How Visa, Using Card Fees, Dominates a Market

Every day, millions of Americans stand at store checkout counters and make a seemingly random decision: after swiping their debit card, they choose whether to punch in a code, or to sign their name. Skip to next paragraph Your Money Guides Credit and Debit Cards » Enlarge This Image Monica Almeida/The New York Times Mitch Goldstone, in his digital photo-processing shop in Irvine, Calif., is part of a suit against Visa and MasterCard. Frontline LogoThe Card Game series is a joint reporting project with the PBS program "Frontline." Multimedia Becoming the Debit KingGraphic Becoming the Debit King Toward a Cashless SocietyGraphic Toward a Cashless Society Related You're the Boss: Does Visa Play Fair? More Articles in This Series Readers’ Comments "Smart retailers take advantage and offer a 'discount' on debit purchases. Sharing the savings with the customers is a great incentive." Tom, Texas * Read Full Comment » It is a pointless distinction to most consumers, since the price is the same either way. But behind the scenes, billions of dollars are at stake. When you sign a debit card receipt at a large retailer, the store pays your bank an average of 75 cents for every $100 spent, more than twice as much as when you punch in a four-digit code. The difference is so large that Costco will not allow you to sign for your debit purchase in its checkout lines. Wal-Mart and Home Depot steer customers to use a PIN, the debit card norm outside the United States. Despite all this, signature debit cards dominate debit use in this country, accounting for 61 percent of all such transactions, even though PIN debit cards are less expensive and less vulnerable to fraud. How this came to be is largely a result of a successful if controversial strategy hatched decades ago by Visa, the dominant payment network for credit and debit cards. It is an approach that has benefited Visa and the nation’s banks at the expense of merchants and, some argue, consumers. Competition, of course, usually forces prices lower. But for payment networks like Visa and MasterCard, competition in the card business is more about winning over banks that actually issue the cards than consumers who use them. Visa and MasterCard set the fees that merchants must pay the cardholder’s bank. And higher fees mean higher profits for banks, even if it means that merchants shift the cost to consumers. Seizing on this odd twist, Visa enticed banks to embrace signature debit — the higher-priced method of handling debit cards — and turned over the fees to banks as an incentive to issue more Visa cards. At least initially, MasterCard and other rivals promoted PIN debit instead. As debit cards became the preferred plastic in American wallets, Visa has turned its attention to PIN debit too and increased its market share even more. And it has succeeded — not by lowering the fees that merchants pay, but often by pushing them up, making its bank customers happier. In an effort to catch up, MasterCard and other rivals eventually raised fees on debit cards too, sometimes higher than Visa, to try to woo bank customers back. “What we witnessed was truly a perverse form of competition,” said Ronald Congemi, the former chief executive of Star Systems, one of the regional PIN-based networks that has struggled to compete with Visa. “They competed on the basis of raising prices. What other industry do you know that gets away with that?” Visa has managed to dominate the debit landscape despite more than a decade of litigation and antitrust investigations into high fees and anticompetitive behavior, including a settlement in 2003 in which Visa paid $2 billion that some predicted would inject more competition into the debit industry. Yet today, Visa has a commanding lead in signature debit in the United States, with a 73 percent share. Its share of the domestic PIN debit market is smaller but growing, at 42 percent, making Visa the biggest PIN network, according to The Nilson Report, an industry newsletter. The Risk of Refusing Critics complain that Visa does not fight fair, and that it used its market power to force merchants to accept higher costs for debit cards. Merchants say they cannot refuse Visa cards because it would result in lower sales. “A dollar is no longer a dollar in this country,” said Mallory Duncan, senior vice president of the National Retail Federation, a trade association. “It’s a Visa dollar. It’s only worth 99 cents because they take a piece of every one.” Visa officials say its critics are griping about debit products that have transformed the nation’s payment system, adding convenience for consumers and higher sales for merchants, while cutting the hassle and expense of dealing with cash and checks. In recent years, New York cabbies and McDonald’s restaurants are among those reporting higher sales as a result of accepting plastic. “At times we have a perspective problem,” said William M. Sheedy, Visa’s president for the Americas. “Debit has become so mainstream, some of the people who have benefited have lost sight of what their business model was, what their cost structure was.” Visa officials said the costs of debit for merchants had not gone down because the cards now provided greater value than they did five or 10 years ago. The costs must not be too onerous, they say, because merchant acceptance has doubled in the last decade. The fees are “not a cost-based calculation, but a value-based calculation,” said Elizabeth Buse, Visa’s global head of product. As for Visa’s market share, company officials maintain that it is rather small when considered within the larger context of all payments, where, for now at least, cash remains king. While Visa may be among the best-known brands in the world, how it operates is a mystery to many consumers. Visa does not distribute credit or debit cards, nor does it provide credit so consumers can buy flat-screen televisions or a Starbucks latte. Those tasks are left to the banks, which owned Visa until it went public in 2008. Instead, Visa provides an electronic network that acts like a tollbooth, processing the transaction between merchants and banks and collecting a fee that averages 5 or 6 cents every time. For the financial year ended in June, Visa handled 40 billion transactions. Banks that issue Visa cards also pay a separate licensing fee, based on payment volume. MasterCard, which is roughly half the size of Visa, uses a similar model. “It’s a penny here or there,” said Moshe Katri, an analyst who tracks the payments industry for Cowen and Company. “But when you have a billion transactions or more, it adds up.” With debit transactions forecast to overtake cash purchases by 2012, the model has investors swooning: Visa’s stock traded at $88.14 on Monday, near a 52-week high, while shares of MasterCard, at $256.84 each, have soared by more than 450 percent since the company went public in 2006. While there is little controversy about the fees that Visa collects, some merchants are infuriated by a separate, larger fee, called interchange, that Visa makes them pay each time a debit or credit card is swiped. The fees, roughly 1 to 3 percent of each purchase, are forwarded to the cardholder’s bank to cover costs and promote the issuance of more Visa cards. The banks have used interchange fees as a growing profit center and to pay for cardholder perks like rewards programs. Interchange revenue has increased to $45 billion today, from $20 billion in 2002, driven in part by the surge in debit card use. Some merchants say there should be no interchange fees on debit purchases, because the money comes directly out of a checking account and does not include the risks and losses associated with credit cards. Regardless, merchants say they inevitably pass on that cost to consumers; the National Retail Federation says the interchange fees cost households an average of $427 in 2008. While the cost per transaction may seem small, at Best Buy, the biggest stand-alone electronics chain, “these skyrocketing fees add up to hundreds of millions of dollars every year,” said Dee O’Malley, director of financial services. “Every additional dollar we are forced to pay credit card companies is another dollar we can’t use to hire employees, or pass along to our customers in the form of savings.” Weighing Rules on Merchants The Justice Department is investigating if rules imposed by payment networks, including Visa, on merchants regarding “various payment forms” are anticompetitive, a spokeswoman said. Several bills have been introduced in Congress seeking to give merchants more ability to negotiate interchange, which is largely unregulated. While interchange remains legal despite repeated challenges, a group of merchants is pursuing yet another class-action suit, this time in federal court in Brooklyn, against Visa and MasterCard that seeks to upend the system for setting fees. “Visa and MasterCard have morphed into a giant cookie jar for banks at the expense of consumers,” said Mitch Goldstone, a plaintiff in the case. Fees were not an issue when debit cards first gained traction in the 1980s. The small networks that operated automated teller machines, like STAR, Pulse, MAC and NYCE, issued debit cards that required a PIN. MasterCard had its own PIN debit network, called Maestro. Merchants were not charged a fee for accepting PIN debit cards, and sometimes they even got a small payment because it saved banks the cost of processing a paper check. That changed after Visa entered the debit market. In the 1990s, Visa promoted a debit card that let consumers access their checking account on the same network that processed its credit cards, which required a signature. To persuade the banks to issue more of its debit cards, Visa charged merchants for these transactions and passed the money to the issuing banks. By 1999, Visa was setting fees of $1.35 on a $100 purchase, while Maestro and other regional PIN networks charged less than a dime, Federal Reserve data shows. Visa says the fee was justified because signature debit was so much more useful than PIN debit; at the time, roughly 15 percent of merchants had keypads for entering a PIN. Merchants said they had no choice but to continue taking the debit cards, despite the higher fees, because Visa’s rules required them to honor its debit cards if they chose to accept Visa’s credit cards. A Seven-Year Battle Wal-Mart, Circuit City, Sears and a number of major merchants eventually sued. After seven years of litigation, Visa and MasterCard agreed to end the “honor all cards” rule between credit and debit and to pay the retailers a settlement of around $3 billion, one of the largest in American corporate history. Visa paid $2 billion, and MasterCard the remainder. Since then, only a handful of retailers have stopped accepting Visa debit cards, an indication that the crux of the lawsuit was “much ado about nothing,” Mr. Sheedy says. And while some merchants said they thought the lawsuit would pave the way to a new era of competition, a curious thing happened instead: while Visa temporarily lowered its fees for signature debit, it raised the price on PIN debit transactions and passed the funds on to card-issuing banks, and its competitors soon followed. The current class-action lawsuit joined by Mr. Goldstone contends that Visa’s PIN debit network, called Interlink, is offering banks higher fees as an incentive to issue debit cards that are exclusively routed over this network. Interlink, which has raised its PIN debit fees for small merchants to 90 cents for each $100 transaction, from 20 cents in 2002, is often the most expensive, especially for small merchants, Fed data shows. One large retailer, who requested anonymity to preserve its relationship with Visa, provided data that showed Interlink’s share of PIN purchases rose to 47 percent in 2009, from 20 percent in 2002, even as its fees steadily increased ahead of most other networks — to 49 cents per $100 transaction in 2009, from 38 cents in 2006. Visa officials say its PIN debit network is taking off despite rising costs because it offers merchants, banks and consumers a level of efficiency and security that regional networks cannot match. “We are motivated as a company to try to drive value to each one of those participants so that they accept the card, issue more cards, use the card,” Mr. Sheedy said. At checkout counters, meanwhile, consumers are quietly tugged in one direction or the other. Safeway, 7-Eleven and CVS drugstores automatically prompt consumers to do a less costly PIN debit transaction. The banks, however, still steer consumers toward the more expensive form of signature debit. Wells Fargo and Chase are among those that offer bonus points only on debit purchases completed with a signature. Visa says it does not care how consumers use their debit card, as long as it is a Visa. But for now at least, the company says the only way to ensure that a purchase is routed over the Visa network is to sign. “When you use your Visa card, you have a chance to win a trip to the Olympic Winter Games,” a new Visa commercial promises. The commercial does not explain the rules, but the fine print on Visa’s Web site does: nearly all Visa purchases are eligible — as long as the cardholder does not enter a PIN. Source : http://www.nytimes.com/2010/01/05/your-money/credit-and-debit-cards/05visa.html?pagewanted=all Copyright 2010 The New York Times Company

