MA – EMA Semester- III, Account Planning & Management

Question Bank November 2017.

1. Answer the following (07/08/15 Marks)

1. What is Account Planning? Explain how it is used in Ad Campaign with a suitable

example.

Account planning is an approach for generating consumer insights that aid in the development of strategy
and tactics and in evaluating communication campaigns.

Account planning was born from the changing consumer environment and the need for a single
department to assimilate and analyze relevant product data that could then be applied to the day-to-day
decision making on an account. The presence of an account-planning department positioned an agency as
having exceptional creative solutions and set it apart from competitors during the all-important stage of
seeking new business.

Use in ad campaigns
Account planning has been used successfully in a number of high-profile campaigns. For example, the
"Got milk?" campaign, designed by the Goodby, Silverstein & Partners agency, was the first campaign to
bring about an increase in milk consumption and sales during the 1990s. The original "Got milk?"
campaign was regional in scope and had been initiated by the California Fluid Milk Processors Advisory
Board. Per capita milk consumption in California had declined 20% from 1980 to 1993, and the total
volume of milk consumed had declined an average of 2% to 3% each year since the late 1980s. The main
reasons for the decline were concerns about milk's fat content, a feeling that "milk is for kids" and a
boring image for milk overall when compared with other beverages (mainly sodas).
Past campaigns had attempted to stem declining milk consumption by giving milk a fun, trendy image
and by running advertising that featured healthy-looking people. While this advertising had been
successful in shifting attitudes toward milk (more than 50% of Californians agreed that "I should drink
more milk than I do"), these new attitudes did not translate into sales. These campaigns also targeted
Californians who either did not consume milk or who consumed very little of it.
Goodby Silverstein recommended instead targeting the 70% of the population that used milk frequently.
Behind this recommendation was the belief that it is easier to get people to continue doing what they
would normally do than it is to get people to start doing something that they have not done before.
Planning played a key role in the development of the campaign and uncovered a basic truth about milk:
the only time consumers think about milk is when they are out of it. This insight led to the "deprivation"
strategy used in the campaign in which complementary food items were presented without milk in order
to stimulate a desire for the product. All executions started with one food item-for example, a cookie-for
which milk is the perfect complement. The twist in the ads was that there was no milk available to
accompany the food, so both the food and the moment were ruined.

This insight was integrated into all levels of the campaign, including media and creative executions as
well as promotional programs. As a result of the campaign, which later was expanded to the national level
under the sponsorship of Dairy Management, a national dairy industry organization, overall milk
consumption grew, frequency of use climbed and sales increased.

2. Explain the steps of Account Planning Process.

Account Planning Process:

Account planning is part consumer research, part strategic planning, and part account management with a
good measure of creativity. Some people (planners among them) contend that account planning makes
advertising more relevant, more credible, and more distinctive. Many argue that the job of the planner is
to represent and interpret consumer wants and needs throughout the creative development process.
Planners develop a more profound understanding of brand equities and target customers than anyone on
the agency and marketing team. They conduct first hand research ranging from focus groups to in-home
observations to psychologically-oriented projective tests. They lead ideation sessions. They write creative
briefs. Planners work closely with creative teams to tell the story of why a consumer should choose one
brand over competition.

Account planning process.

The accompanying chart illustrates one model for the account planning process.

Step 1: Brand and Market Audit: In this model, planning begins with an analysis of the marketplace,
the competition, a brand’s strengths and weaknesses, pertinent demographics, psychographics and cultural
trends. Whether advertising creates or reflects the images doesn't matter; what is important is that the
meaning, sometimes the myth and mystique, behind the brand is understood. To do this, planners have
resorted to inventive ways of eliciting consumer attitudes in order to understand the richness of a brand,
and how consumers relate to it. Also, as markets became more competitive, brands had to become more
 sophisticated. Threats like new technology, product parity and own-label brands put more pressure on
premium brands to differentiate themselves.’

Step 2: Analytical Ideation: “Analytical Ideation” refers to a method that borrows from linguistics,
psychology, anthropology, traditional ideation, and classic marketing to provide a springboard for new
strategies and research questions. According to Jon Steel (1998), ‘The first skill of the planner’s job is to
make ideas happen, not necessarily to have those ideas themselves. The second skill is to spend more
time listening than talking, whether in conversation with consumers, clients or other agency team
members. A good listener will recognize those good ideas and use them, thus allowing others to do the
work for him/her. The third attribute is a chameleon-like quality that allows the planner to develop
relationships with an extraordinarily diverse group of people. In the space of 24 hours, a planner may be
presenting a strategy to the chairman of a Fortune 500 company, moderating a focus group with single,
low-income mothers and briefing a creative team on a new project. It is important that he or she is able to
relate to all of them, in order to both gain their trust and understand their points of view.’

At Abbott Mead Vickers.BBDO they use the ‘three I’s’ to describe the quality of a planner, and these three
values should reflect everyone working in the planning department:

 Inquisitive
 Inspiring
 Imaginative/inventive
After talking to a lot of central planning figure in the UK, it seems to me that the ideal planner is both a
very analytical person and imaginative, and this can be divided into two characteristics. First, he/she has
to be inquisitive and keep digging into the mind of the consumer. Second, he/she needs to be a lateral
thinker, because the best solutions are those that are created from a lateral leap and not just the obvious
solution.

The planner is the member of the agency’s team who is an expert, through background training,
experience and attitudes, in working with information, not just with market research but with all the
information available, and getting it used in order to help solve a client’s advertising problem. ‘The
planner’s job is to continuously analyze and interpret the available information: its assessment, its uses
and, maybe more crucially, its limitations. “Just a re-titled researcher” is not enough. His/her interests,
background, the role expected, the personality needed and how he/she is regarded by the rest of the
agency are all likely to limit how well he/she fits the part.’ (Bartle, 1980)
Step 3: Customer research: From planner’s point of view, researchers are passionate about research and
account planners are passionate about advertising. The planner is a part of the whole process and an
integral part of the team, and therefore also has to create an understanding about what is said and why. In
other words, as Merry Baskin put it, the planner develops a broader and deeper understanding of the
consumer and about his/her relationship with advertising. The planner’s primary role is to champion the
consumer’s point of view. The core craft of planning is therefore the translation of research evidence
into research judgment. Studies relevant to advertising hardly ever speak for themselves and almost
always require interpretation based on knowledge of researching skills and advertising techniques. This is
where the planner comes into the picture.

Customer research may include qualitative and/or quantitative inquires. Planning and planner related
research is all about talking to real people and what motivates those people in their daily lives. According
to Bartle Bogle Hegarty (2001) in London markets and society as such are constantly fragmenting and to
succeed a brand needs fame. BBH claims that without fame a brand will neither be trusted nor purchased.
It will die. On the other hand the right kind of fame to the right kind of consumer is what results in sales.
As planners we therefore constantly need to be working on innovative new ways to get in touch with what
people really think and feel about brands and about the world in general.

