All about GE-McKinsey Matrix

The GE-McKinsey Matrix was developed in response to the shortcomings of the BCG Matrix, which does not account for a number of factors. It was originally used for a visual representation of GE’s 150 business units to determine which business units were doing well, which needed support, and which should be discontinued. However, the matrix can also be applied to a product portfolio. It evaluates each product on two parameters, market attractiveness and product position, which are the labels of the axes on the matrix.

Market attractiveness and product position are determined by a weighted score for all the relevant factors that contribute to each. There are three levels for each parameter—high, medium, and low—giving the matrix nine boxes in total. The placement of each product on the matrix determines the strategy to be used for the product. A-6 shows the GE-McKinsey Matrix.

Products that fall above the diagonal line are high performers, or are those with potential for either growth or cash flow. These are the products on which a company should focus. Products that fall below the diagonal line are those that typically drain a company’s resources, with small returns and little potential for growth. These products should be analyzed thoroughly to determine which can benefit from selective investment in order to move them above the diagonal, and which need to be discontinued.

The factors used to determine market attractiveness are market growth, market size, opportunity to differentiate product and/or services from others in the market, profitability, intensity of competition, risk to returns, pricing trends, entry barriers, demand variability, distribution structure, and technological developments. The factors involved in determining product position are strength of assets and competencies, customer loyalty, cost position relative to competitors, distribution strength, record of technological or other innovation, relative brand strength, market share, and access to financial and other investment resources.

Advantages and disadvantages of GE-McKinsey Matrix:

Advantages:

• This matrix takes into account a number of factors that the BCG Matrix does not.
• It is visually easy to understand and provides more options to place a product as compared to the BCG Matrix, due to the inclusion of the “low” level on both axes.
• It is conceptually similar to the BCG Matrix, so anyone who is familiar with the BCG Matrix can easily use the GE-McKinsey Matrix.

Disadvantages:

• This matrix does not take into account the synergies between various products. Discontinuing one might adversely impact another.
• The scoring of the various factors using the weights is subjective and leaves the tool open to bias.
• It does not help in allocating the relative investments for each product.

You are So Annoying! Not You, SMstudy, I am on the Phone

It seems that there are some dangers with “going native.”

The U.S. Federal Trade Commission (FTC) has increased its oversight of native advertising online and on smartphones. The most recent company running afoul of this intensified supervision is Lord & Taylor, who just settled with the governmental body over charges that “it deceived consumers through paid article in an online fashion magazine and paid Instagram posts,” according to the FTC.

Part of Lord & Taylor’s problem were efforts to produce and publish native advertising. “Native advertising is a form of online advertising that blends in with its surroundings,” according to Digital Marketing, book two of the SMstudy® Guide. The FTC’s charges identified activities among which were “a seemingly objective article in the online publication Nylon and a NylonInstagram post, without disclosing that the posts actually were paid promotions for the company’s 2015 Design Lab clothing collection.” Here was an attempt to blend in with the surrounding content that seems to have blended in all too well.

“While native advertising can be perceived as annoying, it can also be an effective tool if properly used,” asserts the SMstudy®Guide, and the FTC is addressing both points: annoying and proper. What is the proper use of native advertising? The FTC’s actions against Lord & Taylor has resulted in an agreement between the two entities that is open to comment until April 14, 2016. This means the public can become part of defining what is proper.

While that discussion is going on, another facet of technology-driven changes in advertising will definitely become part of the dialogue: using the smartphone. “Unlike traditional marketing in public spaces–such as billboards, magazines, and television–the smartphone is a highly personal space for the consumer and requires an entirely different engagement model,” says Christina Desmarais in an opinion piece for Inc. magazine online.

With personal engagement comes personal offense. The reaction of the consumer becomes less “Do you really think that little of your customers?” and more “What type of girl do you think I am!”

Those who wish to use native advertising will need to develop a keen sensibility as marketing becomes more personal and the natives become more restless.

 

For more interesting information and articles about Sales and Marketing visit SMstudy.com.