The Stages of Building Business Credit: Where Are You?

Melanie Benson Strick is now a million dollar lifestyle success coach. But when she started her coaching and info marketing business, SuccessConnections, it never even occurred to her to build business credit. “The first two years of my business I had no idea how much money it would take to become profitable. Flying by the seat of my pants I used two strategies: borrow from my credit cards and borrow from my father. Unfortunately it wasn’t until I was up to my ears in debt that I knew about other forms of capital, and by then it was too late.” Benson Strick says there is an upside to learning from the school of hard knocks: “The positive by-product of looking for a capital infusion was that I became proactive about revenue projections. I learned how to identify what was going out, what was projected to come in, and create strong strategies to payoff the debt, including using low-interest credit cards. There is no way you can stick your head in the sand and become financially profitable,” she advises. According to the Small Business Administration more than three out of five small enterprises will borrow to start or grow their ventures, frequently using credit cards, home equity loans and loans from friends and family to get started. Like Benson Strick, many entrepreneurs wait until their business is already up and running to start building business credit. But if you start earlier – the very moment you launch your enterprise – you’ll increase your chances for success significantly. And it is worth it. Business credit can reverse your business’s cash cycle and increase profitability. After working with hundreds of business owners, we have found that small businesses are usually at one of four stages when it comes to building business credit: Stage One: Bogus Business Credit At Stage One, you’ve probably bootstrapped it and used personal credit cards, loans from “friends, family, and fools,” equity from your home, or even your life savings to fund your venture. Chances are, there is very little separation between you, your business, and your credit. The vast majority of businesses at this stage are operating as sole proprietors. This is the by far the most common and most dangerous stage of business credit. You are completely mixing business and personal credit, and that means: * You can have major headaches at tax time, not to mention forking over extra money to Uncle Sam by failing to take full advantage of available deductions. * You have no asset protection whatsoever. If your business tanks or is sued, you can lose everything personally and professionally. * Your personal credit score will sink due to the level of debt you’re carrying to fund your business. You may also see the interest rates on your credit cards and other accounts skyrocket. Clearly, you want to move through this stage as quickly as possible. Better yet, skip it altogether. Stage Two: Beginning Business Credit At Stage Two, you begin separating your business credit from your personal credit. You have a corporate structure in place, and you start applying for credit in the name of your business, not your own. By keeping business debts off your personal credit report, they don’t affect your credit scores. While you may not be getting a hefty line of credit from your bank, you are establishing “trade” accounts with retailers or suppliers where you can buy what you need and pay for it later. Most of these vendors will lean on your business credit history, without even looking at your personal credit. Whenever possible, you select vendors who report your payment history to the business credit agencies. This helps you start building a positive business credit score. Stage Two is a massive leap from Stage One. It helps protect your personal credit rating, which in turn allows you to continue to get more credit than you could at Stage One. You help maintain your personal credit scores and don’t run the risk of being turned down for business or personal loans due to the business debt you’re carrying. A small business can chug along at Stage Two for quite a while -- as long as the bills get paid on time. But Stage Two is not the destination. If you’re serious about your business, you’ll want to move to Stage Three. Stage Three: Building Business Credit Stage Three is where your business establishes a strong and stable credit identity. At this stage, you have successfully managed at least five or six trade accounts that report to the major business credit agencies, and you have at least one or two business credit cards that are reported to your business credit reports only – not your personal ones. As a successful Stage Three business owner, you use an accounting system that allows you to generate financial statements as needed, and you understand where your business stands financially at any given time. You are now able to approach banks for unsecured business lines of credit, loans, and leases. To avoid bank rejections and dings on your personal credit, you strategically approach only those banks likely to approve you. At Stage Three, you’ll find yourself with opportunities to borrow or lease without having to rely on your personal credit. Does that mean you’ll never be asked for a personal guarantee or to have your personal credit checked for a business loan? No. Lenders will try to get every bit of extra protection they can. But the stronger your business and corporate credit rating, the more negotiating power you have to strike deals at the most favorable terms. Stage Four: Robust Business Credit Your business is no longer just about you, the owner(s), when you reach Stage Four. It is a “real” business, with strong revenues and a solid track record. Some businesses get here very quickly, but others can be operating for years and not break through. At Stage Four: * Your business credit ratings are strong, and you actively monitor them. * You have solid revenues and well-prepared, audited financials. * You use business credit exclusively (not personal credit), and you have business lines of credit and corporate credit cards with major financial institutions. You may have even negotiated away personal guarantees on some of the credit cards (when you have more than 25 employees and $2 million in revenue). * Your business plan is well-prepared and persuasive. At this Stage, you may decide to look for outside investors -- private investors, angels or venture capitalists (VCs) -- to help take your company to the next level. If you’ve built a strong foundation, you’ll find yourself negotiating much better terms if you choose to bring in outside capital. Even if you don’t plan to borrow, it is essential that building business credit becomes a part of your business from the start. Planning ahead is crucial. As former president John F. Kennedy said, “The time to repair the roof is when the sun is shining.” Get your free xbanker report Gerri Detweiler is considered one of the country’s top credit experts. She has been interviewed for thousands of radio, television and print news stories including USA Today, The Wall Street Journal, The New York Times, Dateline NBC and many others. She has testified before Congress several times and worked on reform of the national credit reporting laws. She is the co-founder of TheXBanker.com. Source : Copyright © 2011 StartupNation, LLC

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Betting on Business Innovation with Rich Internet Applications?

