolio from its competitors? The answer lies in differentiation, which in turn is created by continuous innovation and of course a deep insight of consumer needs and requirements be the advertising is BTL or ATL. Apart from that, customer relationship management is one area in which the banks need to raise their bar especially when loyalty thresholds are low. Many consumers have expressed their reservations about the low level of service and don’t think twice when it comes to switching over to other banks. The lesson: Never trust a bank on face value or simply what they boast in ads.
The Image Factor
When all is said and done, banks still have to concentrate on continuous product development to retain their customers. The logic is simple: While advertising helps to build the image, it is the product that sustains that particular image. Banks also need to remember that while advertising works big time to attract both old and new customers, word-of-mouth remains the most effective way of communication for their products and offerings. So while big names continue to spend their huge advertising budget to promote their products, they also face competition from smaller banks (with less advertising budget) whose terms and conditions may turn out to be more attractive especially for consumers with less money. At the end of the day, however, it is the quality of service and quick turnaround time that will make the consumer an ardent customer of any bank’s products and services.
It has been nearly five years since banks started emphasizing on consumer financing and although majority of our population do not have the means to cash in on this development, there are many and especially the rising middle class who have started utilizing their services for improving their lifestyle. Currently, the default rate is low. For instance, in the auto-financing sector, the recovery rate is around 97% and even if the customer is unable to pay up, with a mortgage the bank can always foreclose one’s property. Some industry experts, however, say that the real test of default will come once the products started ageing and people will start getting tired of long loan repayments.
Now what does the future hold for consumer financing? Have the banks done enough homework to create awareness about their products through right strategies? Some top notch banks continue to hire professionals who have worked laboriously on brand development and building identities for their products. And to a great extent they have succeeded, although the sky remains the limit when it comes to exploring the full potential of consumer banking because a large portion of urban Pakistan still remains untapped. Aggressive marketing along with an effective and innovative mix of ATL and BTL has to continue at an impressive enough pace. The best, however, is yet to come.

Make sure it's Catchy

"I like it. It's CATCHY and EASY to REMEMBER"

No matter what you'r trying to sell make sure your brand name and logo is attractive.

Forecasting in business:

Sales forecasting is especially difficult when you don’t have any previous sales history to guide you, as is the case when you’re working on preparing cash flow projections as part of writing a business plan. Here, is some detailed explanation of how to do sales forecasting.
There are many ways to estimate sales revenues for the purposes of sales forecasting.
For example..
when there is sales forecasting ,you plan to work with a bank for financing, you will want to do multiple estimates so as to have more confidence in the sales forecast. How do you do this?

Sales Forecasting Method #1
For your type of business, what is the average sales volume per square foot for similar stores in similar locations and similar size? This isn't the final answer for adequate sales forecasting, since a new business won't hit that target for perhaps a year. But this approach is far more scientific than a general 2 percent figure based on household incomes.

Sales Forecasting Method #2
For your specific location, how many households needing your goods live within say, one mile? How much will they spend on these items annually, and what percentage of their spending will you get, compared to competitors? Do the same for within five miles (with lower sales forecast figures).

Sales Forecasting Method #3
If you offer say, three types of goods plus two types of extra cost services, estimate sales revenues for each of the five product/service lines. Make an estimate of where you think you'll be in six months (such as "we should be selling five of these items a day, plus three of these, plus two of these.") and calculate the gross sales per day. Then multiply by 30 for the month.
Now scale proportionately from month one to month six; that is, build up from no sales (or few sales) to your six month sales level. Now carry it out from months six through 12 for a complete annual sales forecast.
Also Remember..
Don’t Just Do One Sales Forecast
Include Expenses in Your Sales Forecasting

posted by Abdur Rehaman

How To Choose An Effective Brand Name !!!

Every product in the market is known by a brand name, and it is very, very important to choose a good brand name as sometimes the key to success of a product is its brand name !!

Here are some tips on how to choose an effective brand name

MAKE IT EASY TO REMEMBER
MAKE IT UNIQUE
DON'T BE MISLEADING
MAKE THE NAME FIT THE COMPANY
MAKE YOUR NAME FIT YOUR BRAND IMAGE

Management Issue : How To Maintain Work--Life Balance

1. Don't overbook.
2. Prioritize ruthlessly.
3. Learn how to say no.
4. Organize.
5. Use technology.
6. . . . but don't overdo the use of technology
7. Know it won't always be perfect. don't lose heart if it is not perfectly managed for the first time !

Source : http://www.microsoft.com/smallbusiness/resources/management/leadership-training/need-work-life-balance-7-tips.aspx#Needworklifebalancetips

Funny, buT TRUE : The importance of advertising

For a business not to advertise is like winking at a girl in the dark. You know what you are doing but no one else does

Stuart H. Britt, US advertising consultant


Source: http://www.12manage.com/quotes_m.html

Choose your customers, choose your future by Seth Godin

Marketers rarely think about choosing customers... like a sailor on shore leave, we're not so picky. Huge mistake.