“Lord & Taylor Settles FTC Charges It Deceived Consumers Through Paid Article in an Online Fashion Magazine and Paid Instagram Posts by 50 ‘Fashion Influencers’” (3/15/16) Federal Trade Commission. Retrieved on 3/24/16 from https://www.ftc.gov/news-events/press-releases/2016/03/lord-taylor-settles-ftc-charges-it-deceived-consumers-through

An overview of the SMstudy® Guide is available at http://www.smstudy.com/SMBOKGuide and a free course on Digital Marketing is available at http://www.smstudy.com/Certification/Digital-Marketing-Associate.

The agreement will be subject to public comment for 30 days, beginning today and continuing through April 14, 2016, after which the Commission will decide whether to make the proposed consent order final. Interested parties can submit comments electronically by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section.

Desmarais, Christina. (2/29/2016) “Why Everything You Know about Marketing is Obsolete” Inc. Retrieved on 3/24/16 from http://www.inc.com/christina-desmarais/why-everything-you-know-about-marketing-is-obsolete.html

Tools for Exploring Opportunities and Threats

Before entering a new market, targeting a particular segment, or introducing a new product, it is necessary for any organization to explore opportunities and threats to decide which strategy to follow. The external factors that help a company achieve its goals are considered opportunities, while those that hinder a company`s efforts are considered threats.

 

The external environments that can affect the growth of a company make up two groups: the macro-environment and the micro-environment. A company has zero or little control over the macro-environmental factors. These can be the laws of the country of operation, environmental factors such as weather and climate, political situations, and so on. On the other hand, micro-environmental factors can be controlled by the company; these are the factors that have a more direct impact on the operations and success of the business.

 

Porter`s Five Forces for Industry Attractiveness, Market Analysis, Marketing Research, and PESTEL Analysis are some of the tools that organizations can use to explore opportunities and threats.

• Porter`s Five Forces for industry attractiveness helps a company decide whether or not to enter an industry. If it already has a presence in a particular industry, then using this model enables a company to devise strategies to achieve and maintain profitability. The five forces are the Threat of New Entrants, Threat of Substitutes, Bargaining Power of Customers, Bargaining Power of Suppliers, and Competitive Rivalry.
• The purpose of performing a market analysis is to understand the attractiveness of a market, identify patterns, and predict future events. David Aaker outlined the following dimensions of a market analysis: Market Size, Market Trends, Market Growth Rate and Profitability, Industry Cost Structure, Distribution Channels, and Key Success Factors.
• Marketing research is conducted when the available information is not sufficient for understanding the external factors that can impact a company. Interviews, group discussions, and survey questionnaires are the primary ways to collect information for any research.
• PESTEL Analysis is used to analyze Political, Economic, Social, Technological, Environmental, and Legal factors. It is an effective tool to measure the overall business environment of a market.

Analyzing opportunities and threats that are native to a particular market is an obligatory task for every organization. Success comes from strategies that take advantage of important opportunities and avert threats.

Levels of Sales and Marketing Strategy

A company enjoying a good reign must possess an assortment of umbrellas.

Beneath the wide umbrella of Corporate Strategy exists a smaller umbrella known as Corporate Marketing Strategy, which covers Business Unit and Geographic Strategies. Those, in turn, are further divided into particular Product or Brand Strategies for each product or brand.

This figure illustrates the relationship between the various strategies:

The Corporate Marketing Strategy is defined at a corporate level and outlines the overall marketing goals for the company. These general marketing goals drive more specific marketing strategies for each of the company’s business units or geographies. Each business unit or geography defines its own goals, which become relevant inputs for each area’s particular product or brand marketing strategies. Each product or brand marketing strategy defines sales and marketing objectives for each product or brand, which drive specific tactics that align with and often rely on other Marketing Aspects identified in theSMstudy® Guide (Marketing Research, Digital Marketing, Corporate Sales, Branding and Advertising and Retail Marketing).

