Ch 8-1 Chapter 8 Implementing Strategies: Marketing, Finance/Accounting, R&D, & MIS Issues

Ch Market segmentation 2. Product positioning Marketing Issues Centrally important to Implementation

Ch 8-3 Marketing Mix – Component Factors Service level Warranty Transportation carriers Product line Inventory levels/locations Packaging PublicitySales territoriesBrand name Payment termsSales promotionOutlet locationStyle Discounts & allowances Personal selling Distribution coverage Features LevelAdvertising Distribution channels Quality PricePromotionPlaceProduct

Ch 8-4 Marketing Issues Market Segment Basis Psychographic Behavioral Geographic Demographic

Ch 8-5 Marketing Issues Product Positioning Customer Wants Customer Needs

Ch 8-6 Product Positioning Steps Product Positioning Steps 2. Diagram Map 1. Select Key Criteria 3.Plot competitors’ products 4. Look for niches 5. Develop Marketing Plan

Ch 8-7 Product Positioning Map Low Convenience High Customer Loyalty Low Customer Loyalty High Convenience Firm 1 Firm 2 Firm 3 Rental Car Market Low Customer Loyalty High Convenience Firm 1 Firm 2 Firm 3 Rental Car Market

Ch 8-8 $Amount Needed: $500 Stock Price $40 EBIT Range $1000 to $2000 Tax Rate 175/673 =.26 = 26% Interest Rate 5% # Shares Outstanding 350 EPS-EBIT Analysis (in $millions) Heinz Company – Year End 2001

Ch 8-9 EPS-EBIT Analysis (in $millions) – Heinz Company Stock FinancingFinancing HighLowHighLowHighLow EBIT ($982.4 in 2001)$2000$1000$2000$1000$2000$1000 Interest (5%) EBT Taxes 26% EAT # Shares outstanding EPS

Ch 8-10 Conclusion:  Heinz should use debt to raise the $500 million Finance/Accounting Issues EPS-EBIT Analysis Heinz

Ch 8-11 Allow an organization to examine the expected results of various actions and approaches Finance/Accounting Issues Projected Financial Statements

Ch 8-12 Projected Income Statement for Litten Company (in millions) Prior Year 2004 Projected Year 2005Remarks Projected Income Statement Sales % increase Cost of Goods Sold % of sales Gross Margin Selling Expense % of sales Administrative Expense57.505% of sales EBIT Interest33.00 EBT Taxes % rate Net Income69.75 Dividends25.00 Retained Earnings44.75

Ch Details how funds will be obtained and spent for a specified period of time. Finance/Accounting Issues Financial Budget

Ch 8-14 Cash budgets Operating budgets Sales budgets Profit budgets Factory Budgets Expense Budgets Finance/Accounting Issues Types of Budgets

Ch 8-15 Divisional budgets Variable budgets Flexible budgets Fixed budgets Finance/Accounting Issues Types of Budgets

Ch What a firm owns 2. What a firm earns 3. What a firm will bring in the market Finance/Accounting Issues Evaluating Worth of a Business: 3 Basic Approaches

Ch st firm to market new technological products 2. Innovative imitator of successful products 3. Low-cost producer of similar but less expensive products Research & Development Issues 3 Major R&D approaches to implementing strategies

Ch 8-18 Information collection, retrieval, & storage Keeping managers informed Coordination of activities among divisions Allow firm to reduce costs MIS Issues Functions of MIS