The planner ensures that all interpretations are sound and relevant and presented to the right kind of
consumers in the right kind of media.

Step 4: Creative Work Plan: The “Creative Work Plan” is the blueprint for creative development; it
incorporates all of the learning and insights generated thus far. ‘Account planning impacts on the whole
creative development process except for production. It has a crucial role during strategy development,
driving it forward from the consumer’s point of view. During creative development, account planners
act as sounding boards for the creative team. They are responsible for researching the advertising before
production to make sure it is as relevant as it can be; finally, once the work runs, they monitor its effect in
depth with a view to improving it the next time around.’

Not surprisingly, planners need to know a lot about creativity and the creative process, and they definitely
need to be comfortable with the fact that creativity is strange, intangible, and often hard to understand.
The planning process can add to the creative process by leading the thinking in an inspirational way. ‘The
creative team wants a single-minded directional brief, not a long list of ‘academic talk’. Most good
creative teams want to know the consumer beyond a mere demographic definition; they want to
know what the consumer wants, rather than what the client wants. A good planner brings this sharply
into focus like an expressive photograph.’

Step 5: Creative Development: “Creative Development” gives life to the analytical work upon which it
is based. An evaluative phase of strategies and creative work is often built into the account
planning process at critical junctures

Because all agencies differ and each planner brings a personal expertise to an assignment, the
planning process is varied in content and scope. Whatever the model, with the right analysis and
insights, planners unlock potential in brands that might never be tapped without their guidance. It
is often argued that account planning, part of many disciplines and a discipline of its own, simply
makes advertising better.

3. ‘Got Milk ‘designed by the Goodby, Silverstein & Partners agency, was the first
campaign to bring about an increase in milk consumption and sales during the
1990.Planning played a key role in the development of the campaign. Elucidate.

Use in ad campaigns
Account planning has been used successfully in a number of high-profile campaigns. For example, the
"Got milk?" campaign, designed by the Goodby, Silverstein & Partners agency, was the first campaign to
bring about an increase in milk consumption and sales during the 1990s. The original "Got milk?"
campaign was regional in scope and had been initiated by the California Fluid Milk Processors Advisory
Board. Per capita milk consumption in California had declined 20% from 1980 to 1993, and the total
volume of milk consumed had declined an average of 2% to 3% each year since the late 1980s. The main
reasons for the decline were concerns about milk's fat content, a feeling that "milk is for kids" and a
boring image for milk overall when compared with other beverages (mainly sodas).
Past campaigns had attempted to stem declining milk consumption by giving milk a fun, trendy image
and by running advertising that featured healthy-looking people. While this advertising had been
successful in shifting attitudes toward milk (more than 50% of Californians agreed that "I should drink
more milk than I do"), these new attitudes did not translate into sales. These campaigns also targeted
Californians who either did not consume milk or who consumed very little of it.
Goodby Silverstein recommended instead targeting the 70% of the population that used milk frequently.
Behind this recommendation was the belief that it is easier to get people to continue doing what they
would normally do than it is to get people to start doing something that they have not done before.

Planning played a key role in the development of the campaign and uncovered a basic truth about milk:
the only time consumers think about milk is when they are out of it. This insight led to the "deprivation"
strategy used in the campaign in which complementary food items were presented without milk in order
to stimulate a desire for the product. All executions started with one food item-for example, a cookie-for
which milk is the perfect complement. The twist in the ads was that there was no milk available to
accompany the food, so both the food and the moment were ruined.

This insight was integrated into all levels of the campaign, including media and creative executions as
well as promotional programs. As a result of the campaign, which later was expanded to the national level
under the sponsorship of Dairy Management, a national diary industry organization, overall milk
consumption grew, frequency of use climbed and sales increased.

4. How is Storytelling different from SWOT analysis?

The SWOT analysis is predominantly a left-brain exercise. It is an assessment and is clinical in nature.
While you can add some dimension to this exercise in the form of consumer knowledge, it is still largely
an analytical exercise.
To balance out the SWOT analysis with something more right-brain in nature, you may want to embark
upon drafting an organization narrative or story. Storytelling is becoming a more widely accepted method
of helping management and marketing to better understand their own company or brand in terms that
anyone can comprehend.
The storyteller develops a story much in the same way a company develops a SWOT analysis. However,
unlike the SWOT analysis, most stories are highly engaging. This is why innovative companies, such as
3M are moving to storytelling as a means of business planning. The more engaging the plan, the better
chance it will have of taking root in the organization.
The first order of business for the storyteller is to determine what the protagonist wants or desires. Desire
is the essential lifeblood of any story.
In the case of business, the desire is the corporate or brand goal. Is it to be the very best or simply
known as the best, or to move into new markets, or to quash a competitor? Obviously, to paint a picture of
the company or of a brand, you must know its strengths, the “S” in the SWOT, plus its values and
personality.
The point of storytelling is to put a human face on what is a basically a relatively clinical exercise.
The greatest benefit of storytelling is that human beings naturally want to work through stories. Stories
are how we remember things, rather than by using to-do list or the endless sea of Power Point
presentations that are foisted on corporate America. “What is your story?” is a common question that you
might ask of someone new whom you are meeting for the first time. The same is true in business. Making
the company the protagonist of the story, or the central character with brand or corporate strengths as
value statements, is the beginning of how a SWOT analysis becomes a story. In his quest to seek the
opportunity, the hero must overcome his weaknesses and slay outside threats.
The desires themselves may be the opportunities that you have outlined in the SWOT analysis. But you
must first slay those angry dragons of weakness and get to those rewarding opportunities.
Once you have the basis for the story, your next job is to decide how your protagonist should act to
achieve these desires in the face of such antagonistic forces. It is in the answer to that question that
storytellers reveal the truth about their characters, for most characters are revealed in the choices they
make in their lives.

Now let’s look at how to tell a story of a company. The following is an example of a brief story for Waste
Management. This company had a poor reputation, with a history of accounting scandals and past
associations with gangsters in the trash-hauling business. However, under new leadership, Waste
Management started to reinvent itself, from a garbage-hauling company to a vast environmental-services
company that was introducing all sorts of innovations. The company was a leader in recycling and in
using landfills to develop methane gas as a fuel alternative. But the company was reluctant to tell its story
for fear of bringing up the past transgressions.
Plus, it was unsure whether customers would really care about the firm’s story. However, through a series
of events, the story was told. Here is one small segment of it.
One day, the leader of the world’s greatest environmental company decided that everyone should know
what great things they were doing. Although many told him to be quiet, he just could not for he was proud
of his associates’ accomplishments. So, he rang bells and handed out advertisements that told of the
wondrous things the company was doing to help its customers and the earth. And the people were amazed
and rejoiced. They had no idea that great things had been going on for so long. Not only did they think
better of the company, they also paid handsomely for its services.
Your story can be a summary or it can be a very long story that chronicles specific events and details
specific strengths, weaknesses, threats, and opportunities. It is largely up to you. The point of the
storytelling exercise is to dramatize the outcome the company is trying to achieve and to put a more
human face on what can be a rather dry exercise. Both SWOT analysis and storytelling can be
important tools for the advertising account planner, and both of these tools can be used in concert with
one another.

