Project Management & Marketing (10 Marks)

Definition of Project
 Cost bound, qualitybound and time boundspecific task is project.
 Project is temporary and non routine activities with in time job that has
specified staringdate and ending dates,a clear specific goals and objectives,a scope of work
to be performed, defined roles and responsibilities, predefined budget and resources with
usually a temporary organization in a dynamic environment.
 Common examples of projects are construction ofa building, introduce a new
project, installation ofnew machinery, creation of new software, design and launch of a
new advertisement campaign etc.
 Project differs from ordinary works and need tospecial management techniques
to make it successful.
 Project should be economically and financially viable, politically and legally
suitable,sociallyacceptable, environmentally sustainable, technicallyfeasible.
 The project should be SMART. (specific, measurable, attainable, realistic and
time bound)
 Project involves risk and uncertainties in theiractivities and results.

Project Management
 Project management is a new branch of management emerged for achieving the goals and
objectives efficientlyand effectively within constraint of scope, time, cost and quality.
 Improved seed (input) – increase in productivity (output) increase in living standard of
farmer (outcome/impact)
 It is restructuring methods of management adopting specialtechniques for obtaining better
control and optimal use of human and non human resources.
 It is art of coordinating the resources for the achievement of prespecified goals. It is the
application of knowledge, skills and techniques to execute project efficiently.
 Finally womb to tomb function of the project is the project management.

Attributes of Project management

 Objective oriented: satisfy customer needs and wants

 Change oriented: manage risk and uncertainty
 Team function with mutuality, trust and coordinated with systematic effort
 Functional coordination and harmonization with function as well as vertical and
horizontal directions
 Planning and controlling
 Constraints with time, cost and quality

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 Project life cycle
The project life cycle refers to a logical sequences of activities to accomplish the projects
goals and objectives.

1. Identification of project :
 Proposed objectives
 Imminent risks
 Alternatives scenarios
 Time table factor for the project approval process
 Gather project information document

2. Preparation of project
 Conducting feasibility study, environmental impact assessment (EIA) survey,preparing
engineering and technological design, SWOT analysis
 Action plan report
3. Project appraisal
 Analysis of project from various point view in order to know feasibility and
viability.
 Detail project design and resolve any generating questions about project.
 Political - acceptable
 social - desirable
 Environmental- sustainable
 Technical - suitable
 Economical and financial - viable

4. Project approval
 Budget and resources approval

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 Approval for implementation
 Legal agreement

5. Project implementation
 Most important and time consuming part of project life cycle
 Periodic review and progress
 Quality assurance and major change

6. Project completion
 Evaluation the final project outcomes with comparison to expected outcomes
 Lesson to learned from the project

7. Evaluation
 Measuring outcomes against the objectives and sustainability of results
 Impact of evaluation

Problems of project formulation and implementation in Nepal

 Time over run and cost over run
 Policy and political instability
 Lack of availability of resources
 Weak knowledge, skills and competency among the human resources
 Lack of proper coordination and harmonization among the actors
 Lack of participation
 Top down approach of project selection
 Stunds based project selection rather than implementation
 Donor driven project identification
 Weak institutional capacity

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  Weak efficiency of contractors

Setting objectives & goals

The best way to set project management objectives is byusing the SMART approach.
 Specific - well defined and clearly understood.
 Measurable - the result of your objective can be measured, so it will be clear when it has
been accomplished.
 Achievable - considering the resources and the timethat your team has available, it should
be possible toaccomplish your PM objective.
 Realistic - objectives must be a reasonable way ofproceeding, fit within the broader project.
 Time-bound - project management objectives must have a concrete deadline to avoid
constant delays.

