6A. Organisation Culture
Transcript of 6A. Organisation Culture
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Organizational culture
and committees
FUNCTIONAL DEPARTMENTS
Research and Development
Purchasing
Production
Marketing
Direct service provision
Accounting and Finance
Human Resources
Administration
Purchasing
Purchasing mix: Quantity, Quality, Price andDelivery
Purchasing is 'the acquisition of materialresources and business services for use by theorganisation'.
Cost: Raw materials and subcomponentspurchases are a major cost for many firms.
Quality: The quality of input resources affectsthe quality of outputs and the efficiency of theproduction function.
Stock control Chart
Responsibilities of a purchasing manager
Inputs for production
Inputs for administration Cost control
Liaison with the R&D
Supplier management
Maintenance of inventory levels.
Obtaining information on availability, quality,
prices, distribution and suppliers for the
evaluation of purchasing alternatives.
Production
Converting inputs to outputs
The production function plans, organizes, directsand controls the necessary activities to provideproducts and services, creating outputs whichhave added value over the value of inputs.
Making sure that raw materials are provided andmade into finished goods effectively.
Production and planning (purchase and storing)
Stock Control, The design and technical supportand Quality control
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Service operations
Services are intangible, cannot be stored, areinherently variable in quality and nature and
their purchase results in no transfer ofproperty. The people and processes involvedin providing them are therefore of paramountimportance.
Intangibility, Inseparability (Many services arecreated at the same time as they areconsumed), Variability
Implications of service provision
Poor service quality at one occasion may lead
to prolonged disrepute
Pricing of services is often complicated,
especially if large numbers of people are
involved in providing the service.
Human resources management is a key
ingredient in the services marketing mix
Accounting and Finance
Bookkeeping procedures
Preparing final accounts
Providing management information
Raising finance
Managing finance
Helping with audits
Research and Development (R&D)
Improving existing products and Inventing
new products (product research)
Bringing ideas to sales and production to
improve the ways of production (Process
research)
Must work closely with marketing and
production department
Human resources
Human resource management (HRM) is the
process of evaluating an organization's human
resourceneeds, finding people to fill those
needs, and getting the best work from each
employee by providing the right incentives
and job environment with the overall aim of
helping achieve organizational goals.
Objectives of HRM
To develop an effective human component for
the organisation which will respond effectively tochange.
To obtain and develop the human resourcesrequired by the organisation and to use andmotivate them effectively.
To create and maintain a co-operative climate ofrelationships within the organisation.
To meet the organisation's social and legalresponsibilities relating to the human resource.
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Importance
To increase productivity
To enhance group learning
To reduce staff turnover
To encourage initiative
Human Resource
Recruitment and selection, job description
Human resource audit
Training
Performance management
Dismissal and redundancy
Remuneration
Negotiating with trade unions
Making sure safety needs are met
Paper work for all the employees records
Marketing
These are the main section of the marketdepartments:
Sales department is responsible for the sales anddistribution of the products to the differentregions.
Promotion department decides on the type ofpromotion method for the products, arrangesadvertisements and the advertising media used.
Distribution department transports the productsto the market.
Public relations : corporate activities like
community events and sponsorships.
Conducting market research
To understand the various needs of the
customers.
ACCOUNTING AND
OTHER
DEPARTMENTS
18
More than Selling and Advertising
MarketingWhats It All About?
Provides consumers with need-satisfying goods & services
CUSTOMER SATISFACTION!!!
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What Is Marketing?
All of the above, plus much more!
Personal Selling?
Advertising?
Making products available in stores?
Maintaining inventories?
Marketing
Objectives of Marketing To increase sales revenue To improve and maintain image of the product
or the business
To increase market share
To target a new market
To target a new market segment
The marketing process should be continuousand dynamic as peoples taste and preference
changes over time. E.g. Audio cassettes and typewriters are
replaced by better products for same use
Basic functions
Include: Customer analysis
Buying
Selling
Product and/or service planning
Social responsibility
Price planning
Distribution
Market research
Opportunity analysis
Marketing mix
The set of controllable variables that the firm
can use to influence the buyers responses
Concerned with how to influence consumer
demand
A model used when considering the range of
activities necessary to construct and
implement a comprehensive marketing
strategy
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Price
Jerome McCarthys 4Ps
Promotion
Place
Product
Product Strategies
The starting point of the 4
Ps
Includes physical unit,
package, warranty, service,
brand, image, and value
Product
What Is a Product?