5. As an account planner do SWOT analysis of a brand of your choice.

SWOT Analysis
The traditional business analysis that most companies use to assess their market position and that of their
competitors is called SWOT analysis. SWOT stands for:
• Strengths
• Weaknesses
• Opportunities, and
• Threats.
Strengths and weaknesses are typically internal assessments about the company itself, while opportunities
and threats are looking at outside influences that may affect the company’s position and future.
Strengths and Weaknesses
The fundamental question you have to ask yourself is, “How and why are we better than our
competitors?” Conversely, “How and why are we worse than our competitors?” These are not always easy
questions to answer honestly. As an advertising account planner, your role is to be an objective third party
to facilitate honest dialogue about the company and how it can capitalize on its strengths and shore up to
overcome its weaknesses.

Figure 2.1 shows a strategic wheel that is helpful in guiding a company through this analytical process. As
you can see, there is a blend of hard business factors—such as financial strength, market share, and
product quality—along with more perceptual factors—such as brand equity and communications strength
of the advertising. It is important to look at each side of the equation to help the company gain insight into
how best to grow its business. After you conduct this analysis on the company, it is equally important to
look at the immediate competitors to determine their strengths and weaknesses. This internal evaluation
and comparison against your competitors sets the stage for looking at the opportunities.

Opportunities
In assessing the opportunities of the company, keep in mind that markets are dynamic and that new
opportunities continually evolve. You may want to set up criteria for short-term and longer-term
opportunities. You may also want to look at trends that are competitive in nature and those trends that are
consumer-oriented.’

For example, from your strength and weakness assessment, you may have discovered that your
competitor is retrenching and is pulling out of a market. This would signal a short-term opportunity to
increase your share by filling that void. This is a great example of a short-term opportunity driven by
competition.

But not all opportunities are as easy to see as this one. There are two layers of opportunities that you will
want to identify for a company. The first layer is the obvious opportunities, such as going after new
geographic or target market segments or adding more product features to the portfolio.

The second layer of trends comes from understanding where consumer trends are headed and capitalizing
on them. For example, there is currently a trend among consumers to be watchful about consuming
calories. If you were a food manufacturer, this might lead you to develop a low-cal strategy in terms of
new products and/or marketing communications. This analysis could lead to segmenting your audience
differently than in the past. If your product fits in with this trend, you might use it as a tool to increase
your price.

Trends as Opportunities
Account planner, central roles is to help clients understand what trends are emerging and how to
capitalize on them. While that sounds like a noble mission, how do analysts actually spot trends?
There are a couple of paths that may be followed in seeking out trends. The first path is to subscribe to
trend research. The leading research firm in the field of trends is Yankelovich Partners, Inc.

There are many other specific trend companies that focus on a specific market group such as children or
on a specific industry such as food. All of these companies are great at offering you the basic building
blocks to understanding what trends might be emerging in society and how those changes might impact
your client’s brand.

Finally, you may want to conduct your own primary research among consumers. Motivational research
techniques and ethnographic research are methods whereby researchers get at the deeper meanings that
underlie a brand in consumers’ opinions. This type of research, conducted over time, can help spot shifts
in attitudes that can ultimately impact the client’s brand or company.
Threats
If you are the brand manager of Tide laundry detergent and Clorox decides to launch a new laundry
detergent brand that cleans twice as well as your brand, there is little doubt that it’s a threat to your
brand’s existence. Immediate threats like this are readily apparent. If you are on your toes, a move like
this shouldn’t come as a surprise to you. Threats can come from a variety of directions, so you should
expand your thinking to go beyond the standard competitive set when thinking about a competitive threat.
It is often said your strengths are sometimes your greatest weaknesses.
In looking at threats, it is a good idea to evaluate areas that may look like a positive but may backfire to
cause you danger or harm.
For example, if you are a number three brand in your product category, the distribution channel currently
carrying your brand may turn out to be a larger threat than your “competitor.” With the current rapid
consolidation in the retail arena, private label brands from a Kroger in the grocery arena or Home Depot
in the home improvement market may be more of a threat to your existing shelf space than is the danger
from any single manufacturer. So the strength of being stocked and promoted by a major retailer may turn
to a threat if that retailer wants to market the same item that you manufacture.

In today’s rapidly changing world, an online channel may change the dynamic balance of the marketplace
and you could wind up on the outside looking in. Competition can come either from a like competitor or
from a distribution channel. Another threat could come from how you make your product. If you are a
coffee brand and there is a shortage of coffee beans, the tight inventory is a threat even to the basic task of
putting the brand on the shelf or to selling your product at a price that consumers can afford. A chain of
family-oriented motels might think that its greatest threat comes from other hotel chains when the real
threat is the rapidly rising cost of gasoline, which may discourage family travel.

The most obvious threats are typically readily identified. Most companies have intelligence regarding
their competition, distribution channels, and supply of raw materials. Even in a service business—such as
airlines, shipping, retailing, or tax preparation—identifying competitive threats and potential cost issues
are a matter of normal business intelligence gathering.
What separates the good brands from the great brands is identifying consumer trends that might be a
threat to the business. For example, in early 2002, there were the beginnings of a trend toward eating
fewer carbohydrates as a method to lose weight. This was started some twenty years before with the
Atkins diet, but in 2002 the trend began to catch hold and become more main stream. The South Beach
diet, a friendlier Atkins-type diet, came into vogue and soon stalwarts such as Weight Watchers and others
were following suit. The potato, rice, and pasta industries were slow to respond and took a severe hit in
short-term sales. It played itself out in the low-carb craze where popular sentiment rallied against the “no
carb” crowd to say that a certain amount of carbs is good and there are “good and bad carbs,” much like
there is good and bad cholesterol. The moral of this story is: had the potato, rice, and pasta groups
followed this larger macro trend and just fit into the overarching consumer trend, they would not have
been as weakened as they were by fighting against the carb counters.
The SWOT analysis is a great tool for discussion and prioritization of the opportunities that the brand has
today and in the future. The action plans that come out of a SWOT analysis should include a short-term
goal to stem any immediate threats or capitalize on any immediate opportunities.

The second action plan should be a longer-range plan that builds on the brand’s strengths while working
to shore up against any glaring weaknesses. All of these future plans are worthless without a customer
perspective that can truly add the most value to this exercise.