Business Management Magazine October 01, 2009 Download as a PDF

Innovation is a must for any organization. Many are attempting to create solutions that break down the walls separating business processes from the flow of information. They are being lead by a constant drumbeat demanding more effective interactions with customers, partners, and employees. What they have found is that their legacy applications do just the opposite.
Ultimately executives are asking, “How do we create something that doesn’t just give us a flashier interface but offers substantial benefits?” “How do we create a compellingly different way for people to work, play, and even live?” At a rapidly increasing rate, these organizations are turning to a technology that is revolutionizing business interaction, rich Internet applications.
The promise of rich Internet applications is alluring, but like the Sirens of past it is imperative to avoid the rocky shores that surround them. Many efforts fall short of expectations, deadlines, and budget. Like other IT projects, they fail because of poor planning, management, and expectations.
Other efforts fail in a different way. Not because they didn’t deliver against the schedule or budget, but because they neglected to create the innovation RIAs can provide. This is often because these projects were approached with the same mindset used to develop the legacy applications.
When RIA projects fall flat, the finger of blame is often pointed towards the technology. If companies buy into this and abandon the technology, they forego a very powerful asset. The advantage of RIA is real. With informed executive oversight, experience, and discipline, it can deliver the kind of breakthrough organizations need to stay ahead. The rest of this article is dedicated to helping executives map out a route to RIA success. It summarizes top mistakes and offers best practices that will help avoid the pitfalls.
Establish Clear Business Goals
Not having clear business goals is something that can hurt any project. RIA projects are no different. In fact, it is probably even more important with RIA because the wow factor makes it easy to get sidetracked on flashy features. Answering a few questions like “What measurable business value will this create?” and “Who will specifically benefit from this?” helps tremendously. Making sure that every team member knows the answers to these questions will help them prioritize their efforts.
Embracing experience driven design is critical to capitalizing on RIA. Ignore this and you will surely miss out. Even worse you may be setting yourself up for another stiff dose of negative ROI.
Rather than starting from a list of assumed necessary features, experience driven design begins by understanding the needs of the users you are trying to please. The iterative approach fosters interaction between the application team and the users who matter most. If executed effectively, you can avoid creating a merely superficial application or hearing the dreaded words “Well that is what I asked for but its not what I need.”
Too many times experience driven design is practiced in name only or is pushed to the back burner. Perhaps it seems too fluffy to some. Or perhaps it appears like an easy corner to cut when faced with a tight budget or timeline. Regardless of the reason, the business results rarely vary and are usually unpleasant.
One of the main keys to successfully implementing experience driven design is releasing early and often. A great strategy is to start with basic sketches. From there, the fidelity of the design concepts can be increased until a clickable prototype is reached.
Though it may seem like it is slowing things down, obtaining user input can be done efficiently at each design iteration point. When implemented correctly, it helps to focus priorities and avoid costly wrong turns.
When starting out don’t try to answer every edge case. Identify core interaction points and tackle those first. This avoids getting stuck in the mud and helps drive costs down.
Even seasoned experience architects can push the envelope of what’s technically possible. In some respects this is what you want them to be doing. However, the application eventually needs to be developed and perform when it is deployed. Having the technical architects involved in the experience design phase provides a critically important system of checks and balances.
Status Quo
While this may almost be a cliché, not doing so it is the classic innovation killer. Let the experience designer confront preconceived notions. This can result in innovation and competitive advantage not found in the initial vision.
Some of the greatest strengths of rich Internet applications can also cause great difficulties. For example, the ability to readily connect to a host of different data sources is a powerful one. However, many have not developed an effective services layer to support this kind of interaction.
This is often taken for granted at great cost. In the end, RIAs are dependant on the data going in and out of it. It is not sufficient to think that the necessary services can be cobbled together on an ad hoc basis. If these are constantly in flux or ill defined, it will cause significant problems in development and QA. Time spent ensuring quality in this area will save many hours of delay and finger pointing.
RIAs can rapidly show superficially impressive results. The unfortunate thing is that management often confuses this with having a solid application and their expectations become skewed. A snappy proof of concept isn’t something that will hold up to commercial use. Developing a sustainable RIA requires sound architecture practices like any other business solution.
Most RIA technologies have application frameworks or architectural models associated with them. These frameworks offer a proven approach to development. This delivers an inherent use of best practices and easier maintenance down the road.
The deliverables of RIA projects usually require interaction from a greater variety of specialized skill sets. The ability to effectively tie these together is no easy task. Like other efforts, the amount of time and skill required to complete the project is likely to be underestimated. Do a gap analysis. Without the correct resources or availability, proceeding will have limited odds of success.
This is an area foreign to many businesses. Generally, this group will consist of an experience architect and at least one designer. The experience architect can glean critical user needs and combine that with business goals. From there, they will work with the technical team to translate that into a final application. Finally, designers provide will the polished look and feel while refining subtle user interactions.
Front End Architecture and Development
The front-end architect is responsible for assessing technical and business requirements and determining overall application structure. Additionally, they ensure the creation of a highly scalable and maintainable end product. While working closely with the engineering lead, they will define a development approach that will allow the team to work effectively.
While many organizations have a strong understanding of their backend systems such as databases, LDAP, or ERP, few have expert knowledge in extending them effectively for use with RIAs. As mentioned earlier, this is a critical part of RIA development. The right expertise here will not only increase RIA success but will allow for greater flexibility in future projects.
Keeping multiple teams on task, on budget, and in scope is challenging. Project managers provide objective insight and coordination across disciplines while mitigating risk. Yet, this is an area that is routinely underinvested in and is a top contributor to project failure.
Many organizations task technical leads with project manager responsibilities. Doing this merely injects risk and mediocrity to a project and saves neither time nor money.
Parting Thoughts
RIA’s offer outstanding capabilities and are an excellent platform for driving business innovation. They can break down walls, create compelling new ways to interact, and act as a robust differentiator. Despite best intentions, many of these projects do not deliver the expected result. This is usually due to a lack of experience, understanding, or proper investment in the necessary skill sets.
As rich Internet application development is relatively new, organizations are just now taking the steps to build these skills internally. While this is important, many make the mistake handing mission critical applications to resources learning on the job. This may be beneficial to the individuals building their skill sets, but it does not bode well for the end result.
Utilizing the experience and talent of organizations specialized in this arena can be highly valuable. They can work with executives to develop an effective RIA strategy. From there, these organizations can deploy a veteran team while integrating internal resources. This mitigates a significant amount of risk while considerably increasing return on investment.

"Rich Internet applications have emerged in the past couple years are inexpensively breaking down barriers between different kinds of computer data to yield information for police, businesses and others."
Denver Business Journal

2011 © Universal Mind. All Rights Reserved

Tips memanfaatkan pendekatan e-commerce untuk menjual produk dan jasa

Seringkali apabila kita berpikir tentang toko online,kita memikirkan kompleksitas yang akan dihadapi. Keranjang belanja, merchant account, sistem pembayaran, integrasi dengan sistem, suto-responder dan virtual terminal hanya beberapa aspek dari sistem belanja online yang membikin anda pusing. Sistem yang tampak membingungkan ini sudah cukup membuat enterpreneur/pengusaha yang sibuk akan menjauh dari sistem berjualan di internet.
Beberapa tahun lalu, masih sangat sedikit pilihan untuk menjual barang anda melalui internet. Anda harus memiliki reputasi yang baik untuk mendapat merchant account. Dana dari merchant account akan disalurkan melalui sebuah rekening dan terdapat biaya/ potongan untuk setiap akun rekening. Beberapa bank bahkan memberikan potongan untuk setiap transaksi di rekening anda. Ada juga biaya merchant yang dobel yaitu biaya payment gateway dan payment processor Bahkan meskipun dengan penjualan nol dalam sebulan, anda tetap akan dikenakan biaya per bulan untuk biaya gateway, hosting, shopping cart dan beberapa biaya lainnya. Selain biaya tetap tersebut, anda juga harus membayar persentase potongan untuk setiap penjualan. Untungnya, tahun-tahun terakhir ini, semuanya menjadi lebih sederhana dan lebih murah.
Apabila anda mencari sistem pembayaran sebagai perseorangan, bisnis kecil, komunitas atau grup atau perusahaan, anda dapat memulai mencari pilihan sistem belanja mudah yang tersedia saat ini. Dengan sistem pengecekan akun standard dan layanan pembayaran third-party, maka anda sudah dapat menerima pembayaran melalui email. Anda dapat menulis singkat informasi email dan menaruh link pada email anda untuk digunakan oleh customer anda dalam melakukan pembayaran. Mungkin anda ingin menggunakannya sebagai donasi bagi organisasi anda, cukup gunakan link tersebut dan para donatur akan dengan mudah melakukan pengiriman dana. Namun untuk anda yang ingin tampil lebih profesional dan memudahkan customer anda,  buatlah sebuah website , blog atau halaman social media, karena dengan ini anda dapat menyediakan informasi lebih lengkap mengenai proses pembayaran. Dengan blog, website atau social media, anda dapat menciptakan prosedur pembayaran yang lebih bagus. Anda dapat menyertakan artikel yang informatid berupa audio, video untuk penyajian informasi lebih lengkap bagi pelanggan anda sebelum melakukan pembayaran.
Mungkin saat ini anda berpilik, "Ini seharusnya bisa dilakukan, bisakan saya melakukan ini?. Ok, ini beberapa tips bagi yang anda yang ingin melakukan prosedur commerce dengan mudah:

