Volume 1, 2020

What is the Product Life Cycle and what are its phases and cycles. Strategies for the stages of the product life cycle

Author: Amber Salomons

What is the Product Life Cycle?

According to many authors, products have a life cycle, which is based on the statement that products have certain life limits - from the moment the idea for a new product arises to the moment it goes out of the market. 

The concept of the Product Life Cycle is important for marketing because it gives an in-depth idea of ​​product dynamics. The classic version of the Product Life Cycle concept is represented by three image curves. It is divided into four stages - introduction, growth, maturity, and decline.

Products have a life cycle, which is based on the premise that products have certain life limits.

According to Pride, William M. and Ferrell, O. C: “Product life cycles, like biological cycles, go through introduction, growth, maturity, and decline. As the product goes through the cycle, strategies for competition, promotion, distribution, pricing, and market information need to be periodically evaluated and changed.

The product life cycle concept is used to determine the introduction, development, and termination of the product. Thus, companies can maintain profitably and abandon unprofitable products. ” Reference: https://books.google.com/books/about/Marketing.html?id=yzu6u373WsIC&redir_esc=y

The concept of the product life cycle is important for marketing because it gives an in-depth idea of ​​product dynamics.

The product life cycle concept summarized

• The product range is analyzed based on the product life cycle and the ratio between new and discontinued products is balanced.
• The product life cycle makes it possible to predict the changes that will occur in consumer requirements and in competition.
• The products have a limited life.
• Product sales have clearly defined stages.
• Profits change at each stage of the product life cycle.
• New marketing strategies are required at every stage.

In today's highly dynamic marketing environment, the company's marketing strategy must change accordingly to the changes in the product, the market, and competitors.

To say that a product has a life cycle means:

• The products have a limited life;
• Product sales go through different stages with different challenges, opportunities, and problems for the seller;
• At different stages of the product life cycle, sales increase and decrease;

Different strategies at every stage

The products require different strategies for marketing, finance, production, supply, and personnel at every stage.

The life cycle is not a normative but a descriptive characteristic. It manifests itself as a trend under the influence of the specifics of the products themselves, the behavior of buyers, and the activities of competitors.

All this variety of conditions and factors for the market destiny of the products can modify the stages in the life cycle and present different configurations of the curve. Reference: Four Steps to Forecast Total Market Demand, hbr.org

Therefore, market development is not always reduced to the classical version of the life cycle curve. In many cases, the so-called incomplete life cycles develop ie life cycles that do not pass through all phases.

In many cases, product life cycle curves develop repeat cycles. Usually, the revival of the second wave is achieved by activating marketing efforts to stimulate sales.

The product mix is ​​formed by different types of products and alternatives

As the product mix is ​​formed by different types of products and their alternatives, the market destiny of a business organization depends on how it combines the life cycles of different products so that there are always leading products in the group to provide its main revenue.

Therefore, the analysis of product life cycles is a necessary prerequisite for the choice of marketing tools to achieve the set goals.

The product life cycle concept is best suited for interpreting product and market dynamics. As a planning tool, this concept helps managers identify the main marketing challenges at each stage of a product's life and develop their main alternative marketing strategies. As a control tool, the concept helps the company measure product performance against similar products in the past. The product life cycle concept is less useful as a forecasting tool, as the sales history demonstrates different models and the stages differ in their duration.

Phases of the product life cycle - stages of introduction, growth, maturity, decline

The classic version of the RCP is an S-shaped curve, which can be divided into four stages:

1. Introduction - the appearance of the product on the market; a gradual increase in sales volume; there are no profits because the costs of introducing the product are high;
2. Growth - a period of rapid acceptance of the product on the market, a significant increase in profits;
3. Maturity - a period of "saturation", ie. slowing sales growth; profits stabilize or begin to decline due to increased marketing costs for product promotion;
4. Decline - a period of a sharp decline in sales and profits;

It should be emphasized that determining the beginning and end of each of the four stages is a bit arbitrary. In addition, for most products, it is quite difficult to determine at what stage of their life cycle they are. The trend of increasing competition over time leads to shorter product life cycles, which means that products must become profitable in a shorter period.

The phases of the product life cycle are the following: "development, implementation, increase, saturation, and decline".

The Zero phase in the product life cycle

We can include the zero phase in the product life cycle - the development phase. In many theoretical marketing developments, it is not included in the product life cycle. But it is a necessary preparatory phase, at the end of which the products are "born".

After that, the typical market life cycle of the product begins. The "development" phase includes all efforts to generate ideas for products, their technical and economic development, preliminary studies, and evaluations of the possibilities for their production and sales, its adaptation to the needs of the market, and the interests of the business organization.

The costs incurred in this phase are not covered by any income, so the profit curve here constantly falls down to negative values. The business organization expects to redeem them through the proceeds from future sales. This is a phase of investment in which all guarantees of success or risks of failure of future products are set. The marketing efforts of this phase are differentiated as innovation strategies. They come down to preparing the market for future products and shaping future consumer behavior.

1. Introduction stage.

It starts with the launch of the new product. An important feature is the high ratio of costs for promotion, investment, and research to sales. This is because sales during this period are low and the cost of promotions is high due to the need:

• Inform potential users.
• Implement the distribution path.
• To establish the distribution itself. Organizations focus their sales on those buyers who are most willing to buy, usually high-income groups.

A policy of low or high prices can be adopted. Prices are rather high, as costs are high due to the relatively low production volume, technological problems in production, and the high rate of profit required to meet the high costs of product launch and promotion. The main marketing goals are related to informing consumers, gaining fame, generating demand, and more.

Companies need to decide when to enter the market with a new product. Most studies show that the market pioneer has the greatest advantages.

There are four possible strategies for introducing a new product

The quick profit strategy relies on the high price of the product and a high level of promotion costs. This strategy can be successful if a large part of the potential market is not aware of the product if there are enough high-income consumers willing to pay the high price and if there are potential competitors.

The strategy of slow profit implies low costs for promotion. This is acceptable when the market is small in size and a large part of consumers are aware of the product and accept the high price.

Launching a new product at a low price

A strategy of rapid market entry involves launching a new product at a low price in order to gain the largest market share. It is applied in strong competition.

The strategy of slow market entry, unlike the previous one, relies on low promotion costs along with the low price of the product. It is applied in a large market, in demand with strong price elasticity, in good knowledge of the product.

2. Stage of growth.

The growth stage is a rapid increase in profits. This is a period of rapid acceptance of the product on the market and rapid growth in sales and profits. The competition is emerging. The market share is expanding. The first users to accept the product, if they like it, make repeat purchases and new users appear.

Attracted by the new opportunities, competitors enter the market with new product qualities and wider distribution.

Prices and Sales

Prices remain the same or fall slightly depending on how fast demand grows.

Price reductions are used to attract lower-paying consumers.

Sales increase faster than the cost of promotion and lead to the desired reduced ratio of promotions/sales.

The ads emphasize selective demand, indicating the competitive advantages of the products. Advertising is no longer just about informing, but also convincing customers.

Product modifications and new models

The introduction of product modifications, new models, and versions of the already known product, which is being improved, can begin. The number of endpoints in sales is expanding.

At this stage, profits are growing. Promotion costs are divided into a larger volume of units sold. Production costs fall faster than price reductions due to the "smarter manufacturer" effect.

Strategies to maintain rapid market growth

At this stage, the organization uses several strategies to maintain rapid market growth for as long as possible:

• Improving product quality, adding new properties, and improving design;
• Adding new and related products;
• Entering new market segments;
• Increasing the distribution coverage and entering new distribution channels;
• Change from advertising aimed at informing about the new product, to advertising highlighting its advantages;
• Reduce prices to attract the next layer of more price-sensitive buyers.

3. Stage of maturity

The stage of maturity usually lasts longer and therefore most products are at this stage of their life cycle. This is a stage of market saturation, ie. slowing sales growth as profits stabilize or decrease.

Managing a mature product and choosing the right marketing strategies are relatively the most complex.

When the rate of sales growth begins to decrease, it can be considered that the product has entered the stage of maturity.

Competition is intensifying due to the oversupply of the product. New market niches are being sought.

Organizations are forced to lower prices and increase promotion costs. As a result, profits fall.

Prices are reduced and the goal is to achieve brand loyalty and enter new markets for the company, for which the product is new. Promotional activity increases.

There are three possible marketing strategies for the mature product:

Market modification

Through this strategy, the company seeks to increase the size of the market by increasing the number of consumers and the frequency with which they buy the product.

This can be achieved by attracting new users; entering new segments, winning customers' competitors, and stimulating more intensive consumption and more diverse product applications.

Product modification

This strategy can be implemented in several ways.

• Improving the quality in order to increase the functionality of the product.
• Improving performance.
• Improving the appearance in order to increase the aesthetic appeal of the product.

Product modifications are effective when there are enough users who appreciate the improvements and merits of the product and are willing to pay for it.

Modification of the marketing mix

The organization may modify one or more of the elements of the mix. For example, by reducing the price, including a new distribution channel, more effective advertising, and sales promotion.

The competition in this phase reaches its maximum. The products are known on the market and are mastered as production by many manufacturers and in various modifications.

At the distribution points, there is a diverse range of products, and all possible buyers are covered, as a result of which strong competition in trade develops. A flexible pricing policy is pursued.

4. Stage of decline

This is the last stage of the product life cycle

At the stage of decline, sales of most products and brands go down for the following common reasons:

• Technological progress
• Change in consumer searches
• Increased local and international competition.

All these factors lead to overproduction and a greater reduction in prices and profits.

New strong competitors are emerging.

As sales and profits decline, some organizations withdraw from the market. Other organizations may reduce the number of products offered. They can withdraw from smaller market segments and weaker trade channels. They can also cut their budget for promotions and reduce their prices even more.

Harrigan identifies five possible strategies:

1. Increasing the company's investments;
2. Maintaining the investment level until the uncertain elements in the industry are clarified;
3. Selective reduction of the investment level, abandoning non-profitable consumer groups, while increasing investment in profitable niches;
4. Collecting the company's investments in order to quickly recover the funds;
5. Quickly sell the business by selling off its assets as profitably as possible.

Product life cycle curves, sales, profits.

The classic variant of the product life cycle is an S-shaped curve (Reference: aitriz.org), which can be divided into four stages:

• introduction;
• growth;
• maturity;
• decline

It should be emphasized that determining the beginning and end of each of the four stages is a bit arbitrary. In addition, for most products, it is quite difficult to determine at what stage of their life cycle they are.

Shorter product life cycles

The trend of increasing competition over time leads to shorter product life cycles, which means that products must become profitable in a shorter period.

There is no specific length of the product life cycle. There are a number of different product life cycle curves and each requires a different marketing strategy.

This is due to the difference in the characteristics of the products themselves - seasonal, modern, satisfying basic needs or whims, requiring training for use or not, etc.

E. Berkovich and co-authors consider the product life cycle curves depending on the characteristics of the products, which are divided into:

Products that require extensive user training to be used

These products have a long introduction period because consumers need to realize the benefits of purchasing such a product or be trained to use it. For example, a computer or microwave oven. Special manuals and other materials are provided with them.

Products that do not require training

Their introduction takes place in a short period of time because the benefits of them are easily realized and little knowledge is required about the use of the products. But these products are easily imitated by competitors and have many substitutes. They require large-scale production that meets the demand and occupation of a large market share and retail space to repel competing substitutes.

Fashion products

They are introduced quickly, but also quickly fade away and return after a while.

Products that satisfy whims.

Product life cycle phase management

There are three ways to manage the product life cycle.

Product modification

Strategies are used for modifications, and changes in product characteristics, such as quality, appearance, etc. Modifications can be structural, stylish, functional, and quality. The product changes depending on the changing consumer preferences and thus prolongs its life cycle.

Modification of the market

It means increasing usage, finding new applications, or discovering new users. Finding new applications for the product increases its life cycle.

Repositioning

Placing a different place in the consumer consciousness through the elements of the marketing mix. Repositioning can be expressed in reacting to the position of competitors; reaching a new market; detecting a new trend; in changing the value offered to the consumer.

Eg. Danone in 1984 introduced Jop - liquid yogurt, but the product fails because no one is interested in such a product. In 1988, Danone repositioned Jop as a soft drink for healthy eating and there was a big increase in sales.

The analysis of changes in consumer trends can lead to product repositioning. For example, tanning in the summer was a ritual that led to high sales of beach oil. The growing fear of skin cancer in the summer has led to the repositioning of beach oil as a means of protection against skin cancer.

When repositioning the product line, the company may decide to change the value of the product by increasing or decreasing it. Increasing the value requires adding new values ​​through further improvements or the use of better quality materials.

Questions and Answers

What is the Product Life Cycle?

The product life cycle (PLC) is a concept that describes the journey of a product through various stages, from its introduction to the market until its eventual decline and discontinuation. The PLC model helps businesses understand the dynamics of a product's sales and profitability over time, guiding them in making strategic decisions at each stage.

What are the Phases of the Product Life Cycle?

The product life cycle consists of four key phases:

Introduction Phase: This phase marks the product's initial launch into the market. Sales are typically low as the product gains awareness among consumers. Companies often incur high marketing and promotional expenses during this phase to generate interest and stimulate demand.

Growth Phase: In this phase, the product experiences rapid sales growth as consumer awareness increases. Positive word-of-mouth and effective marketing strategies contribute to the product's success. Competitors may also enter the market during this phase, leading to increased competition.

Maturity Phase: During the maturity phase, sales growth slows down as the product reaches its peak level of market penetration. The market becomes saturated, and competition intensifies. Companies may focus on product differentiation and cost-cutting measures to maintain market share.

Decline Phase: In the decline phase, sales begin to decline as consumer preferences shift, and the product faces obsolescence or competition from newer alternatives. Companies may choose to discontinue the product or explore niche markets to extend its life.

What are Popular Strategies in the Product Life Cycle?

Several strategies are commonly employed during the product life cycle:

Product Innovation: Continuous product innovation is crucial in the introduction and growth phases to meet evolving customer needs and stay competitive.

Market Segmentation: Effective market segmentation helps target specific customer groups and tailor marketing efforts to their preferences during all phases of the product life cycle.

Price Adjustments: Companies may adopt different pricing strategies throughout the product life cycle, such as skimming pricing during the introduction phase and penetration pricing during the growth phase.

Promotional Activities: Promotional efforts are vital in the introduction phase to build awareness and generate interest. In the growth phase, companies may focus on advertising to maintain momentum.

Distribution Strategies: Strategic distribution plays a significant role in reaching target customers efficiently at various stages of the product life cycle.

Product Diversification: During the maturity phase, diversifying the product line or offering complementary products can extend the product's life and sustain sales.

Cost Reduction: Implementing cost-saving measures becomes crucial in the maturity and decline phases to maintain profitability.

What are the Stages within each Phase of the Product Life Cycle?

Within each phase, specific stages can be identified:

Introduction Phase: Stages include product development, market research, product launch, and initial market penetration.

Growth Phase: Stages encompass increased sales, expanded market share, market acceptance, and market growth.

Maturity Phase: Stages involve market saturation, stable sales, intense competition, and efforts to differentiate the product.

Decline Phase: Stages include declining sales, obsolescence, product withdrawal, or entry into niche markets.

How do Companies Manage the Product Life Cycle Effectively?

To manage the product life cycle effectively, companies should:

Conduct Market Research: Gather valuable insights into customer preferences, market trends, and potential opportunities and challenges.

Innovate and Improve: Continuously invest in research and development to innovate and improve the product's features and performance.

Monitor Performance: Regularly assess sales data, customer feedback, and market trends to make informed decisions at each stage.

Adjust Marketing Strategies: Tailor marketing efforts based on the characteristics of each phase, focusing on building awareness, stimulating demand, or retaining market share.

Cost Management: Implement cost-effective measures to optimize profitability during the maturity and decline phases.

Evaluate and Adapt: Continuously evaluate the product's performance and adapt strategies to align with changing market conditions.

How does Competition Impact the Product Life Cycle?

Competition significantly impacts the product life cycle at each stage. During the introduction phase, competitors may respond by developing similar products or attempting to innovate further. In the growth phase, competition intensifies as other companies enter the market. In the maturity phase, companies strive to differentiate their products to retain market share amidst intense competition. In the decline phase, competition may drive companies to explore niche markets or exit the market altogether.

Why is the Product Life Cycle Concept Important for Businesses?

The product life cycle concept is vital for businesses because it provides a structured framework to understand a product's performance and anticipate future challenges and opportunities. It aids businesses in making strategic decisions related to marketing, pricing, product development, and resource allocation at different stages of the product's life. By understanding the product life cycle, businesses can optimize their resources, extend product life, and maximize profitability.

How can the Product Life Cycle Model be applied in Marketing Strategies?

The product life cycle model can be applied in marketing strategies by tailoring marketing efforts to the specific needs of each phase. For example:

• In the introduction phase, marketing efforts focus on building awareness and generating interest through advertising and promotional activities.
• In the growth phase, marketing aims to capitalize on the product's success and expand market share through targeted promotions and distribution expansion.
• In the maturity phase, marketing strategies may focus on product differentiation and customer retention efforts to maintain market share.
• In the decline phase, marketing efforts can be redirected to niche markets or focus on selling the remaining inventory.
• What are the Challenges of Managing Products in the Decline Phase of the Product Life Cycle?

Managing products in the decline phase poses several challenges for businesses:

Declining Sales: The primary challenge is managing decreasing sales and revenue as consumer demand diminishes.

Obsolescence: Products in the decline phase may become outdated or replaced by newer technologies or offerings, leading to potential obsolescence.

Inventory Management: Businesses must carefully manage inventory levels to avoid excess stock and potential losses.

Customer Retention: Maintaining customer loyalty in the face of declining product popularity can be difficult.

Resource Allocation: Allocating resources to declining products while also investing in newer products can be a delicate balancing act.

How Can Companies Revitalize Products in the Maturity Phase of the Product Life Cycle?

To revitalize products in the maturity phase, companies can consider the following strategies:

Product Upgrades: Enhance the product's features and functionalities to offer improved value to customers.

