The Manager's View provides solutions and advice based on management and marketing principles that are used by GWR Research (www.gwrresearch.com). Many of the posts are related to or are taken from the author's books "The Manager's Guide to Building a Successful Business" and "Developing Successful Marketing Strategies". More information on the books is available at Amazon.com, BarnesandNoble.com or Businessexpertpress.com
A CHECKLIST TO EVALUATE STRATEGIC ACTIONS
Often organizations will act based on moves by the competition,
changes in the environment or new opportunities. These actions may not always
be in keeping with the long-term objectives of the organization.
In an earlier blog I gave the example of a young entrepreneur that had
a business that installed Christmas lighting for homes for the holiday season.
His long-term goal was to grow the lighting business to the point where the
capabilities and reputation allowed him to be a major provider for concert and
Faced with the need for revenues in the off-season this entrepreneur
thought that a possible extension for the business was home landscaping and
yard services. While this would have met the short term cash needs of the
organization it would might have led to a different focus and prevented the
company from focusing on the goal of providing lighting services for concerts
and similar events.
One of the best ways to keep a business targeted is to have a Mission
and Vision statement that is understood by everyone in the organization.
statement describes why an organization exists and what it hopes to accomplish
in broad terms. As an example Coca Cola has as its mission statement:
•To refresh the world...
•To inspire moments of
optimism and happiness...
•To create value and make
A vision statement describes how the organization will fulfill the
mission. This statement shows how value will be delivered to company stakeholders
(employees, shareholders, contractors etc.), collaborators (vendors, suppliers,
support service providers) and customers.Alex Chernev, describes the areas where these group values intersect in
his book, The Marketing Plan Handbook,
as the Optimal value proposition.
The Vision statement describes this optimal value proposition. Coca
Cola’s Vision Statement is as follows:
•People: Be a great place to work where people are inspired to be the best
they can be.
•Portfolio: Bring to the world a portfolio of quality beverage brands that
anticipate and satisfy people's desires and needs.
•Partners: Nurture a winning network of customers and suppliers, together we
create mutual, enduring value.
•Planet: Be a responsible citizen that makes a difference by helping build
and support sustainable communities.
•Profit: Maximize long-term return to shareowners while being mindful of our
•Productivity: Be a highly effective, lean and fast-moving organization.
Even great companies can entertain
actions that are not in keeping with the mission and vision that define the
long-term objectives. Coca Cola’s then CEO Doug Ivester mentioned the possibility
of using vending machines that would increase the cost of a soft drink as the
temperature increased. This didn’t “fit” with the mission, vision or the
company image, as it was perceived by the public. While this approach was never
implemented, it raised such uproar that it ultimately became a cause for Mr.
A checklist I have used over the
years has helped keep the organizations I have led focused on finding
short-term actions that supported long term goals defined by the mission and
The checklist is shown below:
requirements – Does the action meet industry and legal standards?
project – Can the action be implemented in an acceptable time frame?
systems – Does the action make use of current systems or will new ones
need to be developed?
4.Fit Image – Does
the action fit the image the firm wishes to project?
5.Resources – is
the action resource and capital intensive?
– Does this product lead to the possibility of new products or businesses being
capacity – Does this action have the potential of damaging image or operations
of the organization?
acceptance – will the customer accept this product/action over others offered in the
market? 1 9. Profitability - Does the action generate enough value to provide the company with a profitable operation?
checklist addresses the value collaborators, customers and stakeholders by
measuring proposed actions against potential resource use, company image, and
the ability to enhance growth and prevent negative consequences.
best advice I have to offer CEOs and strategic planners is to begin with a well
thought out mission and vision statement to guide strategic planning and to use
a checklist designed to keep the firm focused on long term objectives defined
by the mission and vision statement.
process described in my blog offering a strategic marketing planning tool
should use the checklist process when defining strategic objectives and
If you would like more information or
would like GWR Research to conduct a strategic planning training session for
your company, email me at firstname.lastname@example.org.
Finally, the Alexander Chernev book
gives a good example of how to develop a marketing plan. My new book , Developing
Successful Marketing Strategies, introduces the planning tools to support
the marketing plan and provides approaches to discover innovative strategic
When introducing a new product or service to the market a
key, and often critical, consideration is the price for this offering. I have
seen folks simply take the cost of production and use a percent mark up as a
pricing model. This is the simplest model and it provides a good example for
the need to consider other pricing model options.
Here are 10 things to consider before setting a price for
your product or service: ·Mark up
Based on Cost Vs Retail. In the opening paragraph I gave the example of a
model being used that marked up a product by a percent over the cost. The cost
used here is generally direct cost or labor and materials. If someone wants a
30% of the asking price to be the mark up, then using 30% of cost won’t provide the
desired outcome. Simply put, it is the wrong math. If something costs $1 to
make and it is marked up by 30% for a selling price of $1.30 then the profit of
based on the asking price is 23.07%. To arrive at a 30% mark up based on the
selling price it is…
THE IMPORTANCE OF PRODUCT PRICING By
Gary Randazzo The impact of pricing
strategies can be critical for the success of new product launches, a company’s
image and ultimately a company’s short and long-term success. REACTING TO THE COMPETITION I have worked in
several industries and found that pricing is often overlooked as a key
marketing tool. In many instances pricing is driven by the sales department and
is a reaction to the competition. This reaction assumes the competition knows
the market better and has a superior marketing strategy. When reacting to
the competition it is important to understand that you are being drawn into a
game whereby you play by the competitor’s rules. You are playing their game and
changing your strategy. Your hope here is that you can play the game better or
that the competitors can’t play their own game very well. I am reminded of
a time where my company was vying for the business of a key customer. The
customer was a shrewd negotiator. We understood the valu…
TO CLARIFY YOUR MARKETING STRATEGY, START CLASSIFYING YOUR CUSTOMERS
From Texas CEO Magazine, December 2012
By Gary Randazzo
Every business, at some point, will review its marketing strategy. The cause for a strategy review can come from a difficult business environment, a windfall in profits, a change in technology or a change in customer preferences. When a marketing strategy review is in order it can be challenging to decide where to start.
Classifying customers, based on the amount of their spending, can be a good place to begin. Spending used as a metric can help the analyst understand which customers provide the biggest impact:
1) Key customers representing the largest percentage of sales and profit
2) Customers with the potential to provide greater sales (under-potential)
3) Customers that do little or no business with the organization but use products similar to those offered by the organization (nonusers)
This simple classification may…