Here is an example of Levels of Sales and Marketing Strategy:

Land Development Company

• Corporate Level—A land development company wants to grow to be among the top three land development companies in its state.
• Business Unit/Geographic Level—The land development company operates two business units: residential and retail. A goal of the residential business unit is to grow that unit by 12 percent within one year; a goal of the retail business unit is to grow that unit by 10 percent within the same time period.
• Product/Brand Level—Within the residential business unit, the company sells three products: condominiums, town homes and singles. The singles Product Marketing Strategy identifies an objective to grow the sale of single units by 15 percent. To achieve this objective, the teams responsible for building strategy within the various Aspects of Marketing establish specific objectives that are designed to support the overall product objectives and to align with one another.
• Marketing Aspect Level­—The company’s greatest strength is the fact that it is an award-winning leader in green sustainable development. Therefore, the branding and advertising team builds specific tactics that incorporate an increase in reach of its messaging around sustainable development. One specific tactic is to leverage billboard and newspaper advertising with the objective of increasing reach of green messaging by 30 percent. The digital marketing team incorporates tactics to support the objective of increasing the green sustainable development messaging, stressing the importance of this trend and positioning the company as a leader in the industry through the use of various social media channels. One specific tactic is to leverage blogs and online public relations with the objective of increasing the company’s rankings in online searches related to keywords such as “sustainable development.” The tactics of each Marketing Aspect are aimed at achieving their own specific objectives; however, both support the overall singles Product Strategy objective of achieving a 15 percent growth in sales for this product line.

When seeking sustained success, a company should equip and adhere to a comprehensive Corporate Marketing Strategy. That umbrella has you covered.

Identifying Competition: An Essential Element of Marketing

All industries are growing at a rapid pace with emergence of more and more companies. For a company to exist in this race, it needs to mark its presence and grow at the same time. Knowing competition for a company and accordingly positioning the products is something businesses are concerned with today.

Listing Competitors

To get a clear idea of the differentiated positioning the company needs to identify its potential competitors. A thorough analysis of the competitive products, their features, strengths and operational excellence would give the company a clear picture of the market operations and the trends. Understanding the value proposition provide companies a sustainable competitive advantage which can be utilized in attracting customers from the competitors.

In the process of identifying competitors the company should consider the product, substitutes, technological challenges, new entrants, old established brands. Future competitor analysis also plays an important role in creating a brand presence in the market for a product.

 

How to Identify Competition?

With the help of senior management direction and insights the company can have a better picture of the competition in the market existing for its products and services. Also from the market research reports and information published by the competitors help in identifying the details of the competitors and their ways of operation.

In order to understand the competitor in the market for a particular product the several analysis are to be carried out such as future competitive analysis, marketing research and meetings and discussions with industry leaders and experts. Understanding the emerging technologies, new entrants and actively scanning the industry gives a complete idea of the competitors and their structure and functioning. A SWOT analysis of the available list of competitors also gives a fair idea of the trends the competitors following and can help in improvising the products of the company and expand the customer base.

Every business that we see today is part of one or the either industry. With the moving pace and increasing consumer demand the business are expanding. Competition is something which has always been there and shall exist till ever. To find a way out and present the product in a better way in comparison to the competitor’s product is every business’s requirement and they should be focused towards it. Identifying competition empowers the business and gives scope for improvement, which enables it to prosper.

Doritos #CrashTheSuperBowl

A 30-second spot during the Super Bowl can cost upwards of four million dollars, so it better pack a punch. It appears that the Frito-Lay’s marketing team agrees. For the last ten years, Doritos, a Frito-Lay brand, has asked people from around the world to submit a commercial to the “Crash the Super Bowl” contest. The winner attends the game, receives one million dollars, and lands a “dream job” at Universal Pictures.

This year marks the 11th and final competition and there are three finalists in the running. The first commercial, “Ultrasound” isn’t for the faint of heart, but is hilarious. “Swipe for Doritos” is a play on a popular dating app, Tinder, and “Doritos Dogs” is very cute and very clever. Who doesn’t love dogs? The three commercials are quite different, but they all have one thing in common, you will most likely be sporting a six-pack after viewing them from laughing so hard.

Go to https://crashthesuperbowl.doritos.com/finalists/ to vote for this year’s winner.

With the use of the hashtag, Doritos is able to access all platforms of social media for maximum reach, relationship, and reputation. According to Digital Marketing, book two in the SMstudy Guide®, “Social media channels provide a good marketing medium for businesses to run offers and promotions to engage audiences and reach desired objectives. These offers and promotions are typically valid for a fixed time frame, require audiences to participate by discussing their experiences while engaging with the brand and offer attractive rewards to audiences that engage with the brand.”

The three finalists were announced on January 4th and now people will have until February 7th, the day of the Super Bowl, to see if their favorite won.

