10.2 Areas of interface between FF and marketing & Key performance indicators Flashcards
1
Q
The basic way in which the two areas interact:
A
- Budgeting - FF will discuss likely sales volume in order to produce the sales budget
- Advertising - FF will help set up a budget and monitor if it’s cost effective
- Pricing - FF will have input into what price is charged
- Market share - FF can help determine market share by providing info on sales volumes
- KPIs - FF will establish and monitor their KPIs
2
Q
How the FF interacts with sales and marketing:
A
- They should interact to achieve org goals and their own individual functional goals
- Traditionally there may have been antagonism between them over issues such as pricing and cost control
- The modern approach is for them to collaborate and work in partnership
- Effective interaction will be based on close working teams who have a shared vision for the org and an appreciation of each others specialisms
- Technology is assisting this collaboration through the use of tolls such as cloud computing, data analytics and blockchain
3
Q
There are a number of areas the FF can enhance performance by bus partnering with sales and marketing:
A
- Product / service development
- Product / service life-cycles and costing
4
Q
Product / service development:
A
- Org need to continually look for new or improved products to achieve or maintain a competitive advantage
- The FF will work collaboratively with sales and marketing to evaluate new products
5
Q
The stages of product / service development are:
A
- Consider customers needs
- Concept screening
- Design process
- Time to market
- Product testing
6
Q
Product / service life cycles and costing: (pg 306)
A
- After product development most products go through a number of stages in their existence:
- Introduction
- Growth
- Maturity
- Decline
7
Q
Stage 1 - Introduction:
A
- A small number of individuals will be prepared to pay a high price for a new, innovative product
- Revenues will be low and expenditure high
8
Q
Stage 2 - Growth:
A
- Revenue and profit grow as production and interest in the product increases
- Org will seek to differentiate it’s product and brand
- Purchase costs and prices may fall due to economies of scale and increased competitive pressure
- Investment costs will still be high
9
Q
Stage 3 - Maturity:
A
- This is the longest and most successful stage of the life cycle
- Costs settle down into a pattern of repeat or replacement costs
- Growth slows or halts as product consumption finally peaks
- The price may be cut in order to attract a new group of customers
10
Q
Stage 4 - Decline:
A
- Fewer people will purchase the product at the end of the life cycle as superior alternatives replace it and promotional activity will drop
- The org will look to exit the market and find profitable alternatives
11
Q
The FF will interact with sales and marketing in two main ways:
A
- Life cycle costing
- Balanced portfoliow
12
Q
Life cycle costing:
A
- This considers the costs and revenues of a product over it’s whole life (including development) rather than one accounting period
- Therefore, the full cost incurred prior to, during and after production will be considered to ensure that the costs can be covered and/or any possible steps that can be taken to reduce costs
13
Q
Balanced portfolio:
A
- Products at different stages in the lifecycle have different implications for resource requirements, risk and strategy
- The FF involvement in portfolio management would be to help inform decisions about the org overall product offering
- An appropriate balance of existing products in a mature market, together with investment in new products in the introduction and growth stages is best
14
Q
Big data analytics in marketing:
A
- Unlocking the potential value of big data using real-time data analytics and it’s significance to an org sales and marketing function presents a huge opportunity to gain unique insight which can be used to improve competitive position and potentially gain competitive advantage over rivals
- The FF will work collaboratively with marketing function to provide this insight
15
Q
Examples of big data analytics in marketing:
A
- Market segmentation and customisation - the volume and variety within big data enables org to create very specific segments and to tailor it’s products precisely to meet those needs in real time
- Product / service development - org can use data on customer behaviour and social trends to create new products to meet customer needs or to enhance existing products so that they meet needs more exactly
- Decision making - sophisticated analytics tools can be used to improve decision making. Real time data visualisation tech allow managers to adjust tactics (such as dynamic pricing)
-Obtaining customer feedback - org now have access to huge amounts of customer feedback in real or almost real time (such as on social media)
