Professional Documents
Culture Documents
Chapter 1
Marketing concepts
1) 2) 3) 4) 5) Production concept Product concept Selling concept Marketing concept Societal concept
Production
Sales
Customers
(Sales Orientation)
Customer Needs
Production
Sales
(Marketing Orientation)
Types of selling
Order taker sales people Order creators Order getters
Types of Selling
Inside Order Taker Order Takers Delivery Sales People
Focus
Factory
Means
Selling and promoting
Ends
Profits though sales volume
Selling concept
Market Customer needs Coordinated marketing Profits through customer satisfaction
Market concept
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Producer
Marketer
Consumer
13
Technology
Customer orientation
Relationship selling
Diversity
Chapter 2
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(9,9) Problem Solving Oriented I consult with the customer so as to inform myself of all the needs in his situation that my products can satisfy. We work towards a sound purchase decision on his part, which yield him the benefits he expects from it.
I am customers friend,
8 7
6
5 4 3 2
I want to understand him and respond to his feelings and interests so that he will like me. It is the personal bond that leads him to purchase me. (5,5)from Sales technique Oriented
I have tried an effective routine for getting a customer to buy. It motivates through a blended personality and product emphasis (1,1) Take it or Leave it I place the product before the customer and it sells itself as and when it comes.
(9,1) Push the product Oriented I take challenge of the customer and hard sell him, polling on all the pressure it takes to make him buy
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Selling situations
Sales task and function Maintenance selling Developmental selling
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Selling skills
Problem solving skills Effective communication skills
Selling Skills
Listening Skills Negotiation and bargaining skills Conflict management and resolution skills
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Communication process
Feedback Intended Message Perceived Message
Encoding
Decoding
Noise
Sent Message
Received Message
Channel
Sender
Receiver
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Communication process
contd.
Gestures
Facial Expressions Eye Contact Space Distancing
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Process of listening
Attendance Interpretation
Remembrance
Evaluations Response Action
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Levels of listening
Feedback Paraphrasing
Clarifications
Emphatic listening
Active Listening
Barriers to Listening !
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Stage II
Cognition &
Personalization
Stage III
Intentions
Stage IV
Behaviour
Stage V
Outcomes
Perceived Conflict
Felt Conflict
Compromising
Avoiding Accommodating
Structure
Negotiation skills
Situation and timing for negotiations Formulation for a bargaining strategy The theory and strategy of principle negotiations
separate the people from the problem focus on interests, not on positions invent options for mutual gains insist on objective criteria
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Dunkers diagram
Achieve the desired state
General Solution
Possible path to the desired state
Path 1
Path 2
Path 3
Functional Solution
Solution 1
Solution 2
Solution 3
Specific Solution
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Relax Constraints
Perceived problems
Generalize
Re Statement
Re Statement
Decision analysis
31
Approval
Planning
Carry through
Follow up
Evaluation
Chapter 3
The Selling Process
33
Pre-sale preparati on
Prospecting
Follow up action
34
Prospecting
Successful prospecting
50 potential prospects 15 Qualified prospects 6 Interviews 1 sale 50 potential prospects 25 Qualified prospects 17 Interviews 7 sales
No
Successful prospecting
Yes
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Process of prospecting
Identify and define prospects
Methods of prospecting
Cold canvassing
Endless chain customer referral Prospect pool Centers of influence Non competing sales force Observation Friends and acquaintances Lists and directories Direct mail Telemarketing Trade shows and demonstrations
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Selling process
Pre approach to selling Approach to the customer Sales presentation - approach to sales presentation
- attracting customer attention - creating interest - arousing desire and building conviction
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Make concessions in small amounts Admit mistakes and make corrections willingly BE prepared to withdraw a concession Avoid split the difference strategy Do not advertise willingness to concede
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Follow-up action
B2B selling
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Chapter 4
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Price/ Un it
D1
P1 P2
Price/ Un it
Price / Un it
D2
Price/ Un it
D2
P- Price of the product I- Consumer Income T- Consumer preference P0 Price of other goods and QD = B + aP P + a1I + a0P0 + aTT services aP,, a I, a0, aT represents the one unit change in quantity associated with the variables.
