Sales and Marketing Toolkit

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Sales & Marketing Planning WORKBOOK :

Sales & Marketing Planning WORKBOOK August 2011 Dr. Earl Stevens

Developing a strategic business plan:

Developing a strategic business plan Toolbox

The Usual Business Planning Hierarchy:

The Usual Business Planning Hierarchy

Strategic Planning – Many Sub Plans:

Strategic Planning – Many Sub Plans

Framework of a Successful Organisation:

Framework of a Successful Organisation

Business Planning and Delivery :

Business Planning and Delivery

Vision is a Critical Driver:

Vision is a Critical Driver To succeed in the long term, our business needs a vision of how we will change and improve in the future. “without a vision, the people perish” The vision of the business gives its energy. It helps motivate us. It helps set the direction of corporate and marketing strategy.

Values underpin all we do:

Values underpin all we do Values form the foundation of a business’ management style. Values provide the justification of behaviour and, therefore, exert significant influence on marketing decisions. An example is provided by BT Group - defining its values: BT's activities are underpinned by a set of values that all BT people are asked to respect: We put customers first We are professional We respect each other We work as one team We are committed to continuous improvement. These are supported by our vision of a communications-rich world - a world in which everyone can benefit from the power of communication skills and technology. A society in which individuals, organisations and communities have unlimited access to one another and to a world of knowledge, via a multiplicity of communications technologies including voice, data, mobile, internet - regardless of nationality, culture, class or education. Our job is to facilitate effective communication, irrespective of geography, distance, time or complexity. Source: BT Group plc website

Has the Company got a strong Clear Mission?:

Has the Company got a strong Clear Mission? The Business Mission is important to our sales & marketing planning It provides an outline of how the marketing plan should seek to fulfil the mission It provides a means of evaluating and screening the marketing plan; are marketing decisions consistent with the mission? It provides an incentive to implement the marketing plan

Slide 10:

"Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment , to meet the needs of markets and to fulfil stakeholder expectations".

Strategic Audit - ensuring that the Company resources and competencies are understood and evaluated :

Strategic Audit - ensuring that the Company resources and competencies are understood and evaluated

Need to work within Company Resources & Constraints:

Need to work within Company Resources & Constraints

Objectives - Corporate & Functional:

Objectives - Corporate & Functional

Value Chain Analysis:

Value Chain Analysis Value Chain Analysis describes the activities that take place in a business and relates them to an analysis of the competitive strength of the business. Michael Porter suggested that the activities of a business could be grouped under two headings: Primary Activities - those that are directly concerned with creating and delivering a product (e.g. component assembly); and Support Activities , which whilst they are not directly involved in production, may increase effectiveness or efficiency (e.g. human resource management). It is rare for a business to undertake all primary and support activities. Value Chain Analysis is one way of identifying which activities are best undertaken by our business and which are best provided by others ("outsourced"). Linking Value Chain Analysis to Competitive Advantage What activities a business undertakes is directly linked to achieving competitive advantage. For example, if we wish to outperform our competitors through differentiating ourselves through higher quality then we will have to perform our value chain activities better than the opposition. But if we adopt a strategy based on seeking cost leadership this will require a reduction in the costs associated with the value chain activities, or a reduction in the total amount of resources used.

Primary Activities Primary value chain activities include::

Primary Activities Primary value chain activities include: Primary Activity Description Inbound logistics All those activities concerned with receiving and storing externally sourced materials Operations The manufacture of products and services - the way in which resource inputs (e.g. materials) are converted to outputs (e.g. products) Outbound logistics All those activities associated with getting finished goods and services to buyers Marketing and sales Essentially an information activity - informing buyers and consumers about products and services (benefits, use, price etc.) Service All those activities associated with maintaining product performance after the product has been sold

Support Activities Support activities include::

Support Activities Support activities include: Secondary Activity Description Procurement This concerns how resources are acquired for a business (e.g. sourcing and negotiating with materials suppliers) Human Resource Management Those activities concerned with recruiting, developing, motivating and rewarding the workforce of a business Technology Development Activities concerned with managing information processing and the development and protection of "knowledge" in a business Infrastructure Concerned with a wide range of support systems and functions such as finance, planning, quality control and general senior management

Steps in a Value Chain Analysis:

Steps in a Value Chain Analysis

Core competencies:

Core competencies Core competencies are those capabilities that are critical to a business achieving competitive advantage. The starting point for analysing core competencies is recognising that competition between businesses is as much a race for competence mastery as it is for market position and market power. Senior management cannot focus on all activities of a business and the competencies required to undertake them. So the goal is for management to focus attention on competencies that really affect competitive advantage. Core Competencies are not seen as being fixed. Core Competencies should change in response to changes in the company's environment. They are flexible and evolve over time. As a business evolves and adapts to new circumstances and opportunities, so its Core Competencies will have to adapt and change. We need to understand what we are good and what makes us better and to hone these advantages and to develop new ones to underpin the business strategy

Identifying Core Competencies Prahalad and Hamel suggest three factors to help identify core competencies in any business::

Identifying Core Competencies Prahalad and Hamel suggest three factors to help identify core competencies in any business: What does the Core Competence Achieve? Comments Provides potential access to a wide variety of markets The key core competencies are those that enable the creation of new products and services . Makes a significant contribution to the perceived customer benefits of the end product Core competencies are the skills that enable a business to deliver a fundamental customer benefit - in other words: what is it that causes customers to choose one product over another? To identify core competencies in a particular market, ask questions such as "why is the customer willing to pay more or less for one product or service than another?" "What is a customer actually paying for? Difficult for competitors to imitate A core competence should be "competitively unique" : In many industries, most skills can be considered a prerequisite for participation and do not provide any significant competitor differentiation. To qualify as "core", a competence should be something that other competitors wish they had within their own business.

Porter’s 5 Forces of Competitive Position:

Porter’s 5 Forces of Competitive Position

Porter’s 5 Forces of Competitive Position:

Porter’s 5 Forces of Competitive Position

Strategic Planning Link with Marketing Planning:

Strategic Planning Link with Marketing Planning Businesses that succeed do so by creating and keeping customers. They do this by providing better value for the customer than the competition. Marketing management constantly have to assess which customers they are trying to reach and how they can design products and services that provide better value (“competitive advantage”). The main problem with this process is that the “environment” in which businesses operate is constantly changing. So a business must adapt to reflect changes in the environment and make decisions about how to change the marketing mix in order to succeed. This process of adapting and decision-making is known as marketing planning.

Strategic vs. Marketing Plans:

Strategic vs. Marketing Plans Strategic planning is concerned about the overall direction of the business. It is concerned with marketing, of course. But it also involves decision-making about production and operations, finance, human resource management and other business issues. The objective of a strategic plan is to set the direction of a business and create its shape so that the products and services it provides meet the overall business objectives. Marketing has a key role to play in strategic planning, because it is the job of marketing management to understand and manage the links between the business and the “environment”. Sometimes this is quite a straightforward task. For example, in many small businesses there is only one geographical market and a limited number of products (perhaps only one product!). However, consider the challenge faced by marketing management in a multinational business, with hundreds of business units located around the globe, producing a wide range of products. Keeping control of marketing decision-making in such a complex situation calls for well-organised marketing planning.

Key issues in strategic and marketing planning?:

Key issues in strategic and marketing planning? The following questions are key in the marketing and strategic planning process: Where are we now? How did we get there? Where are we heading? Where would we like to be? How do we get there? Are we on course? A marketing plan helps to: The ability of a business to achieve profitable sales is impacted by dozens of environmental factors, many of which are inter-connected Identify sources of competitive advantage Gain commitment to a strategy Get resources needed to invest in and build the business Inform stakeholders in the business Set objectives and strategies Measure performance

SWOT Analysis is still a useful Tool:

SWOT Analysis is still a useful Tool

PEST or SWOT:

PEST or SWOT A PEST analysis most commonly measures a market ; a SWOT analysis measures a business unit, a proposition or idea . Generally speaking a SWOT analysis measures a business unit or proposition, whereas a PEST analysis measures the market potential and situation, particularly indicating growth or decline, and thereby market attractiveness, business potential, and suitability of access - market potential and 'fit' in other words. PEST analysis uses four perspectives, which give a logical structure, in this case organized by the PEST format, that helps understanding, presentation, discussion and decision-making. PEST analysis can be used for marketing and business development assessment and decision-making, and the PEST template encourages proactive thinking, rather than relying on habitual or instinctive reactions.

PEST Analysis - market, business, proposition, etc.:

POLITICAL ecological/environmental issues current legislation home market future legislation European/international legislation regulatory bodies and processes government policies government term and change trading policies funding, grants and initiatives home market lobbying/pressure groups international pressure groups wars and conflict ECONOMIC home economy situation home economy trends overseas economies and trends general taxation issues taxation specific to product/services seasonality/weather issues market and trade cycles specific industry factors market routes and distribution trends customer/end-user drivers interest and exchange rates international trade/monetary issues SOCIAL lifestyle trends demographics consumer attitudes and opinions media views law changes affecting social factors brand, company, technology image consumer buying patterns fashion and role models major events and influences buying access and trends ethnic/religious factors advertising and publicity ethical issues TECHNOLOGICAL competing technology development research funding associated/dependent technologies replacement technology/solutions maturity of technology manufacturing maturity and capacity information and communications consumer buying mechanisms/technology technology legislation innovation potential technology access, licencing, patents intellectual property issues global communications PEST Analysis - market, business, proposition, etc .

Best Companies Spend more time on Forward Planning than Historical Analysis:

Best Companies Spend more time on Forward Planning than Historical Analysis Achieving Agility Through a New Approach to Forecasting In today’s turbulent economy, rolling forecasts are proving to be an important new tool in changing the way budgeting and planning has traditionally been handled. Mary Brandel

Benefits of Rolling Forecasts :

Benefits of Rolling Forecasts

Marketing Planning:

Marketing Planning Toolbox

Do We Understand Marketing?:

Do We Understand Marketing? Marketing is about meeting the needs and wants of customers Marketing is a business-wide function – it is not something that operates alone from other business activities Marketing is about understanding customers and finding ways to provide products or services which customers demand Sales is subset of marketing Marketing Definitions: “The all-embracing function that links the business with customer needs and wants in order to get the right product to the right place at the right time” “The achievement of corporate goals through meeting and exceeding customer needs better than the competition” “The management process that identifies, anticipates and supplies customer requirements efficiently and profitably”

Marketing Map:

Marketing Map

Marketing Orientation is Key:

Marketing Orientation is Key A business that has a marketing orientation sees the needs of customers and consumers as vital. As it develops and markets products to meet those demands, certain structural characteristics become apparent in the business. Business Function Activities Identifying customer/consumer needs and wants Marketing research Developing products to meet customer/consumer needs and wants Research and development Production Deciding on the value of the product to customers Pricing (sales and marketing department) Making the product available to customers at the right time and place Distribution Informing customers/consumers of the existence of the product and persuading them to buy it Promotion

Alternatives to a Marketing Orientation & Dangers:

Alternatives to a Marketing Orientation & Dangers Sales orientation Some businesses see their main problem as selling more of the product or services which they already have available. They may therefore be expected to make full use of selling, pricing, promotion and distribution skills (just like a marketing-orientated business). The difference is that a sale-orientated business pays little attention to customer needs and wants, and does not try particularly hard to create suitable products or services. Production orientation A production-orientated business is mainly concerned with making as many units as possible. By concentrating on producing maximum volumes, such a business aims to maximise profitability by exploiting economies of scale. In a production orientated business, the needs of customers are secondary compared with the need to increase output. Such an approach is probably most effective when a business operates in very high growth markets or where the potential for economies of scale is significant. Product orientation This is subtly different from a production orientation. Consider a business that is “obsessed” with its own products – perhaps even arrogant about how good they are. Their products may start out as fully up-to-date and technical leaders. However, by failing to consider changing technological developments or subtle changes in consumer tastes, a product-orientated business may find that its products start to lose ground to competitors.

Marketing Audit:

Marketing Audit “Marketing audit is a comprehensive, systematic, independent, and periodic examination of a company’s—or business unit’s—marketing environment, objectives, strategies, and activities with a view to determining problem areas and opportunities and recommending a plan of action to improve the company’s marketing performance” Philip Kotler

Characteristics of Marketing Audit:

Characteristics of Marketing Audit Comprehensive Must cover all marketing areas Systematic Sequential diagnostic steps Independent Internal & external auditors Periodic Performed at regular intervals

Marketing Audit Procedure:

Marketing Audit Procedure Marketing environment audit Marketing strategy audit Marketing organization audit Marketing system audit Marketing productivity audit Marketing function audit Marketing excellence review Ethical and social responsibility review

Marketing Management:

Marketing Management Marketing Task Commentary Identify target markets Management have to identify those customers with whom they want to trade. The choice of target markets will be influenced by the wealth consumers hold and the business' ability to serve them Market research Management have to collect information on the current and potential needs of customers in the markets they have chosen to supply. Areas to research include how customers buy (which marketing channels are used) and what competitors are offering Product development Businesses must develop products and services that meet needs and wants sufficiently to attract target customers to wish and buy Marketing mix Having identified the target markets and developed relevant products, management must then determine the price, promotion and distribution for the product. The marketing mix is tailored to offer value to customers, to communicate the offer and to make it accessible and convenient Market monitoring The objective in marketing is to first attract customers - and then (most importantly) retain them by building a relationship. In order to do this effectively, they need feedback on customer satisfaction. They also need to feed this back into product design and marketing mix as customer needs and the competitive environment changes

Customer Support Structure:

Customer Support Structure

Strategic Marketing is a Process:

Strategic Marketing is a Process Source: Macdonald (1995)

Key Elements of Marketing Strategy Formulation:

Key Elements of Marketing Strategy Formulation The strategic 3 Cs Customers, Competitors & the Corporation Environment analysis -- PEST Strategic Marketing Decisions Where to compete How to compete When to compete

A Viable Marketing Strategy:

A Viable Marketing Strategy Must have a clearly defined market Must have a good match between corporate strengths and market needs Must have significant positive differentiation in the key success factors of the business

Corporate Objectives need to Become Grass-Roots Plans:

Corporate Objectives need to Become Grass-Roots Plans

Setting Objectives is “SMART”:

Setting Objectives is “SMART”

The four “P’s” of Marketing:

The four “P’s” of Marketing

The four “P’s” of Marketing:

The four “P’s” of Marketing

Products 101:

Products 101 A product is defined as: "Anything that is capable of satisfying customer needs“ The process by which companies distinguish their product offerings from the competition is called branding. For most companies, brands are not developed in isolation - they are part of a product group . A product group (or product line) is a group of brands that are closely related in terms of their functions and the benefits they provide There are two main types of product brand: (1) Manufacturer brands (2) Own-label brands Manufacturer brands are created by producers and use their chosen brand name. The producer has the responsibility for marketing the brand, by building distribution and gaining customer brand loyalty. Own-label brands are created and owned by distributors. Good examples include Woolworths and Foodtown. The main importance of branding is that, done well, it permits a business to differentiate its products, adding extra value for consumers who value the brand, and improving profitability for the company.

Product Portfolio Planning:

Product Portfolio Planning Businesses must manage their products carefully over time to ensure that they deliver products that continue to meet customer wants. The process of managing groups of brands and product lines is called portfolio planning. Two models of product portfolio planning are widely known and used in business: The Boston Group Growth-Share Matrix, and GE/McKinsey Market Attractiveness model

Boston Consulting Group Matrix:

Boston Consulting Group Matrix The BCG Matrix is used to Assess existing and development products in terms of their market potential, and assist in developing strategic action for products and services in each category. LOW MARKET SHARE HIGH MARKET SHARE GROWING MARKET Problem Child (Rising) Star MATURE MARKET Dog Cash Cow

GE/McKinsey Matrix:

GE/McKinsey Matrix The McKinsey/GE Matrix overcomes a number of the disadvantages of the BCG Matrix. Firstly , market attractiveness replaces market growth as the dimension of industry attractiveness, and includes a broader range of factors other than just the market growth rate. Secondly , competitive strength replaces market share as the dimension by which the competitive position of each SBU is assessed. Market Attractiveness High Medium Low Competitive Strength High Medium Low

McKinsey Growth Pyramid:

McKinsey Growth Pyramid

Product & Market Development:

Product & Market Development Businesses need to regularly look for new products and markets for future growth. A useful way of looking at growth opportunities is the Ansoff Growth matrix which suggests that there are four main ways in which growth can be achieved through a product strategy: Market penetration - Increase sales of an existing product in an existing market Product development - Improve present products and/or develop new products for the current market Market development - Sell existing products into new markets (e.g. developing export sales) Diversification - Develop new products for new markets

Ansoff Growth Matrix:

Ansoff Growth Matrix The Ansoff Matrix is used to help businesses decide their product and market growth strategy. Ansoff’s product/market growth matrix suggests that a business’ attempts to grow depend on whether it markets new or existing products in new or existing markets .

Innovation – Key to Growth:

Innovation – Key to Growth

Step Change for Successful Product Transition & Growth:

Step Change for Successful Product Transition & Growth Companies can be usefully defined by their Products, Technologies & Markets Growth is inevitably disastrous if the 2 – 3 of these factors are changed at once. By changing one at a time the company will maximise the chances of profitable success. “Sticking to the knitting – stepwise” Technologies Products Markets

Product Life Cycle:

Product Life Cycle The stages through which individual products develop over time is called the "Product Life Cycle". The classic product life cycle has four stages (illustrated below): introduction, growth, maturity and decline

Steps in the Product Life Cycle:

Steps in the Product Life Cycle Introduction Stage At the Introduction (or development) Stage market size and growth is slight. it is possible that substantial research and development costs have been incurred in getting the product to this stage. In addition, marketing costs may be high in order to test the market, undergo launch promotion and set up distribution channels. It is highly unlikely that companies will make profits on products at the Introduction Stage. Products at this stage have to be carefully monitored to ensure that they start to grow. Otherwise, the best option may be to withdraw or end the product. Growth Stage The Growth Stage is characterised by rapid growth in sales and profits. Profits arise due to an increase in output (economies of scale)and possibly better prices. At this stage, it is cheaper for businesses to invest in increasing their market share as well as enjoying the overall growth of the market. Accordingly, significant promotional resources are traditionally invested in products that are firmly in the Growth Stage. Maturity Stage The Maturity Stage is, perhaps, the most common stage for all markets. it is in this stage that competition is most intense as companies fight to maintain their market share. Here, both marketing and finance become key activities. Marketing spend has to be monitored carefully, since any significant moves are likely to be copied by competitors. The Maturity Stage is the time when most profit is earned by the market as a whole. Any expenditure on research and development is likely to be restricted to product modification and improvement and perhaps to improve production efficiency and quality. Decline Stage In the Decline Stage, the market is shrinking, reducing the overall amount of profit that can be shared amongst the remaining competitors. At this stage, great care has to be taken to manage the product carefully. It may be possible to take out some production cost, to transfer production to a cheaper facility, sell the product into other, cheaper markets. Care should be taken to control the amount of stocks of the product. Ultimately, depending on whether the product remains profitable, a company may decide to end the product.

