Characteristics and Importance of Marketing Planning
Characteristics and Importance of Marketing Planning
Characteristics and Importance of Marketing Planning
Planning refers to determine of course of action to achieve a desired result. Marketing planning is a logical sequence and series of activities leading to setting of marketing objective results. Marketing planning is concerned with the determination of marketing objectives. These objectives may be long term and short term nature long range and short range.
CHARACTERISTICS AND IMPORTANCE OF MARKETING PLANNING 1. They are complicated in nature. 2. Marketing decisions have long term effects on efficiency, profitability and market standing of the firm. 3. marketing planning is a formal and systematic approach towards planning of all marketing activities-product positioning, price setting, distribution channel. 4. Marketing planning has both optimistic and a pessimistic component. 5. Marketing planning is a forward-looking and dynamic process designed to promote market-oriented or consumer oriented business actions. 6. The success depends to a large extent upon human behaviour and response
Short term marketing planning(STMP) :-short term planning for marketing is generally made for one year or less. STMP has two objectives (a) implementation of LTMP through programmes and budgets and (b) Improvement of operating performance. The plans are normally in the form of budgets. Long term marketing planning:1. The long-range plan is a more general statement of strategic objectives, specifying the markets that the company wants to enter and the products to be introduced over time. 2. The long-term plan is designed to encourage visionary thinking--not just describing the scope of the company's operations at the present time, but looking at how the company could evolve. 3. The long-range view is essential to the company's top management being able to determine what resources will be needed to facilitate the company's future growth. 4. The long-range plan is designed to make certain the company doesn't focus so intently on short-range challenges in the competitive marketplace that it fails to recognize big opportunities for revenue growth in the future. 5. The long-range plan is not so much revised as it is updated each year based on new information about emerging market opportunities or competitive threats.
Short term marketing planning:1. The major difference between these two plans is the level of detail. A company plans out its marketing tasks in great detail for the upcoming year because staff requirements must be estimated, a month-by-month schedule for completion of the tasks must be put together and funds must be allocated for the expenditures listed in the plan. 2. The short-term plan attempts to identify markets where the company can immediately generate revenue. These are existing markets. The long-term plan describes markets that may not be ripe for development today, but are likely to emerge. 3. The short-range plan remains in place unless actual results vary so significantly from plan that adjustments to strategies and expenditures are required. 4. The short-term plan helps keep the company on track toward current year profitability.
Basis
Short Term Marketing Planning It is planning which is done for a short period can as less important purpose for business.
Meaning It is that planning which is done for the essential and vital purposes that have a great importance for the business for long period.
Change
Period
It is done usually for the period of one year or less than one year.
Purpose
It is done for the purpose like- It is done for the purpose like(i)product design (ii)Quality policy (iii)Technology to be employed. (iv)process selection (i)Production scheduling (ii) scheduling for manpower. (iii)breakdown of maintenance (iv)progress check
MICRO MARKETING A Marketing strategy in which advertising efforts are focused on a small group of highly-targeted consumers. Micromarketing is a relatively new marketing trend created by the diversity of the consumer population and the difficulty in creating a single product that appeals to all the diverse groups in the population. MACRO MARKETING A type of marketing in which a company adapts itself to uncontrollable factors within the industry. It looks at the Aggregate flow of goods and services in an economy to determine if it benefits the society in terms of its resource consumption and environmental effects. Macro marketing refers to how product, price, place and promotion strategies the four P's of marketing - create demand for goods and services, and thus influence what is produced and sold in an economy.
Micro marketing
Macro marketing
1Micro means small in scale or scope. Micro marketing concerns individual steps in an overall process.
1Macro means large in scale or scope. Macro marketing, on the other hand, examines that same process as a whole.
2. Depending on the scale, the micro marketing concerns anything from a single production process to the workings of an entire corporation. 3.Micro marketing are individual consumer behavior, pricing decisions and methods, channels of distribution, how firms decide which products to make and market, packing and promotional decisions, methods, brand image management 4. The purchasing target of micro marketing is the individual. It concerns determining a product that a person likes, needs and is willing to spend money on. Micro marketing professionals focus on just such a concern and nothing else 5.Micro-marketing is a kind of 'Nichemarketing' technique most suited for small businesses where the focus could be on a particular product/service. 6Micro-marketing is the performance of activities that collectively seek to accomplish a companys objectives by anticipating customer needs and directing a flow of need-satisfying goods and services from producer to customer. 7. The purpose of a business should be to satisfy the customer needs, rather than simply supply a good or a service that is easy to produce
2.Macro marketing applies to anything from the relationship between the production process and the consumer to global purchase patterns. 3. Macro marketing are market regulation laws, marketing and social responsibility, socially desirable advertising techniques, the efficiency of marketing systems, and overall consumer behavior patterns. 4.The purchase target of macro marketing is the maximum possible customer base. It concerns determining which sections of society compose a product's target audience and how that product reaches that audience.
5.Macro-marketing is a technique that is suited for interconnected markets & for large companies. 6Macro-marketing is a process that directs the flow of goods and services in an economy from producers to consumers in a way that effectively matches supply and demand
7 The purpose of Macro-marketing system will help match supply and demand.
Corporate planning process involves four important activities: 1. Defining corporate mission An organisation exists to accomplish something, e.g., to make cars, to lend money, to provide lounging, to provide education etc. Its specific mission or purpose is usually clear when the business starts. Over the period of time the mission may change, or to take advantage of new opportunities or to respond to new market conditions. Eg amazon.com changed the mission from being worlds largest online bookstore o aspiring to become worlds largest store.
2. Establishing strategic business units (SBUs) SBU is a distinct business unit of the business organisation in the form of subsidiary company, department, division or product line with specific product and market focus and independent authority of a manager to take business decisions. A strategic business unit has 3 characteristics: a. It is a single business or collection of related business that can be planned separately from the rest of the company. b. It has its own set of competitors. c. It has the manager who is responsible for the strategic planning and profit performance and who controls most of the factors affecting profit. 3. Assigning resources to SBUs The companys next task is to determine what objective strategy and budgets are to be assigned to each SBUs.
Intensive growth strategies are appropriate when existing products and existing markets show the potential for sales increase. There are 4 strategies for entering into existing/new markets with existing/new products. PRODUCT Existing Marketing Penetration Market Development Product Development Diversification New
ANSOFFS MATRIX
A) Market Penetration It is a strategy of increasing sales of existing products in existing market. Encourage customers to buy more. Attract competitors customers. Attract non-users. E.g. Procter & Gamble reduced the price of its detergent, Ariel, to increase its sales among existing & new customers in the current market. B) Market Development It is a strategy to increase sales by introducing existing products into new market. This can be done in following ways: Expand to new markets Have additional distribution channels Selling in new location E.g. With globalisation and opening up of Indian borders to new business, many organisations have introduced their products in Indian market. Like Tropicana, Del monte, Heinze, etc.
