Knowledge that Transforms

The present environment is increasingly heterogeneous, turbulent and amorphous and therefore requires a strategic - SWOT analysis which enables decoding of messages it emanates. The latest developments are pushing the PTT system towards restructuring into a commercial and market oriented model capable of responding to the demands of relevant stake-holders. This makes space for applying the SWOT analysis within the PTT system, thus providing broader forecast possibilities and a deeper insight into the status of the PTT infrastructure with a view to reconciling the strategy and the prevailing environment.

The strategy of products market positioning of durable consuming goods producers has become the main concern and great interest for the last ten years, only. Entrepreneurial management is the pre-condition for successful market positioning of a product. The adequate segmentation is the base for successful positioning od a product. The essential instruments of product positioning are a s follows: 1. costs leadership, 2. products differentiation, 3. the combination of products differentiation and costs leadership. The products market positioning is a current choice of priorities and proportions of key marketing mix varieties and sub-markets. The adequate choice confirms the communications continuity on relation marketing mix of an enterprise - review of a sub-market. The products positioning is a quantification of certain quality level of additional value in form of relative products differentiation of an enterprise compared to competitors for target sub-markets. The strategy of products market positioning along with market communications strategy is a guarantee for a permanent competitive differential products (enterprise)priority.

World Wide Web (WWW, W3, or simply the Web), thanks to its specific characteristics, interactivity in first place, creates radically new model of communication, as compared with communication through traditional media. Opposite to mass communication, one message for consumers, WWW enables other extreme, one to one communication. Possibility of adaptation of message for every single consumer, possibility for consumer to personalize content, possibility for consumer to ask for and get all information relevant for buying decision, and very often actual buying. This makes WWW almost ideal channel of marketing communication. WWW has its limitations, but continuous science and technology developments heads in direction of their efficient elimination and makes it more popular and widespread. In each case, efficient marketing communication of majority of today's companies assumes balanced positions of WWW and traditional media. With development curve of WWW today, it is real to expect WWW will be, in 21st century, dominant way of marketing communication.

Sta bi preduzeca trebalo da ucine da bi se prilagodila eko-marketing orijentaciji? Potrebno je uociti i zakljuciti da se zastita okruženja ne bi trebalo shvatiti samo kao mogucu opciju, vec prvenstveno - kao obaveza preduzeca da u svoju strategiju, kojom su definisani vizija, misija i ciljevi, ukljuci kao imperativ - ocuvanje životne sredine. Ovo ce ostvarivati kroz svoje poslovne odluke, koje se odnose na tehnoloski proces i usvojeni kvalitet finalnog proizvoda. Zeleni marketing, ekoloski marketing, invajronmentalni marketing i održivi marketing su razliciti pojmovi sa istim znacenjem. Oni se ne smeju uzimati samo kao moguci profitni potencijal, gde se atribut zelenosti ili ekoloske podobnosti dodaje na proizvod, a marketinske aktivnosti ih koriste u cilju komercijalizacije, vec bi trebalo imati na umu prilaz koji je kompleksniji, sadržajniji i poslovno, na duži rok, efikasniji, a to su: fundamentalne promene u preduzecu kroz definisanje osnovne strategije preduzeca, marketing strategije, organizacione strukture i kao najvažnije promovisanje eko-menadžmenta.

First step in deciding weather to innovate service program of the hotel management company is to compare the position of the existing service assortment to competition's, as well as the identification of the needs and demands of the potential customer of service user. Second step is to find out what is expected from the innovation, how it will be used and how often it will be utilized. Factors influencing innovation success are good strategies, informational systems, skilled and responsible personnel and adequate application. Marketing strategies play the special role. Marketing strategy for its goal has to find the best way for resource allocation, and together with marketing mix combination enables fulfillment of the marketing goals, hence to satisfy demands and needs of the service users. Apart from price, quality in modern environment became key factor for market success in hotel management industry. Innovation, apart from assortment improvement, can be achieved by improving the quality of the service. Marketing and innovations have to be two main determinants of the market oriented hotel management corporation, based on which the company will ensure market and technological validity.