Integration of Product Sales & Marketing:

Integration of Product Sales & Marketing

Product Life Cycle Examples:

Product Life Cycle Examples INTRODUCTION GROWTH MATURITY DECLINE Third generation mobile phones Portable DVD Players Personal Computers Typewriters E-conferencing Email Faxes Handwritten letters All-in-one racing skin-suits Breathable synthetic fabrics Cotton t-shirts Shell Suits iris-based personal identity cards Smart cards Credit cards Cheque books

The four “P’s” of Marketing:

The four “P’s” of Marketing

Setting the right price an important part of effective marketing:

Setting the right price an important part of effective marketing It is the only part of the marketing mix that generates revenue (product, promotion and place are all about marketing costs). Price is also the marketing variable that can be changed most quickly, perhaps in response to a competitor price change. The price of a product may be seen as a financial expression of the value of that product. For a customer, price is the monetary expression of the value to be enjoyed/benefits of purchasing a product, as compared with other available items.

Product Price is the most obvious indicator of cost - need to get product pricing right. :

Product Price is the most obvious indicator of cost - need to get product pricing right. Factors within a businesses’ control include: Price (assuming an imperfect market – i.e. not perfect competition) Product research and development Advertising & sales promotion Training and organisation of the sales force Effectiveness of distribution (e.g. access to retail outlets; trained distributor agents) Quality of after-sales service (e.g. which affects demand from repeat-business) Factors outside the control of business include: The price of substitute goods and services The price of complementary goods and services Consumers’ disposable income Consumer tastes and fashions Price is a critically important element of the choices available to businesses in trying to attract demand for their products.

Pricing - Link Between Price And Business Objectives:

Pricing - Link Between Price And Business Objectives The pricing objectives of businesses are generally related to satisfying one of five common strategic objectives: To Maximise Profits To Meet a Specific Target Return on Investment (or on net sales) Target return pricing is effective as an overall performance measure of the entire product line, but for individual items within the line, certain strategic pricing considerations may require the raising or lowering of the standard price. To Achieve a Target Sales Level Many businesses measure their success in terms of overall revenues. This is often a proxy for market share. Pricing strategies with this objective in mind usually focus on setting price that maximises the volumes sold. To Maintain or Enhance Market Share As an organisational goal, the achievement of a desired share of the market is generally linked to increased profitability . To Meet or Prevent Competition Prices are set at a level that reflects the average industry price, with small adjustments made for unique features of the company’s specific product(s). Firms that adopt this objective must work ‘backwards’ from price and tailor costs to enable the desired margin to be delivered.

Key influences on Pricing Policy:

Key influences on Pricing Policy (1) Costs In order to make a profit, a business should ensure that its products are priced above their total average cost. In the short-term, it may be acceptable to price below total cost if this price exceeds the marginal cost of production – so that the sale still produces a positive contribution to fixed costs. (2) Competitors If the business is a monopolist, then it can set any price. At the other extreme, if a firm operates under conditions of perfect competition, it has no choice and must accept the market price. The reality is usually somewhere in between. In such cases the chosen price needs to be very carefully considered relative to those of close competitors. (3) Customers Consideration of customer expectations about price must be addressed. Ideally, a business should attempt to quantify its demand curve to estimate what volume of sales will be achieved at given prices (4) Business Objectives See over

Factors influencing Pricing & Profit Margin:

Factors influencing Pricing & Profit Margin Nature of the market Mark-up will reflect the degree of competition in the market (what do the close competitors do?) Bulk discounts Should volume orders attract a lower mark-up than a single order? Are there real economies of scale to pass on? Does the overall value of the customer (key account or distributor) demand a discount to reflect the importance of the business? Pricing strategy e.g. skimming, penetration, etc Stage of the product in its life cycle Products at the earlier stages of the life cycle may need a lower mark-up percentage to help establish demand.

Cost Plus Pricing (Avoid):

Cost Plus Pricing (Avoid) Total budgeted factory cost + selling / distribution costs + other overheads + mark up on cost = Price The advantages of using cost plus pricing are: Easy to calculate Price increases can be justified when costs rise Price stability may arise if competitors take the same approach (and if they have similar costs) Pricing decisions can be made at a relatively junior level in a business based on formulas The main disadvantages of cost plus pricing are often considered to be: This method ignores the concept of price elasticity of demand - it may be possible for the business to charge a higher (or lower) price to maximise profits depending on the responsiveness of customers to a change in price The business has less incentive to cut or control costs - if costs increase, then selling prices increase.  However, this might be making an "inefficient" business uncompetitive relative to competitor pricing; It requires an estimate and apportionment of business overheads.  For example, total factory overheads need to be calculated and then allocated in some way against individual products.  This allocation is always arbitrary. If applied strictly, a full cost plus pricing method may leave a business in a vicious circle.  For example, if budgeted costs are over-estimated, selling prices may be set too high.  This in turn may lead to lower demand (if the price is set above the level that customers will accept), higher costs (e.g. surplus stock) and lower profits.  When the pricing decision is made for the next year, the problem may be exacerbated and repeated.

Return on Investment Pricing:

Return on Investment Pricing Determines the price of a product based on the target return on the amount invested in a product Unit Price = (Total costs (fixed and variable) + (% return x Investment)) ÷ budgeted sales volume The use of a targeted return on investment to determine price has the following advantages: Consistent with other performance measures - e.g. Return on Investment A suitable method for market leaders which are able to set a price which competitors follow A relevant pricing method for new products - particularly those which have a substantial investment. The method does, however, have some disadvantages: With new products, there is an inherent uncertainty about what the achieved sales volume will be - which in turn will be influenced by the price chosen Some investment may be common to several products or product groups (e.g. an extension to a factory; investment in new development facilities).  This raises the question of how to apportion investment amongst products.

Penetration Pricing (careful):

Penetration Pricing (careful) Penetration pricing involves the setting of lower, rather than higher prices in order to achieve a large, if not dominant market share. This strategy is most often used businesses wishing to enter a new market or build on a relatively small market share. This will only be possible where demand for the product is believed to be highly elastic, i.e. demand is price-sensitive and either new buyers will be attracted, or existing buyers will buy more of the product as a result of a low price. A successful penetration pricing strategy may lead to large sales volumes/market shares and therefore lower costs per unit. A penetration pricing strategy may also promote complimentary and captive products. The main product may be priced with a low mark-up to attract sales (it may even be a loss-leader). Customers are then sold accessories (which often only fit the manufacturer’s main product) which are sold at higher mark-ups. Before implementing a penetration pricing strategy, a supplier must be certain that it has the production and distribution capabilities to meet the anticipated increase in demand. The most obvious potential disadvantage of implementing a penetration pricing strategy is the likelihood of competing suppliers following suit by reducing their prices also, thus nullifying any advantage of the reduced price (if prices are sufficiently differentiated the impact of this disadvantage may be diminished). A second potential disadvantage is the impact of the reduced price on the image of the offering, particularly where buyers associate price with quality. Unsuccessful penetration pricing may do nothing other than kill the market and the margin associated with it and assuming you survive it may take many years to build the perceived value back into the product or product offering.

Expansionist Pricing:

Expansionist Pricing Expansionist pricing is a more exaggerated form of penetration pricing and involves setting very low prices aimed at establishing mass markets, possibly at the expense of other suppliers. Under this strategy, the product enjoys a high price elasticity of demand so that the adoption of a low price leads to significant increases in sales volumes. Expansionist pricing strategies may be used by companies attempting to enter new or international markets for their products. Lower-cost version of a product may be offered at a very low price to gain recognition and acceptance by consumers. Once acceptance has been achieved more expensive versions or models of the offering can be made available at higher prices. The extreme case of expansionistic pricing, where offerings are made available to the (overseas) market at a price that is actually less than the cost of production is known as dumping. This practice is closely scrutinised by governments since it can force domestic producers out of business and many countries have enacted anti-dumping legislation.

Variable Or Marginal Cost Pricing (dangerous):

Variable Or Marginal Cost Pricing (dangerous) With variable (or marginal cost) pricing, a price is set in relation to the variable costs of production (i.e. ignoring fixed costs and overheads). The objective is to achieve a desired “ contribution” towards fixed costs and profit. The advantages of using a variable/marginal costing method for pricing include the following: Good for short-term decision-making; Avoids having to make an arbitrary allocation of fixed costs and overheads; Focuses the business on what is required to achieve break-even However, there are some real disadvantages using this method: There is a risk that the price set will not recover total fixed costs in the long term. Ultimately businesses must price their products that reflects the total costs of the business; It may be difficult to raise prices if the contribution per unit is set too low

Price Skimming Strategy:

Price Skimming Strategy The practice of ‘price skimming’ involves charging a relatively high price for a short time where a new, innovative, or much-improved product is launched onto a market. The objective with skimming is to “skim” off customers who are willing to pay more to have the product sooner; prices are lowered later when demand from the “early adopters” falls. The success of a price-skimming strategy is largely dependent on the inelasticity of demand for the product either by the market as a whole, or by certain market segments. High prices can be enjoyed in the short term where demand is relatively inelastic. In the short term the supplier benefits from ‘monopoly profits’, but as profitability increases, competing suppliers are likely to be attracted to the market (depending on the barriers to entry in the market) and the price will fall as competition increases. The main objective of employing a price-skimming strategy is, therefore, to benefit from high short-term profits (due to the newness of the product) and from effective market segmentation.

Other Pricing Strategies:

Other Pricing Strategies Prestige pricing Prestige pricing refers to the practice of setting a high price for an product, throughout its entire life cycle – as opposed to the short term ‘opportunistic’, high price of price ‘skimming’. This is done in order to evoke perceptions of quality and prestige with the product or service. Pre-emptive pricing Pre-emptive pricing is a strategy which involves setting low prices in order to discourage or deter potential new entrants to the suppliers market, and is especially suited to markets in which the supplier does not hold a patent, or other market privilege and entry to the market is relatively straightforward. Extinction pricing Extinction pricing has the overall objective of eliminating competition, and involves setting very low prices in the short term in order to ‘under-cut’ competition, or alternatively repel potential new entrants. The extinction price may, in the short term, be set at a level lower even than the suppliers own cost of production, but once competition has been extinguished, prices are raised to profitable levels. Only firms dominant in the market, and in a strong financial position will be able survive the short-term losses associated with extinction pricing strategies, and benefit in the longer term.

The four “P’s” of Marketing:

The four “P’s” of Marketing

Promotion 101:

Promotion 101 It is not enough to have good products sold at attractive prices. To generate sales and profits, the benefits of products have to be communicated to customers. Promotion is about companies communicating with customers. A business' total marketing communications programme is called the promotional mix and consists of a blend of: Advertising Direct marketing Personal selling Sales promotion Public relations tools Promotion has several possible objectives and many pieces of marketing promotion aim to achieve several of the following objectives at the same time:

Objectives of Promotion:

Objectives of Promotion Promotion has several possible objectives and many pieces of marketing promotion aim to achieve several of these objectives at the same time: Inform The company often as to make the distributor and the customer aware that their product exists, and to explain exactly what it does. This is a particularly important objective for new products Persuade An important stage in creating favourable attitudes towards the business and its brands. Through persuasive promotion, management will seek to persuade customers and the trade that their brand has benefits that are superior to competitors Image creation Sometimes, promoting a brand image is the only way to create differentiation in the mind of the consumer (e.g. lager advertising) Reassurance Much promotion (particularly advertising) is about reassuring customers that they have made the right choice and encouraging them to stay loyal to a brand. There are a large and growing number of promotional methods that businesses can use. The main instruments - advertising, direct response mailing, sales promotion, public relations and direct selling, are often mixed together as part of the promotional mix. Each has different strengths. What is important is that the promotional mix is carefully planned and the results monitored to ensure that the total promotional cost is controlled .

Promotional Mix:

Promotional Mix A business' total marketing communications programme is called the "promotional mix" and consists of a blend of advertising, personal selling, sales promotion and public relations tools. Advertising Any paid form of non-personal communication of ideas or products in the "prime media": i.e. television, newspapers, magazines, billboard posters, radio, cinema etc. Advertising is intended to persuade and to inform. The two basic aspects of advertising are the message (what you want your communication to say) and the medium (how you get your message across) Personal Selling Oral communication with potential buyers of a product with the intention of making a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to "close the sale". Sales Promotion Providing incentives to customers or to the distribution channel to stimulate demand for a product. Publicity The communication of a product, brand or business by placing information about it in the media without paying for the time or media space directly. otherwise known as "public relations" or PR.

Advantages and Disadvantages of the Promotional Mix:

Advantages and Disadvantages of the Promotional Mix Mix Element Advantages Disadvantages Advertising Good for building awareness Effective at reaching a wide audience Repetition of main brand and product positioning helps build customer trust Impersonal - cannot answer all a customer's questions Not good at getting customers to make a final purchasing decision Personal Selling Highly interactive - lots of communication between the buyer and seller Excellent for communicating complex / detailed product information and features Relationships can be built up - important if closing the sale make take a long time Costly - employing a sales force has many hidden costs in addition to wages Not suitable if there are thousands of important buyers Sales Promotion Can stimulate quick increases in sales by targeting promotional incentives on particular products Good short term tactical tool If used over the long-term, customers may get used to the effect Too much promotion may damage the brand image Public Relations Often seen as more "credible" - since the message seems to be coming from a third party (e.g. magazine, newspaper) Cheap way of reaching many customers - if the publicity is achieved through the right media Risk of losing control - cannot always control what other people write or say about your product

Choice of Advertising Media:

Choice of Advertising Media There is a huge variety of media available through which a business can conduct an advertising campaign. The starting point in the selection of appropriate advertising media is a “media analysis” . This can be defined as: "An investigation into the relative effectiveness and the relative costs of using the various advertising media in an advertising campaign" Before committing an advertising budget it is necessary to carry out marketing research on: Potential customers Their particular media sampling habits, trade press, newspapers, internet, television How many times the advertisers wish the potential customers to see an advertisement How great a percentage of the market they wish to reach, etc. These elements must be considered and balanced to plan a campaign that will effectively reach its target audience at a reasonable cost.

Five main stages in a well-managed advertising campaign:

Five main stages in a well-managed advertising campaign

Setting the advertising budget:

Setting the advertising budget A famous comment usually attributed to Lord Leverhulme goes: “I know that half of my advertising budget is wasted, but I’m not sure which half” It is very difficult to measure the effect of advertising on a business’ sales. Advertising is just one of the variables that might affect sales in a particular period. These include: Consumer and business confidence Levels of disposable income Availability of product (e.g. do we actually have stock to sell?) Availability of competing products The weather (often blamed poor sales!) How can a business know whether a specific advertising campaign was effective? As a percentage of sales, advertising expenditure varies enormously from business to business, from market to market. Leading pharmaceutical companies spend around 20% of sales on advertising Business such as Ford and Toyota spend less than 1%. An average for fast-moving consumer goods markets (“FMCG”) is around 8-10% of sales.

Setting the advertising budget:

Setting the advertising budget Method (1) Fixed percentage of sales: In markets with a stable, predictable sales pattern, some companies set their advertising spend consistently at a fixed percentage of sales. This policy has the advantage of avoiding an “advertising war” which could be bad news for profits. However, there are some disadvantages with this approach. This approach assumes that sales are directly related to advertising. Clearly this will not entirely be the case, since other elements of the promotional mix will also affect sales. If the rule is applied when sales are declining, the result will be a reduction in advertising just when greater sales promotion is required! Method (2) Same level as competitors: This approach has widespread use when products are well-established with predictable sales patterns. It is based on the assumption that there is an “industry average” spend that works well for all major players in a market. A major problem with this approach (in addition to the disadvantages set out for the example above) is that it encourages businesses to ignore the effectiveness of their advertising spend – it makes them “lazy”. It could also prevent a business with competitive advantages from increasing market share by spending more than average. Method (3) Task: The task approach involves setting marketing objectives based on the “tasks” that the advertising has to complete. These tasks could be financial in nature (e.g. achieve a certain increase in sales, profits) or related to the marketing activity that is generated by the campaigns. Method (4) Residual: The residual approach, which is perhaps the worst of all, is to base the advertising budget on what the business can afford – after all other expenditure. There is no attempt to associate marketing objectives with levels of advertising. In a good year large amounts of money could be wasted; in a bad year, the low advertising budget could guarantee a further low year for sales.

Factors that determine the type of promotional tools used:

Factors that determine the type of promotional tools used There are several factors that should be taken into account in deciding which, and how much of each tool to use in a promotional marketing campaign: Resource availability and the cost of each promotional tool: Advertising (particularly on television and in the national newspapers can be very expensive). The overall resource budget for the promotional campaign will often determine which tools the business can afford to use. Market size and concentration: If a market size is small and the number of potential buyers is small, then personal selling may be the most cost-effective promotional tool. A good example of this would be businesses selling software systems designed for supermarket retailers. But where markets are geographically disperse or, where there are substantial numbers of potential customers, advertising is usually the most effective. Customer information needs: Some potential customers need to be provided with detailed, complex information to help them evaluate a purchase. In this situation, personal selling is almost always required - often using selling teams rather than just one individual. By contrast, few consumers need much information about products such as baked beans or bread. Promotional tools such as brand advertising and sales promotion are much more effective in this case.