C) Product Development It refers to increase in sales by improving current/existing product in some way or developing entirely new product for existing market. E.g. Gillette has modified its razor and named it as Gillette vector for its Indian consumers. Adding new features Explaining advantages and benefits to the customers D) Diversification It is a form of corporate strategy for the organisation. It seeks and helps to increase the profitability through greater sales volume obtained from new product and new market.
BCG Matrix is Boston Consulting Group Matrix. BCG provides a graphical representation for an organization to examine the different business in its portfolio on the basis of their relative market share and industrial growth rate.
The vertical axis denotes the growth of sales in percentage of the market share.
The horizontal axis represents the relative market share, which is the relation of companys sales to the sale of industrys largest competitors.
The four cells of BCG Matrix are termed as Stars, Cash Cows, ?? / Problem Children, Dogs. Each of these cells represents a particular type of business.
a. Stars: Stars are high growth and high market share business, which
may or may not be self sufficient in terms of cash flows. This cell corresponds to the growth rate of Product Life Cycle (PLC). A company pursues an expansion strategy to establish strong competitive position with regard to star business. b. Cash Cows: As the name indicates cash cows are business which generates large amount of cash but the rate of growth is slow. In terms of PLC these are generally mature business, which are reaping the benefits of experience curve. c. Question Mark (??) / Problem Children: Business with high industrial growth rate but low market share for a company are termed as Question Mark / Problem Children. They require large amount of cash to maintain and gain market share. Question Marks are usually new products or service, which has a good commercial potential. No single strategy can be recommended for question mark business. If the company feels that it can obtain a dominant market share, it may select expansion strategy, otherwise retrenchment may be more realistic alternative. Question marks may therefore become stars if enough investment is made or they become dogs if ignored. d. Dogs: Those businesses, which are, related to slow growth industries and where a company has low market share are termed as dogs. They neither generate nor require large amount of cash in terms of PLC. The dogs are usually products in late maturity or decline stage. Retrenchment strategies are the strategies, which are normally suggested here. GE or Mckinsy matrix
In consulting engagements with general electric in 1970s, MnKinsey & co. developed a nine cell portfolio matrix as a tool for screening GEs large portfolio of strategic business unit.
This business GE or Mckinsy matrix is shown below: Business unit Strength High Low High Industry Alternativeness Medium Low BE matrix is similar to the BCG Growth Share Matrix as it maps strategic units on the grid of the industry and strategic business unit position in the industry. The GE Matrix is the improved version of BCG Matrix in the following ways1) In GE Matrix there are two parameters such as industry attractiveness and business unit strength, whereas BCG Matrix uses business growth rate as a proxy for industry attractiveness and relative market share as a proxy for the strength for business unit. 2) The GE matrix has 9 cells whereas, BCG Matrix has 4 cells. . Industry Attractiveness- The vertical axis of GE Matrix is industry attractiveness which is determined by the following factors:Mediun
1) Market growth rate. 2) Market Size. 3) Demand Variability. 4) Industry Profitability. 5) Industry Rivalry. 6) Global Opportunity. 7) Macro Enviornment Factors. Business Unit Strength- The horizontal axis of GE Matrix is Business Unit Strength of a business unit. Some factors that can be used to determine business unit strengths are:1) Market share. 2) Growth in market share. 3) Brand Equity. 4) Distribution Channel Access. 5) Production Capacity. Profit margins relative to competitors.
The techniques to appraise marketing planning process are as follows: 1. Sales analysis Most organizations track their sales results; or, in non-profit organizations for example, the number of clients. The more sophisticated track them in terms of
'sales variance' - the deviation from the target figures which allows a more immediate picture of deviations to become evident. `Micro-analysis', which is simply the normal management process of investigating detailed problems, then investigates the individual elements (individual products, sales territories, customers and so on) which are failing to meet targets. 2. Market share analysis Few organizations track market share though it is often an important metric. Though absolute sales might grow in an expanding market, a firm's share of the market can decrease which bodes ill for future sales when the market starts to drop. Where such market share is tracked, there may be a number of aspects which will be followed:
Overall market share Segment share that in the specific, targeted segment Relative share -in relation to the market leaders Annual fluctuation rate of market share Also the specific market sharing of customers.
3. Expense analysis The key ratio to watch in this area is usually the `marketing expense to sales ratio'; although this may be broken down into other elements (advertising to sales, sales administration to sales, and so on). 4. Financial analysis The "bottom line" of marketing activities should at least in theory, be the net profit (for all except non-profit organizations, where the comparable emphasis may be on remaining within budgeted costs). There are a number of separate performance figures and key ratios which need to be tracked:
There can be considerable benefit in comparing these figures with those achieved by other organizations (especially those in the same industry); using, for instance, the figures which can be obtained (in the UK) from `The Centre for Interfirm Comparison'. The most sophisticated use of this approach, however, is typically by those making use of PIMS (Profit Impact of Management Strategies), initiated by the General Electric Company and then developed by Harvard Business School, but now run by the Strategic Planning Institute. The above performance analyses concentrate on the quantitative measures which are directly related to short-term performance. But there are a number of indirect measures, essentially tracking customer attitudes, which can also indicate the organization's performance in terms of its longer-term marketing strengths and may accordingly be even more important indicators. Some useful measures are:
Market research including customer panels (which are used to track changes over time) Lost business the orders which were lost because, for example, the stock was not available or the product did not meet the customer's exact requirements Customer complaints how many customers complain about the products or services, or the organization itself
Difference between Selling and Marketing Selling 1. Emphasis is on the product. 2. Company Manufactures the product first. Marketing 1. Emphasis on consumer needs wants. 2. Company first determines customers needs and wants and then decides out how to deliver a product to satisfy these wants. 3. Management is profit oriented.
3. Management is sales volume oriented. 4. Planning is short-run-oriented in 4. Planning is long-run-oriented in terms of todays products and markets. todays products and terms of new products, tomorrows markets and future growth. 5. Stresses needs of seller. 5. Stresses needs and wants of buyers. 6. Views business as a good producing 6. Views business as consumer
8. Different departments work as in a highly separate water tight compartments. 9. Cost determines Price. 10. Selling views customer as a last link in business.
producing process satisfying process. 7. Emphasis on innovation on every existing technology and reducing every sphere, on providing better costs value to the customer by adopting a superior technology. 8. All departments of the business integrated manner, the sole purpose being generation of consumer satisfaction. 9. Consumer determine price, price determines cost. 10. Marketing views the customer last link in business as the very purpose of the business.