Network Model
 Network analysis is a technique of planning, schedulingand controlling of a large and
complex project comprising various activities.
 Network technique provides a rational approach to theplanning and controlling of
construction works.
 The application of such techniques is inevitable whenthere is a constraint on resources and a
need for higherproductivity.
The two commonly used network techniques are:
 Critical Path Method (CPM)
 Programme Evaluation and Review Technique (PERT)

Importance of network analysis

 To help projectformulation
 Identify the solution of problems in new horizon
 Provide adequate information and data
 Easy to prepare project schedule
 To maintain the balance between cost resourcesand time correction
 Accomplish solution of planning,schedulingandcontrol

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 Critical Path Method (CPM)

CPM was developed in 1956, in the USA, by a team of engineers working for Dupont
Corporation and Remington Rand. The method was successfully tried for the construction of
chemical plant in Louisville, USA.The method was also used with extraordinary success for
carrying out the repair of a unit in a chemical plant, resulting in nearly 30 % reduction in the
shut down time.

Use of CPM provides meaningful answers to such questions as:

 What will be the completion time of the project?

 If there is a delay in one activity, will the entire project be delayed?

 If so, by how much?

 What is the most economical way to speed the project?

 How to schedule material deliveries so as to have materials whenneeded but avoid costly

storage for long periods.

Advantages of CPM
 CPM is widely used in construction industry by a number of private and public
organizations.
 Application of CPM results in better decision – making and a saving in the overall cost
of the project.
 It shows different activities of large and complex project clearly.
 It shows clearly the interrelationships among various activities.
 It defines the time required for each activity.
 It will be easier for the new person in the orientation of the project.

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 Programme Evaluation and Review Technique (PERT)

 PERT was developed by engineers of the United States Navy whileworking on the Polaris
Missile Program during 1957/58.

 PERT has been in use for various research and development projects which are
non-repetitive in nature. Such projects are characterized by an extreme degree of
uncertainty both in the development of the system and in the time duration of various
activities.

 Three time estimates are used to determine the expected or average time ofeach activity.

 Optimistic time estimate - It is the shortest possible time for completing an activity if
everything proceeds as planned without any problem, i.e. the activity is performed under
ideal conditions.

 Most likely time estimate - It is the maximum for completing an activity under normal
conditions. In this case, conditions are not ideal and minor mishaps may occur.

 Pessimistic time estimate - It is the maximum time required to completean activity under
abnormal or extremely adverse conditions in which everything goes wrong. The estimate
however does not include catastrophes such as fires, earthquakes, floods etc.

Differences between CPM and PERT

CPM PERT
CPM is activity oriented PERT is event oriented
Single time estimates are used for the various The time estimates for activities are probabilistic. The
activities i.e. the time estimates are deterministic. following three types of time estimates are used for each
activity: Optimistic time (to), Pessimistic time (tp)
Likely time (tl)
CPM is used for repetitive types of projects where PERT is used for pioneering type of projects i.e. projects
the time estimates for various activities are either which are the first of their own kind and where prior data
known or can be determined fairly accurately. about activity times is not available.
CPM places emphasis upon optimizing allocation of PERT lays emphasis on reducing project completion time
resources and minimizing overall project cost. without cost constraint.

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 Gantt Chart
 Developed by Henery Gantt, chart design at the time of 1910-1915

 A gantt chart is a horizontal bar chart used in project management to visually represent a project
plan over time.

 This chart lists the tasks to be performed on the vertical axis, and time intervals on the
horizontal axis. The width of the horizontal bars in the graph shows the duration of each
activity.

 Gantt charts illustrate the start and finish dates of the terminal elements and summary
elements of a project. Terminal elements and summary elements constitute the work
breakdown structure of the project.

Modern Gantt charts also show the dependency (i.e., precedencenetwork) relationships between
activities. Gantt charts can be used to show current schedule status using percent-complete
shadings and a vertical "TODAY" line.