Rebranding: Refresh the product's image and branding to appeal to new customer segments or address changing market trends.

Market Expansion: Explore new geographic markets or customer segments to expand the product's reach.

Promotional Campaigns: Launch targeted promotional campaigns to reignite interest in the product.

Bundling and Cross-Selling: Offer product bundles or cross-sell complementary products to boost sales.

Innovative Packaging: Revamp the product's packaging to attract attention and create a fresh appeal.

Customer Feedback: Gather customer feedback to identify areas for improvement and adapt the product accordingly.

Price Adjustments: Strategically adjust pricing to maintain competitiveness while maximizing profitability.

Partnerships and Collaborations: Collaborate with other businesses or influencers to create buzz around the product.

Revitalization efforts can breathe new life into products and extend their relevance in the market, potentially delaying their entry into the decline phase.

What is a business plan? Complete instructions on how to write one

Author: Oliver Cassell

What is a business plan anyway?

The business plan is a document that covers the main goals of the company and contains detailed analyzes, plans, and budgets showing how the goals will be achieved.

The business plan is a kind of road map that leads to success. For any entrepreneur starting a business, this is a vital first step. For any entrepreneur who has been in business for a long time but does not have a business plan, this would again be a very useful step.

What does a business plan contain?

The classic structure of a professionally prepared business plan includes several important sections. They are:

• Summary
• Analysis of the environment
• Market Analysis
• Competition analysis
• Marketing plan
• Management plan
• Operational plan
• Finance plan
• Applications

Let's see what a business plan should contain, section by section.

1. Summary

The summary is usually placed at the beginning of the business plan, but it is best to compile it last.

The summary summarizes the key elements of the entire business plan and is the first thing anyone reviewing your business plan will read. It saves the reader's time on the business plan by briefly introducing it to the main idea and preparing it for the details that follow.

That is why it is important that this summary is at the top level - it is written clearly, concisely and in essence. Its recommended length is no more than two pages.

The summary should also provoke interest in the reader to read the rest of the plan. It should be written in an interesting way and in the context of the need for a business plan - for credit, for investment, for internal use.

In general, the summary will include answers to the following questions:

• What is the product? Do you offer a product or a service? What needs will your product meet? See also What is the Product Life Cycle and what are its phases and cycles. Strategies for the stages of the product life cycle, BVOP.org 2020
• What is the market? What does the ideal customer look like?
• What is the business model? How will your product meet the needs of potential customers?
• What is the competition? Who are your main competitors? What is your strategy for competitive supremacy? What are your unique competitive advantages?
• What is the marketing strategy? What are the key elements of your marketing? How will it reach customers? How will it be sold?
• What is the management strategy? Who are the key executives of the company? What are their knowledge, skills, and expertise?
• What is the operational plan? What are the main stages of starting or developing a business? What are the key deadlines and steps?
• What is the financial plan? What are the main financial indicators that you will strive for in the next one to three years - income, expenses, profit, etc.?
• In addition, and as appropriate, information may be added to the summary of the business plan about:
• What is the company's mission? What does the company do? What are its key values ​​and business philosophy?
• What is the history of the company? How did it originate? When was it founded? By whom? What are the most important facts about it, such as the number of employees, production facilities or sales offices, etc.?

Remember that the resume is the first thing the reader of your business plan will read. Therefore, when you compose it, put yourself in the place of the person who will read it and ask yourself - “Is it exciting? Is it interesting?" If the answer is "No", think about the reasons and correct the summary.

The summary is often defined as the most important part of the whole business plan.

2. Analysis of the environment

The analysis of the environment is that part of a business plan that presents the industry in which the company operates, incl. trends, major players in the industry, key factors, market size and volume, market shares. Reference: Analysis without paralysis: 12 tools to make better strategic decisions by Babette E. Bensoussan and Craig S. Fleisher

When compiling this part of the business plan, it is useful to consider the environment as consisting of two parts - the external environment and the internal environment.

With regard to the external environment, you should address the following topics:

What is the industry? What is its size? What are the trends in it? What niches does it include?

What factors have the greatest influence? What are the key economic, social, demographic, technological, political factors?

What is the legislation? What basic laws, procedures and rules should be followed in the industry?

Who are the main market players? Who are the main competitors? Who are the key suppliers?

With regard to the internal environment, you should address the following topics:

What exactly are you doing? What is your product? Is it a commodity? Is it a service? Is it a combination of the two?

What is your target market? What is characteristic of him?

What is your unique offer to customers? What specific customer benefit does your product bring? What specific need best satisfies? What makes you special for customers - lower price,

higher quality, faster delivery times, better service?

What is your market share? What is the maximum market share you can win? What are the shares of the main competitors?

What are the barriers to entry is the industry? How will you overcome these barriers?

How do you protect your product or company? What brands do you own? What partnership agreements have you signed? What patents, exclusive or special rights do you have?

You should be able to summarize the analysis of the external and internal environment in a few paragraphs. Some of the topics in this section will be covered in more detail in the following sections of the business plan.

3. Market analysis

Market analysis is that part of a business plan that describes the target market of the company, incl. the main features of customers and their needs. Your main task here is to show that you have an excellent understanding of the customers you want to sell to and clarity will be your marketing strategy.

The most important thing here is to define your target market. In the language of marketing, this is also called "segmentation".

For example, if you offer products on the B2C market (business to customer - customers are individuals), it is possible to use the following indicators for segmentation:

Age. In what range does the age of the customers vary? Are the customers children? Are they elderly? Are they retired?

Gender. Are the customers men? Are they women? Are they of both sexes?

Marital status. Are the clients family? Are they single?

Family. What are the peculiarities of the family in the clients? How many children do they have? Who else participates in the household?

Location. Where do customers live? How will I sell to them - locally, regionally, nationally? In the international?

Education. What is customer education? Average? High?

Income. What is the average income of customers?

Lifestyle. What are the main features of customers' lifestyles?

Location. Do customers live in a particular location?

Motivation. What excites customers? What are they most interested in? What motivates them?

Size of the target market. What is the size of the target market?

There are other indicators of market segmentation, but for the purposes of your business plan, the above should do a great job.

Example

For example, if I have a restaurant, my target customers may be vegetarians and vegans, men and women, from the city, aged 25-49, with a very good education, high income, who lead a healthy lifestyle.

If you operate in a B2B market (business to business - customers are companies), it is possible to use the following indicators for segmentation:

Branch. In which industry do customers work? How long have you been working in this industry?

Size. What are the annual turnovers of client companies? How many employees do they have? Are they micro-companies? Small businesses? Medium companies? Big companies?

Location. Where are the customers? How will I sell to them - locally, regionally, nationally? In the international?

Positions. What positions do people who make purchasing decisions occupy? Are they top managers? Of middle rank? Of low rank? What is their functional (technical) specialization?

Served markets. Who are your customers' customers? Who do they sell to? What are they selling?

Motivation. What excites customers? What are they most interested in? What motivates them?

Size of the target market. What is the size of the target market?

For example, if I offer accounting services to other companies, my target clients may be micro or small companies with an annual turnover of up to BGN 200,000, with a staff of up to 10 people, from the city and the region, without restrictions in the industry or business.

You should be able to summarize the market analysis in a few paragraphs. If you serve several target markets, you will need to make room for each of them in your business plan.

4. Competition analysis

Competition analysis is that part of a business plan that identifies direct and indirect competitors and presents a vision of how to overcome their strong competitive advantages.

Competitive analysis is a challenging task. Accurate information is needed to make such an analysis, and this requires research.

Depending on the target market that your company focuses on, determine the main competitors. Think of all the companies that offer similar products to customers in your target market. Think about companies that offer substitutes for your products. They can also be serious competitors.

Example

For example, if I sell laptops, my competitors may be other laptop stores in the city. But they can also be large national equipment chains. They can also be online merchants. They in turn can be Bulgarian or foreign sites. Etc.

The harder part follows. You need to gather specific information about your main customers. You should be aware of:

What markets do competitors serve? What are their main market segments?

What exactly do competitors sell? What are the main features of their products? What are the main benefits of them?

Why do customers buy from the competition? What are the unique competitive advantages of the competition? What specific needs do they meet?

What are the features of competitors' products? What is quality? What are the prices? What are the delivery times? What is the service?

What is the marketing strategy of the competitors? How do their customers learn about them? How do their products reach them? How do they advertise? How do they price?

What strategic advantages do competitors have? Technological advantages? Financial power? Market advantages? Experienced leaders?

In the business plan, you should clarify what your competitive strategy is, ie. how your company will fight the competitors in question. This will require you to formulate a package of features and benefits of your product that are attractive and even unique, in order to be able to find an insufficiently well-served market niche to conquer and dominate.

Example

For example, if I open an online flower delivery store, I could try to offer customers the widest selection of fresh flowers and bouquets, with the highest quality decoration, with free shipping and a refund option in case of dissatisfaction.

The purpose of analyzing competition in a business plan is ultimately to find your own competitive advantage - the unique benefits that only your company can give to customers and the competition cannot.

5. Marketing plan

The marketing plan is that part of a business plan that reveals how the company will combine the elements of its marketing mix to get customers to buy its products.

In other words, the marketing plan clarifies the question of how and thanks to what your products will reach customers.

To this end, the marketing plan should include information on:

Product. What are the characteristics and benefits of the product? What is your unique offer to sell to the target market?

Pricing. What price range does your product fall into? Low, medium, high? What is your pricing strategy? What is your cost? How will you realize sustainable income and healthy profit?

Sales and distribution. How will your product be sold? What distribution channels will be used? What is the process you go through to get the product to your customers?

Advertising and promotions. How will the product be advertised? Television, radio, press, internet, magazines, catalogs, direct mail, point-of-sale advertising? How will the product be promoted? Through free samples, discount coupons, displays at points of sale, product demonstrations?

Here you can describe all other important activities related to the marketing of your company - advertising materials, PR campaigns, internet presence, participation in trade fairs.

You should offer information about the marketing plan in a few paragraphs.

6. Management plan

The management plan is that part of a business plan that describes the key managers and employees who will contribute to achieving the business goals. The management plan also presents the management structure of the company.

People who will read your business plan will probably pay special attention to this part to find out who are the people behind the realization of the business idea. It is not very difficult to prepare a good-looking business plan, but when things come to fruition, you need people with specific competence - knowledge, and skills.

In the business plan, present information on the following topics:

Property.

What is the legal form of the existence of the company? Whose property is it?

Management team. Who runs the company? What is his education, training, experience? Who manages the production? Marketing? Sales? If the company is larger, who heads the R&D and Human Resources departments?

Organizational structure.

If the company is bigger, what is its organizational structure (diagram)?

Staff.

How many and what employees does the company need? What part of them do you have at the moment? Are new people to be hired, in what positions, when?

External assistance.

What external specialists and consultants does the company use?

A business plan can only benefit if it includes the professional CVs of key executives. Such biographies should be concise and specific, preferably in a volume of 1 page each. They should describe the specific knowledge and skills with which each member of the management team contributes to the success of the company.

Even if you make a business plan for a very small company, incl. and from one person, having a well-designed management plan section will show that you are thinking seriously about your business and the human resources you will need once the business grows. This is normal. After all, a business plan is a document that looks to the future.

7. Operational plan

The operational business plan is that part of a business plan which describes the physical assets of the company - production facilities, equipment, buildings, warehouses, offices, representative offices, as well as any important details related to the production process of the product.

The operational plan provides information on:

Manufacturing process. How is the product produced? What are the main stages? What is the production time? What are the main problems within the production? What are the risks?

Delivery. What does the supply chain involve? Who are the key suppliers? Who are the alternative suppliers in case the work with the current ones is stopped?

Quality control. How is quality control carried out? Is the company certified according to the rules of a certain quality system?

Tangible assets. What tangible assets does the company have? What buildings? What technique and equipment? What materials? What other important tangible assets does the company own or should own to ensure smooth product production? What is their value?

Available in stock. How are stocks of finished products, raw materials, and materials stored and tracked?

Cost. How is the cost of the product calculated?

You should be able to summarize the operational plan in a few more detailed paragraphs. Some parts of the operational plan may require more detailed description, but this is normal.

8. Financial plan

The financial plan is that part of a business plan in which a financial analysis and forecasts for the financial condition of the company are made. This is where information about the company's balance sheet, income and expenses and cash flows (or their forecasts) is provided.

Depending on the specific needs in connection with the preparation of a business plan, the information should be given here on:

Sources of funding. Is borrowed capital used? Shareholder? Own? Are subsidies used?

Repayment schedule. How will loans be repaid in case of the availability of borrowed funds?

Estimated income and expenses. Revenues from sales by products (goods or services). Costs for salaries, rents, raw materials, materials, warehousing costs, marketing costs, rents, consumables, maintenance, etc.

Estimated cash flows. What are the cash trends by month, based on forecasts of expected revenues versus estimated costs?

The financial plan should be prepared using tables, be concise, reasonable, and well reasoned.

9. Applications

This part of the business plan, which is usually the last one, includes any additional useful information that is relevant to the business idea. This may include:

• Product photos;
• Copies of contracts, agreements, patents;
• Certificates from various organizations;
• Market research.
• What should be the length of a business plan?

Probably the most correct answer is "It depends". It depends on the purposes for which the business plan is prepared, for which company, by which managers, etc.

As a rule, if the business plan is being prepared for presentation to other people or organizations, for example when seeking funding, it should be more detailed. If the business plan is prepared more for internal purposes, for example, to outline the main goals and strategy of the company, it may be shorter. But it may not be.

As a guide, the length of the summary could be 2-3 pages, the main part of the business plan could be 10-20 pages, and all the details, as long as there are any, can be added in appendices to the plan. In this way, everyone who reads the business plan will be able to get acquainted briefly with the basic information, but also to go into details if they wish.

Some managers or entrepreneurs may find such a length too restrictive 

Some managers or entrepreneurs may find such a length too restrictive for their business, especially if the subject of the activity is more complex or the product range is wider. In such cases, the business plan may reach 50, 100, or even more pages.

I personally am not in favor of such an approach. I believe that the business plan should not aim to describe absolutely every detail of the company's plans and strategy. Rather, it is important to present the main ideas and the most important things.

That is why I believe that the business plan should be as concise, concrete, and clear as possible in order to do real work. A volume of 15-25 pages should generally be sufficient.

The tight structure and synthesized volume of a business plan are offered, for example, by the Sequoia Capital business plan model.

1-page business plan

Various business publications around the world in recent years have commented on a curious topic - a one-page business plan. They claim that it is a useful exercise for an entrepreneur or manager if he manages to reduce his business plan to an absolute minimum and to place everything important on one page.

In practice, there is not much difference between a one-page business plan and a summary of the plan. But while a resume usually fits on 2-3 pages, a one-page business plan should fit into one page.

The following structure can be used for this purpose:

Description of the problem of the clients - needs, needs, desires

Your decision - a product or service;

Target market - who are your customers;

Competitive advantage - what makes you unique, what makes you the best;

Marketing - how your product will reach customers;

Management team - who will manage the processes;

Financial forecast - income, expenses, cash flows, need for capital.

In order to gather everything on one page, one paragraph should be separated for each point. Such a minimalist approach provokes to think in-depth about the essence of business.

Thus, in practice, the one-page business plan will show the business model of the company or in other words - how you will make money.

In summary

Creating a business plan is a serious task. But not impossible if you have clarity about its structure.

I will also note that the business plan is the so-called "First creation" of things. These are the strategic ideas of the company's management, put on paper. Only when this "first creation" of things is successfully completed, it can be considered that the so-called. "Second creation", i.e. the transformation of ideas into deeds will be crowned with success.

Given this, you will not regret taking the time to plan your business. This time will pay off in the form of more focused and conscious actions in the management and development of your company.

Market research. Definition and classification of market research

Author: Will Mattingley

What is market research?

In the conditions of a perfect market economy, market research is an essential and significant element of marketing in business enterprises. Market research is the basis for making a certain management decision, as well as for solving a specific problem. 

The specificity of the problem determines the direction of the market research, which in its essence is a process of purposeful collection, analysis, and evaluation of data. 

Definition of market research

The American Marketing Association defines market research as a function that connects the consumer and society with the market through information and data used to identify and define marketing opportunities and problems. 

All these efforts aim to generate, improve, and evaluate marketing actions, control marketing performance, and to improve understanding of marketing as a process. 

What is Marketing Survey

The Marketing Survey identifies the information needed to obtain these results, as well as the projects and methods for recruiting. information, manages and executes in the process of data collection, analyzes the results, presents the conclusions and their application. 

Market research can be defined as a systematic, ongoing process. This ensures reliable management and executive activity within a company. It can also be perceived as targeted actions carried out in a certain sequence with the help of specific equipment and technology to solve a competitive, significant marketing problem. In practice, a marketing study can be carried out differently depending on the goals of the company, its knowledge, and experience in this field. etc. 

Market research types 

The division of market research into different types can be done by different criteria, as a marketing study can be assigned to different types depending on the chosen criteria. 

The most commonly used criteria are chosen according to:

• the strategic orientation of the study to open new market opportunities and utilize existing ones;
• the life cycle of the product introduction, growth, maturity, decline;
• the service of the decision-making process, dispute the type of data obtained;
• the type of data sources;
• the applied strategy and method of data acquisition. Reference: When Data Creates Competitive Advantage by Andrei Hagiu and Julian Wright

The strategic orientation of the studies

According to the strategic orientation of the study are divided into the product for the discovery of new and to improve existing products and market for the discovery of new market opportunities, as well as for the exploitation of opportunities research channels for distribution and advertising. product image, success in completing the product line.

The study of product quality is difficult to separate from consumer preferences, but here we consider the optimal combination between price and product quality, always bearing in mind that quality is ultimately assessed by consumers, ie Product accessories are of higher quality when there is a higher consumer value.

Product accessories mean the packaging, brand, and price, which undoubtedly affect the consumer's behavior and preferences for the respective product and will help to make the necessary management decisions and actions. 