Promotion
Place (Distribution)
Price
ProductProduct is theheart of
Marketing Mix
Products
Technical features, benefits and limitations of
the product or products offered by the business
The technical features of the product are
important because they will determine whether
it will meet the needs of the customer
Core Vs. Augmented Distribution (Place) Strategies
Place
Product availability where and
when customers want them.
Involves all related to moving
the product from the producer
to the consumer
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The processes of getting goods or services from
producers to consumers
The products must be available in the right
quantity, in the right location at the right time and
at an acceptable price
If it is not readily available to customers, they will
turn to a rival product.
A marketing channel is a system of relationships
existing among businesses that participate in the
process of buying and selling the product or
service.
Channel intermediaries are those organizations
which facilitate the distribution of goods to
ultimate customer.
Channels for Consumer Products
Producer Producer Producer Producer
Consumers Consumers Consumers Consumers
Retailers Retailers Retailers
Wholesalers Wholesalers
Agents orBrokers
Wholesaler
Channel
Retailer
Channel
Direct
Channel
Agent/Broker
Channel
Promotion Strategies
Promotion
Role is to bring about exchanges
with target markets
Includes integration of personal
selling, advertising, sales
promotion, and public relations Any form of communication abusiness or company uses toinform, persuade, or remindpeople about products and to
improve its image
PROMOTION
Promotion
Promotion may be highly specific to
individual products or a range of products,
or may enhance brand recognition in
respect of the organization's public image
In some cases the name of the product
may become synonymous with the
organisation itself
E.g, Xerox, Kellogs, Hoover etc.
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ADVERTISINGThe non-personal
Communication ofIdeas, goods or
services delivered
through selected
media channels.
**PAID FOR**
Objectives of advertising
Increasing the usage of a certain product and
hence acquiring more orders.
Creating new customers and increasing brand
recognition.
To obtain feedback from customers regarding
a certain product.
To indicate introduction of new products or
replacement of old ones.
Major Types of Advertising Media
Newspapers
Magazines
Radio
Television
Outdoor Media
Internet
Alternative Media
Sales Promotion
A range of tactical marketing techniques
(other than personal selling, advertising,
and PR) designed within a strategic
marketing framework, to add value to
product or service in order to achieve a
specific sales and marketing objective
SALES PROMOTION
stimulate purchases increase store traffic
2 for 1 Sale
Buy One,Get OneFree
$2 offafter 8PMon Tuesday
Public Relations
Any activity designed
to create a favorable
image toward a
business, its products
or its policies.
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A specific kind of public
relations that involves
placing positive andnewsworthy information
about a business, its
products, or its policies in
the media is called..
Publicity Publicity
Advantage
It is free!
Disadvantage..
Its contents
cannot be
controlled by the
business
What is the largest form of
promotion?
Personal Selling!
This type of
promotion
requires contact
with potential
buyers
Personal Selling
A promotional method in which one party
(e.g., salesperson) uses skills and
techniques for building personal
relationships with another party (e.g., those
involved in a purchase decision) that
results in both parties obtaining value
Pricing Strategies
The most flexible of the 4
Ps
Price X Units Sold = Total
Revenue
Price
Price
This refers not only to the price of the
product, but to all costs related to the
purchase
The price may be a one-off payment, or a
series of payments over time
In the context of professional services, price is
expressed as fees or charges
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3 Key Questions before pricing
How much does it cost us to make the
product?
How much are competitors charging for a
similar product?
What price are customers prepared to pay?
Government intervention must be studied
Cost-Based pricing
The cost of producing a product sets a
minimum price
If cost exceeds the price, then a commercial
business cannot continue in business
indefinitely
It could be little complicated than it sounds as
calculation of full costs are difficult
Marginal cost pricing
Competition-Based Pricing
Setting a price by examining what competitors
are charging
How to define a competitor?