Gantt chart enables you to capture at a glance:

 How a project breaks down into tasks

 When each task will begin and end

 How long each task will take

 Who’s assigned to each task

 How tasks relate to and depend on each other

 When important meetings, approvals, or deadlines need to happen

 How work is progressing in a project

 The full project schedule from start to finish

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 Elements of a gantt chart
 Task list
 Timeline
 Dateline
 Bars
 Milestones
 Dependencies
 Progress
 Resource assigned
How CPM, PERT and Gantt chart are helpful in project planning

 Project planning- forecasting the future course of action in project. It is part of setting the
standard, identify the resources, proper and effective management of resources with time
and budget.
 Due to the special nature of activity, project planning uses the CPM, pert and Gantt chart
on the basis of its nature and size of project.
 Normal construction project – CPM

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 Special nature of project – PERT
 Gantt chart – activity and time frame

Helpful in project planning

 Arrangement of resources
 Settingthe timeline and dateline
 Management of resources
 Identify the dependency and inter relationship of one activity to another activity
 Determine the key activity of project
 Lesson to learn from the best practices
 Setting the standard of procedure
 Increase the production and productivity

Project scheduling
 A project schedule is a timetable that shows the start and end date of all projecttasks, how
the tasks relate to each other and usually which team members or other resources are
responsible for delivery.

 It is a dynamic document that is created during initial the planning stage.

 listing of activities, deliverables, and milestones within a project includes a planned start and
finish date, duration, and resources assigned to each activity.
Six Processes

 Plan schedule management

 Define project activities
 Sequence activities
 Estimate resources
 Estimate durations

Develop the project schedule

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 Project schedule should include
 Deliverables: A description of the outputs created by the workdone
 Task description: A description of the outcomes want to produce
 Task duration: The entire time taken to complete a task
 Task start and end date: The dates the task will start and finish
 Task dependencies: Relationships between tasks
 Project calendar: Defines the working and non-working times
 Work packages: A group of related tasks within a project
 Budgets: detailed estimate of all costs expected during the project
 Resource availability: What resources you have available, when they are available, and
any conditions of the availability
 Schedule risk analysis: A technique to connect the risk profile oftasks to the schedule

Types of Project Schedules

 Master project schedule: A master schedule tends to be a simplified list of tasks with a
timeline or project calendar.

 Milestone schedule or summary schedule: This type of schedule tracks major milestones
and key deliverables, but not every task required to complete the project.

 A detailed project schedule: This is the most thorough project schedule, as it identifies
and tracks every project activity. If you have a complex, large, or lengthy project, it’s
important to have a detailed project schedule to help track everything

Project Scheduling Benefits

 Assists with tracking, reporting andcommunicating progress

 Ensures everyone is on the same page withtasks, dependencies, and deadlines

 Highlights issues and concerns, such as a lack ofresources

 Identifies task relationships

 Monitors progress and identify issues early

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 ResourceLeveling
 Resource leveling is a technique in which start and finish dates are adjusted based on
resource constraints with the goal of balancing demand for resources with the available
supply.
 Resource leveling helps an organization to make use of the available resources to the
maximum. The idea behind resourceleveling is to reduce wastage of resources i.e., to stop
over- allocation of resources.
 As the main aim of resource leveling is to allocate resource efficiently, so that the project
can be completed in the given time period.
 Resource leveling is aimed at increasing efficiency when undertaking projects by utilizing
the resources available at hand.Proper resource leveling will not result in heavy expenditure.
 The project manager needs to take into account several factors and identify critical to
non-critical dependencies to avoid any last minute delays of the project deliverables.
Resourceleveling Techniques

 Critical path is a common type of technique used by projectmanagers when it comes to

resource leveling. The critical path represents for both the longest and shortest time
duration paths in the network diagram to complete the project.
 However, apart from the widely used critical path concept, project managers use fast
tracking and crashing if things get out of hand.
 Fast tracking: This performs critical path tasks. This buystime. The prominent feature of
this technique is that although the work is completed for the moment, possibility of
rework is higher.

 Crashing : This refers to assigning resources in addition toexisting resources to get work
done faster, associated withadditional cost such as labor, equipment, etc.