Media Examples:

Media Examples Published media National daily newspapers Sunday newspapers Local and regional newspapers Consumer magazines Specialist magazines Trade and professional press Internet Visual and aural media Television Radio Cinema Billboards Transport Direct mailing

Why Advertise?:

Why Advertise? To create awareness, customer interest or desire To boost sales (moving the demand curve to the right) To build brand loyalty (or to maintain it at the existing level) To launch a new product To change customer attitudes – perhaps trying to move a product more “upmarket” or to dispel some widely held perceptions about the product To support the activities of the distribution channel (e.g. supporting a “pull” strategy) To build the company or brand image To remind and reassure customers To offset competitor advertising – businesses may defend market share by responding to competitors’ campaigns with their own advertising To boost public standing: companies can boost their public standing with advertisements that link them with generally approved campaigns such as care for the environment To support the sales force – advertising can make the job of the sales force easier and more effective by attracting leads from potential customers and perhaps motivate them by boosting the profile of the business Create a more conducive environment for our company to successfully sell our products

What to Advertise?:

What to Advertise? In general, there are only two kinds of effective advertising message: Firstly, does the business/product have a Unique Selling Proposition (“USP”) A unique selling proposition is a customer benefit that no other product can claim In reality these are rare, although that does not stop marketers from claiming them for their products. Secondly, does the product or service being advertised “add value” and how? Whatever is advertised, it is important that the message is: Seen Read Believed Remembered Action upon by target customers

Measuring Advertising Effectiveness:

Measuring Advertising Effectiveness Advertising objective How success can be measured Stimulate an increase in sales - Number of enquiries from advert - Number of enquiries converted into sales Remind customers of the existence of a product - Test customer awareness both before and after the advertising campaign - Number of enquiries Inform customers - Test customer awareness - Number of requests for further information Build a brand image -Sales -Test customer awareness of brand recognition and perceived values Build customer loyalty and relationship - Levels of repeat purchase - Levels of customer retention Change customer attitudes - Measure demographic profile of purchases - Measure type of goods ordered by new purchasers - Compare with previous data

Sales Promotion:

Sales Promotion A good definition of sales promotion is: “An activity designed to boost the sales of a product or service. It may include an advertising campaign, increased PR activity, a free-sample campaign, offering free gifts or trading stamps, arranging demonstrations or exhibitions, setting up competitions with attractive prizes, temporary price reductions, door-to-door calling, telemarketing, personal letters on other methods”. More than any other element of the promotional mix, sales promotion is about “action”. It is about stimulating customers to buy a product. It is not designed to be informative – a role which advertising is much better suited to. Sales promotion is commonly referred to as “Below the Line” promotion. Sales promotion can be directed at: The ultimate consumer (a “pull strategy” encouraging purchase) The distribution channel (a “push strategy” encouraging the channels to stock the product) and this is usually known as “selling into the trade”

Methods of Sales Promotions:

Methods of Sales Promotions

Direct Marketing:

Direct Marketing The process of direct marketing covers a wide range of promotional activities:

Direct Mail:

Direct Mail Direct mail is widely thought of as the most effective medium to achieve a customer sales response. Why? The advertiser can target a promotional message down to an individual level, and where possible personalise the message. There are a large number of mailing databases available that allow businesses to send direct mailing to potential customers based on household income, interests, occupation and other variables Businesses can first test the responsiveness of direct mailing (by sending out a test mailing to a small, representative sample) before committing to the more significant cost of a larger campaign Direct mailing campaigns are less visible to competitors – it is therefore possible to be more creative, for longer However, direct mail has several weaknesses: A piece of direct mail is less “interactive” than a television or radio advert, although creative packaging can still stimulate customer response Lead times to produce direct mailing campaigns can be quite long There is increasing customer concern with “junk mail” – the receipt of unsolicited mail which often suggests that the right to individual privacy has been breached. Use of personalised direct mail (inserting “variable data”) and providing “personal URL’s” which take the recipient to a personalised web page can greatly increase the response and useful data capture for subsequent campaigns.

Personal Selling:

Personal Selling Personal selling can be defined as follows: Personal selling is oral communication with potential buyers of a product with the intention of making a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to "close the sale" Personal selling is one of the oldest forms of promotion. It involves the use of a sales force to either: Support a push strategy (encouraging intermediaries to buy the product) Or to support a pull strategy (where the role of the sales force may be limited to supporting retailers and providing after-sales service OR pulling product through a distributor by education of the market or the end consumer – the farmer in the case of Agrichem).

Six Key Activities of Salesforce:

Six Key Activities of Salesforce

Advantages of Personal Selling:

Advantages of Personal Selling

Limitations of Personal Selling:

Limitations of Personal Selling

Public Relations:

Public Relations Public Relations can be defined as: “The planned and sustained effort to establish and maintain goodwill and mutual understanding between an organisation and its publics” A business may have many “publics” with which it needs to maintain good relations and build goodwill. For example: Employees Shareholders Trade unions Members of the “general public” Customers (past and present) Pressure groups Various professional groups Charities funding various research Professional research bodies and policy-forming organisations The media Government and politicians

The Role of Public Relations:

The Role of Public Relations

Public Relations Techniques:

Public Relations Techniques

Using Sponsorship:

Using Sponsorship Sponsorship can be defined as follows: Supporting an event, activity or organisation by providing money or other resources that is of value to the sponsored event. This is usually in return for advertising space at the event or as part of the publicity for the event.

Plan Sponsorship Wisely:

Plan Sponsorship Wisely

The four “P’s” of Marketing:

The four “P’s” of Marketing

Positioning is the Outcome of What you Do or Don’t Do…:

Positioning is the Outcome of What you Do or Don’t Do… Positioning is the result of many things either deliberate or by ignorance and omission. “it is better to keep your mouth shut and be thought a fool than to open it and remove all doubt!” A companies sum total of activities, or lack of will create a “position” in the mind of the various stakeholders. It is critical that the company communicates clearly, frequently, with the right messages, to the right people, and with the right tools and reach. If the Companies “market voice” is less than its market share, then it will be positioned downwards in the minds of the key publics. If the Companies “market voice” is greater than its market share, then it will be positioned upwards in the minds of the key publics. The Company needs to be very clear with its communications at every level to achieve an optimum market positioning which will translate into greater sales, market share and profitability.

Example Positioning Mix:

Example Positioning Mix

Example: Positioning XYZ to be Mainstream – not the “Fixits”:

Example: Positioning XYZ to be Mainstream – not the “Fixits”

XYZ Becomes the Trusted Authority:

XYZ Becomes the Trusted Authority

Summary - Marketing:

Summary - Marketing E ffective marketing: activities that can be objectively and quantitatively measured that make it easier and quicker for sales to take place. #1 Direct marketing. Whether snail-mail or email-based, direct marketing is completely measurable from top to bottom.   You know exactly what response you get, and exactly how many of those leads convert to customers. #2 Internet advertising. Because click-throughs can be measured, and the leads generated through those click-throughs can be tracked, you know exactly how effective your ads are, and what financial impact they’re having. #3 Lead generation events. Regardless of whether these events are in cyberspace or meat-space, you can track the leads and figure out the impact.  That allows you to winnow out events, like most trade shows, that cost too much. #4 Call-to-action advertising. Non-Internet advertising that has a specific call to action, like a discount code, phone number, or a coupon that’s unique to the ad, is measurable.  This is very different from “corporate goodness” ads. #5 Identifying qualified leads. There are a number of packages out there that troll through the Internet to gather data about individuals, job titles, firms, industries and news report that, when merged, produces a qualified prospect list.

Market Research:

Market Research Toolbox

Market research - introduction:

Market research - introduction To undertake marketing effectively, businesses need information. Information about customer wants, market demand, competitors, distribution channels etc. Marketers often complain that they lack enough marketing information or the right kind, or have too much of the wrong kind. The solution is an effective marketing information system. The information needed by marketing managers comes from three main sources: (1) Internal company information: e .g. sales, orders, customer profiles, stocks, customer service reports etc) (2) Marketing intelligence: This can be information gathered from many sources, including suppliers, customers, distributors. Marketing intelligence is a catch-all term to include all the everyday information about developments in the market that helps a business prepare and adjust its marketing plans. It is possible to buy intelligence information from outside suppliers (e.g. Dun & Bradstreet, Thompson), AC Nielsen) who set up data gathering systems to support commercial intelligence products that can be profitably sold to all players in a market. (3) Market research: Management cannot always wait for information to arrive in bits and pieces from internal sources. Also, sources of market intelligence cannot always be relied upon to provide relevant or up-to-date information (particularly for smaller or niche market segments). In such circumstances, businesses often need to undertake specific studies to support their marketing strategy - this is market research.

Defining the Market:

Defining the Market What is our market? And how can it be defined? A market can be defined as follows: A market is the set of all actual and potential buyers of a product or service. This definition suggests that a market is the total value and/or volume of products that satisfy the same customer need. It is important to be careful about how a market is defined. The following key marketing processes rely on a relevant market definition: Measuring market share Measuring market size and growth Specifying target customers Identifying relevant competitors Formulating a marketing strategy

4 Options for Market Research:

4 Options for Market Research Do it yourself - personally This is often the case in smaller businesses. Here, marketing staff do the research themselves. Sample sizes tend to be small - which may be appropriate if there are a relatively small number of customers. Do it yourself - using a marketing research department By employing a marketing research manager, a business may benefit from specialist research skills. Do it yourself - using a fieldwork agency Often the design of a piece of market research can be completed using internal resources - particularly if the business employs a marketing specialist with knowledge of research techniques. However, the scope of the research (for example, interviewing a large sample of consumers in various locations) may be beyond the resources of a business. In this case, the fieldwork can be carried out by a marketing research agency. Use the full services of a marketing research agency Where resources permit a business can invest in the full range of skills offered by marketing research agencies.

Market Research Process:

Market Research Process

Two Types of Market Research:

Two Types of Market Research Ad-hoc Market Research Ad-hoc research studies focus on specific marketing problems and collect data at one point in time from one sample of respondents e.g. Product usage survey New product concept tests (where consumers are asked to trial new brands, product prototypes etc) Advertising development (how does the sample of consumers respond to a specific advertising campaign?) Corporate image surveys (often quite enlightening) Customer satisfaction surveys (often turn into continuous research) Continuous Research Continuous studies interview the same sample of people, repeatedly. The major types of continuous research are: Consumer panels Retail Audits Television Viewer ship / Radio Listening Panels

Quantitative Research:

Quantitative Research Quantitative research is about measuring a market and quantifying that measurement with data. Most often the data required relates to market size, market share, penetration, installed base and market growth rates. However, quantitative research can also be used to measure customer attitudes, satisfaction, commitment and a range of other useful market data that can tracked over time. Quantitative research can also be used to measure customer awareness and attitudes to different manufacturers and to understand overall customer behaviour in a market by taking a statistical sample of customers to understand the market as a whole. Such techniques are extremely powerful when combined with techniques such segmentation analysis and mean that key audiences can be targeted and monitored over time to ensure the optimal use of the marketing budget. At the heart of all quantitative research is the statistical sample. Great care has to be taken in selecting the sample and also in the design of the sample questionnaire and the quality of the analysis of data collected. Market research involves the collection of data to obtain insight and knowledge into the needs and wants of customers and the structure and dynamics of a market. In nearly all cases, it would be very costly and time-consuming to collect data from the entire population of a market. Accordingly, in market research, extensive use is made of sampling from which, through careful design and analysis, Marketers can draw information about the market.

Qualitative Research:

Qualitative Research Qualitative Research is about investigating the features of a market through in-depth research that explores the background and context for decision making. Depth Interviewing: are the main form of qualitative research in most business markets. Here an interviewer spends time in a one-on-one interview finding out about the customer's particular circumstances and their individual opinions. The majority of business depth interviews take place in person, which has the added benefit that the researcher visits the respondent's place of work and gains a sense of the culture of the business. Feedback is through a presentation that draws together findings across a number of depth interviews. In some circumstances, such as segmentation studies, identifying differences between respondents may be as important as the views that customers share. Group Discussions: focus groups are the mainstay of consumer research. Here several customers are brought together to take part in a discussion led by a researcher (or "moderator"). These groups are a good way of exploring a topic in some depth or to encourage creative ideas from participants.

Uses of Market Research:

Uses of Market Research

Uses of Market Research:

Uses of Market Research

Market segmentation:

Market segmentation Toolbox

Market Segmentation - Why Segment Markets?:

Market Segmentation - Why Segment Markets? Better matching of customer needs: Customer needs differ. Creating separate offers for each segment makes sense and provides customers with a better solution Enhanced profits for business: Customers have different disposable income. They are, therefore, different in how sensitive they are to price. By segmenting markets, businesses can raise average prices and subsequently enhance profits Better opportunities for growth: Market segmentation can build sales. For example, customers can be encouraged to "trade-up" after being introduced to a particular product with an introductory, lower-priced product Retain more customers: Customer circumstances change, for example they grow older, form families, change jobs or get promoted, change their buying patterns. By marketing products that appeal to customers at different stages of their life ("life-cycle"), a business can retain customers who might otherwise switch to competing products and brands

Market Segmentation - Why Segment Markets?:

Market Segmentation - Why Segment Markets? Target marketing communications: Businesses need to deliver their marketing message to a relevant customer audience. If the target market is too broad, there is a strong risk that: the key customers are missed and the cost of communicating to customers becomes too high / unprofitable. By segmenting markets, the target customer can be reached more often and at lower cost Gain share of the market segment: Unless a business has a strong or leading share of a market, it is unlikely to be maximising its profitability. Minor brands suffer from lack of scale economies in production and marketing, pressures from distributors and limited space on the shelves. Through careful segmentation and targeting, businesses can often achieve competitive production and marketing costs and become the preferred choice of customers and distributors. In other words, segmentation offers the opportunity for smaller firms to compete with bigger ones.

Behavioural Segmentation:

Behavioural Segmentation

Demographic Segmentation:

Demographic Segmentation

Geographic Segmentation:

Geographic Segmentation

Buyer Behaviour:

Buyer Behaviour Toolbox

Buyer Behaviour - Introduction:

Buyer Behaviour - Introduction An important part of the marketing process is to understand why a customer or buyer makes a purchase. Without such an understanding, businesses find it hard to respond to the customer’s needs and wants. Marketing theory traditionally splits analysis of buyer or customer behaviour into two broad groups for analysis – Consumer Buyers and Industrial Buyers: Consumer buyers are those who purchase items for their personal consumption Industrial buyers are those who purchase items on behalf of their business or organisation Businesses now spend considerable sums trying to learn about what makes “customers tick”. The questions they try to understand are: Who buys? How do they buy? When do they buy? Where do they buy? Why do they buy? Our challenge is to understand how customers might respond to the different elements of the marketing mix that are presented to them. If we can understand these customer responses better than the competition, then it is a potentially significant source of competitive advantage.

Buyer Characteristics Affect Buyer Behaviour:

Buyer Characteristics Affect Buyer Behaviour

Buyer Behaviour - Cultural Factors:

Buyer Behaviour - Cultural Factors Cultural factors have a significant impact on customer behaviour. Culture is the most basic cause of a person’s wants and behaviour. Growing up, children learn basic values, perception and wants from the family and other important groups. Marketing are always trying to spot “cultural shifts” which might point to new products that might be wanted by customers or to increased demand. Each culture contains “sub-cultures” – groups of people with share values. Sub-cultures can include nationalities, religions, racial groups, or groups of people sharing the same geographical location. Sometimes a sub-culture will create a substantial and distinctive market segment of its own. Similarly, differences in social class can create customer groups. Social class is not just determined by income. It is measured as a combination of occupation, income, education, wealth and other variables:

Buyer Behaviour - Social Factors:

Buyer Behaviour - Social Factors A customer’s buying behaviour is also influenced by social factors, such as the groups to which the customer belongs and social status. In a group, several individuals may interact to influence the purchase decision. The typical roles in such a group decision can be summarised as follows:

Buyer Decision-making Process:

Buyer Decision-making Process

Buyer Sources of Information:

Buyer Sources of Information

Buyer Behaviour - five stages in the process of adopting a new product:

Buyer Behaviour - five stages in the process of adopting a new product

Another Model – The Stimulus Response Model:

Another Model – The Stimulus Response Model Marketing Stimuli Other Stimuli Product Price Promotion Place Political Economic Social Technological Buyer Characteristics Buyer Decision Making Process Buyer Responses Product Choice Brand Choice Retail Choice Dealer Choice Purchase Timing Purchase Amount Purchase Frequency

The Process Of New-product Adoption:

The Process Of New-product Adoption A marketing team looking to successfully introduce a new product or service should think about how to help customers move through the five stages. For example, what kind of advertising or other promotional campaign can be employed to build customer awareness? If customers show a desire to trial or sample a product, how can this be arranged effectively? Research also suggests that customers can be divided into groups according to the speed with which they adopt new products. Rogers, in his influential work on the diffusion of innovations, suggested the following classification:

Some Familiar New Products:

Some Familiar New Products

Branding:

Branding Toolbox

Branding 101:

Branding 101 Brands are a means of differentiating a company’s products and services from those of its competitors . There is plenty of evidence to prove that customers will pay a substantial price premium for a good brand and remain loyal to that brand. It is important, therefore, to understand what brands are and why they are important. Macdonald sums this up nicely in the following quote emphasising the importance of brands: “…it is not factories that make profits, but relationships with customers, and it is company and brand names which secure those relationships” Businesses that invest in and sustain leading brands prosper whereas those that fail are left to fight for the lower profits available in commodity markets.

What Value is a Brand?:

What Value is a Brand? Research suggests that Businesses that invest in and sustain leading brands prosper whereas those that fail are left to fight for the lower profits available in commodity markets.

World’s Top 20 Brands in 2007:

World’s Top 20 Brands in 2007

Factors in Building a Brand:

Factors in Building a Brand

Factors which Grow Brands:

Factors which Grow Brands

More Branding 101:

More Branding 101 Brand equity : “Brand equity” refers to the value of a brand. Brand equity is based on the extent to which the brand has high brand loyalty, name awareness, perceived quality and strong product associations. Brand equity also includes other “intangible” assets such as patents, trademarks and channel relationships. Brand image: “Brand image” refers to the set of beliefs that customers hold about a particular brand. These are important to develop well since a negative brand image can be very difficult to shake off. Brand extension: “Brand extension” refers to the use of a successful brand name to launch a new or modified product in a new market. Virgin is perhaps the best example of how brand extension can be applied into quite diverse and distinct markets. Brands and products: Brands are rarely developed in isolation. They normally fall within a business’ product line or product group. A product line is a group of brands that are closely related in terms of their functions and the benefits they provide. A good example would be the range of desktop and laptop computers manufactured by Dell. A product mix relates to the total set of brands marketed by a business. A product mix could, therefore, contain several or many product lines. The width of the product mix can be measured by the number of product lines that a business offers.

Brand Positioning:

Brand Positioning Positioning is how a product appears in relation to other products in the market Brands can be positioned against competing brands on a perceptual map. A perceptual map defines the market in terms of the way buyers perceive key characteristics of competing products. The basic perceptual map that buyers use maps products in terms of their price and quality, as illustrated below:

Competitor analysis:

Competitor analysis Toolbox

Competitor Analysis:

Competitor Analysis Why bother to analyse competitors? Some businesses think it is best to get on with their own plans and ignore the competition. Others become obsessed with tracking the actions of competitors (often using underhand or illegal methods). Many businesses are happy simply to track the competition, copying their moves and reacting to changes . Competitor analysis is important in strategic planning: To help us understand our competitive advantages/disadvantages relative to competitors To generate understanding of competitors’ past, present (and most importantly) future strategies To provide an informed basis to develop strategies to achieve competitive advantage in the future To help forecast the returns that may be made from future investments (e.g. how will competitors respond to a new product or pricing strategy?