Competition pricing is common when
knowledge of the going rate for that particular
product is high among consumers.
Demand-Based Pricing
What customers are prepared to pay
It depends on effective segmentation of marketsand price discrimination which achievesmaximum price from each segment
Price skimming, penetration pricing,psychological pricing etc.
Can discriminate customers on the basis of: Demographic and social characteristics
The time of the purchase
The place of purchase
The extended marketing mix People
People are the most unpredictable resource
employed by an organisation
Contribution of any individual can vary from
day to day, or even during any single day
Moment of truth
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People
An essential ingredient to any service provision isthe use of appropriate staff and people.
Recruiting the right staff and training themappropriately in the delivery of their service isessential if the organization wants to obtain aform of competitive advantage. Consumers make
judgments and deliver perceptions of the servicebased on the employees they interact with.
Staff should have the appropriate interpersonalskills, aptititude, and service knowledge toprovide the service that consumers are paying for.
Process
Refers to the systems used to assist theorganization in delivering the service.
Imagine you walk into Burger King and you ordera Whopper Meal and you get it delivered within 2minutes. What was the process that allowed youto obtain an efficient service delivery? Banks thatsend out Credit Cards automatically when theircustomers old one has expired again require anefficient process to identify expiry dates andrenewal. An efficient service that replaces oldcredit cards will foster consumer loyalty andconfidence in the company.
Systems used by airlines for booking, ticketing
and moving customers through airports and
on to airplanes, and the systems used by
financial institutions to provide remote
banking services
Physical evidence
Where is the service being delivered? Physical
Evidence is the element of the service mix
which allows the consumer again to make
judgments on the organization.
Physical evidence is an essential ingredient of
the service mix, consumers will make
perceptions based on their sight of the service
provision which will have an impact on theorganizations perceptual plan of the service.
the design of the building in which the service
is delivered, and sometimes the environment
in which the building is situated interior layout, decor, as well as use of
contemporary floor plans
uniforms
design of web pages and forms
business cards
loyalty cards.
Marketing strategy
Must be in consistent with strategic plan
Goals and objectives, e.g.: What business are we in?
What broad markets to serve? What market segments?
Competition within markets?
Customer needs, expectations and power?
Strengths and weaknesses?
Orientation
Production
Product
Sales
Marketing
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AnalysisWhere are we now?
PlanningWhere do we want to be?
ImplementationHow will we get there?
ControlDid we manage to get there?Ma
knaut Analysis
Where are we now?
How does the companys market share
compare to rivals?
What are our weakness and strengths?
What is the opportunities and threats we face
in our marketing environment?
Planning
Where do we want to be?
What's our mission, objectives for next year?
What should be our strategy?
Implementation
How are we going to put into effect the
strategy which leads us to our objectives?
Control
Did we achieve our objectives?
If not, why?
How can it could be corrected?
Start again and conduct further analysis
Mass Market
The group of consumers who are the majority buyers
for common household products, i.e. they could betagged as being average.
This group consists of such a wide variety of people,their desires towards a certain product may betotally different from each other. Often competitionto supply the mass market is fierce, but relativelyeasy to enter because of the large amount ofconsumer pool available. There is little scope fordifferentiation in a mass market, e.g. petrol, bakedbeans etc.
Niche Market
A niche market is a relatively small and identifiable
segment of a larger market. They are often
overlooked by large firms.
They are attractive to small businesses as they face
less competition and can charge premium prices.
For example, made-to-measure clothing is a niche
market and tailors can charge a higher price for their
clothes than mass-produced items.
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Segmenting and Targeting Markets Market Segmentation
Market
MarketSegment
MarketSegmentation
People or organizations withneeds or wants and the ability and
willingness to buy
A subgroup of people ororganizations sharing one or morecharacteristics that cause them to
have similar product needs.
The identification of sub-set ofbuyers within a market who share
similar needs and who have similarbuying process.
