“Management is an art of getting things done through and with the people in formally organized groups. It is an art of creating an environment in which people can perform and individuals and can co-operate towards attainment of group goals.”
Management is a universal phenomenon for every individual and organization. It is the management that helps and directs an individual’s efforts towards a specific purpose. According to F.W. Taylor, “Management is an art of knowing what to do, when to do and see that it is done in the best and cheapest way”.
With proper management, one can attain a set of certain pre-determined goals. Management involves working with others to achieve organization’s goals by efficiently deploying limited resources in the evolving world. While goals may vary from one enterprise to another, a strategized plan implemented with proper management is a necessity. For instance, for one organization, it can be launching a new product through market surveys and for other it may be ROI increase by reducing cost.
Creating an internal environment is a crucial part of Management. It is the responsibility of the management team to create appropriate circumstances that encourage maximum efforts so that peers or subordinates are able to perform their task efficiently. There is a definite process at various levels of management which includes ensuring the availability of raw materials, deciding the end-product, determining the wages and payrolls, evaluating the performances, formulation of rules & regulations, and much more.
Hence, it can be said that good management includes being effective as well as efficient. With effectiveness, we mean doing the tasks rightly, somewhat like ‘fitting the square pegs in square holes and round pegs in round holes’. On the other hand, being efficient means doing the task correctly at the minimalist cost with minimum wastage of resources.
A principle, in general, is a fundamental truth that establishes a relationship of cause and effect between two or more variables under given circumstances. Principles serve as a guide to ideas & actions. There are certain management principles serving as statements of fundamental truth based on logic providing guidelines for decision making and actions.
14 Principles of Management
According to Henri Fayol, there are 14 Principles of Management that forms the basis for successful management. These are the outcomes of observations and study of various events managers often experience.
1. Division of Work
This principle of management is applicable to both managerial and technical activities. It states that every employee has a different set of skills that differs from other employee. On the basis of their expertise, employees can be distinguished within the knowledge areas. According to Fayol, expertise promotes efficiency of the employees and boost productivity. Moreover, it also increases speed and precision of the workforce. This management principle of the 14 principles of management is applicable to both technical and managerial activities.
2. Authority and Responsibility
Management is authorized in any organization to give orders to its workforce to get things done. And with this authority comes responsibility. This means that authority and responsibility are the two sides of a coin and should go together. Henri Fayol during his studies realized that authority or power grants managers the right to give orders to the subordinates. The responsibility can be measured from the performance and therefore it is important to make agreements about this.
This third principle of the 14 management principles speaks about obedience which is often considered as a part of the “major values of a mission and vision in the form of good conduct and respectful interactions”. Discipline or obedience is very essential for any organization to run smoothly.
4. Unity of Command
This principle of management implies that employees are answerable to the manager ordering them. This is an important principle because tasks and responsibilities given to an employee by more than one manager may lead to confusion. This can further lead to conflicts for employees.
5. Unity of Direction
This management principle is all about focus and unity. All activities that are related to each other should be categorized as one unit and carried out by one group as a team. Managers should describe these activities in a plan of action and take responsibility for this plan. In addition, the manager is the one to monitor the progress of the defined activities.
6. Subordination of Individual Interest to Mutual Interest
Every individual in any organization has their own individual interest. However, for smooth functioning of an organization, it is a must that these individual interests be considered as subordinate to the interest (ethics) of the organization. This means that everybody in the organization should focus more on the organizational objectives and not on those of the individual and that this principle is applied to all, from employees to the managers.
Motivation and productivity should go together for the smooth running of an organization. This principle argues that remuneration offered to the employees should be sufficient enough to keep them motivated and productive. Henri categorized remuneration under two types: non-monetary (a compliment, more responsibilities, credits) and monetary (compensation, bonus or other financial compensation).
8. The Degree of Centralization
The amount of power exercised by the central management depends on the size of a company. Centralization refers to the extent of decision making authority at the top management.
9. Scalar Chain
Hierarchy is an important aspect of any organization varying from senior management to the lowest levels. This management principle implies that there should be a clear line in the area of authority at various levels of management.
According to this principle, every employee in an organization should have right resources to use so that they can work well in their company. In addition to responsibility of the managers (social order) the work environment must be safe, tidy and clean.
According to Henri Fayol’s Equity principle, workforce must be treated equally and nicely. In addition, employees must be at the right place in the organization to do things correctly. Managers should administer and monitor this process treating their employees impartially and fairly.
12. Stability of Tenure of Personnel
This management principle represents managing and deployment of workers. This should be in equilibrium with the service that is offered by the organization. Management should try to minimize employee turnover and make sure to have the right team in the right place. Major areas such as frequent change of position, sufficient development, etc. must be managed well
According to Henri Fayol, taking this management principle into account, employees should be allowed to express their own innovative ideas. This is really important as t encourages their interest and involvement creating added value for the organization. Employee ideas and their ideas can acts as a source of strength for the organization.
14. Esprit de Corps
The principle ‘esprit de corps’ stands for striving the participation and unity of its people. It says that it is the responsibility of managers to develop morale in the workplace, at the individual level and even in the area of communication. Esprit de corps adds to the expansion of the culture and creates an atmosphere of mutual trust and understanding.
These 14 management principles of management are useful tools for organization management, planning, forecasting, process management, decision-making, coordination and control.
Levels of Management is basically a kind of demarcation between different managerial positions in an organization. The number of levels in management depends on the size of the business and workforce and increases when there’s an increase in both these determinants.
The levels of management can be classified in three broad categories:
1. Top level / Administrative level
2. Middle level
3. Low level/ First-line managers
Managers at the various levels enjoy various roles and responsibilities that are discussed below:
1. Top Level of Management
The top management, which includes board of directors, managing director or chief executive, is the ultimate source of authority. It is responsible for managing the overall goals and policies for an organization and devotes their time on planning and synchronizing functions.