Questions to ask:

Questions to ask What questions should be asked when undertaking competitor analysis? Useful questions to get started: Who are our competitors? What threats do they pose? What is the profile of our competitors? What are the objectives of our competitors? What strategies are our competitors pursuing and how successful are these strategies? What are the strengths and weaknesses of our competitors? How are our competitors likely to respond to any changes to the way we do business?

Sources of Information for Competitor Analysis:

Sources of Information for Competitor Analysis The sources of competitor information can be neatly grouped into three categories: Recorded data: this is easily available in published form either internally or externally. Good examples include competitor annual reports and product brochures; Observable data: this has to be actively sought and often assembled from several sources. A good example is competitor pricing; Opportunistic data: to get hold of this kind of data requires a lot of planning and organisation. Much of it is “anecdotal”, coming from discussions with suppliers, customers and, perhaps, previous management of competitors.

Sources of Competitor Information:

Sources of Competitor Information Recorded Data Observable Data Opportunistic Data Annual report & accounts Pricing / price lists Meetings with suppliers Press releases Advertising campaigns Trade shows Newspaper articles Promotions Sales force meetings Analysts reports Tenders Seminars / conferences Regulatory reports Patent applications Recruiting ex-employees Government reports Discussion with shared distributors Presentations / speeches Social contacts with competitors

Market Share – Where are we?:

Market Share – Where are we? Market share is the percentage of all sales within a market that is held by one brand / product or company. The two most important measures are by: Sales revenue Sales volume (the number of units sold) UK example Position Brand Sales(£'m) Market Share (%) Number of Outlets 1 Marks & Spencer 2,743 10.2 315 2 Next 1,708 6.3 333 3 Arcadia 1,609 5.9 1,603 4 Debenhams 1,076 4.0 97 5 ASDA 963 3.6 215 6 Matalan 776 2.9 137 7 Tesco 710 2.6 588 8 Bhs 631 2.3 163 9 New Look 552 2.1 573 10 John Lewis 482 1.8 25 Total of Top 10 11,250 41.8 UK Market 26,911 100.0 Source; Deutsche Bank 2002

What a Company should already know about its Competitors:

What a Company should already know about its Competitors Overall sales and profits Sales and profits by market Sales by main brand Cost structure Market shares (revenues and volumes) Organisation structure Distribution system Identity / profile of senior management Advertising strategy and spending Customer / consumer profile & attitudes Customer retention levels ???

What we would really like to know about our competitors:

What we would really like to know about our competitors Sales and profits by product Relative costs Customer satisfaction and service levels Customer retention levels Distribution costs New product strategies Size and quality of customer databases Advertising effectiveness Future investment strategy Contractual terms with key suppliers Terms of strategic partnerships

Defining our market:

Defining our market Thought Starters

Example - How do we Define Our Market?:

Example - How do we Define Our Market?

Example - Market Analysis:

Example - Market Analysis

Market Share – Measure of the Success of the Marketing Plan:

Market Share – Measure of the Success of the Marketing Plan Strong link between profitability and relative market share . The higher the market share - the higher the return on investment. This is probably as a result of economies of scale . Economies of scale due to increasing market – in purchasing and the utilisation of fixed assets.

Example - Competitors – how do we stack up? :

Example - Competitors – how do we stack up?

Sales process:

Sales process Toolbox

The Sales Process:

The Sales Process

B2C – Consumer Selling Process:

B2C – Consumer Selling Process

A More Detailed View:

A More Detailed View

B2B – Industrial Selling Process:

B2B – Industrial Selling Process

4 Components/Pillars of Consultative Selling Process:

4 Components/Pillars of Consultative Selling Process

Key Building Blocks in Sales:

Key Building Blocks in Sales

How Salespeople Create Value For Customers:

Identify Creative Solutions to Customer Problems Ease the Customer Buying Process Follow-up After the Sale is Made Customer Value + + = How Salespeople Create Value For Customers

Having a Systematic Sales Process is important:

Having a Systematic Sales Process is important

(Self) Management is the Key:

(Self) Management is the Key Whether you are a salesperson or a sales manager, you need to manage your sales pipeline. Start with the basics: Scheduled closes Quotes Samples Opportunities For each, do you know the following: How many? Success ratio ? If you have goals and you know your success ratios, you can set specific activity goals… Prospecting calls Sales calls to existing customers Presentations of specific products/services

Opportunity Management is also Key:

Opportunity Management is also Key Many sales are lost simply because there was no sales follow-up. Provide yourself with a tool that keeps “reality” in front of everyone at all times. What does it look like? Date In Customer Name Key contact Opportunity Value of the opportunity Step of the sales process and Next Scheduled Activity Scheduled date/time How do you do it? A spreadsheet (coupled with the use of a calendar) An internal database An internal program An internet application

The Twelve Golden Principles Of Selling:

The Twelve Golden Principles Of Selling Principle 1: Always Sell to People This may seem obvious, but it cannot be emphasized enough: You are not selling to an organization or to a conglomerate, but to actual, real people. It is important to remember that all people are different, so you cannot sell the same way to everyone. Second, no two sales are the same, even if they are made to the same company under similar circumstances. To become a good salesperson, it isn't enough to know how to sell. You must aim to become a people expert. It may sound shocking, but the best professional salespeople actually like people! Remember, people buy from people -- they always will. Principle 2: You Have To Sell Yourself Just as you are selling to people, you must also remember that you are not only selling and representing a product or service, but you are in effect selling yourself. When beginning a sales relationship, it is important to remember a few key aspects to representing yourself well. First, be interesting. If potential customers are bored by you, they have less of a chance of being enthralled by any product or service you are representing. Develop intellect. Of course, you are an intelligent person, but can you converse in an intelligent manner? Can you discuss related subjects with thoughtfulness and hold your clients' interest? Never be arrogant -- never talk up or down to your potential clients. It's rude and will serve only to alienate them. Respect the buyer, and they will respect you. Along the same lines, develop your empathy levels. If you can relate to your customers' situations authentically, it helps to build rapport. Finally, control your ego levels. A good salesperson is patient and respectful, not an egomaniac.

The Twelve Golden Principles Of Selling:

The Twelve Golden Principles Of Selling Principle 3: You Must Ask Questions A good salesperson knows what questions to ask, and when. Develop your questioning techniques, always remembering the traditional rules of questioning: What? Where? When? Which? Why? Who? And how? Continually test your understanding of the situation by asking questions and verifying that everybody's on the right track. Principle 4: Listen To Understand Remember, God has given us two ears and one mouth; we should use them in that order! Successful sales professionals talk for 20 percent of the time and listen for 80 percent of the time. It's crucial for new salespeople to develop their active-listening skills. Principle 5: Features Must Be Linked to Benefits It's a standard sales component, but the features-and-benefits connection bears repeating and reminding: Features are common, but benefits are personal and specific. When describing the product or service you are selling, use "link phrases" when outlining the benefits of the features you are showing. Say, "Such and such is a feature of this service, which means that . . .' Remember to be specific. Principle 6: Sell the Results -- Paint a Picture You want the outcome for your prospect to be rosy, but you need to convey that. Discover your prospect's "prime desires," and personalize the benefits to him or her. Describe the end results of the transaction and how it will improve the life of your prospect.

The Twelve Golden Principles Of Selling:

The Twelve Golden Principles Of Selling Principle 7: You Cannot Rely On Logic Emotion drives 84 percent of all buying decisions, not logic. What are the chief buying emotions? They include ego, security, pride of ownership, greed, health, prestige, status, ambition, and fear of loss. Be well aware of these emotions as you approach, engage and deal with your customers. Principle 8: Selective Product Knowledge Is the Key A good salesperson realizes that buyers buy solutions and results; they do not buy products or services. Know the specific aspects of your product or service that will create your client's desired result. Principle 9: Aim To Be Unique You want to convey to your customers an attitude of "me first," rather than "me too." Every business, every company, every product has something that is unique, and this is what you need to stress. Look outside the square, and identify the uniqueness of your product, your service, your company -- and yourself.

The Twelve Golden Principles Of Selling:

The Twelve Golden Principles Of Selling Principle 10: Don't Sell on Price Selling on price is simply a cop out. You must value your expertise, your products and your services, and price accordingly. Always keep the bottom line firmly in your mind. Remember, anyone can give business away. Selling merely on price means we do not need sales people! Principle 11: Present Your Solutions When we present our proposals, rather than mailing, faxing or e-mailing, we increase the likelihood of a sale by a factor of 10 if we do so in person. Principle 12: Be Professional at All Times The greatest compliment a customer can pay you is to describe you as "professional." Don't worry about being liked -- be respected. Being professional is not one thing, it is three: It is what you do, what you say, and how you present yourself.

6 Things To Know about EVERY Prospect:

6 Things To Know about EVERY Prospect It’s always a big mistake to “show up and throw up” a bunch of slides. That’s just asking for trouble, because the prospect will know that you’re not really prepared to talk about the prospect’s real issues.  Therefore, before you present to a prospect, there are six key perspectives that you absolutely MUST have (if you want a fast sale).  Here they are: #1: Their History .  Where are they coming from?  How did they get here?  What do they know about your and your firm?  What dealings have taken place in the past? #2: Frames of Reference. What ideologies and situations might affect their decision-making? Do they have a certain way of viewing your offering? How do they feel about their own firm? #3: Needs and Desires. Where do they want to go?  How do they expect to feel when they get there?  How do they think they’re going to get there?  What do they think will prevent it?

6 Things To Know about EVERY Prospect:

6 Things To Know about EVERY Prospect #4: Likely Objections. What is going to cause them to balk?  How fervently do the believe in that objection? How real is it?  Might it block the deal, no matter what you say or do? #5: Capacity to Act. Are you communicating with decision-makers or seat-warmers?   If decision-makers, what decision do you want them to make?  If not, why are you talking to them? #6: Decision-making Style. If they’re decision-makers, how do they make decisions?  Are they all about facts and figures?  Or do they decide according to a gut feeling? Once you understand these six perspectives, you can tailor your conversation or presentation to match what’s really going on…rather than what you might otherwise wish were going on.

Selling When You're Not The Lowest Price:

Selling When You're Not The Lowest Price "Low price" is not the main reason people buy! In most surveys of buying motivations, low price is never the primary motivation. Yes, it's important. And, when everything else is equal, it will be the deciding factor. But very rarely is everything else equal. And very few people in this world buy only on the basis of low price. How many of you are driving used Yugos? Or wearing a suit you bought at a garage sale? Or watching an 8-inch black & white TV? You don't always buy on the basis of low price, so why should you think that all your customers do? The truth is, they don't They don't always buy the best value. But, they can invariably be counted on to buy the lowest risk! The biggest issue in the minds of your customers and prospects is not price, and its not value - it is risk.

Selling When You're Not The Lowest Price:

Selling When You're Not The Lowest Price What's risk? It is the potential cost to the individual customer if he/she makes a mistake. It's not just the money, although that is part of it. It is also the social, psychological and emotional cost that your customer will pay if your choice isn't the best one. The lower the risk of the decision, the more likely your customer will say "yes" to you - regardless of the price. In order to really understand risk, you must first see this issue from your customers' perspective. Try to put yourself in their shoes, and calculate the amount of risk that you expect your customers to take when you offer them an opportunity to say "yes" to you. Put yourself in the customer’s shoes. Suppose the equipment didn't work the way it was supposed to? He could shut down production lines, spend weeks trying to make things right, cause all sorts of havoc in the plant, and potentially even lose his job. Now that's risk. If you were that plant manager, how much more than the original $20,000 quote would you spend to reduce the risk? It wouldn't be hard to justify a price double that.

Selling When You're Not The Lowest Price:

Selling When You're Not The Lowest Price How to fight the "low price" issue? Worry less about low price, and more about lowering the risk. Here are four strategies to do so. Build solid, deep relationships with the key decision-makers. Relationships mitigate risk. The greater the relationship, the lower the perceived risk. That's why the salesman with the longer relationship almost always has the benefit of the doubt in a competitive situation. Its not the price - its the risk. Make ample use of third party recommendations, customer lists, case studies and testimonials. All of these say to the customer that someone else, or lots of “someone elses”, have used the product or service. That means its less risk for your customer to buy it. Try to get your customer as physically involved with the product as possible. For example, if you're selling a piece of equipment, try to get the customer to trial the equipment, or at least visit somewhere its being used. The more your customer can see and feel the actual thing, the less risk is it to them. Finally, work with your company to create offers that reduce the risk. Trial periods, money-back guarantees, delayed billing, warranties, service desks - all of these reduce your customer's perception of risk. The winners in the competitive selling arena of the Information Age are those who are the low risk providers, not the low price people.

The 10 Laws of Sales Success:

The 10 Laws of Sales Success Keep your mouth shut and your ears open. Sell with questions, not answers. Pretend you're on a first date with your prospect. Speak to your prospect just as you speak to your family or friends. Pay close attention to what your prospect isn't saying. If you're asked a question, answer it briefly and then move on. Only after you've correctly assessed the needs of your prospect do you mention anything about what you're offering. Refrain from delivering a three-hour product seminar. Ask the prospect if there are any barriers to them taking the next logical step. Invite your prospect to take some kind of action.

Five selling mistakes you can't afford!:

Five selling mistakes you can't afford! 1. Unprepared How many salespeople have a written outline of what they expect to achieve on a sales call? Many simply walk in a prospect's office, and ask, "What is it you need today?" If the prospect knew the answer he or she would get the yellow pages out and buy some! Spend time on understanding the real needs and wants of prospects before sales calls. If that means doing some research at the library or on the internet then consider that time spent as an investment in your success

Five selling mistakes you can't afford!:

Five selling mistakes you can't afford! 2. No formal sales presentation Never assume people understand what you sell so you need not bother to explain it. Some salespeople forget that many prospects only have a surface understanding of what they sell, yet may be embarrassed to let the salesperson know. A good sales presentation simply covers the bases and guarantees prospects know all the benefits and how they help the prospects. Presentations can be dynamite selling tools if they address issues near and dear to the prospect. Of course if the salespeople know little or nothing about a prospects needs then they can't give a dynamite presentation, can they? A good sales presentation is not "canned" or "memorized" so the salesperson sounds like a parrot. It is however an explanation of what you sell, presented in an orderly fashion, in plain talk, so prospects can easily not only understand what you sell but also why they should buy.

Five selling mistakes you can't afford!:

Five selling mistakes you can't afford! 3. Reading too many "Relationship Selling" books. It’s good to build positive relationships with customers, however, people don't become lifelong pals after one or two sales calls. Pushing the issue too quickly to "buddy up" may cause some people to back off instead. Another difficulty is when salespeople spend too much time with non-selling conversation about personal matters, sports, family, the list is endless. Always remember your customers are in the middle of doing a job that feeds their family and are expected to produce results, taking too much time with small talk or hanging out at a customers business breeds resentment. Be respectful of other people's time. Good business relationships develop slowly based upon mutual respect. Keep initial sales calls cordial but professional. Being attentive to customer's needs so they see you as a dependable problem solver is one of the best ways to develop a long term business relationship.

Five selling mistakes you can't afford!:

Five selling mistakes you can't afford! 4. Not listening Some salespeople simply talk too much! When you are talking you are not listening, not learning about your prospects wants and needs. A good salesperson should talk no more that 30% of the time, the prospect 70%. The more they speak, the more information you gain about how to best serve them. Salespeople also must understand the art of asking open ended questions to keep the information flowing.

Five selling mistakes you can't afford!:

Five selling mistakes you can't afford! 5. Not taking care of established customers. Some salespeople enjoy the chase of obtaining new accounts so much they tend to ignore their established business. One of the most powerful marketing tools today is good customer service. Never allow customers to be treated as poor relatives looking for a handout. They are your most valuable asset. Remember, your best customers are your competitor's best prospects!

More Reasons Why Sales Calls Fail:

More Reasons Why Sales Calls Fail A sales call is a waste of time if… REASON #1: …you can’t provide the customer with insight and information that the customer would normally pay to receive. REASON #2: …you can communicate about your offerings, but know little or nothing about the customer’s industry and competition. REASON #3: …you can articulate the value of your offerings to the customer, but not the value of doing business with YOUR firm. REASON #4: …you need to ask the customer contact questions that you could easily learn by browsing around on the Internet. REASON #5: …you have not previously determined that this customer is financially capable of buying your firm’s offering.

Why hasn’t the Deal Closed?:

Why hasn’t the Deal Closed? The constant complaint of the sales manager: why hasn’t that deal closed yet? Reason #1: Unfamiliarity. It generally takes more than one (and often several) meetings before a customer will feel comfortable working with a sales professional and the professional’s firm. Fix: Get in front of the customer!  If you can’t afford to travel to see everyone you need to see, try using web conferencing or other online tools. Reason #2: Bureaucracy. Many organizations have a complex decision-making process that involves more than one buyer. Often even the CEO wants consensus with other executives before a major purchase. Fix: Interview your customer contacts to discover that actual decision-making process.  Then devise a plan to influence the process.

Why hasn’t the Deal Closed?:

Why hasn’t the Deal Closed? Reason #3: Competition. It might first be necessary to unseat a competitor before the sales takes place. That can take time, especially if the competitor is internal to the customer, as when you’re selling outsourcing. Fix: Discover the competitive landscape and who has the inside track.  Build a campaign that specifically addresses the competitor’s weaknesses. Reason #4: Priorities. As important as the sale is to you, it may not be all that important to the customer. People can only focus on a few things at once and your offering may not yet be at the top of the stack. Fix: Revisit your customer contacts and build a stronger financial case.  Get the customer to agree on how much it will cost them if they don’t buy now.

Making Professional presentations:

Making Professional presentations Toolbox

Sales Presentation Checklist :

Sales Presentation Checklist I have... Scripted (in writing) my standard presentation(s) Outlined my scripted presentation as a guide for the actual presentation Scripted (in writing) responses to any probable questions or objections that may arise Delivered my standard presentation(s) to at least two different people who have offered me feedback Prepared appropriate standard presentation material for my expected audiences and forums (e.g., auditorium, small round table, conference room, hallway, etc.)

