Management Management, by definition, is a function of planning, organising,
coordinating, directing and controlling. Any managerial system, at any
managerial level, is characterised in terms of these general functions.
Management is revealed in a variety of specific activities. Marketing management refers to a broad concept covering organisation of production and
sales of products, which is based on consumer requirements research. All
companies must look beyond their present situation and develop a long-term strategy to meet changing conditions in their industry.
Marketing management, therefore, consists of evaluating market
opportunities, selecting markets, developingmarket strategies, planning
marketing tactics and controlling marketing results. Strategic planning includes
defining the company’s long-term as well as specific objectives, such as sales volume, market share, profitabilityand innovation, and deciding on financial,
material and other resources necessary to achieve those objectives. In problems of market selecting and product planning one of the key concepts is that of the Product Life Cycle. Those products pass through various
stages between life and death (introduction – growth – maturity – decline), that
is hard to deny. Equally accepted is understanding that a company should have a
mix of products with representation in each of these stages. Companies can
make far more effective marketing decisions if they take time to find out where
each of their products stands in its life cycle.
However, the concept of the product life cycle seems frequently forgotten
in marketing planning, which leads to wrong decision-making. This may well be
seen in the following story. A supplier of some light industrial equipment felt
that the decline in the sales of his major product was due to the fact that it was
not receiving the sales support it deserved. In order to give extra sales support to
this problem case a special advertising campaign was run. This required cutting
into marketing budgets of several promising products those were still in their
“young” growth phase.
In the following extract, members of the Board of a company are
discussing the company strategy.
Since our main objective is to gain market share, I believe we must first
of all reduce our prices.
However, if we reduce prices, we can slowly increase production, which
will eventually enable us to cut unit costs.
That is really a long-term prospect. Unit costs can only come down if we
invest in new plant and machinery. I personally think we should go for higher
profitability. If we upgrade the product, we can change higher prices and get
larger profits. Look, the market is already very competitive. If we increase
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prices, whatever the quality, the market will immediately respond and sales will
drop rapidly. But if we reduce costs in manufacturing, that will put us in a
strong position to adapt to the market.