The Doritos #CrashTheSuperBowl was the first of its kind. It paved the way for companies such as Chevrolet and CareerBuilder, who also pursued online commercial competitions, but Doritos was the only campaign that succeeded. Last year’s fan favorite had more than seven million views!

A study done in 2015 by Medill IMC’s Spiegel Digital and Database Research Center showed that people who participated in the contest were more likely to buy the product and thanks to these participants, sales increased by 42 percent in the first week (post events) and continued to increase by 35 percent by the fourth week.

With the success that has been generated over the years with this campaign, it will be exciting to see what Frito-Lay comes up with next.

For more interesting articles about Sales and Marketing, visit – http://www.SMstudy.com/articles

How to Beef up your Resume with SMstudy

The national unemployment rate is 5 percent, but this number does not include employed people still looking for THE job. With that being said, what can you do to get a leg up on the competition? And let’s be honest, competition is what it’s all about, right? Each person that applies for THE job (the one you want) should be considered your rival. So, how do you stand out with a potential employer and knock your competition back on their heels?

The answer is simple. Certifications. If you are applying for a position in sales or marketing, a certification from SMstudy will put you one step in front of your peers. A certification shows prospective employers that you are passionate about sales and marketing and an added perk- the training will give you the confidence you need to ace that interview.

Adding certifications to your resume also demonstrates that you are able to work hard towards a goal and finish it successfully, something employers consider carefully. If you are able to set your sights on a goal, work towards it, and achieve it. You will ultimately master a new body of knowledge. Or in the case of SMstudy, a Sales and Marketing Body of Knowledge.

As stated at SMstudy.com, “It is important for us to note that the fact that we are in the twenty-first century does not make all the earlier avenues of Sales and Marketing obsolete.”

Technology has changed the way people reach, interpret, and react to information. Therefore, companies are searching for new ways to broaden the scope of sales and marketing thanks to the ability to reach their consumers through the Internet. Given these new forms of buyer-seller options many professionals believe that the information age, brought upon by technological advances, has redefined the roles of sales and marketing.

According to Mike Templeman at Forbes, “Marketing technology is growing at a rapid rate. And that growth is causing it to bridge the gap between sales and marketing by understanding the areas of the funnel that used to be the domain of the sales team. For instance, a remarketing campaign can continue to market to a potential customer even after the sales person has initiated contact. Similarly, marketing automation is also a technology that continues to touch the client, through email campaigns, even after the sales team has made its claim.”

With this information in mind, why wouldn’t you want to earn a certification in sales and marketing with SMstudy? I can’t think of one.

For more information and resources visit http://www.SMstudy.com

In a League of Their Own: The Snapchat Story

When creating an online presence, one of a marketing team’s initial steps is to explore the various digital marketing channels available that will maximize the reach of their products or services. Given the nature of the online world, which is constantly evolving, new channels are developing with greater frequency, and audiences are continuously exploring new sources of online content. Knowing this, marketers must continually assess digital marketing channels for their effectiveness.

To identify the most effective marketing channels for an organization’s products or services, marketers spend a considerable amount of time identifying and understanding the dynamics of all available digital marketing channels and evaluating these channels relative to their company’s overall organizational goals and objectives.

When first moving into the digital marketing realm, it is common for a company to veer towards Facebook and Twitter, considering their global reach. And if so many companies before them have done the same, why not follow the crowd, right? Wrong!

Snapchat is the place to be. Seriously. And here’s why…

According to Adage, “Snapchat entered into a niche that’s so forward because it’s catered towards a generation even its creators didn’t understand. It’s not that the user interface is complicated, it’s that the user interface doesn’t even exist. It makes assumptions about its users preemptively and doesn’t care if it’s shutting out an entire generation.”

The niche generation Adage refers to is the Millennials. If Millennials are your target market, which by the way, they should be considering a recent piece by Entrepreneur stating that 89 percent of Millennials use social media, then exploring Snapchat should definitely be considered.

In the initial stages of researching digital marketing channels, a company’s marketing team identifies target customers in the digital space to understand their likes, dislikes, perceptions of the company’s brand, its major competitors, their digital needs related to the brand, and how the brand may fulfill these needs. All of this information, along with Documented updates of current trends in digital marketing, should be recorded for future reference. But, how does this data lead to a successful ad campaign directed at a target audience? Exploring the many social media platforms that can engage a target audience is a good start.