A Professional's Presentation...:

A Professional's Presentation... My presentation... Focuses on the benefits of my offering as they relate to solving the specific problems of the prospect Begins with the most important benefits and continues in descending order of importance, including only pertinent benefits Has no unneeded statements (zero fluff-- ask, "does it really matter?") Includes a very brief company background discussion only if it adds credibility to the product or service or if it's anticipated that the audience would like it addressed Includes appropriate, customized and easy to understand illustrations where applicable Includes opportunities for prospects to engage Includes a powerful conclusion which clearly illustrates the benefits my prospect will receive as a result of buying my solution now Is 10% shorter in terms of time than would be expected for a presentation which discusses a solution of its relative complexity

A Professional's Presentation...:

A Professional's Presentation... I will be sure to... Minimize the preparation work on the part of the prospect (e.g., acquisition of projectors, flip charts, markers, etc.) Confirm all individuals necessary to purchase my solution will be present Be enthusiastic and transfer my enthusiasm to the individuals in the room Avoid reading directly from any slides Avoid reading directly from my scripts and outline Avoid using industry jargon unless I'm absolutely sure the attendees will understand it Share my attention with all individuals in the room-- not only the primary decision maker Confirm the next action steps with all appropriate parties at the conclusion of the presentation

Being Professional - Prepared:

Being Professional - Prepared 1.    What are your strengths as an individual or as a company? As you prepare to compete, you want to play from a position of strength. You wouldn’t want to go out into the market leading with gymnastics when your strength is swimming. 2.    What is your competition doing? This question is not being asked so that you can do what they are already doing.  It is so you can decide what they are not doing—or not doing well—so you can do it, and do it better. Understand their strengths and weaknesses so that you can be prepared to go after them intentionally and aggressively, yet professionally. 3.    Where and how is your current business growing? Get the data intelligence. This is above and beyond running reports, but rather looking at trends by market segments and time frames. You want to understand where to put your focus for retention or perhaps the “plug” for the leakage. Establish your immediate plan of action and decide what activities are going to have the greatest impact on the business growth.

Being Professional - Prepared:

Being Professional - Prepared 4.    What are your customers wants and needs? Your customers are evolving and changing and becoming more demanding and more technical.  Think about what they want and need from you, not what you want to sell them. 5.    Do you know what you don’t know? A critical part of preparation is the conditioning and training you need so that you can be the best that you can be.  The first step in development is awareness. As a sales rep, do you know what you need to know to be prepared to compete as a professional?  Professionals don’t just show up.

Do you Know what you don’t Know?:

Do you Know what you don’t Know? Know how to pre-plan the sales call to be prepared and to uncover client needs. Understands the amount of sales activity required for appointments, presentations and closing new business. Know how to uncover needs through probing questions and creating rapport. Know how to diagnose, handle and overcome objections. Be Proficient in the e-Commerce offering and capabilities to demonstrate and sell it. Strong financial acumen and understanding of profit margin and what you can do to impact margins for the company. Understand the importance of business reviews, and how to perform them. Thorough understanding of what the company’s expectations are for business growth. Understanding of how to write and present a proposal, other than price. Thorough understanding of bid strategy, pricing and quotation processes. Know how to build an individual sales plan for each account. Know the importance of CPR—Conversion, Penetration and Retention activities—in each account and within your territory. Being prepared is knowing what you need to know about yourself and your business so that you can be the consummate professional, just like the Olympic athlete who is mentally and physically conditioned to win.

10 Biggest Mistakes Sales Representatives Make:

10 Biggest Mistakes Sales Representatives Make 26 % - Didn’t follow client’s buying process 18% - Didn’t listen to the client’s needs 17% - Didn’t follow-up 12% - Were pushy, aggressive or disrespectful 10% - Didn’t explain solutions adequately 6% - Made exaggerated or inaccurate claims 4% - Didn’t understand the client’s business 3% - Acted too familiar 2% - Didn’t know or respect the competition 2% - Other (such as charged high prices) (SOURCE: Harvard Business Review 2006, Atkinson and Koprowski)

Selling and Communication skills:

Selling and Communication skills Toolbox

Communication in Business:

Communication in Business Good communications are essential within a business if it is to prosper. In any business, the communication of information is an essential part of three key business activities:

Barriers to Communication:

Barriers to Communication

Overlooked Communications Skills:

Overlooked Communications Skills According to a UCLA study , the three V’s have varying impact: Verbal (content) = 7% Vocal (how you sound) = 38% Visual (body language) = 55% you need sizzle with the content!! Retention we only retain 20% of what you hear but you retain 50% of what we see & hear

Non Verbal Cues can Help “Influence” the Sales Process:

Non Verbal Cues can Help “Influence” the Sales Process

Cues for Sales Success:

Cues for Sales Success

Relationship Building Keys:

Relationship Building Keys Challenge is to... Quickly build rapport with new prospects Positive, trustworthy, likeable Transforming personal relationship in business relationship in order to gather information and really understand the customers need and wants Management of relationship Long term Multiple relationship at one time Establish a Relationship Strategy Adapt a win/win philosophy Project a professional image – integrity Practice different communication style Become a problem solver

Relationship Strategy Tips:

Relationship Strategy Tips Believe in yourself I can I will I did I’ll try I almost It wasn’t my fault Be assertive , persistent & patient Be Positive people like to be around positive people

Relationship Key - Trust:

Relationship Key - Trust Honest Credibility Believability Self Interest/Empathy Givers vs. Takers Belief that the other party will fulfil it’s obligations in a relationship Develop a win/win (mutual benefit) Will share more Shared goals & realize problems occur Awareness INFO SEARCH Familiarity Comfort Exchange Expansion Risk MAJOR ISSUES Dissolve Where are your relationships in the trust stage? Are you or your stakeholders working with “new” people? What are the major obstacles, threats or road blocks??

Communication Styles: Managing the Relationship Process :

Communication Styles: Managing the Relationship Process Toolbox

Communication Style Principles:

Communication Style Principles Individual differences exist and are important. Individual differences tend to be stable. There is a finite number of styles. Everyone makes judgments about people based on communication style.

Dominance continuum:

Dominance continuum Low High

Sociability Continuum:

Sociability Continuum Low High

Dominance Indicator:

I Perceive Myself As Somewhat Cooperative Competitive Submissive Authoritative Accommodating Domineering Hesitant Decisive Reserved Outgoing Compromising Insistent Cautious Risk-taking Patient Hurried Complacent Influential Quiet Talkative Shy Bold Supportive Demanding Relaxed Tense Restrained Assertive Dominance Indicator

Sociability Indicator:

I Perceive Myself As Somewhat Disciplined Easygoing Controlled Expressive Serious Lighthearted Methodical Unstructured Calculating Spontaneous Guarded Open Stalwart Humorous Aloof Friendly Formal Casual Reserved Attention-seeking Cautious Carefree Conforming Unconventional Reticent Dramatic Restrained Impulsive Sociability Indicator

Communication Style Classification:

High dominance High sociability Low dominance Low sociability Communication Style Classification

The Emotive Style:

The Emotive Style High dominance High sociability Low dominance Low sociability Emotive

Emotive Person:

Emotive Person Appears quite active Takes the social initiative in most cases Likes to encourage informality Expresses emotional opinions

The Director Style:

High dominance High sociability Low dominance Low sociability Emotive Director The Director Style

Director Person:

Director Person Appears to be quite busy May give the impression of not listening Displays a serious attitude Likes to maintain control

The Reflective Style:

High dominance High sociability Low dominance Low sociability Emotive Director Reflective The Reflective Style

Reflective Person:

Reflective Person Controls emotional expression Displays a preference for orderliness Tends to express measured opinions Seems difficult to get to know

The Supportive Style:

High dominance High sociability Low dominance Low sociability Emotive Director Reflective Supportive The Supportive Style

Supportive Person:

Supportive Person Gives the appearance of being quiet and reserved Listens attentively to other people Tends to avoid the use of power Makes decisions in a thoughtful and deliberate manner

Emotives in the “Excess Zone”:

Emotives in the “Excess Zone” Express highly emotional opinions Stop listening to the other person Try too hard to promote own point of view Become outspoken to point of being offensive Use exaggerated gestures and facial expressions to make a point

Directors in the “Excess Zone”:

Directors in the “Excess Zone” Get impatient with the other person Become dictatorial and bossy Will not admit being wrong Become extremely competitive Are cold and unfeeling when dealing with people

Reflectives in the “Excess Zone”:

Reflectives in the “Excess Zone” Become stiff and formal during social interactions Are unwilling to make a decision Avoid displaying any type of emotion Display a strong dislike for change Are overly interested in detail

Supportive in the “Excess Zone”:

Supportive in the “Excess Zone” Agree with everyone Are unable to take a strong stand Become overly anxious to win approval of others Try to comfort everyone Constantly seek reassurance

What Style is Your Buyer?:

High dominance High sociability Low dominance Low sociability Emotive Director Reflective Supportive What Style is Your Buyer?

Negotiation:

Negotiation Toolbox

Are you Selling or Negotiating:

Are you Selling or Negotiating Selling is establishing a need, then matching the benefits of your offering to that need. Negotiating is the actual process of bargaining to meet an mutually acceptable agreement. Both are important parts of developing a sales and closing it. Negotiation is about broader issues than price, like your overall business relationship. If a negotiation to gets down to price alone, you’re not negotiating, you’re haggling.

Strategy of being a reluctant buyer or reluctant seller:

Strategy of being a reluctant buyer or reluctant seller Keep in mind you are never actually being forced to sell or buy something. While you may want something, perhaps even very badly, or may have a good reason to sell something, no one is forcing you. As a good negotiator always have the attitude that you'll live very well even if you don't close the particular deal. People will react to your demeanour in any negotiation. Whether you are buying or selling something, always act as if you are doing so reluctantly. When a buyer offers a price say, "Look, I'm really not sure about selling this even at full price. It has a personal meaning to me and its really very valuable to me. However, it was nice of you to bring an offer to me. In all fairness, just so you won't have wasted your time, what's the very best price that you feel you could give me?" If you are the buyer: "Your asking price is way beyond what I'd even consider paying. I'm afraid it's out of the question. (Start to leave). In all fairness, I can understand you want as much as possible, look, just so you won't have wasted all your time, what's lowest possible price you would take, for cash?"

The Three “Nevers”:

The Three “Nevers” Never disclose that you "can't live without" the object of negotiation. As soon as you let someone know how much you have to have what they are selling, they firm their position and wait for you to break. You've just stated you have to have it. Why should anyone further negotiate with you at that point? Never disclose that you have any time pressure The minute you let someone know you are under pressure to make a decision, they will suddenly become very firm about giving up nothing. They will simply sit back and wait for you to run out of time. Watch deadlines, always probe for your opponents potential time pressures. Never disclose any unsatisfactory "other sources" you've explored. What you are really doing is telling your opponent how badly you need him/her. Your ability to negotiate seriously from this point on is damaged. You start to look and sound needy. You've lost your "walk-away" power and your opponent knows it.

How to negotiate so it doesn't go on endlessly :

How to negotiate so it doesn't go on endlessly Amateur negotiators will start out with small concessions and escalate to larger ones. This always makes an opponent feel that as the concessions get bigger and bigger, there's more. If the last concession you made was the biggest yet, just how big might be the next one. It gets to the point they are afraid to stop, so they go on continuously. Even when they end they always will feel there was more they could have had they didn't get. They don't leave feeling good about the negotiation. Professional negotiators reverse that. They give their biggest concession first. As the negotiations continue, the concessions you get from them get smaller and smaller. The seem to resist a little more each time you go for something else. The opponent feels they are getting close to the end even before they do. When it's over the opponent feels they've gotten you down to the bottom line, there was little if anything to be gained from further negotiations with you.

"What's negotiable?" :

"What's negotiable?" There will be times when buyers demand more than you can give. A time when sellers can't cut any further. Make a list of price trade-offs. The secret of good sales negotiation strategies is to have decided, in advance what you can ask for in return for a price cut. Remember that buyers, like everyone else tend not to value anything they can get easily. In fact if you are too quick to cut prices, no matter how low you go the buyer will always have a feeling he/she didn't really get your best deal. Every time you see them, they'll go for a price cut immediately. On the other hand, if the buyer has to work for a price cut, giving up something in return, he/she will feel they have done their job well and additionally feel like a winner. When they know they are going to have to give something up to get a better deal they will tend to make less demands for lower pricing on future sales calls.

9 Rules for Negotiating a Complex Deal:

9 Rules for Negotiating a Complex Deal The biggest B2B sales opportunities are often quite complex, involving strategic relationships and ongoing business arrangements. Closing these deals often involves some fairly complicated “give and take” negotiating. Unfortunately, many sales pros are more accustomed to simple transactions, where price is the only parameter.

9 Rules for Negotiating a Complex Deal:

9 Rules for Negotiating a Complex Deal Rule #1: Prepare thoroughly. Collect and evaluate information on leverage, values, sale prices, competition and other factors that will have an effect upon the negotiation. Rule #2: Develop realistic expectations. Temper your aspirations with “feasibility” based upon what your counterpart has in mind, and reassess your expectations as the negotiating progresses. Rule #3: Know your pricing parameters. When it comes to price, before bidding, know the deal you want and are able justify as being realistic. Rule #4: Decide whether to “go first” or not. If you put your own number on the table, you put your counterpart into your ballpark.  But, beware, you might accidentally low-ball.

9 Rules for Negotiating a Complex Deal:

9 Rules for Negotiating a Complex Deal Rule #5: Give yourself room to manoeuvre. Leave yourself some bargaining room, but make sure that you have a plausible rationale for the positions that you take. Rule #6: Manage the concession process. Let your counterpart know that every concession is meaningful and don’t let your counterpart think that holding out will reap big rewards. Rule #7: Create and sustain credibility. Buttress any positions that you take with appropriate rationales. Be specific about your facts, and stay detached from the emotion of the negotiations. Rule #8: Negotiate until the contract is signed. Don’t relax once there’s a meeting of the minds because negotiating a written contract is an important final step. Rule #9: Know when it’s time to close. If the negotiation is going well and you’ve got most of what you want, don’t keep negotiating.

Managing & negotiating with different social styles:

Managing & negotiating with different social styles Toolbox

Defining Social Style:

Defining Social Style A person’s Social Style is measured in relation to three behavioural dimensions: Assertiveness Responsiveness Versatility. The Assertiveness Scale: Measures the degree to which a person is seen as attempting to influence the thoughts, decisions or actions of others either directly by tell behaviour or by questioning, i.e. ask behaviour. Tell Behaviour: Is risk-taking, fast-paced, challenging. Ask Behaviour: Is co-operative, deliberate actions, minimizing risks. The Responsiveness Scale: Measures the degree to which a person either openly expresses their feelings or controls their feelings. The ends of the scale are “control” and “emote”. Control Behaviour: Is disciplined, serious, and cool. Emote Behaviour: Is relationship oriented, open, and warm. The two scales combine to give a two-dimensional model of behaviour, which will help you to understand how others perceive you. The dimensions of behaviour will also help you to plan how you can deal more effectively with people of different Social Styles.

Social Styles & how to Negotiate with them::

Social Styles & how to Negotiate with them: Driver: The Director. Assertive but not responsive Task rather than people oriented. Decisive and determined Controlled emotions Set on efficiency and effectiveness. Likes control, often in a hurry. Firm, stable relationships Stubborn, tough. Impatient. Inflexible poor listener. To Negotiate With Drivers: Plan to ask questions about and discuss specifics, actions and results. Use facts and logic. When necessary, disagree with facts rather than opinions. Be assertive. Keep it business-like, efficient and to the point. Personal guarantees and testimonials are least effective . better to provide options and facts. Do not invade personal space.

Social Styles & how to Negotiate with them::

Social Styles & how to Negotiate with them: Expressive: The Socializer. Assertive and responsive. Reactive, impulsive, decisions spontaneous, intuitive Placing more importance on relationships than tasks Emotionally expressive, sometimes dramatic. Flexible agenda, short attention span, easily loved. Enthusiastic. Strong persuasive skills, talkative and gregarious. Optimistic; takes risks. Creative. To Negotiate With Expressives: Seek opinions in an area you wish to develop to achieve mutual understanding. Discussion should be people as well as fact oriented. Keep summarizing- work out specifics on points of agreement. Try short, fast moving experience stories. Make sure to pin them down in a friendly way. Remember to discuss the future as well as the present. Look out for the impulse buy.

Social Styles & how to Negotiate with them::

Social Styles & how to Negotiate with them: Amiable: The Supporter. Not assertive but responsive. Dependent on others. Respectful, willing and agreeable. Emotionally expressive. Everyone’s friend; supportive; soft-hearted. Low risk taker, likes security Group builder. Over sensitive. Not goal orientated. To Negotiate With Amiables: Work, jointly, seek common ground. Find out about personal interests and family. Be patient and avoid going for what looks like an easy pushover. Use personal assurance and specific guarantees and avoid options and probabilities. Take time to be agreeable. Focus discussion on .how. Demonstrate low risk solutions. Don’t take advantage of their good nature.

Social Styles & how to Negotiate with them::

Social Styles & how to Negotiate with them: Analytical: The Clinician. Not assertive, not responsive. Precise, orderly and business-like. Rational and co-operative. Self-controlled and serious. Motivated by logic and facts. Not quick to make decisions. Distrusts persuasive people. Like things in writing and detail. Security conscious. Critical, aloof, sceptical. Excellent problem solver. Likes rigid timetables. To Negotiate With Analyticals: Take action rather than words to demonstrate helpfulness and willingness. Stick to specifics. Analytical expect salesmen to overstate. Their decisions are based on facts and logic and they avoid risk. They can often be very co-operative, but established relationships take time. Consider telling them what the product won’t do . they will respect you for it, and they will have spotted the deficiencies anyway. Discuss reasons and ask why questions. Become less responsive and less assertive yourself.

Sales Ethics:

Sales Ethics Toolbox

Sales Ethics: Oxymoron or Opportunity?:

Sales Ethics: Oxymoron or Opportunity? A study in Business Horizons magazine from Indiana University, found that customers increasingly base their buying decisions on whether they believe a company is ethical. Cynicism promotes fickle buying habits. "Corporations wishing to improve their relationship with the public, must let stakeholders know when they participate in undertakings that benefit the commonwealth." advises the magazine. Companies that take the "high road", will make lifelong customers out of even the most distrusting consumers. Who is the main connection between the company and the customer? The Salesperson! A company’s ethics and integrity are based on the relationship between the salesperson and the customer. How does one build or maintain an ethical foundation that will make a lifelong customer? There are four "ethics questions" that may help in establishing this kind of relationship.

1. Does my decision affect anyone else besides myself and the bottom line?:

1. Does my decision affect anyone else besides myself and the bottom line? If a salesperson reports selling more item that he/she actually sold, or induces customers to "load up" on products during a promotion period, it is a type of cheating that affects many people in adverse ways. One must consider the effect of one’s decision on the company, the customer and on one’s own integrity. The best decisions are made when one becomes "other-focused", or customer focused, if you will. Will the greater good be for you or your customer?? The overall goal needs to be – What can I do for you, to get you to cooperate with me? For life isn’t in the getting, but in the giving! For to the degree that you give is to the degree you get!

