When Marketing doesn’t Work


Marketing has not measured up to expectations in many companies because management has concentrated on the trappings rather than the substance. When most executives talk about what their companies have done to become more marketing oriented, they usually point to such actions as:

  • Declarations of support from top management in the form of speeches, annual reports, or talks to the investment community.
  • Creation of a marketing organization, including appointment of a marketing head and product or market managers, transfer to marketing of the product development and service functions, establishment of a market research function, salespeople reassigned around markets, advertising function strengthened.
  • Adoption of new administrative mechanisms, such as formal marketing planning approaches, more and better sales information, and revised information systems structured around markets rather than products.
  • Increased marketing expenditures for staffing, training and development, advertising, marketing, research.

The point is not that these actions are useless, but that by themselves they are no guarantee of marketing success. Effective marketing requires a fundamental shift in attitude and values throughout the company so that everyone in every functional area places paramount importance on being responsive to market needs. The steps taken in most companies are not useful because they fail to accomplish this crucial shift in attitude. And without this shift in attitude, the most highly developed marketing operation cannot produce any real results.

Why have so few companies gone beyond the trappings to achieve the change in attitude that ensures substantive marketing? Frequently, one or more of these situations exist:

  • In a surprising number of cases, management does not fully understand the marketing concept as it applies in its situation.
  • In many other cases, management understands the implications of the marketing concept but has not committed itself to the actions and decisions needed to reinforce it.
  • In almost every case, management has failed to install the administrative mechanisms necessary for effective implementation of the concept, especially into the non-marketing function.

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.

 

Extending the Product Life Cycle


The concept of the product life cycle tells us that a sequence of actions is required to maintain a product’s sales and profits. The goal of the planning is to stretch out the life of the product, thus keeping it profitable longer. The following techniques are often effective in extending a product’s life cycle:

  1. New or extended uses: The sales of rugged four-wheel drive sport utility vehicles, ranging from inexpensive jeeps to Range Rovers, increased dramatically once they became accepted as family automobiles.
  2. b. Reduce price and build volume: Tylenol became a much more successful product after Johnson & Johnson reduced its price.
  3. c. Increased frequency of Use: Trade associations that are connected to the poultry and fish industries have been successful in informing the public that their products are low in cholesterol and should be eaten frequently as part of a healthy diet.
  4. d. Broaden the target market: As the ethical issue, American tobacco firms have successfully enlarged the market for American cigarettes by focusing on Japan. They have also been very successful in expanding the market for tobacco products in Europe and South America.

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.

 

Corporate Giving


One of the most visible ways in which businesses help communities is through gifts of money, property, and employee service. The corporate philanthropy or corporate giving demonstrates the commitment of businesses to assist the communities by supporting nonprofit organizations.

Some argue that corporate managers have no right to give away company money that does not belong to them. According to the line of reasoning, any income earned by the company should be either reinvested in the firm or distributed to the stockholders who are legal owners. The charitable contributions are one additional way in which companies link themselves to the broader interests of the community, thereby advancing and strengthening the company rather than weakening it.

Companies also help local communities through the substantial number of business donations that are not recorded as philanthropy because they are not pure giving. Routine gifts of products and services for local use often are recorded as advertising expenses; gifts of employee time for charity drives and similar purposes usually are not recorded; and the costs of soliciting and processing employee gifts, deductions usually are not recorded as corporate giving. Still, they add value to the local community of which the company is part.

Many large US companies have established nonprofit corporate foundations to handle their charitable programs. This permits them to administer contribution programs more uniformly and provides a central group of professionals that handles all grant requests. Foreign-owned corporations use foundations less frequently, although firms use highly sophisticated corporate foundations to conduct their charitable activities. As corporations expand to more foreign locations, pressures will grow to expand international corporate giving. Foundations, with their defined mission to benefit the community, can be a useful mechanism to help companies implement philanthropic programs that meet corporate social responsibility.

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.

 

View from the Top


Consider the chief executive’s perspective. When a CEO looks at the company, several features stand out most sharply. These are the traditional components of corporate structure: divisions, functional departments, strategic business units, and subsidiaries. They are the activities over which the chief executive has responsibility. They form the mental model the top leadership has of the business. Most companies take these components for granted as their basic subunits.

Unfortunately, these components cloud more than clarify the perspective most essential to the intelligent resizing of a company’s work.

When changes are made in a company’s strategy, or when changes outside its control make readjustment or retrenchment necessary, the lines and boxes on the company’s organization chart are also frequently shifted. These moves usually seem to make good sense at the time—from just following function, after all—but as the retrospective research indicates, moving the boxes and redrawing the lines do not always pay off.

