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.

Termination of Employees

Most employees are hired for an indefinite period. If no length of employment is agreed upon, employment is “at will.” This means that an employer can discharge such an employee at any time for any reason or without giving any reason. Unions generally negotiate a change in this rule for the employees they represent. Most union contracts contain a clause that permits discharge only for good cause.

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.

Writing a Marketing Plan

• Use a direct, professional writing style. Use appropriate business and marketing terms without jargon. Present and future tenses with active voice are generally better than past tense and passive voice.
• Be positive and specific. At the same time, avoid superlatives (such as terrific, wonderful). Specifics are better than glittering generalities. Use numbers for impact, justifying computations and projections with facts or reasonable quantitative assumptions where possible.
• Use bullet points for succinctness and emphasis. As with the list you are reading, bullets enable key points to be highlighted effectively and with great efficiency.
• Use “A level” (the first level) and “B level” (the second level headings under major section headings to help readers make easy transitions from one topic to another. This also forces the writer to organize the plan more carefully. Use these headings liberally, at least once every 200 to 300 words.
• Use visuals where appropriate. Illustrations, graphs, and charts enable large amounts of information to be presented succinctly.
• Shoot for a plan 15 to 35 pages in length, not including financial projections and appendices. An uncomplicated small business may require only 15 pages, while a new business startup may require more than 35 pages.
• Use care in layout, design, and presentation. Laser or ink-jet printers give a more professional look than  do dot matrix printers or typewriters. A bound report with a cover and clear title page adds professionalism.

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.

Speed and Time

Speed and time measures are very important factors to many customers. The speed with which your company can deliver, whatever it provides, can actually gain you competitive advantage and allow you to offer higher satisfaction, and maybe even demand, or ask a price premium from your customers for that convenience of doing things faster or quicker. However it is not just about the core product, it is also about every single contact or initiation with a customer, from answering the telephone, to replying letters, to the length of a phone call, to how long you’ve been put on hold etc. the customer measures all these factors, largely unconsciously.

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.

Checklist for Evaluating a Franchise

The Franchise

• Did your lawyer approve the franchise contract you are considering after he or she studied it paragraph by paragraph?
• Does the franchise give you an exclusive territory for the length of the franchise?
• Under what circumstances can you terminate the franchise contract and at what cost to you?
• If you sell your franchise, will you be compensated for your goodwill (the value of your business’s reputation and other intangibles)?
• If the franchisor sells the company, will your investment be protected?

The Franchisor

• How many years has the firm offering you a franchise been in operation?
• Has it a reputation for honesty and fair dealing among the local firms holding its franchise?
• Has the franchisor shown you any certified figures indicating exact net profits of one or more going firms which you personally checked yourself with the franchisee? Ask for the company’s disclosure statement.
• Will the firm assist you with:

A management training program?

An employee training program?

A public relations program?

Capital?

Credit?

Merchandising ideas?

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.

Simultaneous Production and Consumption

Whereas most goods are produced first, then sold and consumed, most services are sold first and then produced and consumed simultaneously. A restaurant services cannot be provided until they have been sold, and the dining experience is essentially produced and consumed at the same time. Frequently this also means that the customer is present while the service is being produced and thus views and may even take part in the production process. This also means that frequently customers will interact with each other during the service production process and thus may affect each others’ experiences. For example, strangers seated next to each other in an airplane may well affect the nature of the service experience for each other. That passengers understand this fact is clearly apparent in the way business travelers will often go to great lengths to be sure they are not seated next to families with small children. Another outcome of simultaneous production and consumption is that service producers find themselves playing a role as part of the product itself and as an essential ingredient in the service experience for the consumer.

Because services often are produced and consumed at the same time, mass production is difficult if not possible. The quality of service and customer satisfaction will be highly dependent on what happens in “real time,” including actions of employees and the interactions between employees and customers. Similarly, it is not usually possible to gain significant economies of scale through centralization. Usually operations need to be relatively decentralized so that the service can be delivered to the consumer in convenient locations. Also because of simultaneous production and consumption, the customer is involved in and observes the production process and thus may affect (positively or negatively) the outcome of the service transaction.

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.

 

Limited Warranty

A limited warranty is that does not meet the standards for a full warranty. For example, a limited warranty may cover only parts, not labor, or may require the purchase to return a heavy product to the seller or service representative for service. It may also require the purchaser to pay for handling or allow only a pro rata refund or credit, depending on the length of time since the product was purchased. Often, a limited warranty protects only the first purchaser.

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 Manager

The manager describes what a person does rather than what a person knows. A manager makes sure an organization operates smoothly and efficiently. Upper-level managers, known as executives, address longer-range concerns. They foresee problems years ahead by considering questions such as the following:

1. Is current technology at the company becoming obsolete?
2. How expensive are the newest technologies?
3. How much would they disrupt operations if they were adopted?
4. What other plans would have to be postponed or dropped altogether?
5. When would the new technologies start to pay for themselves?
6. What has been the experience of other companies that have adopted these new technologies?

Executives are concerned with these and dozens of other broad questions that go beyond day-to-day managerial concerns.

Managers want to know the bottom line. They have to get a job done on schedule they don’t have time to consider theory in the way an expert does. Rather, managers must judge constraints—financial, personnel, time, and informational—and make logical and reasonable decisions quickly. And they have to communicate with their own supervisors.