Consumer behavior: Consumer behavior can be defined as the behavior that consumers display in searching for, displaying, suing, evaluating and disposing off products, services and ideas which they expect will satisfy their needs. The main role of marketing manager is to satisfy needs and wants of the Customers. This can only be done by the study of Consumer Behavior. Consumer is the most important person to the marketer because the marketer
takes into consideration the liking and disliking of the consumer and he produces the goods and services accordingly. The more the Consumer Behavior is learnt, the more the needs and wants of the Customers are fulfilled. The Study of consumer behavior helps us: To design the optimal product or service for customers. To determine where the product or Service should be available that would easy for the customers to buy. To determine what price will the customers give up purchasing product or service? To determine which method of Promotion would be most effective for getting the customers to buy a product. It helps in changing the behavior of the consumers. To improve performance of the organization. To achieve the organizational objectives
A very important area for marketing firms is to determine the decision maker or the real customer in the purchase decision of products and services. For purchasing a car , scooter etc , men take decisions whereas for purchasing baby products , kitchen wares , housing furniture decisions are taken by women . For buying a house or going for vacations , decisions are taken by majority of the family members in the family . The firm must find must find out the
characteristics of such a person who play asignificant role in influencing a decision to make a purchase. The following are the different participants in any consumer buying decision:1. Initiator:- Initiator is the person who first suggests the needs of the idea or the need for a particular product which should be bought for satisfying certain requirement. 2. Influencer:- After the initiator has suggested the idea for a particular product , the influencer is the person who gives more information , which will influence the decision of the purchase. 3. Decider:- The decider is the person who ultimately decides to buy a particular product depending upon the situation . He is generally the dominating member of the family , who carries out the role . 4. Buyer :- The decision has been made for certain goods , the buyer goes to purchase from the shop . The actual purchase is made by the buyer , will depend on the convenience of the family members or of the group and it may depend on the earning members or head of the family . 5. User:- The user is actually the ones who actually consumes or uses the product or service and he may or may not be the initiator , decider or buyer For instance , parents purchases the toys but the actual users are the children.
It must be borne in mind that the consumer buy product or services so that it is required to satisfy variety of needs social , psychological etc. Any product or service offered by the sellers should give maximum utility value to the consumers for which they have paid .
ENVIRONMENTAL FACTORS
Buyers Decision
Problem recognition Information search Evaluation of alternative Purchase decision Post-purchase behaviour
Buyers choice Product choice Dealer choice Purchase amount Brand choice
The black box model shows the interaction of Stimuli, Buyers characteristics, Decision process & Consumers response. It can be distinguished b/w interpersonal stimuli (b/w people) & interpersonal stimuli (within people).
Black box model focuses on the stimuli & responses of the consumer. The marketing stimuli are planned & processed by company whereas environment stimuli are given by social factors based on Economical, Social & Political culture of a society. The buyers black box contains the buyers characteristics & decision process which determines the buyers response.
Consumer Buying Process 1. Problem Definition Under problem recognition, the buying process starts when the buyer recognizes a problem or a need. The need can be triggered by internal stimuli or external stimuli. With an internal stimulus one of person normal needs such as hunger, thrust rises to threshold level and becomes a drive or a need. For eg. A person passes by a bakery and sees freshly bread that stimulates hunger or a person admire neighbour new car.
2. Information Search An arose consumer will be inclined to search for more information. The minor range of information search is heighted attention. At this level a person simply becomes more receptive to the information about a product. At the next level a person may enter active information research by reading about the product, calling friends, visiting stores for more information. There are four sources from which the active information can be obtained. a. Personal Sources Friends, Relatives, Acquaintance
b. Commercial Sources Advertising, Sales person, Dealers, Packaging c. Public Sources Mass media ( Newspapers, Magazines), Consumer rating organizations d. Experimental Sources- Handling a product, examining a product and using a product.
3. Evaluation Of Alternatives There is no single process used by consumers in all buying situation. There are several decision evaluation process. Some of the basic concepts while evaluating various alternatives are a. The consumer is trying to satisfy a need. b. The consumer is looking for certain benefits from the product solution. c. The consumer sees a product as a bundle in varying abilities. For eg. Hotel -location, cleanliness, atmosphere, price. Mouthwash Colour , Germs fighting, price.
4. Purchase Decision In the evaluation stage, the consumer forms preferences among the brands in the choice set. The consumer may also form an intention to buy most preferred brand. A consumer decision to modify, postponed or avoid the purchase is influenced by the perceived risk. The amount of perceived risk depends upon the money on stake. The amount of aptitude , uncertainty and the amount of consumer confidence.
5. Post Purchase Decision After purchasing product a consumer will experience some level of satisfaction or dissatisfaction. The marketer job does not end when the product is bought. Marketer must monitor post purchase action and post purchase product users. The buyer satisfaction is the function of closeness between the buyer expectation and product received performance. If performance falls short of expectations the consumer is disappointed. If it exceed expectation, then the consumer is satisfied, the consumer is delighted. Various factors affecting consumer buying behaviour are as follows :-
1) Culture- Culture is defined as the complex sum of total belief of knowledge, belief, tradition, customs, art, morals and any other habit acquired by people as a member of society. Culture of one society differs from another. For eg- person grown in US is exposed to the following values:-Prestige, success, progress, freedom, etc. (a) Sub culture It refers to people within a culture with distinct customs, traditions and behavior which set them apart from each other. For eg- hindus brahmins of tamil nadu are different from hindus brahmins from Kolkata. 2) Social factors:-These are as follows:(a) Social class-It refers to society which is relatively permanent and orderly divided whose members share similar value and behavior. (b) Social group-Its a collection of individuals who share common attitudes and a sense of relationship as a result of interaction which each other. Social groups may be primary such as families, friends and coworkers whom a person interacts continuously and informally. Secondary groups are those where relationship is more formalized and less personal in nature. For eg-professional groups, religious groups and trade union groups. (c)Family-The family is the most important factor in consumer buying behavior process. One can distinguish two families in the buyers life. The family of orientation consists of parents and siblings. From parents person acquires an orientation towards religious, politics, economics, sense of personal ambition, etc. Family of propriation includes ones spouse and children and has direct influence on everyday buying behavior.
(d) Role and status-The persons position in each group can be defined in terms of role and status. A role consists of activities; a person is expected to perform. Each role carries a status.
