Six Sigma is a business management strategy, initially implemented by Motorola, that today enjoys widespread application in many sectors of industry. This template provides a complete road map to improve the quality of process outputs by identifying and removing the causes of defects (errors) and variation in manufacturing and business processes.

http://www.gazhoo.com/doc/200905171405573399/Six+Sigma+Template+Kit

The Boston Consulting Matrix is a very well known management tool used to determine what investment priorities should be given in the product portfolio or SBU in a company.
In spite of its popularity in the business world, the BCG Matrix has to many weaknesses that makes this model not applicable from a financial point of view.

http://www.gazhoo.com/doc/200903190321170026/BCG+MATRIX++FINANCIAL+POINT+OF+VIEW

On 13th November 2009 I will do a workshop on ‘Blue Ocean Strategy’ for Kansdenkdag. The Blue Ocean Strategy is the international bestseller written by W. Chan Kim and Renee Mauborgne. The core idea in the book is to extend your business while making your competition irrelevant since the focus has to move to non-customers. At the moment this strategy is extensively hyped by marketing advisors and consultancies. They bring it as the method to save your business from extinction. But to me, this is certainly not the idea behind the book. Red and Blue Oceans don’t stand apart, they exist next to each other. Red Oceans are the cash flows you need to keep your cash cow (see Boston Consulting Group-matrix) alive in your product/service portfolio and the Blue Ocean is the healthy cash flow you will need to invest in your stars to come.

What is this strategy about anyway?
Most companies are in the Red Ocean, trying to extend their business while focusing on the competition who aim at the same customers. This mostly leads to price wars and lowers the status of your brand. In order to get out of this conventional way of thinking the authors W. Chan Kim and Renee Mauborgne propose to draw a Strategy Canvas to see the big picture of your market space. This means you draw a X and Y-axis. On the X-axis you name the key success factors from your business and on the Y-axis you rate them. Then you draw a value curve to combine the rating with your success factors. In the same canvas you draw this value curve also for your competitor(s).
To start the creative thinking you need to utilize the Four Actions Framework  to emerge the Blue Ocean Strategy from your canvas. This may sound difficult, but it simply means that you need to check which factors you can reduce or eliminate in order to gain insight how to drop your cost structure and which factors in your industry you can raise or create with the goal to lift buyer value and to create new demand. This should result into value innovation and the Blue Ocean of uncontested market space, making the competition irrelevant.

But what is so creative about lowering costs and higher customer value?
Therefore the authors suggested the six paths framework next to the framework mentioned above. This is quite a fun thing to do in a business environment during a brainstorm session. You will look at alternative (1+2+3) industries, across strategic groups within industries and across the chain of buyers you can approach for your business. Next to that you (4) look across complementary product and service offerings, and ask which products/services can I add to higher customer value? What are my customer doing before, during or after they utilize my product/service? Or you can think about strategic alliances, networks, co-creation opportunities which will enrich your business. The last two paths are (5) to look across functional or emotional appeal to buyers and (6) to look across time. With looking across time the authors mean to find insight in trends that are observable today. You need to ask yourself which trends have a high probability of impacting your industry, how will they do that and how can you open up for unprecedented customer utility? And that’s it!!

Red Ocean next to Blue Ocean
Of course in the book the authors explain far more about the above mentioned frameworks, but the essence is what I wrote just now. This will give you a start. The authors do realize there are quite some key organizational hurdles to overcome to execute Blue Ocean Strategy. But I think that you can at least start with a brainstorm and take the six paths framework step by step. To change everything at once is in my view too radical. And not taking the competition into account anymore is also an illusion. The competitive strategy theory of Porter is certainly not dead. I actually think that Blue Ocean is the combination of the differentiation and focus strategy of Porter with a pinch of cost leadership. They just gave another name to it. Smart indeed. The Red Ocean is the stuck in the middle position a business falls in when having no focus on the future cash flows.
Red and Blue Ocean do stand next to each other. The Red Ocean is your current position and the Blue Ocean is what you aim for in the future. For me this strategy is a combination of having passion for your business, to bring in some creative out-of-the-box thinking and to restrict the problems that keep your business from growing.