Your customers define what you make, how you make it, where you sell it, what you charge, who you hire and even how you fund your business. If your customer base changes over time but you fail to make changes in the rest of your organization, stress and failure will follow.

Sell to angry cheapskates and your business will reflect that. On the other hand, when you find great customers, they will eagerly co-create with you. They will engage and invent and spread the word.

It takes vision and guts to turn someone down and focus on a different segment, on people who might be more difficult to sell at first, but will lead you where you want to go over time

summary: i would completely agree as choosing your customers are a very important part of your marketing plan. market segmentation, market targeting, market positioning and differentiation are all done in order to choose your right customers. in fact the whole idea of marketing revolves around customers and so when you choose your customers, you're basically choosing your product and your company's future.

Developing marketing strategies

It includes:

1- Positioning

2- Develop new product, test and launch

3-Modification in the stages of product life cycle

4- Strategy choice depends on the strategy pursued by the firm

5-Consider changing global opportunities and challenges

Product mix strategies

Product mix strategies

• Company can add new product lines, thus widening the product mix. • Company can lengthen the existing product lines to become a more full line company. • It can add more product versions of each product and deepen its product mix. • The company can pursue more product line consistency, or less, depending upon whether it wants to have a strong reputation in a single field or in several fields.

Managing the Product Mix

If an organization is marketing more than one product it has a product mix. o Product item--a single product o Product line--all items of the same type o Product mix--total group of products that an organization markets
In a dynamic marketing environment, the product mix is not static. The effects of changing technology, evolving competition and changes in customer needs mean that is most important for an organization to find ways of keeping its product ranges fresh and interesting. This opens up a number of management problems, requiring planned procedures and strategies in order to: o retain and maintain existing products so that they continue to meet their objectives o modify and adapt existing products to take advantage of new technology, emerging opportunities or changing market conditions. o delete old products that are close to the end of their working lives and no longer serve their purpose o introduce a flow of new products to maintain or improve sales and profit levels and to form a firm foundation for tomorrow’s market. Too many products could put an organization at risk, as product launch is resource intensive with no guarantee of success. At the other extreme, too many declining products could threaten the future of the business as sales and profits start to fall.
Elements of a Product Mix Depth measures the # of products that are offered within each product line. Width measures the # of product lines a company offers.
Product decisions Marketers make product decisions at three levels: o individual product decisions o product line decisions o product mix decisions
1. Individual product decisions are focused around the development and marketing of: o Product attributes o Branding o Packaging o Labelling o Product support services.
2. The product line is comprised of a group of products that are closely related because: o they function in a similar manner o are sold to the same groups o are marketed through the same types of outlet o fall within given price ranges The product line length involves the number of items in the product line. It is greatly influenced by the company objectives and the resources. Product line growth needs to be planned carefully and is extended in two ways: ‘stretching’ and ‘filling’.
Product line stretching Downward stretch: Company initially located at the top end of the market and then ‘stretches’ downwards to pre-empt a competitor or respond to an attack. Launch of C-Class by Mercedes-Benz. Upward stretch: Companies stretching upwards to add prestige to their existing range of products. Toyota with the Lexus. Can be risky due to customer perception and inability of sales people to trade up and negotiate to the new level. Two-way stretch: Extending product lines upwards and downwards to address different segments of the market.
Product line filling: Increasing the product line by adding more items within the present range of the line. Reasons for product filling: § Extra profits § Satisfying dealers § Using excess capacity § Being the leading full-line company § Plugging holes to keep out the opposition Care needs to be taken that the line filling does not lead to cannibalisation and customer confusion.
3. Product mix decisions Product mix or product assortment consists of all the product lines and items that a particular seller offers for sale to buyers. Dimensions of the product mix Breadth or width - Wide product mix containing many different product lines. E.g Unilever producing cooking oil, toilet soap, cosmetics etc. Length - Total number of products in the product lines Depth - Different versions, such as size of packaging and different formulations. Consistency - How closely related the various product lines are in end use, production requirements, distribution channels etc