(3) Personal factor-A buyers decision is also influenced by personal characteristics these include buyers, age, occupation, life style, personality etc. (a)Age and lifecycle-People change the goods and services they buy over a period of time. Taste in food, clothes, furniture and recreation are often age related. Marketers define their target market in terms of life cycle and develop appropriate products and making plans for each stage. (b)Occupation-A persons occupation affects the goods and services bought. For eg-blue collar workers tends to buy more rough work clothes whereas executives buy more business suits. (c)Economic condition-A persons economic situation will affect product choice. Marketers of income sensitive goods watch trends in personal income savings, interest rate and business cycle in the country. For eg- Timex makes more affordable watches such as fastrack. (d)Lifestyle-People coming from say in subculture, social class and occupation may have different lifestyle. Lifestyle is basically a persons patter of living.
(e)Personality and self concept-Each person has distinct personality influencing his or her buying behavior. Personality refers to unique psychological characteristics that need consistent and lasting response to ones own environment. Personality is in terms of traits such as self confidence, dominance, socio-ability autonomy and aggressiveness. Personality can be useful in analyzing consumers behavior for certain products or brand choices.
Self concept- Many marketers uses a concept related to personality- A persons self concept. The basic self concept assumption is that people posses product and service which reflect their identity we are what we are.
(4)Psychological factors- These are as follows:(a) Motivation-A person has may need at given time. Some are biological arising from a state of tension such as hunger, thrust or discomfort. Other are needs arising from need of recognition, esteem or belonging. A need becomes a motive when its aroused to a level of intensity. (b)Perception-Its a process by which people select, organize and interpret information to form a meaningful picture of the world. People can follow different perception of the same stimuli because of free processes. 1) Selective attention 2) Selective retention 3) Selective distortion People are exposed to great amount of stimuli every day. Its impossible for a person to pay attention to all stimulus. Selective attention is the tendency of people to screen out most of information to which they are exposed. Selective retention: - People will get much of they have learned. They tend to retain information that supports their attitude. Selective distortion describes the tendency of people to interpret information in a way that will support what they believe.Eg if you distrust a company you might perceive even the honest advertisement of the company as questionable.
(c)Learning- Its a process which changes and individual behavior arising from experiences.Learing theorist say that most of the human behavior is learn. Learning occurs through interplay of drives, stimuli, responses, uses and reinforcement. For eg -a consumer buys a Sony camera, if the experience is rewarding, the consumer will probably use to camera more and his reinforced. Then the next time, the consumer shops for similar product, the probability of is greater that he will buy Sony product. (d)Attitude-Attitudes are dispositions towards objects, people and events. Its our attitude how we respond to different product or service. For eg Most housewives had negative attitude towards frozen, hydrated or instant food, but today with more women joining the workforce , such products are viewed as convenience and instant to cook means are looked as favourable.
The various kinds of buyers in Consumer behaviour are:1) Loyal: - These are those who remain loyal to be a source of considerable periods. 2) Opportunistic:-These are the buyers who choose between sellers on the basis of who will best further for his long term interests.
3) Best deal: - These buyers concentrate on the best deal available at that time. 4) Creative:-These are those buyers who tell seller precisely what they want in terms of product service, price etc. 5) Advertising buyers: - These are the buyers who demand advertising support as a part of a deal. 6) Chisellers: - These buyers are those who constantly demand for a discount. 7) Nuts and bolts: - Buyers who wants products and services on their quality.
The different type of buying decisions are:a) Complex buying decision :- Consumer undertakes complex buying behavior when they are highly involved in a purchase and proceeds of significanent differences between brands. Egs.- laptops , personal pcs , automobiles. b) Dissonance reducing buying decision :- This occurs when consumers are highly involved with an expensive , infrequent or risky purchase but sees little difference among various brands . c) Variety seeking buying behavior :- Consumers undertakes variety seeking buying behavior in a situation involvement but significant brand difference. Eg.- busicuits , soaps. d) Habitual buying decision :- It occurs when the consumers are less involved and sees little or few difference among different brands.
INDUSTRIAL MARKETS Their objective is to enable production or to run an enterprise. Their motive is rational prompted.
CONSUMER MARKETS Their objective is personal and focusing on need satisfaction. The buying may be rational or emotional. Purchasing function is undertaken by individual consumer.
2. Buying motive
3. Purchasing function Purchasing function is undertaken by professionals or purchase department. 4. No. of consumers 5. Order size Consumers are limited. In terms of order size industrial market order size is large. Many times industrial buyers are spread over large geographical area.
The consumer base is very large. In this the order size is small. In consumer markets, the consumers are spread over large geographical area but for specific products consumers are restricted to specific geographical area.
6. Spread of consumers
BUSINESS BUYING BEHAVIOR PROCESS 1. PROBLEM RECOGNITION The business buying behavior process began with when someone in business or company recognizes a problem or a need that can be meet by acquiring a goods or service. 2. GENERAL NEED DESCRIPTION & PRODUCT SPECIFICATION The buyer determines the needed item, general characteristics & required quantity. 3. SUPPLIERS SEARCH The buyer tries to identify the most appropriate suppliers. The buyer can examine trade directory, contact other companies for recmuntation watch trade advertisement, internet & attend various trade shows. 4. PROPOSAL SATISFACTION The buyer invites the qualified suppliers to submit proposal. If the items complex pr expensive, the buyer may require a detailed proposal from all suppliers. 5. SUPPLIERS SELECTIONS Before selecting suppliers, the supplier, the companys specifies the desired supplier attributes it will the rate suppliers on these attributes & identify the most attractive suppliers. 6. ORDER ROUTINE SPECIFICATION After selecting suppliers, the buyers negotiate the final order, listening the technical specification, the expected time of delivery, return policy, warranties, etc. 7. PERFORMANCE REVIEW The buyers periodically review of performance of chosen suppliers. The performance review may be the buyer to continue, modify or end the relationship with suppliers.
Major Influences on Business Buyers Business buyers are subject to many influences when they make their buying decisions. Some marketers assume that the major influences are economic. They think buyers will favor the supplier who offers the lowest price or the best product or the most service. They concentrate on offering strong economic benefits to buyers. However, business buyers actually respond to both economic and personal factors. Far from being cold, calculating, and impersonal, business buyers are human and social as well. They react to both reason and emotion. Factors affecting Business Buying Behaviour : Environmental Factors Business buyers are influenced heavily by factors in the current and expected economic environment, such as the level of primary demand, the economic outlook, and the cost of money. As economic uncertainty rises, business buyers cut back on new investments and attempt to reduce their inventories. An increasingly important environmental factor is shortages in key materials. Many companies now are more willing to buy and hold larger inventories of scarce materials to ensure adequate supply.