• Tentukan apa yang ingin anda jual dan berapa anda menghargainya. Lakukan riset online di pasaran apabila anda masih belum yakin dengan harga yang anda miliki.
• Tulis deskripsi sekitar 200 kata atau kurang mengenai produk atau layanan anda. Pastikan anda menuliskan dengan baik mengenai fitur dan keuntungan dari produk yang anda tawarkan.
• Gunakan template sederhana untuk menciptakan sebuah website , blog atau social media untuk menempatkan link pembayaran untuk produk anda atau layanan anda. Selalu ingat untuk menciptakan halaman "Thank You" yang akan muncul saat customer selesai melakukan pembelian. Apabila anda menjual barang yang berupa file/digital goods, tempatkan download link atau instruksi untuk mendownload di halaman ini.
• Buka sebuat akun third-party yang dapat memproses pembayaran bagi customer anda. Terdapat banyak pilihan. Pastikan menggunakan layanan yang fiturnya cocok dengan kebutuhan anda.
• Tambahkan detail produk atau layanan pada akun payment processor anda, Sebuah link email atau html embed code akan tercipta di langkah ini.
• Lakukan pengetesan pada link atau web code untuk memastikan ini berjalan sesuai yang anda inginkan dan berjalan normal.
• Sekarang anda telah siap untuk mengambil informasi dan menaruh pada website anda atau mengirimkannya melalui email.
• Tugas selanjutnya adalah memonitor penjualan anda dan meningkatkan layanan pada customer anda. Dan nikmati hasil penjualan anda dengan sistem e-commerce ini.

Kini anda telah membaca gambaran singkat bagaimana memanfaatkan sistem commerce untuk menjual jasa produk atau layanan/service. Bagi anda yang ingin memiliki toko online sendiri atau tidak ingin telalu pusing dengan prosedur online yang terasa cukup rumit, Visigraphic dapat membantu anda membuat sebuah shopping cart online bagi penjualan produk anda atau jasa anda. Hubungi Visigraphic untuk bagi anda yang ingin menjual produk melalui toko online. Klik disini untuk menghubungi Visigraphic                                                                                                                                                                                                                   Copyright © 2010 Visigraphic - Indonesia Website Development. All Rights Reserved.
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The Strategic Role of Marketing

In the Harvard Business School Press book Marketing as Strategy, London Business School's Nirmalya Kumar argues that marketing must help drive organizational change. Q&A.

Management has forgotten, or never realized, the ability of the marketing function to help drive organizational change, says Nirmalya Kumar in his new book, Marketing as Strategy: Understanding the CEO's Agenda for Driving Growth and Innovation, published by Harvard Business School Press.
In this interview, Kumar discusses how the burden is on marketers themselves to rise above the tactical level and drive organization-wide initiatives to deliver value to customers.
Manda Salls: You make the point that marketers are often (and increasingly) treated as a function rather than as part of the strategic team. Why does this happen? Have CEOs lost their faith in marketers?
Nirmalya Kumar: CEOs have lost faith in marketing primarily for two reasons. First, shareholders and analysts are pressuring corporations and their CEOs to deliver against short-term profit and revenue objectives. CEOs are unsure of returns from marketing expenditures and marketers have acquired a reputation as a "spend" function rather than a "save and make" function. The belief is that a finance person managing a brand would probably take more time to determine how much to spend to support it and how to measure the effects of the spending than a marketer, who would just ask for more money. Marketing initiatives must have a substantial, demonstrated, top- or bottom-line effect to excite the CEO.
Second, marketers are too often seen as specialists and tacticians talking about the "Four Ps" (product, place, price, and promotion) rather than strategists who help CEOs lead organization-wide initiatives that have strategic, cross-functional, and bottom-line impact. With all its specialization, marketing has not aspired to lead major transformational projects that involve cross-functional, multinational teams sponsored by the CEO. Other functions have been better at rallying around transforming initiatives such as Total Quality Management (TQM) and reengineering led by operations; Economic Value Added (EVA) and Mergers and Acquisitions (M&A) guided by finance; and the Balanced Scorecard driven by accounting. The result is that one encounters the positions of chief operating officer, chief technology officer, and chief financial officer much more frequently than the chief marketing officer in companies.
Q: How can marketers begin to improve their value to a company? Are marketing executives short-selling themselves?
A: Given the above, to improve value to the company, marketers must engage CEOs and the top leadership in meeting the two marketplace challenges that all companies face: enhancing customer loyalty and reducing downward pressure on prices. To meet this, companies are looking for growth-related initiatives like expanding to new and growing channels of distribution, selling solutions instead of products, and pursuing radical rather than incremental innovation.

Marketing initiatives must have a substantial, demonstrated, top- or bottom-line effect to excite the CEO.

Marketing executives have the skills to lead such initiatives if they are willing to take the leadership role and be more cross-functional in their thinking. None of these initiatives can be successfully implemented by the marketing function alone.
Q: As markets become global, how important is it for marketers to tailor products and marketing strategies for each region? How does this weigh against the importance of a unified market strategy for a product?
A: Overall, with more open media and economies, consumers are to some extent moving closer together in needs. Yet, differences remain. One needs to balance the economies of scale and higher profits that come from global products and programs versus the increased sales and penetration of markets that result from tailored marketing strategies.
The challenge is to be elemental—find which aspects of marketing are really scale-sensitive versus those elements where local adaptation truly increases value for customers. Unfortunately, in practice this is very hard to implement, as local managers tend to believe everything is unique about their markets while corporate headquarters tend to see the world as more global than it is. Thus there is, and will always be, a tension between designing programs and products that are global versus local. Increasing understanding through market research that allows the examination of this issue in a more "objective" manner and moving managers across countries to enhance communication are two methods used by companies to grapple with this challenge.
Q: From the low-carb craze to product lines aimed at men, new brands seem to be multiplying exponentially. What problems can brand proliferation cause companies? How can a company determine if it has too many brands?
A: There are four problems caused by brand proliferation and if a company observes these then it knows it has too many brands.
First, the larger the number of brands in the company's portfolio, the greater the overlap of brands on target segments, positioning, price, distribution channels, and product lines. The overlapping results in cannibalization of sales and duplication of effort. If managed poorly, many of the brands in the portfolio may end up competing with each other rather than with the brands of competitors.
Second, a larger brand portfolio means lower sales volumes for the individual brands as the total market divides among them. Without scale economies in product development, supply chain, and marketing, firms cannot support each brand at competitive levels. Third, the rise of powerful mass merchants such as B&Q, Carrefour, and Wal-Mart has triggered brand consolidation perhaps more than anything else. Retailers' tremendous negotiating power, especially against weaker brands, forces manufacturers to critically evaluate their brand portfolios.
Finally, marginal brands end up consuming a disproportionate amount of a company's time and resources, and exacerbate tensions between the narrowly focused brand and country managers.

Local managers tend to believe everything is unique about their markets while corporate headquarters tend to see the world as more global than it is.

Q: In your book, you talk about the changes technology has brought to distribution channels, and the risks and rewards of being an adopter of new technology. What would you recommend to companies that are considering a channel migration?
A: A well-articulated strategic logic for entering a new or emerging channel of distribution is the bedrock of any channel migration decision. The following six questions are helpful in evaluating the opportunity presented by the new distribution channel:

1. How attractive is the value proposition that the new distribution channel gives our target segments?
2. Is the proportion of our target segment attracted to the new channel large enough to demand our attention?
3. Do we have a differentiated value proposition or an operational advantage in serving customers through the new channel?
4. Is our cost structure and value network optimized to serve customers through the new channel?
5. What can and will competition do with the new channel?
6. How will the new distribution channel change consumer channel preferences and strategies of existing channel members?

In light of the answers to these question, becoming either an early adopter or a follower first requires that a company balances the potential for additional sales and margins against the risk of upsetting its existing distribution structure.
[ Buy this book ]
Manda Salls is Web editor for Baker Library.

Market-Driving Checklist

by Nirmalya Kumar
Market-Driving Mind-Set

Does our top management continuously reinforce the need for market-driving ideas?

Do we actively seek to cannibalize our own products?

Is the pursuit of competing emerging technologies permitted?

Are new ideas routinely imported from the outside?

Are time and resources allocated for curiosity-driven explorations?

Market-Driving Culture

Do we tolerate failures when people are attempting something really new?

