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Name the 7 P’s of the service marketing mix
What is the range of promotional methods available to marketers?
- Promotional influences on the
- customer – word of mouth, sales promotion (BOGOF etc), public relations,
- merchandising (e.g. toys), direct marketing (e.g. junk mail), internal
- marketing, exhibitions, corporate image, packaging, sponsorship, advertising,
- personal selling., branding.
A key element of any manager’s role is that of planning; describe a
concise framework for a marketing plan detailing the contents of each section.
- 1. Analysis of the current situation
- (using marketing research)
2. Business mission/objectives
3. Strategies – ANSOFF
- 4. Tactics/operation plan – marketing
- mix proposals
Differentiate between controllable anduncontrollable variables of a marketing plan, giving examples of each
Controllable factors – Product place promotion and price
- Uncontrollable – CERTS; Competitive, Economic, Regulatory,
- Technological, Social
What is the difference between human resource and personnel management?
- Human resources management is concerned with treating people as
- a factor of production. Personnel management is the life cycle of an employee –
- the administrative discipline of hiring and developing employees so they become
- more valuable to the organisation.
What are the types of issues which
personnel departments have to deal with?
- Personnel management involves dealing with:
- Recruitment and selection
- Starting a new job
- Effective working
- Dealing with problems
- Social Issues
- Employment Law
- Communication and negotiation
- Termination of employment
Discuss the steps required to developing a human resource strategy
and indicate the role of the
Personnel function where required
- The Human Resource strategy must be
- in line with the corporate strategy. There are 2 critical questions – what
- kinds of people do you need to manage and run the business to achieve its
- objectives? And what people programmes and initiatives must be designed and
- implemented to attract, develop, and retain staff to complete effectively?
- The steps to developing a human
- resources strategy are:
1. Understand your business strategy
2. Develop a mission statement
3. Conduct SWOT analyses
4. Conduct a detailed HR analysis, concentrate on COPS
5. Revisit your business strategy and compare it with the SWOT and COPS
6. For each critical people issue, highlight the options
7. Implement and evaluate the action plan
These are related to the ‘COPS’factors: Culture, Organization, People, and HR systems.
What are the key elements which define a ‘bureaucratic’
“A large organisation of any kind (public or private) with special features not found in small organisations”
A prescribed set of rules and administrative regulations which provide guidance for its members and ensures that uniform standards are maintained
- An arrangement of individual jobs into a
- hierarchy in which different levels of graded authority are recognised
- A system of written records which provide
- precedents to guide actions in the future
- A system of positions through which work is
- carried out, called executive roles
- A system of positions whereby power and
- authority are distributed in such a way as to enable the organisation to
- achieve its objectives
- Power: capacity to change individual’s
- Authority: legalised power, which in a
- business derives from the owners who provide the company resources
Net present value: When all the net cash flows for each year of the project have been discounted at adetermined rate to today’s value
- Net cash flow
- Arithmatic sum of the cash flows for a given period of the project’s life, usually oneyear
Give examples of quantitative quality control techniques and how they might be used in industry
- 1. Range and mean (X and r) charts – UCL and LCL
- 2. Histograms
- 3. Pareto Analysis – the “80:20” rule
- 4. Run charts
- 5. Scatter diagrams
Give examples of qualitative quality control techniques and how they might be used in industry
1. Brainstorming (“green light thinking”)
- Rules: purpose is stated and understood. Urge participation without fear or
- criticism. No criticism or discussion of suggestions. Encourage building
- on ideas of others. Record on flip charts.
2. Ishikawa “Fishbone” diagrams
4.Force field analysis
5. Nominal group technique
Definitions of quality
- 1. Customer or user-based
- 2. Manufacturing-based
- 3. Quality in the constructed product
- 4. Product based
- 5. Value based
- 6. Transcendent
- 7. Systems (as part of)
Definitions of quality and their application in business or everyday use.