Business buyers also are affected by technological, political, and competitive developments in the environment. Culture and customs can strongly influence business buyer reactions to the marketer's behavior and strategies, especially in the international marketing environment. The business marketer must watch these factors, determine how they will affect the buyer, and try to turn these challenges into opportunities. Organizational Factors Each buying organization has its own objectives, policies, procedures, structure, and systems. The business marketer must know these organizational factors as thoroughly as possible. Questions such as these arise:-How many people are involved in the buying decision? Who are they? What are their evaluative criteria? What are the company's policies and limits on its buyers?
Interpersonal Factors The buying center usually includes many participants who influence each other. The business marketer often finds it difficult to determine what kinds of interpersonal factors and group dynamics enter into the buying process. Participants may have influence in the buying decision because they control rewards and punishments, are well liked, have special expertise, or have a
special relationship with other important participants. Interpersonal factors are often very subtle. Whenever possible, business marketers must try to understand these factors and design strategies that take them into account.
Individual Factors Each participant in the business buying decision process brings in personal motives, perceptions, and preferences. These individual factors are affected by personal characteristics such as age, income, education, professional identification, personality, and attitudes toward risk. Also, buyers have different buying styles. Some may be technical types who make in-depth analyses of competitive proposals before choosing a supplier. Other buyers may be intuitive negotiators who are adept at pitting the sellers against one another for the best deal.
1. Promotions: Promotion means to give a higher position, status, salary and responsibility to the employee. So, the vacancy can be filled by promoting a suitable candidate from the same organization. 2. Transfers: Transfer means a change in the place of employment without any change in the position, status, salary and responsibility of the employee. So, the vacancy can be filled by transferring a suitable candidate from the same organization. 3. Internal advertisements: Here, the vacancy is advertised within the organization. The existing employees are asked to apply for the vacancy. So, recruitment is done from within the organization. 4. Retired managers: Sometimes, retired managers may be recalled for a short period. This is done when the organization cannot find a suitable candidate. 5. Recall from Long Leave: The organization may recall a manager who has gone on a long leave. This is done when the organization faces a problem which can only be solved by that particular manager. After he solves the problem, his leave is extended. 2. External Sources of Recruitment: The external sources of recruitment are:1. Press advertisements: Advertisements of the vacancy in newspapers and journals are a widely used source of recruitment. The main advantage of this method is that it has a wide reach. 2. Educational institutes: Various management institutes, engineering colleges, medical Colleges etc. are a good source of recruiting
well qualified executives, engineers, medical staff etc. They provide facilities for campus interviews and placements. This source is known as Campus Recruitment.
3. Placement agencies: Several private consultancy firms perform recruitment functions on behalf of client companies by charging a fee. These agencies are particularly suitable for recruitment of executives and specialists. It is also known as RPO (Recruitment Process Outsourcing) 4. Labour contractor Manual workers can be recruited through contractors who maintain close contacts with the sources of such workers. This source is used to recruit labour for construction jobs. 5. Unsolicited applicants: Many job seekers visit the office of well-known companies on their own. Such callers are considered nuisance to the daily work routine of the enterprise. But can help in creating the talent pool or the database of the probable candidates for the organization. 6. Recruitment at factory gate: Unskilled workers may be recruited at the factory gate these may be employed whenever a permanent worker is absent. More efficient among these may be recruited to fill permanent vacancies.
S.no Personal Selling 1. It involves direct interaction of salesman with the individual. 2. It is confined to a particular area.
3.
4.
In this, there is two way communication . the salesmen explains his /her viewpoints to the potential buyer and knows about his/her reactions. In this, there is only one channel of transmission of messages that is personal talks of the salespersons with the potential
Advertisement It is non personal and is addressed to customer in general. It is generally formed to cover large no of people. In this,there is one way communication. The target person`s reactions can not be known immediately Advertisement offers a wide choice of channels, such as radio, audio visual such as t.v
customers.
etc.
Physical qualities Good appearance Sound health A good posture Pleasing voice Social qualities Good manners Courtesy Tactfulness Helpfulness friendliness
Mental qualities Quick-action Imagination Self confidence Creative talk Moral qualities Determination Sincerity Loyalty Courage
1. PHYSICAL QUALITIES: Good appearance: - the outward appearance makes some impression on the customer. A good looking salesman in a neat dress with a pleasing appearance will succeed in capturing the minds of the customers. He must have the well brushed hairs. He must have a cheerful smiling face, which is considered as the mirror of the mind. Sound health: - sound health and a good physique is very essential for a business salesman. Travelling salesman needs good health as he has to travel many places, eating different varieties of food, face different kinds of weather condition. Health is wealth. Good posture: - the way or style of holding the body is another controllable factor. A salesman must have a good posture when he
meets his prospects. A defective posture makes his appearance unwanted. He must display a good posture while standing or sitting and while walking his head must kept erect. Pleasing voice: - the voice is very important for a salesperson. It must be attractive. The voice is the index of ones own feelings. It should not irritate the customer. The words uttered by the sales person must be clear, pleasant nad sweet.
2. MENTAL QUALITIES:- these qualities are: Quick action: - a salesman must be alert and quick in action. He has to face many prospects of different temperament. He must have the mentality to face any situation and, be ready to answer any question. He must have a quick thought of action- why to say, how to tell, how to tackle the situation. Imagination:- imagination is the key to success in the selling. If one possesses a rich imagination, it is of the great help in solving the problem. He must have a creative mind. For e.g. take a case of an insurance agent. He gives the picture of the retirement period of life. When the agent gives the view, through the eyes of the customers, the latter is impressed much i.e. the agent has to imagine things from the point of view of the customer. He becomes customer oriented and tackles the difficulties of the customers. He puts himself in the buying position. Self confidence: - a confident man never fails. He has the confidence in himself and his work, capacity and power. Confidence makes him optimistic and enthusiastic. He can meet any situation in the product line. He engages or talks with the customer, makes him belief and customer acts on his suggestion. Experience and knowledge are the base of the confidence. Creative talk: - A good businessman will never be defeated by his prospects. Generally a salesman never gives a no reply. He should try himself to satisfy a customer and at same time push his stocks. For e.g. a customer ask the seller to show a wooden chair. The shop possesses no wooden chair, but has steel chairs.