This happens because, frequently, the wrong question is being asked. The search is usually for the “best” organizational configuration: flat, functional, divisional, matrix, or some hybrid. This issue, which eventually does need to be addressed, is premature if it is the first thing that comes to mind when considering the company as a whole. It diverts attention from careful consideration of the “functionality” that the “form” is being adapted to. It also makes the company susceptible to the management fad of the moment, so that a means because the goal: how can we flatten our structure, use cross-departmental teams, or become an information-based organization? These are all potentially useful tactics, but for what end?

This type of organization, driven from the top down, is one that deals with the structures for doing things, rather than the things that need doing. Its view of the boxes on the organization chart too often goes no deeper than the head count the boxes contain. This perspective is troublesome and can be misleading, but even more dangerous is the viewpoint provided by some contemporary forms of strategic planning.

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.

Formal Authority


Formal authority can be thought of as the right to command or compel another person to perform a certain act. Power is the ability to influence or cause a person to perform an act. It is possible for a manager to have formal authority without power, just as it is possible for a subordinate to have power without formal authority. The distinction between these terms may be significant for the manager, who may assume that his formal authority automatically gives him power but overlook the fact that his subordinates also have power, at times greater than his own. The manager in such a situation can encounter difficult and frustrating experiences without knowing why.

If formal authority were dependent upon physical power only, life would be even more difficult than it is. Ultimately, formal authority is dependent upon the law, but most frequently it results from a  shared perception that those with formal authority have rights that ought to be acknowledged. This “ought” is so widely believed that those with formal authority may very frequently have real power as a result.

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.

Musts and Wants


Divide the objectives into two categories: Musts and Wants. The Must objectives are mandatory: they must be achieved to guarantee a successful decision. When the time comes to assess alternatives against our objectives, any alternative that cannot fulfill a MUST objective will immediately drop out of the analysis. These objectives must be measurable because they function as a screen to eliminate failure-prone alternatives. We must be able to say, “This alternative absolutely cannot fulfill this objective; it cannot meet a requirement that is mandatory for success.

All other objectives are categorized as WANTS. The alternatives we generate will be judged on their relative performance against WANT objectives, not on whether or not they fulfill them. The function of these objectives is to give us a comparative picture of alternatives—a sense of how the alternatives perform relative to each other.

A WANT objective may be mandatory but cannot be classified as a MUST for one or two reasons: First, it may not be measurable. It cannot, therefore, give us an absolute Yes or No judgment about the performance of an alternative. Secondly, we may not want a Yes or No judgment. We may prefer to use that objective as a relative measure of performance.

An objective will be stated frequently as a MUST and then be rephrased as a WANT so that it can perform both functions. The MUSTs decide who gets to play, but the WANTs decide who wins.

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

Hetrogeniety


Because services are performances, frequently produced by humans, no two services will be precisely alike. The employees delivering the service frequently are the service in the customer’s eyes, and people may differ in their performance from day to day or even hour to hour. Heterogeniety also results because no two customers are precisely alike; each will have unique demands ir experience the service in a unique way. Thus, the heterogeniety connected with services is largely the result of human interaction (between  and among employees and customers) and all of the vagaries that accompany it. For example, a tax accountant may provide a different service experience to two different customers on the same day depending on their individual needs and personalities and on whether the accountant is interviewing them when he or she is fresh in the morning or tired at the end of a long day of meetings.

Because services are heterogeneous across time, organizations, and people, ensuring consistent service quality is challenging. Quality actually depends on many factors that cannot be fully controlled by the service supplier, such as the ability of the consumer to articulate his or her needs, the ability and willingness of personnel to satisfy those needs, the presence (or absence) of other customers, and the level of demand for the service. Because of these complicating factors, the service manager cannot always  know for sure that the service is being delivered in a manner consistent with what was originally planned and promoted. Sometimes services may be provided by a third party, further increasing the potential heterogeniety of the offering. For example, a consulting organization may choose to subcontract certain elements of its total offering. From the customer’s perspective, these subcontractors still represent the consulting organization, even though their actions cannot be totally predicted or controlled by the contractor.

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

Coping with Frustration


There are three general approaches to coping with frustration: 1) to ignore it, 2) to recognize it, and 3) to attack a non-related target, and a fourth is to change strategies for reaching the goal by going around the barrier, developing new skills, or acquiring new resources. The third general approach—attacking a non-related target—is normally dysfunctional and utilized by those unable or unwilling to accept their frustration and confront their sources directly.