New Product Development Process

1. Idea Generation- is the idea worth considering? Ideas might come from Internal sources: R & D, top mgt’ employees; External sources: Customers, competitors, distributors, suppliers, research institutes
2. Idea Screening- Is the product idea compatible with company objectives, strategies? Strength and weaknesses, Fit with objectives, Market trends, Rough ROI (Return on Investment) estimate Ideas are evaluated against criteria; most are eliminated. Errors: A GO-Error A DROP-Error
3. Concept development and testing-Can we find a good concept for the product that consumers say they would try? Concept: who will use the product? What primary benefit should the product provide? When will people consume? Concept testing is the way of testing new product concepts with a group of target consumers to find out if the concepts have strong consumer appeal. It can be presented symbolically or physically. Nowadays are designed and developed in a computer Obtain: Reactions from customers, Rough estimates of cost, sales and profits
4. Marketing strategy development-can we find a cost-effective, affordable marketing strategy? Preliminary market strategy plan describe: • The target market, product positioning, and sales, share, and profit goals for the first few years. • Product price, distribution, and marketing budget for the first year. • Long-run sales and profit goals and the marketing mix strategy.
5. Business Analysis Evaluating proposal’s business attractiveness - Will this product meet our profit goal? Management prepares sales, cost, and profit projections. As new information comes in, the analysis will undergo revision and expansion
6. Product development R&D or reengineering – developing physical product Prototype development and testing
7. Market testing Not all companies undertake market testing. New-to the market products, high risk, high investment cost influence market testing.
Questions: have product sales met expectations? Or should we send the idea back for product development (stage 6)? how much market testing should be done, and what kind(s)? How many test cities? Which cities? Length of test? What information? What action to take?
8. Commercialization-Are product sales meeting expectations? Contracting for manufacture or build or rent a full-scale manufacturing facility. The company launching a new product must first decide on introduction timing, geographic strategy, target market prospects and introductory market strategy. When? (introduction timing) – First entry – Parallel entry – Late entry Where? (geographic strategy) – single location, – a region, – the national market or – the international market. To Whom? (target market prospects) – Determining initial distribution and promotion – Early adopters, heavy users and opinion leaders How? (introductory market strategy) – Developing action plan for introducing the product – Critical path scheduling (CPS) can be used

The Product Life Cycle

Understanding the product life cycle is key to understanding how to market a product. Many marketing campaigns are won and lost because of knowledge of the product life cycle. If understood, the product life cycle will tell you how to market a product and how much money to spend.
The product life cycle is divided into four parts; introduction, growth, maturity, and decline. These parts of the cycle follow a the curve you would normally expect, a long slow initial acceptance, a period of rapid growth, a long length of time where the product has fully saturated the market, and its eventual decline in obsolescence.
The introduction phase of the product life cycle is the easiest to market, but the most resource and cost intensive. The target market is the early adopter. The problem is the early adopter is the most difficult consumer to convince. The early adopter seeks status. They crave new products, not because of usefulness, but sexiness. They want to feel this product they are buying into will bring them some amount of prestige among their constituents.
The question then is, how do you market to them? Ad and event intensive sales are probably the most useful. Ads should focus less on the feature-benefits and more on the emotional aspect of the product. One company that makes this distinction very clear in their advertisements is Apple Computers. When advertising for their personal computing products, they use the PC vs. Mac ads. These ads are entertaining and grab your attention, but focus mainly on the feature-benefit aspects of a product. The iPhone ads are very low on feature-benefits and high on the coolness factor.
Growth is the period when everyone knows your product, but they aren't sure if they want to use it or not. Here it is important to stop focusing on the coolness of a product, and start focusing on the features and benefits of a product. At this point, the early adopters have shown the world how cool the product is and how cool they are for having one. The rest of you market wants to know why it is they should get one. If they don't see a real benefit, then they will move on to the next product.
Maturity is the least expensive segment of a product's life cycle. When a product has generally been accepted, and the market has reached its final penetration, it has reached this point. Your marketing techniques should focus on maintaining customers and customer satisfaction. Your advertisements can focus on what you can do for them while they keep using you product.
Decline is the most difficult segment for most companies. Decline requires a lot of soul searching. If a company continues in the status quo, the product will decline and the company will continue to spend money on it. This is the recipe for disaster. A company has one of two paths it can take. Either, you can rebuild the product, or you must discontinue the product.
If the company wishes to revitalize a product, it usually does so in one of two ways. The first is nostalgia marketing. You remind the consumer about the product and that it was always there. The second, is to refresh the product. You can create new promotional material, new packaging, new advertising or new features.
The process of rebuilding a product's market is often not feasible because of obsolescence. If this is the case, the company shouldn't just discontinue the product and leave the customer hanging. A well designed marketing plan should inform customers of the end of the products life cycle, and move them onto another of the companies replacement products.

Product development:

It means offering new or improved products for present market. By knowing what the present markets needs, a firm may see ways to add or modify product features, create several quality levels, or add more types or sizes to better satisfy customers while seeking, also, to expand.

What is marketing?

Marketing seeks to satisfy the needs of people (customers or the market) (creating a sense of usefulness or utility) through the exchange process.

The Marketing Mix or the "4 P's" are:

Product
Price
Promotion
Place (or distribution)

These are employed to satisfy a target market' or target demographic (the pool of potential customers).

Example:

Product: Procter and Gamble introduces a new toothpaste designed to taste good and fight cavities. Logo and packaging designed in bright colors to appeal to kids of elementary school age to encourage more tooth brushing.

Price: $2.00, and discounted by means of coupons
Promotion: television and radio commercials, magazine and newspaper ads, and a website; these use bright colors and happy music, perhaps an animated cartoon character for a fun and family-friendly attitude

Place (or distribution): Supermarkets, drugstores, discount stores such as Wal-Mart
Target demographic:

Mothers with kids who make toothpaste buying decisions for the family (advertising could be shown on children's programming, prompting kids to ask parents to buy the toothpaste)

Product Levels

A product has five levels.