The main types of market research include the following topics

The main types of market research cover: market research studies provide an opportunity to determine the target market; sales research consists in the quantitative measurement of sales. of purchasing motivation a lot of valuable information that will give us an answer to the question of why buy our product or that of the competition, study of consumer habits need to know the habits of consumers because very often they determine whether to buy a product or not.

The pre-introduction phase of concept and tests

The pre-introduction phase includes concept tests, product laboratory tests, positioning research, brand name tests, packaging, advertising concepts, real market tests, introduction phase, market share research, product availability, product awareness, consumer reactions, reuse, growth phase, consumer behavior study, segmentation studies, sales forecasts, mature phase, a study of new consumer applications of the product, diversification studies, competition strategy study, availability study product and advertising effectiveness, phase of "decline" study of price elasticity, study to reduce costs.

According to the service of the decision-making process, research is divided into preliminary, actual, final, and follow-up. Preliminary research is necessary when there are no more reliable ways to identify the marketing problem or the risk of misidentification would be too great gather information to properly define the problem, properly understand its environment, and verify the data that indicated the presence of this problem, the actual study should allow finding different alternatives to solve the already identified problem when there are no routines ways to directly find alternatives in solving the problem and at the same time the risk of wrong decisions is too great, the final studies allow on the basis of the collected and processed information to propose specific measures, follow-up studies are used to identify and identify divergent it from the normal “behavior of the basic parameters of the company, thus identifying the relevant problems.

Quantitative and qualitative market research

According to the type of data obtained, surveys are divided into: quantitative and qualitative. Quantitative research is conducted when the marketing problem is sufficiently well defined, the solution of which requires quantitative data, subjected to appropriate processing. 

These studies are strictly formalized and run in a certain sequence As a rule, these surveys are based on large samples of respondents. The collected quantitative data are processed using statistical techniques through appropriate computer programs. The most important feature of quantitative surveys is their representativeness.

They require complex organization, large budget, a team of diverse specialists, and enough qualitative research is used in cases where the solution of the problem can not be done on the basis of quantitative data but requires understanding, reasoning, explanation, etc. They are used to identify and formulate marketing problems and hypotheses, as well as and in the need to make sense of and explain the quantitative data.

Studies based on secondary and primary data

According to the type of marketing data sources, the studies are divided into studies based on secondary data "office study" or "field study" and studies based on primary data "field study" or "field study". The golden rule in conducting each study is that before proceeding to the collection of primary data, we must exhaust all possibilities for finding secondary data. In many cases, they are sufficient to solve the problem or reduce the need for a large amount of primary data. The study is cheaper, is carried out more quickly, and in many cases proves to be extremely necessary, as it helps to more accurately formulate the topic of the study, research hypotheses, planning surveys, interviews, etc. The field study is carried out by collecting primary data targeted from the original source. Primary data are collected using different methods.

Depending on the methods used, studies can be implemented in different ways and forms: quantitative methods are unstructured, flexible, and adaptive, usually used to generate ideas and hypotheses.

By using them, the research can be in the form of an unstructured interview, group discussions, projective methods using proactive techniques, expert evaluation, etc. The method of observation provides data on the actual behavior of various economic entities. When using this method, the survey can be: simple, on, secret, self-monitoring, observation "by record", etc .; the survey this method is expressed in the systematic collection of structured data From the use of this method, the survey can be conducted as a direct personal, postal, home survey, a survey of respondents, street survey, group survey, personal interview, group interview, telephone interview.

When using the experimental method, the causal relationships between two or more variables are investigated by introducing changes in the independent variables when tracking the changes in the dependent variables. There are two main types of laboratory and field experiments. of formulaic, descriptive, and experimental.

The market research as a concept includes a daily and continuous collection of data

Apart from the fact that market research as a concept includes the daily and continuous collection of data on the marketing environment, it is also a consequence of some contradiction between what is desired and achieved or the presence of untapped, existing, and new opportunities.

The identified or insufficiently unambiguously formulated problem can lead to high costs of money, time, and labor, without any coverage. and researchers can make sense of it in terms of the requirements of market research. the problem itself contains the object.

Related to many problems, this is the market of a product or group of products. Each real object is a set of many variables, but the problem itself allows some of these variables to be removed, and based on the other variables the subject of the study is obtained. this gradually narrows the field of study by focusing only on those variables that are relevant to the problem being studied.

Career planning and development: Definition and goals of career development

Author: Amelia Williams

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Therefore, carefully review all our certification programs and choose the right one for you.

Until recently, people spent most of their working lives in an organization. But in the decade after World War II, loyalty to the employer organization began to decline gradually, increasing job opportunities. In the 1980s, young people who started their careers in the United States changed jobs an average of six times.

The processes taking place in the modern world increased the mobility of workers, as they were guided by new principles and interests. No one entering any job thought that they would go all his way in it. After acquiring a certain level of knowledge and skills, usually, everyone starts as a specialist in a given organization and faces opportunities for growth hierarchy.

This, of course, depends on the qualities of the individual himself, but also on some objective conditions in the organization, which limits or provides prerequisites and conditions for career growth. When a person gets the opportunity for professional development in the organization, they become motivated to achieve high work results, develop their potential, and identify aspirations for self-realization.

The lack of a positive attitude towards the career development of the staff leads to losses for the organization - it loses its good employees. Organizations need to attach importance to human resources, as their development means achieving long-term goals.

One of the ways to reach mutual satisfaction between employers and employees is by planning the human resources career. Many people ask themselves what they need to do to make a career. What is the area in which they would best perform? What actions should they take to advance in their professional growth? What is the basis for evolving in the organization’s career hierarchy? What is the probability of staying on the current job, and is it possible to start a new career at a later stage? The answers to these and other questions provide the basic steps that ensure career advancement.

What is a career?

A career is a set of positions that a person has held in his professional life, which enriches the experience of the individual and ensures his growth in the profession. The sequence of activities, including education, training, gaining professional experience determines the career path. It is related to the opportunities for holding a higher position in the future.

What is Career planning?

Career planning is a process in which personal skills, qualities, knowledge, motivation, and other characteristics are actualized. Information about job opportunities and choices is collected. Specific goals are set through a plan for achieving success in the career.

Career development is a series of activities aimed at establishing, developing, succeeding, and enriching a career.

Proper career planning is based on the definition of professional goals - the future positions to which a person aspires on the path of his career. For some people, moving these positions involves developing preliminary plans and strategies, others rely on their luck, but although it helps in some cases, the right education, experience, abilities, and their proper development are necessary conditions to create and career development. Career planning is important for the realization of goals set in the field of professional development. A person who makes a plan to achieve career goals does better. The process helps people to realize their potential according to their abilities and to be more satisfied if, thanks to planning, they succeed in achieving the set goals.

According to the so-called "Cone-shaped" model of E. Shine, the career develops in three directions:

• Vertically - when raising and lowering
• Radial - when increasing or decreasing the volume of responsibilities
• Peripheral - moving to another functional area

Career planning is a process that takes place in the organization. From her point of view, the career planning of employees increases their motivation, helps to reduce turnover. If the organization carries out career planning activities, it reduces the desire of employees to leave it. The very fact that the organization cares about the careers of its employees has a positive effect on them, people understand that they are part of a comprehensive plan for the development of the company. See Effective steps to career planning, MIT.edu

The organizational view of career planning is related to achieving the following goals:

• Knowing the needs of employees;
• Informing employees about the potential opportunities for development in the organization;
• Development of employees' abilities;
• Assistance for the manifestation of the potential of the employees;
• Improving personal growth;
• Satisfying the needs of employees.

Main activities of human resources management: Relationships with other management sciences

The main activities of human resources management, such as staff assessment, training, and qualification, planning of human resources needs, etc. There are two main focuses on these activities. The first is the traditional focus on these activities is that they serve the organization in recruiting staff - to meet the needs of staff with appropriate people with the necessary qualities, abilities, and interests.

The second focus considers them through the prism of career planning and development - the main human management activities serve to satisfy the long-term interests of employees, to increase their motivation, to stimulate the development of staff potential. Staff planning, training, and qualifications are central to the career planning process.

Personnel planning, for example, can be used not only to forecast labor needs but also to fill vacancies with potential candidates from the organization. Similarly, the periodic assessment of employees is used not only in determining pay but also provides information on the needs for development and qualification of employees, is used in the development of individual development plans. In other words, all personnel management activities serve to meet the needs of both the organization and its employees. The organization receives a better performance of staff, and employees receive a richer and more challenging career.

Training and development are part of the company's strategy

Along with training and development, career management is part of the company's strategy. Career planning programs are becoming an extremely important part of human resource management. Their main goal is to help employees analyze their abilities, set their professional goals correctly, and synchronize their needs for growth in the organization.

Today, more and more senior managers and managers in the field of human resources see in career breading opportunities to meet the needs of the organization and its employees. The process involves setting goals by employees that motivate additional training and education.

Employee expectations

The career planning process should be in line with the expectations of employees in this regard. Regardless of the differences related to gender, education, qualification, the expectations regarding career planning are related to:

• Impartiality and fairness in the process;
• Equal opportunities for all participants;
• Awareness of all participants;
• Assistance from specialists in the field of human resources management.

Key roles in the career planning process.

In the process of career planning, the main roles are played simultaneously by the individual, the immediate manager, and the organization.

There is much controversy over who is responsible for career planning. The issues of responsibilities in career planning are also discussed in practice. Initially, the responsibility for the path and growth of employees is assumed by the organization, which determines the rate of growth and to which position the employee will reach. This approach has its supporters in the 50s and 60s of the last century. Gradually, however, poor results show his inefficiency in terms of career development.

There is also an understanding that career planning is the responsibility of the employee himself, not the organization. It is considered that the main responsibility for the career in the organization lies with the employee himself. An expression of this view is the minimal or no support that the organization provides to its employees in the field of careers. Such a position could be based on a lack of knowledge and experience in carrying out the overall career planning process. Today, more and more organizations believe that career work is a joint effort of the company and its employees. The main thing in this concept is the perception of the thesis that the organization and the employees are partners in career development. Employees need to know what skills and abilities they have, what help they can expect from the company in the field of career planning.

Despite the different opinions on this issue, the fact that in the process of career planning the main roles is played simultaneously by the individual, the immediate manager, and the organization.

The individual is the one who bears the main responsibility for his career, evaluates his opportunities, collects information about the opportunities for development, and is the one who takes the necessary actions to achieve a challenging and rich career in the future.

The manager plays the role of coach, evaluator, advisor to the individual in the career planning process. It evaluates work performance, assists the individual in developing a career development plan, is a kind of link between employees and career development opportunities in the organization.

The employer (or organization) also has a role to play in the career planning and development process. For example, it may offer workers various training programs, career guidance, development opportunities, and various career options.

Career development process.

Career development activities are related to the preparation of schemes and plans for possible career development. These activities are crucial in identifying managers who have sufficient qualities and are ready for promotion in the hierarchy; in the appointment of managers for promotion, but need additional training, which is carried out in various forms; identifying managers who are not suitable for promotion and need to find their rational place in the organization.

Other authors do not limit the career development only to the management staff but include in this process all employees in the organization. The main argument for maintaining this thesis is that the share of employees who have operational functions of planning, organizing, and controlling is growing. All employees are tasked with working in a diminishing role of direct control, increasing participation in decision-making, increasing the emphasis on group work, quality, and active customer relationships. At the same time, there are changes in the motivational mechanism of people, and the motivating impact of professional and professional growth for a career in the organization is increasingly sought. It is this need that Maslow puts at the top of his pyramid - the need for self-realization, for the development of potential abilities and skills, for the achievement of what the individual believes he can achieve. Therefore, the thesis that only managers need training has less and less weight.

The process of creating career development encompasses career planning and management. Career planning is a process in which the individual employee determines and implements actions to achieve certain career goals. Career management is a process of selecting, evaluating, hiring, and developing employees.

Responsibilities of the employee

Discuss personal career development preferences with the line manager

Formation of an agreed action plan with the manager

Follow the approved action plan

Providing accurate information to managers about personal abilities, professional experience, and career development desires

Responsibilities of the manager

Acting as a catalyst, giving guidance to the employee in career planning

Assessment of the reality of individual goals and needs

Gives guidance and advice to the individual on the implementation of the mutually agreed development plan

Verification of the information provided by the individual

Providing information on vacancies for which the manager is responsible

Use of the provided information for: 1) determination of all suitable candidates for the vacant position and selection; 2) determining the opportunities for career development (training programs, job rotation) of employees and their proper positioning

Provides models for career planning, counseling, and necessary information for individual career planning

Providing appropriate training on career planning issues

Training of employees and their inclusion in various development programs

Responsibilities of the organization

Providing information system and updating

Ensuring the correct use of information because of the efficiency of the process

Career dynamics and analysis

Career dynamics describe career development - how people develop in their careers by increasing, enriching, or expanding their position, acquiring greater responsibilities, or making greater use of their opportunities and skills. Career analysis covers the characteristics of "professional family" and "professional growth - the ladder"

• career dynamics: the development of individual careers goes through the following stages, in terms of their employment is opportunities for development.
• growth at the beginning of the career, when new skills are acquired, knowledge grows quickly, competence develops, preferences and interests are clarified
• establishing the path of career development, when acquired during the previous stage, have already been applied, evaluated and strengthened by experience when higher levels of competence have been reached, full career development (maturity) when individuals have taken the already chosen path of career and act according to their abilities, skills, and motivation.

During these stages, different individuals develop at different rates, the progress they make is different for each. For example, in the process of maturity, some individuals continue to grow, others remain at the same level, and some decline.

The four groups of workers

There are four groups of workers, given the changes that occur in their career development. The first group consists of employees with high development potential, performing below the standard.

The second group includes employees working in key positions, having the potential for development, and performing according to the requirements of the standard.

The third group includes employees who have good performance but poor development opportunities and the fourth group consists of people with unsatisfactory job performance and low development potential.

The challenge for the organization is to do what is necessary to make the first group of employees into those of the second or third, and to keep the employees of the second and third groups from falling into the last group.

Career growth is associated with the so-called. "Plateau" of the career

Not infrequently, career growth is associated with the so-called "Plateau" of the career. The career "plateau" is considered as a point in the career, where the probability of additional hierarchical manifestation is very small.

Anyone can fall into this situation. In this situation, the organization can take several actions to effectively manage the process and prevent falling into the "plateau" of the career. The first action involves efforts to keep the well-performing employees in the "plateau" of the career in the third group.

The second action is related to the construction of an effective information system, clarifying the accessible paths for personal development and growth, which those who fall into the "plateau" can use.

The third action is related to the possibilities of the evaluation system, encouraging people to get out of the "plateau" of the career.

The task of the management of the organization is to help employees

The task of the management of the organization is to help employees who have fallen into the "plateau" of the career. The question of the usefulness of these employees has been much discussed. The arguments of the defenders of the need to restore employees in the "plateau" of the career are aimed at their possession of:

• Knowledge about the specifics of the labor process. Usually, those who fall into the "plateau" are employees who have worked for some time in the organization, have knowledge of the specifics of the work, have the competence to perform it.
• Knowledge of the organization. They have the necessary information about the organization in which they work.
• Loyalty. Practice shows that employees who fall into the "plateau" of their careers show high loyalty to the organization.

All this determines the need for assistance from the organization and its employees' managers to get out of the "plateau" of the career. There are the following possibilities for this:

Creating interest in current work. The higher the job satisfaction, the less likely employees are to be inefficient. Opportunities in this direction include setting goals and linking them to the goals of the organization, the introduction of a competitive principle in the work.

Establishment of development programs that are not aimed at relocating future work, but at strengthening the opportunities for the realization of the current position. The main goal of such programs is to help the employees who have fallen into the "plateau" of their careers to work more fully and qualitatively in the position they currently hold.

Change in the behavior of managers concerning the employees who fell into the "plateau" of the career. Ignoring those people who are in such a situation does not bring any benefits to the organization, but only deepens and complicates the problem.

The study of career dynamics is essential in determining career management policies in the organization, as well as in developing plans for continuity of management (managers).

The analysis of the career dynamics begins with an analysis of the development of the individual in the organization and an analysis of the work performed. This analysis can also be used to determine the actions needed to change the path of career development. Last but not least, the analysis of the dynamics of the career reveals and reveals quite common phenomena, such as unjustified and unjustified increase and the problems of the managers, who mark a decline in their development.

Career analysis. Professional ladder and families

The professional ladder represents all the steps that individuals take to grow in their careers in a certain "professional family". The "professional family" consists of professions that have a common main activity, even if they have differences in the level of work performance.

Career management policy.

The career management policy outlines the basic principles of the organization on the issues of the professional development of the staff. This policy can be long-term or long-term and thus determines the funds that will be invested in staff development. They differ:

Short-term plans - employers choose it (consciously or not) when they are currently interested in job performance. The training and education of managers given the future needs of the organization are considered a waste of time and money. They are guided by the motto that if they hire good employees, they will take care of future needs, if necessary they will hire external specialists.

Long-term plans - these are organizations that have a vision, focused long-term approach to career planning, and have a structured approach to this issue. Preliminary staff evaluation schemes are prepared for the identification and development of individual talents, for the growth and movement of staff.

Long-term flexible plans - these are organizations that assess the importance of good performance at the moment, but to some extent prepare their staff for career development. They see the need to develop the talents and potential of their employees. This approach protects organizations from the short-sightedness of short-term policies, but in cases of rapid development and change in external conditions, changes could not be adequately addressed.

Career management policy must be consistent with other policies

Career management policy must be consistent with other policies in the organization, of its type. The short-term policy is more common in small organizations, and long-term in larger ones, where forecasts can be made of the organization's struggling needs.

Career management policies find real realization in the concrete plans for the career development of the employees.

The career planning process.

Many factors influence an individual's needs and reactions to career planning activities. Such factors are career guidance, career anchors, career stages, determining career orientation, and individual abilities.

Career guidance.

Edgar Schein (Career Dynamics: Matching Individual and Organizational Needs) developed the idea of ​​a career anchor. It is a concept based on the distinctive abilities and motives for work that guide, strengthen, and unite the individual professional experience. Shine distinguishes five different career anchors.