Main functions of the top management are:
- Issues important instructions to carry out various procedures.
- Lays down the enterprise’s objectives and policies.
- Prepares strategic plans for the enterprise.
- Appoints the subordinates for middle level.
- Coordinates and controls the activities of all the departments.
- Maintains contact with the external world.
- Guides and directs people at other levels.
2. Middle Level of Management
Middle Level comprises of the branch managers and departmental managers, who are responsible for the functioning of their department. They devote more time to organizational and directional functions.
Their functions can be emphasized as –
- Implement the plans of the enterprise in accordance with the directives and policies of the top management.
- Make plans for the sub-units of the enterprise.
- Participate in employing & training the lower level management.
- Interpret policies from top level management to lower level.
- Coordinates the activities within the division or department.
- Delivers important reports and other crucial data to the top level management.
- Evaluate performance of subordinate managers.
- Inspires lower level managers towards better performance.
3. Lower Level of Management
Also known as supervisory or operative level of management, the lower level management comprises of supervisors, section officers, foreman, superintendent etc. They are responsible for directing and controlling function of management.
Their functions and roles include –
- Assigning tasks to various employees.
- Guiding and instructing workforce for day to day activities.
- Responsible for the quality and quantity of production.
- Responsible for maintaining good relation in the company.
- Interacts with the workforce directly and listen to their problems, offers them valuable suggestion. Also, recommends their appeals to the higher level, if needed.
- Provides training to the peers.
- Prepare periodical reports about the workers’ performance.
- Ensure discipline in the enterprise and motivates the workers.
A proper coordination between the people at various managerial levels is a must for any enterprise to run well and prosper.
A majority of people have confusion between the two common terms: MANAGEMENT and ADMINISTRATION.
While both these terms may seem to be the same, they are entirely different from each other, both in terms of their utility and functionality. Administration is basically determining the objectives and crucial policies of an organization. On the other hand, management is the act of putting into practice the objectives and plans decided upon by the administration.
Definition of Administration
According to Theo Haimann, “Administration means overall determination of policies, setting of major objectives, the identification of general purposes and lying down of broad programs and projects”.
According to Newman, “Administration means guidance, leadership & control of the efforts of the groups towards some common goals”.
Administration refers to the activities of higher level that lays down basic principles of an organization.
Definition of Management
“Management is the process of conducting a set of functions [planning, organizing, staffing, directing and controlling] to get the work done in an efficient and effective manner.”
The process of management brings together the acts of visualizing, initiating and combining the various components while sustaining the feasibility of the enterprise towards company goals.
Management is an art of getting things done through & with people organized formally in groups.
Points of Difference between Administration and Management
- While Administration is a high level activity, management is a middle level activity done by business and functional level.
- Management is an executive function that makes the decision of an organization within its framework. But administration is a determinative function that sets up the organization’s decisions.
- Administrators are the people who invest the capital, and receive profits from an organization. But, management consists of a group of people who leverage their relevant skills to fulfill the company objectives.
- Planning and organizing of functions in administration are the key factors, whereas management involves functions like motivating and controlling.
- As per the abilities of an administrator is concerned, administrative qualities is a must. However, in management, ability to deal with human resource and some technical skills are crucial.
- The management decisions are shaped by the opinions, values, beliefs and decisions of the managers while the administrative decisions are influenced by public opinion, government policies, customs etc.
- Management is used by business enterprises. Administrators are usually found in government, military, religious and educational organizations.
- Management is an art, science and profession. While administration is perhaps both science and art.
- Administration usually covers the business aspects, like finance. But, management is a subset of administration.
- Administration is a system of organizing the people and resources to make them successfully achieve common goals and objectives. Whereas management is all about the technical and everyday aspects of the company’s operation.
- Administrators are judged by their performance and must possess leadership and vision. Management is judged by the administrators, deals with the employees and should possess managerial qualities.
From the above postulates, it can be said that administration and management are entirely different terms. However, in practicality, both these terms are more or less same. A manager has to perform both administrative and functional activities while dealing with the employees of the organization. While the managers working on the top most level are said to be the part of administration, the managers working on the middle or lower level represents management. Thus, it can be said that administration is above management or that it drives management.
The meaning of management has been different for different people. Some consider it as a SCIENCE because of its proven and experimented principles, for some it is an ART because of the practice it requires in accomplishing it while others consider it to be just a PROFESSION and a source of income.
Well, in reality, Management is a combination of this Trivia. Management is an ART, a Science and a PROFESSION, too.
Management as an ART
Ability to apply knowledge & skill in order to attain the desired results is defined as ART. It is a personalized application of basic theoretical principles for achieving best possible results. For example, an ability of a tailor to shape a piece of cloth into a well-stitched dress is an art. Similarly, a sculpturist with his/her art can transform a rock piece into a beautiful idol.
The essential features of art include:
- Practical/Industry Knowledge
- Personal skills
- Ability to improve through constant practice
- Result oriented approach
Since management is concerned with implementing the knowledge, skills, principles, and theories of management to attaining the desired goals and to solve certain management problem in an organization, management is considered as an art.
Management as a SCIENCE
“Science is a systematic body of knowledge pertaining to a specific field of study that contains general facts which explains a phenomenon.” It ascertains relationship between the cause and effect between two or more variables and emphasizes the principles which govern their relationship. Scientific methods of observation and verification through testing lead to the development of these principles.
The essential features of Science are:
- Universally Acceptable Principles.
- Observation and Experimentation.
- Established Cause and Effect Relationship.
- Verified and Predictable validity.