Sources:
Kim C. and Mauborgne R., Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant, HBR Press 2005.
Interview with Chan Kim by Rick Nieman on RTLZ (introduction is in Dutch, interview is in English)

This is a great document for a leader to help attain his or her objectives. The document helps you to achieve your goals by helping you map out as to how you will manage, lead and engage employees to by aligning it with the current situation, carving out a strategy and constantly self evaluating your own self to ensure there is no derailment from the stated objectives. I have also provided a worksheet completed for Jack Welch, former CEO of GE

http://www.gazhoo.com/doc/200812020604379936/Leadership+Development+Action+Worksheet

This is a great document for a leader to help attain his or her objectives. The document helps you to achieve your goals by helping you map out as to how you will manage, lead and engage employees to by aligning it with the current situation, carving out a strategy and constantly self evaluating your own self to ensure there is no derailment from the stated objectives. I have also provided a worksheet completed for Jack Welch, former CEO of GE.

http://www.gazhoo.com/doc/200812020604379936/Leadership+Development+Action+Worksheet

This is a great document for a leader to help attain his or her objectives. The document helps you to achieve your goals by helping you map out as to how you will manage, lead and engage employees to by aligning it with the current situation, carving out a strategy and constantly self evaluating your own self to ensure there is no derailment from the stated objectives. I have also provided a worksheet completed for Jack Welch, former CEO of GE.

http://www.gazhoo.com/doc/200812020604379936/Leadership+Development+Action+Worksheet

The following is an excel template for creating a BCG Matrix Chart.

The BCG Matrix, or Growth-share Matrix, is based on the Product Life Cycle theory that can be used to determine what priorities should be given in the product portolio of a business unit. To ensure long-term value creation, a company should have a portfolio of products that contains both high-growth products in need of cash inputs and low-growth products that generate a steady flow of cash.

The matrix has 2 dimensions: market share and market growth. The basic idea behind it is that the bigger the market share a product has or the faster the product’s market grows the better it is for the company.

LINK:

http://www.gazhoo.com/doc/4611/BCG+%28Boston+Consulting+Group%29+Matrix+Template

Six Sigma is a business management strategy, initially implemented by Motorola, that today enjoys widespread application in many sectors of industry. This template provides a complete road map to improve the quality of process outputs by identifying and removing the causes of defects (errors) and variation in manufacturing and business processes.

http://www.gazhoo.com/doc/200905171405573399/Six+Sigma+Template+Kit

The Boston Consulting Group (BCG) Growth-Share Matrix, or more simply known as the BCG Matrix, continues to be one of the more popular strategic management tools used today.

The BCG Matrix classifies business units or product portfolios into four distinct categories based on market growth and market share, measured against competitors.

In the diagram, various portfolios can be classified as dogs, question marks, stars, or cash cows. Cash cows are leaders in a mature (low growth) market, dogs are cash traps, question marks have the potential of becoming stars or dogs, and stars are the high maintenance high performers.

In simplest terms, organizations will have a mix of portfolios that fit into each of these quadrants. The idea is to retire the dogs; and make use of the cash cows to both promote question marks into new stars and continue to invest in stars until these become cash cows. The NetMBA site provides a good summary of the BCG Matrix, including some of its inherent limitations.

Our case today presents a situation where the BCG Matrix could have been applied effectively.

Over a period of 20 years, a family-owned business grew from being a small scale trader to becoming one of the biggest vendors of computer servers and peripherals in its region. This was mainly due to an exclusive distribution contract with Hewlett Packard (HP), one of the world’s leading computer manufacturers.

The company’s market dominance was, however, seriously threatened in the mid 1990s when its exclusive contract with HP expired. Not only did HP decide to sign distribution contracts with other vendors then, it also opened its own operations in the region.

The company had three main business streams at this time. Aside from still being the undisputed leader among HP resellers, it had also established an IT training arm with a good market reputation, and it was still the only company in the region providing re-calibration and other support services for HP products.

These three business streams were all cash cows: outright leadership or high market share in fairly mature segments. However, recognizing the longer-term possibility of losing market share because of increased competition, the company decided to diversify and opened its own consulting services arm.

The company correctly predicted a regional boom in ERP consultancy requirements, so it aggressively built an Oracle and SAP consulting practice. This initial investment saw the company pioneering the growth of ERP consulting in the region, where it became a clear market leader within just a two-year period.

Unfortunately, the company in its core was still a computer hardware vendor, with most of its senior executives having their performance and bonus schemes attached to volume selling of HP products. This led the company to lose sight of what should have been its strategic focus: utilizing its cash cows (computer hardware sales, calibration, and education services) to promote question marks (Oracle and SAP consulting practice) into stars.

Instead, bent on protecting its market share as a HP reseller, the company’s sales executives started offering its Oracle and SAP consulting services as cheap, value adding incentives for bulk hardware purchases. In the short term, this allowed the executives to continue to meet their sales quotas and earn their bonuses.

What they did, however, was also turn their biggest cash cow, computer hardware sales, into a very expensive star. This was always going to be difficult to maintain, considering the increased competition not only from other resellers, but from HP itself, its main product provider.

