Good Pricing Decisions

Pricing decisions draw on many areas of marketing expertise. It requires a comprehensive understanding of the forces that shape the market, including competitive  interactions, technology and consumer psychology. Sometimes these forces interact and are likely to put downward pressure on prices, such as substitutes, technological advances, price-driven competition, customer experience, and changes in internal focus, such as sales forecasts. Customer makes it difficult to raise prices, as repeat customers’ ability to perceive incremental value of a company’s product or service diminishes over time, especially as substitute or competitive products emerge. Increased internal expectations in the form of expected sales increases or new budgets can send prices on a downward spiral. Customer price sensitivity may also serve  to keep prices in check, especially in the presence of available competitive substitutes or among a company’s marginal customers.

Even in a deflationary economy, there are opportunities for keeping prices from dropping or even for raising prices. However, customers must perceive that these enhancements deliver a genuine, meaningful benefit, or they will continue to seek lower cost alternatives.

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.

High Performance Standards

It is important that you clearly define performance standards for employees. Employees need to know what performance level is expected, what performance is below standards, and what it takes to achieve high standards of performance.

The most convenient time to set performance expectations is during the employee’s annual performance review at the beginning of a new business planning cycle. Prepare for this discussion by doing the following:

1. Identify what you would consider objectives for the employee, i.e., the goals for performance that exceed the job requirements and are challenging, yet attainable. Things to consider: giving the employee more decision-making authority, adding responsibilities, taking on supervisory roles, and increasing productivity goals.
2. Consider also the requirements for satisfactory performance relative to the employee’s tenure, experience, and expertise.
3. Discuss your expectations with your employee, taking into account his or her perspective and any information you may have overlooked that would affect standards of performance. The more input employees have in setting performance expectations, the more likely they will be to buy into the standards upon which you agree.
4. With your employee, come to consensus on performance standards that meet and exceed expectations. Document your decisions.
5. Clarify the rewards for performance with the employee.
6. Meet periodically to discuss progress. If appropriate, revise expectations while keeping goals challenging.

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.

Preparing a Resume

All job applicants need to have information circulating that reflects positively on their strengths. That information needs to be sent to prospective employers in a format that is understandable and consistent with the organization’s hiring practices. In most instances, this is done through the resume.

No matter who you are or where you are in your career, you need a current resume. Your resume is typically the only information source that a recruiter will use in determining whether to grant you an interview. Therefore, your resume must be a sales tool; it must give key information that supports your candidacy, highlights your strengths, and differentiates you from other job applicants.

It is important to pinpoint a few key themes regarding resumes that may seem like common sense but are frequently ignored. If you are making a paper copy of your resume, it must be printed on a quality printer. The style of font should be easy to read—Courier or Times New Roman. Avoid any style that may be hard on the eyes, such as a script or italic font. A recruiter who must review 100 or more resumes a day is not going to look favorably at difficult to read resumes. Use an easy to read font and make the recruiter’s job easier.

It is also important to note that many companies today are using computer scanners to make the first pass through resumes. They scan each resume for specific information like key job elements, experience, work history, education, or technical expertise.

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.

Human Capital

The economic growth, employment levels and the availability of a skilled workforce are inter-related. Economic growth creates employment, but economic growth partly depends on skilled human resources – a country’s human capital. The concept encompasses investment in the skills of the labor force, including education and vocational training to develop specific skills.

Personal and national success are increasingly correlated with the possession of skills. Skilled individuals can command a premium salary in periods of high economic activity. Worldwide, unemployed levels remain high, while organizations have difficulty filling vacancies which require specific expertise. A shortage of skilled people can act as a limiting factor on individual organizations and on the economy as a whole. Small firms are also vulnerable because their owners do not possess basic marketing and finance skills. It is in the interest of any country to maximize its human resources by investing in the skills of its workforce, its human capital. Human capital is one component of a country’s overall competitiveness.

The most successful developing countries are investing heavily in the education and technical skills of their population. Skills requirement are particularly critical at the managerial level.

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.

