LESSON
5
[ Subject for Sludy On Management and Managers
passed the zenith of its potent al sales and no amount ol additional sales support could have extended its growth This became quite clear in the jnd of year sales results which showed no improvement The promising products however went into gradual sales decline
In short management has failed to consider each products position in its life cycle
WORKING ON THE TEXT Marketing Management
Management by definition is a fund on of planning organizing coordi nating directing and controlling Any managerial system at any manage rial levei is characterized in terms of1 these general functions
Management is revealed in a variety of specific activities Marketing management refers to a broad concept covenng organization of produc tion 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 condit ons in their industry Marketing management therefore consists of evaluating market oppor tunrties selecting markets developing market strateges planning mar keting tactics and controlling marketing results
Strategic planning includes defining the company s long term as we I as spec f с objectives such as sales volume market share profitability and innovation and deciding on financial material and other resources necessary to achieve those objectives
In problems of market selection and product planning one of the key con cepts is that of the Product Life Cycle That products pass through various stages between life and death (introduction — growth — matufity — de clme) is hard to deny Equally accepted is the understanding that a com pany should have a mix of products with representation in each of these stages Companies can make far more effective marketing decisions f they take t me to find out where each of their products stands in its ! fe cycle
However the concept of the product life cycle seems frequently for gotten fn marketing planning which leads to wrong decision making Th s may well be seen m the following story
A suppl er of some I ght industrial equ pment felt that the decline in the sales of fits major product was due to the fact that it was not receiving the sales suppot it deserved In order to give extra sales support to this problem case a special advert sing campa gn was run This required cutting into ma keting budgets of several premising products that were stiff in their "young growth phase tn {act the major product has long since
jln the following extract members of the Board of a company are discussing the company strategy '.Fox Since our main objective is to gain market share I be'ieve we
lust first of all reduce our prices Brown But if we reduce prices that will cut our pro'it^ Fox Thats right but we can slowly increase production which will
eventually enable us to cut unit costs Smith Thats really a long term prospect Unit costs can only come down if we invest in new plant and machinery7 I personally think. we should go for higher profitability If we upgrade the product we can charge higher prices and get larger profits Look the market is already very competitive if ле increase prices whatever the quality the market will immediately respond and sales will drop rapidly But if ле reduce costs in manufacturing that will put us in a strong position to adapt to the market
poles
, intermsof — сточки зрения | plan) and mach nery — машины и оборудование
ECTION A
x 1 Read and translate the text
к 2 Say what Information the text gives about
management as a science 2 marketing management as a specific ac-r 3 the concept of the Product Life Cycle 4 wrong decision making g from failure to consider the correct life cycle of the product
fEx.3 Think and answer
|1 What is the difference between sales management and marketing
management' j 2 Why is the Product Life Cycle considered one of the key concepts in
marketing?
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