• Core benefits- the essential service or benefit that the buyer is buying. E.g. getting clean, rest and sleep,

• Basic (generic) products - the basic product recognized as such. E.g. soap; room components – bed, bathroom,

• Expected products - the set of attributes and conditions that the buyer normally expects in buying the product. E.g. smell, shape; clean bed, towel, quietness, etc

• Augmented products - additional services and benefits that the seller adds to distinguish the offer from competitors. E.g. anti-bacterial, moisturizing; fresh flowers, rapid services, etc

• Potential product- the set of possible new features and service that might eventually be added to the offer. that exceeds customer expectations. E.g. Vitamins; candy on the pillow.

Product and Product Mix

Product Planning refers to the systematic decision making related to all aspects of the development and management of a firms products including branding and packaging. A product is anything that can be offered to a market to satisfy a want or need. Each product includes a bundle of attributes capable of exchange and use. Products that are marketed include physical goods, services, experiences, events, persons, places, organizations, properties, information, and ideas. The marketing manager needs to understand how markets develop overtime, in order better to plan and manage products, their life-cycles and their marketing strategies.
Differences between Goods and Services o Goods are tangible. You can see them, feel them, touch them etc. o Services are intangible. The result of human or mechanical efforts to people or objects o Sales of goods and services are frequently connected, i.e. a product will usually incorporate a tangible component (good) and an intangible component.

MANAGING PRODUCT LIFE CYCLE

Stages in Product Life Cycle • Introduction • Growth • Maturity • Decline

Introduction • Price: High • Quality: Low • Number of versions: Few • Number of competitors: Few • Intensity of Competition: Little • Advertising: High to introduce • Distribution: Little

Growth • Price: High and dropping • Quality: Low and growing • Number of versions: Few and increasing • Number of competitors: Few and growing • Intensity of Competition: Growing • Advertising: Still high to expand • Distribution: Growing

Maturity • Price: Dropping and stabilizing • Quality: High • Number of versions: Many • Number of competitors: Many/dropping • Intensity of Competition: High • Advertising: Stable • Distribution: Maximum

Decline • Price: Dropping • Quality: High • Number of versions: Dropping • Number of competitors: Dropping • Intensity of Competition: Depends • Advertising: Dropping • Distribution: Losing

Labeling

Labeling is a particular area within the packing field that represents the outermost layer of the product. Labels have a strong functional dimension, in that they include warnings and instructions, as well as information required by law on best industry practice. Labels state, at the very least, the weight or volume of the product. A bar code and the name and contact address of the producer. Consumer demand has also led to the inclusion of far more product information, such as ingredients, nutritional information and the environment friendliness of the product. Information about the extent to which the packing is made of recycled is also much more common now. Sellers must label products. The label may be a simple tag attached to the product or an elaborately designed graphic that is part of the package. The label might carry only the brand name or a great deal of information. Even if the seller prefers a simple label, the law may require extra information.

Types of brands: -

There are many forms of branding but primarily there are manufacturer, distributor, price and generic brands

Brand Equity: - a) is an asset b) a degree of brand-name recognition perceived brand quality, strong mental and emotional associations, and other assets such as patents, trademarks and channel relationship. c) is a measure of a number of different components, including the beliefs, images and core associations consumer have about particular brand.Brand equity is the positive differential effect that knowing the brand by the buyer has on the seller.

Creating Powerful Promotional Marketing

Before starting a promotional marketing campaign for your small business take the time to carefully plan the incentives and objectives. Ask yourself the following questions:

• Are you planning to collect names as leads or discount an item as a loss leader to gain a larger customer base? Determine the reason for the promotion.

• Who is the target of your promotional campaign? Is it your competitors customers or existing clients who have not made a purchase in the last 12 months?

• What incentive works best for your customer group? Coupons, sweepstakes or sampling?

• What is your available budget? Choose an advertising vehicle like direct mail, email, or in-store that will not exceed your promotional budget.

• Will you run the promotion in-house or hire an outside promotional agency? Choose in-house if you have a limited budget and time to learn more about promotional marketing.

• How will your business decide if promotional marketing is a success? Select a clear goal and do not forget to measure the results.

• Is your promotion in compliance with State and Federal laws. Promotional marketing incentives must comply with the law. For instance, the Federal Trade Commission states "when a "free" offer is tied to the purchase of another product, the price of the purchased product should not be increased from its regular price."

Any contests or sweepstakes offered by a company that require a purchase to enter are illegal in the United States. Check your country or state government agency to make sure you comply with regulations and laws.

The continued spending by small and large companies on promotional marketing is a clear indication that promos work. Apply promotional marketing to your small business and experience a sales boost

Put your name in the "Labels for this post"

Please form a habit of putting your full name in the labels section just above the "Publish Post" option.

It'd greatly help our instructor or his TA to calculate how many posts each student has made, as the total number of your posts would appear in the labels section (on the right-bottom side of the blog). [Mine at this instance, for example, are 5.]