 

Designing Strategies

Corporate strategy shows how a complex organization achieves its mission, while the business strategy shows how each business within the corporation contributes to the corporate strategy. These strategies typically include decisions about shared values and beliefs; industries to work in; amount of diversification; businesses to start, acquire, close or sell; type of products to make; organizational structure; relations with customers, suppliers, shareholders and other stakeholders; geographical locations, and targets for long-term profitability, productivity, market share, etc.

Consider three factors while designing strategies:

1. The mission, which gives the overall aims and context for other decisions.
2. The business environment, which includes all factors that affect an organization but which it cannot control, such as:
   1. Customers—their expectations and attitudes;
   2. Market—size, location, and stability;
   3. Competitors—the number, ease of entry to the market, their strengths;
   4. Technology—currently available and likely developments;
   5. Shareholders—their objectives, returns on investment, profit levels;
   6. Other stakeholders—their objectives and amount of support;
   7. Legal restraints—trade restrictions, liability and employment laws;
   8. Political, economic and social conditions—including stability, rate of growth, inflation, etc.

The business environment is similar for all competing organizations, so to be successful you need a distinctive competence.

1. The distinctive competence, which includes the factors that set your organization apart from the competitors. If you can design new products very quickly, innovation is a part of your distinctive competence. A distinctive competence comes from your organization’s assets, which include:
   1. Customers—their demands, loyalty;
   2. Employees—skills, expertise, loyalty;
   3. Finances—capital, debt, cash flow;
   4. Products—quality, reputation, innovations;
   5. Facilities—capacity, age, value;
   6. Technology—currently used, planned;
   7. Suppliers—reliability, service;
   8. Marketing—experience, reputation;
   9. Resources—patents, ownership.

The strategic plans show how the organization can achieve the mission.

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.

Designing Strategies

Corporate strategy shows how a complex organization achieves its mission, while the business strategy shows how each business within the corporation contributes to the corporate strategy. These strategies typically include decisions about shared values and beliefs; industries to work in; amount of diversification; businesses to start, acquire, close or sell; type of products to make; organizational structure; relations with customers, suppliers, shareholders and other stakeholders; geographical locations, and targets for long-term profitability, productivity, market share, etc.

Consider three factors while designing strategies:

1. The mission, which gives the overall aims and context for other decisions.
2. The business environment, which includes all factors that affect an organization but which it cannot control, such as:
   1. Customers—their expectations and attitudes;
   2. Market—size, location, and stability;
   3. Competitors—the number, ease of entry to the market, their strengths;
   4. Technology—currently available and likely developments;
   5. Shareholders—their objectives, returns on investment, profit levels;
   6. Other stakeholders—their objectives and amount of support;
   7. Legal restraints—trade restrictions, liability and employment laws;
   8. Political, economic and social conditions—including stability, rate of growth, inflation, etc.

The business environment is similar for all competing organizations, so to be successful you need a distinctive competence.

1. The distinctive competence, which includes the factors that set your organization apart from the competitors. If you can design new products very quickly, innovation is a part of your distinctive competence. A distinctive competence comes from your organization’s assets, which include:
   1. Customers—their demands, loyalty;
   2. Employees—skills, expertise, loyalty;
   3. Finances—capital, debt, cash flow;
   4. Products—quality, reputation, innovations;
   5. Facilities—capacity, age, value;
   6. Technology—currently used, planned;
   7. Suppliers—reliability, service;
   8. Marketing—experience, reputation;
   9. Resources—patents, ownership.

The strategic plans show how the organization can achieve the mission.

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.

Product Knowledge

You have to be expert before you even start your business. The old saying, “We learn by our mistakes” will not do your business reputation any good if it applies to your lack of expertise. You have to know your products or service inside out. You may love a business for the product lines, but will your customers love the products too? When problems arise with a product, or when a customer asks technical questions, are you knowledgeable enough to resolve these problems and answer their questions competently and confidently?