Customer or user-based
- “Quality is fitness for use” Juran, 1989
- “Goods that best satisfy (customer’s)
- preferences are those that they regard as having the best quality” Gavin,
“Quality means conformance to requirements” Crosby, 1979
Quality in the constructed product
- “Quality in the constructed project is
- achieved if the completed project conforms to the stated requirements of
- the principal participants (owner, design professional, constructor)
- while conforming to applicable codes, safety requirements, and
- “ A precise and measurable variable, relative
- to the amount of some ingredient or attribute possessed by a product”
- Garvin, 1984
- “Best for certain customer conditions. These
- conditions are a. the actual use and b. the selling price of the product”
- Garvin 1984
- Quality is synonymous with innate excellence,
- Garvin 1984
- Quality is neither mind or matter, but a
- third entity independent of the other two.. even though quality cannot be
- defined you know what it is” Pirisig, 1981
- How well something, such as a product or service, meets the
- required standard.
Zero Defects was a management-led program to eliminate defectsin industrial production; Philip Crosby incorporated it into his"Absolutes of Quality Management". Although applicable to any type ofenterprise, it has been primarily adopted within supply chains wherever largevolumes of components are being purchased (common items such as nuts and boltsare good examples). Case study: missile delivery one month early, insistence onperfection
A quality circle is a volunteer group composed of workersusually under the leadership of their supervisor, who are trained to identify,analyze and solve work-related problems and present their solutions tomanagement in order to improve the performance of the organization, andmotivate and enrich the work of employees. Dr Kaizen
Kaizen, Japanese for "improvement", refers to philosophy or practices that focus upon continuous improvement of processes in manufacturing, engineering, and business management. By improving standardized activities and processes, kaizen aims to eliminate waste (lean manufacturing).
Kaizen in depth
- The Toyota Production System is known for kaizen, where all line
- personnel are expected to stop their moving production line in case of any
- abnormality and, along with their supervisor, suggest an improvement to resolve
- the abnormality which may initiate a kaizen.
The cycle of kaizen activity can be defined as:
- Standardize an operation and activities.
- Measure the operation (find cycle time and amount of in-process inventory).
- Gauge measurements against requirements.
- Innovate to meet requirements and increase productivity.
- Standardize the new, improved operations.
- Continue cycle ad infinitum.
- This is also known as the Shewhart cycle, Deming cycle, or PDCA.
- Other techniques used in conjunction with PDCA include 5 Whys, which is a form
- of root cause analysis in which the user asks "why" a failure
- occurred five successive times, basing each subsequent question on the answer
- to the previous.
- Quantitative: The idea that roughly 80% of the effects come from
- 20% of the causes, e.g. :
80% of a company's profits come from 20% of its customers
80% of a company's sales come from 20% of its products
80% of a company's sales are made by 20% of its sales staff
A Gantt chart is a type of bar chart that illustrates a project schedule. Gantt charts illustrate the start and finish dates of the terminalelements and summary elements of a project. Modern Gantt charts also showinter-dependency of tasks.
A qualitative function
“Fishbone diagram” – Cause and effect
Equipment, materials, process, environment, people, and management
Statistical Process Control
- Statistical process control (SPC) is a method of quality control which
- uses statistical methods. SPC is applied in order to monitor and control a
- process, dividing quality errors into special and common causes. Control charts.
Failure Mode and Effect Analysis
A qualitative function
- Failure Mode and Effects Analysis (FMEA) was one of the first
- systematic techniques for failure analysis. It was developed by reliability
- engineers in the 1950s to study problems that might arise from malfunctions of
- military systems. A FMEA is often the first step of a system reliability study.
- It involves reviewing as many components, assemblies, and subsystems as
- possible to identify failure modes, and their causes and effects. For each
- component, the failure modes and their resulting effects on the rest of the
- system are recorded in a specific FMEA worksheet.
- FMEA is one of the best ways of analyzing potential reliability
- problems early in the development cycle, making it easier for manufacturers to
- take quick action and mitigate failure. The ability to anticipate issues early
- allows practitioners to design out failures and design in reliable, safe and
- customer-pleasing features.
ISO 9000 Series
The ISO 9000 is a family of standards related to quality management systems, designed to help organizations ensure that they meet the needs of customers and other stakeholders while meeting statutory and regulatory requirements related to a product.
Describe the key ‘ingredients’ you would expect to find in a generic business plan.
