Management, by definition, is a function of planning, organizing, coordinating, directing and controlling. Any managerial system, at any managerial level, is characterized in terms of these general functions.
Management is revealed in a variety of specific activities. Marketing management refers to a broad concept covering organization of production and sales of products, which is based on consumer requirements research. All companies must look beyond their present situation and develop a long-term strategy to meet changing conditions in their industry. Marketing management, therefore, consists of evaluating market opportunities, selecting markets, developing market strategies, planning marketing tactics and controlling marketing results.
Strategic planning includes defining the company's long-term as well as specific objectives, such as sales volume, market share, profitability and innovation, and deciding on financial, material and other resources necessary to achieve those objectives.
In problems of market selection and product planning one of the key concepts is that of the Product Life Cycle. That products pass through various stages between life and death (introduction - growth - maturity - decline) is hard to deny. Equally accepted is the understanding that a company should have a mix of products with representation in each of these stages. Companies can make far more effective marketing decisions if they take time to find out where each of their products stands in its life cycle.
However, the concept of the product life cycle seems frequently forgotten in marketing planning, which leads to wrong decision-making. This may well be seen in the following story.
A supplier of some light industrial equipment felt that the decline in the sales of his major product was due to the fact that it was not receiving the sales support it deserved. In order to give extra sales support to this problem case a special advertising campaign was run. This required cutting into marketing budgets of several promising products that were still in their "young" growth phase. In fact the major product has long since passed the zenith of its potential sales, and no amount of additional sales support could have extended its growth. This became quite clear in the end-of-year sales results which showed no improvement. The promising products, however, went into gradual sales decline.
In short, management has failed to consider each product's position in the life cycle.
III. Say what information the text gives about:
· management as a science;
· marketing management as a specific activity;
· the concept of the Product Life Cycle;
· wrong decision-making resulting from failure to consider the correct life cycle of the product.
I. Read and translate the following sentences and word combinations. Let's discuss a company strategy.
Our main objective is to gain market share.
to cut one's profits
plant and machinery
to upgrade the product
to adapt to the market
II. Act out the following dialogue.
In the following extract members of the Board of a company are discussing the company strategy.
Fox: Since our main objective is to gain market share, I believe we must first of all reduce our prices.
Brown: But if we reduce prices, that will cut our profits.
Fox: That's right, but we can slowly increase production, which will eventually enable us to cut unit costs.
Smith: That's really a long-term prospect. Unit costs can only come down if we invest in new plant and machinery. I personally think we should go for higher profitability. If we upgrade the product, we can charge higher prices and get larger profits.
Fox: Look, the market is already very competitive. If we increase prices, whatever the quality, the market will immediately respond and sales will drop rapidly. But if we reduce costs in manufacturing, that will put us in a strong position to adapt to the market.
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