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Market Strategy

Market Strategy. the financial implications of marketing. Market Strategy. Your task is to prepare a five year plan: You must explore several strategies Set and quantify objectives You must balance profitability with growth and survival You will be helped by a computer

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Market Strategy

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  1. Market Strategy the financial implications of marketing

  2. Market Strategy Your task is to prepare a five year plan: • You must explore several strategies • Set and quantify objectives • You must balance profitability with growth and survival • You will be helped by a computer • Leaving you to think and discuss

  3. The Business Situation • A typical manufacturing company • The current, domestic market has stagnated • So you must investigate new markets • Exporting the current products • Selling directly using your own staff • Selling via non-exclusive agents • Selling via non-exclusive dealers • Launch New Domestic Products

  4. Performance Measures • Profitability • Return on Investment • Growth • Sales (units & value) • Market Share (unit & cash) • Worth (residual profit) • Survival • Cumulative Cash Flow • Long Term • Discounted Cash Flow (I.R.R. & N.P.V.)

  5. Market Structure • Total Market • Total potential sales • Growing over time • Served (penetrated) Market • Where the company is selling • Penetration of total market increases • Competitive Share • Proportion of served market that buys • Influenced by your marketing decisions

  6. Market Influences • Price • Promotion • Performance • Inventory Availability • Receivables Policy • Launch Year

  7. Using the Computer • Choose & enter a team name • The Planning Options • Review Current Plan • Compare Plans • What-If Analysis • Change Working Plan • Recess Planning

  8. Review Current Plan Select from several reports • Detail Results • Summary Results • Combined Detail • Combined Summary

  9. Detail Results Shows for each of the five years • Sales Revenue • Unit Market Share • Cash Market Share • Profit • Profit to Sales • Capital Employed • Cumulative Cash Flow • Return on Investment • Residual Profit

  10. Summary Results Shows for the five years as a whole • Served Market Share • Total Sales Revenue • Average Unit Market Share • Average Cash Market Share • Total Profit • Average Profit to Sales • Worst Cash Flow • Internal Rate of Return • Net Present Value

  11. Observations • Think before you act (do not waste your plans) • Ask for help if you need it • There is no right or wrong answer (your best plan will be the one that best meets the financial objectives you decide) • Enjoy the challenge

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