What the sales executives also inadvertently did was make the question marks, Oracle and SAP consulting, very expensive business units to maintain that provided very little real returns. And with resources having been re-allocated to protecting its share of the computer hardware market, the company was also not going to be able to sustain the momentum it built with its consulting businesses.

Soon, new competitors entered the ERP consulting market, and by virtue of its pioneering status, the company became a natural target for aggressive talent raids. This signaled the deterioration of the company’s consulting practice and not long after, the business units that had all the potential of becoming stars instead became dogs and had to be put down.

Meantime, the company continued to focus on protecting its share of the hardware sales market, even at the behest of its calibration and educational services units. But this was a battle it was never going to win, and it also very slowly lost its dominant market position. Perhaps realizing the inevitable, some of the company’s sales executives started leaving and sought better opportunities elsewhere.

With lost market share came reduced revenues and sliced profits. This significantly cut down the company’s ability to financially support its most expensive star, and it was just going to be a matter of time before its hardware sales business also becomes a dog. It eventually did, and with no other star prospects in sight, the company closed shop in 2005.

by Freddy J. Nager, Founder & Fusion Director, Atomic Tango LLC

Mmm, head cheese.

The stock market these days is looking about as appetizing as a plate of warmed-over head cheese. At the same time, the real estate market is making the head cheese look good. So as a result, many businesses are cutting their expenses, particularly in marketing.

Yes, as a devoted reader of this blog, you know they’re making a mistake… With the competition scampering and cowering like Dick Cheney during a terrorist attack, now would be a strategically killer time to invest in a full-on marketing offensive.

But, alas, you have no choice. Most of your cash is going to gas-up your SUV, and the car dealership guys break into hysterics whenever you ask about trading it in.

So a cutting we go — but where? Do you use your handful of ad dollars to hype your best selling products? Or do you try to rescue products that just aren’t moving?

This question crossed my mind the other day when I saw a big, expensive ad in the L.A. Times offering a great deal on a Hummer. Considering that consumers are now clamoring for small cars, is GM being smart or have they completely lost it? Of course, you know I’ve got an opinion, but let’s have some fun and apply a little methodology…

One framework you can use here is the classic Boston Consulting Group Matrix, which has been taught to flocks of MBA students everywhere for over 30 years, but you get to learn it here free. (Is this blog a bargain or what?) The BCG matrix uses the criteria of market growth rate and market share to analyze product portfolios and allocate financial resources. It consists of a 2×2 matrix with four categories apparently named by a 3-year-old:

1. Question Marks: products with low share of a high-growth market
2. Stars: products with high share of a high-growth market
3. Cash Cows: products with high share of a low-growth market
4. Dogs: products with low share of a low-growth market

BCG Matrix

Theoretically, most products pass through all four stages as they mature, starting out as question marks and ending up as dogs. Some products can also sit right on a border between categories. (Note: I use “products” here, but you can also use the matrix to analyze brands or entire businesses.)

Now, if you’ve got time on your hands and really want to impress your boss, you can treat the crossbars of the matrix as an X axis and a Y axis, with your products relatively positioned within each box. However, doing so could lead to a marathon discussion over whether a product should be positioned a little bit higher or lower and possibly to the right a bit… in other words, the dreaded paralysis by analysis. So unless you’re getting paid by the hour, I recommend sticking to a simple 2×2 matrix.

Once you put all of your company’s products into their respective categories, you then consider these rules:

1. Stars: invest your marketing dollars in these since they could become dominant market leaders
2. Cash Cows: milk these to provide the cash to invest in your stars and a few question marks
3. Question Marks: invest in the most promising of these as well — but only a few
4. Dogs: cut the leash and let these go to the highest bidder for some much needed cash

To illustrate, imagine that you’re Coca-Cola. Your portfolio might look something like this:

• Question Mark: your energy drink brand (Full Throttle)
• Star: your bottled water (Dasani)
• Cash Cow: your namesake soft drink (Coca-Cola)
• Dog: your sweetened juice drink (Hi-C)

As Coca-Cola’s CMO, you would use income from Coke to invest primarily in Dasani and Full Throttle, while looking to sell off Hi-C to some private equity fund with too much cash on its hands.