One way to increase your product knowledge is to contact the manufacturers or local distributor. They are usually happy to send you product information and answer your questions. Some of the questions you should research about your product lines (or service) are these:

• How long have these products been on the market?
• Are they seasonal, and when do most sell?
• How often are these products upgraded or changed?
• Could you be caught unexpectedly with obsolete inventory?
• What do the manufacturers’ warranties cover?
• Are replacement parts readily available?
• Are the products competitively priced?
• Are buying trends increasing or decreasing?
• Are the products high, medium, or low in quality?
• How do the products compare to the competition?
• What are groups do these products appeal to?
• What is the life expectancy of the products?
• Could the products become obsolete due to changing technology?

After these questions are answered, you may find that the business is not viable after all. The product pricing may be too high compared to the competition, or you may discover that over the previous five years, overall demand for the products is declining due to technological changes and shifts in consumer buying trends. In another five years, the demand could become substantially less. The products may appear high in quality on sight, but you may discover that they are poorly made and not something that you would feel confident selling. Perhaps the manufacturer’s guarantees are inadequate, or replacement parts are priced exorbitantly and hard to secure.

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.

Idea Generators

Idea generators are individuals who have the ability to sift through jungles of market and technological information to find ideas that lead to new products or services. They possess the talent and knowledge to find new cost or time effective procedures, approaches, or problem-solving strategies. They possess skill that is deep expertise in one discipline combined with broad enough knowledge in others to see the linkages between them. Such skills are critical in integrating different functions (R&D, design, marketing, manufacturing, customer service) to synthesize a product or service, in seeing the connection between a technology and its applications, or in turning customer expectations into products.

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.

Analyzing Current Situation: Checklist

Phase 1: The Environment

1. What is the state of the economy and are there any trends that could affect the industry, firm, or marketing strategy?
2. What are current trends in cultural and social values and how do these affect the industry, firm, or marketing strategy?
3. What are current political values and trends and how do they affect the industry, firm, or marketing strategy?
4. Is there any current or pending federal, state, or local legislation that could change the industry, firm, or marketing strategy?
5. Overall, are there any threats or opportunities in the environment that could influence the industry, firm, or marketing strategy?

Phase 2: The Industry

1. What industry is the firm in?
2. Which firms are the major competitors in the industry and what is their annual sales, market share, and growth profile?
3. What strategies have competitors in the industry been using, and what has been their success with them?
4. What are the relative strengths and weaknesses of competitors in the industry?
5. Is there a threat of new competitors coming into the industry, and what are the major entry barriers?
6. Are there any substitute products for the industry, and what are their advantages and disadvantages compared to this industry’s products?
7. How much bargaining power do suppliers have in this industry, and what is its impact on the firm and industry profits?
8. How much bargaining power do buyers have in this industry, and what is its impact on the firm and industry profits?

Phase 3: The Firm

1. What are the objectives of the firm? Are they clearly stated? Attainable?
2. What are the strengths of the firm? Managed expertise? Financial? Copyrights or patents?
3. What are the constraints and weaknesses of the firm?
4. Are there any real or potential sources of dysfunctional conflict in the structure of the firm?
5. How is the marketing department structured in the firm?

Phase 4: The marketing Strategy

1. What are the objectives of the marketing strategy? Are they clearly stated? Are they consistent with the objectives of the firm? Is the entire marketing mix structured to meet these objectives?
2. What marketing concepts are at issue in the current strategy? Is the marketing strategy well planned and laid out? Is the strategy consistent with sound marketing principles? If the strategy takes exception to marketing principles, is there a good reason for it?
3. To what target market is the strategy directed? Is it well defined? Is the market large enough to be profitably served? Does the market have long-run potential?
4. What competitive advantage does the marketing strategy offer? If none, what can be done to gain a competitive advantage in the marketplace?
5. What products are being sold? What is the width, depth, and consistency of the firm’s product lines? Does the firm need new products to fill out its product line? Should any product be deleted? What is the profitability of the various products?
6. What promotion mix is being used? Is promotion consistent with the products and product images? What could be done to improve the promotion mix?
7. What channels of distribution are being used? Do they deliver the product at the right time and right place to meet customer needs? Are the channels typical of those used in the industry? Could channels be made more efficient?
8. What pricing strategies are being used? Hw do prices compare with similar products of other firms? How are prices determined?
9. Are marketing research and information systematically integrated into the marketing strategy? Is the overall marketing strategy internally consistent?

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.