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TRANSACTIONAL SYSTEMS
USERS
MDSS
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Forecasting process
The forecasting process is defined as the series of decisions and actions taken by a business organization in:
identifying the forecasting objectives determining the independent and dependent variables developing a forecasting procedure using the available data in the selected method to estimate the sales in future
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Forecasting process
contd. Determine independent and dependent variables Develop forecasting procedure Forecast objectives
Select forecasting analysis method Comprehend total forecasting procedure Collect, collate, gather and analyze data
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Expert opinion
Quantitative methods
Test marketing
Nave method
Trend method
Moving average
Regression method
Exponential smoothening
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Sales
Time
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Nave method
Sales (at the period t) = Sales T+1 The following formula shows how to adjust the nave method to account for a change in rate of sales levels. The formula is stated this way: Next Years Sales = This Years Sales X This Years Sales Last Years Sales Freehand Method
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Method of semi-averages
In this method available data are divided into two parts, usually with equal number of years on both the parts Year
1993 1994 1995
Sales
102 105 114
1996 1997
1998 1999
110 108
116 112 102+105+114 321 ----------- = -------- = 107
Decomposition method
It is a time series method in which seasonality is taken in to account while doing demand forecasting. This method consists of three essential steps which are illustrated below.
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Correlation analysis
a correlation is basically the degree of linear association between two variables where one variable is treated as independent variable and sales as the dependent variable sales managers look for variables that correlate with or relate to sales correlation analysis involves the determination of whether a relation exists, and if it does, then measuring it, testing whether it is significant, and establishing the cause and effect relation the degree of relationships between the variables is called co-efficient of correlation
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Regression analysis
regression analysis is another form of correlational technique reveals average relationship between two variables and this makes possible estimation or prediction a statistical method used to incorporate independent factors that are thought to influence sales into forecasting procedures
Sales Sales
Econometric techniques
Econometric techniques uses multiple independent variables where the assumption is that of a liner equation between the dependent variable (sales) and independent variables
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data availability cost variability consistency of the data the degree of detail necessary time horizon technical sophistication ability of the method to capture the level of risk and variability the level of accuracy of the forecast fundamental change indicators
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Chapter 5
Sales Organization
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Sales organization
an organization of individuals either working together for the marketing of products and services manufactured by an enterprise or for products that are procured by the firm for the purpose of reselling a sales organization defines duties, roles, rights, and responsibilities of sales people engaged in selling activities meant for the effective execution of the sales function
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Sales organization
contd.
a structural body through which the functions of sales management are carried out sales organization always makes efforts to increase sales, thereby achieving the principle of profit maximization, which contributes to the overall growth of enterprise
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external factors:
- the speed of market change - reduction in the number of vendors per buyer - closer to customer relationships - changes in regulations and international practices
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Organizational principles
span of control unity of command hierarchy of authority
Organizational design
formal and coordinated task assigning territories establishing flows of communication and responsibilities of sales groups and individuals to customers effectively
Line organization
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Direct to Home
Distributors
Bundling
Gifting
Regional Distributors
Consumer
Retailers
Consumers
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Design by territory
VP Marketing National Sales Manager
Staff Function
Line Function
20 Sales People
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Design by product
President, Marketing
Manager (Training)
Manager (Promotion)
Manager (Sales)
Manager (Training)
Manager (Promotion)
71
Design by customer
President (Marketing) Vice President (Marketing)
Sales People
Sales People
Sales People
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President
Functional
Marketing Manager Combined International Sales Org. Design G.M International Sales Divisional Manager Food
Customer
Product
Europe Division
America Division
Gulf Division
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Sales Organization
Key account sales
- focus on CRM - customer profitability and value analysis - the few accounts give incremental returns - national accounts
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Sales
Marketing
Technical Support
Manufacturing
Chapter 6
77
Sales territory
dealer,
a distributor or a marketing organization at a given
period of time
78
Sales territory
(contd.)
Territory shapes
circle
wedge
Clover leaf
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Opportunity
The account may represent a good opportunity. The sales organization needs to overcome its competitive disadvantages and strengthen its position to capitalize on the opportunity. Either direct a high level of sales resources to improve the position and to take advantage of the opportunity or shift resources to other accounts.
i g h
The account offers a good opportunity. It has high potential and the sales organization has a differential advantage in serving it.
Strategy
Commit high levels of sales resources to take advantage of the opportunity.
Strategy
L o w
Opportunity
The account offers stable opportunity since the sale organization has differential advantages to serving them.
Opportunity
The account offers little opportunity. Its potential is small and the sales organization is at a competitive disadvantage in serving it.
Strategy
Allocate a moderate level of resources to maintain current advantage.
Strategy
Strong
Either commit a minimal level of resources to the account or consider abandoning the account altogether.
Weak
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Sales territories
New Territories..?