But before you rush off and start reallocating your dinero, consider these caveats…

Caveat #1: Markets change with the economy and other conditions — sometimes very quickly. What if consumers make a massive shift from bottled water to tap water, as many municipal governments are doing? Dasani is doomed. Or what if Tiki Bar TV uses Hi-C as a drink mixer, making it a hip and trendy drink amongst geeks overnight? Your dog is now a star…

Caveat #2: One company’s dog is another company’s cash cow (or better). Some investors have struck gold by buying another company’s dogs. In 2003, Nike bought troubled Converse for only $305 million (less than what the movie “Iron Man” earned in two months). Nike then marketed Converse through retailers (such as Target) where it would not allow its own brand to be sold. In 2007, Converse earned $550 million. With Nike’s resources and marketing ingenuity, this old dog learned a few tricks.

What matters most is what makes sense for your business. For example, some companies might prefer to have cows over stars, because cows require less advertising and innovation. They’re also less risky. So don’t just rely on the BCG Matrix alone to make your decision — it’s just a start. Keep an eye on market trends, and consult a marketing expert about what you might be able do with the product.

Back to GM. As we all know, SUV’s were stars just a couple of years ago, while small cars were dogs; now, because of evil gas prices, SUV’s are barking while small cars are shining. So by advertising the Hummer, GM put their money into a dog. According to the BCG Matrix, that’s not the best possible use of their limited resources. But of course, without bad decisions, GM wouldn’t be GM now, would it?

************************

To have the BCG Matrix professionally applied to your business, with strategies on how to maximize your portfolio, contact Atomic Tango…

Like that? Click this for more: Hey There Mighty Brontosaurus: Marketing Myopia Lives On

image credits:
head cheese: Methyl Lives, Creative Commons
BCG Matrix: Netmba.com, Creative Commons

I have always wondered when I type “Marketing Tool”, “Marketing Strategy” and even “Marketing Professionals” in google I do not get what usually will be hoped for. So I have taken matter in my own hands.

This is a compilation of the top 10 Marketing Tools (based on empirical evidences). These are not “THE RULES” just a way to get you started on your own thinking. Also I will NOT be using any Jargon because a) this is no point of playing with literature when the essence is “lost in translation” b) “If you can’t explain it simply, you don’t understand it well enough”. Albert Einstein .

Tool #1: Answer the Question: What business are we in?

This is very basic question which every business person should think about and answer. This question is more relevant to you in taking decisions about Communication[what to say] or Positioning [what picture to draw in the user(consumers) mind] . For example when coke says The strategic intention is to  put a Coke within ‘arms reach’ of every consumer in the world. This is a very strong Action Item for the whole company as everyone(from CEO to Retailer) has to work towards the same goal with no ambiguity.

Also Please do not confuse between Vision ‘vs’ Mission. To put it simply if you see a beautiful girl in a pub and you instantly decide to marry her(for whatever reason). Then your vision statement will be in the likes of “Live Happily Ever after With Her” and Mission statement can be “Get a date and make her interested”.

Tool #2: Mind Map

Nothing beats the good ol’ Paper-Pencil-Eraser, On a piece of paper put down your ideas and correlated them in various relationship.Then group them to see the relations and interests. However if you do prefer working on your machine. there are many software which help you in this task.

• For MAC (Paid): OmniGraffle
• For PC (Paid): Concept Draw MINDMAP
• Freeware : Freemind

Eg. You are thinking to make a punchline for your brand of a new Podcast for Gamers.

Here on a piece of paper write all what come to your mind like Podcast, Games, action, Music, Dynamics, Hardware, Software, Wii, Xbox, Hero, Frags, Guns, Killing Spree, etc etc…… then group then in a bigger buckets. And then now you are clear to go on the major points of association. Go ahead make a good one “next best thing happened to you after of course your girlfriend” . i know this one sucks but you can do better then me.

Tool#3: Five Forces Model / Six Forces Model

Ok this is bit more serious and lets have fun with it. First of all if you will. Imagine there is Ball on the floor. Now we know the ball on floor and you standing by it will have following cases most of the times there can be more but since Mr Michael Porter (He is one of the Greatest Thinkers in field of Management ) said that there are 5 we’ll stick with five to conform with rest of the word, but take my word please improvise.

1. Gravitational Force ( The force from the set bigger then itself) -
2. Frictional Force (the force which hinders its movement)
3. You (If you kick it move or it cannot)
4. New/better ball (If you get a new ball you’ll stop playing with old one)
5. Abandon (You might want to shoot aliens so you leave the ball)

Then come a few people who were not happy with Mr Porters Analysis and said we also want our name in history lets add one more bullet.

6. You get a new pair of Nike (Now this complements the Ball on the floor, as you’ll at least play to showoff the shoes). Mapping the prior to scenario to Porters 6 force model.I am sure you’ve got it but now but for my clarification i am going to spell it out.

