Management Needs Answers

Management Needs Answers to plan

Assignment, delegation, and responsibility are created as plans are made. As the plan progresses, “questions will be asked.” These should be answerable if a sound control method has been built into the program:


1. Who are the profitable customers, where are they? If this is known, then how unprofitable are the losers, and why?


2. Which kinds of jobs are the profitable ones – by process, customer type, purpose? Which are the unprofitable and why?


3. How are our prices as compared with our competitors? What kinds of jobs have we been low bidders on, what kinds have we lost?


4. How many of our customers are in declining industries? How are sales to “old reliable” holding up? Are there any likely newcomers we ought to see more of?


5. How well are our salesmen covering the line? Are any of them becoming product specialists at our expense? Are they calling on all customers?


6.  our salesmen seeing the right people when they call? Who are the right people? Do we have this information on record?


7. Have we any group of customers who appear to give us only their low-profit business? Can we do anything about this?


8. Are our customers classified as to (a) importance to us (b) potential volume (c) profitability? Are we playing the winners in salesmen’s call frequencies?


9. Are we providing any services that our customers particularly like? Are we providing any that are unnecessary, costly but not desirable?


10. How effective is our advertising and public relations program? What kind of corporate image do we have? What kinds of work does the public associate us with?


11. How do salesmen rank as to profitability of business brought in? Have we any unprofitable salesmen? Let’s see what our most profitable man is selling, and to whom.


12. How can we save salesmen’s time? What kinds of detail can we relieve them of, profitably? What kinds of selling can be done by phone or mail?

Creating the Marketing Mix

Creating the Marketing Mix

Every business problem has alternative solutions else decisions would be unnecessary. The criteria for such decisions must be based on objectives – aspects affecting volume, profits, service and growth. Every business decision including creating the marketing mix must be based on whatever facts are available or can be assembled – the more the better so long as manageable.

Questions may be developed to organize facts to cover marketing decisions. Such questions, when answered properly, would create the most logical “marketing mix.” Thus all of the functions of marketing would be performed in maximum coordination as the modern concept of marketing management demands. The implementation of these components into an operable mechanism is a matter of delegation, management, and administration.

To emphasize the need for review and check-off of all marketing functions, and to insure full coverage in the marketing program, 17 questions are presented which a manufacturer might well ask his staff when reviewing in detail prospects for a product, particularly a new one. While many will call for clearly factual, even statistical data, others can be answered readily from observation and experience.

Most failures in marketing can be attributed to executive oversight, neglect, or lack of facts with respect to answering these questions. Hence, their importance cannot be overemphasized.

A marketing plan consists of a total volume goal broken down (at least) by products, customer types, areas, and time periods. That is, how much of each product is to be sold to each type of customer in each territory over each month or quarter? How much profit is each to produce?

The results of such planning create the salesman’s budget or quota, his responsibilities over the time period selected, and a basis for his appraisal and control and for his compensation. It is essential to the salesman’s performance that he understand these procedures and provisions. Therefore, they must be included in his training.

In summary, good business organization calls for management to:

•Establish the business goal
•Analyze the market potential
•Plan a marketing program to get the job done
•Organize manpower, equipment, capital
•Train people to execute assignments
•Execute-administrate the program
•Control it – goals, budgets, performance as planned

Thus the “marketing mix” is developed and the selling and sales promotion job defined. Only then can we question and measure the performance of those responsible.

Marketing as a Profit Center

Marketing as a Profit Center

Marketing involves many activities including selling; but it is many things more than selling. Transportation, storage, credit, packaging, and even buying are marketing activities. Sound marketing management consists of seeing to it that all marketing activities (transportation and warehousing as well as selling and advertising) are also effectively and efficiently performed, in harmony toward the common goal of profit.

Historically, we have produced in order to be able to sell. Now, we market – have a marketing organization – in order that we may justify production. When the typical (or average) consumer product (food, clothing, autos, appliances) is purchased, more than half of its price pays for its marketing, only half or less goes to production, manufacturing.

Until recently, our methods of production were generally more efficient than our methods of marketing. Currently, greater strides are taking place in marketing than manufacturing. Yet there is still more room for improvement in marketing than in manufacturing.

