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.

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.

Two-way HR Planning Process

Like other business strategies, human resource strategies are shaped through both top-down and bottom-up processes in an organization. A top-down processes provides the strategic context necessary for team and unit planning.

Through a focused company environmental assessment, it provides information on possible future trends and issues affecting  the business and influencing the shaping of plans and objectives. People close to the operating business may not readily take such a broad future view. It requires looking outside the company to external competitive practices, economic and social trends, and possible future conditions that may some day have an impact on the business.

A plan is strategic in character if it is focused on important issues raised in an environmental assessment. In today’s competitive organization, it is important that employees at all levels be attuned to external  forces and changes and to the strategic direction being taken to address them.

In a bottom-up approach, planning of human resource actions is a cumulative process. Instead of broad strategies being broken down into progressively greater detail, detailed strategies are aggregated and synthesized into  meaningful umbrella strategies. Each business unit or department is asked to identify the human resource issues of concern, taking into consideration the guidance of the long-term planning inputs. They are also asked to specific analyses, forecasts, and assessments regarding these issues. Specific action plans are selected and adopted. Both human resource staff and managers should participate in this effort.

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.

Ethics Hot Lines

In some companies, when employees are troubled about some ethical issue but may be reluctant to raise it with their immediate supervisor, they can place a call on the company’s ethics hot line. These hot lines have become more common.

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.

Promoting Sales

First stage marketing strategies should focus on sales promotions that will attract immediate customers and selling methods that will ensure repeat business. First stage companies can also benefit from sales and promotion activities, but with a focus on short term rather than long term benefits. Ideas include:

1. Invite a local newspaper to write an article on some unique aspect of the company.
2. Invite television reporters to cover a special event sponsored by the company (fund raising drive, a banquet honoring an employee, or the introduction of snappy new product).
3. Start a charity book collection drive at local schools.
4. Sponsor a young people’s athletic team.
5. Sponsor a civic band or float in a local parade.
6. Donate materials, space, or services to community theater groups.
7. Sponsor a paper, glass, aluminum, or plastic recycling drive.
8. Get behind a social cause.
9. Donate used computers, office equipment, etc., to local schools, hospitals, or welfare agencies.

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.

Existential Creativity

Existential creativity is about raising the quality of our existence, enlarging our consciousness, actualizing our potential, and growing and developing in ways that increasingly manifest our inherent humanity. There is a higher side to the human—love, compassion, hunger for knowledge, appreciation of beauty, truth, goodness, spiritual yearnings. Existential creativity in the organizational context is enabling organizational members—its internal stakeholders—to pursue their growth, self actualization, and noble yearnings so that they can recreate themselves and become unique human beings.

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.

Ethical Problems in Product Strategy

Product quality, planned obsolescence, brand similarity, and packaging questions are significant concerns of consumers, managers, and governments. Competitive pressures have forced some marketers into packaging practices that may be considered misleading, deceptive, and/or unethical. Some firms make package larger than necessary to gain shelf space and consumer exposure in the supermarket. Odd-sized packages make price comparisons difficult. The real question seems to be whether these practices can be justified in the name of competition. Growing regulatory mandates appear to be narrowing the range of discretion in this area.

Product testing is another area that raises ethical concerns. To help assure consumers of product quality, many companies use seals of approval for their goods and services. Recently however consumers have begun to question whether the use of these seals is ethical, since they have to be purchased at fees ranging from $10,000 to $1 million. The seals also do not promise that the product is the best one on the market. Many of the organizations that offer seals of approval do not conduct product testing themselves or even compare brands.

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.

Determining Training Needs

When a supervisor sees evidence of inadequate job performance, assuming the individual is making a satisfactory effort, attention should be given to raising the worker’s skill level. When a supervisor is confronted with a drop in productivity, it may suggest that skills need to be fine-tuned. Of course it would be related to other factors, too—lack of resources or equipment malfunctions. That’s why it’s imperative to pinpoint the problem precisely.

In addition to the productivity measures, high rejection rate or unusual rate of wastage may indicate a need for employee training. A rise in the number of  accidents reported can also suggest some type of retraining is necessary. Furthermore, the changes that are being imposed on workers as a result of a job redesign or a technological breakthrough demand training.

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.

Desires and Results

When there is a gap between rhetoric and reality a change program may annoy all the interests involved:

o     The ‘haves’ with a vested interest in the status quo may feel threatened by the prospect of change.

o     The ‘have-nots’, who hope to benefit from change, may in return be disappointed by the lack of results.

o     When the rhetoric continues, those in favor of the status quo may view the lack of results as no more than a temporary relief, or calm before the storm.

o     The disappointment of the ‘have-nots’ can turn to disillusion, despair, and even a sense of betrayal, where the rhetoric has raised expectations beyond the prospects of delivery.

Managers have a tendency to follow their beliefs rather than the words. Burying your head in the sand may enable you, for a time, to avoid contemplating awkward realities. Understanding what people really believe gives you some idea of what you may be in for. Some managers may just not believe that it is going to happen.

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.

 

Public Relations (PR)

Public Relations is the management function that evaluates public attitudes, identifies the policies and procedures of an individual or an organization with the public interest, and executes a program of action to earn public understanding and acceptance. In other words a good public relations program has three steps:

1. Listen to the public: Public relations starts with good marketing research (evaluates public attitudes).
2. Develops policies and procedures that are in the public interest: One does not earn understanding by bombarding the public with propaganda; one earns understanding by having programs and practices in the public interest.
3. Inform people of the fact that you are being responsive to their needs: It is not enough to simply have programs that are in the public interest. You have to tell the public about those programs so that they know you are being responsive.

Publicity is one of the major functions of the public relations department. Publicity is any information about an individual, a product, or an organization that is distributed to the public through the media and that is not paid for, or controlled by, the sponsor.

Other activities include:

• Establishing contact with civic groups, consumer organizations, and other concerned citizens to learn their views of the organization, to answer their questions, and to provide information (or education).
• Opening lines of communication with customers, suppliers, distributors, retailers, stockholders, government agencies, educators, and community leaders.
• Conducting studies to find the economic, environmental, and social consequences of organizational practices and to learn how to make a more positive contribution to customers, stakeholders, and society.
• Providing any assistance needed to adjust the goals, policies, practices, personnel policies, products, and programs of the organization to meet the needs of changing markets.
• Assisting all members of the firm in developing effective programs of consumer information and education.
• Sending speakers to schools, clubs, and other such groups to maintain an open dialogue with students and other socially active members of society.
• Creating incentives for employees to participate in public-affairs activities such as raising funds for charitable groups.
• Answering consumer and other complaints promptly and correcting whatever it was that caused the complint.
• Training employees or volunteers to provide prompt, friendly, courteous, and helpful service to anyone who contacts the organization in person, by phone, or written correspondence.
• Demonstrating to society the organization is listening, reacting, adjusting, and progressing in its attempt to satisfy its diverse publics.
• Opening two-way communications with employees to generate favorable employee opinion and to motivate employees to speak well of the organization to others.

This is an incomplete description of all the activities and responsibilities of the PR people, but it at least gives some feeling for what they do.

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.