1. Competitive Rivalry within industry [ Gravitational Force ( The force from the set bigger then itself)]: keep track of the industry its self and you will not miss new trend or will make a mistake which has been repeated. Hell you might even change the direction of the industry.
2. Bargain power of the supplier [Frictional Force (the force which hinders its movement)]: These are the people who give you raw materials, shipping, manufacturing etc. This is a where you can actually create competitive advantage over the competition by selecting correct vendor and creating value mutually ideally.
3. Bargain power of the Customer [You (If you kick it move or it cannot)]: Customer is King will you fight with him if feels he’s being over charged or not being heard ? You are nothing if the customer decide that so , “Listen” to what they are saying and what they “need/want”. Be careful though we (Customer) always don’t know what’s good for us eg. did any one of us told apple to make ipod???
4. Threat of new entrants [New/better ball (If you get a new ball you'll stop playing with old one)]: This one is very clear look at facebook, friendster, orkut, MySpace, etc. This is free market don’t fight until essential for survival , try and collaborate and give more choice to the users.
5. Threat of Substitute Products [Abandon (You might want to shoot aliens so you leave the ball)]: There are only 24 hrs in a day and you aim is to capture sometime from the busy consumers life so don’t force yourself over threat of substitute let consumer make choice give him/her enough compelling reasons to be with you then the next best thing.
6. Complementary Products [You get a new pair of Nike (Now this complements the Ball on the floor, as you'll atleast play to showoff the shoes)]: Keep track of this and use them to your advantage. They can be very nicely used to create ( associations in consumer’s mind) eg: Beer and Fish Fingers.

Tool#4: Marketing Mix

Lets take example of “Nothing” as our product.

Product -Our product is “nothing”. Now this nothing has to be broadly something people can either keep in their backpacks or People with backpack can be kept in them. It can also be some thing people feel/experience. Here is our time to look at two words “Product VS Services”. Product is something you can hit someone with eg: You can hit some one with the Vista OS CD Pack(best use ). Service is something which is in the mind of beholder.Eg The Saving people from “fear of installing vista” is service.

Price – “Nothing” cost 10 moola to make(Salary, Utilities, etc ) and you sell(Advertisements, Margins, Profits etc) it for 200 Moolas. Yes Sir, you can decide the price based on number of factor like , need, perceprion, Simillar products. This is very ambgus choice. This is simple to see alround Airlines, Phones, Real Estate .

Place – Where we keep or Nothing : Online/Offilne(Filthy Rich Place/ Middle Class Mall/ Kwiky Store)

Promotion – The act “ANY WAY POSSIBLE” to let you know we have “Nothing” and YOU WANT IT. Like TV ADS, Posters, Utube, Blogs, Websites, Sir Richard Branson Times Square dressed in a nude suit, a cell phone covering his privates, to introduce Virgin Mobile to the U.S., Madonna publishes a dirty book, Giving employees stuff, “No.2, We Try Harder”, Anything craetive which can hold you attention and lets you know “Nothing” exists.

Tool#5: BCG Matrix

Use of the BCG Matrix for each product or service, and point out the value of its sales. The BCG Matrix thus offers a very useful ‘map’ of the mapping products (or service) strengths and weaknesses, also the likely cash-flows.

This idea is, to point out where is moola is going and where is it coming from(Cash Flow).

• Cash cows: High market share in a slow-growing industry. Eg.  MS Office 03
• Dogs: Low market share in a mature, slow-growing industry. Eg. MS Live
• Question marks (also known as problem child) Eg. Vista
• Stars are units with a high market share in a fast-growing industry. MS Office 07

Above is a just a hunch so you get an idea.

Tool#6: SOWT

SWOT (strengths, weaknesses, opportunities and threats) is a just a table analysis provides a quick
picture of the current situtation.

Use SWOT to:

• Gain insight into your organization’s assets and liabilities.
• Decide using it:
  • Should we open a new office in Amstardam
  • Should we Jump from eifel tower to promote out tooth paste
  • can we retire now
  • Can I leave this job now
  • Should i marry her

This will work iff many people give inputs and they not under life threat for doing so,or are  getting paid to do so.

Tool#7: Gap Analysis

This one is simple, whatever they tell you, just remember. You have a Situation, Products, Opportunity, Paths, Jobs, Houses anything one or more that is what you will compare with. The one in mental picture or another reference point which you think is right. Just compare it, though its not a NO BRAINIER . You need to provide a contrast between two pictures and say what we need to do  to reach the “Perfect state”.

eg: You have a Project Score is 2 of 20 and to pass the university you need score of 50. This implies that you need to score of  48 of 80 just to clear the exam. You Dad says I will give you a bike if you get 75 %.. Now all you need to do a gap analysis between Passing and getting a Bike.