6. Explain the various steps in marketing strategy and analysis.

1. Opportunity Analysis

2. Competitive Analysis

3. Target Market Selection (STP)

STEP 1:

1. Opportunity Analysis: Market opportunities are areas where there are favorable demand trends, where
the company believes customer needs and opportunities are not being satisfied, and where it can compete
effectively. A company usually identifies market opportunities by carefully examining the marketplace
and noting demand trends and competition in various market segments. A market can rarely be viewed as
one large homogeneous group of customers; rather, it consists of many heterogeneous groups, or
segments. In recent years, many companies have recognized the importance of tailoring their marketing to
meet the needs and demand trends of different market segments.

STEP 2:

2. Competitive Analysis: In developing the firm’s marketing strategies and plans for its products and
services, the manager must carefully analyze the competition to be faced in the marketplace. Marketers
 must recognize they are competing for the consumer’s discretionary income, so they must understand the
various ways potential customers choose to spend their money. An important aspect of marketing strategy
development is the search for a: competitive advantage, something special a firm does or has that gives it
an edge over competitors.

Ways to achieve a competitive advantage

1. Having quality products that command a premium price

2. Providing superior customer service
3. Having the lowest production costs and lower prices
4. Dominating channels of distribution.
5. advertising that creates and maintains product differentiation and brand equity

Companies must be concerned with the ever-changing competitive environment. Competitors’ marketing
programs have a major impact on a firm’s marketing strategy, so they must be analyzed and monitored.
The reactions of competitors to a company’s marketing and promotional strategy are also very important.

Competitors may:
1. Cut price
2. Increase promotional spending
3. Develop new brands
4. Attack one another through comparative advertising.

STEP 3:

IDENTIFYING THE TARGET MARKET

Here are three steps to follow when identifying the target market:
 Identify Why A Customer Would Want To Buy Your Product/Service
 Segment Your Overall Market
 Research Your Market
Step One — Identify Why a Customer Would Want To Buy the Product/Service
The first step in identifying the target market is understanding what products/services have company has
to offer to a group of people or businesses. To do this, identify the product or service’s features and
benefits. A feature is a characteristic of a product/service that automatically comes with it.
 For example, if toothpaste has a stain-removing formula, that’s a feature. The benefit to the customer,
however, is whiter teeth.
While features are valuable and can certainly enhance your product, benefits motivate people to
buy.
An example is anti-lock brakes; they are features on a car, but the benefit to the consumer is safety.
By knowing what your product/service has to offer and what will make customers buy, you can begin to
identify common characteristics of your potential market.
For example, there are many different consumers who desire safety as a benefit when purchasing a car.
Rather than targeting everyone in their promotional strategy, a car manufacturer may opt to target a
specific group of consumers with similar characteristics, such as families with young children. This is an
example of market segmentation.
Step Two: Segment the Overall Market
It is a natural instinct to want to target as many people and groups as possible. However, by doing this the
promotional strategy will never talk specifically to any one group, and the company will most likely turn
many potential customers off. The promotional budget will be much more cost effective if company
promote to one type of customer and speak directly to them. This allows company to create a highly
focused campaign that will directly meet the needs and desires of a specific group. Again, this is called
market segmentation.
An example of market segmentation is the athletic shoe industry. Major manufactures of athletic shoes
have several segmented markets. One segment is based on gender and the other segment is based on the
type of sport or activity. They have different promotional campaigns for each market segment.
Larger markets are most typically divided into smaller target market segments on the basis of geographic,
demographic, psychographic and behavioristic characteristics:
 Geographic. Potential customers are in a local, state, regional or national marketplace segment. If
you are selling a product such as farm equipment, geographic location will remain a major factor in
segmenting your target markets since your customers are located in particular rural areas. Or, if you own a
retail store, geographic location of the store is one of the most important considerations.
Climate is a commonly used geographic segmentation variable that affects industries such as heating and
air conditioning, sporting equipment, lawn equipment and building materials.
Decide if your business is going to do business on a local, regional, national or international level.
Identify the geographic region where your market is located. Identify specific boundaries within which
you will do business.
 Demographic. Potential customers are identified by criteria such as age, race, religion, gender,
income level, family size, occupation, education level and marital status. Choose those characteristics of
 your demographic target market that relates to the interest, need and ability of the customer to purchase
your product or service.

For example, a target market for a real estate developer selling luxury vacation homes near Walt Disney
World would include professional married couples approximately 30 to 45 years old with young children,
and with incomes of more than $100,000.
Another example of targeting through demographics is Liz Claiborne Apparel Company. They have
named their target market, her name is Liz Lady. They know Liz Lady’s age, income range, professional
status, family status, hobbies and interests. Every decision from marketing to design is based on Liz
Lady’s profile.
A demographic profile for a business would include such factors as customer size, number of employees,
type of products, and annual revenue. If you are a business-to-business marketer for example, you may
want to consider segmenting according to your target customer’s size. A printing company may decide to
target only magazine publishers that publish more than one magazine because they need high volume
accounts to make a profit.
Identify the following demographic characteristics of the market.

Consumer Market
 Age  Income  Gender  Profession
 Profession  Education  Family Size  Homeowner
 Marital Status

Business Market
Geographic location Size of Company Annual revenue Number of Branches
Number of Employees Industry Age of Company

 Psychographic. Many businesses offer products based on the attitudes, beliefs and emotions of
their target market. The desire for status, enhanced appearance and more money are examples of
psychographic variables. They are the factors that influence your customers’ purchasing decision. A seller
of luxury items would appeal to an individual’s desire for status symbols.
Business customers, as well as consumers, can be described in psychographic terms. Some companies
view themselves as cutting edge or high tech, while others consider themselves socially responsible,
stable and strong. Still others see themselves as innovative and creative. These distinctions help in
determining how your company is positioned and how you can use the company’s position as a marketing
tactic.
 For example: Southwest Airlines has positioned itself as an innovative and fun airline that takes
passengers on short, inexpensive excursions, whereas Delta chooses to promote reliability and safety.
The following are psychographic variables. Identify the characteristics of your target market.
Consumer Market
 Life style  Fun-seeking  Family stage  Trendy
 Hobbies  Status seeking  Sports  Conservative
enthusiastic
 Forms of  Socially
entertainment Responsible

Business Market
Business Style Industry Leaders Business stage Innovative
Employees Relations Conservative Trade Associations Socially Responsible
Business Products/Stable Services Used Employee Friendly Publication
Subscriptions
Workforce Type Management Style

 Behavioristic. Products and services are purchased for a variety of reasons.