Management is a social and behavioral science because it deals with the behaviors of human beings that is ever changing and cannot be predicted precisely.
For example, while a tailor can shape a piece of cloth into a dress, he/she has to follow some predefined principles. Thinking of the design is the art of the tailor however, to use that art is science based on various principles. And these principles are accepted and applied universally. So, management is a Science.
The ancient saying, “Manager are Born” has been discarded in favor of “Managers are Made”. It has been remarked aptly that management is the oldest of art and youngest of science, which is perfectly true.
Management as a PROFESSION
Profession is an occupation or a job done by any individual, who is well aware of delivering personal services to the people with expertise. To practice a profession, an individual must have acquired certain academic qualifications and training in the related field. In addition, a professional is required to follow the ethical code of conduct of an organization.
The essential features of profession are:
- Ability to render personal service with expertise and specialization.
- Formal education and training from a recognized institution.
- Code of conduct
- Representative Association.
For instance, to become a financial manager, an individual should be a Graduate in financial management as his/her major field of study from a recognized university. Similarly, in order to become a HR manager, one must have a Diploma with Human Resource Management.
So, Management is an Art, Science and Profession.
“Scientific Management is an art of knowing exactly what you want your men to do and seeing that they do it in the best and cheapest way.”
Fredrick Winslow Taylor, popularly known as the ’Father of Scientific Management’ began his career as an operator and succeeded as chief engineer. During his career, he conducted various experiments that laid the foundation of scientific management. According to Taylor, if a work is evaluated scientifically, it is possible to find one best way to accomplish it.
Taylor believed that the employees can easily be motivated by money. Hence, he proposed the idea of “a fair day’s pay for a fair day’s work.” According to this new idea, if an employee fails to achieve adequate in a day, he/she did not deserve to be paid as much as other highly productive worker.
So, scientific management is considered as a thoughtful, planned and dual approach towards the management job.
Four Principles of Scientific Management
Taylor’s gave four principles of scientific management as:
- Substituting the way you work by “rule of thumb,” or using common sense. Instead he proposed to use the scientific method to study work and find out the most efficient way to accomplish specific tasks.
- Instead of assigning workers to any task, they should be given the jobs on the basis of their capability and motivation. Moreover, they should be trained to work at maximum efficiency.
- Monitor employee performance, give instructions and supervise them to ensure that they’re using the most efficient ways of doing job. .
- Managing the overall work between managers and workers where managers should spend their time training and planning, and workers performing their tasks efficiently.
Evaluation of Taylorism
Taylor’s Scientific Management Theory encourages that there is “one right way” to do something. Therefore, it is at odds with present approaches like MBO (Management By Objectives), BPR (Business Process Reengineering), and other similar tools. All these promote responsibility in individuals, and look for ways to push decision making through various levels of the organization.
The approach to scientific management advocated by F.W. Taylor is based upon the below mentioned principles.
Development of Science as a replacement of rule of thumb –This principle emphasized on adopting new scientific ways to do work quickly and efficiently instead of following the old, traditional techniques.
- Taylor suggested that work assigned to a worker should be monitored and analyzed in context of part and time involved in doing it.
- It emphasized on replacing the traditional ‘rule of thumb’ with the method of analysis, data collection, examination and formation of rules.
- This is because decisions under scientific management are made on the basis of facts and by using scientific ways.
Scientific Procedures to Select, Train and Develop leaders
- Workers should be selected using scientifically designed procedures.
- Physical, mental & other requirements should be enlisted for each job.
- Employees should be selected & trained accordingly to make them fit for the job.
- Management should offer good opportunities for the development of employees with better potential and skills.
- Efforts should be made to improve employees to their greatest level, efficiency & prosperity.
Co-operation between Management & Employees
- There should be no individualism and managers and workers should consider each other as “important” for the organization.
- Only co-operation can help achieve company goals efficiently.
- There should be no discord between managers & employees.
- Interest of both managers and employees should be harmonized to secure understanding and cordial relations between them.
Division of Responsibility – This principle aims at determining the real nature of roles to be played by managers & workers at different levels.
- While the management is responsible for planning the work. Employees should take it as their responsibility to execute the work.
- Hence, there should be proper planning and execution.
- Both employees and managers should completely respect and value each others’ efforts and work. They should change their outlook towards their mutual relation also.
- Managers are required to create appropriate working conditions for the peers and solve all the issues scientifically.
- Likewise, employees should perform their jobs with extreme attention, dedication and carefulness, without wasting the resources of enterprise.
- Managers should offer handsome remuneration to the employees to boost their moral. This also creates a sense of belongingness among them.
- When employees get satisfactory remuneration, they work sincerely in a disciplined manner and with loyalty.
- This, in turn, helps in increased productivity and economical growth of the organization at a faster rate.
Maximum Success for Employer & Workers – This principle states that organizations should take care that managers and employees are being allotted work according to their ability and interest and even paid accordingly.
- The aim of scientific management is to maximize the prosperity of both managers and employees.
- It is possible only when each worker gets opportunity to attain the highest level of efficiency.
- With maximum output & optimal utilization of resources, employers can gain higher profits and workers can get better wages.
- Organizations should follow the principle of “maximum output in place of restricted output”.
The Principles of Scientific Management are widely practiced. These principles result in cooperation between managers and employees that eventually develops into teamwork. Scientific management has made many significant contributions to the development of management practice.
While the principles of scientific management unfold its basic philosophy, the important question is how to implement these principles in practicality. Below are discussed the techniques as proposed by Taylor for implementing the principles of scientific management.
Time Study is a technique enabling the managers to determine average time taken by an employee to perform a specific task.
- Each and every part of the job is studied in-depth.
- An average employee with reasonable skill and ability is selected and studied in this technique.