"Facebook Hijackers Speak Out About... School Project? "

I don't know whether you, enthusiastic facebook-users, have been victims of this hijack assault - well not an assault but a school project! I have read that:

Hundreds of Facebook groups were turned into zombies on Tuesday in an attempt to display just how vulnerable social networkers can be. Using a design flaw in Facebook's groups feature, a group called Control Your Info found Facebook groups where the administrator had stepped down, joined the group, claimed the vacant administrator spot (which is open to any group member when the administrator leaves) and changed the name to Control Your Info.

What you must be horrified to know that this stunt (the causes are explained in the article) was done as an experiment as a school project. The foursome, the guys doing this hijacking thing, belong to Hyper Island school of Digital Media. The project was to be presented on Wednesday. they hoped their project would be a success. Read the full article here.

What is forex

Foreign Exchange (FOREX) is the arena where a nation's currency is exchanged for that of another. The foreign exchange market is the largest financial market in the world, with the equivalent of over $1.9 trillion changing hands daily; more than three times the aggregate amount of the US Equity and Treasury markets combined.
Unlike other financial markets, the Forex market has no physical location and no central exchange (off-exchange). It operates through a global network of banks, corporations and individuals trading one currency for another. The lack of a physical exchange enables the Forex market to operate on a 24-hour basis, spanning from one zone to another in all the major financial centers.

Traditionally, retail investors' only means of gaining access to the foreign exchange market was through banks that transacted large amounts of currencies for commercial and investment purposes. Trading volume has increased rapidly over time, especially after exchange rates were allowed to float freely in 1971. Today, importers and exporters, international portfolio managers, multinational corporations, speculators, day traders, long-term holders and hedge funds all use the FOREX market to pay for goods and services, transact in financial assets or to reduce the risk of currency movements by hedging their exposure in other markets.

Eight Tips for Better Brainstorming

1. Use brainstorming to combine and extend ideas, not just to harvest ideas.
Andrew Hargadon's How Breakthroughs Happen shows that creativity occurs when people find ways to build on existing ideas. The power of group brainstorming comes from creating a safe place where people with different ideas can share, blend, and extend their diverse knowledge. If your goal is to just "collect the creative ideas that are out there," group brainstorms are a waste of time. A Web-based system for collecting ideas or an old-fashioned employee suggestion box is good enough.

2. Don't bother if people live in fear.
As Sigmund Freud observed, groups bring out the best and the worst in people. If people believe they will be teased, paid less, demoted, fired, or otherwise humiliated, group brainstorming is a bad idea. If your company fires 10% of its employees every year, for instance, people might be too afraid of saying something "dumb" to brainstorm effectively. It is better to have them just work alone.

3. Do individual brainstorming before and after group sessions.
Alex Osborn's 1950s classic Applied Imagination, which popularized brainstorming, gave advice that is still sound: Creativity comes from a blend of individual and collective "ideation." Skilled organizers tell participants what the topic will be before a brainstorm. I once went to a session on how to give an "itch-less haircut," and, at the suggestion of the organizer, took a preliminary trip to a salon where I asked the stylist for a cut as "itch-free as possible" to jumpstart my thinking. At the brainstorm, I reported how tightly the stylist wrapped the cape around my neck and how she put talcum powder all over me—effective, if uncomfortable and messy measures.

4. Brainstorming sessions are worthless unless they are woven with other work practices.
Brainstorming is just one of many practices that make a company creative, and it is of little value if it's not combined with other practices—such as observing users, talking to experts, or building prototype products or experiences—that provide an outlet for the ideas generated. Some of the worst "creative" companies that I've worked with are great at coming up with new ideas, but never actually get around to implementing them. A student and I once studied a team that spent a year brainstorming and arguing about a simple product without producing even a single prototype, even though a good engineer could have built one in an hour or two. The project was finally killed when a competitor came out with the product.

5. Brainstorming requires skill and experience both to do and, especially, to facilitate.
In all of the places that I've seen brainstorming used effectively—Hewlett-Packard, SAP's Design Services Team, the Hasso Plattner Institute of Design at Stanford (or "The d.school"), the Institute for the Future, Frog Design, and IDEO—brainstorming is treated as a skill that takes months or years to master. Facilitating a session is a skill that takes even longer to develop. If you hold brainstorms every now and then, and they are led by people without skill and experience, don't be surprised if participants "sit there looking embarrassed, like we're all new to a nudist colony," as one manager toldThe Wall Street Journal. That is how humans act when they do something new and have poor teachers.

6. A good brainstorming session is competitive—in the right way.
In the best brainstorms, people feel pressure to show off what they know and how skilled they are at building on others' ideas. But people are also competitive in a paradoxical way. They "compete" to get everyone else to contribute, to make everyone feel like part of the group, and to treat everyone as collaborators toward a common goal. The worst thing a manager can do is set up the session as an "I win, you lose" game, in which ideas are explicitly rated, ranked, and rewarded.

A Stanford graduate student once told me about a team leader at his former company who started giving bonuses to people who generated "the best" ideas in brainstorms. The resulting fear and dysfunctional competition drastically reduced the number of ideas generated by what had been a creative and cooperative group just weeks earlier.