Business owners must determine what those reasons are, such as: brand, loyalty, cost, how frequently and
at what time of year customers in a segment use and consume products. It’s important to understand the
buying habits and patterns of your customers. Consumers do not rush and buy the first car they see, or the
first sofa they sit on. A Fortune 500 company doesn’t typically make quick purchasing decisions.
Answer the following questions regarding your market.
 Reason/occasion for purchase?
 Number of times they’ll purchase?
 Timetable of purchase, every week, month, quarter, etc.?
 Amount of product/service purchased?
 How long to make a decision to purchase?
 Where customer purchases and/or uses product/service?

Most businesses use a combination of the above to segment their markets. Demographic and geographic
criteria will usually qualify your target markets so you can establish if segment members have enough
money to purchase your offering or if they’re in a location that’s accessible to the product. Most
businesses then use the psychographic and behavioristic factors to construct a promotional campaign that
will appeal to the target market.
 For example, Career Options is limited to the geographic region where their office is situated because
their target customers want to work in that area. In their advertising they will appeal to psychographic
factors such as the desire for stability and income.

Step Three: Research Your Market

The facts and data about the defined target market can be collected through various qualitative and
quantitative research methods.
Demographic, Psychographic and Behavioristic:
The primary vehicles to obtain this information are surveys and focus groups. Surveys are typically
anonymous and try to reach as many members of a target market as possible. Focus groups, on the other
hand, attempt to get an understanding of a specific market segment by questioning eight to 12 members of
that group to discover what psychographic and behavioristic factors might motivate the entire group. You
should consider hiring a marketing research firm, since executing both questionnaires and focus groups
can be complex undertakings.

CHOOSE THE SEGMENTED TARGET MARKET(S) YOU WILL SELL TO

After identifying and defining the possible segments within your target market, you must face the critical
question of whether it would be profitable and feasible for you to pursue each identified segment, or
choose one or two. To make this decision, you must answer the following questions:
 What is the financial condition of my firm? If you have limited resources at this time, you may
want to direct your marketing efforts to only one segment. A concentrated advertising campaign to reach
one market segment is likely to be more effective than a diffuse campaign attempting to reach two.
 What segments are my competitors covering? Are they ignoring smaller segments that I can
possibly exploit? The printing company previously mentioned may decide to pursue small magazine
publishers because there are many competitors currently serving the needs of larger publishers. Or,
Career Options may discover that since in their geographic location there are several firms that
specialize in helping professionals in transition, they should specialize in the recent college graduate
market.
 Is the market new to your firm? If so, it may be better for you to concentrate on one segment for
now, and expand to others when your initial segment has been successfully penetrated. Developing new
markets takes a greater commitment of time, money and energy.
Important Considerations:
 If you pursue one segment of your target market and the demand for your product decreases, so
will your financial strength. In essence, you are putting all your eggs in one basket.
 When your firm becomes well established in a particular market segment, it may be difficult for you
to move to another segment. This may occur due to your market reputation or popularity.

7. As an account planner do a STP of a client (Brand).

8. What is BCG Matrix? Explain it with a suitable example

9. Explain BCG matrix and its limitation

10. Explain how to create a winning Value proposition.

A value proposition is a promise of value to be delivered. It’s the primary reason a prospect should buy
from you.

In a nutshell, value proposition is a clear statement that

 explains how your product solves customers’ problems or improves their situation (relevancy),

 delivers specific benefits (quantified value),

 tells the ideal customer why they should buy from you and not from the competition (unique
differentiation).

1. It’s for people to read and understand

Value proposition is something real humans are supposed to understand. It’s for people to read.

2. Use the right language

Value proposition needs to be in the language of the customer. It should join the conversation that is
already going on in the customer’s mind. In order to do that one need to know the language customers use
to describe product offering and how they benefit from it.

The way brand speak about your services is often very different from how your customers describe it .
The answers are in account planning and a detail interaction with consumers.

3. What the value proposition consists of

The value proposition is usually a block of text (a headline, sub-headline and one paragraph of text) with
a visual (photo, hero shot, graphics).

There is no one right way to go about it, the following formula is useful:
  Headline. What is the end-benefit you’re offering, in 1 short sentence. Can mention the product
and/or the customer. Attention grabber.

 Sub-headline or a 2-3 sentence paragraph. A specific explanation of what you do/offer, for
whom and why is it useful.

 3 bullet points. List the key benefits or features.

 Visual. Images communicate much faster than words. Show the product, the hero shot or an
image reinforcing your main message.

4. Evaluate brand current value proposition by checking whether it answers the questions below:

 What product or service is the company selling?

 What is the end-benefit of using it?

 Who is the brand’s target customer for this product or service?

 What makes offering unique and different?

Use the headline-paragraph-bullets-visual formula to structure the answers.

5. Always strive for clarity first.

The best value proposition is clear: what is it, for whom and how is it useful? If those questions are
answered, you’re on the right path. Always strive for clarity first.

If brand value proposition makes people go “hmph?”, you’re doing it wrong. If they have to read a lot of
text to understand brand offering, then it will not work. Yes, sufficient amount of information is crucial
for conversions, but brand need to draw them in with a clear, compelling value proposition first.

Research by Marketing Experiments says that the key challenge companies have is identifying an
effective value proposition, followed by communicating it clearly.

6. What makes a good value proposition?

 Clarity! It’s easy to understand.

 It communicates the concrete results a customer will get from purchasing and using your products
and/or services.

 It says how it’s different or better than the competitor’s offer.

 It avoids hype (like ‘never seen before amazing miracle product’), superlatives (‘best’) and
business jargon (‘value-added interactions’).

 It can be read and understood in about 5 seconds.

Also, in most cases there is a difference between the value proposition for the company and its product.
brand must address both.

7. How to craft a unique value proposition

A key role for the value proposition is to set brand apart from the competition. Most people check out 4-5
different options / brands before they decide. Brand should offer to stand out in this important research
phase.

The key thing to remember is that brand don’t need to be unique in the whole world, just in the
customer’s mind. The closing of a sale takes place in a customer’s mind, not out in the marketplace
among the competition.

Boosters for brand value proposition

Sometimes it’s the little things that tip the decision in brand favor. If all major things are pretty much the
same between brand and its competitors’ offer, brand can win by offering small value-adds called
boosters.

These things work well against competitors who do not offer them. Boosters can be things like

 Free shipping

 Fast shipping / Next day shipping

 Free bonus with a purchase

 Free setup / installation

 No setup fee

 No long-term contract, cancel any time

 License for multiple computers (vs 1)

 (Better than) Money-back guarantee

 A discounted price (for a product)

 Customizable

11. Suggest a suitable value proposition for a telecommunication service provider.

12. What is a Pitch. Explain the process of pitching

What is a PITCH?
An advertising pitch describes the proposals of an advertising agency to promote a product or service.
The pitch states the objectives for the campaign and describes how the campaign will deliver its intended
results. Companies request advertising pitches so that they can select the most suitable proposal from a
number of advertising agencies. A successful pitch should demonstrate that an agency can use the
marketing budget effectively to create greater value for a brand, according to the World Federation of
Advertisers.
The process of pitching
Step 1: It All Starts With a Client Who Wants a New Advertising Campaign.
This client may have an advertising agency already, known as the incumbent, or it may not be
currently involved with an agency. Either way, the client has decided that the new campaign
needs new blood, and agencies will contend with each other to win that business. For the
incumbent, it’s not so much winning new business as keeping hold of it.

