Principles of Marketing
Observed that higher ROI is earned by companies that are able to charge higher prices, most likely because of successfully differentiating their products and the firms that operate at cost advantage. There is seemingly a positive correlation between market share and ROI. The economies of scale, market power, and quality of management are some of the factors that make market share profitable.As market share increases, businesses are likely to have a higher profit margin, a declining purchase-to-sales ratio, decline in marketing costs as a argental of sales, higher quality and higher priced products. One of the mall determinants of business profitability Is market share.
Businesses with high market share are considerably more profitable than smaller sizes rivals. ROI Indicates the profitability of a company.Large businesses have high rate of return because they have achieved economies of scale in procurement manufacturing, marketing, and other cost components. Small sized business focus more on customer relations while large sized businesses work on economies of scale. As the businesses grow, they eve away from the physical market. They cannot build their businesses around individual customers anymore, so they will have invisible customers in the market and they will try to meet the general (average of the) demands of such customers.Mid-sized companies have low ROI because as they are growing from the small sized company to a larger one, they try to hold on to the aspects that worked for them in the past without necessarily realizing that their old methods might not be efficient for them anymore; while also moving forward adapting to new needs which costs them more resources.
We use the u-curve marketing tool to analyze the correlation between ROI and market size, that have been thoroughly discussed by many authors, marketers and finance analysts. A Curve gives the general trend of a particular industry.The curve is an exponential (hypothetical) line drawn as an average from the scattered plots In the graph. For our study purpose, we take the telecommunications industry and analyze its trend using 5 major telecommunications operator in France. The data and the graph are presented below: Company Locomotive Bogus SF Orange VINE ROI 38. 04% 19. 73% 155.
95% 58. 48% 31 . 06% U Curve for Telecommunications Industry guesses 120 Series 1 20 10 15 25 35 ere data has been collected from the financial statements from the annual reports for the year ended 2012 for the aforementioned companies.The ROI has been calculated manually as (Net The chart shows us that as the market share increases, the ROI also increases. In case of Bogus, the ROI is abnormally high considering its market size in comparison to SF and Orange which are the dominator of this industry, due to several reasons such as addition of newer technology to provide better quality services, huge expansion in international market; ND returns from other services of the company also has an important role to play.If En take more companies from this industry and plot them in the graph, the exponential line will remain unchanged; however, we will be able to see more clearly the positioning of these different companies in line with the industrial trend. We also need to consider that the curve will not always take the shape of a ‘U’ because the return on each industry varies as they are influenced by several factors relevant to that particular industry.
TV. Samsung focuses on promoting TV in emerging economies in response to the expected rise in demand, with differentiated design and technology, including JIHAD TV, curved LED TV and large-sized TV’s of over 60 inches and smart TV. As far as the product line getting broader, the product obtains bigger market share by meeting Ender demands as the market leader in a mass production industry, riding on the robust rising markets. It is Samsung biggest cash cow with not much potential to outgrow.Laptop: This product reveals the resilient growth in the competitive environment as customers normally have non-adhesive preference before they enter this market or plus shelf obtaining achieve the steady revenues, but it’s uncertain if they have more future tendency. Smart phone: The emerging markets and the successful launch of premium mobile phones in the global market popularize smart phone rapidly, which build the environment for stars. It balances the profit won in developing market and the delayed economic recovery as well as the increased competitions and expenses in developed markets.
The result is more potential than better-performed position. Samsung strategy to apply high-tech to meet the market tendency is the good way to give more profit space and lengthen its product-life. Tablet: Samsung supplies touch screens to Apple for pad, Macro Pro, phone, and pod. It also manufactures the touch screens for its limited edition Galaxy tablets, which, combined with its technology, competes head-to-head with Apple and other tablets. As the screen is manufactured by Samsung itself, the cost for a Samsung tablet is obviously lower than an pad with the same quality screen.However, they have not shown any other advantage over their competitors yet. Printer: Because of the strong competitor such as HP in this product segmentation, Samsung printers are out there in the market to take shelf space in order to prevent competitor’s market growth.