Snapchat offers brands the opportunity to create their own account allowing them to be followed by their customers, but the app has also paved the way for Snapchat influencers to have great sway over their followers. Influencers, in general, are people that have extremely large social media followings and are paid by companies to advertise their brand. The use of influencers has proven to be a smart move, since, as noted by Jay Baer, president of Convince & Covert “only 33 percent of people in America actually follow brands”

In the end it’s all about reach. The more people you can reach in your target audience the better, so it is important for a company’s digital marketing team to explore all options. Maybe even if that means stepping out of their comfort zone and focus on a new avenue for social media marketing. Based on the low level of online brand loyalty, companies like Snapchat have thought outside the box to offer innovative ways to reach target audiences without a company having to push to gain followers.

For more interesting articles visit SMstudy.com/articles

Sources:

“To Big Brands, From a Millennial: Snapchat Filters Are Where It’s At,” Jillian Hausmann, March, 28 2016. http://adage.com/article/digitalnext/steps-brands-sponsor-snapchat-filters/303288/

“The Real Generation Gap: How Adults and Teens Use Social Media Differently,” Kathleen Davis, August 26, 2013. https://www.entrepreneur.com/article/228029

“11 Shocking New Social Media Statistics in America,” Jay Baer. http://www.convinceandconvert.com/social-media-research/11-shocking-new-social-media-statistics-in-america/

Its All in Your Head: A Brief Introduction to Psychological Pricing

Have you ever tried to sell something quickly (desperately) by lowering the price well below market value only to discover no one will bite? If so, your frustration is not unique. You’ve just experienced the quirky, seemingly-counterintuitive nature of the human consumer.

It’s long been known that pricing can make or break your sales, even when the value and quality of the product or service hasn’t changed. To the consumer, it matters not that you’re offering them the deal of a lifetime. They’ve already decided that the price is too low and, therefore, something is amiss. Of course, it’s all in their head, but the effects of pricing have real-world outcomes, such as a loss of sales because the set price doesn’t seem to match the perceived value. This is just one of the reasons why it’s wise to know a few basics of psychological pricing and how it contributes to a product’s perception and, in turn, sales.

Psychological pricing is one component of a much broader and more complex pricing strategy for a product or service. TheSMstudy® Guide defines a product’s or service’s pricing strategy as “focused on creating a sustainable brand perception and sustainable profitability for the product or brand, while growing and maintaining a healthy market share.”

All aspects of a pricing strategy are important to the success of a product, but psychological pricing can have a very significant influence on how consumers perceive a product’s value. In a recent post titled “Focus on the Why,” we noted the critical function emotional responses play in consumer buying decisions. Why a product was created or why a company does what it does speaks directly to consumers’ emotions and creates a strong call to action as well as brand loyalty.  According to Shelley Frost of Demand Media, psychological pricing works on the same level, by tapping into a customer’s emotional responses to promote sales.

“Instead of appealing to the rational side of the consumer, this strategy appeals to their emotional side. The pricing may aim to strike a thrifty note with a bargain or stir up feelings of prestige with a high-end item,” Frost said.

There are many forms of psychological pricing that may be employed by marketing departments (and individuals), including the value perception pricing example noted above. Others you may have encountered include these five provided by Psychology Pricing:

1. Odd Pricing – Quite simply, it’s the illusion of the difference between .99 and $1. We humans perceive a real value difference between the two even though we understand logically the difference in price is a mere .01.
2. Prestige Pricing – The opposite of odd pricing, prestige pricing creates the perception of higher quality by pricing a product or service to a rounded number. For example, $1 instead of .99.
3. Buy One, Get One Free – Same as 50% off, right? But somehow it looks so much more alluring when a product is marked “Buy One, Get One Free.”
4. Comparative Pricing – Similar to the straw man definition, comparative pricing sets up a false comparison so the consumer finds one offer decidedly more attractive.
5. Product Bundle Pricing – The gift basket of marketing ploys, product bundle pricing offers a discount on a group of items packaged together. A win-win situation for marketer and customer.

