Positioning Strategy Decision


The challenge facing a manager is deciding  which positioning strategy is most appropriate in a given situation. The choice of a strategy is made easier when the following three questions are considered. First, who are the likely competitors, what positions have they staked out in the marketplace, and how strong are they? Second, what are the preferences of the target consumers sought and how do these consumers perceive the offerings of competitors? Finally, what position, if any, do we already have in the target consumer’s mind? Once answered, attention can then be focused on a series of implementation questions:

  • What position do we want to own?
  • What competitors must be outperformed if we are to establish the position?
  • Do we have the marketing resources to occupy and hold the position?

The success of positioning strategy depends on a number of factors. First, the position selected must be clearly communicated to target customers. Second, as the development of a position is a lengthy and often expensive process, frequent positioning changes should be avoided. Finally, and perhaps most impotant, the position taken  in the marketplace should be sustainable and profitable.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Be Inquisitive in Customer Service


Desire quality, efficiency, and precision

  • Focus on the customer’s need for accuracy and efficiency by methodically outlining steps, processes, or details related to a product or service.
  • Communication should be tied into facts, not feelings.
  • Have details and information prepared in advance and be thoroughly familiar with them
  • Approach encounters in a direct, businesslike, low-key manner.
  • Avoid small talk and speaking about yourself.
  • Ask specific open-ended questions about customers’ background or experiences related o the product or service.
  • Present solutions in a sequential fashion stressing advantages, value, quality, reliability and price. Also, be prepared to point out and discuss disadvantages.
  • Have documentation available to substantiate your claims.
  • Don’t pressure customer decisions and follow through on promises.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures

Talking about Bookkeeping


Everyone knows intuitively, if not experientially, that good bookkeeping is good business. If you don’t keep track of your business’s money matters—what comes in and what goes out—you will be in the dark as to how well or poorly your business is doing, and hence how well or poorly you’re handling certain aspects of the business. After all numbers do not lie. If they indicate that all is well, you’ll be able to capitalize on your success by, if nothing else, continuing to do with confidence whatever you’re doing right. If the numbers reveal that all is not well, you will be able to take appropriate measures to solve problems which if left unchecked could land you in failure zone. Just as with certain physical diseases, early detection means early cure and increased chance of survival. Lastly, it goes without saying that slipshod recordkeeping can cost you time, anxiety and even money when tax time rolls around. In sum, while its understandable that people are inclined to avoid and neglect bookkeeping matters, its fundamentally inexcusable.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Business Financial Strategy


Financial strategy examines the financial implications of corporate and business-level strategic options and identifies the best financial course of action. It can also provide competitive advantage through a lower cost of funds and a flexible ability to raise capital to support a business strategy. Financial strategy usually attempts to maximize the financial value of the firm.

The trade-off between advancing the desired debt-to-equity ratio and relying on internal long-term financing via cash flow is a key issue in financial strategy. Many small and medium-sized companies try to avoid all external sources of funds in order to avoid outside entanglements and to keep control of the company within the family. Many believe that only by financing through long-term debt can a corporation use financial leverage to boost earnings per share, thus raising stock price and the overall value of the company. Higher debt levels not only deter takeover by other firms (by making the company less attractive), but also leads to improved productivity and improved cash flows by forcing management to focus on core businesses.

A very popular financial strategy is the leveraged buy out—a company is acquired in a transaction financed largely by debt—usually obtained from a third party, such as an insurance company or an investment banker. Ultimately the debt is paid with money generated from the acquired company’s operations or by sales of its assets. The acquired company, in effect, pays for its own acquisition. Management of the leveraged buy out is then under tremendous pressure to keep the highly leveraged company profitable. Unfortunately the huge amount of debt on the acquired company’s books may actually cause its eventual decline by focusing management’s attention on short-term matters.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Pro Forma Income Statement


Because marketing managers are accountable for the profit impact of their actions, they must translate their strategies and tactics into pro forma, or projected, income statements. A pro forma income statement displays projected revenues, budgeted expenses, and estimated net profit for an organization, product, or service during a specific planning period, usually a year. Pro forma income statements include a sales forecast and a listing of variable and fixed costs that can be programmed or committed.

Pro forma income statements can be prepared in different ways and reflect varying levels of specificity. They have a typical layout consisting of six major categories or line items:

  1. Sales—forecasted unit volume times unit selling price
  2. Cost of goods sold—costs incurred in buying or producing products and services. Generally speaking, these costs are constant per unit within certain volume ranges and vary with total unit volume.
  3. Gross margin (sometimes called gross profit)—represents the remainder after cost of goods sold has been subtracted from sales.
  4. Marketing expenses—generally programmed expenses budgeted to produce sales. Advertising expenses are typically fixed. Sales expenses can be fixed, such as a salesperson’s salary, or variable, such as sales commissions. Freight or delivery expenses are typically constant per unit and vary with total unit volume.
  5. General and administrative expenses—generally, committed fixed costs for the planning period, which cannot be avoided if the organization is to operate. These costs are frequently called overhead.
  6. Net income before (income) taxes (often called net profit before taxes—the remainder after all costs have been subtracted from sales.

A pro forma income statement reflects a marketing manager’s expectations (sales) given criterion inputs (costs). This means that a manager must think specifically about customer response to strategies and tactics and focus attention on the organization’s financial objectives of profitability and growth when preparing a pro forma income statement.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

The Contract Theory


The contract theory holds that when a person buys a product or service, he or she is entering into a contract with the manufacturer. The manufacturer (and by implication the employee representing the manufacturer) has four main obligations:

  1. To make sure the product or service complies with the contract in several respects: it should do what its advertisements say it can, it should operate a certain period of time before needing service or maintenance, and it should be at least as safe as the product information states and the advertising suggests.
  2. To disclose all pertinent information about the product or service, so that the potential consumer can make  an informed decision on whether to purchase it.
  3. To avoid misrepresenting the product or service.
  4. To avoid coercion.

Critics of the contract theory argue that the typical consumer cannot understand the product as well as the manufacturer does, and that consumer ignorance invalidates the contract.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Expert Power


There are several ways managers use expert power. They can promote an image of expertise by subtly making others aware of their education, experience, and accomplishments. To maintain credibility, a leader should not pretend to know things that he or she does not know. A leader whose pretentions are exposed will rapidly lose expert power. A confident and decisive leader demonstrates a firm grasp of situations and takes charge when circumstances dictate. To enhance their expert power, managers should also keep themselves informed about developments related to tasks, valuable to the organization, and relevant to their expertise.

A leader who recognizes employee concerns works to understand the underlying nature of these issues and takes appropriate steps to reassure subordinates. To avoid threatening subordinates’ self-esteem, a leader with expert power should be careful not to flaunt expertise or behave like a know-it-all.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

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