Tool#8: Pareto analysis

The Pareto principle (also known as the 80/20 rule and the law of the vital few states that in many things, 80% of the consequences come from 20% of the causes.

• Twenty percent of your activities will account for 80 percent of your success.
• Business: Twenty percent of customers will account for 80 percent of profit.
• Twenty percent of the people you know provide you with 80 percent of nurturing support and satisfaction.
• You get 80% of your media awareness from 20% of your buy.
• As Woody Allen would say, 80% of success is just showing up.
• Any Task Project 80% takes only 20% of you time. Rest of the 20% takes rest 80% of your time.

Make a note when microsoft’s Steve Ballmer accuses google of doing something for so long of a time. What microsoft misses the point that Most organizations (and most people) settle for 20%, effort and energy and hit the bottom and move on to the next thing. A few people insist on devoting an unreasonable amount of effort into something. They are the ones who cross the expectations and get rewarded handsomely for it.

Tool#9: PEST

“Political, Economic, Social, and Technological analysis” and describes a rule of factors(Not in your control most of the time) used in environmental scanning. It is a part of the external analysis when doing market research and gives a overview.It is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations.

Tool is a macrotool(Very Birds eye view of the economics) used iff an organization or person is wanting to change the enviorment in terms PEST.

Tool#10: Game theory

I will get somewhat serious now as this is a very important tool and will require understand in details. Game Theory is the formal study of conflict and cooperation. Game theoretic concepts apply whenever the actions of several entities are interdependent. These entities may be individuals, groups, firms, or any combination of these. The concepts of game theory provide a language to formulate, structure, analyze, and understand strategic scenarios. Its apllication is found in Negotiation, Casino’s, Movies, Quality, Supply chain Management, Communications, Finance, Biotechnology , Politics, Product Definition, Wireless Towers, NO of Start bucks in one place,War etc. I will not be able justify in few pars, so I will dedicate an entire separate post to this tool. Anyone who wants to co-author this let’s do it together.

In the end I would like thanks you for taking time and with this thought: These are idea are not “THE LAW” request you to use them just as someones point of view and not litrally. Use these to understand someone came with this thought once, can you come up with you own?

Few Tools and Resources for You This is a live list* I will update this as and when new resources com to my mind. I will request you help also to add to this list.

Marketing Myopia
Purple Cow
Games People Play
BCG Matrix
The World Is Flat

I have always wondered when I type “Marketing Tool”, “Marketing Strategy” and even “Marketing Professionals” in google I do not get what usually will be hoped for. So I have taken matter in my own hands.

This is a compilation of the top 10 Marketing Tools (based on empirical evidences). These are not “THE RULES” just a way to get you started on your own thinking. Also I will NOT be using any Jargon because a) this is no point of playing with literature when the essence is “lost in translation” b) “If you can’t explain it simply, you don’t understand it well enough”. Albert Einstein .

Tool #1: Answer the Question: What business are we in?

This is very basic question which every business person should think about and answer. This question is more relevant to you in taking decisions about Communication[what to say] or Positioning [what picture to draw in the user(consumers) mind] . For example when coke says The strategic intention is to  put a Coke within ‘arms reach’ of every consumer in the world. This is a very strong Action Item for the whole company as everyone(from CEO to Retailer) has to work towards the same goal with no ambiguity.

Also Please do not confuse between Vision ‘vs’ Mission. To put it simply if you see a beautiful girl in a pub and you instantly decide to marry her(for whatever reason). Then your vision statement will be in the likes of “Live Happily Ever after With Her” and Mission statement can be “Get a date and make her interested”.

Tool #2: Mind Map

Nothing beats the good ol’ Paper-Pencil-Eraser, On a piece of paper put down your ideas and correlated them in various relationship.Then group them to see the relations and interests. However if you do prefer working on your machine. there are many software which help you in this task.

• For MAC (Paid): OmniGraffle
• For PC (Paid): Concept Draw MINDMAP
• Freeware : Freemind

Eg. You are thinking to make a punchline for your brand of a new Podcast for Gamers.

Here on a piece of paper write all what come to your mind like Podcast, Games, action, Music, Dynamics, Hardware, Software, Wii, Xbox, Hero, Frags, Guns, Killing Spree, etc etc…… then group then in a bigger buckets. And then now you are clear to go on the major points of association. Go ahead make a good one “next best thing happened to you after of course your girlfriend” . i know this one sucks but you can do better then me.