Psychological pricing may have a touch of the “dark arts” about it (it is, after all, a system of psychological manipulation), but it’s been proven effective and is at this point nearly ubiquitous. So the next time you are selling an item and feel the temptation to set the price low in order to turn a quick buck, consider that you might be selling yourself short. A higher price tag, whether fair or not, creates the illusion of greater quality and value and may actually stir up the deep psychological urge to buy compared to the friendly bargain price you thought would create a fast sale.

For more articles on sales and marketing, visit http://www.smstudy.com/articles

Sources:

“5 Psychological Studies on Pricing That You Absolutely MUST Read” https://blog.kissmetrics.com/5-psychological-studies/

SMstudy Guide, Digital Marketing, Pg. 53.

“The Ultimate List Of Psychological Pricing Strategies” http://www.psychologicalpricing.net/ultimate-list/

“What Is Psychological Pricing?” Shelley Frost, Demand Media http://smallbusiness.chron.com/psychological-pricing-11862.html

“Lessons From the Biggest Pricing Strategy Failure of 2012,” Patrick Campbell, Jan. 2, 2013. http://www.priceintelligently.com/blog/bid/168572/Lessons-From-the-Biggest-Pricing-Strategy-Failure-of-2012

VMEdu Cloud LMS Lets You Create and Host Your Online Courses for Free

The state-of-the-art platform from VMEdu is disrupting the Learning Management System (LMS) market. As part of the VMEdu Authorized Content Partner (V.A.C.P.) program, VMEdu is allowing anyone to create and host their courses with zero upfront investment and no requirement for technical expertise. Not just that—it provides content experts with the option of hosting their courses on their own website and provides them with their own high quality mobile app too.

Following are some of the key benefits of the VMEdu Authorized Content Partner (V.A.C.P.) Program:

1. Best Student Experience – Online, Mobile and Classes: VMEdu Cloud Learning Management System (LMS) is, by far, one of the best adult learning platforms globally. It has been built over a period of 7 years, with several millions of dollars of investment – and tested thoroughly by launching multiple courses and websites, which have now become global leaders in their fields. Using the VMEdu LMS allows V.A.C.P.s to offer their courses on their own websites – either online or through their mobile apps. VMEdu also supports physical classroom training options for some high-demand courses. Moreover, VMEdu’s strong back–end capabilities helps its partners easily manage their relationships and training requirements with VMEdu Inc. VMEdu LMS is hosted in a very scalable cloud infrastructure; and already hosts hundreds of courses, with more than 50,000 learning resources including videos, questions, case studies, simulated exams, flashcards, study guides etc. Anyone can join for free and launch their free course in few minutes/hours on their own website.

2. Zero Setup and Maintenance costs – No technical knowledge or infrastructure required: Unlike on other traditional LMS platforms, one does not have to pay any licensing fees, buy expensive hardware, or hire expensive software professionals to launch their online courses and mobile apps. There is no cost associated with creating or uploading the courses. Unlike traditional LMS platforms which usually have negligible support for mobile apps, VMEdu creates the best-in-the-industry mobile apps at zero-cost for Android Phones (if more than 1 hour of video courses uploaded) and $ 250 for IPhone. One can save more than 90% of your current LMS expenses by using VMEdu LMS – and also have significantly more capabilities than those offered by traditional LMS platforms.

3. Additional Revenues – Courses can be sold to VMEdu partner network of 750+ V.A.T.P.s: Courses created by V.A.C.P.s can be made available and sold through VMEdu’s fast-growing partner network of 750+ Authorized Training Partners (A.T.P.s) in 50+ countries. This makes their course available to a huge network of companies, colleges, universities, training companies, and individual trainers/experts. No other traditional LMS platform helps content providers with customer acquisition.

4. Leader in Global Education: VMEdu is a global leader in adult education through its multiple brands and partner eco-system. VMEdu has taught more than 500,000 students from 150 countries and 3,500+ companies; and have a huge A.T.P. partner network of 750+partners in 50+ countries. It is funded by Sequoia Capital which is the leading Private Equity/Venture Capital firm in the Silicon Valley – and has funded innovative global companies such as Apple, Google, Cisco, LinkedIn, Oracle, WhatsApp, etc.

To learn more about the VMEdu Authorized Content Partner Program, visit http://www.vmedu.com/Overview-VACP.asp