7. Use brainstorming sessions for more than just generating good ideas.
Brainstorms aren't just a place to generate good ideas. At IDEO, these gatherings support the company's culture and work practices in a host of other ways. Project teams use brainstorms to get inputs from people with diverse skills throughout the company. In the process, a lot of other good things happen. Knowledge is spread about new industries and technologies, newcomers and veterans learn—or are reminded—about who knows what, and jumping into a brainstorm for an hour or so to think about someone else's problem provides a welcome respite from each designer's own projects. The explicit goal of a group brainstorm is to generate ideas. But the other benefits of routinely gathering rotating groups of people from around a company to talk about new and old ideas might ultimately be more important for supporting creative work.

8. Follow the rules, or don't call it a brainstorm.
This is true even if you only hold occasional brainstorms and even if your work doesn't require constant creativity. The worst ""brainstorms"" happen when the term is used loosely, and the rules aren't followed—or known—at all. Perhaps the biggest mistake that leaders make is failing to keep their mouths shut. I once went to a meeting that started with the boss saying, "Let's brainstorm." He followed this pronouncement with 30 minutes of his own rambling thoughts, without a single idea coming from the others in the room. Now that's productivity loss!

The rules vary from place to place. But Alex Osborn's original four still work: 1) Don't allow criticism; 2) Encourage wild ideas; 3) Go for quantity; 4) Combine and/or improve on others' ideas. To steal from IDEO, I'd add "One conversation at a time" and "Stay focused on the topic," as both help save groups from dissolving into disorder.

Courtesy, www.businessweek.com

Packaging

Packaging includes the activities of designing and producing the container for a product. The package may include up to three levels of materials. E.g. Old spice aftershave

Bottle - primary package

Cardboard box - secondary package

Corrugated box - shipping package

Packaging is any container or wrapping in which the product is offered for sale and can consist of a variety of materials such as glass, paper, metal or plastic depending on what is to be contained. Packaging is an important part of the product that not only serves a functional purpose, but also acts as a means of communicating product information and brand character. The packaging is often the consumer’s first point of contact with the actual product and so it is essential to make it attractive and appropriate for both the products and the customers need.
Due to the growth of mass merchants and self-service, manufacturers have come to realize the value of packaging as a marketing tool. Today it is a vital part of a firm’s product-development strategy; a package may even be an integral part of the product itself. Packaging has become a potent marketing tool. Well-designed packages can create convenience and promotional value.

Developing an effective package for a new product requires several decisions. The first task is to establish the packaging concept: defining what the package should basically be or do for the particular product. Decisions must include the following elements: size, shape, materials, color, text and brand mix.

The packaging elements must also be harmonized with decisions on pricing and other marketing elements. Once the packaging is designed, it must be tested.
Factors that have contributed to packaging growing use as a marketing tool:- • Self service: An increasing number of products are sold on a self-service basis. The package attract attention, describe the products features, create consumer confidence and make a favorable overall impression • Consumer affluence: Rising consumer affluence means consumers are willing to pay a little more for the convenience, appearance dependability and prestige of better packages. • Company and brand image: packages contribute to instant recognition of the company or brand. It differentiates a product from competitors by its design, color, shapes and methods. • Innovation opportunity: Innovative packaging can bring large benefits to consumers and profits to producers. Packaging can be a major element of new-product planning. • Promotional tool: It serves as a promotional tool and is the final form of promotion the consumer sees prior to making purchase decision. • Reminder: A package also serves as a reminder after a purchase is made.

Although packaging is expensive, developing effective packaging may cost several hundred thousand dollars and take several months to complete. Companies must pay attention to growing environmental and safety concerns about packaging. Shortages of paper, aluminum, and other materials suggest that marketers should try to reduce packaging.

The benefits of branding

The consumer
Easier product identification
Communicates features and benefits
Helps products evaluation
Establishes product’s position in the market
Reduces risk in purchasing
The manufacturer
Helps creates loyalty
Defends against competition
Creates differential advantage
Allows premium pricing
Helps targeting/positioning
Increases power over retailer
The retailer
Benefits from brand marketing support
Attracts customer
Helps differentiate the product from competitors

Smart Marketing with Customer Loyalty

One of the best ways to build a more profitable and sustainable business is by increasing customer loyalty. Your marketing dollars go much farther when customer loyalty is high.

Ref: http://www.allbusiness.com/marketing/strategic-marketing/3992-1.html

Subway and $5 strategy

Subway's $5 footlong, the brainchild of an obscure Miami franchisee, is the fast-food success story of the recession
Stuart Frankel isn't what you'd call a power player in the world of franchising. Five years ago he owned two small Subway sandwich shops at either end of Miami's Jackson Memorial Hospital. After noticing that sales sagged on weekends, he came up with an idea: He would offer every footlong sandwich (the chain also sells 6-inch versions) on Saturday and Sunday for $5, about a buck less than the usual price. "I like round numbers," says Frankel, a brusque New Yorker who moved to Miami in 1972 and owned a drugstore before opening his first Subway outlet in 1988.
More from BusinessWeek.com:

• In-N-Out Burger: Professionalizing Fast Food

• The 25 Fattiest Fast Foods

• The Challenges for McDonald's Top Chef

Customers liked his round number, too. Instead of dealing with idle employees and weak sales, Frankel suddenly had lines out the door. Sales rose by double digits. Nobody, least of all Frankel, knew it at the time, but he had stumbled on a concept that has unexpectedly morphed from a short-term gimmick into a national phenomenon that has turbocharged Subway's performance. "There are only a few times when a chain has been able to scramble up the whole industry, and this is one of them," says Jeffrey T. Davis, president of restaurant consultancy Sandelman & Associates. "It's huge."