Are processes in place to capture learning from failures?

Are people encouraged to share their failures publicly?

Do we constrain innovation through too much respect for hierarchy?

Are organizational rules and norms enforced too rigidly?

Do we tolerate mavericks and allow space for champions to flourish?

Market-Driving People

Do we hire people who will increase the genetic pool of our company?

Do we mix people on teams to generate creative abrasion?

Are novices included on important projects to question assumptions?

Do we think our people are entrepreneurial?

Are exceptional innovation achievements and efforts recognized and rewarded?

Market-Driving Processes

Do we allow for long payback horizons for innovation projects?

Do we accept alternative routes to obtain funding and approval for market-driving ideas?

Do we have processes that move ideas from the bottom to the top without obstruction?

Do we run competitions to generate radical new concepts?

Do we ensure that radical ideas do not lose resources to incremental ideas?

Excerpted with the permission of Harvard Business School Press from Marketing as Strategy: Understanding the CEO's Agenda for Driving Growth and Innovation by Nirmalya Kumar. Copyright 2004 Nirmalya Kumar; All rights reserved.

The Washington Post

Seeking North American expansion, Saab picks up New York business

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By Marjorie Censer, Monday, July 11, 1:29 AM

Seeking to grow its North American business, Swedish defense company Saab AB is doubling its D.C. staff and has purchased an East Syracuse-based air traffic management and surveillance firm.

Saab — which sold off the automobile business of the same name in 2000 — expects to increase its North American office, which is based in the District, from about 15 employees to at least 30 in the next six months, said Dan Enstedt, president of Saab North America.

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It will primarily add business development and sales staff as it looks to beef up its U.S. and Canadian presence through both organic growth and acquisitions.

Late last month, Saab agreed to pay $155 million for Sensis, a 600-employee company known for its work in air traffic management and in sensors and radars. Saab could pay up to an additional $40 million depending on the success of the business. The deal requires approval from U.S. antitrust authorities, but Enstedt said he expects it to close by September.

Sensis, which has locations in Reston and the District, will function as a Saab subsidiary. Its estimated revenue hit about $130 million last year.

Despite tightening U.S. budgets, Enstedt said the country still represents a sizable market.

“We’ve been here in the U.S. for a long time, but we really want to grow the business much more,” he said. “To be a successful company here, of course, you need to have a stronger footprint.”

Enstedt said he anticipates that Sensis’s air traffic management and sensor work will both be growing businesses. He noted that Sensis has won work on the United States’ next-generation air traffic management system while Saab is working on a similar program in Europe, meaning the combined company should be able to take on even larger projects.

Additionally, Enstedt said, Saab’s growing U.S. presence will help it build partnerships with companies like Boeing and Northrop Grumman. Saab’s last U.S. acquisition was North Carolina-based Barracuda Technologies in 1999.

The company is not alone, as many other European firms — facing tightened European defense spending — are looking to the United States for growth. Major firms like Cobham of England and Finmeccanica of Italy have made recent U.S. purchases.

“There’s tremendous pressure now on European defense budgets,” said Philip Finnegan, director of corporate analysis at the Teal Group. “Already the expectation is that pressure is going to grow on U.S. defense budgets, but still the size is so much greater that . . . most European defense companies want to expand into the U.S.”

While not ruling out future acquisitions, Enstedt said another one will not happen quickly.

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Importance of Marketing

From a very small fish to becoming the big one and then the biggest among all. This is how few brands have changed with time e-g: Levis Microsoft and many other "The Big Fish"

The financial success of such brands have been depending on combined efforts of their financial strategies and their marketing efforts. One thing that's been common among all there brands is a high degree of Brand loyalty. They have managed to capture the share of heart and in turn share of customer’s wallet.

Companies now understand that marketing plays an important roll in their overall success ,so now companies have CMOs (Chief Marketing Officer) along with CFOs and CEOs. They understand that if there are functions close to customers its ether Sales or Marketing. Sales become a direct interface among customs and products offered by companies, and marketing is an indirect function between customer and the company.

But what makes marketing so big? Why is it important? If you have a great product you are bound to succeed then why do u need to spend on marketing / advertising?

The answer to these questions lies deep within the customer’s brain. Customers / consumers are smart and they understand what makes your product different form mine. If you are offering then 1 % more that what I do why should they pay me rather than paying you. That’s the point. And secondly it’s important to communicate theproduct offerings to the end user. If a marketing team has worked hard on understanding the consumer needs they need to make sure their customers get a feel “This brand knows what I want ”. Trust me this is the only major differentiator between why your 1% more is able to get you more loyal and more number of customers.

The time has changed. To products that are offered by a brand you have "n" number of more substitutes and consumers get to know which is the better substitute that suites there requirements . So it is important to make sure that marketing efforts are more on understanding the changing needs on today’s customer. We need to understand the minds of customers. It’s rightly said “customer is KING”

Marketing managers need to understand the customer needs and they need to make their major decisions such as the features to include, the price to be offered to customers and what to spend on advertisements.

Marketing today has become a emotional research which helps understanding customer and consumers psychology so that products are developed based on these understanding. The marketing managers need to answer following questions:

* How do we find the right market segment?
* How do we differentiate?
* How can we compete with low cost business models?
* How do we build a better brand?
* How do we reduce cost of customer acquisition?

A successful Marketing team can carefully analyze customer needs and carefully monitor there competitors marketing moves. Remember a short term sales driven view does not work in business world today. The C-level managers, the CEO,CFO should communicate importance of marketing in an organization, how the marketing function plays a great role in organizations success.

Also read: Emotional Marketing | SWOT / TOWS Analysis | Porter's Generic Strategies | Marketing Mix |
Tags: Importance of Marketing

All content is copyright © 2010 drypen.in and it's original authors. Reproduction without prior consent is prohibited.

Strategic Management | Positioning Strategy

Nature and role of marketing

The Times 100 / Revision Theory / Marketing

All modern organisations engage in marketing so as to be able to please and win the loyal support of their customers. Gillette engages in marketingto find out about the needs and requirements of shavers,

banks engage in marketing research to find out about its customers financial services requirements, and the Inland Revenue engages in market research to find out about the needs and requirements of taxpayers and other clients.The Chartered Institute of Marketing uses the following definition of marketing:

'Marketing is the management process responsible for identifying, anticipating and satisfying consumer requirements profitably.'

The definition places consumers at the centre of the organisation's activities - whether they be consumers of Kellogg's Special K, the pupils or parents of children at the local school, or people queuing up to watch Nottingham Panthers play ice hockey.

Some organisations are very close to their consumers - for example, a post office in a small town. For other organisations consumers may be thousands of miles away - for example, Cadbury Schweppes selling confectionery and soft drinks around the world. The principle that the 'Consumer is King and Queen' is just as relevant to the organisation engaged in international marketing.

There are a number of key ingredients to the Chartered Institute of Marketing definition:

* Identifying - This will involve answering questions such as 'How do we find out what the consumer's requirements are?' and 'How do we keep in touch with their thoughts and feelings and perceptions about our good or service. This is a key purpose of market research.

* Anticipating - Consumer requirements change all the time. For example, as people become richer they may seek a greater variety of goods and services. Anticipation involves looking at the future as well as at the present. What will be the Next Best Thing (NBT) that people will require tomorrow.

* Satisfying - Consumers want their requirements to be met. They seek particular benefits. They want the right goods, at the right price, at the right time in the right place.

* Profitability - Marketing also involves making a margin of profit. An organisation that fails to make a profit will have nothing to plough back into the future. Without the resources to put into ongoing marketing activities, it will not be able to identify, anticipate or satisfy consumer requirements.


Read more: http://www.thetimes100.co.uk/theory/theory--nature-role-marketing--245.php#ixzz1NoSTzGOi

Copyright © The Times Newspapers Ltd and MBA Publishing Ltd 1995-2011

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The Tennessee Small Business Development Center (TSBDC) at ETSU and the Kingsport Office of Small Business Development & Entrepreneurship (KOSBE) will host a free Small Business Spring Night School on Tuesday, May 24 and Thursday, May 26 from 6 – 9 p.m., at the Kingsport Center for Higher Education, downtown Kingsport.

Primarily, the Small Business Spring Night School provides free training, peer-to-peer networking, collaborative problem-analysis, problem-solving and access to financing to small business owners and entrepreneurs.

The workshop is offered free of cost, but registration is required.