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 Uses of resource leveling
 To optimize resources
 To minimize deficits
 To prevent task overloading
 To ensure the quality of a project output

Systems of project control

 Professional function not broadly known as a set ofspecialized skills in its own right.
 delivering required profits to cost, time and performance.
 covers all phases of a project life cycle from initiating theproject through to closure, final
learning from experienceand systematic analysis of overall project performance.

Project control is the process of

 Setting the project standard
 Measure actual performance
 Find performance deviation (if comparison between
 Standard and actual performance)
 Take corrective action

A. Setting Project Standard

 Objective, scope and importance of work
 Project specification
 Work breakdown structure
 Job specification
 Work package and minimum expectations
 Major estimates and budget
 Master planning and schedule
 Determining productivity
 Financial forecasting and funding plans
 Quality statement

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B. Performance Observation
 On the side observation
 Off thesideobservation
 Productivitycost
 Audit report
 Minute book

C. Comparing actual performance againststandard

 Committedscheduleprogress
 Actual progress
 Measuringtools

D. Corrective Action
 Replacing/ preplanning
 Correction on planning
 Reorganization
 Reprogramming
 Revise allocating resources
 Improve MIS
 Revise working schedule
 Improve management policy and strategies

Elements of Project Controls

 Risk Management (includes identification &assessment)
 Planning and Scheduling
 Cost estimating and management
 Scope and Change Management
 Earned ValueManagement
 Document Control
 Supplier Performance
 Maintaining the project baseline
 Reporting
Importance of Project Control
Project Controls is a process that encompasses the resources, procedures, and tools for the
planning, monitoring, and controlling of all phases of the capital project lifecycle. This includes
estimating, cost and schedule management, risk management, change management, earned value
progressing, andforecasting.

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The importance of project control are:
 Engineering, estimating, and controllingcostsand assessingprojectvalue
 Developing, updating, and maintaining schedules
 Riskmanagement: developing strategies to avoid or minimize the impact of risks
 Earned value management and schedule
 Project documentation
 Diagnosing project cost and scheduling
 Quality assurance and oversight
 Integration of control elements and other components of the project
Cost control
Control Costs is the process of monitoring the status of the project to update the project costs
and managing changes to the cost baseline. Thekey benefit of this process is that it provides
the means to recognize variance from the plan in order to take corrective action and
minimize risk. The inputs, tools and techniques, and outputs of this process are depicted:

Operating Budget
 Detailed statement showing all the operational expenses tobe incurred and incomes to be
generated during a particular period of time
 The operating income such as revenue from operations and income by sale of the
by-product is considered for thepurpose of operating budget.

Operating expenses

 Prime cost: Direct material, direct labor and direct expenses

 Office and administrative expenses

 Selling and distribution expenses

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 Financial expenses
Preparation of operational budget

 Step 1: Make a revenue budget.

 Step 2: Budget for costs.
 Step 3: Budget for operating expenses.
 Step 4: Account for unexpected expenses.
 Step 5:Adjust budget.
 Step 6: Track budget vs actual.
Introduction to budgetary control
Actual results are compared with the budgeted results systemof controlling cost includes
preparation of Budgets coordinating the departments and establishingresponsibilities
comparing performance with budgeted and acting upon results to achieve the maximum
profitable.The process of budgetary control includes:

 Setting the standard budget

 Measuring actual budget expenditure
 Comparison of standard and actual budget
 Find out Causes of deviation
 Taking corrective action
How does budget help in financialplanning and control
Budget is the representation of quantitative aspect of plan, policies and program with
projection of income and expenditure. Budget helps to financial planning and controlling by:

For financial planning

 Arrangement of resources
 Forecasting the future events based on past and present situation
 Provide the road map on future
 Optimal use of financial resources

For financial controlling

 Make the comparison between the standard and actual aspect and then taking corrective

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 action for betterment on future.
 Budget helps to the optimal utilization of resources through plannedexpenditure and income.
So it is the basis of financial planning and controlling.