Step 2: The Client Puts Out a Request For Agencies to Pitch.

This is commonly known as an RFP, or Request For Proposal. This will outline the scope of
work, what needs to be done, when it needs to be done by, and other information that
prospective agencies need to know.

Step 3: The Client Selects Agencies to Brief.

Very popular, blue chip clients will be inundated with pitch requests. They can’t possibly see all
of them, so they will select a handful to brief. Often, they will send the RFP only to agencies
they want to work with. Start-up companies, or businesses with a bad reputation, will have less
interest and thus, the client will be more open to seeing agencies with less prominence.
Sometimes, the agencies will meet in person with the client to receive the creative brief itself and
ask questions.
On rare occasions, the agencies will all receive the brief at the same time, in the same meeting.

Step 4: The Agency’s Principals Will Brief the Teams.

After receiving the brief and other information, the principals and account team will craft an
internal creative brief for the creative director and the art director/copywriter team(s) working on
the pitch. This is the driving force of the pitch in an advertising agency. Pitches are like fashion
shows. They are not always an example of what should be done, but what could be done. It’s a
chance for the agency to pull out all the stops, and really wow the clients.
“Just imagine where we could take you?”

Step 5: The Creative Department Creates Campaigns

Several creative teams will be given the creative brief, and will immediately begin crafting ideas.
This can take a week, or even less, or it can take months. It all depends on the timeline given to
the agency by the client. Over the course of this time, ideas are shown to the creative director,
who will mould and advance some ideas, and reject others. Then, the account team is brought
into the process to review the work.
Step 6: The Agency's Principals Select the Campaign To Be Pitched
When both the account team and the CD are happy with the work, the principals of the agency
will get to see it, and select a campaign to develop. This is the one the agency will throw its
weight behind, creating mock-ups of ads and websites, and even shooting some material
specifically for the pitch. If the agency was lucky enough to receive a pitch fee, this is where the
money will be spent.

STEP 7: The Agency Polishes and Practices the Pitch Internally.

Practice, practice, practice. The agency will make sure everything is right. They will bring in
research to support their ideas. They will have boards made that look stunning. They will cut
together sample videos. They will even hire actors or models. This is the time to remove the
glitches, kick the tires, and make sure everything is as perfect as it can be. If there are any flaws,
this is the time to iron them out. Of course, it also means that last-minute changes will be
required, meaning more late nights, early mornings, and rush fees.

Step 8: Pitch Time. The Client Receives The Presentation.

One by one, agencies will meet with the client, usually at the client’s head office, to give
their pitch presentation. For a client, this can take up a whole day. Agencies may have to travel a
long way to pitch, sometimes flying around the country for a 1-hour meeting. If there is the
potential to win millions of dollars in new business, it’s worth it. Technology has meant that
clients and agencies can do this via video conferencing, but few want to do it that way. For a
start, if another agency is doing the meeting in the flesh, the agency calling in will have an
immediate disadvantage. There are also technical problems that can haunt a video call, and very
few agencies want to risk the chance of new business disappearing because a piece of equipment
is down.

Step 9: The Client Chooses an Agency.

After much deliberation, the client will let the winning agency know who they are, and let the
others down. Many people believe that the best work wins, but that’s naïve. The client will take
into account many factors, including price, distance, personalities, agency culture, and
capabilities. If they like the work from another agency better, it’s not uncommon to see that
surface anyway. It’s not exactly moral, but it’s the way of the world.

Step 10: The Agency Works on the New Campaign.

Once the pitch is won, the work comes into the agency, and the real work begins. Now, things get
a little more down to earth. The winning pitch may have been stunning, but now the client wants
to see a more realistic version, without all the bells and whistles. They will ask for things to be
toned down. They will ask for smaller budgets. This is just what is expected. Very rarely does the
work that won the pitch make it to the printer or TV screens untouched. And now, that agency
has the client on its roster.
Until it becomes the incumbent with a fire about to be lit underneath it, and the circle begins
again.

13. What are the 11 Winning Pitch Presentation Rule.

11 Winning Pitch Presentation Rules:

1. Understand the Difference between Advertising and New Business
The number-one reason for presentation loss by most agencies is confusing new business with the skills
they need to do good marketing communications. There’s a big difference, and the lack of understanding
here is the reasons so many firms have trouble with growth.
2. Take the Lead Right from the Start
From the beginning be the most interested. At the RFP (Request for proposal) stage be the most
tantalizing. At the agency tour stage be the best-organized agency. At the final presentation showcase the
best presentation team. Do these things and you win because you’re in the lead. It’s difficult to win first
place from back in the pack.
3. Quickly Decide If You Want the Account
Make sure you have a good chance to win. Check chemistry (your type of people). Successful agencies
quickly decide they want the account, and then they decide what it will take to win. Are you willing to put
in the time, energy required to win?
4. Know How the Agency Will Be Selected
Will it be a relationship win? Or a big idea? Will options carry the day? Scorecard? Today many prospects
and search consultants use scorecards. Often the second-best agency wins the entire account on points.
Think about the scorecard and make sure you achieve high marks in every category.
5. Agree Early on the Presentation Make-up
Most clients are disappointed at agency presentation time because they expect a show and they get bored
instead. Focus more on the presentation: speaking skills, use of tools, ability to relate, eye contact,
sentence structure, organization of thoughts, humor, and appearance. Organization of overall show,
including setup, refreshments, tent cards, podiums, the presentation structure, use of time, and dramatic
effects. Your agency must own the room.
6. Decide on the Agency “Hero”
New business is all about showcasing the people. Make sure you clearly identify the prospect’s hero: the
one person who can stand up, carry the day and slay the prospect’s key issues. They must be the right
profile, right title, right responsibility, and most importantly be great at presenting. And not the agency
president!
7. Use Profiling to Win on Chemistry
When your agency profiles correctly and thereby shows versatility, you win. All members of the agency
management team must understand how to identify different profiles, how to build trust with each one,
and most importantly, how each will make their decision. Each profile is looking for something different
in an advertising agency. Knowing the correct profile determines the presentation tactics you select.
8. Establish the Presentation Chunks Early
You must treat the entire presentation as a series of acts in one play. Introduce each act with interest.
Build to key points. And end each act strongly. Write out dull sections and put the information in the leave
behind. This makes the leave behind more important, which is helpful.
9. Present the Right Way
There is a power to presenting the right way, use it. Maintain eye contact, build a story, connect with the
audience, and much more. Little things like practicing “Nancy Reagan” (your team looking adoringly at
whoever is speaking) to keep the audience focused and avoiding dead screen time with title slides. Don’t
introduce the next speaker (agenda covers that) and practice TV time with quick cuts to the next topic.
10. Rehearse, Rehearse, Rehearse
A major presentation is worth 8 hours of rehearsal. If you don’t have time to do rehearsals, then don’t do
the presentation. Fly into the presentation city a day early if you must.
11. Build a Team of Winners
It’s a smart agency who uses the same people time and again to win key pieces of business. The teamwork
shows through, and this means a lot to prospects. Round out your team of winners with new additions
each time, such as adding appropriate account handlers and designated creative team members, but have
them join a core team of experienced presenters who know how to win.