Tuesday, May 24, attendees will learn:

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So You Want to Start a Business: This class is designed for individuals who have never before owned or operated a small business. Topics included in this session include a discussion of successful business ownership traits (participants will complete an entrepreneurial assessment); assessment of the business idea; and some of the “mechanics” of establishing a business, such as forms of business ownership, insurance, business planning, and obtaining financing. Facilitated by Aundrea Wilcox, Executive Director of KOSBE, Senior Business Counselor for TSBDC at ETSU Kingsport Affiliate Office.

Thursday, May 26, attendees will learn:

Social Media Is Here! Are You Ready? An Introduction to Social Media for Small Business: This class is an introductory session on social media. The topics discussed will include the basics of social media and why it is needed in your small business and the pros and cons of using social media. You will learn what the top four social media sites are and how to utilize them. Most importantly, in this class you will learn how to develop a social media strategy for your business. Facilitated by Mark Bays, Business and Technology Counselor for Tennessee Small Business Development Center at ETSU in Johnson City

6 Ways to Raise Your Credit Score FAST: Nowadays, if your credit score is less than 700, your chance of getting a small business loan is negligible. There is good debt and bad debt. The more you know about the credit rating system overall, the better you can boost your credit score and save money in the long run. Attend this class and learn how to better manage your credit and how to establish or re-establish a good track record. Facilitated by Robert Price, PriceDaniels Credit Group, Inc.

Start Your Business Plan Tonight: Attendees should be prepared to handwrite or bring their lap tops and plug in to begin working on their first draft business plan in a class setting. If you have started a plan, but never finished it, or you have no idea where to begin, this class is for you. This hands-on class will take you through the complete business planning process, reviewing all of the integral parts of a business plan. Attendees will participate in a personalized approach to goal-setting and strategy development for their business or idea. In addition to group discussion, there will also be an opportunity to receive some individual attention while developing financial projections and working on your own operating plan. This class if for startups as well as existing businesses. You must bring your own laptop or a notepad. Facilitated by Aundrea Wilcox.

The Small Business Spring Night School is designed with new and existing businesses and entrepreneurs in mind (including home-based), however, retirees seeking a second career, part-time workers wanting to supplement their income, upper class high school and college students are encouraged to participate. There is no cost to attend, but seating is limited. Therefore, advanced registration is required. Anyone interested can register online or call (423) 392-8825 for more information.

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Marketing Plan

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Business Resource Software, Inc.

Marketing Plan
The information for this article was derived from many sources, including Michael Porter's book Competitive Advantage and the works of Philip Kotler. Concepts addressed include 'generic' strategies and strategies for pricing, distribution, promotion, advertising and market segmentation. Factors such as market penetration, market share, profit margins, budgets, financial analysis, capital investment, government actions, demographic changes, emerging technology and cultural trends are also addressed.

There are two major components to your marketing strategy:

* how your enterprise will address the competitive marketplace
* how you will implement and support your day to day operations.

In today's very competitive marketplace a strategy that insures a consistent approach to offering your product or service in a way that will outsell the competition is critical. However, in concert with defining the marketing strategy you must also have a well defined methodology for the day to day process of implementing it. It is of little value to have a strategy if you lack either the resources or the expertise to implement it.

In the process of creating a marketing strategy you must consider many factors. Of those many factors, some are more important than others. Because each strategy must address some unique considerations, it is not reasonable to identify 'every' important factor at a generic level. However, many are common to all marketing strategies. Some of the more critical are described below.

You begin the creation of your strategy by deciding what the overall objective of your enterprise should be. In general this falls into one of four categories:

* If the market is very attractive and your enterprise is one of the strongest in the industry you will want to invest your best resources in support of your offering.
* If the market is very attractive but your enterprise is one of the weaker ones in the industry you must concentrate on strengthening the enterprise, using your offering as a stepping stone toward this objective.
* If the market is not especially attractive, but your enterprise is one of the strongest in the industry then an effective marketing and sales effort for your offering will be good for generating near term profits.
* If the market is not especially attractive and your enterprise is one of the weaker ones in the industry you should promote this offering only if it supports a more profitable part of your business (for instance, if this segment completes a product line range) or if it absorbs some of the overhead costs of a more profitable segment. Otherwise, you should determine the most cost effective way to divest your enterprise of this offering.

Having selected the direction most beneficial for the overall interests of the enterprise, the next step is to choose a strategy for the offering that will be most effective in the market. This means choosing one of the following 'generic' strategies (first described by Michael Porter in his work, Competitive Advantage).

* A COST LEADERSHIP STRATEGY is based on the concept that you can produce and market a good quality product or service at a lower cost than your competitors. These low costs should translate to profit margins that are higher than the industry average. Some of the conditions that should exist to support a cost leadership strategy include an on-going availability of operating capital, good process engineering skills, close management of labor, products designed for ease of manufacturing and low cost distribution.
* A DIFFERENTIATION STRATEGY is one of creating a product or service that is perceived as being unique "throughout the industry". The emphasis can be on brand image, proprietary technology, special features, superior service, a strong distributor network or other aspects that might be specific to your industry. This uniqueness should also translate to profit margins that are higher than the industry average. In addition, some of the conditions that should exist to support a differentiation strategy include strong marketing abilities, effective product engineering, creative personnel, the ability to perform basic research and a good reputation.
* A FOCUS STRATEGY may be the most sophisticated of the generic strategies, in that it is a more 'intense' form of either the cost leadership or differentiation strategy. It is designed to address a "focused" segment of the marketplace, product form or cost management process and is usually employed when it isn't appropriate to attempt an 'across the board' application of cost leadership or differentiation. It is based on the concept of serving a particular target in such an exceptional manner, that others cannot compete. Usually this means addressing a substantially smaller market segment than others in the industry, but because of minimal competition, profit margins can be very high.

Pricing
Having defined the overall offering objective and selecting the generic strategy you must then decide on a variety of closely related operational strategies. One of these is how you will price the offering. A pricing strategy is mostly influenced by your requirement for net income and your objectives for long term market control. There are three basic strategies you can consider.

* A SKIMMING STRATEGY
If your offering has enough differentiation to justify a high price and you desire quick cash and have minimal desires for significant market penetration and control, then you set your prices very high.
* A MARKET PENETRATION STRATEGY
If near term income is not so critical and rapid market penetration for eventual market control is desired, then you set your prices very low.
* A COMPARABLE PRICING STRATEGY
If you are not the market leader in your industry then the leaders will most likely have created a 'price expectation' in the minds of the marketplace. In this case you can price your offering comparably to those of your competitors.

Promotion
To sell an offering you must effectively promote and advertise it. There are two basic promotion strategies, PUSH and PULL.

* The PUSH STRATEGY maximizes the use of all available channels of distribution to "push" the offering into the marketplace. This usually requires generous discounts to achieve the objective of giving the channels incentive to promote the offering, thus minimizing your need for advertising.
* The PULL STRATEGY requires direct interface with the end user of the offering. Use of channels of distribution is minimized during the first stages of promotion and a major commitment to advertising is required. The objective is to "pull" the prospects into the various channel outlets creating a demand the channels cannot ignore.

There are many strategies for advertising an offering. Some of these include:

* Product Comparison advertising
In a market where your offering is one of several providing similar capabilities, if your offering stacks up well when comparing features then a product comparison ad can be beneficial.
* Product Benefits advertising
When you want to promote your offering without comparison to competitors, the product benefits ad is the correct approach. This is especially beneficial when you have introduced a new approach to solving a user need and comparison to the old approaches is inappropriate.
* Product Family advertising
If your offering is part of a group or family of offerings that can be of benefit to the customer as a set, then the product family ad can be of benefit.
* Corporate advertising
When you have a variety of offerings and your audience is fairly broad, it is often beneficial to promote your enterprise identity rather than a specific offering.

Distribution
You must also select the distribution method(s) you will use to get the offering into the hands of the customer. These include:

* On-premise Sales involves the sale of your offering using a field sales organization that visits the prospect's facilities to make the sale.
* Direct Sales involves the sale of your offering using a direct, in-house sales organization that does all selling through the Internet, telephone or mail order contact.
* Wholesale Sales involves the sale of your offering using intermediaries or "middle-men" to distribute your product or service to the retailers.
* Self-service Retail Sales involves the sale of your offering using self service retail methods of distribution.
* Full-service Retail Sales involves the sale of your offering through a full service retail distribution channel.

Of course, making a decision about pricing, promotion and distribution is heavily influenced by some key factors in the industry and marketplace. These factors should be analyzed initially to create the strategy and then regularly monitored for changes. If any of them change substantially the strategy should be reevaluated.