In writing to a manager, try to determine his or her technical background and then choose an appropriate vocabulary and sentence length. Focus on practical information. If you think that your reader will take your information and use it in a document addressed to executives, make your reader’s job easier. Include an executive summary and use frequent headings to highlight your major points. Ask your reader if there is an organizational pattern or format, or a strategy for writing the document that will help him or her use your document as source material.

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 Master Plan

Many people assume that a formal business plan is only for big time businesses. Wrong. A business plan is for anyone who wants to give their enterprise their best possible shot. It is where you detail out all the operational, marketing, and money matters of your business. It is, in essence, a road map. With it, you will better be able to reach your goal. Without it, you run the risk of spending precious time and money traveling in circles or unwittingly wandering into danger zones.

In response to the question, what a business plan is, follow the following”

• A business plan is written by the home-based business owner with outside help as needed.
• It is accurate and concise as a result of careful study.
• It explains how the business will function in the marketplace.
• It clearly depicts its operational characteristics.
• It details how it will be financed.
• It outlines how it will be managed.
• It is the management and financial “blueprint” for startup and profitable operation.
• It serves as a prospectus for potential investors and lenders.

A study for “why” of creating it, note:

• The process of putting the business plan together, including the thought that you put in before writing it, forces you to take the objective, critical, unemotional look at your entire business proposal.
• The finished written plan is an operational tool, which, when properly used, will help you manage your business and work toward its success.
• The complete business plan is a means for communicating your ideas to others and provides the basis for financing your business.

While you are to be the author of the document, you shouldn’t hesitate to get professional help when it comes to areas outside your ken, such as accounting, insurance, capital requirements, operational forecasting, and tax and legal requirements. Finally, in response to the question, “When should Business Plan be used?” note:

• To make crucial startup decisions
• To reassure lenders and backers
• To measure operational progress
• To test planning assumptions
• As a basis for adjusting forecasts
• To anticipate ongoing capital and cash requirements
• As the benchmark for good operational management

If you have been doing your research and homework all along, you probably have most of the raw material for the business plan, so it won’t be such an awesome task.

Business plans differ greatly, depending on the nature and scope of the enterprise. Some elements a person in a retail sales business would need in his or her business plan may be totally irrelevant for your service business. Similarly, business plans vary in length—from five or six pages or a virtual booklet; some are written in an engaging narrative style while others take another approach—just the facts. However, while business plans may differ in style, tone, length, and components, there is some common ground. Below is a list of items that should be in almost every business plan:

• A summary of the nature of your business and its principal activity with a detailed description of the product(s) or service(s) you will offer.
• A statement as to the form your business will take (sole proprietorship, partnership, incorporation) and how it will be managed and operated (with information on employees or subcontractors if applicable).
• A discussion of any extra-ordinary (and potentially problematic) matters revolving around such things as space requirements, production processes, and operating procedures.
• A discussion of major trends in your trade or profession.
• A discussion of your competition and the basis on which you will compete.
• A description of your target market that might include a profile of a typical customer or client.
• A discussion of your plans for pricing, sales terms, and distribution.
• A discussion of how you intend to advertise and promote your products or services.
• A detailed statement of startup and operating costs for at least the first year.
• A discussion of how your business will be financed.
• Profit and loss and cash flow statements for at least the first year of business.

If this list has made a business plan seem all the more scary and arduous a task, don’t panic. There are books on the market that will guide you through the process.

A clean attractive business plan is a sine qua non if you will be applying for a loan or looking for investors. But even if the document is for your eyes only, you owe it to yourself to produce a professional-looking document. Since it is your road map, the neater it is the better it will serve you when you refer to it at various stages of your entrepreneurial journey.

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 Product Life Cycle

Customer demands are constantly changing. There are many reasons for this, ranging from fashions to new regulations. Sometimes there are obvious patterns to demand. Another pattern comes from the product’s life cycle. Demand for just about every product follows a life cycle with five stages:

1. Introduction. A new product appears and demand is low while people learn about it, try it and see if they like it—for example, palmtop computers and automated checkouts at supermarkets.
2. Growth. New customers buy the product and demand rises quickly—for example, telephone banking and mobile phones.
3. Maturity. Demand stabilizes when most people know about the product and are buying it in steady numbers—for example, color television sets and insurance.
4. Decline. Sales fall as customers start buying new, alternative products—for example, tobacco and milk deliveries.
5. Withdrawal. Demand declines to the point where it is no longer worth making the product—for example, black and white television sets and telegrams.

The length of the life cycle varies quite widely. Each edition of The Guardian completes its life cycle in a few hours; clothing fashions last months or even weeks; the life cycle of washing machines is several years; some basic commodities like Nescafe has stayed in the mature stage for decades.

Unfortunately, there are no reliable guidelines for the length of a cycle. Some products have an unexpectedly short life and disappear very quickly. Some products, like full cream milk stayed at the mature stage for years and then started to decline. Even similar products can have different life cycles – with Ford replacing small car models after 12 years and Honda replacing them after seven years. Some products appear to decline and then grow again—such as passenger train services which grew by 7 per cent in 1998 and cinemas where attendances fell from 1.64 billion in 1964 to 54 million in 1984, and then rose to 140 million in 1997.

One thing we can say is that product life cycles are generally getting shorter. Alvin Toffler says, ‘Fast-shifting preferences, flowing out of and interacting with high-speed technological change, not only lead to frequent changes in the popularity of products and brands, but also shorten the life-cycle of 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.