- A task is assigned to an average worker and time is ascertained using a stop watch for performing that particular job.
- Taylor proposed that Fair day’s work should be concluded through experiments, observations, and analysis by keeping in view an average worker.
Standard Time × Working Hours = Fair Day’s Work
Motion Study is the study of the movements of body and limbs on machine involved in performing a job.
- The purpose of this study is to get rid of useless motions and ascertain the best way of performing the job.
- A motion study is an attempt made to know whether some elements of a task can be eliminating, combining or changing their sequence to achieve necessary rhythm.
- This study boosts the productivity and efficiency of employees by eliminating all unnecessary body motions.
Functional Foremanship was proposed to improve the work quality since a single manager might not be an expert in all the aspects of work.
- Taylor advocated functional foremanship for achieving ultimate specification.
- Employees are to be managed by specialist foreman.
- This technique is an extension of the principle of specialization at the managerial level.
- Taylor promoted appointing 8 foramen – 4 at the planning level & 4 at implementation level.
- The categorization of these specialist foremen are: –
- Instruction card clerk responsible for labeling the instructions according to which employees are required to perform their job.
- Time & cost clerk concerned with following a time table for doing a task & specifying the material and cost of labor involved in it.
- Route clerk ascertains the route through which raw materials has to be transported.
- Shop Disciplinarians are responsible for making rules and regulations to guarantee discipline at the workplace.
- Gang boss is concerned with making arrangement of employees, machines, tools, etc.
- Speed boss has to maintain the speed and remove interruptions in the production process.
- Repair boss is responsible for the maintenance of machine, tools and equipments.
- Inspector has to maintain the quality of product.
Differential Piece Wage Plan is based on the study of wage payment and its relation with efficiency of a worker.
- Simply, a worker who is more efficient is paid more wage than others.
- On the contrary, workers who are inefficient in their work and produce less output are paid less than the current rate i.e. worker is penalized for his inefficiency.
- In addition, workers who make efforts to improve their efficiency are offered incentives.
- This scheme also encourages inefficient employees to get better in their work and improve their standards.
- This technique leads to mass production minimizing the cost and maximizes profits.
- In order to create ordeal relationships between the managers and employees, various other techniques have been developed.
- These techniques also helps in creating better understanding on part of works including the use of instruction cards, graphs, slides, charts, strict rules & regulations, etc, to increase efficiency of employees.
“A place where two or more parties are engaged in selling or buying of products, services or information is termed as a MARKET.“ And, the two parties involved in the exchange are known as the “Seller” and the “Buyer”.
The seller sells goods and services to the consumer/buyer and gets money in exchange. A market to be competitive, there has to be more than one buyer and seller.
There are two main market conditions: Monopoly and Monopsony.
Monopoly – In this market condition, there is a single seller and multiple buyers at the market place. In monopoly, the seller is the dominant with no competition from others and hence enjoys complete control over products and services. In this condition, the seller fixes the price of goods or service and has the power to change on its own.
Monopsony – A market condition where there is a single buyer but many sellers is termed as monopsony. Since in such a set up, there is a single buyer against many sellers, he/she can exert his control on them which means that buyer here has an upper edge over the sellers.
1. Physical Market- A set up where buyers can meet the sellers physically and buy the desired product or service from them in exchange of money. Examples of physical market include shopping malls, retail stores and department stores
2. Non-Physical Markets/Virtual markets – In this market set up, buyers buy goods and services online. Here, the buyers and sellers do not interact physically or meet; rather the exchange is done through internet. For example, Flipkart, eBay, etc.
3. Market for Intermediate Goods – Sellers sell raw material in these markets required for the final production of end products.
4. Auction Market – In an auction market, the seller sells his products or services to the highest bidder.
5. Black Market – A setup where illegal goods such as drugs and weapons are sold.
6. Knowledge Market – In such a set up, the exchange of information and knowledge based products is done.
7. Financial Market – Market dealing with the trade of liquid assets (money) is called a financial market.
Financial markets are of following types:
• Stock Market – A market form where buyers and sellers exchange shares.
• Bond Market – In such a set up, the buyers and sellers are involved in the exchange of debt securities, usually in the form of bonds.
• Foreign Exchange Market – Here, parties are engaged in trading of currency. In a foreign exchange market, one party exchanges one country’s currency with equal quantity of another currency.
• Predictive Markets – A set up where exchange of products or service takes place for future. The market status determines the status of the buyer; the buyer is in profit when the market rises and is at a loss when the market crashes.
Size of the Market
The market size is based on two factors:
Number of sellers and buyers
Total money involved annually.
Defining Marketing for the 21st Century
It’d be no wrong to say that the 21st Century has the beginning of the new economy. The credit goes to the technology innovations and development.
Peeping back into the past, the Industrial revolution is known as the beginning of the old economy that focused entirely on producing enormous quantities of standardized goods. This mass product was crucial for satisfying large consumer base and cost reduction as increased production enabled the companies to expand into new markets across geographical areas. The ancient economy comprised of organizational hierarchy in which the top management instructed the middle managers over the labors.
In contrast, the new economy revolves around the buyers completely, thanks to the digital revolution. Buyers can access all types of information about the product and services. Moreover, there’s no more standardization, instead there is a lot of customization with a dramatic rise in product offering. The new economy has also seen a great transformation in the purchase experience of the customer and commencement of online purchase, aiding the buyers with 24 × 7 product purchase getting delivered at office or home.
Organizations have also taken benefits of available information and are designing more efficient marketing programs as per the customers’ demand. Digital revolution has led to the rise in communication speed using mobile, e-mail SMS, etc. These transformations have greatly helped he companies in taking faster decisions and execute strategies more swiftly.