Disc Storage: This market is ruled by MIMIC followed by HP and Dell. It is a tough and tight market for Samsung. This product line of Samsung plays the role as “Dogs” in the market against the competitors.It will always run with red numbers on financial statements, however, will take precious valuable space in the shelf closing the market to other possible competitors. The Relative Market Share (ARMS) of the company in comparison to its competitors in the market in terms of potential/performance or ROI/market size is 1. 54/0. 89, suggesting that major players in a market tend to be more profitable than their competitors.
. ARMS offers a way to benchmark a firm’s or a brand’s share against that of its largest competitor, enabling managers to compare relative market positions across different product markets.INNOVATION Innovation is the process when an existing item is used as the foundation to create something new, which is not necessarily very different from the original item, but has improved features, or is more useful in the environment it exists/operates in. Innovation allows business and firms to fill the gaps of demand and supply in the current market place by improvising what already exists. In order to analyze this tool of marketing, our group decided to use a “Hair Dryer”. A hair dryer basically has five components: the outer cover blower heating element motor power source problem and/or the inconvenience for the users of a hair dryer.On one hand, with an ordinary hair dryer, there is lack of human mobility while using the product.
This reduce can only be used in a fixed – where there is a power outlet; so the users have to stay in one particular place without moving to dry their hair with a dryer. On the other hand, users usually need to keep standing while using this product. As the length of the wire is limited, it may force the users to operate it in uncomfortable gestures. This is more difficult for the users who have long, thick hair as it will take them longer to complete the task. O improve the aforementioned drawbacks, we applied the innovation process. In order to innovate something new or better, one or more of the components must be moved from the original product, without drastically changing the product. It is important to remember that the function of an innovated product must always follow the form, which means that the functionality is less important than the form, because customers are generally resistant to changes and they evolve one step at a time, while technology leaps.
Keeping this in mind, out of the five essential products mentioned earlier, we decided to remove the power source, so that the product has improved functionality and maintains its basic structure. Once the power source is removed, we added a rechargeable battery inside the Andre, with an in-built extension. Our end product would look like in the picture. After this innovation process, the dryer will still perform its core function – dry hair; Introit any changes in the form; but it will have more flexibility in terms of human mobility.The user will be able to use the product in the bathroom standing right in front of the mirror, or in the balcony, etc. The users can charge the dryer and then use it in any place, in any gesture they feel comfortable in, without any obstacle. VALUE-CHAIN En have chosen a Music CD to study the value-chain.
The music industry is a high- risk business. For those looking for a career in this industry; only a handful makes it to stardom. Music may be a hobby for few but those that make it big often battle record labels, music retailers and digital media in order to claim returns on what is rightfully theirs. In the making of a CD the key players are: the Composers, the Publishers, the Agents/Managers, the Artist, the Record labels, the Manufacturer, the Distributor, the Retailer, and finally the Customer. Each player brings their unique Indispensable capabilities that work together to complete the product. The roles of each of the key players are outlined below: Composers (lyricists & musicians): are those who write the lyrics of the song and/or compose the melody. They also have the patent of their creations that could be sold compositions.
Publishers: publish musical works of the composers and make it accessible to performing artists. Agents/Managers: act as an intermediary between the composers and the other actors to generate and negotiate contract opportunities, and to develop the artists and their repertoire. Artists (singers & bands): are those who interpret/perform (sing) what the lyricists have written for them. Since music is intangible usually they are the image of the reduce. Some famous artists of the past decade are Iranian, Mine, Beyond, La Fine, La Chronicle and many others.Record labels: are the entities that finance, record, manufacture, promote and market the music. They are usually the ones running the show.
Sony BMW music entertainment, Universal Records, Columbia Records are some of the largest record labels in the global music industry. CD Manufacturers: give physical visibility and shape to the music. They transform the diurnal music recording into solid object which is the CD itself. Distributors Wholesalers): are the connection between the Record Labels and the Retailers. They take CDC in bulk from the labels, warehouse them and ship them, on demand, mostly to the retailers.