The Environment
Environmental factors positively or negatively impact the industry and the market growth potential of your product/service. Factors to consider include:

* Government actions - Government actions (current or under consideration) can support or detract from your strategy. Consider subsidies, safety, efficacy and operational regulations, licensing requirements, materials access restrictions and price controls.
* Demographic changes - Anticipated demographic changes may support or negatively impact the growth potential of your industry and market. This includes factors such as education, age, income and geographic location.
* Emerging technology - Technological changes that are occurring may or may not favor the actions of your enterprise.
* Cultural trends - Cultural changes such as fashion trends and life style trends may or may not support your offering's penetration of the market

The Prospect
It is essential to understand the market segment(s) as defined by the prospect characteristics you have selected as the target for your offering. Factors to consider include:

* The potential for market penetration involves whether you are selling to past customers or a new prospect, how aware the prospects are of what you are offering, competition, growth rate of the industry and demographics.
* The prospect's willingness to pay higher price because your offering provides a better solution to their problem.
* The amount of time it will take the prospect to make a purchase decision is affected by the prospects confidence in your offering, the number and quality of competitive offerings, the number of people involved in the decision, the urgency of the need for your offering and the risk involved in making the purchase decision.
* The prospect's willingness to pay for product value is determined by their knowledge of competitive pricing, their ability to pay and their need for characteristics such as quality, durability, reliability, ease of use, uniformity and dependability.
* Likelihood of adoption by the prospect is based on the criticality of the prospect's need, their attitude about change, the significance of the benefits, barriers that exist to incorporating the offering into daily usage and the credibility of the offering.

The Product/Service
You should be thoroughly familiar with the factors that establish products/services as strong contenders in the marketplace. Factors to consider include:

* Whether some or all of the technology for the offering is proprietary to the enterprise.
* The benefits the prospect will derive from use of the offering.
* The extent to which the offering is differentiated from the competition.
* The extent to which common introduction problems can be avoided such as lack of adherence to industry standards, unavailability of materials, poor quality control, regulatory problems and the inability to explain the benefits of the offering to the prospect.
* The potential for product obsolescence as affected by the enterprise's commitment to product development, the product's proximity to physical limits, the ongoing potential for product improvements, the ability of the enterprise to react to technological change and the likelihood of substitute solutions to the prospect's needs.
* Impact on customer's business as measured by costs of trying out your offering, how quickly the customer can realize a return from their investment in your offering, how disruptive the introduction of your offering is to the customer's operations and the costs to switch to your offering.
* The complexity of your offering as measured by the existence of standard interfaces, difficulty of installation, number of options, requirement for support devices, training and technical support and the requirement for complementary product interface.

The Competition
It is essential to know who the competition is and to understand their strengths and weaknesses. Factors to consider include:

* Each of your competitor's experience, staying power, market position, strength, predictability and freedom to abandon the market must be evaluated.

Your Enterprise
An honest appraisal of the strength of your enterprise is a critical factor in the development of your strategy. Factors to consider include:

* Enterprise capacity to be leader in low-cost production considering cost control infrastructure, cost of materials, economies of scale, management skills, availability of personnel and compatibility of manufacturing resources with offering requirements.
* The enterprise's ability to construct entry barriers to competition such as the creation of high switching costs, gaining substantial benefit from economies of scale, exclusive access to or clogging of distribution channels and the ability to clearly differentiate your offering from the competition.
* The enterprise's ability to sustain its market position is determined by the potential for competitive imitation, resistance to inflation, ability to maintain high prices, the potential for product obsolescence and the 'learning curve' faced by the prospect.
* The prominence of the enterprise.
* The competence of the management team.
* The adequacy of the enterprise's infrastructure in terms of organization, recruiting capabilities, employee benefit programs, customer support facilities and logistical capabilities.
* The freedom of the enterprise to make critical business decisions without undue influence from distributors, suppliers, unions, creditors, investors and other outside influences.
* Freedom from having to deal with legal problems.

Development
A review of the strength and viability of the product/service development program will heavily influence the direction of your strategy. Factors to consider include:

* The strength of the development manager including experience with personnel management, current and new technologies, complex projects and the equipment and tools used by the development personnel.
* Personnel who understand the relevant technologies and are able to perform the tasks necessary to meet the development objectives.
* Adequacy and appropriateness of the development tools and equipment.
* The necessary funding to achieve the development objectives.
* Design specifications that are manageable.

Production
You should review your enterprise's production organization with respect to their ability to cost effectively produce products/services. The following factors are considered:

* The strength of production manager including experience with personnel management, current and new technologies, complex projects and the equipment and tools used by the manufacturing personnel.
* Economies of scale allowing the sharing of operations, sharing of production and the potential for vertical integration.
* Technology and production experience
* The necessary production personnel skill level and/or the enterprise's ability to hire or train qualified personnel.
* The ability of the enterprise to limit suppliers bargaining power.
* The ability of the enterprise to control the quality of raw materials and production.
* Adequate access to raw materials and sub-assembly production.

Marketing/Sales
The marketing and sales organization is analyzed for its strengths and current activities. Factors to consider include:

* Experience of Marketing/Sales manager including contacts in the industry (prospects, distribution channels, media), familiarity with advertising and promotion, personal selling capabilities, general management skills and a history of profit and loss responsibilities.
* The ability to generate good publicity as measured by past successes, contacts in the press, quality of promotional literature and market education capabilities.
* Sales promotion techniques such as trade allowances, special pricing and contests.
* The effectiveness of your distribution channels as measured by history of relations, the extent of channel utilization, financial stability, reputation, access to prospects and familiarity with your offering.
* Advertising capabilities including media relationships, advertising budget, past experience, how easily the offering can be advertised and commitment to advertising.
* Sales capabilities including availability of personnel, quality of personnel, location of sales outlets, ability to generate sales leads, relationship with distributors, ability to demonstrate the benefits of the offering and necessary sales support capabilities.
* The appropriateness of the pricing of your offering as it relates to competition, price sensitivity of the prospect, prospect's familiarity with the offering and the current market life cycle stage.

Customer Services
The strength of the customer service function has a strong influence on long term market success. Factors to consider include:

* Experience of the Customer Service manager in the areas of similar offerings and customers, quality control, technical support, product documentation, sales and marketing.
* The availability of technical support to service your offering after it is purchased.
* One or more factors that causes your customer support to stand out as unique in the eyes of the customer.
* Accessibility of service outlets for the customer.
* The reputation of the enterprise for customer service.

Conclusion
After defining your strategy you must use the information you have gathered to determine whether this strategy will achieve the objective of making your enterprise competitive in the marketplace. Two of the most important assessments are described below.
Cost To Enter Market
This is an analysis of the factors that will influence your costs to achieve significant market penetration. Factors to consider include:

* Your marketing strength.
* Access to low cost materials and effective production.
* The experience of your enterprise.
* The complexity of introduction problems such as lack of adherence to industry standards, unavailability of materials, poor quality control, regulatory problems and the inability to explain the benefits of the offering to the prospect.
* The effectiveness of the enterprise infrastructure in terms of organization, recruiting capabilities, employee benefit programs, customer support facilities and logistical capabilities.
* Distribution effectiveness as measured by history of relations, the extent of channel utilization, financial stability, reputation, access to prospects and familiarity with your offering.
* Technological efforts likely to be successful as measured by the strength of the development organization.
* The availability of adequate operating capital.

Profit Potential
This is an analysis of the factors that could influence the potential for generating and maintaining profits over an extended period. Factors to consider include:

* Potential for competitive retaliation is based on the competitors resources, commitment to the industry, cash position and predictability as well as the status of the market.
* The enterprise's ability to construct entry barriers to competition such as the creation of high switching costs, gaining substantial benefit from economies of scale, exclusive access to or clogging of distribution channels and the ability to clearly differentiate your offering from the competition.
* The intensity of competitive rivalry as measured by the size and number of competitors, limitations on exiting the market, differentiation between offerings and the rapidity of market growth.
* The ability of the enterprise to limit suppliers bargaining power.
* The enterprise's ability to sustain its market position is determined by the potential for competitive imitation, resistance to inflation, ability to maintain high prices, the potential for product obsolescence and the 'learning curve' faced by the prospect.
* The availability of substitute solutions to the prospect's need.
* The prospect's bargaining power as measured by the ease of switching to an alternative, the cost to look at alternatives, the cost of the offering, the differentiation between your offering and the competition and the degree of the prospect's need.
* Market potential for new products considering market growth, prospect's need for your offering, the benefits of the offering, the number of barriers to immediate use, the credibility of the offering and the impact on the customer's daily operations.
* The freedom of the enterprise to make critical business decisions without undue influence from distributors, suppliers, unions, investors and other outside influences.