As far as the business market is concerned, awareness and of product is very essential for marketers as businesses keep on looking for ways to establish or maintain a credential in their respective market. For world market, marketers have to think about cultural diversity and the international trade laws, trade agreement, and regulatory needs of individual market. For organizations with constrained budgets, importance is related to pricing of products, hence companies have to design and sell products accordingly.
21st century and digital revolution have made organizations make significant changes in the way they conduct their business. One common yet major trend in the 21st century is the need of stream lining the systems and processes with the focus on cost reduction through outsourcing. Simultaneously, the marketing people look out for ways to build long term relationship with the purchasers. This relationship sets up platform understanding consumer needs and picks. Apart from this, marketers consider distribution channels as partners in business and not merely as the customers. Organizations and marketers are making decisions through various computers simulated models.
“Marketing Research is defined as the function that connects the consumer, customer and public to the marketer by the means of information. This information is then used to recognize and define marketing opportunities and issues, generate, refine and assess marketing actions; examine marketing performance and improve understanding of marketing as a process.”
It can further be considered as a well-planned, organized process which implies that it requires planning at all the stages by using a scientific procedure. It is a process that attempts to offer accurate authentic information. It is also sometimes defined as the use of scientific method to find the solution of marketing problems.
With proper marketing research, organizations can identify the needs of their customers and make efforts to meet them in best possible way. Systematic gathering of information and its analysis is the main task of Marketing Research.
Relationship and difference between Marketing Research and Marketing Information System (MIS)
Information generated by Marketing Research from various sources like internal, external, marketing intelligence agencies is considered as a part of MIS. Basically, MIS is a set of formalized methods for generating, evaluating, storing and sharing information to marketing decision makers on continuous basis.
- Marketing Research is conducted with a particular purpose in mind with information being generated when it is done, while MIS information is generated continuously.
- While Marketing Research is an ad-hoc system, MIS is a continuous entity.
- In Marketing Research, information is gathered for specific purpose, hence it is not rigid. But information is more rigid and structured in MIS.
Marketing Research is significant for decision-making and strategic market planning. It helps an organization in identifying the market opportunities and limitations, developing and deploying market strategies, and in evaluating the efficiencies of marketing plans.
Marketing Research is an evolving and widely used business activity because the sellers need to know more about their end customers. It is an important link between marketing decision makers and the markets in which they run.
Marketing Research includes various crucial principles for generating information which is helpful to managers. These principles relate to importance and the timeliness of data, the importance of defining objectives carefully and clearly.
In the most basic form, marketing strategy is a plan to sell services or products in a way that renders long-term profitable growth. It is like a road map for any brand guiding the brand where to go and what’s the best route to get there. Successful companies use strategy to deliver their offerings to the customers that will have meaningful impact.
“Marketing Strategy is defined as an organization’s strategy that combines all of its marketing goals into one comprehensive plan. It offers a blueprint for achieving these marketing objectives. Marketing strategy is the basic building block of a marketing plan. A good marketing strategy requires in-depth market research and focus on the right product mix to attain the maximum profit potential and uphold the business.
A marketing strategy helps a brand to focus on its insufficient resources on the best possible opportunities so as to amplify the sales.
A marketing strategy is planned by:
1. Selecting the right target market: Choosing the target market here means the potential buyers of specific products or services of an organization. Not all the market segments are beneficial to an organization. While certain market segments can guarantee rapid profits, certain others may have great potential with high barriers to entry. Hence, a careful pick has to be made by the organization. For this, the organization needs to carry out in-depth marketing research to identify the traits and particular needs of the buyers and the particular in the target market.
2. Collecting the marketing mix: Gathering the marketing mix means how the organization intends to sell its products or services. For this, the organization should gather the four P’s of marketing (discussed below) in appropriate combination. This is an important section of marketing job. Various decisions have to be made like –
- The most appropriate mix of the four P’s in a particular situation.
- Availability of various distribution channels and which one should be used.
- Appropriate developmental strategy to be used in the target market.
- Designing the right price structure.
The Marketing Mix, also known as “The Four P’s,” that lays the building blocks of a Marketing Strategy.
- Product – Products and their packaging must sustain the position of a brand. Design and functionality need to be considered carefully and developed to communicate product profits.
- Price- Organizations selling a premium product can control above average prices. Brands who want to be recognized as price leaders should offer lower prices to reap a competitive edge.
- Place – The choice of distribution channel must be consistent according to the brand’s positioning. This means that a high-end product must be linked with a high-end distribution channel to strengthen product value.
- Promotion – Promotion strategy includes the brand’s USP into all of its messaging. Organization should include all of the brand’s marketing objectives and develop particular tactics that will render against them. This includes recall of key communication point, brand awareness, shifts in preference, and more.
Significance of Marketing Strategy
- It offers an organization a competitive edge.
- Marketing Strategy aids in developing products and services with best profit making potential.
- These help in discovering the areas affected by brand’s growth thereby helping in creating an organizational plan to satisfy customer needs.
- It helps in fixing the right price for organization’s products and services based on information gathered by market research.
- It helps a brand to make the best utilization of its resources to offer a sales message to its target market.
- It helps to set the advertising budget in advance, and develop a method determining the scope of the marketing plan.
Brand Promotion is an important part of any Marketing Process. It is a must for every organization to promote their brand, products and services among their customers in order to surpass the competitors and to sustain in the long run.
Brand promotion not only increases awareness about a brand but also increases the sales, yielding huge benefits and revenue for the company.
What is Integrated Marketing Communication (IMC)
According to the AMA (American Marketing Association), “Integrated marketing communication is a planning process that guarantees that all brand contacts received by a customer for a product, service, or organization are relevant to that person and consistent over time”.
