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Submitted by vcesar on February 26, 2008
Category: Business
Words: 9713 | Pages: 39
Views: 161
Popularity Rank: 49,870
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DISTRIBUTION
Firm, Brand, and Product Line Objectives
Firm level objectives: It is not enough to simply state a firm’s goal as maximizing the present value of total profit since this does not differentiate it from other firms and says nothing about how this objective is to be achieved. Instead, a business and marketing plan should suggest how the firm can best put its unique resources to use to maximize stockholder value. A number of resources come into play—e.g.,
Distinctive competencies—knowledge of how to manufacture, design, or market certain products or services effectively;
Financial—possession of cash or the ability to raise it;
Ability and willingness to take risk;
The image of the firm’s brand;
People who can develop new products, services, or other offerings and run the needed supports;
Running facilities (no amount of money is going to get a new microchip manufacturing plant started tomorrow); and
Contacts with suppliers and distributors and others who influence the success of the firm.
Market balance: It is essential that different firms in the same business not attempt to compete on exactly the same variables. If they do, competition will invariably degenerate into price—there is nothing else that would differentiate the firms. Thus, for example, in the retail food market, there are low price supermarkets such as Food 4 Less that provide few if any services, intermediate level markets like Ralph’s, and high-end markets such as Vons’ Pavillion that charge high prices and claim to carry superior merchandise and offer exceptional service
Risk: In general, firms that attempt riskier ventures—and their stockholders—expect a higher rate of return. Risks can come in many forms, including immediate loss of profit due to lower sales and long term damage to the brand because of a poor product...
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