I was sat in a meeting the other day, talking about software requirements. And we began talking about ideas of branding and how ‘advertising’ has changed. Its no longer about repetitive bombardment from billboards and placards. Advertising in my opinion does not do ‘maketing’ justice. Marketing is about demonstrating the core values of why you do business and ensuring alignment with customers. Its not about blag or smoke and mirrors. Its about well timed, relevant content and engaged communication to ensure maximum comprehension and efficacy. Its about being human. Scott Stratton talks a lot about this. Definitely worth checking out and finding on twitter too @unmarketing . So stop advertising and start talking.
Anyway i digress ever so slightly… So we spoke of Customer Relations Management Systems (“oh the joy i hear you shout”). CRM we then thought could mean something else, and we explored the idea of ‘Contextually Relevant Marketing”. I am sure this is not coined here, i just thought it was really cool and i wanted to blog about it. The idea that a brand should be engaging with you at the right moment, with the right content. The lines between customer and company are blurred these day, and i think those companies that cannot leverage this ability to engage will always fall short of the mark. I believe that most companies dont get this, they still act on the opposite side of the fence to the customer. The problem is, there is no fence anymore. Be your company.
Just some sunday afternoon ramblings having watched Andy Murray win Wimbledon. Fair play.
Business is changing. We all know that. It is becoming fast, and flexible. A battle ground for new business models is emerging where the traditional lines of business and consumer are opaque. Social technology is not just about Facebook and Twitter, but rather a new way of approaching information and thus business. Its about niche short-term monopolies, and perhaps the idea of sustained competitive advantage are dated and archaic.
In the business of today, we have to engage with each other (including our customers). In the business of tomorrow we have to start the conversations on an individual level (in fact the good companies today are already there).
Anyways, this was just a quick hello as i have not posted in ages and thought i would post this little vid i found. Happy New Year.
Lets start with some basics.
Total Revenue = Price of individual goods or service x quantity of product sold
If Unit Elasticity was in effect, ie the Elasticity of Demand was equal to 1, then a 1% rise in price would result in a 1% drop in demand (and vice versa) assuming that the correlation was a negative one
i.e Ed = (-)1.
But this is unlikely to be found in the real world, in particular for anything more than a small stretch of the demand curve.
When the elasticity of demand is seen to be inelastic (ie Ed < 1 ) is can be seen:
When the elasticity of demand is said to be elastic (Ed > 1 ) it can be seen:
Marginal Revenue is the change in total revenue seen as the firm sells one more unit of its product.
MR = change in TR / change in Q
This is the total revenue divided by the output, or simply put the average revenue achieved per product sold.
AR = TR/Q
It is obvious to see that when the price per unit is equal the average revenue is the revenue achieved for per product sold and therefore the demand curve is also the average revenue curve.
There are some key relationships to notice from the graphs above:
Please note that during these discussions and examples all other factors are ceteris paribus.
I have begun to read the ‘Principles of Business Economics’ by Joseph G. Nellis and David Parker for my Executive MBA Course at University of the West of England, or UWE for short. And in an attempt to get this into my brain, i am going to try and condense some of this into Blog format. If this is not useful for you, please excuse me, or alternatively if this is useful and you have other comments or links please let me know.
This is is process by which business managers decide:
– what goods and services to produce.
– how to combine available resources to provide goods and services.
– and for whom these goods and services are supplied.
One of the major determinants on this what, how and who concept is the “Price Mechanism’.
‘Vertical Integration’ is the basis for deciding at what point the company/business begins and where the market begins. For example, to decide whether or not to undertake the Public Relations for a particular business or product in-house or to employ the market to do this for you. A business manager will be looking at both the Transaction Costs of buying in this service from the outside market and also the Opportunity Cost that will result by allocating resources to providing this in-house.
Transaction Cost – this is the cost incurred when buying in market skills.
Opportunity Cost – this is what is ‘given up’ when we decide to persue a particular choice
As business managers we can look at the Production Possibility Curve to make decisions like this, regarding both new products and services that we may look to perform in-house.
This model offers a tool to understand what we will loose (the Opportunity Cost) should we choose to pursue another business aim. For example, if a company is producing only colour printers and wishes to enter the personal computer market it must decide what effect the manufacture of personal computers will have on the production of the colour printers. In this model below, OB represents the current manufacturing level of colour printers. If the company where to decide to make OC personal computers then the new production rate for colour printers would be OD. And furthermore, if the company where to make OG personal computers then it would be producing OH printers. However, what we have to be aware of are ‘Diminishing Marginal Returns’. Please note that this Production Possibility Curve only results when all the current resources of the business are at maximum.
It must be noted, and understood when looking to make these production decisions (or simply the allocation of resources) that as we apply more of one input (e.g. labour) to another input (e.g. capital or land) that after some point the resulting increase in output becomes smaller and smaller. This is known as Diminishing Marginal Returns.
Therefore to increase the production possibility of the business without decreasing the output seen in the other areas (in this particular case of colour printers), more resources are required.
Here is a quick 20 minute interview with Gerald Celente from the Tommy Schnurmacher Show, on the 09.11.11. We are all aware that Gerald Celente has been scarily correct with many of his predictions on economic and social events, such as the 2008 financial crash, the London Riots, the Gold Bull Run and even the Occupy Wall Street Movement. Some say he is a living Nostradamus, but that could be a little sensationalist. He does however, paint an interesting picture, and has some scary predictions and I believe his viewpoint is definitely worth hearing. Founder of the Trend Research Institute and Direct Democracy Now he is a big advocate in shifting the current economic and political systems, to spread the wealth and power around to all constituents, rather than just a few.
In this interview, he states that the world economy is more connected than we could ever imagine, and that the engine we believed was going to pull the world from this current Financial Crisis, China, is not working. If the West does not consume, the Chinese does not manufacture and that Chile and Brazil will follow suite as a supplier of natural resources. Mr Celente suggests until we have hit rock bottom we do not act, and that this is Global Destabilisation.
In this he also talks of a ‘New World Order’ that has been passed around as a Conspiracy Theory for years, but begins to argue that this is happening now. As the US Federal Reserve lends Trillions of US $’s to Banks, which lend to Governments that default on loan payments, the power shift toward the economic elite is enormous. This could be classed as a land grab, for all the natural resources, electric supply, land and farming by those in control. He argues that bailouts are not bailouts, but instead control through debt. The more indebted a country, the higher the taxes, the more the people work to pay the loan interest owed to a few.
Its all pretty scary stuff, but i think that this is important to hear, so that we can aim to develop and implement a plan to avert this pending shift. Although my question is, seeing as the Global Economy is so very complicated that not only can we not fully understand it, what actions can actually be taken to make change?
I have just started reading this MBA In A Day by Steven Stralser. Within the first two chapters alone i have found some great advice on the importance of both a companies Human Capital (ie the soft squidgy Human bit) and the Motivational factors within the organisation.
I am reading this, so i have a little heads up before my MBA course in January, but i would recommend any business owner or aspirational manager read this.
Chapter 3 here we come….
This blog is for me, so i can quickly reference and find useful links and vids that i stumble upon from the web. If you happen to like it great, if not… no stress.