1. Executive summary
3. Main products and/or services
4. Market analysis and marketing
5. Manufacturing and operations
7. Organisation and personnel
9. Financial analysis
10. Risks and rewards
11. Objectives and milestones
When starting a new business a plan is essential to securing finances from relevant
institutions such as banks. What are
the key factors which such an institution would expect to see addressed in a plan for this type of venture?
- Good market research – what are the current trends?
- Strength of the business idea.
- Experience of the key personnel.
- Ability to repay any loans or security if unable to do so.
- Contingency plans – what if the business fails to meet the expected volumes/turnover? Or even, what if the business does much better/expands more quickly than expected?
- Consideration of the business environment i.e. the SLEPT factors.
Give brief descriptions of five primary theories which may be useful to
a practising engineer as a basis for making ethical choices.
1. Utilitarianism – greatest good for people
2. Duty Ethics – what you should do, e.g. not lie, steal, etc
3. Rights Ethics – life, liberty, the pursuit of happiness
4. Virtue Ethics – support good character traits
- 5. Environmental ethics – “moral community” – consideration for
- all living things
Describe the roles of codes of ethics for a professional body.
- Inspiration and guidance – proper conduct
- Support – publicly held beliefs back the
- Deterrence and discipline; basis for
- misconduct allegations
- Education and mutual understanding
- Contribution to the profession’s public image
- – allows for self-governance
- Protecting the status quo – maintaining
- minimum standards which may be difficult to change
- Promoting business interests – in case
- businesses become self-serving at the expense of the public
“The management of pure or non-speculative risks to which the assets, personnel and income of a business are exposed”. Risk management is identifying risk and the analysis of risk.
Key parts of a business plan
Some common information:
–P & L projections
Why business plan?
Setting realistic goals for activities and performance
Demonstrate how objectives will be met
Identify the resources required to achieve the plan
Helps to focus management’s thinking
Who does business plan?
Everyone can be involved, but mainly departmental managers
What is Human Resources Management?
-Maximise the contribution of people in the organisation
- Succession Planning
- People skills
Stakeholder - define
- a person, group or organisation with an interest in what the organisation does.
Critical External Relationships for an organisation
There are various ways in which the environment is related to an organisation
Opportunities and threats
- Critical external relationships: Stakeholders,
- interest groups and pressure groups
Matrix organisation - diagram
Matrix organisation - functional and project responsibilities - what are they?
- Provide day-today guidance on work o be done
- Determine all priorities related to work
- Ensure funding levels available for work including special tools
- Ensure conflicts between functions resolved
- Plan project and ensure project objectives being met
- Provide customer interface
- Monitor project progress including resource usage and spend
- Provide personnel of correct skills for job to be done
- Determine methods to be used in carrying out tasks, including tools
- Look after “pay and rations” of staff, inc personal development
- Ensure technical know-how transferred between projects
- Monitor progress of functional contributors and help with technical problems
Discuss the internal and external factors which create pressure for
Compare and contrast two different organisations to show how they have
common features which are affected by their role / purpose
Social arrangement – Ford v Army
Ford – people working in different divisions making different vehicles
Army – soldiers in different regimes with a chain of command from top to bottom
Ford – sell vehicles and make money
Army – defend the country, defeat the enemy, international peacekeeping
Ford – costs and quality are reviewed and controlled. Standards constantly increased
Army – strict disciplinary procedures and training
Ford – physical: factory gates; social: employment status
Army – physical: barracks; social: different rules to civilians
Payback period calculates the time for the incremented cash outflow to be recouped.
- cash outlay £40,000
Year 1 £5,000
Year 2 £10,000
Year 3 £15,000
Year 4 £20,000
*(Approx. 3.5 years payback time)*
Year 5 £10,000
- The interest rate of i per annum:
P= Principal amount invested
A = amount accumulated
n = no of years
Money invested in equipment..
- i. fails to earn interest
- ii. reduces in value as the equipment depreciates
- iii. no taxes
x = amount available in n years
n = years
i = interest per year
Critical people issues
- middle management capability
- change management
- career development
- skills shortages
- silver collared knowledge worker (old people)
- pay and rewards
Two most significant problems trying to implement a business strategy
Not having the right people
Failure to train people properly
People are the competitive advantage of companies
Human Resources strategy
- Must be in line with the corporate strategy
- 2 critical questions:
- - what kinds of people do you need to manage and run the business to achieve its objectives?