The Importance of
Market Segmentation
Markets have a variety of product
needs and preferences
Marketers can better define
customer needs
Decision makers can define objectives
and allocate resources more accurately
Segmentation Bases
Characteristics of
individuals, groups,
or organizations used
to divide a total market
into segments.
(variables)
Bases for Segmentation
Psychological factors
Socio-economic groups
Geography
Gender
Age
Product Life Cycle
Product Life Cycle
A concept that provides a way to trace
the stages of a products acceptance,
from its introduction (birth) to its decline
(death).
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Marketing Strategies for PLC
INTRODUCTION GROWTH MATURITY DECLINE
Product
Strategy
DistributionStrategy
PromotionStrategy
PricingStrategy
Limited models
Frequentchanges
More models
Frequent
changes.
Large number
of models.
Eliminate
unprofitable
models
Limited
Wholesale/
retail distributors
Expanded
dealers. Long-
term relations
Extensive.
Margins drop.
Shelf space
Phase out
unprofitable
outlets
Awareness.
Stimulate
demand.Sampling
Aggressive ads.
Stimulate
demand
Advertise.
Promote
heavily
Phase out
promotion
High to recoup
development
costs
Fall as result of
competition &
efficient produc-
tion.
Prices fall
(usually).
Prices
stabilize at
low level.
Committees
Team of employees assembled to arrive at a
joint solution to problem / situation at hand
Typically consists of individuals from different
divisions and departments
Attempt to resolve the problems throughmeetings and discussions
Purpose and role
Examples include: Creating new ideas, R&D, brainstorming
Communication, disseminating information andobtaining feedback
Problem solving, task force or working party
Co-ordination of projects, departments, disciplines
Representing interests of others, stakeholders,environment
Overseeing procedures, roles, activities Making formal recommendations (to do somethingor not to do anything)
Types
Executive committees have the power to govern
or administer. The board of directors of a limited
company is itself a 'committee' appointed by the
shareholders, to the extent that it governs or
administers.
Standing committees are formed for a particular
purpose on a permanent basis. Their role is to
deal with routine business delegated to them at
weekly or monthly meetings.
Ad hoc committees are formed to complete a
particular task (e.g. fact-finding and reporting
on a particular problem before being wound
up).
Joint committees may be formed to co-
ordinate the activities of two or more
committees, for example, representatives
from employers and employees may meet in a
Joint Consultative Committee. This kind of
committee can either be permanent or
appointed for a special purpose.
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Sub-committees may be appointed by
committees to relieve the parent committee
of some of its routine work
Management committees in many businesses
contain executives at a number of levels not
all the decisions in a firm need to be taken by
the Board.
Advantages
Include:
More than one head to reach decision
Spread of responsibility Multi-perspective, talent, judgment, abilities
Larger work load
Maximizing co-ordination
Focal point for information and action
Formalises processes, improves communications
Delaying mechanism (when necessary)
Disadvantages
Include: Can slow decision making
Compromise
Excessive procedures
Waste time and resources
Abdication of responsibility
Dominating member(s)
Groupthink
Slow reaction to events Easy to delay and avoid decision making
Chair
Responsibilities (Higgs Report)
Leadership
Ensuring effectiveness
Setting the agenda
Ensuring all receive accurate, timely, clear information
Effective communication with primary external parties
Managing time to allow appropriate discussion
Encouraging active engagement and participation byall and equal opportunity for all
Chair
Skills (Higgs Report):
Understanding of formal/informal procedures
Persuasion, firmness and tact
Communications
Impartial & objective
Discrete and tactful
Punctuality
Considered to be the right person for the Chair
Committee Secretary
Primary responsibilities:
Schedule committee meetings (with the Chair); Prepare meeting agenda (with the Chair);
Give notice of meetings
Take meeting notes, decisions made, responsibilities Daft minutes for approval by the Chair
Circulate approved minutes to all members Ensure members understand responsibilities for
action
Generally assist the Chair in running the meeting
Provide the Chair with procedural support asnecessary
Provide general administration between meetings
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Committee Secretary
Skills:
Organisation
Logical thinking
Language and grammar
Note taking
Communication (writing VIP)
Understanding of procedures