2. How do you become successful? Making sales or making loyal customers?:

2. How do you become successful? Making sales or making loyal customers? When you "make" a customer, you have begun the process of establishing a trust dimension. This trust becomes the basis for not only your business, friendships as well. Trust is the basic building block of any relationship. We don’t buy from people/companies we don’t trust! Why should your customers buy from you is they don’t trust you? Experience has proven that more time you spend in building solid trust-based relationships with your customers, the more loyal they become and consequently the better your bottom line. The emphasis in sales must go into relationship building, not just into the sale of products or service. What is the basis of developing a trust dimension?? Honesty!

3. Are ethics and service intertwined?:

3. Are ethics and service intertwined? What is good for the customer must always supercede what’s good for me. Going the "extra mile" for one’s customers establishes a valued based added dimension that will build trust, alleviate worry, and become the basis for all future business. Criticizing the competition always cheapens us in the eyes of the customer. Prove how valuable each customer is by being honest, customer focused and truly committed to exceeding your customer’s needs. Time should be spent, not in "brow beating" the competition, but rather in informing the customer of the benefits of doing business with you. This should be the goal for developing business. Remember, today’s customer requests are tomorrow’s customer demands! If you help your customers with what they need, they will come back to you for what they want! How are needs fulfilled? By doing what we can to meet the customer’s timeline, requirements, and expectations in an enthusiastic, and ethical manner. This builds trust and when trust exists, relationships flourish!

4. What is the "PTP" factor?:

4. What is the "PTP" factor? In whatever you do and in whatever you decide, you must always keep in mind the "PTP". What is the PTP? What is your Price To Pay for what you want to do? And if you can’t pay, then you better walk away! For what goes around always comes around! Decision making is like throwing a rock into a pond. No matter how big or small the rock is, when it hits the water, water is displaced! Likewise, no matter how big or small your decision is, other people are affected and that reality must be a consideration before you make the decision! For decisions that we in the hopes that no one finds out are usually wrong! Do you really want the sale at any cost? At the cost of your company’s integrity? your own integrity? Your company’s reputation? Your reputation? For what goes around always comes around! Always do what’s best for the customer. It will always come back to you. Remember, people like to do business with people that can be trusted, make them feel good, and will give them the very best advice, service and product!

Cross selling:

Cross selling Toolbox

Customers Desire Up Selling :

Customers Desire Up Selling One of the common blocks for most sales people is that they perceive up selling as irritating & undesirable to customer On the contrary customers desire cross selling & up-selling 88 % of customers value service reps who suggest alternative products or services that better meet their needs 73 % are interested in learning about new products or services the company is promoting 61 %t tend to ask service reps about these products and alternatives Customers not only engage in sales discussions with service reps, but they also buy 42 % of customers said they purchased additional products or services “sometimes” or “frequently” Worldwide Survey of Consumers by The Forum Corp.

Up Selling Helps the Customer :

Up Selling Helps the Customer When you Up-sell it's a way to further help your customer…to be more powerful, to enjoy more benefits, to maximize the usefulness of the products or services You are making informed suggestions as a knowledgeable representative Why don’t you open an FD to put in your excess cash in the bank account You are apprising customers of options they may not be aware of Offer – Buy 2, Get 1 Free You are often anticipating future needs A tie to go with the 3 piece suit that you have brought

Up-selling is Complete Selling :

Up-selling is Complete Selling Up selling is "complete" selling If you are selling a matching tie with the three piece suit, uncovering a need by asking the question leads to complete selling From the customer's standpoint, completing a satisfactory purchase Saving his an additional trip to buy the tie

Complete Selling: Types:

Complete Selling: Types Sell more of what your customers are already buying Customers have certain buying habits OR generally there are some hot selling items (based on sales data) Other music CDs featuring your customers' favourite artists Software companies are buying training in grooming & etiquette Sell complementary products and services Products that can be sold in conjunction with other products Fries/Potato Wedges with Burger Easy up-sell that can be made at the point of purchase Music CD + CD carrying case Introduce non-complementary products and services Current customers possess a degree of trust in your business and this can be converted into sales of products not directly related to the customers' existing purchases customer who typically buys music CDs can be introduced to videotapes and DVDs

Complete Selling :Points to Note:

Complete Selling :Points to Note Ensure that the customer is satisfied with first sale Factors most strongly affect their willingness to consider purchasing additional products or services. Satisfaction with current purchase How well additional products or services fit the customer’s needs Price Focus on customer needs-not yours. Sell with integrity Don't try to sell the customer something you wouldn't buy if you were ‘them’ It’s easy . It is a ‘by the way’ presentation Since it's done after the customer has decided to go ahead with a purchase, the hard part of the sales conversation has already been done. You've got to assume that the customer will naturally want this.  Begin the up sell with a brief benefit, then if possible, add something unique about what you're selling. Up-selling is just presenting the information in a "by-the-way" assumptive manner

Complete Selling: Points to Note:

Complete Selling: Points to Note Be prepared with positive aspects when selling expensive alternatives. Customers will ask why they should choose these Why should I buy Polaroid glasses instead of plain Recognizing sales opportunities is a matter of observing ‘body language’ and ‘reading’ customers Signals to look for : uncertain body language, looking around, scanning the counter , hesitation in ordering, or studying menus for a long time Excellent service would be to go and sell to these customers Remain in Control One of the key phrases that will end a large, multiple-item sale with a whimper rather than a bang is…‘Would you like anything else?' This is not proactive and does not put you in control." Instead, says salespeople should take the lead. Some phrases : Would you like [product X] with your [product Y]. (Example: A Pepsi to go with Crisps.)

Three Mistakes in Complete Selling:

Three Mistakes in Complete Selling The 3 biggest mistakes : No attempt is made to up-sell or cross-sell The salesperson comes across as being pushy To avoid sounding pushy, particularly if the up-sell requires some elaboration, ask for the customer's permission to describe it Continuing to sell after the customer says he’s not interested The up-sell is made in an unconvincing manner so the customer generally refuses Service through sales not ingrained Little product knowledge Emphasizing features rather than benefits Selling something that the salesman would not buy himself

Territory Management:

Territory Management Toolbox

Nature of Territory Management:

Nature of Territory Management Salespeople are not only responsible for individual customers (account management) but also responsible for a group of accounts (territory management). It is defined as planning, implementation, and control, of sales persons activities with the goal of realizing the sales and profits potentials of their assigned territories.

Defining Territory Management:

Defining Territory Management Although geographic considerations play a role in setting boundaries, sales territories are primarily based on customer grouping. Should the sales executive assigned a territory on the basis of the geographically area or customer base? What if a customer has multiple plant location? Or the client shifts its business area?

Types of Accounts:

Types of Accounts Major Accounts Customers whose significance to the company’s business requires special attention and experience. Major accounts are also termed as ‘ key accounts’ They are usually called on either by special sales people “senior sales representative” or “key accounts manager”, or by regional or district sales managers. Direct Accounts Large accounts involving special arrangements in terms of pricing, credit or product design. For e.g. central buying offices of a multinational firm. These are also called “ House” or “National” accounts those served by home office personnel or executives.

Territory Activities :

Territory Activities

Sales Territory Design:

Sales Territory Design Designing sales territory involves breaking down a firm’s customer base so that accounts can be well served by individual sales persons. Poor territory design can lead to inadequate market coverage, unequal workload, lack of control over the workforce and depressed morale. A company's sales territory represents basic accountability units to the lowest level of aggregation.

Manage to Succeed :

Manage to Succeed

Reasons for establishing sales territories:

Reasons for establishing sales territories Companies form sales territories mainly to maximize sales and profits. There are 3 pairs of guiding principles that cause sales management to employ territories in their operations: (a) customer-related (b) salesperson-related (c) managerial

Customer-Related:

Customer-Related REASONS Provide intensive market coverage Provide excellent customer service BENEFITS Produce higher sales Produce greater satisfaction

Sales Person-Related:

Sales Person-Related REASONS Generates enthusiasm and motivation Facilitate performance evaluation BENEFITS Lead to less turnover, employee satisfaction Offer rewards related to effort, pay-for-performance

Managerial-Related:

Managerial-Related REASONS Enhance control Coordinate promotion BENEFITS Tight handle on selling expenses / allocate cost by territory Plan for staff incentives

Reasons for Revising Territories:

Reasons for Revising Territories Major accounts open or close down facilities, move into or out of the area, or shift in customers business – geographically or technological in nature Aggressive domestic or international competition (markets are dynamic and conditions change) Changes in company’s buying policies or structure Salespersons related revision due to physical, social, or psychological changes. A salesperson may display a reduced energy level, family problems of various kinds can effect territory performance significantly. If a territory’s sales potential was underestimated or overestimated. Managers can also find that they need to realign territories as new product lines are introduced into the company’s product mix and the presentation and servicing burdens become too large under old arrangement.

Reasons for NOT establishing sales territories:

Reasons for NOT establishing sales territories When a company is small (few resources) When friendship sales is important to maintain for long-term relationship When high technology selling is involved. In high technology application there are often a very limited number of potential customers nationwide that require highly specialized advice.

Developing Territories:

Developing Territories Drawing up territories ranks among the most important responsibilities of sales managers. It affects the sales force morale and performance. Results can be measured by sales volume, relative market share or profit.

Factors to consider in establishing ‘Territories’:

Factors to consider in establishing ‘Territories’ Sales persons workload and nature of the job, for e.g. a prospecting salesperson can handle a larger territory assignment then a person who must provide full service for each account. The type of product / product lines The type of competition faced by the company in each territory. The desired intensity of the market coverage / challenging territories Channels of distribution available and transportation system Sales potential and servicing requirement. Limited potential territories can be used as a training grounds for new members of a sales force. Salesperson can be assigned to more challenging territories in accordance with their performance.

Model of Territory Management:

Model of Territory Management Territory management can be defined broadly in terms of: Planning (Analysis, Objectives, Strategies, Tactics) Implementation (achievement of new business targets, reporting) Control (compares intended and actual results with a view to taking corrective action)

1. Planning:

1. Planning Analysis: Account load – the number of actual and potential customers assigned to a salesperson Account potential – the share of an account’s business that the firm can reasonably expect to attract. Servicing requirements – established and new accounts have servicing requirements that are based on both the past volume with the company and their unique needs and problems. Objectives: Concern here is the sales volume and market share goals in the territory, which is derived in top-down manner, starting from corporate objectives. Strategies: Have to work on various strategies like pricing, promotional, delivery terms, payment and credit terms. Tactics: Routing and scheduling task, avoid repetitive tasks, intensity of territory coverage and minimizing non-productive time. Designing a sales person travelling plan or the sequence of location to be visited (known as ‘Routing’). Proper scheduling or sequencing of appointments.

2. Implementation:

2. Implementation Establishing customer base; selling and servicing these accounts is the principal act of territory activity. New business development should be a continuous undertaking. Customer satisfaction and maintaining long term relationship are among the foremost concern of the territory manager. Another important ingredient in implementation is ‘reporting’. Maintaining a steady flow of reports to the home office about sales results, problems or corrective actions.

3. Control:

3. Control A feedback process A comparison take place between intended and actual results, with a view of taking corrective action where required.

Prioritize Your Activities to Produce Maximum Results :

Prioritize Your Activities to Produce Maximum Results How you prioritize your sales territory management activities depends upon whether you are managing a territory that has existing customers, or whether you are building your customer base from scratch. If you manage a territory that has existing customers, your first priority should be to introduce yourself to every single one of your customers. This should be a pleasant, low-key introduction along the lines of, "I just wanted to introduce myself and see if there is anything I can do to help you." Then, as you are chatting with your customers, you can ask, "Would you mind sharing with me how you think my company's relationship with you has been going so far? What have we been doing well? Where could we improve?" Collecting this kind of feedback is a great way to start relationships with customers. It also helps you draw any festering problems out into the open. If you can address the problems quickly, it can really jump-start your relationships with the affected customers. This same approach can also be effective for customers that have been reducing their purchases from your company over time, or customers that have stopped ordering completely. It is never much fun to listen to people complain. But, if you can isolate and solve the problems that are causing the dissatisfaction, you can produce a rapid and substantial boost in sales.

Prioritize Your Activities to Produce Maximum Results :

Prioritize Your Activities to Produce Maximum Results If you find customers that are really happy with the service your company has provided, drill down (with more questions) to determine just what has made them so happy. Their answers will provide you with a template for successfully managing their (and other) accounts. Also, ask these happy customers for referrals, regardless of whether you have contributed in any way to their happiness! Happy, satisfied customers are usually delighted to share their positive experience with others. Once you have met all of your existing customers, the next step is to identify target prospects in your territory Start by checking with your manager. If they have been managing your sales team for any period of time, they should be able to suggest some good target prospects. Once you have compiled a list of target prospects, determine which ones you will pursue first. Which target prospects have the greatest potential to purchase the largest amounts of products and services? Which ones are likely to be "quick closes"? If you have both types of target prospects on your list, pursue several of each type at the same time. In the words of a well-respected executive that I used to work with, "Elephant hunting is great. But those rabbits sure taste good in between the elephants!" When you are ready to begin pursuing your target prospects, start by asking your existing customers whether they know anyone that works in the target organizations. If they do, ask for referrals. Once you have exhausted available referrals, proceed with the other activities in your prospecting plan - but tailor these activities to attract the attention of your target prospects.

Prioritize Your Activities to Produce Maximum Results :

Prioritize Your Activities to Produce Maximum Results Conclusion Effective sales territory management begins with touching base with every single one of your existing customers. Ask questions to gauge their satisfaction with their relationship with your company. If they identify any problems, work aggressively to solve these problems as your first priority. If a customer expresses happiness and satisfaction, ask questions to determine what your company has been doing right. Use this information to create a template for managing all of your accounts. Also be sure to ask for referrals, both in general and to specific target accounts. Exhaust these referrals before you begin the other (less productive) activities in your prospecting plan. Prioritize your activities as described in this article, and you will maximize sales growth in your territory!

Account Review:

Account Review Toolbox

The Account Review:

The Account Review Sales may be the only profession where even superstars lose more than they win. Sales is not a numbers game... sales is rocket science... And like all professionals, salespeople always test assumptions, evaluate processes and learn from the business they get and from the business they lose. The account review is one way to organize your analysis of your sales results. It helps you identify why the outcome was what it was so you can learn from your successes and turn even your set backs into something valuable. Pull out ten recent cases of business you've won or lost... work through the questions and answer them objectively. No need to spend time on beautiful and grammatically correct responses — quick stuff here. You're looking for patterns or correlations that will help you minimize future losses and maximize your potential for future wins.

What was the Sales Result?:

What was the Sales Result? WON || LOST Sales opportunity 1. What's the company? 2. What's the role of my primary contact? 3. What's the primary contact's title? 4. What product or service was involved? Source of prospect 1. Was the prospect from my outbound prospecting efforts? If so, which lead source? 2. Was the prospect from an advertising or direct marketing campaign? If so, which campaign? 3. Was the prospect from a trade show? If so, which show, when and where? 4. Was the prospect a referral? If so, from whom? From what industry was the referral given? 5. Was the prospect an inbound inquiry? If so, be thankful for this one.

Decision & Needs Analysis:

Decision & Needs Analysis Decision maker/ decision process 1. Who was the decision maker? 2. What was the decision maker's title and role? 3. Describe the decision making process. 4. Who else was involved in the decision making process? What were their titles and roles? 5. What was the time frame for the decision? 6. What third party influencers were involved? 7. Did I have direct access to the decision maker? 8. Was my primary contact the decision maker? Needs and objectives 1. What was the prospect's specific need for the product or service involved? 2. Describe specific statements from the primary contact that define that need. 3. What objections were raised by the prospect? 4. What responses were used to overcome those objections?

Understand the Needs:

Understand the Needs Note: if you're uncertain of how well you understand your prospect's needs, review these questions to evaluate your understanding... 1. What was my prospect's business goal or objective? 2. What was my primary contact's personal goal or objective? 3. What was the prospect doing before they made this decision? 4. How many people would use the product or service involved? 5. Specifically, how would the prospect use my product or service? 6. How long has the prospect been in business? 7. How long has the primary contact been with the prospect company?

Other Useful Questions:

Other Useful Questions Playing field and competition 1. When did I arrive in the buying process? e.g. first, 1. second, last... 2. What criteria was established by the prospect for the selection process? 3. How were these criterion determined? 4. When did I last verify these criterion were still valid? 5. What competitors were involved? 6. If the account was lost, who won? Pricing/ budget 1. What was the prospect's budget or desired price target? 2. Was price raised as a significant issue? If so, when in the process? 3. What price concessions, if any, were offered to the prospect? When?

More Useful Questions:

More Useful Questions Referrals and collateral 1. Which referral customer(s) did I use, if any? 2. Which collateral material(s) did I use? 3. What type of follow up or support materials were provided? Time frame 1. What decision time frame did the prospect provide at the beginning of the process? 2. What was driving the time frame? 3. Did the time frame change as I moved through the sales cycle? 4. When did I last verify the decision making time frame?

And More Useful Questions:

And More Useful Questions Warning signals 1. Did the prospect hedge on when a decision would be made? If so, when in the process? 2. Did the prospect hedge on the available budget or target price point? If so, when in the process? 3. Did the primary contact reduce frequency of contact or become increasingly unavailable? If so, when in the process? 4. Did the primary contact reduce my contact with others involved in the decision making process? If so, when in the process? 5. Did the decision making process get changed? If so, when in the process? 6. Did the prospect de-emphasize the need for the product or service? If so, when in the process? Overview/ summary 1. If won, was there one occurrence or activity that was primarily responsible for winning the business? If so, what? 2. If lost, was there one occurrence or activity that was primarily responsible for losing the business? If so, what?

Time management:

Time management Toolbox

Time: its attributes:

Time: its attributes Time is neutral Time cannot be saved for future use Each activity requires a minimum quantum of time Time has a value like currency Time is cumulative in nature

Time Management:

Time Management

How Sales People Typically Spend their time - 46.9 Hour Workweek:

How Sales People Typically Spend their time - 46.9 Hour Workweek

Very Common Time Wasters:

Very Common Time Wasters Not enough time scheduled for necessary, top priority tasks Interruptions, drop-in visitors, distractions, telephone calls Doing-it-yourself, involved in too many detailed, routine tasks Always crises, fire-fighting Lack of objectives, deadlines and priorities Lots of paperwork, reports, reading material Leaving tasks partly done, jumping from task to task Procrastination, indecision, daydreaming Lack of self discipline Socializing, idle conversation Failure to do top priority tasks first Constantly switching priorities

Understand the value of your time...:

Understand the value of your time...