We may respond unconsciously to frustration with one or more of a variety of psychological defences. We utilize these, usually unconsciously, to protect our self-concepts. These defences help us block all the force of more reality than we can take at a particular time. They can also be dysfunctional if they are used too frequently or block us from coping with our problems in more direct and effective ways. A desirable learning goal is to become more aware of the defenses we use and to avoid those that prevent us from dealing with our frustrations as well as we might.

Mild frustration may not lead to anger and aggression, although intense frustration always does. A more pessimistic view would imply that little can be done about choosing when and how we express our frustration. We think much can be learned.

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

Accrual Accounting and Cashflow


Before the end of World War 1 most managers kept track of cash out and cash in. many senior citizen owner-managers still do today. There is an inherent problem in keeping the records that way, however, if the business offers and receives much credit. Doing business on credit displaces the time of the exchange of cash from the exchange of goods and services. Sometimes very little cash comes in during a particular month and very much cash comes in during other months. The same is true of cash out.

Keeping in track of what you pay or get paid for credit transactions causes the monthly reports describing the operations to fluctuate from month to month even though the goods and services flowing in and out of the business may be very much the same. About 1920 the accounting profession began placing emphasis on the accrual method of accounting to overcome this difficulty.

The accrual method portrays the smoothed-out profit as if all the transactions had been for cash and as if the business had purchased only exactly what was needed to make the sale. It is not an accurate portrayal of everything going on in the business, but it is a good approximation of the net effect of those things that affect profit. The problem is that so much emphasis has been placed on the accrual method income statement and balance sheet that the importance of cash has been regulated to virtual obscurity.

Even this result is satisfactory when the reports are describing large businesses with access to external financing through the stock market, commercial paper, and bank loans at the prime interest rate. But companies that do not have access to these external sources of financing have a different problem. For them, the flow of cash through the business means life or death, whether the accrual based profit is great or terrible. When new or small businesses need cash they must turn to the bank, the banker will look to the personal savings and assets of the owner-manager for collateral.

Accountants have not forgotten nor overlooked the importance of cash. They recognize the need for cash in sufficient quantity to keep the business operating. For their purposes, however, they often infer the cash available to the business from the income statements and describe future cash availability with the balance sheets. They, and others, frequently describe it as: cash flow equals net profit after taxes plus depreciation and other noncash expenses, such as amortization.

This statement is incorrect except under some very stringent preconditions that rarely exist in practice for a small business. This statement is an approximation that is valid for large and stable businesses in which changes from year to year are small and the statements from which the cash flow is inferred are annual reports. For a small and new business looking at monthly financial reports this approximation is inadequate. In a small, growing business the net cash flow to the firm’s bank account does not equal the net profit plus depreciation. Profit is not cash nor is it cash flow.

Although this pronouncement may be unconventional, entrepreneurs are realistic. Successful entrepreneurs ask how it really works and then get on with building their business. In the conventional approach the analysts, having inferred cash flow from profit, depreciation, and amortization, stop there, allowing their readers to assume that the resulting cash is in the bank wiating to be spent.

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

Use and Misuses of Authority


Most managers believe they must have authority to accomplish their jobs. They believe it is their superior’s responsibility to see that they have adequate authority in the areas for which they are held responsible and accountable. But a manager who either misuses or oversas his authority to get his subordinates to carry out their tasks may be inviting trouble. This is why it is important for the manager to understand the various sources of authority and power and the differences among them.

 Most people who have worked in the business world have seen a situation in which subordinates have “fired” their boss. By dragging their feet on assignments by cauing the organizations to do a relatively poor job, and by directing criticisms to appropriate ears, a unified group of subordinates can cause such trouble that their boss’s superiors may question his ability to handle his work group. Under these conditions the subordinates may sometimes be shown the door; but occasionally the boss is fired. That this can and does happen illustrates that managers are dependent, in part, on their work groups, just as their work groups are dependent, in part, on the managers. Although the manager has formal sanctions to back up his authority, the work group has informal sources of power it can utilize. The manager who relies only on his formal authority to direct the efforts of others may, therefore, not achieve the best results. It is desirable that he also be a leader; in short, he should be able to influence his subordinates as well as give them orders.

 Managers are often “caught in the middle”between the values, orders, and expectations of their superiors and the values, needs, and expectations of their subordinates. The manager usually needs to retain the support of both his superior and his subordinates, and the dilemma he feels when there is conflict between the two can create intensely uncomfortable feelings. The pressure is  compounded when the values and expectations of his peers are also involved, as they frequently are. Different managers resolve these internal dissonances in a variety of ways. Some ignore, or pay less attention to, either the subordinates or the superior, usually the former. Others try to find compromises that satisfy both, at least enough to avoid undue problems. But however thay handle them, most managers experience the discomfort of man-in-the-middle problems.

 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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