Planningof Quality, time and costdimensions

Time: A project's activities can either take shorter or longer amount of time to complete.
Completion of tasks depends on a number of factors such as the number of people working on
the project, experience, skills, etc. Time is a crucial factor which is uncontrollable. On the other
hand, failure to meet the deadlines in a projectcan create adverse effects. Most often, the main
reason for organizations to fail in terms of time is due to lack of resources.

Cost: It's imperative for both the project manager and the organization to have an estimated cost
when undertaking a project. Budgets will ensure that project is developed or implemented below a
certain cost. Sometimes, project managers haveto allocate additional resources in order to meet the
deadlines with a penalty of additional project costs.

Scope: Scope looks at the outcome of the project undertaken. This consists of a list of
deliverables, which need to be addressed by the project team. A successful project manager will
know to manage both the scope of the project and any changein scope which impacts time and
cost.
Quality: Quality is not a part of the project management triangle, but it is the ultimate objective of
every delivery. Hence, the project management triangle represents implies quality. Many project
managers are under the notion that 'highquality comes with high cost', which to some extent is true.
By using low quality resources to accomplish project deadlines does not ensure success of the
overall project.
Like with the scope, quality will also be an important deliverable for the project.
 Trade off between time, cost and quality

 Inter related and interdependent to each other

 In the absence of one thing then superiorofanother things
 For example,when cost reduces then decreasingthe quality
 Time increase then enhance the quality that affectthe increase in cost
 The organization should be focus to optimal use of resources by optimal
aspect of time, cost andquality.

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 Negotiating for Materials, Supplies and Services
 It is the most important part of the project management. The success of project depends on
the uses of materials and services in efficient and effective manner.
 It is focus to smooth and continuous supply of the materials and serviceon time with pre
specified cost and quality.
 Most business owners would view a good deal as one that meets all their requirements. But
there are many other factors to consider, such as whether you want to do business with a
particular supplier again

Setting objectives for purchase negotiations. These might include:

 price
 value for money
 delivery
 payment terms
 after-sales service and maintenance arrangements
 quality
 lifetime costs of a product or service
 whether or not the product or service is essential to your business

Supply Management

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 Importance of negotiations
 To provide a fair and reasonable price of commoditiesand services.
 Help to Time and quality management
 To Successful operation of project
 To ensure that the contract is performed on time.
 To remove obstacles may be create in future.
 To exercise control over the manner in which the contract is performed.
 To develop cordial relations with competent suppliers.
 To help project procurement planning

Project monitoring and evaluation

 Monitoring and Evaluation (M&E) is used to assess the performance of projects. Its
goal is to improve current and future management of outputs,outcomes and impact.
 Employee training – better service – customer satisfaction – attracting new customer and
retaining existing customer
 Improve seeds – increase in production – increase in productivity -increase in living
standard of farmer
 Monitoring is a continuous assessment of programmes based on earlydetailed information
on the progress or delay of the ongoing assessedactivities.
 An evaluation is an examination concerning the relevance, effectiveness, efficiency and
impact of activities in the light of specified objectives.
There are various techniques to M&E of project. They are:
 Logical framework
 Cost benefit analysis
 Capital budgeting
 Sensitivity analysis
Project Monitoring
Monitoring is the systematic and routine collection of information from projects and
programme for four main purposes:
 Tolearn from experiences to improve practices andactivities in the future;
 To have internal and external accountability of theresources used and the results obtained;
 To take informed decisions on the future of theinitiative
 To promote empowerment of beneficiaries of theinitiative

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 Project Evaluation
 Evaluations appraise dataand information that informstrategic decisions, thus improving
the project or programme in the future.
 Evaluation of project through the differentdimensions by
 Relevance
 Effectiveness
 Efficiency
 Impact
 Sustainability

 Economy
 Suitability

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Need ofcost classification and analysisin project management
Project – cost, time and quality fixed any development activity is project
Project management – mange the resource effectively and efficiently for smooth operation and
functioning of project.
Cost classification and analysis – segregation of cost on the basis of nature, behavior, cost
center, attributes etc.
Needs:
 Successful operation of project
 Resourcemanagement
 Does not misuse the money
 Avoid the problem of over cost and under cost
 Find out of shut down point
 Settingthe profit target
 Conduct the project on estimated cost
Bringing the project to a successful conclusion