Time Management:

Time Management T ime is life, do not waste it I dentify major thieves of time and eject them M ake a realistic list of things to do and act on it E liminate unnecessary activities M emory aids such as diaries and tape recorders are useful A nalyse how time is spent N ever take on more than is necessary, learn to say no A nalyse yourself and operate within your strengths G et on by being organized E mploy a programme of physical and mental fitness M anage backlog E mploy a schedule or planner to chart the way ahead N ever cease striving to become more efficient and effective T reat each day as your last, maximize it.

Principles of Time Management:

Principles of Time Management Set goals and Establish priorities Spot the Time Wasters Live Time Management Think quality not quantity of Time Organize Yourself for success – Prioritize, Clear your desk, delicate work to others, stay healthy in body and mind, Act purposefully and positively. Write a Daily Time schedule: - Time, Activity, Priority (mark each activity according to how important it is (A: Extremely important; B: Important; C: relatively unimportant), Effectiveness and then evaluate the complete time plan of the day. Work to suit your preferred lifestyle

How to plan your day:

How to plan your day Visualise your long term goal Try to do your planning at the same time every day. Use only one planner to keep track of your appointments Write out a To do list every day Don’t jam your day full of activities. Do it now. Always plan time for balance; include family, fitness, recreation, Social and spiritual activities.

Importance of Setting Goals:

Importance of Setting Goals

Problems and Solutions for Proper Time Management:

Problems and Solutions for Proper Time Management Personal: ü Know priorities of doing things ü Be organized ü Spend some time as leisure time Psychological: ü Have self discipline ü Learn to say “No” if it demands ü Believe in team work ü Have a watch on the work entrusted

Problems and Solutions for Proper Time Management:

Problems and Solutions for Proper Time Management External: ü Maintain proper relationship with friends and colleagues ü Never attempt indirect interactions Social: ü Allot some time to spend with nature with parents, to love, to listen, to dream to and to think ü Morning 4.00am to 9.00am is the best time for work

Problems and Solutions for Proper Time Management:

Problems and Solutions for Proper Time Management Postponement: Postponement or procrastination is mainly due to a lack of interest or pleasantness in work and the complexity of work. ü Unpleasant tasks ü Complex projects ü Fear of failure ü Lack of interest ü Perfectionism ü Distraction, lack of focus

Organize Your Time:

Organize Your Time The money hours organize your day around the money hours – the hours when you can and should be talking with prospects and customers handle non-revenue generating activities before or after the money hours Prospecting hours dedicate a certain percentage of money hours to prospecting to increase the probability of reaching prospects, vary the time of day you prospect schedule it, do it, love it Follow-up queue up and standardize your most frequently used follow-up pieces for easy production and distribution document follow-up immediately – don't set it aside Professional development schedule non-money hours for sales skill development or improving industry and/ or product knowledge understand the value of your time...

Organize your Time:

Organize your Time Sales days be aware of the sales days for each month and quarter know where you are in the sales timeline and plan accordingly Sales stats understand and track your sales stats so you can plan effectively dials to contacts contacts to qualified leads qualified leads to proposals proposals to contracts contracts to customers dials per hour follow up calls per hour follow up attempts before dropping determine the value of each sales hour given your earnings level/ target

Organize your Time:

Organize your Time Extra time choose a reasonable extra amount of time to dedicate to sales each day (23 minutes each sales day adds one extra sales day each month) Productive down time always have something to read... always... for flight delays, waiting rooms and lines use drive time for sales development and phone calls (get a headset if you can) The extra call one extra call a day is more than 250 extra contacts in a year remember time management basics... Start early not only for the day, but also for the week, month and quarter start early on projects and sales appointments

Organize your time:

Organize your time Plan ahead look ahead to sales days around holidays, end of the month and end of the quarter and plan accordingly be aware of the sales "timeline" for your product – where you are in the month and where you are with the prospect Respect time your time, your prospect's time, your customer's time professionals don't waste time and prospects and customers respect those who understand this... be punctual and be succinct

Tips for Successful Time Management:

Tips for Successful Time Management Doing things with concentration, dedication conflicts and commitment and not in a careless manner. Trust others and distribute works to others Never think about unnecessary things and never interfere in others matters Postponement of planned events is an avoidable bad habit Breakdown your goals into smaller task with manageable steps Be punctual Hurrying up is to always the best way of doing a thing faster Don’t forget or misplace things Use a calendar/ Get organized

Imagine the luxury of having more time:

Imagine the luxury of having more time To spend with your family To go on that “special” vacation To take up a new hobby To read that latest, popular book Or just to relax and live a little. All of this is possible but you must use time management techniques to organize your personal and business activities

Final Word on Time Management:

Final Word on Time Management PAY P rioritise your A ctivities by Y ield

Leadership & motivation:

Leadership & motivation Toolbox

What is the Difference Between Leadership and Supervision:

What is the Difference Between Leadership and Supervision Leadership: The use of influence with other people through communications processes to attain specific goals and objectives Supervision: The day-to-day control of the Salesforce under routine operating conditions

Sales Force Socialization:

Sales Force Socialization Task-Specific Self-Esteem: The extent to which an individual believes s/he can perform a task competently Organizational Commitment: The extent to which an individual feels a bond to the organization Formalization: The extent to which work activity is directed by rules, regulations, and commitment Work Alienation: An individual's psychological separation from the activities of the job Job Involvement: An individual's psychological attachment to the job itself

Power and Leadership:

Power and Leadership Five types of power which may be present in interpersonal relationships: Expert Power Referent Power Legitimate Power Reward Power Coercive Power

Leadership Approach:

Leadership Approach Trait Approach Behaviour Approach Contingency Approach

Impact of Management Style (McGregor Theory):

Impact of Management Style (McGregor Theory)

Sales Manager’s Leadership Roles:

Sales Manager’s Leadership Roles Inspirational leader: the sales manager is the emotional catalyst for subordinates. Innovator: a leader is the source of problem-solving ideas for followers – how to win the big account, how to cover the territory more effectively, how to reduce expenses. Superior performer: ideally the supervisor is a proven salesperson and knows a great deal about selling, salespeople respect the supervisor order and advice. Guardian of the status quo: sales manager speaks for and represents the company; he is the source of information about firm’s policies, procedures etc.

Individual Leadership Skills:

Individual Leadership Skills Perception: a sales manager must be skilled at perceiving the meanings and causes of individual and group behaviour. Conceptual ability: it is the process by which one relates to and understands everything that happens. Self-awareness: it is a person’s ability to recognize that a leader is an integral part of the management process. Human relations skills: art of creating and maintaining organizational cooperation for maximum efficiency, low cost and high personal job satisfaction.

Coaching:

Coaching The continuous development of salespeople through supervisory feedback and role modelling. Take a we approach Address only one or two problems at a time Don’t focus on criticizing poor performance, reinforce good performance Foster involvement Recognize differences in salespeople and coach accordingly Coordinate coaching with more formal sales training Encourage continual growth and improvement Insist salespeople evaluate themselves Obtain agreement with respect to punishments and rewards Keep good records

Motivation:

Motivation The core of sales management – is simply the “how-to” aspect of getting salespeople to do their jobs well. To determine the proper incentives to use, sales managers must understand the needs of their sales people. This is not easy because each salesperson is different and has different needs. Research also suggests that salespeople’s psychological and sociological needs differ according to career stage.

Types of Needs:

Types of Needs Primary needs: physical needs that must be satisfied immediately. Secondary needs: psychological needs that are satisfied at a later stage. Rational needs: are those based on reasons. Emotional needs: these are based on emotions or may result from desires for status and prestige.

Maslow’s Hierarchy of Needs:

Maslow’s Hierarchy of Needs The theory states that needs on the lowest level must be identified and satisfied before higher-level needs become important motivating forces: Physiological needs – basic requirements Safety needs – protection from various kinds of threats, dangers and uncertainties Social needs – significant relationship with other people Ego needs – feelings of self-esteem, self respect, self confident and achievement. 5. Self-actualization – desire for self-fulfilment and a wish to succeed simply for the sake of accomplishment, not for material gain/recognition

Maslow’s Hierarchy of Needs:

Maslow’s Hierarchy of Needs

Adams’ Equity Theory diagram - job motivation:

Adams’ Equity Theory diagram - job motivation

Expectancy Theory of Motivation:

Expectancy Theory of Motivation Theory that people decide how much effort to put into their work based upon what they expect to get out of it. Salespeople will be motivated to do well if they belief that their efforts will result in appropriate rewards. High motivation occurs when a salesperson values the specific outcome (reward) that results from successful performance.

Path Goal Theory:

Path Goal Theory Concept that a salesperson’s motivation stems from the supervisor setting the tasks, and expected performance levels, then providing the support required for their accomplishment. It is extremely important that a salesperson understand his/her role in the firm (Role Clarity). Path-goal theory is a leadership model that says the supervisor’s establishment of tasks and expected performance levels and the provision of needed coaching guiding, support, and rewards will motivate subordinates towards higher levels of performance and greater job satisfaction.

People Performance Potential Model :

People Performance Potential Model For assessing teams and identifying development direction and aims.

Building a Results-Focused Culture:

Building a Results-Focused Culture 1. Decide that your culture is a competitive tool. Well, duh! Of course your culture is important. Your CEO just reaffirmed it at the last employee meeting as “We Are Family” blared in the background. Not so fast, Bucko. Affirming is not the same as deciding. The best companies treat their culture as part of their core business strategy. Until you decide (truly decide) to do so, nothing else in this article matters. 2. Inspect and act on what you expect. Your company conducts an annual employee survey, right? If not, you should. It’s simple – write down what you believe, and ask people how the organization is doing. Yes, it takes coordination. On the other hand, Johnson & Johnson does it every year in thirty-six languages to employees in fifty-seven countries. You can do this. The difficult part is actually doing something with the information. Inspecting what you expect only works when you act. Doing so makes the inspection meaningful and makes everyone more conscientious about contributing to the culture. Culture change follows performance change, and performance change begins with clear expectations reinforced by accountability.

Building a Results-Focused Culture:

Building a Results-Focused Culture 3. Hire your people. “Hire for fit” is an accepted principle in human resource circles. So why bring it up? We sacrifice conceptual support on the alter of immediate need. Slots are filled with the best immediately available fit rather than making the extra effort to find the person who has your culture oozing from their pores. Every effort to make a better match between applicants and your culture will be rewarded with increased results and better working relationships. 4. Cultivate Culture Carriers at every level. Building a great culture in today’s flat, connected world requires that messages be carried to and from every organizational level. Memos from the board room compete with blogs from the front line for attention and relevance and influence. No one cares what the senior leaders say if their immediate supervisors are not living the message. Exceptional leaders use every tool at their disposal to earn and maintain trust and build the relationship every day. They fight for the right to have great people committed to the cause. They see and act on a greater vision than employees see for themselves. Cultures can be articulated from the top, but they are cultivated when people at every level feel included. Asking people to apply to others what they do not receive themselves sentences you to failure.

Building a Results-Focused Culture:

Building a Results-Focused Culture 5. Generate creative tension. Give us a compelling goal and a clear picture of reality, and we will act to close the gap. Everyone who has watched a two-year old go after the cookie jar on top of a refrigerator knows this is true. Presented with the ultimate prize of Double Stuffed Oreo cookies and the frustrating reality that they are vertically challenged, creative tension sets in. You don’t have to talk about thinking outside of the box, or being creative or any other piece of business speak. Just sit back and watch them try stuff until the goal is met. Sadly, creative tension subsides when the prize on the top of the refrigerator is less appealing- like brussel sprouts. 6. Protect the culture when times are bad. Anyone can build a great culture when times are good. It takes courage to do so when they are not. Macro level actions from the top make the news. Micro level actions – like a supervisor who conducts a disciplinary conversation in a manner that shows respect, solves the problem, and maintains the relationship – makes partners in the quest to deliver amazing results. Here’s the news – Be relentless at very level, in good times and bad, in finding new ways to nurture, sustain, and guide a culture that it is focused on results, relationship, and accountability.

Sales management:

Sales management Toolbox

Sales Management is not fun :

Sales Management is not fun I recently consulted with the universal source of all knowable information, Google, and it would appear that sales management is not fun. Here is my proof: “sales management fun”; zero matches (although “sales management. Fun…” came up a couple of times. “I love being a sales manager”; zero matches “I like being a sales manager”; zero matches “I love sales managers”; zero matches “I love sales management”; two matches “I want to be a sales manager”; five matches (now we are getting somewhere!) By contrast, check out the results of these searches… “I love Paris Hilton”; 25,400 matches “I love baseball”; 155,000 “I want to be rich”; 102,000 “I hate my boss”; 59,200 matches

Sales Management Simply:

Sales Management Simply

The Four Phase-Model of the Sales Management Process:

The Four Phase-Model of the Sales Management Process

A more detailed Sales Management Model:

A more detailed Sales Management Model Describing the Personal Selling Function Defining the Strategic Role of the Sales Function Developing the Sales Force Directing the Sales Force Determining Sales Force Effectiveness and Performance

Another view of Sales Management:

Another view of Sales Management

Another View of Sales Management:

Another View of Sales Management

Five Levels of Sales Management:

Five Levels of Sales Management

Sales Management Trends:

Transactions Relationships Local Global Management Leadership Individuals Teams Sales Volume Sales Productivity Sales Management Trends To From

Sales Management Process:

Sales Management Process

Leadership Trends:

Leadership Trends

Sales Teamwork Approaches:

Sales Teamwork Approaches

Sales Teamwork Approaches:

Sales Teamwork Approaches

Main Purpose of the Sales Managers Job:

Main Purpose of the Sales Managers Job To achieve and exceed Sales Objectives by ensuring that each and every member of the team achieves and / or surpasses his / her respective objectives. “We cannot do today’s job with yesterday’s methods and be in business tomorrow” --- Nelson Jackson A Group of Donkeys lead by a lion can defeat a group of lions lead by a donkey ---Socrates

5 Differences Between Managers and Representatives :

5 Differences Between Managers and Representatives Representative Works alone Does the work Like a player in the team Is lead and Managed Responsibility: Single Manager Works with others Develops people/customers Like a coach and a counsel; Pitches in as player when needed. Is the Leader/Manager according to the condition Responsibility -Various

Sales Force Competencies: “Top 10” Mindmap:

Sales Force Competencies: “Top 10” Mindmap

Sales Management Key Responsibilities:

Sales Management Key Responsibilities Building the right sales strategy Hiring the right team Creating the right compensation plans, territories and budgets Setting the right projections Motivating the team Tracking revenue against goals Resolving conflicts Training & coaching the sales representatives & technical sales staff Managing sales and customer service processes Getting the sale!

Other Responsibilities :

Other Responsibilities Ensuring achievement of assigned Team’s and individual team members’ objectives Decision Making Ensuring his objectives achievement covering up deficit of anyone in his team. Focus on Brands / New Products Distribution Channel Management Timely Reporting and Feedback Developing Team Members Market Development Market Intelligence Strong Customer Focus Planning, Monitoring & Controlling Appraising &Reviewing Necessary course corrections

Sales Manager Competency Map:

Sales Manager Competency Map

Key Activities :

Key Activities Strong Customer Focus Right product for the right customers Frequency of visits Servicing Trouble shooting Retention and multiplication of customers Tracking of Customers Objective setting Assigning the responsibilities as per the resources Alternative steps in case of crisis Monitoring of Progress/Key Customers

Key Activities:

Key Activities Ensuring at distributors’ level Inventory Check Payment follow up Liquidation of short expiry / non moving products Settlement of Claims Successful of Operation of bonus offers New Product availability Reporting Weekly Reports on time Specialty Coverage Analysis Sales Promotion Proposal / Report cum Expenses Statement Subordinates’ Coverage format-Self Analysis Campaign Sales Meeting follow up. Record of Leaves Sales Diary

Key Activities:

Key Activities Market Development / Market Intelligence Gather information from distributors / retailers to know the actual market potential Focused approach Rural coverage Distributors’ appointment Customer contact programmes Tracking Competitors Feedback On inputs On competitors Regarding strategies On emerging trends To subordinates on performance To superiors on any important developments

Key Activities:

Key Activities Development of Team Members Review of Team members’ performance identifying key areas for improvement Improving his/her knowledge / skill levels Coaching Training Improving his / her personality Motivating Review and Appraising Performance Agreed action plans Market potential Consistency in sales Coverage of territory Coverage of Key customers Growth in Sales Maturity Market knowledge Reporting

Key Skills:

Key Skills Analytical Skills Technical Skills Communication Skills Selling Skills Planning Skills Reviewing Skills Managerial Skills Interpersonal relationship Skills Negotiating Skills Administrative Skills Interviewing Skills Counseling Skills Forecasting Skills Leadership Skills

Key Performance Parameters:

Key Performance Parameters Targets Field Work inputs Implementation of strategies Implementation of learning Knowledge Team Performance Development of Subordinates Market Development Reporting Discipline Distribution Management Maintenance and analysis of Data Self Development

Sales Manager Profile:

Sales Manager Profile Team Leader Decision Maker Coach Role Model Problem Solver Strategist Knowledge Resource Good Communicator Mediator Counselor Motivator Negotiator Positive Thinker Hard Worker Honest Listener Observer Fair Achiever Adaptable Enthusiastic

The Effective Sales Manager:

The Effective Sales Manager

Difference between Marketing and Sales Management:

Difference between Marketing and Sales Management Marketing and sales are close relatives. Marketing sets the scene. Sales finish the job. When all else is said and done, marketing is part of the sales process. Sales is the end result of marketing. Sales is part of marketing – it is the transfer of title of ownership of goods. Marketing is concept oriented and Sales is Product oriented. The Marketing function creates the dark clouds and the Sales function makes the rain.

Quantitative short-term Objectives of Sales Management:

Quantitative short-term Objectives of Sales Management

Qualitative longer-term Objectives of Sales Management:

Qualitative longer-term Objectives of Sales Management

Keys to Sales Management:

Keys to Sales Management

Sales Management is Required:

Sales Management is Required The responsibility for ensuring that every member of the sales team is successful and performing at optimum levels lies entirely with management and on the next slide are the eight reasons why sales people fail. In fact, you can as ask just three very straightforward questions, in order to identify why a salesperson is underachieving i.e., Are they visiting/talking to enough clients/prospects? In other words are they pro-active and are their activity levels high? Are they talking to the right people within those client/prospect organizations? Are they able to penetrate the formal DMU (Decision Making Unit) and get to the MAN? Are they saying/doing the right things? This really means – how strong are their selling skills?