Technical ability: represents the current work that individuals are doing and that they want to continue using their existing skills. They avoid positions that take them away from established competencies and for them, growth increases the volume of skills rather than raising them in the hierarchy. An example of this is an engineer who wants to improve the design of microchips, not hold a leadership position.

Questions and Answers

What is Career Planning and Development?

Career planning and development refer to a systematic process of setting career goals, identifying opportunities for growth and advancement, and creating a path to achieve long-term career objectives. It involves continuous learning, skill enhancement, and aligning individual aspirations with organizational needs.

What are the key goals of Career Development?

The primary goals of career development are as follows:

Personal Growth: Career development aims to foster personal growth and self-awareness, helping individuals understand their strengths, interests, and values to make informed career decisions.

Skill Enhancement: It focuses on enhancing existing skills and acquiring new ones through training, education, and hands-on experiences to stay relevant and competitive in the job market.

Career Advancement: Career development seeks to provide opportunities for career advancement, whether through promotions, lateral moves, or transitions to higher-level roles.

Employee Engagement and Retention: By investing in career development, organizations can boost employee engagement, satisfaction, and retention, as employees feel valued and supported in their career aspirations.

Succession Planning: Career development contributes to succession planning, as organizations groom talented employees for future leadership roles, ensuring a pipeline of capable leaders.

Organizational Effectiveness: Aligning individual career goals with organizational objectives fosters a more motivated and skilled workforce, positively impacting overall organizational performance.

Adaptability: Career development encourages adaptability, enabling individuals to navigate changing industry trends and job requirements effectively.

What are the Key Elements of Career Planning?

The key elements of career planning include:

Self-Assessment: Individuals assess their skills, strengths, weaknesses, interests, and values to identify potential career paths that align with their aspirations.

Goal Setting: Career goals are established based on personal aspirations, taking into account short-term and long-term objectives.

Career Research: Individuals research different career options, industries, and job roles to gain insights into potential career paths.

Identifying Development Opportunities: Individuals identify learning opportunities, certifications, workshops, and training programs that can enhance their skills and knowledge.

Networking: Building professional networks and connections helps individuals gain valuable insights, job referrals, and mentorship opportunities.

Resume and Interview Preparation: Career planning involves creating a well-crafted resume and preparing for interviews to effectively showcase skills and experiences.

Continuous Learning: Individuals commit to continuous learning and self-improvement to remain adaptable and competitive in their chosen field.

How can Employers Support Career Development?

Employers can support career development in several ways:

Training and Development Programs: Offer training, workshops, and skill-building programs to enhance employees' knowledge and competencies.

Career Pathing: Provide clear career paths and growth opportunities within the organization, encouraging employees to aspire to higher roles.

Mentorship and Coaching: Establish mentorship or coaching programs to provide guidance and support to employees in their career journeys.

Performance Feedback: Regularly provide constructive feedback and performance evaluations to help employees understand areas for improvement and growth.

Career Development Resources: Offer resources such as career counseling, access to online learning platforms, and career development workshops.

Talent Mobility: Promote internal mobility by allowing employees to explore lateral moves or transfers to different roles within the organization.

Recognition and Rewards: Recognize and reward employees for their accomplishments and contributions, motivating them to pursue further career development.

Why is Career Planning essential for both Individuals and Organizations?

Career planning is essential for both individuals and organizations for the following reasons:

Individuals: It empowers individuals to take charge of their career growth, make informed decisions, and align their personal aspirations with professional achievements. Career planning boosts job satisfaction, engagement, and overall well-being.

Organizations: Career planning contributes to a motivated and skilled workforce, promoting employee retention and loyalty. It helps organizations identify and groom potential future leaders, ensuring a strong talent pipeline and sustained organizational success.

How can Career Development Impact Employee Engagement?

Career development positively impacts employee engagement by offering employees a clear path for growth and advancement. When employees see that their organization invests in their career aspirations, they are more likely to be engaged, committed, and enthusiastic about their work. Feeling valued and supported in their career goals enhances overall job satisfaction and productivity.

What Role does Lifelong Learning Play in Career Development?

Lifelong learning plays a crucial role in career development as industries and job requirements evolve rapidly. Embracing lifelong learning ensures that individuals continuously update their skills and knowledge, remaining adaptable and competitive in the job market. Continuous learning expands opportunities for career growth and allows individuals to stay relevant and valuable to their employers.

How can Career Development Contribute to Organizational Success?

Career development contributes to organizational success by fostering a skilled, engaged, and motivated workforce. Employees who are supported in their career aspirations are more likely to be committed to their organization, leading to reduced turnover and higher employee retention rates. Moreover, employees with enhanced skills and knowledge contribute to increased productivity, innovation, and overall organizational effectiveness.

What are the potential challenges in Career Planning and Development?

Challenges in career planning and development may include:

Limited Resources: Individuals and organizations may face constraints in accessing career development resources, such as funding for training programs or time for professional development.

Unclear Career Paths: In some organizations, unclear or limited career paths can pose challenges for employees seeking advancement and growth opportunities.

Changing Industry Trends: Rapidly changing industry trends may require individuals to adapt and update their skills continually, creating challenges for career planning and development.

Work-Life Balance: Balancing career development aspirations with personal commitments can be challenging for individuals seeking professional growth.

Alignment with Organizational Needs: Organizations need to align career development efforts with their strategic goals to ensure that employees' aspirations support the organization's objectives.

How can Employees Take Ownership of their Career Development?

Employees can take ownership of their career development by:

Setting Clear Goals: Define short-term and long-term career goals based on personal interests and aspirations.

Seeking Feedback: Actively seek feedback from peers, supervisors, or mentors to identify areas for improvement and growth.

Networking: Build professional networks to gain insights into various career paths and potential opportunities.

Continuous Learning: Embrace lifelong learning by participating in training programs, workshops, and industry conferences.

Advocating for Development Opportunities: Express interest in training or career advancement opportunities to supervisors or HR departments.

Staying Adaptable: Be open to new challenges and experiences, embracing change as opportunities for growth.

Updating Resumes and Profiles: Keep resumes, LinkedIn profiles, and other professional profiles up-to-date to showcase skills and achievements effectively.

Taking Calculated Risks: Be willing to take calculated risks to explore new roles or challenges that align with career goals.

What is the internal recruitment? Internal recruitment as part of the career planning process

Author: Amelia Williams

What is the internal recruitment?

Internal recruitment is the decision to relocate employees (existing) to vacancies in the organization. These staff actions include promotion, transfer, or relocation, but at the same hierarchical level up and downgrading of employees to a higher or lower hierarchical level.

Examples of internal recruitment

In the development of large corporations can be found examples of the needs of internal staff movement and the effect it has had on the state of the organization. For example, 12,000 IBM workers changed jobs in 1986. Many of them changed their career development by moving from surplus departments (such as manufacturing) to those in which there was a shortage at the time (marketing, sales). Xerox Corporation Reprographics Business Group redirects its highly qualified staff (chemists, engineers, etc.) to computer engineering, a field of activity that is completely different from their previous one, as dictated by the high shortage of specialists in this field.

Personnel management processes are not limited to decisions about who will join the organization, but also how the transfer of employees in the various hierarchical levels. They are becoming increasingly important for personnel management in the organization, given the ability to respond adequately and effectively to the rapidly changing and competitive environment. It should be noted that the movement of staff within the organization affects career development, a fact, which is of great importance for the status of employees, for meeting their needs - tangible and intangible, which in turn affects their work motivation and performance of duties, respectively the good condition of the organization.

How to select candidates for transfer from one position to another

Here the question is, how to select candidates for transfer from one position to another? What are the factors that influence the desire of employees to move to another position, to accept certain opportunities for change? What determines the needs of the internal movement of staff?

The diagnostic approach to internal personnel management gives us answers to these questions.

Although this is a process that focuses on the organization's job search opportunities, there are external conditions that determine it. External conditions are the labor market, the legislation in the country and the decisions of the trade unions. The state of the organization and the employees are internal.

Although similar to external recruitment, internal recruitment is characterized by working with workers from the organization itself. The process of internal selection consists not only in selecting the appropriate candidates for the vacant position but also concerning the rejected candidates who remain in the organization, as this affects their future job performance and motivation. In the external selection, the rejected candidates have little or almost no direct effect on the results of the organization. Thus, in the internal selection of staff, the organizations simultaneously take into account the organizational and personal interests in decision-making. These two factors constitute an important aspect of internal selection - career development.

Stages of the employee's career

A factor that is of great importance in career planning is at what stage of the career cycle the individual is. The career cycle is the totality of all the stages that an individual's career goes through.

As individuals gain work experience, their professional development can be viewed in the context of the biological life cycle of growth and decline. For example, a person at an early stage of his career development is less interested in his pension insurance than in his opportunities to rise in the hierarchy. The four stages of a career are orientation, job establishment, support, and retirement.

I will mention bellow all stages of the career development of most people.

Career orientation

The orientation stage covers the period from approximately 15 to 24 years of age, in which the individual explores career opportunities by comparing them with their interests and abilities. During this stage, the young person makes an effort to adapt to the working world.

Orienteering activities include attempts to clarify and identify interests and skills; enriching them through various training programs; overcoming the parental pressure regarding finances and directing the interests to a certain field of work. The orientation process is influenced by the school family and friends' environment. It is possible to try and reject different professions, to fail, but in this way, the young person gains experience and shapes his interests.

The most important thing during this period is for the individual to realize his specific abilities and talents. Gradually he turned to permanent work. This is the transition to the second career stage - establishment;

Establishing the workplace

The stage of establishment passes between the 24th and 44th year of the individual's life, and this is the most fruitful period for professional performances. It is believed that during this period the individual has found the right job for himself and his actions are aimed at keeping his job. In many cases, a person "anchors" to a certain job at the beginning of the period.

The establishment stage is divided into three sub-stages:

Substage of experience: corresponds to the age between 25 and 30 years. During this period, the individual assesses whether the professional field to which he or she is oriented is appropriate for him or her, and if he or she is not trying to focus on another;

Substage of stabilization: this is the period that roughly covers the age between 30 - 40 years. During this period, clear and specific goals are set for the future development of the already chosen profession, detailed career development plans are made, aiming at the fulfillment of the set goals;

Substage of occupational crises;

Between 35-45 years, the individual takes stock of what has been achieved so far given the goals and ambitions set at the beginning of his professional development. They may find that some of their dreams of professional career (such as becoming a company president) will not come true. It is necessary within this period to realize the degree of importance of their work and the place of their career in their lives. Often during this period, one wonders what one wants to be, what one can achieve, and what one must sacrifice to achieve what one wants to be.

The establishment process includes successful negotiations in the course of job search, recruitment, and guidance in the selected organization. During this early socialization in the organization and identified his future with her. A process of mutual acceptance follows. The individual, colleagues, and managers must get to know each other's abilities. There is a need for an open exchange of information and feedback between evaluation and performance. Such feedback stimulates the demonstration of capabilities on both sides;

Support

In the course of this stage (45-65) the individual is already an important member of the organization, has found his rightful place for professional performance and his efforts are focused on its preservation. The evaluation of job performance is more important for his motivation. The organization relies heavily on the employee's experience. It becomes a model of behavior for the younger ones and can train them. During this stage, crises in professional development may occur, stimulated by factors outside the work environment, such as family changes, children leaving home, divorce, death of parents, changed financial obligations, awareness of boundaries, including death, which may lead to a change in goals. These crises vary from person to person.

Withdrawal

Some authors characterize the last years of his career as a time of retirement. Preparing for retirement can lead to a psychological withdrawal from the organization long before the physical departure. Characteristic of this stage is a reduced role and fewer responsibilities, the growth of collegial relations into friendly and vice versa.

Some sociologists and psychologists include more stages or merge life with career stages. Some describe the transition between the various stages as critical (Manuel London). Others accept the existence of a "career clock" that affects the rate of transition from one stage to another (J. Rush, A. Peacock, and G. Milkovich). Other concepts are "career turmoil", which is transmitted by problems in life; self-unrest - dissatisfaction with one's performance, career content unrest - dissatisfaction with the volume and content of work in the chosen career; job unrest - dissatisfaction with the work environment. Robert Oliver argues that career unrest reduces an individual's ability to put creativity into their work, which affects their productivity.

Types of professional orientations

• Realistic orientation: people with this type of orientation are attracted to professions that involve physical activities that require skills, strength, and coordination, such as agricultural activities.
• Research orientation: this type of orientation presupposes an interest in careers that involve cognitive activities (thinking, organizing, understanding) rather than emotional ones. For example, biologists, chemists, and other precise sciences.
• Social orientation: people who have an interest in professions that are characterized by interpersonal relationships and contacts, rather than physical and intellectual work. For example, psychologists, service professions;
• Standard (conventional) orientation: this is an orientation that presupposes an interest in activities structured and subject to different norms. For example, accountants, bankers, etc .;
• Entrepreneurship orientation: these are managers, entrepreneurs, and other management activities;
• Artistic orientation: these are people who are attracted to careers in which they can express qualities such as artistry, emotionality, creativity (artists, musicians, advertising agents.

Often people have more than one of the listed types of orientation, for example, they can have social, research, and realistic orientation at the same time.

According to Holland, the closer and more compatible the individual's orientations, the easier it will be to choose a career. to explain and illustrate his claim, Holland places on each corner of a hexagon one type of orientation. The model has six angles, each of which corresponds to a type of personal orientation.

According to Holland's study, the closest two orientations in the figure are the most compatible. If the first two priority orientations of the individual lie on one side of the hexagon, then the choice of career should be the easiest. In case the orientations lie on two opposite angles (realistic and social orientation) the process of career choice is accompanied by certain indecision.

Determining specific abilities and skills

Once the individual career orientation has been determined, the career stage in which the individual finds himself, it is time to determine the specific abilities.

Successful and good work performance depends not only on the motivation of the individual but also on his abilities. The individual can have a conventional professional orientation, but his abilities and talents will determine the specific profession to which he will focus. Whether he will be an accountant, banker, or manager depends on his abilities and talent. There are many tools and methods for assessing individual abilities.

Organizational change management in successful companies

Author: Bianca P Robson

Organizational change management in successful companies depends on many factors like employee engagement, motivation and the application of strategies in the process of change

The organization uses its resources (people, machines, technology, materials, money, time) to work for the benefit of its users and for itself. Reference: How Organizational Resources Affect Strategic Change and Performance in Turbulent Environments: Theory and Evidence by Matthew S. Kraatz, Edward J. Zajac, 2001

Even if it maintains its equipment well, it becomes obsolete and needs to be repaired first, and later replaced.

Even if it was modern, the technology became obsolete and began to need small improvements on-site, and subsequently more and more improvements, and finally a replacement.

Even if it is properly developed, each product reaches its stage of maturity and it is necessary to look for new solutions - first cosmetic improvements, and later - deeper - by radically changing the product or by replacing it with a newer one.

Similarly, they gradually remain and cease to meet the necessary management structure, information system, payment system... Economic efficiency may begin to decline.

Today, large companies often carry out dozens of initiatives - mergers and acquisitions, experimenting with e-business, developing new products, or entering new markets. This is required by the ever-changing environment. The consequences are that managers are constantly helping employees learn to work with a new program and deal with an uncertain future. Reference: A Guide to Organizational Resources and How to Manage Them By Grantham University, 2019

The major concerns about every change

There are three major concerns about every change, said Peter Theiss, CEO of Delta Consulting Group.

What will the future bring?

People ask themselves the following questions: "Will I be better financially? Will I succeed? Who does my career, my future depends on? ”

What to do now?

Employees wonder what to say to their family, colleagues, etc. about the situation in which they find themselves. They are hesitant about how to react to the change.

Can I handle this?

"Can we continue to perform well as we make the change?"

These worries are not expressed aloud, but are a topic of conversation during the lunch break, for example. ”These worries in the cafe will reduce productivity and cause your most talented employees to leave the company, says Catherine Yates, senior consultant at Hewitt Associates. Managers responsible for change know that they need to communicate with employees and diligently distribute newsletters and create PowerPoint presentations. These methods disseminate information by telling employees what to expect, but rarely allay their worries or enthusiasm about their future opportunities.

The successful organization and its employees

Every successful company builds a strong emotional bond with its employees, believes John Katzenbach, whose book "Supreme Performance: Win the Hearts and Minds of Your Employees" describes 5 different strategies for achieving emotional attachment. During change, positive employee emotions are often the best antidote to feelings of anxiety and helplessness. The manager's job is to link change to goals that excite employees. ”Discover the emotionally hot buttons of the group - what your employees respond to and what would interest them,” Katzenbach advises.

Technicians are excited about innovation and making exciting developments. Sales representatives like the idea of ​​gaining market space.

Employees of companies such as Home Depot and Marriott are hired because they are interested in offering great service. Depending on the context, there is an opportunity to motivate employees for each of these goals or others, for example, the chance to win a big bonus or to acquire new skills.

As Corning Cable Systems prepares to undertake a significant corporate restructuring, CEO Sandy Lyons kicks off the process by holding individual meetings with about 50 managers. The goal is to make them think, "It's entirely possible", explains Lyons.

Most employees want to have the opportunity to express their opinions. "Be open, engage your employees and make them part of the solution," advises Lyons. It is also good to conduct surveys of employees' opinions about the change. Effective communication during rapid change is two-way. During the restructuring of Corning Cable Systems, says Sandy Lions, ”we created a site for the internal network. He informed about everything related to the change. Anyone could come in and ask a question. A response was received within 48 hours. Many worries go away when people get their questions answered. ”

Most change initiatives have been imposed on companies, says Chris Turner, a longtime Xerox employee. (Reference). Coercion, however, rarely succeeds. Even if employees do their job, they will lack enthusiasm. Invite employees to participate in the change and work with that 25 % who agree, Turner recommends.

