Marketing

Marketing factors are of prime importance for a business organisation as it relates itself to its environment through marketing functions. The managers should appraise the organisation in the light of various marketing factors taking into account how these factors are contributing or not contributing to the achievement of organisational objectives and how long they will continue to do so if the same position continues. Prominent marketing factors taken for evaluation are as follows.

• Competitive Competence Business: organizations have to operate in a competitive field, except in the case of protective markets where markets are not defined by individual company or market factors but by nonmarket factors. The organization’s competitive competence can be appraised on the basis of trends in market shares for which the information can be made available from various outside sources as well as through the organization’s own marketing research department. Apart from market shares, many other factors also go in determining the competitive competence as described below.
• Product Mix: Product mix decides the various sources of revenue to the organisation. This is true not only for a diversified organisation but even for a single class. If the revenue is coming from a single product or from very limited number of products for a diversified company, this may be its weakness.
• Product Life Cycle: Product life cycle is an attempt to recognize distinct stages in the sales history of the product. Corresponding to these stages are the various marketing opportunities and threats. Normally every product and brand has to pass through a life cycle: introduction stage growth stage, maturity stage, and declining stage. Products at declining stage are the weak point for the organisation and adequate precaution must be taken.
• Marketing Research Marketing: research offers the information for taking various marketing decisions in the light of the environmental demand. The efficient and effective marketing research system is strength for the organisation because it will enable to relate the organisation with its environment through suitable strategy. An effective channel of distribution is a strength of the organisation because it not only distributes the products at the points where these are needed but also provides the feedback regarding the changes in the market forces. However, a centralised distribution channel may be a weak point because it may weaken the organization’s position at the time of emergency.
• Sales Force: An effective and efficient sales force closed with key customers is strength for the organisation because it may withstand any threat posed by the environment. However, sales force concentrating sales efforts to a few customers may be weakness.
• Pricing: Pricing is a factor which affects both sales as well as revenue to the organisation, particularly in price sensitive markets. Though there can be different pricing strategies in different markets and at different product life stages, these must match with the product and market.
• Promotional Efforts: Various promotional efforts affect the positioning of the products in the market. They also affect the brand images as well as the general image of the organisation. Effective promotional efforts are strength for the organisation and their absence a weakness.

On the basis of the analysis of various factors of marketing, strengths and weaknesses in this area are presented in Table below:

Strengths and weaknesses In marketing
Strengths	Weaknesses
Favorable company image	Poor company image
Diversified product-mix	Single or limited product
High market share	Low market share
Growing or maturing stage of  product life cycle	Declining product life cycle
Effective and efficient distribution channel	Ineffective distribution channel
Efficient and motivated sales force with   contacts with large number of customers	Inefficient sales force With   limited contact with customers
Efficient promotional efforts and proper   product positioning	Lack of promotional efforts
Efficient marketing research and feedback   system	Defective or no marketing   Research
Pricing commensurate with product and   market features	Pricing unrelated to product   and market features
Review and updating of marketing strategy.	Stagnant marketing strategy.

Finance: Finance area deals primarily with raising, administering, and distributing financial resources to various activities so that a proper balance is maintained and the organisation achieves its objectives. Since the objective achievement is often expressed in monetary terms, the areas of finance and accounting have assumed added importance. The extent to which the organisation has effective financial management and accounting system, it is strong. The strengths and weaknesses in the areas of finance and accounting can be ascertained in the following ways.

• Capital Cost: The various sources through which the organization raises its financial funds determine the capital cost. A proper balancing of various sources of financing ensures that the overall cost of capital for the organization is low. While determining the sources for funds, various factors can be taken into account, such as debt/equity norm, capital market position, profitability of organization, and various conditions attached with funds. A low capital cost is strength and high capital cost is weakness.
• Capital Structure: Capital structure of an organization determines the scope for flexibility in raising additional capital needed, maintaining financial leverage, and maintaining minimum capital cost. An effective capital structure is strength which provides for greater flexibility for raising funds and appropriating various sources of funds so as to take advantages of trading on equity.
• Financial Planning: Financial planning is the determination, in advance, of the quantum of capital requirement and its forms. Thus, it determines what types of assets will be required to run the business and how much capital will be required for this, time when the capital is required, and from where the necessary capital will be available. If the organisation plans all these things well in advance, it stands to benefit and thus, it is its strength.
• Tax Benefits: Tax benefits are partly the result of efficient financial planning and partly the result of environmental variables, particularly government policy. If the organisation is planning its investment pattern properly, it takes the advantages of tax benefits under the provisions of Sections 32A. 801, 80HH, 35 (2ia), and 35(28a) Advantages under these provisions may reduce the tax liability of the organization to a very low level or even zero level, consequently improving its liquidity. Similar advantages may accrue in indirect taxes also.
• Pattern of Shareholding: The pattern of shareholding decides the type of threats the organization may fare regarding its takeover by another company or group. If the shareholding is widely distributed, the company and its present management can run things smoothly and can think in long-term perspective. Thus, wider shareholding provides strength to the organisation but concentration of shareholding even in the hands of financial institutions may be a weakness.
• Relationship with Shareholders and Financiers: The type of relationship between the company and its share- holders and financiers determines the type of risk that the company can take. If such relationship is cordial, the company can go for smooth working even in case of adversity and can undertake major policy changes. The role of shareholders and financiers is quite important in formulating and implementing these policies because such actions can be taken only after their approval.
• Accounting Procedures: Efficient accounting procedures and systems for costing, budgeting, profit planning, and auditing not only determine that there Is no. misappropriation of funds but also provide feedback for further course of action. They provide information at the points where it is needed and the time when it is needed. Absence of such systems provides inefficiency in the organisation and it cannot know the way in which it is progressing.

On the basis of above discussion, the major strengths and weaknesses in the area of finance are presented in Table

Strengths and weaknesses in finance
Strengths	Weaknesses
Low capital cost	High capital cost
Sound capital structure	Defective and rigid capital structure
Sound financial planning and proper capitalization	Bad financial planning either over or under capitalization
Advantages of tax concessions	High incidence of taxes
Widely distributed shareholding	Shareholding in a few hands
Cordial relations with shareholders and financiers	Lack of cordial relations with shareholders and financiers
Efficient and effective accounting   systems and procedures	Lack of proper accounting  systems and procedures