The resourceful salesman replies, we have exhausted the stock and ordered for the wooden chair. by the way sir we have steel chairs, which are more durable but at same price. Shall I show you? The customer cannot take leave of the shop. The salesman reply and suggestions must create an interest in the mind of the buyer. 3. SOCIAL QUALITIES: Good manners: - a salesman must cultivate good manners. Good manners are charming and bad manners areirritative. Annoyed replies and irritative action will sweep the diamonds away. People get annoyed or develop the dislike towards the careless actions of an approaching salesman, such as playing with rings, rubbing the hairs, rubbing shoes, biting nails, coughing continuously, standing on one leg, swinging the chair, clearing the nose etc. All these bad manners should be avoided and good manners are cultivated. Courtesy: - using polite and courteous words, a salesman can turn prospects into customers. Courtesy in dealing with customers, by using pleasing words like thank you , please , excuse me etc. this will win the hearts of the customers. It costs nothing to a salesman, but it is a profit to him. Tactfulness: - when a delicate situation is faced, a tactful salesperson deals it in a proper way, in time and in an appropriate manner. He always tries to avoid unwanted happenings. Through tactfulness one can avoid the obstacles, troubles, calamities eye. Helpfulness: - he must have a helpful attitude whenever the customer is in need of the information. The salesman must expose the merits and demerits of the topic relating to the product. Friendliness:- customers may very in opinions, age, economic status, ideas, temperament etc. a sales person must give a grand welcome to all those, who happen to visit the shop, with a friendly conversation. His dealing must be that of a friend advisor. He must enjoy the arrival of customers and must associate with them easily. 4. MORAL QUALITIES: Determination: - A sales person must have constant effort and patience. In his profession to improve further. It is the will to succeed. He must stick to his profession. Practice makes the man
perfect. Ceaseless practice, as a game, as a player or a professional wrestler makes salesman to come up to the top. Sincerity:- it is an added quality. He must be sincere towards his work. By sincerity, one can win friends, customers, retain old once and similar others. Dependability will increase through sincerity. He must take true statements with full information of product and assist the customer in taking the decision. Loyalty: - A salesman must have a full desire to work in cooperation with the firm by adopting the policies laid down by the firm. He must speak in the favour of the firm. Other wise the situation will be worse. Co-workers are to be respected to build a team spirit. The success of the sales depends on the sales person. The team spirit brings success to the firm. Courage:- this is the quality of one to meet danger without giving way to fear. One must have enough bravery or boldness. In business there arise various situations, such as, happening of tactless deals, unfulfilled promise, errors committed, carelessness shown etc. in all these situations the salesman must not fear and should face them with courage.
Personal Selling Process Personal selling is the process of personal presentation by the firms sales force for the purpose of making sales and building customer relationships. Steps in personal selling process: 1. Prospecting A prospect means a potential buyer. Prospecting means searching for a person to whom sale can be effective.
Prospect is a person who has wants to be satisfied and ability and willingness to buy. The following are the ways to find prospective customers: Cold calling Acquaintance, reference Direct mail Personal observation methods Company re-calls Trade shows and exhibitions
2. Pre-approach activity It involves developing and understanding about the prospective or qualified buyer as to their needs, problems, buying motive, preferences, personal characteristics etc. this pre-approach activity is effective for making ground for the sales.
3. Approach In this stage prospects and salesman come in contact with each other face to face. This salesman has an opportunity to understand and interact with the prospect in a better way. The salesman should put forward his best effort to make the best use of this opportunity in getting the attention of the prospect and to convince him or her to buy the product. A-Attention I-Interact F-Features A-Advantage
B-Benefits V-Value
4. Presentation and demonstration Presentation means showing the product to the customer in a special way to attract his/her attention. The presentation should be such that the prospective customer takes continuous interest in the product. The sales person should describe the features, advantages, benefits, value/worth of the product in brief. There is no specific approach that will be successful in all the cases. The success of a salesman depends upon the degree to which he is able to match his presentation with the attributes of the customer. Demonstration involves explaining the actual views of the product. Its purpose is to generate interest and desire of the customer in the product. It is particularly useful in case of consumer durables. Charts, slides, CDs and sample of the product may be used ds presentation.
5. Handling objections Customer always have objections during the presentations or when asked to place an order. The problem can be in the logical or psychological and objections are often unspoken. In handling objections, the salesperson should use positive approach, seek out hidden objections, ask the buyer to clarify any objection, take objections as opportunity to provide much more
information about the product and turn the objection into reason of buying. Every salesperson needs training in the skills of handling the objection.
6. Closing of sales After handling the prospects objection, the salesperson should now try to close the sale. Some salespersons do not get around to close the sales. They lack confidence, feel guilty about asking the order or fail to recognize closing signal from the buyers including physical action, comments and questions. Salesperson can use one of the several techniques such as they can ask for the order, review points of agreement, offer to help a write-up for the order or ask whether buyer wants this model or that one or note the buyer will lose out if the order is not placed out.
7. Follow-up The last step in selling process is follow up. Follow up is necessary if the salesperson wants to ensure customer satisfaction and repeat business or order. Right after closing the call the salesperson should schedule a follow up call when the initial order is received to make sure that there is proper installation, instruction and services.
At the heart of any successful sales force operation is the selection of goodsalespeople. The best salespeople must possess four key talents: -
Intrinsic motivation Disciplined work style To ability to close a sale and; The ability to build relationship with customers
Selection procedure is different from firm to firm. Each firm has its own method in choosing men for employment. The requirement of quality in men depends on the job description. Similarly the select ion method also depends upon the sales management. The following are covered under selection process of salesperson in sales: -
Application blank
Screening
Reference
Personal interview
Test
Medical examination
Final interview
1. APPLICATION BLANK Necessary information about the applicant is required to consider for appointments. Generally the candidate are asked to apply on companys application form, sent directly to applicants against a requisition or an application form , known as application blank given in the advertisement itself.
2. SCREENING Screening is a process by which applicants are to be screened out (rejected) from further consideration. The remaining applicants are formally considered by appointment, subject to further formalities. By rejecting the applicants of unqualified applicants, much time and energy can be saved in further processing.
3. REFERENCE It is a common practice to ask the applicant to mention the names of two reference or refreee, to wh om the sales manager can make enquiries about the integrity, general character and ability of the applicant concerned .if the opinions are favorable, the applications pass to the next stage; and in case the referee gives unfavorable comment, the applicatio n is rejected at this stage.
4. PERSONAL INTERVIEW
This is an important step in the process of selection. Only the screened applications are considered for selection and the firm sends out interview letters. By this interview the sales manager can understan d the positive and negative qualities of the applicant.