In general terms, IMC or simply brand communication is an organizational strategy developed to popularize their products and services among the target customers. IMC simply means combining all the promotional tools to make them work together. The process of brand promotion involves identifying the best target customers and promoting the brand among them through any one of the below mentioned means:
- Sales Promotion
- Public Relation
- Personal Selling
- Direct Marketing
- Social media, etc.
Hence, Integrated Marketing Communication can be defined as the “integration of all the methods of brand promotion to promote a particular product or service among target customers”. All aspects of marketing communication in an IMC work together for enhanced sales and maximum cost effectiveness.
Various components of Integrated Marketing Communication:
1. The Corporate Culture – To increase their sales, organizations should design the features of products and services in accordance with their work culture. While every company has a vision, it is crucial for the marketers to keep this in mind before designing their products and services.
For example, Assume there is an organization ‘A’ that has its vision of promoting green and clean world. Hence, all its products need to be bio-degradable and eco friendly, according to the vision of the organization.
2. The Foundation – Foundation stage refers to the detailed analysis of the product and the target market. It is important for the marketers to know the brand, its products and services and target customers. In addition, organizations are required to know the needs, expectations and attitudes their end-users. Also, keeping a close watch on the activities of competitors is also essential.
3. Brand Focus – This element of IMC symbolizes the corporate identity of the brand.
4. Communication Tools – Communication tools comprise of different modes of promoting a particular brand like advertising, promoting through social media such as Facebook, LinkedIn, twitter, and direct selling, and so on.
5. Consumer Experience – Analyzing the consumer experience can lead a brand to continuous success. Hence, marketers need to focus on their consumers and what they feel about the product. All the products should meet and go beyond customer expectations. Products with better quality, packaging and affordable prices are likely to attract customers more.
6. Promotional Tools – To promote your brand, you need some effective promotional tools such as personal selling, trade promotions, and so on. To achieve this, organizations need to boost their relationship with end users and external clientele.
7. Integration Tools – It is essential for every organization to keep a track of the customer review and feedbacks. They need to have specialized software such as customer-relationship management (CRM) that can help them in computing the effectiveness of various integrated marketing communications tools.
8. Synergy– Synergy is a necessity for a successful integrated marketing communications strategy. All the different forms of promotional tools you use including direct marketing, social media, advertising, etc. must coordinate with the brand identity.
Being a social creature, humans love to interact and communicate with each other. While globalization has reduced the worldly boundaries, internet has changed the way the people interact and socialize. Now, people need not to write letters or make a telephone call at the STD booths to talk to a relative or a friend. Instead, you can stay in touch with your near and dear ones instantaneously or in real time. Thanks to the internet technology!
Among the numerous innovations and discoveries by the internet technology, one of the very significant is the SOCIAL MEDIA MARKETING (SMM).
Social Media Marketing
“Social media marketing refers to the techniques that target social networks and applications to spread brand awareness or promote particular products.” Social networking not only refers to the instant messaging and other forums or blogs where people discuss certain topics, it also include using social media sites for sharing pictures, videos, movies, music, and other forms of shareable information. Because of the varied services these social media platforms offer, they are extremely popular among the people. For instance, YouTube is a video sharing platform that allows you to upload and download videos on internet. Hence, millions of viewers log into it every minute to view the latest movies, videos, songs, etc.
Social Media is also a great source of all type of information. The best example to it is the Wikipedia. It is a popular platform for finding adequate information about a particular topic. Wikipedia is a great platform allowing everyone to share and contribute information, definitions and explanations. The information provided on Wikipedia can be built, reviewed, edited and reformed through the collective efforts of people interested in the particular topic. And perhaps, Wikipedia is best example of social media network that brings people close to discuss, communicate and create content that is useful to all. Hence, Wikipedia best describes the development and power of social media.
Apart from being significant to common people, Social media is a powerful tool for those belonging to the marketing industry. Social media marketing symbolizes online promotions, buying and selling of products and services between marketers and the customers.
The availability of widespread audience on the internet facilitated organizations to easily reach out to their prospective customers and promote their products and services. This helps marketers to build opinion about their brand and initiate discussion about their products with interested buyers. Not only this, promoting a brand online also helps the customers know about the latest products and services in the market. Apart from this, marketers can also get real feedback about their brand from the customers, which further help them improve their products and services according to the expectations of their target customers.
Technology has changed the way we live, think and make money. Thanks to the digital Technology. And when it comes to making money using technology, E-commerce technology is worth discussion.
What is E-Commerce?
E-commerce refers to “the conduct of transactions by electronic means.” In other words, “Electronic commerce” or e-Commerce is the use of electronic mediums to carry out business transactions. Often it refers to the sale of goods and services over Internet; however it also covers buying mechanisms online.
Today no business can overlook the massive ‘Online Market’ existing on the internet which means E Commerce is just inevitable. Traditional markets have been replaced with the ‘Virtual Markets’. With E Commerce, it is now possible and convenient for sellers to reach to global customers enhancing the boundaries of their market, thus changing the way business is conducted. Online Marketing is drastically different from the physical marketing which involved the hassle of door-to-door marketing, product distribution and selling.
E Commerce involves the application of Information and Communication Technology (ICT) and Electronic Funds Transfer (EFT) for exchange between consumers-organizations, organization-organization and even consumer-consumer.
E-Commerce is not only restricted to buying and selling online, but also covers:
• Consulting of users
• Preparation of estimates online
• Access plan to point of sales
• Provision of an electronic catalog
• Online payment
• Real-time product management
• Delivery tracking
• Post-sales service
With E-commerce, consumers now have access to almost every necessity of their daily lives at affordable prices on the internet. E-commerce allows you to buy anything without actually visiting the store or enquiring the salesperson number of times. E-commerce has made our lives faster and simpler.