14. Explain the role of a Key Account Manager

The Role of the Key Account Manager

The basic role of a key account manager inside your company is to build and nurture loyal, long-lasting
relationships with each of your high-value customers.

They do this by positioning themselves as a dedicated resource for your key accounts, someone who is
committed to helping them solve their problems, realize their business goals, and achieve success. While
sales may be responsible for the initial interactions and onboarding of the client, your key account
manager is the one in charge of ensuring their continued satisfaction and success.

After all, a happy client is a client that will stick with you for the long-haul. So what, specifically, can a
key account manager do to improve customer retention and be an asset to your most valuable accounts?

Build Trust

Trust is by far one of the most important components of building an ongoing relationship with key
accounts. It is the foundation for every business relationship, and without it, no business can survive. Key
account managers help cultivate and preserve that trust by providing a consistent and reliable experience
for your clients.

With the right tools and the right approach, key account managers work to establish a rapport with clients
and prove to them that they are on their side. Your clients need to know that they can count on their key
account manager, not only to deliver on your company’s promises but also to take a genuine interest in
their success.

Become a Strategic Advisor

Becoming the go-to person for your client’s needs goes hand in hand with building trust. The more your
key account managers understand your client’s business goals and work with them to create strategies to
achieve them, the easier it will be to align your goals with theirs.

Ultimately, your key accounts want to know that you are rowing the boat in the same direction they want
to go. It is the job of your key account manager to not only row in the right direction but to help steer the
ship. When your key account managers assume the role of strategic advisor to your key clients, they add
an indispensable value to your product or service and demonstrate to clients how your company is
directly benefitting their bottom line.

The important thing to remember is that succeeding with key account management takes a significant
amount of time to implement correctly. There will be bumps in the road, but in the end, it is worth it. Key
account managers that take the time to build a reservoir of trust and goodwill with their counterparts will
prove invaluable to your company.

15. Why is choosing the right customers so important for an account planner
Why is choosing the right customers so important: The selection of key customers that a
company makes has a crucial effect on the success of its key account programme and the
perception of its success. Unless the key customer portfolio performs better than groups of
customers not receiving the same level of investment, why would a company continue with
it? Any customers who do not respond positively are diluting the results and endangering the
whole programme.

The task of categorizing customers needs to be carried out methodically and thoroughly. It
will probably take more effort than suppliers expect, but the importance of getting it right
cannot be overestimated. All kinds of onward decisions depend on it, from what resource the
customer receives, to who should be appointed to manage them, and what expectations
may be set for them. Companies failing to tackle the task of selection and categorization
properly should expect to fail at key account management. Below are mentioned the
reasons why choosing the right customers is so important.

1. Fulfilling corporate strategy: Key customer selection is one of the most

important decisions that suppliers face in key account management (KAM). Whether
key customers currently represent 20 per cent or 80 per cent of your business, they
should, by definition, be business leaders – leaders in your business, and/or leaders in
their own sectors as well. The key customers to whom you give special attention
must be those that will make a substantial contribution to the fulfillment of your
strategic vision, so making the right choices is critical. If you fail to choose
appropriately, your portfolio is likely to contain a mixed bag of big names, old friends
and difficult/over-demanding customers which is not going to take your business
anywhere, never mind the vision of the future that you have mapped out. Your other
customers are typically smaller and more often driven by their markets than leading
in them, and it is very unlikely that they can fulfil both their own part in your strategy
and make up for what the key accounts fail to deliver. So to achieve corporate
objectives, you must select the right key customers. Although choosing key
customers is one of the most important decisions in KAM, and also one of the earliest,
some companies believe that their key customer portfolio is a ‘given’, and appear to
avoid making the decision at all. In essence, they are saying that their biggest
customers now are also their best, and will always be so. This is a very dangerous
assumption, and should be challenged and investigated objectively. Look for phrases
like ‘We don’t need to do that – our key customers choose themselves’ and ‘It’s
obvious – we all know who they are anyway.’ Check your selection process against
the list below.
2. Selecting for superior returns: It quickly becomes clear that KAM and key
customers will be a major pull on resources. If they are not, then it will be just a
cosmetic programme, soon to be discredited by customers and your own organization
alike. However, when your company is investing in customers, it will be expecting
better performance from these customers than it receives from the rest of its
customer base, whether in terms of growth, increased margins or some other
contribution to profit. The customers picked out for special treatment should be those
who will give a superior yield in the future. Ultimately, that is how your Board will
judge whether the approach is successful, and more worthy of their investment than,
say, buying more equipment, more staff training or more advertising. Otherwise, why
bother?
3. How many key accounts? Why would key customers spend their time with you if they did not
expect significantly special treatment from their key relationships? Genuine KAM reaches deep
inside a company to come up with the kind of breadth of offer and innovation that these
customers seek. It requires a considerable change from traditional ways of working and, even if
that is achieved, the capacity of a supplier to deliver this kind of treatment profitably is not
infinitely expandable. There is a ceiling to any supplier’s capacity for intimacy, which needs to be
recognized. Hiring an extra bunch of key account managers to go out and be nice to customers
does not shift the ceiling – but it may bring the house down!
Big companies with big customer databases often talk about their key customers as the ‘top 100’
or ‘top 200’, or even the ‘top 300’. We can assume these have been badly chosen (usually just on
past sales volume) and are inadequately served, certainly below the level expected by a key
customer. As suppliers realize the limitations on their capacity to support key customers properly,
they invariably tighten up on the numbers admitted to the portfolio. Numbers of genuine key
customers may range from about 12 to 50 (Figure 2.1). They may stretch from extremes of 5 to
75, but usually those at the upper end of this range are actively working to reduce the number. In
fact, about 50 key customers seemed to be the ceiling for successful KAM in even the largest
corporations. The optimum number of key customers, i.e. that most commonly observed in
companies running successful KAM programmes, is somewhere between 15 and 35.
 16. Why understanding relationships is so important in KAM?