5. TESTS Test is an additional tool, which the applicant are further tested to determine their suitability to the job. Generally following are the important types of psychological tests conducted: -
Ability test This test is devised to ascertain the capacity to grasp things, and is a measure to know how well a person perform a particular task with motivation. This can also b e called as mental ability or intelligence test.
Habitual characteristic test A man may be intelligent but may hesitate to take a decision. This test is aimed to know ones aptitude and interest on normal daily work, irrespective of the best behavior occasionally.
Achievement test This test is designed to know as to what knowledge a man has gained from his education or training.
6. MEDICAL EXAMINATION
The important thing about any person, apart from all qualities and eligibility is that he must be physically fit for the job. Diseases and physical deficiencies of the salesman will affect the business. As such, selected applicants have to undergo medical examination.
7. FINAL INTERVIEW AND APPOINTMENT The selected applicant are called for a final interview and their suitability is measured from the different tests, physical reports etc. The job must be explained to him along with all relevant details, which are required in performing the duties efficiently.
If everything is in favour of the applicant, an agreement must be execute d by him. Generally the agreement contains duties and authorities, sales quota, sales territory allotted, salary etc.
Sales personnel serve as the companys personal link to the customers. Sales representative is a company to its customers. It is the representative who brings back much needed information about customers. Therefore, the company needs to carefully consider issues in sales force design namely:
Sales force objectives & strategies Sales force structure Sales force size
Sales force Objectives & Strategies: The old idea of sales force was that they should sell, sell and sell. Then sales persons had quotas and better sales people either meet or exceed sales quotas. Companies need to define the specific objectives they want their sales force to achieve.
For example: A company might want its sales representative to spend 80% of their time with current customers and 20% of the time with prospects or new customers. The specific allocation scheme depends upon the kind of products and customers, but regardless of the selling content, sales person will have one or more of the following:
a) b) c) d) e) f) g)
Companies must deploy sales force strategically so that they call at right time in a right way to the right customers. In deploying sales force, a company can either have a direct sales force or contractual sales force.
A direct sales force consists of full or part time paid employees who work exclusively for the company. A contractual sales force consists of manufacturers, representatives, sales agents and brokers who are paid commissions based on their sales.
Sales force Structure: The sales force strategy has implication of sales force structure. If the company sells one product line to many customers in different locations, it would use a geographical sales force structure.
If the company sells many products to many different customer types, the sales force structure would be either product based or customer based.
Sales force Size: Once the company defines its strategy and structure, it is ready to consider sales force size. Sales representatives are the companies most productive and expensive assets. Increasing their number will increase both sales and costs. Once the company establish the number of customers it wants to reach, it can use workload method to establish sales force size.
For example: A company estimates that there are 1,000 A accounts and 2000 B accounts. A account needs 36 calls per year and B account needs 12 calls per year. A company needs a sales force that can make 60,000 calls per year.
1,000 Accounts
36,000
2,000 Accounts
48,000 60,000
Suppose an average sales person does 1,000 calls per year then in this case 60 sales persons will be required.
PURPOSE AND IMPORTANCE OF SALES QUOTA AS FOLLOWS:1.IT PROVIDES GOALS AND INCENTIVES: quotas provides sales person, distributed outlets and others engaged in selling activity, goals and incetives to achive certain performance level. Many companies use quotas to provide there sales force the incentives for increasing there compensation through commission and bonuses. 2.CONTROLLING SALES PERSON ACTIVITY:- quotas provide an oppourinity to direct and control the selling activities of the sales person.sales person are held responsible for certain activities like customer calls, calling new customer, giving min. no. of demonstration. IF the sales person fails to attain these quotas, the co. can take corrective action to rectify there mistakes. 3.EVALUATING PERFORMANCE:- quotas enable the co. to evaluate performance of its sales personal, territory or distribution network. Performances against quotas also help to identify the strong and weak points of the sales force. 4.CONTROLLING THE SELLING EXPENSES:- quotas are also desgined to keep the selling expenses within limits. Some companies re-infuse the sales expenses upto a certain %age of sales quota. Other tie expenses to the sales
person compensation in order to avoid wasteful expenses. Expenses quotas also help companies to set profit quotas. 5.MAKING EFFECTIVE COMPENSATION PLAN:- quotas play an important role in the companies sales composition plan. Some Indian companies follow the practice that there sales person will get commission only when they excced there assigned quota. Companies may also used attainment of the quotas in full or part as basis of calculating the bonus. If the sales person does not reach the min. desired quota he/she will not be entitled for any bonus.
The territory should be planned in such a manner where maximum amount of sales persons time is spent in interacting with the customer rather than travelling. This will automatically reduce the expenses also. There is various alternative of shapes of territory which can be used to optimize the travel time expenses and resources. The following are the different types of sale territory shspes:1. 2. 3. 4. Circle shape Clover leaf shape Wedge shape Suitable station sales person
1) Circle shape
B
C A
Circle shape is appropriate where the concentration of customers is more or less the same throughout the territory. The sales person is based in a town which is near the center of his/her complete territory this shape ensures equal concentration of the sales person to all of his/her customers. Because the time involved in travelling to any area of his/her territory will be save.
A D E
It is desirable for companys marketing industrial goods. This shape is suitable when customers are located randomly. In other words there concentration is not equal in all areas of territory. In this shape sales person is based at the center of territory and plan his/her tour to cover all customers along one leaf.
Wedge shape territory is suitable when the sales person is based in town with dense population of customers and has to visit the satellite towns also for small customers or sparsely populated region. Such a shape is an alternative to circle shape for companys marketing fast moving consumer good or pharmaceutical products.
The sales person should be located or based at a place in his/her territory with the highest concentration of customers. Suppose a territory consist of towns A, B, C, D, E, F and G and the most of customers are located at town F then the headquarters of the sales person should be towned F only. Moreover other towns should be well connected with town F and distance should be minimum between the towns. Alternative way
A B D E C
Sales territory represents a group of customers, G an industry, a market or a H geographical area. A territory may or may not have geographical boundaries. A sales territory comprises of group of customers or geographical area assigned to sales unit. Some of the factors that influence sales volume of a territory are: 1. Market build up approach This approach estimates the present and potential product or service demand by looking at how the market builds up, who are the present and potential users, how much they consume and at what frequency.
