Theories

• Tannenbaum Schmidt Continuum


  A model that highlights the range of different management styles that may be adopted ranging from a 'tell' approach to one that involves delegation
• Tannenbaum Schmidt Continuum


  • Highlights that there are a range of styles rather than categorising management and leadership simply in terms of either authoritarian and democratic. It shows that there is a continuum
• Blake Mouton Grid


  A model that highlights different management styles, according to their focus on the task and the people within the business
• Scientific decision making


  A model that highlights the different stages in a scientific, data based approach to decision making. It outlines a logical sequential process
• Decision trees


  Provides an example of scientific decision making
• Stakeholder mapping

  Categorises stakeholders in terms of their relative power and interest
• Market mapping


  Identifies how products/brands are perceived by customers relative to other products/brands in the market
• Price elasticity of demand


  Measures the sensitivity of demand to changes in price
• Income elasticity of demand


  Measures the sensitivity of demand to changes in income
• STP segmentation, targeting, positioning


  Outlines the marketing process of segmentation, targeting and positioning
• Income elastic demand


  Income elasticity of demand is greater than 1
• Income inelastic demand


  Income elasticity of demand is less than 1
• When to use income elasticity of demand


  • When studying influences on demand
  • When studying correlation (it shows how one variable changes when another one changes)
  • When considering how a business might prepare for or be affected by changes in the incomes of its customers (ie, changes in revenue may be affected by demand and this in turn will influence factors such as cash flow, profit forecasts, inventory and human resource planning)
• Segmentation, targeting, positioning (STP)

  Outlines the marketing process
• Segmentation, targeting, positioning (STP)

  1. Analyse a market to identify the segments that exist

  2. Select which segments they think the business should target (depending on eg relative strengths)

  3. Decide where in the targeted markets the products should be positioned relative to competitors
• When to use segmentation, targeting, positioning (STP)

  • How markets are segmented
  • What makes a segment attractive to a business
  • Why a business might target relatively few or many segments
  • How a business might decide to position its products (this links with market mapping)
  • The nature of the marketing mix because this must link back to the target market and positioning of the product
• 7Ps of the marketing mix

  Analysing the marketing mix using the 4Ps may be enhanced by adding additional elements to it. These further elements may be particularly relevant in a service economy.
• The 7Ps

  • Product
  • Promotion
  • Price
  • Place
  • People
  • Physical environment
  • Process
• People


  In a service economy, the people who serve you, and factors such as how trained they are and how knowledgeable they are about the products, can be important considerations
• Physical environment


  In a service outlet, the environment can influence your decisions to shop there as well as influence how long you stay and how much you buy
• Process


  The process involved in a transaction can affect the customer experience. For example, is it easy to register with an online business? Is there an easy ordering and payment system?
• When to use the 7Ps

  • When considering how a business might try to become more competitive students might want to analyse how improving the different elements of the mix could help
• Boston Matrix


  A common method of portfolio analysis developed by the Boston Consulting Group (BCG). It assesses how products are performing in relation to market share and market growth.
• Boston Matrix quadrants

  • Dogs (low market share, low market growth)
  • Cash cows (high market share, low market growth)
  • Problem children (low market share, high market growth)
  • Stars (high market share, high market growth)
• The purpose of the Boston Matrix is to identify typical stages of a product over time
• How long each stage of the product life cycle lasts will vary
• Managers must interpret data carefully; for example, a fall in sales may be the start of the decline phase or may simply be a temporary fall
• When to use the product life cycle

  • To show how the marketing mix needs to be adapted at different stages
  • To consider the different possible life cycles of different products
  • To explore the relationship between marketing and other functions
• Inventory control chart

  Highlights issues relating to inventory management such as the re-order level, re-order quantity, usage rates and lead time
• When to use the inventory control chart

  • When considering inventory management and factors affecting the level of buffer stock, re-order quantities, re-order levels, usage rates, lead times
  • What happens if usage rates increase unexpectedly
  • What happens if inventory is too high or too low
• Hackman and Oldham's model of job design

  Identifies factors that influence the motivating potential of a job
• Core job characteristics in Hackman and Oldham's model

  • Skill variety
  • Task identity
  • Task significance
  • Autonomy
  • Feedback from the job
• The higher a job scores on the core job characteristics, the more motivating the job is likely to be
• If a job scores lowly in one or more of the core job characteristics it will reduce its motivating potential
• When to use Hackman and Oldham's model of job design


  • When discussing job design and the impact of motivation, you could consider the different intrinsic aspects of a job and therefore link motivational theorists such as Herzberg
• Motivation


  Motivation is an important aspect of managing people. It can affect commitment, creativity, cooperation, retention rates, and labour turnover rates. However, motivation alone does not guarantee more productivity.
• Herzberg's two-factor theory

  Identifies hygiene factors (extrinsic elements that prevent dissatisfaction) and motivators (intrinsic factors that actually motivate)
• Maslow's hierarchy of needs


  Sets out levels of needs that people have, and that managers should try to meet the next level on the hierarchy to motivate employees
• Taylor's scientific management

  Monitors how a task is being completed, develops the 'one best way' of completing a job, and pays employees based on output (piece-rate)
• Almost anything that changes the terms and conditions of employees is likely to have an impact on employees' motivation