 Project planning: CPM, PERT, gantt chart, resource leveling, project scheduling,
resourceplanning
 Project implementation – negotiation of material and service from suppliers, project
control, preparing the operating budget andcost control, quality assurance
 Effective monitoring and evaluation

Concept of FIRR and EIRR

 Accounting cost = explicit cost

 Economic cost = explicit + implicit cost, implicit cost consider the opportunity cost
 Economic cost is equal or grater than accounting cost.
 Profit = Revenue – Cost
 Accounting profit is grater or equal to economical profit.
 The economic and financial analysis in project appraisal evaluates the priority of a project
in, and its effect on, the overall economy of the country.
In this analysis the economist focuseson three basic questions:
 Is the project in a sector which deserves priority with regard to allocation of scarce
resources?
 Within the sector, how will the project contribute to the sector's development?

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 Will the project generate sufficient economic benefits to the country to justify the use of
scarce resources (capital, management and labor, material inputs, utilities ?

Note: All three questions require a thorough sectorial and marketing analysis and a
quantification of economic costs and benefits to assess the project's impact on the country's
economy and sector.
Concept of EIRR

 The generally accepted quantitative measure of the economic attractivenessof a project is

the Economic Internal Rate of Return (EIRR), which is the discount rate at which the
discounted economic benefits of the project are equal to the costs. If the EIRR of a
project is equal to, or greater than the opportunity cost of capital in the country, the
project is considered acceptable.

 To test the economic viability, the EIRR was calculated based on the incremental cost and
benefit streams associated with each project. The economic analysis evaluated the
economic performance of the proposed components by comparing the with-project and
without project scenarios, i.e. the economic value of the supply of electricity that the
components will provide compared with the existing patterns of energy use in non
electrifiedareas.

 IRR is the point where PV of future benefits is equal to initial cash outlays.EIRR is equal
points where PV of future benefits is equal to economic costof cash outflows. Economic
cost involve the implicit and explicit cost.

 EIRR > Cost of capital – project should be accepted.

Concept of FIRR
 The FIRR is an indicator to measure the financial return on investment of an income
generationproject and is used to make the investment decision.
 The FIRR is obtained by equating the present value of investment costs ( as cash
out-flows ) and the present value of net incomes ( as cash in-flows )
 The FIRR represents the level of financial return on the investment and it is expected cash
in-flows and projecting cash out flows from an income generating project the investor’s
concern.
 The internal rate of return (IRR) is a metric used in financial analysis to estimate the
profitability of potential investments. IRR is a discount rate that makes the net present
value (NPV) of all cash flows equal to zero in a discounted cash flow analysis.

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 This is defined as the rate at which the net present value of the investment is zero. The
discounted cash inflow is equal to the discounted cash outflow. This method also
considers time value of money. It tries to arrive to a rate of interest at which funds
invested in the project could be repaidout of the cash inflows. However, computation of
IRR is a tedious task.
 It is called internal rate because it depends solely on the outlay and proceeds associated
with the project and not any rate determined outside the investment.

Difference between EIRR and FIRR

EIRR FIRR
It is the rate where economic value is equal to It is the rate where cash outflow is equal to cash
economic cost. inflow.
It analyzed the economic aspect of the project. It analyzes the financial aspect of the project.

It considers the implicit andexplicit cost both.
The relevancy of EIRR isassessment of project on
economic point of view.
If EIRR > cost of capital, the project should be
accepted.
EIRR is equal or greater than FIRR
It consider only explicitcost.(accounting cost)
The relevancy of FIRR is assessment of project on
financial point of view.
If FIRR > Cost of capital, the project should be
accepted.
FIRR is less or equal to EIRR

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 Inject pdf page no 60 here in this blank page

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 Todayamount of 1000 = more than1000 afterthe year
 Let market interestrate is 10%
 Afteryear the value of 1000 = 1000(1+0.1) = 1100
 After2 year = 1100(1+0.1) = 1210
 After3 year = 1210(1+0.1) = 1322

 IRR: PV of cash outflow = PV of cash inflow

 Initial investment (net cash outlay) = projectedincome afterthe operation

Year 1 2 3 4 5
Cash Flow 15000 20000 25000 30000 45000
df@10%

Business strategic planning

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 What is Marketing?