Side payments, known politely as gainsharing and pejoratively as bribery, are prevalent in marketing. Indeed, many management schools have added ethics modules to their basic marketing courses to discuss these issues and there is much discussion of side payments in the literature (e.g., Adams 1995, Borrus [Borrus, Amy. 1995. A world of greased palms. Business Week (November 6) 36–38.], Mauro [Mauro, Paolo. 1997. Why worry about corruption? International Monetary Fund. Washington, D.C.], Mohl [Mohl, Bruce. 1996. Auto dealers color surveys to polish image: Buyer's say salesmen tamper with makers' questionnaires. Boston Globe (August 11) B1, B6.], Murphy [Murphy, Kate. 1995. Corporate gifts: What's naughty or nice. Business Week (December 11) 122.], Peterson [Peterson, Barbara S. 1996. Taxing question: Will the government make you pay for your next travel benefits? Frequent Flyer (February) 27–30.], and Rose-Ackerman [Rose-Ackerman, Susan. 1996. Bribes and gifts. Proc. Conf. Economics, Values, and Organization, April 19–20. Yale University, New Haven, CT.]). We seek to provide insight with respect to one class of marketing side payments. We hope that our analyses clarify some of the issues and suggest how these side payments affect marketing activities. We begin by focusing on one common example of potential side payments—salesforce ratings of internal sales support. We derive two formal results and speculate on how these results generalize. The two results are (1) that having one group of employees rate another implies that there are almost always incentives for side payments, but (2) the side payments need not reduce the firm's profit. At least in theory, the firm is always able to revise the reward system to factor out these side payments. The first result, based on a straightforward proof, has important practical implications for managers who may wish to preclude side payments. They may be unable to design a ratings-based reward system that does not have inherent incentives for side payments. The second result, in our opinion, is quite surprising. It suggests that marketing managers might be advised to invest more time into understanding how side payments affect employee reactions to reward systems. They might want to reconsider costly efforts to monitor, police, or preclude such side payments. While our results do not substitute for a moral discussion of side payments, we hope that the formal structure for one common marketing situation provides valuable insight. The system we analyze is based on a practical managerial problem we have observed. The salesforce evaluates a sales support group with a real-valued rating. The sales support group is rewarded based on that rating, whereas the sales-force is rewarded based on outcomes, such as sales or customer satisfaction, that indicate incremental profits to the firm. The reward to the salesforce might also depend upon how it rates sales support. For example, the salesforce might be held to a higher standard whenever it rates sales support as “excellent.” (We argue in the paper that the firm will want this to happen.) In addition, the salesforce might ask for a side payment from the sales support group as compensation for high ratings. We cast the practical problem as a formal game and incorporate the following issues: (1) incremental actions taken by the salesforce and by sales support are perceived to be onerous, (2) the measure of incremental profit is a noisy measure, (3) both the salesforce and sales support are risk averse, (4) given the reward system imposed by the firm, both the salesforce and sales support will maximize their well-being, and (5) given the structure of the reward system, the firm will seek to maximize expected profits. We first show that there are almost always incentives for side payments. Specifically, we demonstrate that sales support is better off with a side payment, while the salesforce is no worse off. This is not surprising because the reward to sales support is increasing in the rating, while in the absence of a side payment, the salesforce will select a rating such that its net marginal returns to increasing the rating are zero. The exception occurs when the rating is constrained by the firm to be less than this “optimal” rating, but even then there might be incentives for side payments. We next show that the firm can anticipate these side payments and design a reward system to factor them out at no loss of profit. The intuition is straightforward. The firm first adjusts the marginal returns in the reward functions for sales support and for the salesforce such that they will each take the “optimal” actions even though they engage in side payments. Then the firm adjusts their fixed compensation so that the firm extracts its full profit. The proof is difficult because we must show that adjusted reward systems exist and we must show that they allow the full profit to be extracted. Throughout the paper we discuss the practical implications of our results. We close by highlighting future research opportunities.