Leadership may cause the company to meet its stated goals. "If the company wants more entrepreneurship, but the method of payment does not encourage such behavior, the role of the manager is to say: The current system does not encourage entrepreneurial behavior. We need to rethink the way we pay our employees. ”

The manager can apply different strategies in the process of change

In political strategy, the goal is the structure of power. It relies on attempts to influence formal and informal leaders. The economic strategy relies on financial stimulus. Therefore, from this point of view, the one who controls the organizational budget has the power to buy and change everything, especially in the firm belief that everyone has a price.

The academic strategy is based on the assumption that providing sufficient information and credible facts to people will lead to acceptance of the need for change.

The engineering strategy adopts the technocratic approach, according to which the change in the physical nature of the work will inevitably cause the people who perform it to change.

The military strategy relies on the approach of "brutal force" and "ignorance" to change a situation. Physical strength and endurance are required, and the following plans are rewarded.

Confrontation strategy is a high-risk approach, as it is based on the assumption that if you manage to arouse people's interest in the problem and then mobilize them to solve it, they will change. Much depends on the strategist's ability to defend his position and arouse "enthusiasm" for work without creating tension.

Approaches that organizations are trying to implement

Some of the more specific approaches that organizations try to implement:

Training and communication. They help people understand the logic and need for change. This process requires mutual trust.

Participation and inclusion. People are more supportive of change if they have participated in its formulation and design.

Facilitation and support. It is about training and counseling, which is useful, but there is no guarantee that it will lead to overcoming resistance.

Negotiation and consensus. This primarily refers to the negotiation of incentives and remuneration. When resistance is caused by something that people perceive as a loss, this approach can be very helpful.

Manipulation and inclusion. This approach involves veiled attempts to influence people, such as the selective use of information or the conscious ordering of events.

Explicit and coercive coercion. The use of threats may work for the time being, but it is unlikely to lead to long-term commitment to change.

Change is effective if three stages are followed

According to Kurt Lewin, change is effective if the following three stages are followed sequentially: thawing, alteration, and freezing. Reference: Lewin’s 3 Stage Model of Change Explained, bmc.com

Change management models, based on K. Lewin's view, are linear and reflect relatively static processes (Kanter, Stein, Jick 1992). The metaphor of the organization as an ice cube, which can be thawed and re-frozen in the desired shape, clearly and easily describes the process but creates the feeling of change as something simple and easy to do. In practice, organizations never "freeze" to "thaw", because they are constantly undergoing complex and multifaceted processes. Managing change in the desired direction.

Different types of managers

Author: Marta Rodrigues

In this article, we describe the types of managers but have you thought of yourself as a manager? BVOP is a trendy and visionary guide for all modern managers.

What are the different types of managers?

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Good management is a matter of well-chosen managers. They are the intermediaries between all employees in the company or organization. A good manager must be a perfect manager and a great leader at the same time. Regardless of how subordinates perceive their director, the problem of managerial responsibility remains significant. It can be illustrated, best with the so-called "Management Five"

The manager must provide effective means to unite each team

The manager must provide effective means to unite each team. In the presence of different interests and levels of motivation, a great variety in the behavior of the teams is possible. The leader must know the main stages of the evolution of the team in terms of its cohesion.

Knowledge of the evolution in the development of groups and their features will allow the leader to apply in practice forms and methods of operational and long-term management, adequate to the stage of development of the group, its social maturity, and preparation.

Nature and qualities of the manager

With the advancement of technology, competition in the supply of goods and services is increasing, which leads to increased management difficulty. It is this management that the manager takes care of so that the institution or company makes the most profit and thrives. Successful management is due to the successful management of the manager.

Making these decisions is a combination of many activities, such as informing, choosing between many offers, forecasting, analyzing, and many others before making an important management decision.

The big difference between a manager and a leader

Many authors note that there is a big difference between a manager and a leader. Leadership is part of management, but being a leader does not necessarily mean that you are a leader. Management can be defined as a mental and physical process that encourages subordinates to perform pre-prescribed tasks and duties.

Leadership can be defined as the process by which a person influences the behavior of group members. The head (manager) of an organization is a person who is both a leader and effectively manages his subordinates.

The purpose of a manager is to influence others in such a way that they perform the work assigned to them by the organization. However, leadership is the ability to influence the behavior of individuals and groups and guide their efforts to achieve the goals of the organization. "A leader is one who knows how to attract others and motivate them to perform a task. or to achieve a specific goal.

The main part of the management

The main part of management in any organization is the coordination of its activities and directing the efforts of members to achieve its goals. This process includes the ability to be a leader, as leadership is an integral part of effective management.

Achieving the goals of the organization

Leadership is manifested in interpersonal relationships. It is associated with achieving the goals of the organization so that followers perceive them as their own. Effective governance is inextricably linked to leadership.

However, after all the above, it should be borne in mind that the difference between a manager and a leader does not just exist. The difference is important for the development of any organization because in most cases the leader and the manager in a company are two different people.

Therefore, in order to distinguish the leader and the manager from each other, we will consider them both together and separately. In this way, we will be able to draw objective conclusions.

Types of managers according to the level of management in the organization:

Top-level - Top managers

Top-level - Top managers. They define the goals of the organization, develop the strategy and management policy, and have representative duties. These include President, Vice President, Deputy CEO, and CEO. To be a successful top manager you need the following qualities:

Curiosity

Many successful top managers are hellishly curious people. This country of theirs often remains hidden from the media during meetings with investors. But there is a reason for this - CEOs must radiate trust and a measured sense of power. Stability must be written on their faces. But if you take them out of this everyday scenario, you will see a completely different side of them. They can tell you stories of mistakes and failures.

They can also ask general questions - those that concern the big picture. For example, they wonder why things work a certain way and whether they can be improved. They want to hear people's stories and what they do.

These are the questions that point to opportunities for entrepreneurs and help managers understand the people who work for them. And how to be stimulated to work together effectively. It is no coincidence that many managers use the same phrase to explain what the CEO does: "I study human nature."

One must learn from everyone, Alan Mulally

According to Alan Mulally, who leads the Ford car company, one must learn from everyone.

Tempered self-esteem. Some people accept failures completely calmly, even with some pleasure. They also have a list of steps on how to overcome the next one. Because they have hardened self-confidence.

Sense of team

At one point, the idea of ​​team play in corporate life became devalued. It was reduced to the elementary "I work in a team, so I'm a team player." The most effective CEOs are more than team players. They understand the principles by which the team works and know how to get the most out of everyone. Just as people can have all sorts of skills, so top managers are people who know how to understand teamwork.

Simple attitude

In many companies, there are sometimes persistent problems with the way of communication. Most CEOs want the same things from their employees - be brief, drive-in substance, explain clearly.

However, few people can achieve the simplicity required by the boss. Instead, they mistakenly decided that they would impress everyone with a long PowerPoint presentation that showed how diligently they had researched the issue. Or that they will discourage any objections by talking more.

Courage

Are you comfortable feeling uncomfortable, do you like situations where you don't have a map or a compass? Are you nervous when everything goes smoothly and you want to shake things up? Do you agree to take surprising career moves to learn new skills? In other words, do you have the courage?

Risk-taking is often associated with entrepreneurs whose attitude to the realization of their idea is: "I will bet everything." But risk-taking does not exactly cover the quality that many CEOs possess and look for in others.

Medium managers

From intermediate-level - Medium managers. They are responsible for the implementation of decisions taken by the highest level, and control of the slave. to lower-level managers. The middle managers implement (the) decisions made by the top managers and control the work of the operational managers. These include heads of divisions, directors of various divisions, heads of departments, and divisions.

They manage operations managers and workers. This is the middle management level. As the decline in engagement most severely affects middle management levels, to avoid a crisis in an institution, it is sometimes necessary to reduce staff to a lower position.

By downgrading, the middle manager can become operational to reduce the organization's costs, as the middle management level is more expensive than the lower one.

Operations Managers

From a lower level - Operations Managers. They coordinate the activities of the contractors. Such positions are heads of shift sectors, autonomous groups, etc. They are the most common. Their responsibility is related to the realization of the product or service provided.

A basic principle in the movement of the management staff is its transition from a lower to a higher management level.

According to the field of management:

• Marketing managers related to the realization of product or service markets, search, advertising, etc.
• Financial managers - manage the financial resources of the organization
• Production managers - manage the production activities of the organization, manage quality, new facilities, and technologies
• Human Resource Managers (or Personnel managers) - They deal with recruitment, selection, recruitment, movement, evaluation, and training of employees
• Administrative managers - coordinate the activities of various functional areas in the organization
• Project Managers - responsible for the execution of a specific project
• Public relations managers, etc.

Qualities of a successful manager

To achieve these goals and activities, every manager must have certain qualities. The qualities of each manager are: Owned by birth or acquired.

The qualities possessed by birth are:

• logical and abstract thinking
• observation and memory
• concentration
• fantasy and creativity

The acquired qualities are:

• determination conviction to turn the decision into reality
• dynamics of initiative and entrepreneurship
• reliability as a partner responsible, constant, discreet, honest, ethical
• self-confidence, inner conviction
• authority, eloquence
• optimism

Is the leader a leader and is the leader a manager?

One of the things a manager should strive for is to be a leader and a good manager. Is the manager a leader and is the leader a manager? This is a very common question. The manager and the leader are two similar terms, which, however, have recently been increasingly used as synonyms in the press. Probably because many managers have leadership qualities, and many leaders perform purely managerial functions. But, as we found, the difference between a manager and a leader is significant.

Many would like only leaders or at least potential leaders to work in the company. To have a leader, however, he must have followers. Therefore, leaders will always be a small part of the team. Many followers cannot be leaders. Their strength and value lie in being capable, reliable followers. Everyone has their value, but in the right place and at the right time.

A manager without leadership qualities, for example, is indispensable in situations of downsizing and layoffs. Put a leader in such a situation and he will wither - leaders are born to create, to attract, to expand the business.

The leader and the manager occupy an important place in business

Both the leader and the manager occupy an important place in modern business life. Moreover, in the name of the company's success, they must establish fruitful cooperation.

With the development of business relationships, nowadays, being a good manager is no longer enough for great success. You need to integrate both the role of manager and leader to achieve significant success in the organization. As a manager, you have to achieve high results, and as a leader, you have to focus on the people who achieve the results. From the two professions - manager or leader - choose the one that best suits your personality.

Confucius, 2,500 years ago, said, "Choose a profession you love and you won't have to work even a day in your life!"

What is it like to be a good manager?

In management theory, a leader who manages to bring the personal goals of employees closer to those of the organization is called a leader. This is one of the most valuable skills of leaders today, which is largely shrouded in mystery and mystery.

The common belief is that a leader is a charismatic person; the leader is born that way; either you have it or you don't; not acquired and so on. Some people indeed handle this role better and easier than others, but any leader can acquire the skills to lead people as long as he realizes the need for such skills and makes the necessary efforts.

Every manager must be able to formulate goals and put them clearly in front of subordinates. To make someone do something, he must clearly understand what we want from him. Otherwise, the result that will be obtained will not meet our expectations. This is one of the most important skills of a manager so that the work is not done.

Highlight the most characteristic individual qualities

The manager must be able to highlight the most characteristic individual qualities of each of his subordinates. Without it, he is tied up and will probably assign tasks to the wrong people and will not get the expected results. A good leader knows his people, both their strengths and weaknesses, but focuses on the strengths to use their potential.

A leader must make an effort to understand what are the most important things for each person, what he believes in, what his desires are, and what his values ​​and goals are. In this way, he can guide people to the goals he wants to achieve.

Conclusion

For a successful economy and management of companies and organizations, the most important thing is the choice of specialists working in it. The managers take care of the good management of the implementation of the tasks in each company. That is why they must be very well selected, such as skills and qualities. The better managers a company has, the better it develops.

Managerial skills are both personal qualities of the person and acquired skills for communication with people, management skills, and persuasiveness. One of the traits that are important to be a good manager is to be able to work in a team.

Managers are the link between the lower level of workers and the higher management level. To be able to satisfy both levels, the manager must be very communicative and always find a "common language" with everyone, and be able to resolve any situation with ease.

Questions and Answers

What are the different types of managers in an organization?

There are various types of managers, each with distinct roles and responsibilities in an organization. Some common types include general managers, functional managers, project managers, line managers, and middle managers. General managers oversee the overall operations of the entire organization or a significant division, while functional managers lead specific functional areas like finance, marketing, or human resources.

Project managers are responsible for managing specific projects from inception to completion, while line managers handle the day-to-day activities of a particular team or department. Middle managers, on the other hand, bridge the gap between top-level executives and frontline employees, overseeing departmental performance and implementing organizational strategies.

What is the role of a general manager?

The role of a general manager is critical in an organization, as they are responsible for formulating and executing strategies to achieve the company's goals and objectives. General managers work closely with other executives and senior leaders to set the organization's vision and direction. They provide leadership, guidance, and support to various departments and ensure that the organization operates efficiently and effectively. General managers are also responsible for managing resources, making high-level decisions, and ensuring that the organization remains competitive and successful.

What do functional managers do?

Functional managers are accountable for specific functional areas within an organization, such as finance, marketing, operations, or human resources. Their primary focus is on optimizing the performance of their respective departments. Functional managers develop and implement strategies to achieve departmental goals and objectives while aligning with the overall organizational mission. They manage resources, budgets, and personnel within their functional area, ensuring that the department operates smoothly and contributes to the organization's success.

How do project managers differ from other types of managers?

Project managers have a unique role compared to other types of managers, as they are responsible for managing temporary projects with specific deliverables and timelines. Unlike functional or general managers, who oversee ongoing operations, project managers are focused on the successful completion of a specific project. They define project scope, create a project plan, allocate resources, manage risks, and coordinate the efforts of various team members to achieve project goals. Once the project is completed, the project manager's role may come to an end, as they move on to other projects.

What is the role of line managers in an organization?

Line managers, also known as front-line managers or first-line managers, play a crucial role in overseeing the day-to-day operations of a specific team or department within an organization. They are responsible for supervising and guiding employees in their daily tasks and ensuring that work is carried out efficiently and effectively. Line managers communicate organizational goals and objectives to their team members, provide feedback and coaching, and address any issues or challenges that may arise. They are the direct point of contact for employees and serve as a critical link between higher management and frontline staff.

What are the key responsibilities of middle managers?

Middle managers serve as a vital link between top-level executives and front-line employees. Their responsibilities include translating the organization's strategic goals into actionable plans and initiatives at the departmental level. Middle managers lead and guide their teams, ensuring that employees understand their roles and responsibilities.

They are responsible for setting departmental targets, monitoring performance, and providing regular feedback to both their team members and upper management. Middle managers also play a crucial role in communicating decisions and changes from higher management to their teams, as well as conveying feedback and insights from employees to senior leadership.

How do project managers handle project risks?

Project managers employ various strategies to handle project risks effectively. They start by identifying potential risks early in the project planning phase. This involves analyzing the project scope, timeline, and resources to identify potential challenges. Once risks are identified, project managers assess their potential impact on the project's success and likelihood of occurrence.

They then develop risk mitigation plans to address and minimize these risks. Throughout the project's lifecycle, project managers continuously monitor risks and take proactive measures to avoid or mitigate any emerging issues. By addressing risks promptly and effectively, project managers increase the chances of successful project completion.

What skills are essential for a successful general manager?

Successful general managers require a diverse skill set to effectively lead an organization. These skills include strong leadership and decision-making abilities, strategic thinking, effective communication, and the capacity to inspire and motivate teams. General managers should possess a keen understanding of business operations, financial acumen, and the ability to adapt to changing market conditions. They also need to be visionary and capable of setting and executing long-term goals to drive the organization's growth and success.

How can line managers enhance employee productivity and engagement?

Line managers play a critical role in enhancing employee productivity and engagement. They can achieve this by providing clear expectations and goals to their team members, ensuring that employees understand their roles and how they contribute to the organization's success.

Line managers should offer regular feedback and recognition for employees' efforts and achievements, which fosters a positive work environment and boosts morale. Additionally, supporting employee growth and development through training opportunities and career advancement prospects encourages employees to be more engaged and invested in their work.

What challenges do middle managers often face in their roles?

Middle managers face various challenges due to their position between top-level executives and front-line employees. Balancing the expectations and demands from higher management with the needs and concerns of their teams can be challenging. They may encounter communication difficulties when conveying decisions or changes from senior leadership to their team members.

Additionally, middle managers often deal with competing priorities and the pressure to meet departmental goals while aligning with the organization's overall strategy. Coping with these challenges requires strong communication, negotiation, and adaptability skills.

Top 6 Project Management Trends for 2022

Author: Anton Radev

Undoubtedly, project management activities change with each passing year due to the transformation not only of the industries but also of the whole professional community. We will look for an answer to this question, which excites many experts in the field.

"Project management was a relatively static discipline, but this is no longer the case", Anton Radev says and shares his forecasts for the next year. Here are his top 6 project management trends for 2022.

Top 6 Project Management Trends for 2022 by Anton Radev

1. Increase of remote project managers and expansion of virtual teams

The negative global situation related to COVID-19 is not the only reason for this trend. In the last few years, more and more organizations have focused their energy on geographically distributed teams in different areas of the world.

Many people believe that organizations use this approach to reduce costs by recruiting staff from lower-paid locations in general. The truth is that many production activities require local management. Many organizations have branches in multiple countries. The presence of the project manager on site was proven a long time ago as an effective approach.

2. Increase of Agile project management practices

The implementation of Agile practices such as Scrum, Kanban, and Extreme Programming in the development processes is increasingly practiced not only because of the proven ease of operation of these methodologies.

The newly established Agile project management title "BVOP Certified Project Manager" created by "Business Value-Oriented Principles ltd", incorporates many modern trends, practices, and systems. The new management teaching combines business principles based on the Japanese Kaizen philosophy, Lean thinking, and MVP.

Eastern production principles have greatly supported Western governance models. The Agile philosophy is not just preferred by many professionals but also provides multiple approaches and shares ideas for optimizing resources and time.

3. More technically literate project managers

Modern product development largely involves technology and various software applications. Project management of high-tech processes requires technical competence. Understanding what the teams are doing is essential to the success of the project. The Scrum Product Owner role, for example, is now considered to be (by some people) the equivalent of a project manager. Many organizations and teams hire a Product Owner who is technically literate to lead product development optimally. 