Advertising is the practice of ‘telling and selling’ a product or service.
Advertising Management, likewise, is a process of using various media to sell a product or service. The process of advertising management begins before the marketing research and includes media campaigns, which aid in selling the product.
While there are various ways to advertising, media campaigns are not very fruitful in the absence of effective advertising management.
At the initial stage of advertising management, the data produced as the outcome of marketing research is used to determine the types of advertising required for a specific product. With an advertising management process, organizations find it easy to define the outline of the media campaign. In addition, it also helps them in deciding the type of advertising to be used before the product launch.
Advertising Management is a complex task and it takes a lot of inspiration and creativity to launch an effective and successful advertising campaign. Further, only by keeping the big picture in mind, the management skills come into play. If the advertising campaign of a company works well for long, reaches the right customers, and produces the expected revenue, it is said to be fruitful for the company.
To make the advertising effective, make sure to include it from the market research time. With market research, companies can identify:
- The niche of the targeted population
- Reasons for potential segment to opt for the product or service.
Organizations can use these findings to prepare for advertising campaigns. After procuring this information, the advertising management works on creating the specifications for the entire advertising campaign. For instance, if the campaign is to be run on radio, what all ads would be used, etc. should be determined prior to the launch.
“Customers” or the end users play a vital role in designing the advertising campaign. After all, advertising is all about customers only. Hence, their consideration is important in campaign’s success.
According to Richard Buskirk says, “Advertising is a paid form of non-personal presentation of ideas goods and services by an identified sponsor.”
Being the best way of communicating with the customers, advertising helps organizations to inform their customers about their brand, products and services. Advertising is done using various media types and different techniques most suited.
Objectives of Advertising
Four main objectives of advertising are:
- Trial: Most start-up ventures or companies generally work for this objective. It involves convincing the customers to make them buy a particular product or service introduced in the market. To achieve this objective, the advertisers make use of meaty advertisement to attract customers and inspire them look the products and buy for trials.
- Brand Switch: Companies wanting to attract the customers of the competitors have this as their objective. To achieve this, marketers try to encourage customers to switch from their existing brand to their product.
- Continuity: It is related to retain the existing customers for long. For this, marketers usually launch new products of customer interest and advertise them well so that the existing customers keep buying their products.
- Switching Back: To bring back the previous customers, who have switched to other brands, advertisers use different ways to attract them back such as discount sale, some reworking done on packaging, new advertise, etc.
In short, advertising is an artistic way of communicating with the end users, both directly and indirectly. However, the two basic requirements to achieving these objectives are great communication skills and excellent convincing power.
Significance of Advertising
Advertising is a very crucial thing which has become a necessity for organizations today. Let’s have a look on how and where is advertising crucial:
1. Advertising is significant for the customers
Imagine a newspaper, television or a radio without an advertisement! Imagine yourself as a customer. Can you buy any product without prior knowledge about it? Perhaps not! This is where advertising comes in. Customers buy a product or service only after they are made aware of the products available in the market. Without proper information, customer won’t know about the products available and will not purchase the product even if it was the best. Another benefit of advertising for customers is that people find the best products as they are able to compare different products based on various factors. This makes it convenient and easy for them to buy the one which suits their need and pocket.
2. Advertising is important for the manufacturers and sellers of the products
Advertising plays a crucial role for the manufacturers and sellers, because
- It helps them promote their products and services among the customers.
- It helps increasing sales.
- It helps them know about the products of their competitors and make the right strategies to meet up the competition standards.
- It helps organizations in creating goodwill for their brand and gains customer loyalty in the long run.
- With the help of advertising, organizations learn about the demand of the customers and demand and supply become a never ending process.
3. Advertising is important for the society
Advertising helps in educating the society, be it things of daily life, government policies, international happenings, etc. Some social issues like child labor, liquor consumption, smoking, girl child killing, family planning education, etc. can also be taken care of with the help of advertisement. In addition, it also promotes the living standard of the people by enhancing the quality and variety in utilization as a result of constant research and development activities by the producers.
Advertising is the best tool for companies to promote their products and services through various offline and online mediums in order to increase the sales of their product and services and boost their brand value. It is basically the act of spreading awareness among the consumers about a particular brand or its products. Also, it works by focusing on customer’s requirement to buy the product. Hence, advertising has become an important part of the corporate industry globally. For this reason, organizations spend a lot of their budget on promotional campaigns. Advertising helps in building a brand of the product which goes a long way for making effective sales.
There are various types of advertising that are usually used by the organizations. Have a look at them.
Classification of Advertising
- Print Advertising– This is probably the oldest form of advertising in which written promotion are done. Newspapers and magazines have been used over years by different companies from various industries across the globe. With print media, companies can endorse their brand or products through fliers and brochures through newspapers and magazines. They can buy advertising space in any popular newspaper or magazine and the cost depends on various factors including the quantity of space, type of paper, and the page of the publication. For instance, an advertisement on the first page of the newspaper costs more than on other pages. Likewise, an advertisement in a thick, glossy paper or a highlighted corner would be more expensive than in an ordinary quality paper.
- Broadcast Advertising –This form of advertising is widespread all around the world. Broadcasting includes radio, television, and Internet advertising. With this form of advertising, companies can cover up large number of audience, even in real time. Advertisements on the television are very popular. The length and time of the ad determines the cost of a particular advertisement. For instance, advertisements that are telecasted at the prime time would be more costly than the regular ones. While, radio advertising has been a popular form of broadcasting, after the advent of television and internet, its popularity has reduced greatly. However, it is still an important advertisement form in rural areas. The radio campaigns are quite popular in some sections of society helping to sell the products/services.