Pioneers' marketing mix reactions to new entries are recognized as important determinants of the outcome of pioneerlate mover competition, particularly in price-inelastic markets such as those for pharmaceuticals, cigarettes, and luxury goods. Managers in such markets are interested in better understanding when to accommodate (i.e., decrease marketing spending) or retaliate (i.e., increase spending) in nonprice marketing variables such as advertising and salesforce. In addition, the reallocation of marketing resources toward advertising (indicated by a pull strategy) or salesforce (indicated by a push strategy) upon entry is strategically important to managers. Previous theoretical research shows that pioneers should retaliate in both static and growing markets. Results from empirical research are mixed in that they support both accommodation and retaliation in growing markets. Empirical research also shows that a pioneer accommodates (retaliates) with its low (high) elasticity marketing mix variable. Contrary to prior research, however, some pioneers have successfully accommodated late movers in growing markets, and in some cases, have accommodated with their stronger marketing mix variables and also retaliated with their weaker marketing mix variables. For example, Bristol Myers Squibb's Capoten accommodated the entry of Merck's Vasotec in the growing ace-inhibitors market with its more powerful variable, salesforce, but also retaliated with its less potent variable, advertising. Moreover, not much is known about how the pioneer's marketing mix allocation should change (i.e., toward pull vs. push strategies) in response to new entries. We seek to better explain the pioneer's reactions and predict its shift in marketing mix allocation upon new entry. We note that prior research's predictions on the pioneer's reactions are based on a limited number of key factors such as product-market characteristics and the pioneer's elasticities prior to a new entry. In this paper, we extend previous research by adding two other critical factors, namely, the impact of new entry on the pioneer's elasticities and margin, and different competitive game structures to better predict and explain the pioneer's reactions. We develop analytical results on the pioneer's reactions in price, advertising, and salesforce in different competitive games (both Nash and different leader-follower games). In these results we identify the conditions under which the pioneer should accommodate, or retaliate, or not react to a late mover's entry, and shift its marketing mix allocation toward pull versus push strategies. We empirically illustrate some of the analytical results using data from a pharmaceutical category. We show that a pioneer who adopts a follower (leader) role with respect to a marketing mix variable in a static (growing) market, and witnesses a decrease (an increase) in own elasticity and margin upon a new entry, generally should accommodate (retaliate) in that variable. However, we are also able to show that there are cases where these general reactions don't hold. Thus, for example, it is possible for a pioneer to find it optimal to accommodate in a growing market or to retaliate even when its elasticity decreases upon entry, depending on the combination of competitive game, the impact of entry on elasticities and margin, and market growth. In this way, our results point to the fact that it is necessary to look not only at one factor at a time, but instead examine the combination of all the factors. We explain the empirical support for both accommodation and retaliation in growing markets by showing that the pioneer should accommodate (retaliate) a late mover with its competitively low (high) elasticity marketing mix variable. Competitively high (low) elasticity variables are not (are) likely to be significantly reduced by a new entry in the anticipated competitive game. With regard to reallocation of the pioneer's marketing mix, we show that the change in the pioneer's marketing mix allocation should follow the change in the relative marketing mix effectiveness after new entry. This, in turn, depends on the structure of competition, the impact of the late mover on its elasticities and margins, and the competitor's marketing mix elasticities, in addition to own elasticities. The results can guide managers on how factors such as competitive structure, changes in elasticities and margin, and market growth impact the pioneer's marketing mix decisions, and on when to accommodate, retaliate, or not react to a late mover's entry, and shift marketing mix allocation toward pull versus push strategies.

Managerial decisions involving marketing channels are among the most critical that an organization must make. Part of the reason for this importance is that relationships between manufacturers and their intermediaries usually involve long-term commitments that are difficult to change. On the other hand, in order to respond to the realities of the market place, an organization must be ready to adapt its distribution practices—sometimes under considerable uncertainty about the long-term consequences. Such a problem faces the U.S. automobile industry, which has led manufacturers to experiment with various channel structures. When manufacturers first changed their distribution policies, they were clear about the short-term effect on sales, but were unsure about its longer term impact on profitability. In this article, we develop a model to analyze the marketing of durable products through multiple channels. Our analysis suggests that, even though it was not apparent at the time, manufacturers were indeed behaving optimally when they changed their policies. Our model provides insights not only to automobile manufacturers but also to practitioners and academics who are interested in understanding the unique problems associated with marketing durable products through multiple channels. We develop a two-period model by assuming that a single manufacturer markets a durable product through two retailers—a rental agency and a dealer. The rental agency focuses mainly on renting the product in a daily rental market while the dealer focuses on selling the product to a different set of customers in the sales market. To model the development of channels in the U.S. automobile industry, we analyze three different channel structures. The first structure, a separate channel, reflects the state of the industry through most of the 1980s, when rental agencies were franchised solely to rent and dealers solely to sell the cars. In response to a decrease in overall sales, manufacturers encouraged rental agencies to sell their “slightly used” rental cars in the consumer market, resulting in the second structure, an overlapping channel. Dealers did not like this arrangement, however, and in the next experiment, a buyback channel, some manufacturers began buying back used rental cars and selling them through dealers. In terms of the consumer side of the model, we assume that consumers are heterogeneous and have product valuations that are distributed uniformly between a low and a high value. In addition, they recognize that as the durable depreciates with use, its secondhand market value decreases. While both sold and rented goods depreciate with use, we assume, based on an analysis of market prices, that sold goods depreciate at a higher rate than rented goods. Given these different depreciation rates and consumers' underlying utility functions, we develop the market demand functions in the dealer's and rental agency's markets. Then for each of the channel structures, we solve the intermediaries' and manufacturer's problems. The main contribution of this article is that it allows us to evaluate the profitability associated with various channel structures for all the players in our analysis—the dealer, the rental agency, and the manufacturer. In terms of the intermediaries, we find that the overlapping channel is the most profitable structure for the rental agency; on the other hand, it is the least profitable for the dealer. In terms of manufacturer profitability, our model suggests that the separate channel is the least profitable, and the overlapping channel is the most profitable. It is interesting to note that the distribution structure in existence today is more akin to a buyback channel. This strikes us as a compromise channel, which alleviates dealer concerns with the overlapping channel, and yet does not harm rental agencies as much as a separate channel. These are surprising results because conventional wisdom has been that the overlapping channel was competing away profits for all players. This suggests to us that automobile manufacturers were indeed on the right track when they began experimenting with the structure of their distribution channels.