Eight Reasons why Sales People Fail - Management:

Eight Reasons why Sales People Fail - Management 1. Wrong or no selection process - The wrong person for the position 2. Wrong or no training - Insufficiently developed 3. Wrong or no planning - Expected to do all of their own planning 4. Wrong or no supervision – Left without competent supervision 5. Wrong or no motivation - Not properly motivated to meet objectives 6. Wrong or no stimulation – Not stimulated by appropriate incentives 7. Wrong or no evaluation – Not regularly appraised against a set of agreed objectives 8. Wrong or no executive action – Not adequately supported by a competent manager

Determining Sales Management Effectiveness:

Determining Sales Management Effectiveness

Team Evaluation – Best Case:

Team Evaluation – Best Case Sales team is a revenue machine. People have the right skills & experience They’re motivated to come in each day and close business You coach them regularly to improve their performance When problems arise, they’re dealt with swiftly The sales team does a great job delivering the company’s value proposition, brand strategy and messages

Team Evaluation – Worst Case:

Team Evaluation – Worst Case Your sales team isn’t strong. They may not have a dedicated sales manager to help improve performance. They may not have enough experience, especially if you’re a small company that can’t yet afford the big hitters. You have a pipeline but don’t know what’s happening with the prospects; it takes longer than it should to close deals. You suspect you need an entirely new sales operation.

Team Evaluation – Neutral Case:

Team Evaluation – Neutral Case The are strong & weak players on the sales team. Some require a lot more hand-holding than you’d like. There isn’t always time to give them the help they need. As a result their close ratios are much lower than they should be. They’re probably not hitting their quotas, but they’re not a major liability to the company.

The Five Big Concepts for Sales Managers:

The Five Big Concepts for Sales Managers Be a mentor not a tor mentor. Manager + Mentor = Sales Leader Salespeople have to work for Sales Managers. They want to work for Sales Leaders Always be focused on helping your salespeople and your customers create more of their customers. Find a mentor for yourself.

Some Tips for Sales Managers :

Some Tips for Sales Managers Resist the temptation to continue to do what made you a success as a “Fighter Pilot” salesperson. You are now a “Ship’s Captain”. Meet with each person on your team and gather some “Emotional Intelligence (EI)” on them. Use that information only in a positive way. Go on sales calls with them and let them do the pitches. Critique them later with a constructive 1:1 . Find out from the members of your team how they like to be managed. Stick with that as long as they are consistently making their numbers. Treat the people below you like kings and queens…they are doing the hard work. Have kind ears…be the person they want to go to with questions and problems. Realize that a salesperson’s problem is your problem. Take bullets for the team. Teach self sufficiency and resourcefulness. Set realistic sales goals. Be analytical not ANAL-lytical. Always maintain your personal integrity. Train your team constantly and review team goals regularly.

Effective Sales Managers:

Effective Sales Managers Utilize a Strategic Perspective Focused on Customers Attract, Keep, and Develop Sales Talent Leverage Technology 1 2 3

A Good Manager will…..:

A Good Manager will….. …always succeed in getting more output and better results from his team members …and they will deliver this willingly!

Managers : Ineffective v/s Effective:

Managers : Ineffective v/s Effective Ineffective Manager Appeaser Bully Lackey Despondent Gouger Favoritism Gutter Inspector Master of Hindsight Effective Manager Advisor Benefactor Cheer Leader Decisive Example Setter Fair Generous Honest

Managers : Ineffective v/s Effective:

Managers : Ineffective v/s Effective Ineffective Manager Insecure Jealous Know-all Loner Manipulator Nag Opinionated Pillion Rider Quashes new ideas Effective Manager Innovator Judicious Knowledge Resource Leader Motivator Negotiator Open minded Perseverant Quality Conscious

Managers : Ineffective v/s Effective:

Managers : Ineffective v/s Effective Ineffective Manager Reactive Subjective Trumpet Blower Unfair Vengeful Whiner Excuse Master Yesterday’s hero Zombie Effective Manager Receptive Strategist Transparent Understanding Vibrant Winner’s Mind Set Experimenter Youthful Zestful

Sales Management Checklist:

Sales Management Checklist Your team general periodic discussion/ review goals/ expectations understood sales skill training motivation product/ service/ industry knowledge training recruiting promotions/ new roles/ new positions performance reviews recognition operational issues activity numbers sales numbers (units/ revenue/ margin) sales process reviewed sales communication reviewed/ distributed before and after the sale reviewed (processes) lead generation barriers to remove from sales efforts External relationships top customers contacted top competitors reviewed top partners contacted Self-development management skills additional contributions

Sale Management styles - as written by the sales team:

Sale Management styles - as written by the sales team Humour with a Lesson

The Engineer:

The Engineer Characteristics: Started his own company and now wants some customers. Quote: “I built a better mousetrap, so I hired you to take the orders.” Pros: May offer you some equity in the company. Cons: Equity will be worthless unless he gets wise about selling. Warning: He will never, ever, truly respect what you do. Care and Feeding: Expose him to some real-life customers so that he understands that selling the product isn’t all that easy.

The Volcano:

The Volcano Characteristics: Explodes whenever things don’t go the way he thinks they should. Quote: “If you can’t make your &*$% numbers, get the *%&# out of here.” Pros: Might apologize later for acting like a jackass. Cons: Is actually a jackass. Warning: He will grind your ego into dust. Care and Feeding: Observe the inevitable signs (like a twitching eyelid) that he’s about to erupt, then excuse yourself to “make an important customer call.”

The Robot:

The Robot Characteristics: Believes that sales technology is more important than making sales. Quote: “If we don’t populate the database, we can’t get valid analytics!!” Pros: Makes beautiful slides for top management. Cons: Treats sales reps as faulty peripherals. Warning: Big brother (or sister) is watching you. Care and Feeding: Log your activity in your CRM system as briefly and quickly as possible.  Turn off your cell phone and laptop if you’re taking the afternoon off.

The Addict:

The Addict Characteristics: Booze, drugs, gambling, sex… You name it, he’s doin’ it. Quote: “Why work hard if you’re not going to play hard?” Pros: Will be out of the office much of the time. Cons: Can get extremely cranky the morning after. Warning: He has his hand in the till and will need a scapegoat when it comes up short. Care and Feeding: Avoid as much as possible. Try to be somewhere else when then inevitable excrement hits the proverbial fan.

The Patsy:

The Patsy Characteristics: Got assigned as sales manager because nobody else wanted the job. Quote: “I don’t know much about sales but I’ll do my best to help.” Pros: Won’t try to tell you how to sell. Cons: Has no clue whatsoever what’s going on. Warning: If everyone makes quota, you’ll be stuck with him forever. Care and Feeding: Try to convince him to take lots of sales training courses. It will keep him out of the office and - who knows? - he might actually learn something.

The Marketeer:

The Marketeer Characteristics: Has an MBA and therefore thinks he understands why customers buy things. Quote: “Marketing drives sales.” Pros: Knows how to secure a big budget. Cons: Wastes most of that budget on brochures. Warning: He thinks you are expendable. Care and Feeding: Nod your head up and down every time he talks. Throw the brochures in the trash (somewhere other than your office) and make your own sales materials that can actually help you sell something.

The Backseat Driver:

The Backseat Driver Characteristics: Used to be top rep but got promoted to manager. Quote: “Watch me close this deal for you.” Pros: Probably can close deals that you can’t. Cons: His arrogance quickly wears thin. Warning: May expect a percentage of your commission. Care and Feeding: Turn him into a role model. Watch carefully, then ask questions about how and why he handles customers that way.  Then hide your calendar.

Our Hero:

Our Hero Characteristics: Is committed to making the sales team successful, and knows how to train them to achieve this. Quote: “That was excellent. What do you think you could be doing better? (Listens.) Hmmm…. I think I can help you with that.” Pros: Rarer than diamonds in dog food. Cons: You’ll hate working for anyone else. Warning: If the hero’s manager isn’t a hero, too, she’ll probably get fired. Care and Feeding: Enjoy it while it lasts…

Sales training:

Sales training Toolbox

Introduction:

Introduction Sales training can provide a variety of benefits that include Higher sales force performance Improved customer relationships More efficient time management Less need for management supervision Greater product and market knowledge More comprehensive understanding of firm policies

Reasons Why Sales People Fail:

Reasons Why Sales People Fail 1. Wrong or no selection process - The wrong person for the position 2. Wrong or no training - Insufficiently developed 3. Wrong or no planning - Expected to do all of their own planning 4. Wrong or no supervision – Left without competent supervision 5. Wrong or no motivation - Not properly motivated to meet objectives 6. Wrong or no stimulation – Not stimulated by appropriate incentives 7. Wrong or no evaluation – Not regularly appraised against a set of agreed objectives 8. Wrong or no executive action – Not adequately supported by a competent manager

Importance of sales training:

Importance of sales training Critical because of cost of sales call Sales activities must be efficient Sales force must produce satisfied customers Salesperson must also be able to operate independently At great distances from headquarters Training provides skills needed to succeed

Need for Sales Training:

Need for Sales Training Sales personnel, whether new or experienced, must be socialized Work ethics, job expectations, and ways of conducting business Training process complicated by introduction of race, creeds, and cultures Training allows firm to set standards for: Job accuracy and job expectations

The Sales Training Process:

The Sales Training Process

Needs Assessment:

Needs Assessment The first stage is to determine the strengths and weaknesses of skills, knowledge and attitudes (SKA) of sales force Subjective assessment methods Upper management judgment Sales management judgment Training department judgment Objective assessment methods Interviews Surveys Performance measures End-of-course evaluations General assessment methods Organizational and sales training objectives Competitors’ sales training programs (benchmarking)

Training Objectives:

Training Objectives Set objectives or goals of training program Objectives address SKA “gaps” Should set SMART objectives Specific, Measurable, Attainable, Realistic, and Timely Total sales revenue will increase by 5%, over the next six months, for the PBX product Objectives communicate the expected outcome of the training program

Planning Sales Training:

Planning Sales Training Methods – theme, scope, coverage, length, instructor, location, media and materials employed Firms can use formal and OJT training Must be aware of time away from customers

Planning (continued):

Planning (continued) Program length – formal training is one or two weeks in duration normally at a central location Length varies by: Industry, company size, adoption rate of high technology, training budgets, and corporate culture Sales personnel should be taught: How to sell, company policies, product knowledge, local market conditions, and their clients’ culture

Planning (continued):

Planning (continued) Training Methods High-tech – computer based and interactive Lecture, programmed, case studies, coaching, role playing, business games, and discussions are also utilized Training Location Physical location and availability Normally conducted off site for privacy Firms may select a centralized site

Planning (continued):

Planning (continued) Instructor Selection Sales manager, trainers, or consultants? Training Topics Select those that will satisfy objectives Product, market, and company information, along with sales techniques, and socialization Firms often spend most time on product knowledge and sales skills Will vary by industry and desired performance

Conducting Sales Training:

Conducting Sales Training Put the planning stage into action Must remain flexible If a particular aspect of training not working as planned, it should be changed

Evaluating Training:

Evaluating Training Important to measure how well the training achieved the goals set However, many variables can complicate the evaluation of training There remain a number of ways to provide evidence of training success Has funding been well spent? Did trainees learn and can they perform?

Levels of training evaluation:

Levels of training evaluation Reaction Trainee response to the training program Getting accurate responses in some cultures Scales Numbers Openness Knowledge Measuring the knowledge or skill attained Tests/Exercises Early intervention to improve learning Attitudes About the customer, firm, and job Provides benchmark for how training applied Accuracy, objectivity, and friendship concerns Results What outcomes did training cause Most useful, but most difficult measure Many extraneous variables dilute measure

Other Evaluation Methods:

Other Evaluation Methods Compare outcome(s) to training objectives If objective was to increase sales of product PBX by 5% over the following 6 months; did this happen? Utility analysis permits computation of sales training value Managers compute cost and gain to compute an outcome utility Estimates lead to criticism

Follow-up Training:

Follow-up Training Sales training continual Initial training to establish basic skills Follow-up training to reinforce basic skills, plus teach new skills, knowledge, and attitudes Continual training imperative in global marketplace Sales force may cling to local culture

How to keep sales training programs on target! :

How to keep sales training programs on target! Toolbox

1. W. I. I. F. M. (What's in it for me!) :

1. W. I. I. F. M. (What's in it for me!) In some meetings participants are there because it's expected of them, attending because they feel obligated or the boss told them they had to attend. As an old saying goes, "You can lead a horse to water but you can't make him drink." Some companies and organizations fail to "sell" participants on the benefits of training sessions, they assume they already know. Big mistake. Be sure people understand the point of each training event and specifically how the new knowledge benefits them.

2. Use People experienced in Training – get to the point:

2. Use People experienced in Training – get to the point Long winded people discussing the interior of a ping-pong ball! I know it's a temptation to use knowledgeable industry people and in some cases, necessary. Unfortunately many people who normally don't speak in public are generally boring. The longer their presentation, the duller it gets and people in the audience "turn-off" mentally. Another great training opportunity slips away. The solution of course is to use people with experience in training or at the least, speaking before others. Not only are they more interesting to hear, they understand how to pace the meeting and most importantly, when to stop making a point.

3. Irrelevant Information :

3. Irrelevant Information People going to meetings expect to enjoy themselves, be entertained and learn new ideas in a positive atmosphere. Information presented at training sessions must be carefully distilled to the essential points. If a story is told, an example given or even a joke is used it must be relevant to the issue at hand. Additionally the material must be presented in an orderly fashion so participants can follow along. Finally, it needs to be current material, not a rehash of tired old ideas. Before you permit someone to do training, make sure they have a focused outline or curriculum in writing to follow and have done this before. Working from notes on scraps of paper or worse, from memory, produces poor programs with attendees mentally turned off long before the program finishes. This isn't the place to practice.

4. Keep it upbeat :

4. Keep it upbeat Training sessions require a positive ambiance, the feeling that learning is not only pleasant, but the knowledge contributes to the participants success. The person who facilitates should be upbeat and able to communicate the benefits of the training to the participants in a positive way. When people feel they are learning something that will help them and in a positively charged environment, the learning comes easy!

Sales forecasting:

Sales forecasting Toolbox

Getting the direction right…:

Getting the direction right…

Sales Forecasting Introduction:

Sales Forecasting Introduction Introduction Sales forecasting is a difficult area of management. Most of us believe we are good at forecasting. However, forecasts made usually turn out to be wrong! Marketers argue about whether sales forecasting is a science or an art. The short answer is that it is a bit of both. Reasons for undertaking sales forecasts Businesses are forced to look well ahead in order to plan their investments, launch new products, decide when to close or withdraw products and so on. The sales forecasting process is a critical one for most businesses. Key decisions that are derived from a sales forecast include: Employment levels required Promotional mix Investment in production capacity Plant Capacity & Projected Utilization Availability of Raw Materials Working Capital Requirements Capital Expenditure Return on Investment

Types of Sales Forecasts:

Types of Sales Forecasts There are two major types of forecasting: Macro forecasting is concerned with forecasting markets in total. This is about determining the existing level of Market Demand and considering what will happen to market demand in the future. Micro forecasting is concerned with detailed unit sales forecasts. This is about determining a product’s market share in a particular industry and considering what will happen to that market share in the future. The selection of which type of forecasting to use depends on several factors: The degree of accuracy required – if the decisions that are to be made on the basis of the sales forecast have high risks attached to them, then it stands to reason that the forecast should be prepared as accurately as possible although this involves more cost. The availability of data and information - in some markets there is a wealth of available sales information (e.g. clothing retail, food retailing, holidays); in others it is hard to find reliable, up-to-date information. The time horizon that the sales forecast is intended to cover . For example, are we forecasting next weeks’ sales, or are we trying to forecast what will happen to the overall size of the market in the next five years? The position of the products in its life cycle. For example, for products at the “introductory” stage of the product life cycle, less sales data and information may be available than for products at the “maturity” stage when time series can be a useful forecasting method.

Basis for Sales Forecasts:

Basis for Sales Forecasts Sales forecasts can be based on three types of information: What customers say about their intentions to continue buying products in the industry What customers are actually doing in the market What customers have done in the past in the market Sales forecasts also rely on obtaining information on existing market demand: As a starting point for estimating market demand, a company needs to know the actual industry sales taking place in the market. This involves identifying its competitors and estimating their sales. An industry trade association will often collect and publish (sometime only to members) total industry sales, although rarely listing individual company sales separately. By using this information, each company can evaluate its performance against the whole market.

Preparing a Sales Forecast:

Preparing a Sales Forecast Very few products or services lend themselves to easy forecasting . In most markets, total demand and company demand are not stable – which makes good sales forecasting a critical success factor.

Many use a Time Series Analysis:

Many use a Time Series Analysis Many businesses prepare their sales forecast on the basis of past sales. Time series analysis involves breaking past sales down into four components: The trend: are sales growing, “flat-lining” or in decline? Seasonal or cyclical factors: Sales are affected by swings in general economic activity (e.g. increases in the disposable income of consumers may lead to increase in sales for products in a particular industry). Seasonal and cyclical factors occur in a regular pattern; Erratic events: these include strikes, fashion fads, war scares and other disturbances to the market which need to be isolated from past sales data in order to be able to identify the more normal pattern of sales Responses: the results of particular measures that have been taken to increase sales (e.g. a major new advertising campaign) Using time series analysis to prepare an effective sales forecast requires management to: Smooth out the erratic factors (e.g. by using a moving average) Adjust for seasonal variation Identify and estimate the effect of specific marketing responses

Protanz Projected Revenues F2009:

Protanz Projected Revenues F2009

Projected Plasma Proteins F2009:

Projected Plasma Proteins F2009

CRM’s & reporting tools for real time management:

CRM’s & reporting tools for real time management Toolbox

Sales Aspects needing Constant Management:

Sales Aspects needing Constant Management

Dashboards – Information at your fingertips:

Dashboards – Information at your fingertips Executive Adoption Marketing Corporate Group Business Unit Global Account Management GAM Account Dashboard – All Accounts GAM Account Dashboard Individual GAM Dashboard Executive Adoption Marketing Sales Analysis Executive Adoption Marketing

Key Challenges:

Key Challenges Lack of… New Deal Awareness Solution Selling Meeting Collaboration Pipeline Views Quota Management 408 Low customer service Reduced revenue Inefficiency Poor account planning

The Solution -?:

The Solution -? Account Dashboards Account Managers need to know… What’s about to close? What’s new? Who’s meeting with who? How are deals progressing? Are we reaching our goals? * 409

Short-Term:

Short-Term What’s about to close? Who’s meeting with who? What’s new? What’s big?

Big Picture - How are things progressing?:

Big Picture - How are things progressing? Pipeline by Account Stage Type – focus on new business Business Unit – solution selling, cluster products, gaps

Long-Term:

Long-Term Are we reaching our account management goals – pipeline and actual? Quarterly Annually

Full View of The World…:

Full View of The World…

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