In fact, the $3.8 billion in sales generated nationwide by the $5 footlong alone placed it among the top 10 fast-food brands in the U.S. for the year ended in August, according to NPD Group. That puts the $5 menu's success just a notch behind KFC and ahead of Arby's and Domino's Pizza. It helped privately held Subway, of Milford, Conn., lift U.S. sales 17% last year at a time when most restaurant chains, save for industry leader McDonald's, struggled. Actually, make that soon-to-be-former industry leader McDonald's. Subway's low-cost franchising model and mainstream appeal have allowed it to add 9,500 locations in the past five years, for a total of about 32,000 outlets. At its current growth rate of 40 new stores a week, Subway is poised to surpass McDonald's in worldwide locations sometime early next year. (Measured by total sales, McDonald's $30 billion still dwarfs Subway's $9.6 billion, although Subway has now supplanted both Wendy's and Burger King in market share.)
"A Life of Its Own"
Frankel's $5 footlong idea illustrates how a huge company can wake up and eventually seize on a good idea that's not generated at headquarters. Frankel, along with two other local managers in economically ravaged South Florida, ceaselessly championed the idea to Subway's corporate leadership amid widespread skepticism. Once it was approved, Subway's marketing team quickly generated a memorable campaign that firmly established the $5 footlong nationwide. The promotion's success spawned imitators and created an unprecedented demand for staple ingredients such as turkey, ham, and tuna. "The whole thing took on a life of its own," says Jeff Moody, CEO of Subway's franchise-owned advertising arm, the Subway Franchisee Advertising Fund Trust.

The fact that a sandwich, the quintessential American food, has grabbed the spotlight right now comes as no surprise to some. Its appeal goes beyond the low sticker price—you can share a footlong with a co-worker or a friend (something that's not quite as easy with a Big Mac). "People are not eating out as much anymore, so anything that brings people together through food is much more compelling nowadays," says Michelle Barry of the Hartman Group, a Seattle consultancy that employs anthropologists and sociologists to ferret out consumer perceptions for such companies as Kraft Foods and Wal-Mart Stores.
For Frankel, the biggest surprise from his $5 promotion was that his profit margins didn't decline. Many promotions are so-called loss leaders designed to draw customers in the hope they'll buy higher-margin items alongside the featured special. That's one reason most offers have a time limit. Frankel's food costs did rise as a percentage of sales, but that was offset by the overall boost in volume and the increased productivity of his employees, who had less down time. Even after adding two new staffers, Frankel made money on each $5 sandwich.
Frankel kept the weekend promotion going for more than a year. At the same time, Subway's top brass was growing tired of a national ad campaign that featured spokesman Jared Fogle, who had lost 245 pounds almost a decade earlier by eating Subway six-inch subs for lunch and dinner. Company insiders envied the success of McDonald's dollar menu and wanted a "value" offering of their own. In September 2007, Steve Sager, a Subway development agent who oversaw about 225 franchises across South Florida, heard about the success of Frankel's $5 deal. He decided to try it in a troubled Fort Lauderdale outlet on Commercial Boulevard, a gritty thoroughfare dotted with strip malls. On the first day of the promotion, the store nearly ran out of bread and meat. Sales doubled.
Sager called Subway co-founder Fred DeLuca, who lives in the vicinity, and excitedly shared the news. An intrigued DeLuca came by the shop and, Sager says, "saw the potential instantly." (DeLuca declined to comment.) Charlie Serabian, the owner of 50 South Florida Subways, decided to launch the promotion in some of his stores. To advertise, he slapped crude homemade signs in the windows that spelled out "ALL FOOTLONGS $5." DeLuca joked that they looked like ransom letters. It didn't matter: Sales rose as much as 35%. Some locations, such as those housed inside Wal-Mart stores, did even better.
Moody, the marketing chief, hopped a flight to Fort Lauderdale a month later. He arrived at one store at 11 a.m. to find a line out the door. Frankel and Sager, who accompanied him, jumped behind the counter to help make sandwiches, while Moody talked to customers. Most were buying footlongs, and some were saving half for later.