Use of Information Technology IT enabled services computer programmes simulation techniques
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Chapter 7
84
Sales quota
a quota is an expected performance objective a quota is a sales assignments or goal to be achieved in a specific period of time it is routinely assigned to the sales units (e.g. departments, divisions, and individuals) sales units proceed to reach quotas in their respective domains
A sales quota is the sales goal set for a product line, company division, or sales representative. It is primarily a managerial device for defining and stimulating the sales effort.. Kotler
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Principles..
contd.
flexible to the prevailing and emerging market conditions there should be a level of definiteness in the quota set for a salesperson it should be fixed either in terms of geographic territory, on money value, or on the basis of units of product(s) a participatory quota setting procedure followed jointly by the sales manager and sales people together serves as a tool of motivation and leads to the realization of the organizational sales goals
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S M A R T
Optimistic Results
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Chapter 8
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Job qualification
Job description
Identify best sources of recruitment: internal and external sources Recruitment Generate database of candidates Evaluate candidates Selection Socialization Select and induce candidates to accept positions Socialize
Organizational characteristi cs, company image and climate, styles of supervision, compensatio n, and motivation of the company
level of motivation
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internal sources
- existing employees - lateral and upward moves - interns and cooperative students - employee referral programmes
external sources
- industry sources
-
educational institutions and campus recruitments - employment exchanges - placement consultants - walk in interviews
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External sources
contd...
Selection procedure
- inviting application forms - personal interviews - reference checks - physical examinations - psychological tests - intelligence - personality - aptitude and skills - determination of terms of service - appointment - initial orientation
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Socialization process
process of orienting a new salesperson to the sales organization, territory, or division in which he or she will be working three stages
Anticipatory stage Encounter stage Settling stage
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Chapter 9
101
102
103
104
105
Training needs
Identification of specific problems Anticipating impending and future problems Management requests Interviewing and observing the personnel on the job Performance appraisal Questionnaire survey Checklist Attitude survey Interpersonal skill test
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Types of training
Cross-functional training
Team training
Creativity training
Literacy training
108
Training methods
Didactic method
- structure the lecture - reinforce the Message - aid concentration - material used for the lecture - make it memorable for the participants - deliver with dynamism - use questions
Training methods
Seminars Discussions Role play Case study Fishbowl Workshops Sensitivity training Transaction analysis In-tray exercises Transcendental meditation
contd..
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Content
Contents Knowledge Proficiencies Location Evaluation
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Process of socialization
Anticipatory socialization
Accommodation stage Outcome stage
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Chapter 10
Sales Force Motivation
113
Process of motivation
Motive
Behaviour
Tension reduction
Goal
114
Motives
Primary General Secondary
115
Motivational drives
Principles Security Achievement Approval Loyalty Advancement Leadership Human behaviour
116
Theories of motivation
Content Process Reinforcement
117
Content theories
Need hierarchy theory Hertzbergs two factor theory Alderfers ERG theory
118
Process theories
Equity theories Expectancy theories
120
Reinforcement theories
Hulls drive theory
Skinners reinforcement theory
121
Personal characteristics
Environmental conditions
Organizational policies
122
Group methods
Communication
Auxiliary environment
Feedback
123
Chapter 11
Sales Force Compensation
124
125
Financial compensation
Non-financial compensation
126
Financial compensation
Straight salary plan Straight commission plan Bonus and incentive Salary plus incentive (combination plan) Drawing account and commission plan Allied methods
127
Non-financial compensation
Sales contests
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Chapter 12
130
Deciding on the criteria for measuring performance Deciding in the conduct of the performance appraisal Deciding on the evaluation of individuals and teams Comparison of actual performance with standards Deciding on the frequency of the performance appraisal The external variables and their influences
Conduct of performance and individual vs team appraisal Example of a Role result Matrix
Position Developing a new business Servicing existing customers Key account manager Regional sales manager
Application engineer
Customer service staff Technical support staff Installation and quality engineer Financial staff
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Chapter 13
Distribution channel management - an introduction
134
135
136
Spatial discrepancy
Temporal discrepancy Need to break the bulk Need to provide assortment
137
Control
Direct Distribution
Indirect distribution
138
Distribution channel management encompasses all activities dealing with the distribution function of the firm The distribution strategy provides guidelines for decision making The distribution management function can be viewed as happening in two phases: the ex ante phase and the ex poste phase
140
Phase
Establishing the channel
Distribution Channel Strategy Channel Objective Activity Finalization Organizing the activities Developing Policy Guidelines
142
Chapter 14
Designing customer-oriented marketing channels
143
Channel Design
The channel design is normally meant to give a clear idea about: The number of channel entities in the channel network, The way in which they are linked, The roles and responsibilities of the entities in the network The rewards for participating in the activities and also Clear cut guidelines for the major activities to be performed during the normal functioning of the channel.