4. Project managers located on the client's premises

It is no longer uncommon for the project manager to be placed next to the client literally. I had such experience and worked for an organization that accommodated me directly in the client's office, which turned out to be an excellent approach. Productivity and efficiency were high. My role was not only as a project manager, but I also combined product management functions, which leads me to the next topic.

5. Mixed management roles

Modern project management in actual practice is no longer what it was years ago and what is taught at universities or in the traditional obsolete teachings. Creating products requires many and completely different skills from those needed for project management.

BVOP, for example, included in its Product management principles many recommendations borrowed from user research practices, design, and UX fields. Knowledge of design and user behavior combined with technical and development skills are invaluable assets. 

I started my career as a web designer, tried to do graphic design as well, then worked for years as a Front-end developer. I studied UI/UX principles. When I need it, I do Back-end development myself to practice. I can predict the work of most technical teams developing software products. I know the teams’ problems in depth and at the same time, I am aware of the needs of the business.

I give myself as an example because my career history describes the sought-after professionals today. It is already difficult for me to say (regarding software projects) what is project management or product management because for me these two disciplines and professions overlap. I have talked to many directors of companies whose HR departments are recruiting. These directors also had difficulty defining roles.

6. Decentralized project management continues

This trend emerged in 2016, but in 2021 the decentralization of project management will progress, which isn't necessarily something negative. I do not want to go into detail on the subject, but instead, I want to give some advice to the whole management community. Be collaborative, and never forget that sharing knowledge and having common goals are the most important things not only for the business but also for you. Be erudite managers with wise priorities.

What is project management after all?

Let us give a short explanation of the topic for the newcomers.

The main challenge in project management is to achieve all project objectives within the given constraints. Each project usually requires documentation created at the beginning of the development process. The main limitations of project management are scope, time, quality, and budget. An even more ambitious challenge is to optimize the allocation of the necessary resources and use it to achieve predetermined goals.

The goal of project management

The goal of project management is to create a complete project that meets the client's goals. In many cases, the mission of the project manager is to shape and understand the client's ideas and then to meet their expectations. Once the client's goals are identified, they will be the starting point for all decisions made by other project participants - project managers, designers, architects, consultants, contractors, subcontractors, etc. And the goal of business value-oriented project management (BVOPM) is also to bring product development to a close. But by reducing waste and reducing complex processes.

The Agile thinking

At the same time, Agile thinking distances itself from the mentioned project variables and focuses only on productivity and results that must fully satisfy end users. For me, the combination of these two concepts is the supreme thinking in project management.

What is marketing and types of social groups’ research

Author: Kyler Schmidt

What is Marketing?

Marketing is a study of the market and compliance of production with it. It is a concept and management approach, according to which the entire production process in a company follows the requirements and the state of the market. Marketing is market-oriented and market-oriented company management.

What are the marketing phases?

There are three main phases of marketing:

1. Market research (supply and demand study).
2. Creation of a product following the requirements and the market situation.
3. Realization of the product through appropriate marketing approaches (advertising, setting appropriate prices, etc.).

What is Market research?

Market research is the systematic planning, collecting, and analysis of data that are related to a specific marketing situation facing the company.

Market research is not a real marketing tool. Gathering information about the state of the market, the interests of consumers, and the state of one's own company only create a basis for making marketing decisions and for determining a marketing strategy.

The marketing environment is very dynamic today. It is characterized by an extremely rapid change of factors influencing the activity of the enterprise. Therefore, the need for real-time marketing information is greater than at any time in the past.

The purpose of marketing research

The purpose of marketing research is to provide the necessary information for company and marketing decisions.

The successful operation of any company depends largely on its provision of the necessary information, based on which management makes decisions about the implementation of the company's activities.

Marketing deals with identifying and meeting the needs of man and society. One of the shortest definitions of marketing is "profitable satisfaction of needs." In some Western European countries, as well as in the US, marketing is one step ahead. There, organizations must take into account not only the needs of their specific customers in the narrow sense of the word but also the requirements of different groups in society and society as a whole. We are entering an era of social responsibility, where organizations must take into account the need to build a good image of themselves in society and also the results of their activities on society as a whole.

Modern marketing is a battle

Modern marketing is a battle that relies on the possession of information rather than other resources. Competitors may borrow equipment, products, and activities, but may not copy company information and intellectual capital. The main competitive advantage of a company is its information resource.

The science that studies the psychological characteristics of consumption and consumer behavior officially took its place in the American Psychological Association in 1960, when a section on consumer psychology was established.

There is a special scientific journal, the Journal of Consumer Behavior, which covers research on consumer behavior and motivation. The rich empirical material and numerous experiments concentrate their efforts on one main goal - to understand what the person thinks and how he acts as a consumer. Determining exactly how the consumer relationship is formed is extremely important, as in this way it will be possible to use different ways to influence it.

Consumer behavior

The influence of the social environment on consumer behavior is sometimes stronger than the personal attitude toward the product. A person often under the influence of various factors takes actions that contradict his attitudes and desires.

The influence of social factors and consumer attitudes is most fully reflected in the theory of the rational behavior of Ajzen & Fishbein. According to her, attitudes towards the product and social influence determine the trends in consumer behavior. Sometimes intentions are formed only under the influence of social factors, sometimes personal attitudes dominate, and in other cases, the influences are influenced by both attitudes and the social environment.

Eight styles of consumer behavior

Eight styles of consumer behavior can be distinguished according to the different social roles and statuses of the individual consumer:

1. Demanding high quality;
2. Oriented in the brands and observing the principle price-quality; attitude to acquiring famous and expensive brands;
3. Focused on innovation and fashion - likes new products, with an attitude based on practical observation;
4. A user who receives pleasant emotions from visiting stores. For him, this is rest and entertainment. This type of behavior is typical of young people gaining life and user experience;
5. Economical, with thought for the price. The consumer reacts quickly to sales and seasonal discounts;
6. Impulsive and frivolous style of behavior in which a person tends to make purchases under the influence of the moment and is not interested in wasting time and money;
7. Embarrassed by the rich choice. The consumer experiences information overload in the market and tries to understand something more about the offered brands and goods.
8. Habitual actions, attachment to a certain brand. With this style of behavior, the consumer again chooses the already liked stores, goods, and brands for which he seeks information because of his positive experience from past purchases.

Attitudes and decisions of consumers

Value orientations are also an important factor in explaining the different attitudes and decisions of consumers. The values ​​reflect the goals that the person sets for himself and the ways for their realization. Lifestyle plays an important role here, as it not only reflects the activities of people, their interests, and opinions but also through it a person interprets, comprehends, and predicts all his life events, aligning them with their values. Lifestyle is constantly changing and this is necessary to match both the value system and the attitudes of the individual. There are three main categories and consumer lifestyles:

The first category covers consumers who spend their money solely on meeting their primary needs, from which they are guided. Most often they have a minimum income, are on the brink of poverty, unemployed. Their interests are related to necessities and only the price is important;

Consumers who shape their behavior from external factors

The second category is consumers who shape their behavior from external factors and they are the main consumer group in the market. When they make purchases, they tend to get influenced by others. They are divided into three subtypes: belonging to others, imitating, and successful. The first two types try to gain the approval of others. They are prone to imitation and follow fashion trends, while at the same time, their attitudes are in line with the opinion of influential people. The successful have a very high income and the goods they buy must show their high position. They focus on the latest models, and love luxury and ostentation; such are the goods they buy;

The smallest group of consumers are those who are guided by their specific attitudes in their behavior, individualists, determined and impulsive, for whom the opinion of others is not important and do not comply with it. They like to experiment. For them, it is not the product itself that is important, but the process of consumption.

Sets of expectations for each person's behavior

Each of us occupies a place in groups, organizations, and institutions. Each place is associated with a certain role - a set of actions and activities that the person in a certain position is expected to perform, based on the expectations of both the individual and those around him. Because people hold multiple positions, they also have many roles. So there are several sets of expectations for each person's behavior. The roles of the individual influence both general behavior and buying behavior. The requirements of the different roles a person has can be inconsistent and confusing.

The term role is occupied by the theater. It refers to a set of behaviors that have socially conditioned functions and comply with generally accepted norms.

Ralph Linton in 1936 defines social roles as a dynamic aspect of the social status of the individual, ie. the social role is understood as the realization of the implementation of the rules and obligations, according to the social status.

The position occupied by the individual in social relations

Another popular definition of the role was formulated by Beadle and Thomas in 1966. and states that it is a position occupied by the individual in social relations. Roles require and build behavior related to a specific role, knowledge, and values ​​needed to perform them, as well as the appropriate rank that the individual occupies in society. A similar approach to the concept of social role defines it as a normatively defined way of behavior expected by anyone who occupies a position in society.

Each role is played from a certain position in society. This position is determined by the role status. In itself, it does not depend on the role and personality it occupies. Social status determines a person's place in society and the set of rights and obligations that he performs, occupying a given status.

Status and role

The effect of role performance on the formation of the individual is indisputable and significant. The role places the individual not only in the social network among others but also builds a generalized image in his own eyes. Status and role determine a person's social identity. A social role is an expression of the status occupied, it is a sign of certain opportunities, social functions, and power. Thus it gives a social essence to the individual. Both statuses and roles have a corresponding social value. They are values ​​with which the individual identifies, evaluations that relate not just to the role, but to himself.

Regarding the connection between the social role and status and the consumer behavior of the individual, there is a specific connection between the occupied public position and the consumer basket of the individual.

Each role is tied to specific attributes that it presupposes - symbols of the position.

A concrete example is the result of a study conducted in England and commissioned by a recruitment agency, according to which an office employee who maintains his good business image must have an iPod and two mobile phones.

The survey

About 1,500 people took part in the survey, 67% of whom said that portable devices such as laptops, flash drives, and small phones are the most important symbols of their social status. Almost half of the respondents believe that a person should have two mobile phones - one with which to conduct business conversations and one personal. As a symbol of social status, food is already considered - certain restaurants visited during lunch breaks and even the preferred varieties of coffee.

Each society is a puzzle of different social strata and groups. They have different habits, their behavior, specific interests, and preferences - from the way they dress, eat, work and rest, even party affiliations. Of particular importance are those needs, preferences, requirements, ways of making purchasing decisions that will determine their behavior in the market. Culture is a factor that marketing takes into account specifically, and in its broadest sense - one of the fundamental principles of international marketing is related to cultural differences and the adaptation of the company's marketing mix to these differences.

Sectors of the social system

People are located in specific sectors of the social system. This disposition predetermines and predetermines almost everything the individual does.

Marketers need to know how roles affect buying behavior. To develop a marketing mix that exactly matches the target market, marketers need not only to know who is making the actual purchase but also which other roles are influencing the purchase.

In their role as consumers, individuals mutually influence each other in their purchase decision. These influences can be from friends, family, from one or another group.

The effect of group influence on human behavior was developed by Professor Elton Mayo (Harvard).

Within the individual groups, its members define and perform different roles. The role is a prescribed pattern of behavior that the individual must follow in a given situation because of his position in that situation.

Role behavior

The personality of the individual does not determine the role of the determinant. Role behavior is determined by many characteristics - role style, role parameters, role load and overload, role conflict. Role style expresses individual differences in the performance of a role. Role parameters are a set of different types of behavior acceptable for a role.

The role load is the result of the simultaneous performance of multiple roles by the individual. When he tries to play more roles than his abilities (time, energy, money, etc.), role overload is observed. If a situation requires the performance of two different (incompatible in time) roles by the individual, he is faced with role conflict.

The application of role theory in marketing practice is mainly associated with the creation of a role-oriented product group. It is a set of products recognized as necessary for the proper performance of a role. Role-oriented product groups are important in determining both appropriate and inappropriate products for a given role. Product groups must be consistent with all parameters of role behavior.

Decision-making process

Much of the information in the user decision-making process is obtained as a result of intra-group communications. The information is processed by one or more members of the group.: The performers of such a role are called opinion leaders. They interpret, filter, and disseminate information to other members of the group. An important situational feature for informed leaders is dissatisfaction with the product. Identifying the leaders in my opinion is the first step on the way to developing a marketing strategy. Opinion leaders cannot be easily identified because of their similar characteristics to others.

A family is a social group that plays an important role in building people's values ​​and relationships. It is a basic functional unit in the study of consumer behavior. 

Roles in the family

Sociologists distinguish three types of roles in the family, which also influence the decision to buy.

Traditional roles. In them, the woman is supposed to perform the functions of housewife and educator of the children, and the man - to create economic security, exercise family power, and make the main decisions in the family.

Friendly roles. Maintaining such a role requires mutual moral support from both spouses. Building social contacts in this structure is a function of family values, common interests, and views.

Role of partners. Such a role attitude requires both partners to have their economic contribution to the family and to share the responsibility for the children and family responsibilities. Such a model presupposes the full participation of each of the partners in decision-making in the family. The decision-making process for buying and using products in a family is extremely complex.

Participation of individual members in the purchase scenario

The participation of individual members in the purchase scenario can be characterized by the following seven roles:

• Influential
• Porters
• Decision-makers
• Buyers - members making the purchase; they may be different from the decision-makers
• Preparers
• Users - supporting
• Managers

Many decisions of varying importance are made in families. The main task in the study of consumer behavior is which family member has a decisive influence on different types of decisions.

The classical theory distinguishes four models of buying in the family:

• Decisions with the domination of the spouse
• Decisions with the domination of the wife
• Syncretic decisions - the husband and wife make the decision together
• Autonomous decisions

Higher and lower social positions

In any society, people classify others into higher and lower social positions. The social class is an open group of individuals who have a similar social status. The class is "open" because people can go in and out of it. The criteria used to group people into classes vary from society to society. In our society, we use many factors, including employment, education, income, wealth, religion, race, and ethnic group.

A person who classifies someone does not need to apply all the criteria of society. The number and importance of the factors chosen depend on the personal qualities of the individual being classified and the values ​​of the person making the classification.

Individuals in a social group develop and adopt common patterns of behavior

To some extent, individuals in a social group develop and adopt common patterns of behavior. They can have similar relationships, values, the same patterns, and properties. Social class affects many aspects of our lives. Social class determines the type, quality, and quantity of the purchased and used products, and influences the individual way of purchase, and the visited shops.

The population itself does not make the market. People must have the willingness, desire, and ability to buy.

The hidden buttons for the influence of the consumer

The main task of marketers is to find hidden buttons for the influence of the consumer. Psychological motives are perhaps the strongest mechanism for promoting consumption.

Adam Galinsky and Derek Rucker (professors at a school of management) conducted several experiments to establish the link between a sense of power and control and consumer behavior. The main conclusion is the desire of consumers with a lower power position to spend more on products that are associated with power and authority.

Consumers compensate for the feeling of helplessness and lack of strength by buying products that are perceived as signs of power. Interestingly, if the same product is not given high social status, its value in the eyes of the consumer decreases dramatically. This mechanism works only when consumers have low self-esteem in their power capabilities and when the product is presented as a sign of certain social status.

Lower social circles

Another result of the research shows that the representatives of lower social circles prefer the “explicit” consumption of luxury products - that is, they need to have the logo/brand visible.

According to the authors of the study, the lower position in the social pyramid makes people more influential than the opinions of others and therefore they want to strengthen their social status through explicit consumption of luxury products.

On the other hand, the representatives of the prestigious social strata are mainly interested in their own opinion due to their higher self-esteem. Therefore, they are not so much influenced by appeals to the authorities, but rather by the functionality of the products. Therefore, when attracting customers with high social status, the emphasis should be on the objective qualities of the product and not on its essence as a sign of power and strength.

Differentiated attitudes toward the different consumer groups

The companies have a differentiated attitude towards the different consumer groups with high, medium, and low incomes. Some companies, such as Coca-Cola, serve all three groups and their products are inexpensive and popular. But most companies focus on one of the groups or offer different products for different groups.

In almost every society there are different social classes, which are defined as relatively stable groups within society, which are arranged in a hierarchical order and are characterized by the presence of similar values, interests, and behavior of their members.

There are several characteristics of social classes:

• People belonging to the same class tend to behave almost equally;
• Depending on belonging to one or another class, people occupy a higher or lower position in society;
• The social class is determined not based on one variable, but based on the position, income, wealth, education, value orientation, and other similar characteristics of the people belonging to it;
• Individuals can move to a higher or lower class.

The social classes are characterized by preferences for goods and brands

The social classes are characterized by clear preferences for goods and brands of clothing, household items, leisure activities, and cars. That's why some marketers focus their efforts on a particular social class. The target social class presupposes a certain type of store in which the goods are to be sold, a choice of certain means of disseminating information about its advertising, and a certain type of advertising message.

The six main social classes

According to a sociological study, for example, there are six main social classes in the United States:

Upper upper class (less than 1% of the population) - the elite of society, coming from famous families and living from inherited wealth. They donate their money to charity, own more than one home, and send their children to private schools. Serve as a reference group for the other classes. The market of jewels, homes, and services for the organization of recreation and travel.

Lower upper class (about 2%) - people with free professions or businessmen receiving high incomes because of their abilities. Active in public and civil affairs, they crave recognition of their social status and demonstratively spend. They strive to move to the upper class. The market for expensive houses, yachts, swimming pools, and cars.

Upper middle class (12%) - career people with free professions, managers, and businessmen. They are concerned about spiritual life, culture, and civic life. The market for nice homes, furniture, clothing, and household utensils.

Lower middle class (30%) - employees, small entrepreneurs "working aristocracy" (plumbers, middle engineering, and technical staff of factories). They are concerned with the observance of the norms and rules of culture. Do-it-yourself market, home accessories, strict style clothing.

Upper lower class (35%) - small employees, skilled and semi-skilled workers. They are concerned about the problems of a clear division of gender roles, and about strengthening their position in society. The market for sporting goods, beer, and household goods.

Lower lower class (20%) - unskilled workers, people living on benefits. Food market, TVs, and used cars.