Today, the production costs of different firms are more likely to be competitive than their marketing costs. Assuming that the firm’s production costs are competitive, the question of profit lies in efficient marketing. No firm can succeed if (1) its production costs are excessive or (2) its marketing program is less efficient than that of its competitors.

Production should thus provide marketing with a product that is cost-competitive and can be priced and sold at a profit. It is then up to marketing to bring about these sales with maximum efficiency. Thus, marketing management becomes a center responsible for the production of profit.

“Profit” does not accrue until the goods are sold, delivered, and paid for. Hence, if production costs tend to be almost identical and the price competition is keen, the question of profit lies almost entirely in relative marketing efficiency as between producers. If “marketing” encompasses all activities beyond production and if profit losses can occur in any phase of distribution, then it is marketing efficiency that makes or breaks profits.


“Giveaways” — the pencils, pens, buttons, calendars and refrigerator magnets you see everyday — are called “Specialty Advertising” in the advertising business.

Chances are, you have some specialty advertising items right at your desk. Businesses imprint their name on items and give them away (or sometimes sell them at very low cost) in order that:

You notice their name enough times on the item to build “top-of-the-mind” awareness. So when you need a restaurant, for instance, you think of their name first.

You appreciate the goodwill of the company giving you the item and eventually return the favor by giving them some business.

These are both long-term advertising investments that can take months or years to turn into actual sales.

First, select the best item that would tell your story most effectively. While an accountant can give away an inexpensive calculator, the same item may not be ideal for a hairdresser. A comb or brush might be more appropriate in that case.

Second, decide what you are going to say on the item. A company slogan? Address directions? Since you have a relatively small area, you must be very concise and direct.

Third, figure out your method of distribution. Are you going to send them to each customer through the mail? If so, how much will that cost? Will you have them in a big bowl that says “take one”? Distribution is just as important to consider as buying the item.

Just as there are many reputable specialty advertising professionals in your area, the industry is notorious with a lot of high-pressure telephone and mail solicitors who often give specialty advertising a bad name. Don’t buy specialty advertising through the mail without checking the quality and prices with trusted local representatives first. And, buying specialty advertising over the telephone is not recommended at all.

Specialty advertising is a unique way to generate goodwill and put your name on items that people remember. But don’t do it unless you have an item and distribution plan that will benefit your business.





When people think of Outdoor Advertising, they usually think of the colorful billboards along our streets and highways. Included in the “outdoor advertising” classification, however, are benches, posters, signs and transit advertising (the advertising on buses, subways, taxicabs and trains).  They are all share similar advertising rules and methods.




Outdoor advertising reaches its audience as an element of the environment.  Unlike newspaper, radio or TV, it doesn’t have to be invited into the home.  And it doesn’t provide entertainment to sustain its audience.




Some Outdoor Advantages


Since it is in the public domain, Outdoor Advertising assuredly reaches its audience.  People can’t “switch it off” or “throw it out.”  People are exposed to it whether they like it or not.  In this sense, outdoor advertising truly has a “captured audience.”




It’s messages work on the advertising principle of “frequency.”  Since most messages stay in the same place for a period of a month or more, people who drive by or walk past see the same message a number of times.




Particular locations can be acquired for certain purposes.  A billboard located a block in front of your business can direct people to your showroom.  Or you can reach rural areas efficiently by placing a billboard in each small town.




Outdoor advertising is an excellent adjunct to other types of advertising you are doing.  In fact, it is most effective when coupled with other media.




Some Outdoor Disadvantages


Outdoor advertising is a glance medium.  At best, it only draws 2-3 seconds of a reader’s time.




Messages must be brief to fit in that 2-3 second time frame.  Ninety-five percent of the time, either the message or the audience is in motion.




The nature of the way you have to buy outdoor advertising (usually a three month commitment) is not conducive to a very short, weeklong campaign.




When you buy outdoor advertising, remember that location is everything.  High traffic areas are ideal.  A billboard in an undesirable area will do you little good.  Keep your message concise (use only five to seven words) and make it creatively appealing to attract readership.  Few words, large illustrations (or photos), bold colors and simple backgrounds will create the most effective outdoor advertising messages.