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Assortment
145
146
3. 4.
5. 6.
7.
Consumer financing
Direct contribution
Indirect contribution
Other contribution
Spatial Assortment convenience, bulk breaking, waiting time Spatial convenience Spatial convenience Spatial Assortment convenience, bulk breaking Waiting time, bulk breaking, spatial convenience Spatial Assortment convenience, waiting time, bulk breaking Bulk breaking, spatial convenience, waiting time
Ordering
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150
(contd.)
The profile of the customers who are the target market for the channel The needs and requirements of the target market with regard to the identified service outputs provided by the proposed/ existing channel: Analysis of the operations of the existing channels that deal in similar product/service lines
Plan..
Contd.
Details about the various channel constituents who will be performing these tasks
Chapter 15
153
Logistics strategy
Cost reduction Capital reduction Service improvement
154
Logistics Planning
Inventory Management
Inventory levels Deployment of inventories Control methods
Transportation decisions
Modes of transport Carrier routing/scheduling Shipment size /consolidation Customer Service goals
Location decisions
Number, size and location of facilities Assignments of stocking points to sourcing points Assignment of demand to stocking points
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156
157
Total cost
Inventory cost
Transportation cost Warehousing cost
Number of warehouses
158
Why Inventories?
To improve customer service To smoothen the operations of the logistics system To reduces costs Inventory procurement costs Inventory carrying costs Stock out costs Cost associated with inventory
159
Echelon inventory
Stockist echelon lead time
Supplier
Stockist
Retailer
Retailer
Retailer
Retailer
Retailer
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162
Chapter 16
163
Channel relationships
Perceptions of organisational power Dependence Control Trust Commitment Co-operation
164
165
Channel control
Tolerance Function
PayOff Function
Zone of acceptance
Supplier authority
166
Coercion
persuasion
Authority
control
167
Promotional Responsiveness support systems Financial returns Quality products Technical Reliable delivery assistanc Competitive price e National reputation Company
Training
policies
Market resear ch
Incentive programme
Explanation
Where information on general business issues and the channel program is merely exchanged with channel member personnel. In this type of strategy the consequences of the acceptance or rejection of the channel programme or its implementation are stressed, but these consequences are based (contd.) on a response from the market environment, 169 not on the mediation of the
Reward and Economic reward Punishment Non-economic reward Economic punishment Strategies
Non-economic punishment Direct request
In this type of strategy rewards and punishments are directly given to channel members
This strategy involves making a direct request to the channel member where the Principal mainly communicates desires or wishes concerning the channel members acceptance of the channel program. In this type of strategy specific action is requested; consequences of acceptance or rejection are stressed and are based on the mediation of the channel principal.
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(contd.)
+ ve
Behaviour Reinforcement process Behavioural reinforcement Inducement process Behavioural change Moderate rationalization Attitude change Moderate confrontation Behavioural and attitudinal change Radical rationalization Attitude change Radical confrontation Behavioural and attitudinal change
- ve
171
Conflict resolution
Felt conflict
Manifest conflict
Negotiation
173
Negotiation strategies
HIGH
Accommodative Collaborative/problem solving
Compromise
LOW
Chapter 17
Retail Management
175
176
(contd.)
177
178
Percentage of availability
80%
90% 100%
179
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Customer services
Product services Service products Support activities
182
Range purchased
Customer service facilities used
183
Delivery Installation
Post purchase phase Use extension Repeat visits
184
Post-purchase Stage
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C O N T R O L
Direct exporting
Licensing Franchising Contract manufacturing Strategic alliance
R I S K
Joint venture
Wholly owned subsidiary
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Outcomes
Divided loyalties Seller buyer atmosphere Unclear future intentions Communication blocks Negative attitudes Problems in physical distribution Vertical trading restrictions Dismissal difficulties
Remedies
Offering good incentives, helpful support schemes, frank discussions, and high levels of interactions Making judicious ways of two way visits, establishing a well managed communication programme Full compliance with law,drafting a strong distributor 189 agent.
190
Export procedure
1
Exporter
4 5 5
Importer
2
Import warehouse
9
Manufacturing
8 6
Customs
9
Freight forwarder
Ship Contd.
Customs broker
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Contd.
Stat e
1
Process
The Sale
Importer
makes enquiry from potential supplier Exporter sends catalogue and price list Importer requests samples Exporter sends Proforma invoice Importer sends purchase order
3
4 5 6 7 8 9
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Customs broker
193
Exporting documents
Letter of credit Bill of lading Commercial invoice Commercial invoice Consular invoice Certificate of origin
194
Thank you
195