Price Differentiation


A common response during slow demand is to discount the price of the service. This strategy relies on basic economics of supply and demand. To be effective, however, a price differentiation strategy depends on solid understanding of customer price sensitivity and demand curves.

Heave use of price differentiation to smooth demand can be a risky strategy. Over –reliance on price can result in price wars in any industry where eventually all competitors suffer. Price wars are well known in the airline industry, where total industry profits suffered as a result of airlines simultaneously trying to attract customers through price discounting.

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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Postponement


Postponement is the delay to the last possible moment of the final formulation or commitment of a product. The most general method which can be applied in promoting the efficiency of a marketing system is the postponement of differentiation for example, to postpone changes in form and identity to the latest point in the marketing flow or to postpone changes in  inventory location to the latest possible time. Minimization of the risk of speculation is achieved by delaying differentiation of the product to the time of purchase. Savings in transportation of goods are achieved because merchandise is moved in larger quantities, in bulk, or in relatively undifferentiated places.

Postponement is the opposite of speculation. A speculative inventory is put into a distribution center whenever the cost of carrying that inventory is less than the profit derived from having that inventory readily available to stimulate purchases.

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.

Defining Oligopoly


An oligopoly is a form of competition in which a market is dominated by just a few sellers. Generally, oligopolies exist in industries that produce products such as steel, cereal, automobiles, aluminum, and aircraft. One reason some industries remain in the hands of a few sellers is that the initial investment to enter an oligopolistic industry is usually tremendous. Think what it would cost to build a steel mill or an automobile assembly plant. In an oligopoly, prices tend to be close to the same. Note, for example, how most credit cards charge very similar rates. The reason for this is simple. Intense price competition would lower profits for all the competitors, since a price cut on the part of one producer would most likely be matched by others. Product differentiation, rather than price differentiation, is usually the major factor in market success in a situation of oligopoly.

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.

 

Leadership and Transformation


There is some consensus concerning what is important, and what needs to be done to bridge the gap between transformation expectations and transformation achievement that is found in many companies.

  • A clear and compelling vision and strategy is essential for both differentiation and transformation. The vision should embrace both the transformation ‘end state’ and the transformation process.
  • Top management commitment is of crucial importance in the management of change. It needs to be communicated and sustained. A practical and necessary demonstration of commitment is to ensure that all the pieces of the transformation jigsaw puzzle and the critical factors for competitive success are in place.
  • People need to be empowered and equipped to manage change, and to handle the extra responsibilities that are being placed upon them. This requires a holistic perspective, new attitudes, fresh approaches and additional techniques. In particular, there is a need for the qualities associated with the ‘organic manager.’
  • Within corporations there are hidden businesses. Management and business processes should focus energies and resources upon those people and activities that activities that make the greatest contribution to business development the greatest contribution to business development and competitive success.

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.

 

Core Competency


Competences vary in the extent to which they are at the center of a firm’s ability to offer low cost or differentiated products or services. To be at the center, competences must meet three criteria: customer value, competitor differentiation, and extendability. The customer value criterion requires that a core competence must make an unusually high contribution to the value that customers perceive. A competence is a competitor differentiating if it is uniquely held or, if widely held, the firm’s level of the competence is higher than that of its competitors. A competence is extendable if it is used in more than one product area.

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.

 

Generic and Grand Strategies


Many businesses explicitly and all implicitly adopt one or more generic strategies characterizing their competitive orientation in the marketplace. Low cost, differentiation, or focus strategies define the three fundamental options. Enlightened managers seek to create ways their firm possesses both low cost and differentiation competitive advantages as part of their overall generic strategy. They usually combine these capabilities with a comprehensive, general plan of major actions through which their firm intends to achieve its long-term objectives in a dynamic environment. Called the grand strategy, this statement of means indicates how the objectives are to be achieved. Although every grand strategy is, in fact, a unique package of long-term strategies, some basic approaches can be identified: concentration, market development, product development, innovation, horizontal integration, vertical integration, joint venture, strategic alliances, consortia, concentric diversification, conglomerate diversification, turnaround, divesture, and liquidation.

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.

 

Marketing Communication


Communication is a constant activity. It is universal and essential feature of human expression and organization. Its scope is as broad as society itself, for every social act involves communication. Communication is concerned with sending and receiving knowledge, ideas, facts, figures, goals, emotions and values. It is much more than an occasional technique employed to convey a message. It is a ceaseless activity of all human beings, and therefore also of all human organizations. Communication is also a central element of the way in which people relate to and cooperate with each other, interpersonal event which is the building block of society. Individuals not only send and receive information in order to cooperate, but parallel with this individuals are constantly communicating their self-images to all around them. Whether we like it or not, whatever a person does as a social act will be observed by others, and is therefore a communication about themselves.

 Communication is more than a marketing tool. It is also an important basis of culture. It has fostered language and music, literature and philosophy, science and poetry. So in one sense, communication can be viewed as neutral and benign, a form of human interaction which helps society and the organizations within it to work well, and which can only benefit those who take part in it. This would be a reasonable approach to a definition if every communication included everything that could possibly be said on a subject, but of course this would be impossible. Communication is a selective art, as important for what it does not convey as for what it does convey.

 Communication is also a human skill, so it is concerned with the state of mind of the communicator, and with the state of mind of the person intended to receive the communication. Communications objectives are often specified as outcomes of attitude change.

 Does this mean that marketing communication is propaganda? To qualify as propaganda, business communication must be seeking to influence the emotional attitudes of others without allowing them to make an effective or rational choice. This is never the situation in business, where in every market there are competitors, and for every product or service there is an alternative or substitute. Indeed, the existence of competition is now arguably a necessary precondition for business strategy. Communication by a business is a creative form of differentiation, always competitive, always seeking to persuade customers, shareholders and employees that its own market offerings are the best choice available. That is the sales pitch of the marketplace, not the imperative of propaganda.

 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, Line of Sight

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