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Environmental Development with Management Studies

Sustainable Environmental Development with Management Studies PgCert/PgDip/MSc
Facts about Sustainable Environmental Development with Management Studies
Qualification PgCert/PgDip/MSc
Duration PgCert: Full time - 1 semester, part time - 2 semesters PgDip/MSc: Full time - 1 year, part time - 2 years
Attendance Full time: 2 days per week
Part time: 1 day per week
Management studies: usually 2/3 weekends
Assessment Exams and/or coursework; dissertation (MSc)
Course structure
Choose Kingston's Sustainable Environmental Development with Management Studies PgCert/PgDip/MSc

If you are interested in the environment and issues concerning sustainable development, conservation and the management of natural resources, and would like to gain the skills and knowledge necessary to assist with the implementation and maintenance of sustainable environmental management, this course is ideal. It focuses on combining sound environmental practice with economic and social agendas. These subjects are taught in combination with the fundamentals of management theory, setting your scientific knowledge in a vocational context.
What will you study?

There is a choice of two paths to take with this MSc. Path B allows you to omit the Waste Management and Contaminated Land Remediation module - which examines the types, sources and effects of environmental contaminants and their effects on ecosystems and human health - and concentrate more on the management studies modules.

The sustainable environmental development modules enable you to evaluate the changing nature of human interaction with the environment; examine current conservation policy, strategies and issues; and look at the involvement and response of commercial, industrial and public sectors to environmental issues. The management studies modules give you an insight into how the business world operates and will introduce you to marketing concepts and people management skills.
Who teaches this course?

Faculty of Science logo

This course is taught by staff in the Faculty of Science. Find out more...
Teaching staff include:

* Professor Guy Robinson
* Dr Stuart Downward
* Dr Ros Taylor

Research areas

Many of the staff in the Faculty of Science are research active. This ensures they are in touch with the latest thinking and bring best practice to your studies.

Find out more...
Course structure

Please note that this is an indicative list of modules and is not intended as a definitive list. Those listed here may also be a mixture of core and optional modules.
Path A modules

* Sustainable Environmental Management
*
Sustainable Environmental Management

This module evaluates the changing nature of human interaction with the environment and the development of present day environmental awareness in the context of sustainable development.

It provides an in-depth understanding of the environmental issues faced by business and industry, and the challenge of improved sustainability against a background of evolving government policy and stakeholder pressure.

The module also promotes critical understanding of environmental management systems (EMS) as developed in response to changing environmental policy or other stakeholder demands.
Close this module description

* Biodiversity and Conservation
*
Biodiversity and Conservation

This module reviews the concept of biodiversity and examines current conservation policy, strategies and issues as they apply at a range of scales. An examination of their applications within local, regional and national and global frameworks provides an important policy perspective.
Close this module description

* Water Resource Management
*
Water Resource Management

This module offers an opportunity to study the relationships between water and human society at a variety of scales.

In particular, it looks at how water has been managed at global, national and regional scales and how an understanding of hydrological knowledge can be applied to practical water resources problems. It further introduces and investigates the wider concepts of water resources management, governance and water planning decisions.
Close this module description

* Economic Ethics and the Social Environment
*
Economic Ethics and the Social Environment

This module explores the meaning and application of responsibility towards the environment, economy and society.

It uses relevant economic and geographical theory to examine local, national and international sustainability issues. In particular, we use case studies to examine the commercial, industrial and public sectors' involvement and response to a range of issues.
Close this module description

* Waste Management and Contaminated Land Remediation
*
Waste Management and Contaminated Land Remediation

This module provides an understanding of the types, sources and effects of contaminants in the environment, and their effects on ecosystems and human health. It covers an awareness of the feasibility and limitations of the main techniques and strategies for the remediation of contaminated land. There is a specific focus on the policies and practice of waste management in developed countries.
Close this module description

* Research Analysis and Data Analysis
*
Research Analysis and Data Analysis

This module prepares you for independent research work, including an explanation of the importance of unbiased data sampling and how it may be achieved.

It seeks to improve the quality of your scientific thought and procedure by explaining a range of statistical and other data analytical techniques applicable to environmental and spatial data.

In addition to the use of GIS elsewhere in the course, the module provides extensive experience of the use of computers for data analysis and other applications.
Close this module description

* Finance Resource Management
*
Finance Resource Management

This module examines the role of financial accounting within organisations. It provides an overview of financial accounting systems in business and public sector organisations.

It also covers:
o the needs of first level managers for financial information and their role in supplying information;
o accounting concepts and conventions; and
o ways of measuring income and valuing assets.
Close this module description

* Managing People and Organisations
*
Managing People and Organisations

This module will provide you with a framework which will enable you to critically reflect upon your performance and plan your professional development. It provides an understanding of human behaviour within organisations and looks at how management performance can be enhanced through effective human resource management. You will demonstrate your ability to integrate international aspects of managing people and organisations and develop an understanding of human resource practices and procedures.
Close this module description


Path B core modules

* Sustainable Environmental Management
*
Sustainable Environmental Management

This module evaluates the changing nature of human interaction with the environment and the development of present day environmental awareness in the context of sustainable development.

It provides an in-depth understanding of the environmental issues faced by business and industry, and the challenge of improved sustainability against a background of evolving government policy and stakeholder pressure.

The module also promotes critical understanding of environmental management systems (EMS) as developed in response to changing environmental policy or other stakeholder demands.
Close this module description

* Biodiversity and Conservation
*
Biodiversity and Conservation

This module reviews the concept of biodiversity and examines current conservation policy, strategies and issues as they apply at a range of scales. An examination of their applications within local, regional and national and global frameworks provides an important policy perspective.
Close this module description

* Water Resource Management
*
Water Resource Management

This module offers an opportunity to study the relationships between water and human society at a variety of scales.

In particular, it looks at how water has been managed at global, national and regional scales and how an understanding of hydrological knowledge can be applied to practical water resources problems. It further introduces and investigates the wider concepts of water resources management, governance and water planning decisions.
Close this module description

* Economic Ethics and the Social Environment
*
Economic Ethics and the Social Environment

This module explores the meaning and application of responsibility towards the environment, economy and society.

It uses relevant economic and geographical theory to examine local, national and international sustainability issues. In particular, we use case studies to examine the commercial, industrial and public sectors' involvement and response to a range of issues.
Close this module description

* Research Analysis and Data Analysis
*
Research Analysis and Data Analysis

This module prepares you for independent research work, including an explanation of the importance of unbiased data sampling and how it may be achieved.

It seeks to improve the quality of your scientific thought and procedure by explaining a range of statistical and other data analytical techniques applicable to environmental and spatial data.

In addition to the use of GIS elsewhere in the course, the module provides extensive experience of the use of computers for data analysis and other applications.
Close this module description

* Finance Resource Management
*
Finance Resource Management

This module examines the role of financial accounting within organisations. It provides an overview of financial accounting systems in business and public sector organisations.

It also covers:
o the needs of first level managers for financial information and their role in supplying information;
o accounting concepts and conventions; and
o ways of measuring income and valuing assets.
Close this module description

* Managing People and Organisations
*
Managing People and Organisations

This module will provide you with a framework which will enable you to critically reflect upon your performance and plan your professional development. It provides an understanding of human behaviour within organisations and looks at how management performance can be enhanced through effective human resource management. You will demonstrate your ability to integrate international aspects of managing people and organisations and develop an understanding of human resource practices and procedures.
Close this module description


Path B optional modules (choose one)

* Marketing
*
Marketing

This module will develop your understanding of key marketing concepts. It looks at:
o how effective marketing can be used to enhance organisational performance;
o the role of analysis, planning, implementation and control in the marketing process;
o how to develop positioning strategies, prepare plans using the appropriate marketing mix and assess their financial implications and risk; and
o key generic marketing strategies and relationship marketing.
Close this module description

* Managing Operations
*
Managing Operations

This module will acquaint you with the basic terminology and concepts of operations management. You will:
o learn how to analyse and evaluate the operations of organisations in both the service and manufacturing sectors; and
o develop planning and control methodologies to improve the efficiency and effectiveness of an organisation.
Close this module description


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* Order a prospectus
* Favourite this course
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Apply for Sustainable Environmental Development with Management Studies PgCert/PgDip/MSc at Kingston University London
Related courses

Related to this course:

* Environmental and Earth Resource Management PgCert/PgDip/MSc

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