Many social groups

The individual is a member of many social groups. Their position in each of them can be characterized in terms of role and status. The role is a set of actions that the people around him expect from the individual. Each role has a certain status, reflecting the degree of a positive evaluation by society. One often stops one's choice of goods that speak of one's status in society. Marketers are aware of the potential for turning goods into status symbols. Such symbols turn out to be different in different social classes.

People with the same income can have completely different lifestyles. The symbols in the everyday life of a rich man could be a Ferrari car, a Rolex watch, or a Valentino suit. Another rich man could have a more conservative style, characterized by a lot of work, big savings, and reasonable expenses.

The way of life is manifested in the activities, interests, and opinions of people.

Questions and Answers

What is Marketing?

Marketing is a fundamental business function that involves identifying, anticipating, and satisfying customers' needs and wants through the creation, communication, and delivery of products or services. It encompasses various strategies and techniques aimed at promoting and selling offerings to target audiences, with the ultimate goal of achieving organizational objectives and fostering customer loyalty.

Why is Marketing essential for businesses?

Marketing plays a crucial role in the success of businesses for several reasons:

Customer Understanding: Through marketing research, businesses gain insights into their target market's preferences, behaviors, and pain points, allowing them to tailor their offerings accordingly.

Brand Awareness: Effective marketing efforts build brand awareness and recognition, ensuring that the brand remains at the forefront of consumers' minds when making purchasing decisions.

Market Differentiation: Marketing helps businesses showcase unique selling propositions, setting them apart from competitors and highlighting their value to consumers.

Customer Engagement: Engaging marketing campaigns foster connections with customers, encouraging loyalty and repeat business.

Revenue Generation: Ultimately, marketing efforts drive sales and revenue, contributing to the financial growth of the organization.

Types of Social Groups' Research

Social groups' research, within the context of marketing, involves understanding the behavior, attitudes, and preferences of specific groups of consumers based on shared characteristics. This research helps businesses target their marketing efforts more effectively and create tailored campaigns. Some common types of social groups' research include:

Demographic Research: This type of research focuses on characteristics such as age, gender, income, education, ethnicity, and marital status. Demographic segmentation helps businesses target specific groups based on their shared demographics.

Psychographic Research: Psychographic research delves into consumers' lifestyles, personalities, interests, and values. It allows businesses to understand the psychological and emotional drivers behind consumer behavior.

Geographic Research: Geographic research looks at consumers' locations, including country, region, city, or even neighborhood. It helps businesses customize marketing messages to suit different geographical areas.

Behavioral Research: Behavioral research analyzes consumers' actual purchase behaviors, brand loyalty, and usage patterns. This type of research assists in predicting future consumer actions and tailoring marketing strategies accordingly.

Generational Research: Generational research focuses on understanding the preferences and behaviors of different age groups, such as Baby Boomers, Generation X, Millennials, and Generation Z. This segmentation enables businesses to target each generation effectively.

Social Class Research: Social class research examines consumers' social standing, income levels, and lifestyle choices. It helps in crafting marketing messages that resonate with specific social classes.

How is Social Groups' Research conducted?

Social groups' research is conducted through various methods, including:

Surveys and Questionnaires: Businesses collect data through structured surveys and questionnaires, either online or in-person, to gather insights from target groups.

Focus Groups: Focus groups involve in-depth discussions with a small group of participants to gain qualitative insights into their attitudes and opinions.

Observation: Observational research involves observing consumer behavior in natural settings, providing real-time data on their actions and choices.

Secondary Data Analysis: Researchers also analyze existing data and reports from reputable sources to extract relevant information about social groups.

How can businesses utilize Social Groups' Research in Marketing Strategies?

Businesses can leverage social groups' research in marketing strategies in several ways:

Segmentation: By understanding different social groups' characteristics and preferences, businesses can segment their target audience and tailor marketing messages to each segment.

Product Development: Research insights help in developing products or services that cater to specific social group needs and preferences.

Advertising and Communication: Marketing messages can be customized to resonate with different social groups, increasing the relevance and effectiveness of advertising campaigns.

Brand Positioning: Social groups' research aids in positioning the brand in a way that aligns with the values and aspirations of the target audience.

Social Media Marketing: Understanding social group preferences on various social media platforms enables businesses to engage with their audience more effectively.

How does Digital Marketing leverage Social Groups' Research?

Digital marketing utilizes social groups' research to precisely target specific audiences through online channels. By analyzing user data, social media behavior, and online interactions, digital marketers can tailor content and advertisements to resonate with different social groups. This personalized approach enhances engagement and conversion rates, maximizing the effectiveness of digital marketing campaigns.

What are the Ethical Considerations in Social Groups' Research for Marketing?

Social groups' research in marketing raises ethical considerations, such as ensuring the privacy and confidentiality of participants' data. Researchers must obtain informed consent and avoid any form of manipulation or harm to participants. Transparent communication and ethical data handling practices are essential to maintain trust with consumers and protect their rights.

How can Cultural Differences Impact Marketing Strategies based on Social Groups' Research?

Cultural differences significantly impact marketing strategies when using social groups' research. What resonates with one social group in a particular culture may not appeal to another. Cultural sensitivity and awareness are crucial in crafting marketing messages that align with diverse cultural values, beliefs, and norms.

Why is Longitudinal Social Groups' Research Valuable for Marketing?

Longitudinal social groups' research involves studying social groups over an extended period. This approach provides deeper insights into evolving consumer behaviors, preferences, and attitudes. For marketing, longitudinal research helps identify trends and changes within social groups, enabling businesses to adapt their strategies for long-term success.

How can Businesses Leverage Social Groups' Research for Brand Loyalty Programs?

Social groups' research informs the design of effective brand loyalty programs. By understanding the motivations and preferences of different social groups, businesses can create personalized loyalty rewards and incentives that resonate with specific customer segments. This fosters brand loyalty, encourages repeat purchases, and strengthens customer relationships.

The differences between Project Manager and Product Manager

Author: Anton Radev

Project Manager vs Product Manager

As a project manager, you are mainly responsible for the life cycle of the project and its stages of creation, all administrative formalities (project management processes), and especially its variables - scope, quality, time, and cost. Of course, you have a lot of other activities, but they are not the foundation of this role.

The Project management role and formalities

You plan everything and follow the protocol and your expectations. At the end of the project, everything must be delivered according to the agreements.

This is the main thing that, in theory, should excite you. These are also your formal activities as a project manager. Of course, you are also responsible for supplies, external and internal parties, and stakeholders. Sometimes you are even involved in certain HR responsibilities, inspection, and other issues, but they are not the basis of your profession.

The concerns of the Project Manager and the Product Manager

The project manager does not care whether the product will be white or red.

However, as a product manager, in addition to the fact that the color can bother you, you may be the one who will provide requirements for it.

The project manager is often not interested in what will happen to the project once it is completed and delivered.

However, as a product manager, this will be your main concern.

The project manager is rarely interested in whether the product will generate revenue once completed.

As a product manager, this will be another major concern of yours.

The project manager is not interested in the users, but the stakeholders and their satisfaction.

As a product manager, you will be primarily interested in users and then satisfying business stakeholders who are only affected by the amount of investment. Stakeholders and investors are not interested in consumers, but profits. As a product manager, you need to be interested in everything.

You, as a product manager, can plan how much and in what to invest.

The project manager does not do this.

Tools and practices

The project manager uses project management tools, approaches, and practices that help control the aforementioned budgets, quality, scope, and time. The project manager applies their professional skills to them.

The product manager on the other hand works with practices such as market analysis, user analysis, product research practices, benchmarking, product strategy, product vision, product price, return on investment, user experience, usability, business value, production processes, KPI. That's a lot of things. The product manager can also participate in marketing activities. 

The real results. Success or failure

The project manager monitors the implementation according to the documentation and agreements.

As a product manager, if you don't like the color shade of the product, you probably won't be happy. You will not care what exactly is written in a document, but you will defend your idea. There will be conflicts and you will probably cause them.

Purely formal project management procedures such as requests for change, change of plans, and recalculations will begin. They are done by the project manager.

Your request to change the color may not be satisfied if the directors of the project management office do not accept the change and do not approve additional costs.

If your product turns out to be successful even without your request, in the end, you will be ridiculed and everyone will whisper: “Thank God we did not listen to this unreasonable man. The product is successful and we have saved unreasonable costs.

If your product fails and you know it's because of its color, it won't make sense for you to make fun of anyone, as everyone (including you) will have to look for a new job. Your organization may have suffered serious losses. Everyone will whisper, "Why didn't we listen to this smart man?"

Project and Product managers have common goals and causes

The negative scenarios from the above are of course unlikely, as everyone around you, especially your directors and investors, is unlikely to allow this to happen. But still - many projects fail.

You all have to fight together against the possibility of falling into an unpleasant reality. You all need to use your talents, competencies, practices, approaches, and tools.

Problems with work, processes, and colleagues

The project manager usually escalates the problems in the team, if any. A project manager is an individual unit, part of the project management office. Sometimes they are part of the development team, but they are still on the side of their directors and investors.

The product manager can lead an entire division or several, such as marketing, product, design, or all together, depending on your organization. They are usually not part of the PMO. Product managers escalate problems to directors, mainly about the product, but not about team members spending too much time in the entertainment room.

Project managers express their concerns to directors that you have delays. They clearly state the reasons and offer solutions.

Product managers express their concern to directors that users have changed their habits and behavior. A change in strategy and product is needed. They provide data and evidence of this, suggest specific actions to adapt the product.

Project Manager and Product Manager in real life

If it happens that you have mixed responsibilities in your work and you do different tasks, then the position you have been appointed to is simply combined. You may find yourself in a situation where your directors want just that from you.

If it happens that you perform mixed activities on your own initiative without anyone asking you to, then this can mean two main things:

• You give too much of yourself.
• You do not understand well your responsibilities and obligations in the organization.

In the first case, it will be due to your personality.

In the second case, this will be due to an inadequate HR department and directors.

The implementation of mixed activities is not necessarily negative. Whether we accept it as negative may depend on:

• How exactly do we see the situation we are in.
• Do we manage to cope with all our regulated obligations? Do all additional activities interfere with our work?
• Do we really manage to do our job well, if we look at it from the side?

Senior Product Manager & Senior Project Manager role (Mixed activities as a positive)

Sometimes having mixed activities can also be seen as positive.

If the organization that hired you wants this from you as a senior professional, then it expects serious competencies from you. You are probably trusted as an expert with a wide range of experience and skills. Your directors will expect you to be a driving force in the whole product, as well as in the processes, from the point of view of their management (project management).

Your salary will probably be very good.

A Senior position with Regular salary (Mixed activities as a negative)

Sometimes the organization that hired you expects mixed activities from you but does not treat you as a senior role and does not officially recognize the large set of your skills. You can do a lot of activities during the working day, but it doesn't matter. Then most likely your directors follow the principle of "one salary for two positions".

There is always a possibility that the organization that hired you inadvertently applies this approach because your directors simply have no idea of ​​the activities and responsibilities of the project manager and product manager. Then just talk to them. Share all your worries and clearly state your request to be accepted as a senior specialist who deserves a senior salary.

RACI matrix of responsibilities

Author: Beatrice Alvaro

The RACI matrix of responsibilities is a popular tool in project management practices. When there is a common task to be done in a team, sometimes there is a problem with responsibility.

In particular, it is easy to blur the responsibility and it is not entirely clear who is responsible for what in the joint work and for what is not.

The so-called "RACI Matrix", which is a useful tool for allocating responsibilities in the team. With its help, some problems in expectations and coordination between people can be avoided to get the job done more efficiently.

Let's take a closer look at what this is all about.

RACI matrix/chart of responsibilities

The RACI matrix of responsibilities is an acronym of four words:

• R (Responsible) - This is the person who actually works on the task and realizes it in practice;
• A (Accountable) - This is the person with the highest responsibility and authority over the task;
• C (Consulted) - This is the person the task should be consulted;
• I (Informed) - This is the person who needs to be informed about the task.

With the help of the RACI matrix, it is possible to visualize in tabular form who is responsible for what in the work on a certain project or team task. This ensures clarity about the roles that each individual plays in the overall work.

Let's look in particular at each of the elements of the RACI matrix.

R - Responsible

The letter R denotes the person who actually does the work and realizes it. These can be one or more people who have to complete the task, achieve the goal, or make the decision.

Once the work is done, the Responsible (R) should report this to the Accountable (A).

A - Accountable

The letter A marks the person with the highest responsibility and authority over the task. The person in charge (A) distributes the different roles in the RACI matrix among the people, as well as “accepts” the work when the task is completed or a decision is made.

Accountable (A) is usually the project manager. To avoid misunderstandings, it is correct to have only one Accountable person in one project.

C - Consulting

The letter C indicates the person with whom the task should be consulted. These can be one or more people who have to give their opinion before the work is done and finished.

Communication with a Consultant is usually two-way. Such a person helps with information and advice and practically influences the final result of the work.

I - Informed

The letter "I" indicates the person who must be informed about the task. These can be one or more people who need to be kept abreast of the progress of the project or activity.

There is no need to formally agree with Informed, ie. this is not a person in the role of Consultant. Such a person does not contribute directly to the task or decision to be made.

How to make the RACI matrix/chart

To create the RACI matrix, it is necessary to consider the following sequence of steps:

The task is clarified - project, final goal, solution.

One axis of the matrix describes all the tasks and activities that need to be performed.

The other axis of the matrix describes all the people in the team.

A matrix is ​​obtained in which the letters R, A, C and I indicate the attitude (role) of each person concerning the tasks/activities to be performed. For each task/activity, it is indicated who will work, who is responsible, who will consult, and who will be informed.

There should be only one Accountable (A) and at least one Responsible (R) on each row of the RACI matrix. Counseling (C) and Informed (I) are only optional options.

When the RACI matrix is ​​filled, it is good to look in detail. It is useful to consider:

• Is there a balanced distribution of people for all activities and tasks?
• Do people have the necessary high competence to handle their responsibilities?

Once everything is clarified, all team members should be familiarized to be aware of their roles and responsibilities. These roles and responsibilities can also be discussed in advance with people, of course.

Variations of the RACI matrix/chart

The RACI matrix can be found in different areas with other abbreviations, for example:

ARCI matrix

At the forefront is the letter A, which emphasizes the key role of the person with the highest responsibility for the task;

RASCI or RASIC matrix. A fifth element is added - Supportive. This is a person who provides resources and assistance in case of need.

RACI-V. In some situations, a new role is added - Verifies. This is the person who does the quality checks to make sure that the work is done given the quality criteria and standards set initially.

CAIRO. The Omitted role is added. This person is removed from the project and is not involved in the communication of everyone else related to the task.

In some sources, the RACI matrix can also be found as a "Table of Responsibilities".

Who creates the RACI chart?

In project management practices, the project manager usually creates a RACI matrix. Their supervisors (such as a project director or program manager) usually need to approve it. Roles and responsibilities rarely change, but if they do, be sure to update your matrix, table, or another tool you use.

Once this chart is ready, all participants in the project need to get acquainted with it in detail and accept it formally.

It is rare for a team/project member to claim another responsibility or want to do the other person's work. You will not meet a programmer, for example, who wants to be a project manager or vice versa. The director does not like to do design. The designer will not inform stakeholders. That's why you have a project manager. And so on. Now you understand perfectly the complexity of the activities and the need for different responsibilities.

Summary

The RACI matrix helps to allocate responsibilities for a team task. It outlines how everyone contributes most to the ultimate goal.

With the help of the RACI matrix, the risk of mistakes, the inaction of certain people, or duplication of efforts can be reduced. In this sense, the matrix is useful for better communication between people.

Questions and Answers

What is the RACI Matrix of Responsibilities?

The RACI Matrix is a project management tool used to clarify and define roles and responsibilities within a team or organization for specific tasks or projects. The acronym RACI stands for Responsible, Accountable, Consulted, and Informed, which are the four main roles assigned to individuals or groups involved in a project.

How does the RACI Matrix work?

The RACI Matrix is presented in a tabular format with tasks or activities listed in rows and team members or groups listed in columns. Each cell of the matrix corresponds to a specific task and the associated roles:

Responsible (R): This role is assigned to the person or group who is primarily responsible for completing the task or activity. They are the ones who carry out the work and ensure its completion. Having a clear "Responsible" designation prevents confusion and ensures that specific individuals are accountable for specific tasks.

Accountable (A): The accountable role is responsible for the overall outcome of the task. They have the authority to make decisions and are ultimately answerable for the success or failure of the task. The "Accountable" role ensures that there is clear ownership and someone who can be held responsible for the task's overall success.

Consulted (C): Individuals or groups in the consulted role are those who provide input and expertise to the task but are not directly responsible for its execution. They are often sought for advice or feedback during the process. Involving the right people in the "Consulted" role ensures that relevant expertise is considered in decision-making.

Informed (I): The informed role includes individuals or groups who need to be kept informed about the progress and results of the task. They are recipients of communication but are not actively involved in the task's execution. Keeping stakeholders "Informed" ensures transparency and helps manage expectations.

Why is the RACI Matrix valuable in project management?

The RACI Matrix is valuable in project management for several reasons:

Clarity: It provides clear and unambiguous definitions of roles and responsibilities, reducing misunderstandings and conflicts. Team members know exactly what is expected of them and who they should approach for specific tasks.

Efficiency: By assigning specific roles to each task, the RACI Matrix streamlines decision-making and task execution processes. It prevents duplication of efforts and minimizes the risk of tasks falling through the cracks.

Accountability: It ensures that someone is ultimately accountable for the success of each task, promoting ownership and commitment. When individuals know they are accountable, they are more likely to take their responsibilities seriously.

Communication: The RACI Matrix facilitates effective communication by identifying stakeholders who need to be consulted or informed at different stages of the project. It ensures that the right people are involved at the right time, enhancing collaboration and coordination.

How to create a RACI Matrix?

To create a RACI Matrix, follow these steps:

Identify tasks: Start by listing all the tasks or activities involved in the project. Break down the project into manageable components.

List team members: Identify all the team members or groups who will be part of the project. This can include individuals from different departments or external stakeholders.