 Marketing deals with identifying and meeting human and social needs.
 It is managing profitable customer relationships.
 By attracting new customers by promising superior value.
 By keeping and growing current customers by delivering satisfaction.

Old sense - telling and selling

New sense - satisfying customer needs

 The systematic planning, implementation and control of a mix of business activities

intended to bring together buyers and sellers for the mutually advantageous
exchange or transfer of products; Dictionary of Marketing

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Philip Kotler- principle of marketing “Marketing is a “value creating” and “value

delivering” process.”

 Marketing is a process by which companies create value for customers(good

products and services which satisfies the customer) and build strong customer
relationships(happy and positive customer) to capture value from customers in return
(brand loyalty & money)
 Good marketing is important for the success of every organization.

The Marketing Process

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 Understanding the Marketplace and Customer Needs
1. Customer Needs, Wants, and Demands
Customer Needs:
 States of deprivation
 Physical—food, clothing, warmth, safety
 Social—belonging and affection
 Individual—knowledge and self-expression
Wants:
 Form that needs take as they are shaped by culture and individual personality.
Demands:
 Wants backed by buying power
2. Market offerings(products, services and offerings)
3. CustomerValue and satisfaction
4. Exchanges and relationships
5. Markets

Designing A Customer-Driven Marketing Strategy

 Focus areas for designing a marketing strategy:
 Selecting customers to serve -definingthe target market
 Deciding how to serve customers in the best way – choosing a value proposition5
alternative concepts for designing a customer-driven marketing strategy are:

 Production concept: Consumers will favor products that are available and highlyaffordable.
Management should focus on improving production and distribution efficiency.
 Product concept: Consumers will favor products that offer the most quality,performance,
and innovative features. Focus on making continuous product improvements.
 Selling concept: Consumers will not buy enough of the firm’s products unless itundertakes a
large-scale selling and promotion effort.
 Marketing concept: Organizational goals are achieved by knowing the targetmarkets’ needs
and wants and delivering the desired satisfactions better than competitors do.
 Societal concept: Marketing strategy should deliver value to customers in such away that
improves both customers as wells as society’s well being and long-run interests.

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 3. Constructing an integrated marketing plan that delivers superior value
 The company’s marketing strategy outlines which customers the company will serve and how
it will create value. Then the marketer develops integrated marketing plans that will the
intended value totarget customers.
 It consists of the firm’s marketing mix (4Ps), the set of marketing tools the firm uses to
implement its marketing strategy.
 Product – This means the offering that is made by the company tothe market in the form of
the goods and services.
 Price – This refers to that one which the customer pays for buying aspecific product form
any company.
 Place – This refers to the efforts that the company makes to make sure that the products are
available to the customers whenever theywant to buy it.
 Promotion – This refers to the effort that the company puts in to make sure for the fact that
the sales of the products are carried outbetter provisions to their customers.

4. Build profitable relationship and createcustomer delight

 Customer relationship management.
 Asimple enough concept that focuses on just that;managing customer relationships.
 Customer delight is surprising a customer by exceeding their expectations and thus
creatinga positive emotional reaction.
 The overall process of building and maintainingprofitable customer relationships by
delivering superiorcustomer value and satisfaction.
 It deals with all aspects of acquiring, keeping and growing customers.

Product Planning
 Product Planning is the ongoing process of identifying and articulating market
requirements that define a product's feature set. It serves as the basis for
decision-making about price, distribution and promotion.