In personal relationships, you behave differently towards different people according to how
well you know them and what they mean in your life. If you treated your oldest friend with
distant formality, he or she would be puzzled and upset: old friendships should be warm and
relaxed, frank and open to new ideas. Similarly, if you treated an acquaintance like your
postman or your child’s teacher as an old friend, they would be equally puzzled and upset,
or even offended and enraged by your familiarity. It is the same with intercompany
relationships. If you have just started trading with a customer in a limited way, trying to
involve the chief executive in a strategic planning workshop would be seen as unnecessary
at best, and presumptuous at worst. Asking for inside information about the business may
be greeted with suspicion, if yours is seen as a simple trading relationship, but it may be
welcomed and even expected if you have a highly collaborative liaison with the customer.
You need to understand when you do not yet have the kind of relationship that entitles you
to call on that amount of attention. Many customers have thousands of suppliers, so they
have to prioritize their time very carefully. Your best plan is to:
understand your current position in the relationship hierarchy,
decide how far this relationship can go and how far you want it to go, and
make a plan to move forward, matching your strategies to the stage you
Be aware of the fact that customers do not usually see the relationship in the same way as
the supplier, particularly the key account manager (Figure 3.1). When we asked suppliers
what level of relationship they had with a key customer, and then asked their customers the
same question, we found that the answers were almost always different. The supplier
usually rated the relationship one level higher than the customer. But only the part of the
relationship that is agreed by both sides can be real. If you think about it, you cannot be
closer to me than I am to you. Of course, the reverse is true too, that your customer cannot
be closer to you than you think you are to them but, in general, it is suppliers that suffer
from delusions of intimacy much more than customers. In fact, only the reciprocated part of
a relationship is effective.
It follows that the rest is either an investment or a waste.
Investing resource
It may be right to behave as if the relationship were more advanced than it is currently, in
order to develop it to that higher level, provided that:
you have calculated that the customer can and will respond,
You are intentionally investing in the customer,
you monitor the development of the relationship and the return from it, and
you take action if progress is not achieved.

Wasting resource
If you have somehow slipped into a stage of relationship which is one-sided and not moving
forward, you should stage a cautious retreat:
consider what you are doing that is not appreciated by the customer
withdraw resources carefully to a more appropriate level.
The following sections describe the different stages of relationship in some detail to help you
identify at what level you cooperate with your customers currently, and what that indicates
in terms of your behaviour and opportunities.
 17. What is Relationship Management? Explain the pros and cons of it.

2. Short Notes

1. Strength and Weakness (same as Q5)

2. Trends as Opportunities (same as Q5)
3. Limitation of BCG matrix ( same as Q 9)
4. 6 Components of Defining Key Account Management

Definition of key account management. This describes a customer-oriented coordination unit within a
company, in which activities associated with very important customers are consolidated.

6 Components of Defining Key Account Management

As well as having a core definition, we find that having a shared understanding of the following six
components of key account management helps create focus.
1. Viewing key accounts as separate from those that are simply large accounts in terms of revenue.

2. Limiting the number of key accounts, and protecting vigorously from uncontrolled and ill-advised
key account list growth.

3. Pursuing key accounts as institutional partners such that you build innovation and value together,
becoming deeply linked to each other’s future.

4. Allocating key account focus on three core topics: penetrating, expanding, and protecting
accounts from competition.

5. Viewing key accounts as assets that require continued, and often significant, investment to yield
maximum returns. These investments often include structuring and aligning your business’
processes and systems to maximize account value.

6. Viewing key account investment returns as tied to long-term business strategy.

5. Three types of Customer Categorization

6. Demographic, Psychographic and Behavioristic

7. Role of an Account Planner (Same as Q 14)

8. Porter’s Five Forces

Porter's Five Forces of Competitive Position Analysis were developed in 1979 by Michael E Porter of
Harvard Business School as a simple framework for assessing and evaluating the competitive strength
and position of a business organisation.
This theory is based on the concept that there are five forces that determine the competitive intensity and
attractiveness of a market. Porter’s five forces help to identify where power lies in a business situation.
This is useful both in understanding the strength of an organisation’s current competitive position, and the
strength of a position that an organisation may look to move into.
Strategic analysts often use Porter’s five forces to understand whether new products or services are
potentially profitable. By understanding where power lies, the theory can also be used to identify areas of
strength, to improve weaknesses and to avoid mistakes.
Porter’s five forces of competitive position analysis:

The five forces are:

1. Supplier power. An assessment of how easy it is for suppliers to drive up prices. This is driven by the:
number of suppliers of each essential input; uniqueness of their product or service; relative size and
strength of the supplier; and cost of switching from one supplier to another.
2. Buyer power. An assessment of how easy it is for buyers to drive prices down. This is driven by the:
number of buyers in the market; importance of each individual buyer to the organisation; and cost to the
buyer of switching from one supplier to another. If a business has just a few powerful buyers, they are
often able to dictate terms.
3. Competitive rivalry. The main driver is the number and capability of competitors in the market. Many
competitors, offering undifferentiated products and services, will reduce market attractiveness.
4. Threat of substitution. Where close substitute products exist in a market, it increases the likelihood of
customers switching to alternatives in response to price increases. This reduces both the power of
suppliers and the attractiveness of the market.
5. Threat of new entry. Profitable markets attract new entrants, which erodes profitability. Unless
incumbents have strong and durable barriers to entry, for example, patents, economies of scale, capital
requirements or government policies, then profitability will decline to a competitive rate.
Arguably, regulation, taxation and trade policies make government a sixth force for many industries.
What benefits does Porter’s Five Forces analysis provide?
Five forces analysis helps organisations to understand the factors affecting profitability in a
specific industry, and can help to inform decisions relating to: whether to enter a specific
industry; whether to increase capacity in a specific industry; and developing competitive
strategies.

Actions to take / Dos Actions to Avoid / Don'ts

 Use this model where there are  Avoid using the model for an
at least three competitors in the individual firm; it is designed for use on
market an industry basis
 Consider the impact that
government has or may have on the
industry
 Consider the industry lifecycle
stage – earlier stages will be more
turbulent
 Consider the
dynamic/changing characteristics
of the industry

9. Brand Audit
10. Wheel of Competitive Strategy
11. Consumer Insight
12. Role of a Key Account Manager (same as Q14)

MA – EMA Semester- III, Account Planning & Management

Paper Pattern 60 Marks 2 Hours
Q1. Case Study (15 Marks)
- 3 Pointers have to be explained (each pointer for 5 marks each)

Q2. a. (15 Marks)

OR
Q2. b. (15 Marks)

Q3. a. (15 Marks)

OR
Q3. b. (08 Marks)
Q3. c. (07 Marks)

Q4. Short Notes (Answer Any 3 out of 5) (15 Marks)

-------------------All the Best---------------------