Assign roles: For each task, assign the appropriate RACI role to each team member or group. Ensure that there is only one person accountable for each task to avoid confusion.

Review and validate: Review the RACI Matrix with all team members to ensure everyone agrees with their assigned roles. This collaborative approach fosters buy-in and reduces the risk of misunderstandings.

Can the RACI Matrix be adapted for different project types or industries?

Yes, the RACI Matrix can be adapted for different project types, industries, and organizational structures. It is a versatile tool that can be used in various contexts to clarify roles and responsibilities in project management.

What challenges can arise when using the RACI Matrix?

Some challenges that may arise when using the RACI Matrix include:

• Ambiguity: It can be challenging to define roles clearly, leading to overlapping or unclear responsibilities. It is essential to ensure that roles are well-defined and understood by all team members.
• Lack of Communication: If team members are not adequately informed or consulted, it can lead to misalignment and delays. Regular communication and updates are crucial to keep everyone on the same page.
• Changes in Project Scope: As project scope evolves, roles and responsibilities may need to be adjusted accordingly. Flexibility is key to adapt the RACI Matrix to changing project requirements.
• How can the RACI Matrix be integrated into project planning?

The RACI Matrix is typically integrated into project planning during the initial stages. It helps in defining roles and responsibilities before the project starts, ensuring that everyone knows their tasks and areas of authority. The matrix should be revisited and updated as needed throughout the project's lifecycle to reflect any changes or adjustments.

Is the RACI Matrix a dynamic or static tool?

The RACI Matrix is a dynamic tool that can evolve throughout the project. As the project progresses, roles may change, and new stakeholders may be involved. Therefore, it requires continuous evaluation and updates to remain relevant and effective.

Can the RACI Matrix be applied to both small and large-scale projects?

Yes, the RACI Matrix is suitable for both small and large-scale projects. It is beneficial in any project where roles and responsibilities need to be clearly defined to ensure efficient execution and accountability.

Navigating the Complex Waters of Project Management: A RACI Matrix Success Story

As a seasoned project manager with two decades of experience under my belt, I've had the privilege of witnessing the evolution of project management practices. One tool that has consistently proven its worth throughout my career is the Responsibility Assignment Matrix (RACI Matrix). Allow me to share a memorable experience that highlights the power and effectiveness of this invaluable tool.

Several years ago, I was tasked with leading a high-stakes project for a multinational corporation. The project involved developing and launching a groundbreaking product that was expected to revolutionize our industry. The stakes were high, and the project was complex, involving multiple teams, stakeholders, and dependencies. It was clear from the outset that keeping everyone aligned and accountable would be a monumental challenge.

Enter the RACI Matrix.

Defining Roles and Responsibilities

The first step in creating our RACI Matrix was to bring together key stakeholders, including department heads, team leads, and subject matter experts. We conducted a series of workshops to identify all the tasks, activities, and deliverables associated with the project.

During these workshops, we used the RACI framework to define roles and responsibilities:

Responsible: This person or team would be responsible for executing the task or activity. In our case, this included project managers, designers, engineers, and marketers.

Accountable: This individual would be accountable for the overall success of the task or activity. In our project, this was the executive sponsor who had the ultimate responsibility for the project's outcome.

Consulted: These were the individuals or teams that would provide input or expertise when needed. This category included subject matter experts from various departments.

Informed: These were the stakeholders who needed to be kept in the loop about the progress of the task or activity. It included executives and other teams impacted by our project.

Achieving Clarity and Accountability

Once we had the roles and responsibilities defined, we created a visual representation of the RACI Matrix. This matrix became our North Star throughout the project. It was prominently displayed in our project management software, and everyone had access to it.

The impact was immediate and profound. Here are a few ways the RACI Matrix transformed our project:

Clear Accountability: With roles and responsibilities explicitly defined, there was no room for ambiguity. Team members knew exactly who was responsible for each task, reducing the risk of tasks falling through the cracks.

Efficient Decision-Making: The RACI Matrix facilitated streamlined decision-making. When issues or challenges arose, we could quickly identify who needed to be consulted or informed, ensuring that decisions were made by the right people at the right time.

Improved Communication: Stakeholders who needed to be informed about project updates received timely communication, which reduced confusion and ensured alignment.

Risk Mitigation: By identifying potential bottlenecks or dependencies early on, we could proactively address them, reducing project risks.

Project Success and Beyond

Thanks in large part to the RACI Matrix, our project was not only completed on time and within budget but also exceeded expectations. The product launch was a resounding success, and our company enjoyed a significant competitive advantage.

This experience reinforced my belief in the power of effective project management tools, and the RACI Matrix has become a staple in my toolkit. It's a testament to the importance of clear roles and responsibilities in any project, regardless of its size or complexity.

As I continue to navigate the ever-evolving landscape of project management, I carry with me the lessons learned from this experience. The RACI Matrix isn't just a tool; it's a beacon that guides teams through the complex waters of project execution, ensuring that everyone stays on course and reaches their destination successfully.

Changes in the Scrum Guide from 2020 - New in Scrum explained with examples

Author: Anton Radev

Scrum has changed in 25 years. Is this change good? When I heard the news, I immediately researched the new in the Scrum Guide. I admit I was quite surprised. What has changed was quite different from my expectations.

The first thing that impressed me was the even shorter version. The Scrum Guide is now 13 pages long. So far it has been 19. I have always shared my opinion that this guide is quite short for most people. Beginners do not have a great chance to learn detailed and useful material for their work.

What are the changes in the Scrum Guide from 2020?

The first change is the use of simpler language.

The creators removed the context of software development. So they want to make their framework even more comprehensive.

Other innovations are slight changes in text format such as re-organized content (e.g., "Measuring Progress toward Goals").

There is already a so-called Product Goal, for which your Product Owner is responsible.

No more talking about roles. For example, the Product Owner role is now just a Product Owner.

The Development Team is now just Developers.

The increment was "potentially releasable". It is now "In order to provide value, the Increment must be usable".

The term self-organization is now self-management.

Sprint Goal is now an official part of the Sprint Backlog. So far, this has only been a good practice, but not part of the manual.

Definition of Done is now much clearer throughout the Increment.

There are no more 3 questions during the Daily Scrum event. What you will talk about during this meeting is entirely your choice. As long as you inspect the progress.

During Sprint Planning, an important official topic was "Why Sprint is Valuable to Stakeholders".

The Sprint Review (known as the demo) is already in the context of a review from both the Sprint Goal and Product Goal perspectives.

The Servant Leadership term no longer exists. The current term is simply Leadership.

Scrum Master and Product Owner can easily participate in the Daily Meeting event as Developers.

The Scrum Master already assists the Product Owner in finding techniques and defining a Product Goal.

What is the Product Goal?

As this is an entirely new topic and at the same time unclear again, let us discuss it in more detail.

This part of the article is based on the publication of Dave West, who only shares some details at the moment. I have taken out only the most important topics and I have not quoted abstract and vague parts of his article.

As these explanations may not be enough for me, or they may push some Scrum teams in an unproductive direction, I will post additions to all of the points here. In these additions, I present my point of view and recommendations for the teams. I also share examples for additional clarity on each point.

Product Goal is the topic that addresses the question of "why" we do all this work.

The word Goal is intentional because it describes two things:

This is something to strive for.

It is measurable when you have achieved it.

The new Scrum Guide does not give details about the details of the Product Goal, thus allowing Scrum teams to form the goal in the right way for their context. For example, some Scrum teams may work for a quarterly Product Goal with clear specifics. Another Scrum team may have a Product Goal that is more abstract.

Here are some of the features of Product Goal:

It is recommended that the Product Goal be clear and concise.

My addition:

Product Goal must be understandable to all. This includes the entire Scrum Team and stakeholders with access to team artifacts.

Example: Your director opens your online resources (such as Jira or Confluence) and reads the purpose of your product. Unfortunately, he doesn't understand anything.

The goal of the product can be achieved without completing all Product Backlog Items.

Addition:

The Product Owner role, as responsible for the Product Backlog and for the product as a whole, may decide to re-prioritize (drop) the unfinished Product Backlog Items. That is, choose not to do at all in the near future. This choice and change in prioritization must be fully compliant with the product requirements.

Example: Your Product Owner can remove User Story regarding importing data from a .pdf file, as it considers importing data only from a .xlsx file into just enough for your product. Make sure no investor or director gets mad because this Item is below in your Product Backlog.

The Product Goal may change over time. Original idea: "understanding of the Product Goal will be refined".

Addition:

It would probably be a good practice to refine your Product Goal rarely only when strong needs are identified, or at the end of your chosen period to achieve the goal.

Example: As you already know, the Scrum community does not accept the radical change of Sprint Backlog Items during the sprint. In this way, we achieve calm work without nerves and crises. When necessary, modifications and changes are made in the next sprint. Changing the Product Goal would also have a negative effect on performance.

Product Goal is transparent in the Product Backlog in the same way that Sprint Goal is transparent in the Sprint Backlog. Each Scrum team will do what is necessary to make this happen depending on their environment.

Addition: In fact, everything should be clear here. The purpose of the sprint is no secret and everyone has access to it. Each Scrum team can publish it in their work software, or print it out and hang it on the wall in their room.

Product Goal compared to Value Proposition

Here's another easy explanation for Product Managers, which is not from Dave West's article, but I think it would be quite useful.

In the PMA Product Management course, we learn what Value Proposition is and the students have an exercise in which they define it.

Product managers need to know what Value Proposition is.

Also, in this context, we can add that the Product Goal can be adopted as a short version of the Value Proposition, which concerns a specific period of time. However, instead of a specific period of time, you can think about your product goal for a specific version of your product, if that will make it easier for you.

And since the Scrum Master role helps your Product Owner find techniques for defining a Product Goal, if you are a Scrum Master or a future one, research the Value Proposition topic right away, as it may be helpful.

Conclusion

The Scrum Guide is now even shorter, instead of becoming more detailed and offering more knowledge. Instead of more free knowledge for everyone, this reduction is likely to keep the need for additional detailed courses. Simplifying the language should help readers. There is some improvement here, but the whole abstraction and still many vague terms remain.

"Increment must be usable". Usable is again an abstract concept.

I would recommend everyone to read the term Usability in product development.

Also, note the relationship between "usable" and the absence of serious defects. That is - your work has no bugs.

The Scrum Guide now really looks like a brochure or an advertisement. But there is no longer version. Everyone in the world interprets this guide as they wish. Everything remains the same as before.

Definition of Done has already been explained, which is pretty good.

Since Scrum Master and Product Owner are also developers attending the Daily Scrum event, you need to be warier of conflicts of interest. Also without the old interesting questions, and since everyone is a developer, the event is more and more like people who come together and talk. Specialists who do not know those old classic eternal questions will not have an example of how to inspect and discuss their risks and problems.

Scrum preaches events of fixed duration. However, this does not prevent team members from meeting as many times a day as they wish and discussing their problems, regardless of their duration. The Daily Scrum event seems a bit redundant now.

The competent Product Owner seems to need to know more and more product practices in order to be able to cope with the product goal. At the same time, however, your Scrum Master should support his colleague Product Owner in this part as well. There is still the idea that the Scrum Master role should have the best "research skills" and competencies to support the very important Product Owner, who should be responsible for the product and should not be a beginner amateur.

Contradictions remain with the new changes.

Maybe we will meet a new generation of Scrum Masters, for whom Leadership is different from Servant leadership and probably have not heard the old term.

The Development Team at least gave a sense of unity among the developers. They are no longer a team, only developers.

Advanced teams really have more leeway and can use their own definitions, interpretations, and practices. In fact, advanced teams have always followed their own practices, work styles, and rules (which actually often break Scrum rules).

All modules and topics in the Scrum course of PMA for example will keep their old content so that everyone can learn the old rules. The new will be noted in the relevant comparison sections. Let every professional have a basis for comparison with before and now and let everyone choose a team to choose their terminology, rules, and ideas.

How does employee experience affect the company's success?

Author: Kaarina Nieminen

What is employee experience? The term Employee Experience comes from marketing and describes the customer's experience in contact with the company: from the moment of entering the store, visiting the site (interview), and ending with purchase and service (leaving the company).

These are all the impressions that the customer (employee) receives daily in contact with the company.

Many HR professionals today believe that creating a positive employee experience is their top priority. From customer experience to employee experience.

The concept of "customer experience" is born from the understanding that a satisfied and happy customer becomes a brand ambassador and advocate. According to the same principle, it is argued that the opinion of an employee who is satisfied with his work experience in the company becomes a tool for promotion.

Richard Branson, the founder of Virgin, argued that a successful organization should look after its people first, then its customers, and lastly its shareholders. Why is this so important?

Symmetry of attention

In cases where the manager requires employees to be attentive and special to their customers, it is assumed that the employees themselves are treated in the same way. This is called "attentional symmetry."

It's not so much about fairness as it is about logic and efficiency. Recommendations for communication with customers often boil down to the fact that you need to respond quickly, carefully treat each request, and necessarily offer a solution. If an employee within his organization does not see and feel the same approach to himself, difficulties and problems arise in internal communication. This will inevitably lead to a decrease in work efficiency. The "Do as I say, not as I do" rule is known to not work.

A company with an empathetic, dynamic and proactive approach to management naturally and easily develops a caring attitude towards customers.

The employee is a client of the HR department

This idea is not new: every good manager knows that it is most effective to show by example. However, the fact is that HR personnel are beginning to monitor, measure, and discuss the "employee experience". And now this direction is separated as a separate area that needs to be worked on.

In today's increasingly service-oriented economy, relationships are becoming a key asset for companies that can build relationships.

Organizations can no longer ignore the emotions and impressions of customers and employees, it becomes part of marketing and promotion.

Thus, today your employee is not only a specialist providing a service, but also a brand advocate. Thus, today your employee is not only a specialist providing a service but also a defender of the brand.

The wide transparency that has appeared in our lives thanks to digital tools has led to the fact that every opinion and review can become visible to a large number of people.

Subordinate or partner

The role of the HR specialist in the company changes with the development of the market. He no longer manages a group of subordinates.

Today, he must care for project team members who are in partnerships rather than vertical relationships with their management. He should be interested in challenges, problems, and desires and support the team so that everyone shares the goals with the organization as a whole.

In addition, with the emergence of the opportunity to work with freelancers, outsourcing employees, and external consultants, the question arose of how to combine separate and independent work units into a team.

Improving the employee experience should be one of the top priorities for your company's HR department.

One of the tools is the implementation of an understandable and intuitive personnel management system, which will allow the employee to trace his path in the company, feel his participation in an organized and careful corporation, get quick answers to his wishes, learn new skills and to plan his professional development.

HR communications must become HR marketing

Bernard Duperin from Emakina France, a recognized specialist in digital transformation, spoke very interestingly about the approach to HR at the marketing level when it is not the marketer in the usual sense who deals with it, but the recruiter himself.

Where is the chief marketing officer in human resources?

HR marketing is not the same as HR communication. On the client-side, we can sometimes observe a specialist who combines both functions, but it is obvious that on the HR side, we usually only deal with communication.

Communication pays attention to the purpose of message delivery, marketing to the actions taken as a result of the message. One says "this is good", the second "subscribe". There are world-renowned businesses whose products are unknown, as well as the opportunity to become a customer. That is, the brand is famous, but are all the products famous?

Same thing with recruiting. Communications - "I know the company exists and they have values", and Marketing - "they have a project that I can see myself in, and they have a vacancy that I need to respond to".

Employer brand and employee experience

To date, from an HR perspective, companies have communicated using two wildcards – brand and proposition. A brand usually has a more or less stable list of values and pluses that make the business acceptable to the employee. The proposal represents an open path to a final deal. Sometimes with some counterproductive strategic actions.

Consumer marketing figured this out a long time ago. Too strong a generalization is not good: you need to segment and qualify the task as much as possible to effectively apply forces in the right place.

It has also recently become clear that behind the products and services provided to the consumer is a "buying" experience. That is, remaining at the level of consumption, HR communications do not reach the level of employee experience.

Focusing the HR function exclusively on the user

Monsieur Duperin often makes a connection between the digitalization of the organization and its reorientation to the needs of the end-user. In the sense that if the end-user is happy, then that's what we should work for, regardless of how the employees performing the service feel.

How can anyone assume that a candidate doesn't use the same logic when researching and making employment decisions that they use when choosing a consumer product? It can be assumed that the level of exactingness, skepticism, and detail will be even higher due to the importance of the subject of choice than most everyday consumption decisions.

In short, the candidate buys, of course, not the job, he "buys" work experience in the company, and all this becomes more and more obvious with each difficult-to-fill position or with new generations of employees who are no longer bought by words without evidence.

A marketing approach to the candidate is a must

In summary, it all boils down to the fact that a marketing approach is needed in HR. An approach that is expressed in the following:

• Where communications segment audiences, marketing is actively targeted;
• Position and company are products with a value proposition and transparent obligations, and contracts. The employer's value proposition is no longer effective at this time;
• Taking into account the concept of the employment process from A to Z: unknown, target (targeting), a candidate who must be suitable for the company while working in it. We don't waste time talking, we make the event happen;
• The concept of knowledge - first a candidate, then an employee;
• The concept of personalization is based on personality knowledge. Personalization of approach, offer the position, and communication. Customization of the experience that should continue when an employee is accepted into the company;
• The concept of a holistic approach is when the experience is adapted in all directions. For example, did you know that more and more candidates want to be able to send resumes via mobile devices, and manually downloading resumes and job descriptions are considered obsolete;
• The point of contact concept: who to mobilize, how to ensure that all contacts are established with candidates with the necessary experience. What do we apply / meaning for each touch point;
• The concept of programming/advertising strategies;
• The need to convey the message in the tone and format that will be most effective for each direction and target audience.

Bernard doesn't mention much, but one thing is absolutely clear – HR departments must continue with the real marketing and candidate experience, and go beyond their usual HR communication. 

Will marketing break through HR? Why not! Bernard believes that part of the future of HR will have to transform into a marketing function if the passivity of HR functions is not to one day face an insurmountable obstacle.