 Product planning is also the means by which companies and businesses can respond
to long-term challenges within the business environment often achieved by
managing the product throughout its life cycle using various marketing strategies,
including product extensions or improvements, increased distribution, price changes
and promotions.

 It involves understanding the needs and wants of core customer groups so

products can target key customer desires

 Product planning is the act of managing and supervising the search, screening,
development and commercialization of new products; the modification of existing
lines; and the discontinuance of marginal orunprofitableitems.

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 Product Planning Process
 To meet the customer needs
 To increase the sales
 To optimallyutilize resources
 To analyze the company’s strengths and weaknesses
 Survival of the firm
 Commercial
 Achieving the goals of marketing management
 To planeffectively
 To conform to timeschedules

Marketing Strategies in the Various Stages of Product Life Cycle

Product Life-Cycle Strategies

Introduction: Slow sales growth and profits are nonexistent
Growth: Rapid market acceptance and increasing profits.
Maturity : Slowdown in sales growth and profits level off ordecline
Decline : Sales fall off and profits drop

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 Marketing Strategies in the Various Stages of Product Life Cycle

Characteristics Introduction Growth Maturity Decline

Sales Low Sales Rapidly rising sales Peak sales Declining sales
Costs High cost per Average cost per Low cost per customer Low cost per
customer customer customer
Profits Negative Rising profits High profits Declining profit
Customers Innovators Early adopters Middle majority Laggards
Competitors Few Growing number Stable number beginning Declining
to decline
Marketing Create product Maximize market share Maximize profit while Reduce expenditure
Objectives awareness and trial defending market share and milk the brand

Marketing Strategies in the Various Stages of Product Life Cycle

Strategies Introduction Growth Maturity Decline

Product Offer a basic Offer product Diversify brands Phase out weakmodels
product extensions, service, and items
warranty
Price Charge cost-plus Price to penetrate Price to match or Cut price
market best competitors’
Distribution Build selective Build intensive Build more intensive Go selective: phase out
distribution distribution unprofitable outlets

Advertising Build product Build awareness Stress brand Reduce to level

awareness among and interest in the differences and needed to retain
early adopters mass market benefits hard-core loyal
anddealers
Sales Use heavy sales Reduce to take Increase to Reduce to minimal
Promotion promotion to advantage of heavy encourage brand level
enticetrial consumer demand switching

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 Marketing Strategies in the Various Stages of Product Life Cycle

Introduction Stage
 Rapid skimming-launching the product at highprice and high promotion level
 Slow skimming-launching the product at highprice and low promotional level
 Rapid penetration-launching the product at lowprice with significant promotion
 Slow penetration- launching the product at lowprice and minimal promotion

Growth Stage
 Improving product quality and adding new productfeatures and improved styling
 Adding new models and flanker products
 Entering new market segment
 Increasing distribution coverage and entering new distribution
 Shifting from product-awareness advertising to product-preference advertising;
 Lowering prices to attract the next layer of price-sensitive buyers.

Maturity Stage
 Market modification
 Product modification
 Marketing-mix modification

Decline Stage
 Increasing the firm’s investment(to dominate the market or strengthen its competitive
position)
 Maintaining the firm’s investment level until the uncertainties about the industry are
resolved
 Decreasing the firm’s investment level selectively, by dropping unprofitable customer groups,
while simultaneously strengthening the firm’s investment inlucrative niches
 Harvesting (“milking”) the firm’s investment to recovercash quickly
 Divesting the business quickly by deposing of its assetsas advantageously as possible.

Developing the marketing program

 Know Your Market: market segmentation, market positioning, target market
 Perform Strategic Analysis: Porter’s Five Forces Analysis, PESTEL analysis, sensitivity
analysis, network marketing analysis
 Set Marketing Objectives: marketing plan, desire outcome
 Generate Strategies and Tactics for Achieving Objectives
 Evaluate Strategies: swot analysis, return on investment, availability of resources
 Implement: brand positioning, marketing strategies in various stage of product cycle,
new product development,
 Track, Analyze, and Optimize:

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