Clearly, the South Florida crew was onto something. The question was whether it would resonate elsewhere. "Unless it was in your store, you were skeptical," Moody says. At a meeting of the franchisee marketing board that fall, Frankel presented his idea. Many owners thought the promotion would send food and labor costs soaring, erasing any hope of profits. A motion to roll it out nationally failed.
Annoying Jingle
But others picked up on Frankel's idea and tried it in locations ranging from Washington to Chicago. Right before Christmas 2008, the board voted again, and the motion passed. (Franchisees still had the option to not do it.) Moody pushed ahead with a national campaign, despite having no market research to back up the idea. "It violated all our normal processes," says Moody, whose annual ad budget is around $500 million.
Subway soon brought in its ad agency, MMB of Boston. "Let's not overcomplicate this," MMB managing partner Chad Caufield recalls thinking. The idea was to use hand gestures and an irritatingly addictive jingle to convey both the price (five fingers) and the product (hands spread about a foot apart). MMB also shot on a soundstage, giving the commercial a stylized, campy look. "We wanted to create the feeling that this was a movement taking hold," Caufield says.
The campaign was launched on Mar. 23, 2008—the same month that Bear Stearns collapsed into the arms of JPMorgan Chase. "The timing could not have been better," says Dennis Lombardi, executive vice-president at restaurant consultancy WD Partners. Over the first two weeks, franchisees reported that sales shot up 25% on average. Within weeks, 3,600 videos of people performing the jingle appeared on YouTube. Fogle, attending the NCAA Final Four college basketball tournament soon after the launch, was serenaded with the song by students. The $5 footlong was mentioned on ESPN, The Tonight Show, and celebrity gossip site TMZ. The North Carolina State Fair even held a $5 Footlong Song Challenge—an American Idol-style event for the 4-H crowd.
The franchisee marketing board quickly voted to extend the four-week promotion to seven weeks. When that ended, Subway kept it going but limited the number of $5 sandwiches to just eight, removing items with high ingredient costs, such as the Chicken & Bacon Ranch sandwich.
Suddenly Subway needed 50% more food supplies. Bread shortages became a problem, as the ratio of six-inch sandwiches to footlong orders, normally 2 to 1, flipped. Subway's franchise-owned Independent Purchasing Cooperative, or IPC, had to scramble to find new sources of bread. Even mundane items, such as plastic sandwich bags from China, nearly ran out. "I was in a panic," recalls IPC CEO Jan Risi, who furiously worked the phones, cajoling her network of suppliers to run extra shifts.
Even Cheaper
Soon, copycat offers emerged. Boston Market offered 11 meals for $5 each, while Domino's sold sandwiches for $4.99 and KFC launched $5 combo meals. T.G.I. Friday's began selling $5 sandwiches. "Five dollars is the magic number now," says restaurant consultant Malcolm Knapp. "It's become a price point that consumers respond to," says Judy Cantrell, Boston Market's chief brand officer.
The question now is when the campaign will run out of steam. MMB's Caufield admits the issue keeps him up at night: "Are we riding this pony too long?" Tony Pace, a senior executive who works with Subway's marketing arm, replies bluntly: "If you had a brand that represented nearly $4 billion in sales, would you plan an exit strategy for it?"
Pace says the footlong will remain "as long as it makes good economic sense," so a decline in footlong sales could force price hikes, or limits such as $5 after 4 p.m. (Serabian has gone the other way as the South Florida economy has worsened, offering footlongs for $4 in his stores.) There are also concerns that Subway's focus on the footlong could distract it from new growth areas, such as a planned push into breakfast items or international expansion. (Save for some tests in Australia and Canada, the $5 footlong hasn't gone beyond the U.S.)
Meanwhile, Frankel has moved on to a new idea. Now he's pushing for Subway loyalty cards that let purchasers accrue points toward free sandwiches. Driving down Interstate 95 toward Jackson Memorial on a cloudy autumn day, Frankel chronicles the frustrations he's had convincing DeLuca and others that this could be a hit. Maybe now that Frankel is the Father of the $5 Footlong, they'll listen.

Courtesy , Business Week.

Understanding the Role of Social Media in Marketing

Social media represents low-cost tools that are used to combine technology and social interaction with the use of words. These tools are typically internet or mobile based. A few that you have probably heard of include Twitter, Facebook, MySpace and YouTube.
Social media gives marketers a voice and a way to communicate with peers, customers and potential consumers. It personalizes the "brand" and helps you to spread your message in a relaxed and conversational way.
The downfall to social media, if you could call it that is that it must be a part of your everyday life in order to keep the momentum and attention you need for it to be successful.
If you think that social media is only for the small business owners that are trying out an experiment, I have to correct you. Here are just a few companies that have become involved in social media:

• Absolut Vodka - Online Video on YouTube and Using Facebook to house their Top Bartender fan page.
• BMW - Utilizing Facebook to promote their 1-Series Road Trip and they have created a Rampenfest Page for fans.
• Dunkin Donuts - That's right they've found value in social media and have set up a microblogging Twitter account.
• The role of social media in your marketing is to use it as a communication tool that makes you accessible to those interested in your product and makes you visible to those that don't know your product. Fact is social media is so diversified that it can be used in whatever way best suits the interest and the needs of your business.

For more information go to about.com where the answer of this was given by laura lake