Tool#3: Five Forces Model / Six Forces Model

Ok this is bit more serious and lets have fun with it. First of all if you will. Imagine there is Ball on the floor. Now we know the ball on floor and you standing by it will have following cases most of the times there can be more but since Mr Michael Porter (He is one of the Greatest Thinkers in field of Management ) said that there are 5 we’ll stick with five to conform with rest of the word, but take my word please improvise.

1. Gravitational Force ( The force from the set bigger then itself) -
2. Frictional Force (the force which hinders its movement)
3. You (If you kick it move or it cannot)
4. New/better ball (If you get a new ball you’ll stop playing with old one)
5. Abandon (You might want to shoot aliens so you leave the ball)

Then come a few people who were not happy with Mr Porters Analysis and said we also want our name in history lets add one more bullet.

6. You get a new pair of Nike (Now this complements the Ball on the floor, as you’ll at least play to showoff the shoes). Mapping the prior to scenario to Porters 6 force model.I am sure you’ve got it but now but for my clarification i am going to spell it out.

1. Competitive Rivalry within industry [ Gravitational Force ( The force from the set bigger then itself)]: keep track of the industry its self and you will not miss new trend or will make a mistake which has been repeated. Hell you might even change the direction of the industry.
2. Bargain power of the supplier [Frictional Force (the force which hinders its movement)]: These are the people who give you raw materials, shipping, manufacturing etc. This is a where you can actually create competitive advantage over the competition by selecting correct vendor and creating value mutually ideally.
3. Bargain power of the Customer [You (If you kick it move or it cannot)]: Customer is King will you fight with him if feels he’s being over charged or not being heard ? You are nothing if the customer decide that so , “Listen” to what they are saying and what they “need/want”. Be careful though we (Customer) always don’t know what’s good for us eg. did any one of us told apple to make ipod???
4. Threat of new entrants [New/better ball (If you get a new ball you'll stop playing with old one)]: This one is very clear look at facebook, friendster, orkut, MySpace, etc. This is free market don’t fight until essential for survival , try and collaborate and give more choice to the users.
5. Threat of Substitute Products [Abandon (You might want to shoot aliens so you leave the ball)]: There are only 24 hrs in a day and you aim is to capture sometime from the busy consumers life so don’t force yourself over threat of substitute let consumer make choice give him/her enough compelling reasons to be with you then the next best thing.
6. Complementary Products [You get a new pair of Nike (Now this complements the Ball on the floor, as you'll atleast play to showoff the shoes)]: Keep track of this and use them to your advantage. They can be very nicely used to create ( associations in consumer’s mind) eg: Beer and Fish Fingers.

Tool#4: Marketing Mix

Lets take example of “Nothing” as our product.

Product -Our product is “nothing”. Now this nothing has to be broadly something people can either keep in their backpacks or People with backpack can be kept in them. It can also be some thing people feel/experience. Here is our time to look at two words “Product VS Services”. Product is something you can hit someone with eg: You can hit some one with the Vista OS CD Pack(best use ). Service is something which is in the mind of beholder.Eg The Saving people from “fear of installing vista” is service.

Price – “Nothing” cost 10 moola to make(Salary, Utilities, etc ) and you sell(Advertisements, Margins, Profits etc) it for 200 Moolas. Yes Sir, you can decide the price based on number of factor like , need, perceprion, Simillar products. This is very ambgus choice. This is simple to see alround Airlines, Phones, Real Estate .

Place – Where we keep or Nothing : Online/Offilne(Filthy Rich Place/ Middle Class Mall/ Kwiky Store)

Promotion – The act “ANY WAY POSSIBLE” to let you know we have “Nothing” and YOU WANT IT. Like TV ADS, Posters, Utube, Blogs, Websites, Sir Richard Branson Times Square dressed in a nude suit, a cell phone covering his privates, to introduce Virgin Mobile to the U.S., Madonna publishes a dirty book, Giving employees stuff, “No.2, We Try Harder”, Anything craetive which can hold you attention and lets you know “Nothing” exists.

Tool#5: BCG Matrix

Use of the BCG Matrix for each product or service, and point out the value of its sales. The BCG Matrix thus offers a very useful ‘map’ of the mapping products (or service) strengths and weaknesses, also the likely cash-flows.

This idea is, to point out where is moola is going and where is it coming from(Cash Flow).

• Cash cows: High market share in a slow-growing industry. Eg.  MS Office 03
• Dogs: Low market share in a mature, slow-growing industry. Eg. MS Live
• Question marks (also known as problem child) Eg. Vista
• Stars are units with a high market share in a fast-growing industry. MS Office 07

Above is a just a hunch so you get an idea.