Unfortunately it is not as easy as it looks. Its major use is Industrial Goods Company where complete listing of user is available along with approximate consumption norms. Publications such as annual surveys of Industries, trade directories, state, district and city wise list of manufacturing units etc. can be useful in this regard. Starting with one user industry in an area and then adding up all the relevant industries in the area one can estimate the potential of that area. By aggregating the estimates of all areas one can arrive at total markets potential of the product. For example: If foreign airlines, the market potential for all areas sums up to 3,000 and for Maharashtra state 600 i.e. 20 %. This means that the airlines have to invest 20% of its marketing and sales efforts in Maharashtra. Given the customer wise market potential and the classifications of the customers in A, B, C categories, the number of frequency of calls required to tap the sales potential among the customers can be determined. This needs to the estimates of total sales cost required by area, and number of sales persons required. Sales territories are then form in a manner in that the sales potential and work load for each territory is equal.
2. Workload approach or WJ Talleys approach Workload approach of territory design is based on creation of territory that is equivalent in terms of workload performed by the sales person. The steps involved in the creation of sales territory are: i) ii) iii) iv) Customers are grouped into class sizes according to the annual sales volume that a company has. Optimum call frequency for each class of customers is estimated. Present and potential customers are then located geographically and arrange volume wise and value wise. The number of present potential customers in each volume and value group is then multiply by the desired call frequency to get
total number of plan calls required for each geographical control unit.
The objectives of sales territory are: 1. Proper market coverage systematic mapping of sales territory helps mapping of sales territory helps sales person in effectively combing the territory , covering present as well as potential customers. 2. Effective development of sales force - proper knowledge of the diamonds of the sales territory results in assignment of the right person for the right territory. The specificity in job description and responsibility helps in assigning optimum workload am on sales person. Therefore when territories are distributed equitable to the sales person fewer conflicts arises from calling on someone else customer and on the work load carried out. 3. Efficient customer service well designed sales territory improves buyers and sellers contact and enable better customer satisfaction. 4. Evaluation of sales force- comparison of the sales person performance to the potential of the assigned territories results in their objective
evaluation of territories by territories evaluation of sales performance helps to make necessary adjustment in the sales territory. 5. Improving selling and marketing productivity well designed sales territories , coordinates territories selling of activities with other
marketing function of the company market planning on territory basis can be more effectively used to determine the sales quota and developing profit plans similarly sales n dost analysis can be done more easily on territory basis rather than on the entire market.
Negotiation
Negotiation Process consists of the following steps: Planning Briefing Bidding Bargaining Setting Rectifying Reviewing
Planning Preparation of Negotiation needs to recover purpose, plan, and pace of the meeting. The opening statement should be carefully plan. Physical arrangement influences the form of subsequent negotiations. Therefore, it is important to plan well before negotiations.
Briefing The negotiation team needs to be brief on the strategy in case of group negotiation. It is also to be told about the roles & task which negotiations have to look in during the course of negotiation.
Bidding A bid may be defined as a n offer from one party to another. The negotiation would bid high in the opening, but not much higher which would be rationally defended. Bidding clarifies where the difference lie between parties and creates a bases from which they can move forward and re solve the differences.
Bargaining This phase involves coming close to the objectives intended to achieve. In this phase, the basic strategy is to achieve, convince and pursue to the demands, for this one may need to have logical approach and clear frame out questions and planned arguments.
Setting Solutions can only be found when both the parties are willing to do business. This means both the parties are willing to move forward. The parties should always strive to create a win -win situation. The negotiation should always remember: a) Not to create a loss/lose situation. b) Avoid win/lose situation c) Accept nothing less than a draw. d) Aim for win-win situation.
Ratifying When the negotiators have reached an agreement on the outcome. The agreement should be written down and signed by both the parties allow for no misunderstanding and misinterpretation
later. It is important that both the parties agree jointly on how an agreement should be entered into.
Reviewing After the negotiation is over , it is important to review how negotiation has happened. The negotiator must assess how they have conducted the negotiation process ? Were there any variations in the outcome ? How, when the teams have performed their goals ? What skills need to be develo ped before their game. Sit down to negotiate. All these steps are important for a successful negotiation process. Skills require for effective Sales Negotiation The good negotiation must have following traits 1 Patience 2 Clarity 3 Self Confidence 4 Mental Alertness 5 Must be over details
The following are the basic rule with respect to effective negotiation skills 1 Begin with positive note 2 Address problems and not personality involved 3 Pay little to initial offers 4 Emphasis on win win approach or problem selling approach 5 Create an open and trusting environment
Negotiation is an attempted trade-off between getting what you want and getting along with people. Negotiation has become a significant part of business deals. Everything has become negotiable as sellers maintain their profits and clients know their abilities to negotiate.
Interpersonal skills, the right attitude, and the right approach to negotiation. An understanding of the negotiation process and key strategies
You as a sales professional can get sales, maintain margins and keep clients coming back for more if you can demonstrate negotiation skills. A few tips for building effective negotiating skills:
Be bold when achieving goals and know when to accept the other persons opinions and values. Be aware that communication with the client is a very important skill and maintaining an on-going relationship with them fetches good returns for the business. Be aware of targets and adopt the most suitable style to achieve a deal. Try and ensure that the needs from both sides are met the results of your negotiation must be long-lasting. Skillful listening, the right posture, good eye contact, appeasing facial expressions and right questioning techniques are all very important while negotiating. Be assertive but keep an open mind. Share the right information and dont lie or exaggerate. It is counter productive eventually. Develop acceptance and trust with clients. Understand the market and where the maximum sales take place. Understand competitive strategies and acquire negotiation skills for pricing. Always try to be well-informed about the customer to understand him better. Remember that the most important quality is convincing the customer and maintaining a cordial relationship in the long run.
To conclude, every sales person must be aware of negotiating skills because they play a crucial role in every aspect of the selling process.
SALES BUDGET
A Sales Budget is a programme designed for a stipulated time frame that highlights selling expenses and anticipated sales, quantitatively and in value terms. Therefore a budget is a list of planned expenses and revenues. It is a plan for saving, borrowing and spending. Sales Budget can be created product wise, territory wise, customer wise and salesperson wise. It serves as a scale to measure the performance or progress of a company. It helps to identify the areas in which the company needs to strengthen or improve the performance. This can be done by comparing the actual performance with the budgeted performance and taking corrective measures in case of any deviation. Sales Budget helps to keep the expenses under control.
Following are the factors to be taken under consideration while preparing Sales Budget: Past sales figures and reports Salesmens estimates Plant capacity Orders in hand Seasonal fluctuations
1. Planning- Profit planning based on expected sales less cost of achieving the sales. 2. Coordination- SB is finalized with coordination of Marketing, Finance, Production and HR. Coordination of all the departments is required 3. Control- It serves as the basis for controlling if deviations occurs in performance