- - what people programmes and initiatives must be designed and implemented to attract, develop and retain staff to compete effectively
HR Strategy wrt COPS
Culture; Organisation; People; HR Systems
- Culture – beliefs, values, norms and style
- Organisation – structure, job roles and reporting lines
- People – skills levels, staff potential and management capability
- HR Systems – compensation, recruitment, training, communications
Developing a HR strategy. Flow chart
How COPS influence HR strategy (flowchart)
Matrix structure - advantages and disadvantages
- • Can help to break down traditional department barriers, improving communication across the entire organisation
- • Can allow individuals to use particular skills within a variety of contexts
- • Avoid the need for several departments to meet regularly, so reducing costs and improving coordination
- • Likely to result in greater motivation amongst the team members
- • Encourages cross-fertilisation of ideas across departments – e.g. helping to share good practice and ideas
- • A good way of sharing resources across departments – which can make a project more cost-effective
- • Members of project teams may have divided loyalties as they report to two line managers. Equally, this scenario can put project team members under a heavy pressure of work.
- • There may not be a clear line of accountability for project teams given the complex nature of matrix structures.
- • Difficult to co-ordinate
- • It takes time for matrix team members to get used to working in this kind of structure
- • Team members may neglect their functional responsibilities
7S’s Organisational Model
- Structure and Systems
- Skills and Shared Values
- Ansoff’s (1965) matrix.
- This considers the opportunities of offering existing and new products within existing and/or new markets and the levels of risk associated with each.
Ansoff's matrix (words)
This matrix suggests four alternative marketing strategies:
- Market penetration - involves selling more established products into existing
- markets, often by increased promotion or price reductions or better routes
- to market, for example online.
- Product development - involves developing new products or services and placing
- them into existing markets.
- Market development - entails taking existing products or services and selling
- them in new markets.
- Diversification - involves developing new products and putting them into new markets at the same time. Diversification is considered the most risky strategy. This
- is because the business is expanding into areas outside its core activities and experience as well as targeting a new audience. It also has to bear the costs of new product development.
Personnel management (long)
- Personnel management involves dealing with an employee’s actual job – the organisation, job design, job analysis, and
- manpower planning.
- It involves recruitment and selection, finding the right
- person for the job through a person specification, and the process of
- interviewing, assessment centres, and psychometric testing.
- When an employee is
- starting a new job, the personnel management department handles the contract of employment, employment record, pay details, induction, policies and procedures, and the employee handbook.
- They deal with effective working – training and development, competencies, appraisals, and career development.
- They deal with the benefits – the pay policy, job evaluation, pay scales, bonuses, sick pay,and pensions.
- They deal with problems, maintaining rules and standards, and disciplinary procedures such as dismissal, grievances, employment tribunal, ill health and accidents.
- Social Issues such as maternity/paternity leave, disability, parental leave, time off to deal with domestic emergencies, work/life balance, flexible working.
- Employment Law – contractual, diversity
- (discrimination), employee rights, representational rights, H&S
- Communication and negotiation – communication policies, communication methods, involvement of employees, empowerment, negotiation with unions and representative bodies, maintaining good industrial relations
- Termination of employment – voluntary, dismissal, redundancy, retirement, ill health, death
Important things in HR
Motivation, development, competency, involvement
Management, machines, materials, and money
What is human resources management
- Human resources management is concerned with treating people as a factor
- of production (the 4Ms, Management, machines, materials, and money).
- Human resources maximises the contribution of people in the organisation, including succession planning and people skills.
- People factor
- As workers become more knowledgeable they demand more; pay is no longer the main / sole criterion.
- Managers’ roles are changing - no longer just ‘conduits’ for information
- Organisations have to face the reality of retraining, re-educating and redeploying their staff
- Social values and environmental concerns mean that managers now want a career that matches their own values and aspirations (SRI)
- Tired of doing ‘more with less’
- Seeking autonomy
- Internal Rate of Return
- The value of interest that makes NPV = 0 is the projects rate of return
NPV - what value do you want?
- The higher the NPV, the more viable the project is.
- If the NPV is negative, the project is not viable.
Discounted cash flow (IRR)
- i1 < i2
For i1 > i2