Tool#6: SOWT

SWOT (strengths, weaknesses, opportunities and threats) is a just a table analysis provides a quick
picture of the current situtation.

Use SWOT to:

• Gain insight into your organization’s assets and liabilities.
• Decide using it:
  • Should we open a new office in Amstardam
  • Should we Jump from eifel tower to promote out tooth paste
  • can we retire now
  • Can I leave this job now
  • Should i marry her

This will work iff many people give inputs and they not under life threat for doing so,or are  getting paid to do so.

Tool#7: Gap Analysis

This one is simple, whatever they tell you, just remember. You have a Situation, Products, Opportunity, Paths, Jobs, Houses anything one or more that is what you will compare with. The one in mental picture or another reference point which you think is right. Just compare it, though its not a NO BRAINIER . You need to provide a contrast between two pictures and say what we need to do  to reach the “Perfect state”.

eg: You have a Project Score is 2 of 20 and to pass the university you need score of 50. This implies that you need to score of  48 of 80 just to clear the exam. You Dad says I will give you a bike if you get 75 %.. Now all you need to do a gap analysis between Passing and getting a Bike.

Tool#8: Pareto analysis

The Pareto principle (also known as the 80/20 rule and the law of the vital few states that in many things, 80% of the consequences come from 20% of the causes.

• Twenty percent of your activities will account for 80 percent of your success.
• Business: Twenty percent of customers will account for 80 percent of profit.
• Twenty percent of the people you know provide you with 80 percent of nurturing support and satisfaction.
• You get 80% of your media awareness from 20% of your buy.
• As Woody Allen would say, 80% of success is just showing up.
• Any Task Project 80% takes only 20% of you time. Rest of the 20% takes rest 80% of your time.

Make a note when microsoft’s Steve Ballmer accuses google of doing something for so long of a time. What microsoft misses the point that Most organizations (and most people) settle for 20%, effort and energy and hit the bottom and move on to the next thing. A few people insist on devoting an unreasonable amount of effort into something. They are the ones who cross the expectations and get rewarded handsomely for it.

Tool#9: PEST

“Political, Economic, Social, and Technological analysis” and describes a rule of factors(Not in your control most of the time) used in environmental scanning. It is a part of the external analysis when doing market research and gives a overview.It is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations.

Tool is a macrotool(Very Birds eye view of the economics) used iff an organization or person is wanting to change the enviorment in terms PEST.

Tool#10: Game theory

I will get somewhat serious now as this is a very important tool and will require understand in details. Game Theory is the formal study of conflict and cooperation. Game theoretic concepts apply whenever the actions of several entities are interdependent. These entities may be individuals, groups, firms, or any combination of these. The concepts of game theory provide a language to formulate, structure, analyze, and understand strategic scenarios. Its apllication is found in Negotiation, Casino’s, Movies, Quality, Supply chain Management, Communications, Finance, Biotechnology , Politics, Product Definition, Wireless Towers, NO of Start bucks in one place,War etc. I will not be able justify in few pars, so I will dedicate an entire separate post to this tool. Anyone who wants to co-author this let’s do it together.

In the end I would like thanks you for taking time and with this thought: These are idea are not “THE LAW” request you to use them just as someones point of view and not litrally. Use these to understand someone came with this thought once, can you come up with you own?

Few Tools and Resources for You This is a live list* I will update this as and when new resources com to my mind. I will request you help also to add to this list.

Marketing Myopia
Purple Cow
Games People Play
BCG Matrix
The World Is Flat

Portfolio Planning is economics put into action, an attempt to “use limited resources to fulfill unlimited demands” and although tools such as BCG and GE Matrices are designed for large organisations with extended product lines, I also feel they are useful for smaller companies, who also have unlimited demands but much more limited resources.

Portfolio planning has three real functions; balance future & present earnings, quantify existing cash flow and to analysise the company’s Strategic Gap (their expected performance – desired performance). The real use to small companies (whose cash flows and strategic gaps will be more obvious) is in the balancing function. Have these companies assured they aren’t relying on past innovations to maintain current market share? Or is there to much of a gap between certain product releases?

But a smaller scale application of the BCG matrix would highlight some of this models problems;

• market share and growth rate would be harder to obtain for these smaller companies,
• market growth, cash use and cash generation may be less (or even not) linked in smaller organisations/markets
• blindly applying the matrix would put blinkers to innovation on managers eyes, and as such they could be caught out by not paying attention to new market developments
• attempting to ‘balance’ a small companies by cutting out certain project could lead to a much higher loss of ’synergies’ than in large companies