- Outdoor Advertising –This type of advertising makes use of various tools to get customer’s attention like the billboards, kiosks, and tradeshows and events which are an effective way to convey the message of any organization. While billboards are there all around, however the content displayed should be capable enough to attract potential customers means they should be very attractive. Organizing events, on the other hand, such as exhibitions and trade fairs for promoting the product or service helps in effective endorsement of the product. Hence, outdoor advertising is also an effective advertising tool.
- Public Service Advertising –This type of advertisement is done for public causes to make people aware about such public issues. Social, national and environmental matters such as political integrity, AIDS, Cancer, energy conservation, population, illiteracy, poverty and many more which need more awareness are spread through these advertising. Public service advertising has achieved widespread importance in recent times and is an effective tool to communicate the message.
- Covert Advertising – This is an entirely different way of advertisement. In this form, the product is subtly included in a serial or movie and is no actual advertisement. It includes just mentioning the product in the movie or TV serial. For instance, Katty Perry using Apple phone in her new album. Seeing a product being used by a celebrity creates an impact on the audience which boosts their interest in buying that product.
Outdoor advertising is a form of advertising used to communicate with the general public via mediums like transit posters, highway billboards, wall paintings, etc.
Outdoor advertising is very significant to companies because they serve their purpose of brand promotion very well. The ads displayed through outdoor advertising are not only huge, but are also clear and visible to all. Everything presented to the audience is in a format that helps the viewers make up their mind for purchasing the product or service.
According to Outdoor Advertising Association of America (OAAA), businesses spend millions of dollars on outdoor advertising every year. This proves that outdoor traffic is very fruitful for companies and hence will keep on growing.
While the print and newspaper advertising comprises a major part of advertising industry, outdoor advertising is distinctive in its own way. It is one of the most cost-effective methods of advertising today. It just needs you to design a billboard and get it printed. Placing the outdoor ads strategically can guarantee considerable exposure at a very little cost.
The way companies use online advertising greatly varies on the basis of their needs. For instance, food companies like Mc Donald’s make use of highway billboards to grab the attention of their customers and calling them to trying their new products. Similarly, tourism and automobile industries make use of the billboards on highways to promote their tourism plans and latest products.
There are several other forms, apart from the billboards, by which companies can carry out outdoor advertising. Beverage companies, for example, use sporting events to exhibit and promote their products. For instance, Coca Cola sponsored the Fifa World Cup. Other places where you can see outdoor ads are: taxicabs, railways, buses, walls, and subways. These forms of outdoor advertising are very common and highly cost effective
Marketing Communications is a predominant part of what is known as the marketing mix. The marketing mix basically defines the 4Ps of Marketing and Promotion. It is the message which an Organization conveys to the market. One needs to be very particular about the different messages that are being conveyed through various mediums for the purpose of Marketing.
Conventionally, printed marketing was the basic method of conveying the messages to the consumers. However, in recent times, emails, blogs, television and company websites have become an up-to-the-minute way of conveying the organization’s message to the consumers. It becomes important that the message you give in one medium should relate with the message provided through the other medium. For example, one should use the same logo on your website as the one you are using in your email messages.
Looking at the above reasons, people scheming out the marketing communication process thus become very important for the company. These executives play an important role of formulating out an integrated marketing communication process by conveying the messages of their organization through different mediums to the consumers.
Let us now understand the marketing communication process.
The Marketing Communication Process
A marketing communication process identifies where the investments have been done and what is it that is adding on to the investment, thus letting you to the opportunity to alter the advertising campaign, for generating out maximum benefits.
The first stage includes the strategic development in which creation of a marketing communication program takes place. At this stage, an organization decides what all will define their advertising group. In the Second stage, the responses of the consumers are captured, recorded and maintained as advertising statistics. Further, the executives examine and evaluate the data to generate important reports as an aid to the distribution of the integrated marketing and communications budget.
The integrated marketing communications is considered as a data-driven approach identifying the consumer insights and developing a strategy using the appropriate combination of offline and online channels. This helps effectively in building a stronger brand-consumer relationship. Selecting the most suitable communication elements is essential for the success of any business and should be effective across all platforms. After successful accomplishment of the integrated marketing process, the company can collect rich dividends from it.
Marketing communication is an effective way of conveying a company’s message to its customers about its brand, products and services. The basic marketing communication process involves the following constituents: Sender, Encoding, Transfer Mechanism, Feedback, Response and Decoding.
• The SENDER is usually the company/firm that produces the product.
• ENCODING is communicating the message in comprehensible terms for the customer.
• TRANSFER MECHANISM is the medium used to “transfer the message”.
• DECODING is the way a customer interprets the message.
• RESPONSE is the reaction of the customer on the message.
• FEEDBACK is a measure of how successful the advertising campaign was.
Basic Model of Communication
Sender – A sender is also referred to as a source and is the one who has a message to convey. For example, a company or a brand manager can be considered as a Sender. In a marketing process, it is important to ensure that the source or the sender is realistic and trustworthy. Also, source can be direct or indirect.
Encode – The sender encodes ideas into a message. A brand manager, for example, decides to advertise a new product.
Message – Based on the ideas given by the sender, the marketer creates an effective message that is clear and effective enough to achieve the communication objectives.
Receiver – The receiver is the person or group of people with whom the sender tries to communicate and share the message. For example, customers are the receivers for a company.
Decode – On receiving the message from the sender, the receiver decodes it. It I important here that the sender and the receiver have common experiences in order to decode the message at the receiver’s end as it was intended to be.
Feedback – Feedback is considered as examining and evaluating how precisely the intended message is being received by the receiver. Marketing research can be a way to collect feedback from the receivers.
Essentially, it involves asking receivers if they have seen the message, whether they remember the message, and their attitude towards the message (product).