ANALYSIS OF THE CURRENT MARKET SITUATION PDF

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Contribution of the sales function, analysis of the current market situation, generation and selection of strategies, budget, implementation and control, the promotional mix, from sales strategies to tactics and brand or supplier loyalty....

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ANALYSIS OF THE CURRENT MARKET SITUATION

The proximity of the sales function to the market puts the company in a unique position to contribute to the analysis of the current market situation it faces. In particular, it is common for the sales area to be in a good place to contribute to the analysis of customer needs and trends in purchasing behavior. The sales manager can also make a valuable contribution in terms of competitors' knowledge and market position. This role as informants of sales managers should not be ignored because, through the sales force, executives in this area are ideally equipped to provide accurate and up-to-date information based on customer feedback. Determination of sales potential: Sales forecast Animportant responsibility of the sales manager is the development of sales forecasts to use as a starting point in business planning. The sales manager's short-, medium- and long-term forecasts form the basis for the allocation of the company's resources, in order to achieve advance sales. Generation and selection of strategies Although decisions on the right market strategies are made in marketing management, sales management should be consulted and should provide information for this decision. Again, the sales function is ideally located to comment on the relevance of any of the suggested strategies. The sales manager should actively encourage his staff to comment on whether the company's sales strategies are appropriate. Sellers are at the forefront of tactical marketing and can more realistically assess how existing target markets will respond to the company's marketing initiatives. Without a doubt, we must not overlook the fact that there are people at the forefront who have the benefit of greater contact with customers. Budget, implementation and control The development of sales forecasts is a necessary precursor to detailed marketing plans. Sales forecasting is also used in sales budgeting. Based on the sales forecast, the manager must determine what level of spending will be required to reach the predicted sales level. It is important to remember this estimate, which is the basic principle of the entire budgeting procedure of a company. It affects not only the activities of the sales department, but also production, human resources management, finance and research and development. For now it is sufficient to note that for the preparation of the sales budget, the sales manager must make a description of the essential activities that are required to meet the sales forecast, along with an estimate of their costs. The precise content of the annual sales budget will vary across companies, but it is

common to include salary details, direct sales expenses, administrative costs, commissions, and bonuses. Once the budget for the sales department is agreed, the manager must assume responsibility for its implementation and control. In drawing up future plans, it is important to take into account past performance information against the budget and, in particular, any differences between actual and budgeted results. The sales manager should analyze and interpret these "budget variations", both favorable and unfavorable, as data for the planning process. The reasons for the variation in the budget should be reported along with details of any corrective action taken and their effects. Marketing plan influence on sales activities: Strategies and tactics Any planning process is effective only to the degree to which it has influence over the action. A marketing planning system influences the activities, strategic and tactics of the entire company. The classic marketing approach favors the inwardout planning model proposed by Schultz, Tannenbaum and Lauterborn. However, the inward reverse planning model has gained supporters. Cignoring the cost-per-sale calculation for current customers, then lagging customers and prospects in the database and finally new customers. The cost-per-sale calculation determines the sales goal in each case. This process is followed by a strategy for each discrete segment. It is not possible, for example, to offer a product at the same price for each customer segment. Similarly, the types of communication will be different for each of them. Ideally, both the segment strategy and the content of communications against reasonable alternatives will need to be tested. The most successful test alternatives will be used in the rest of the population of each segment. Although the inside-out model has a financial boost, it is much less secure than the customer-oriented planning model. Perhaps this influence is clearer when you look at decisions related to the program and the marketing mix. Sales strategies are the ones that have the greatest influence on the planning decisions of the promotional element of the marketing mix. Here we briefly consider the concept of a "mix" of promotional tools, describing considerations in choosing an appropriate mix and implications for sales strategies. In particular, the important and often misinterpreted relationship between advertising and sales is explained and analyzed. The promotional mix Animportant facet of marketing planning is the development of a program; the most important step in this preparation is the determination of the marketing mix: product, price, distribution and promotion. Since the sale is only one element in the promotional part of this mix, it is customary to refer to the promotional mix (or more

correctly, the mix of communication) of a company. This traditional promotional mix consists of four main elements: 1. 2. 3. 4. 5. 6.

Advertising Sales promotion Advertising/public relations Personal sales. These traditional elements can now be added: Direct marketing Interactive/online marketing

In most companies the four traditional elements can contribute to sales, but it must be decided what to highlight. This decision is made at the planning stage. In addition, it is important that the elements of the promotional mix work together to achieve the company's goals. An important task of management planning is to coordinate promotional activities. Several factors influence the planning decision as to what to give importance in the promotional mix. In some companies the emphasis is on the sales force with almost the entire promotional budget dedicated to this element of the mix. In others, ads or sales promotion are more efficient and productive than personal sales. Perhaps the most surprising aspect of the different promotional tools is the degree to which they can replace each other. Companies within the same industry have marked differences in promotional emphasis, a fact that makes it difficult to be specific about developing a promotional mix within a given company. As a guide, we describe some of the most important factors influencing this decision. 1. Market type. Oneof the main distinctions between market types is between businesses and consumer markets; hence the distinction between B2B and B2C marketing. As seen, the application of the elements of the marketing mix often differs when marketing in each of these markets. The "new" promotional mix increasingly considers the possibilities of ecommerce, which is highlighted by advances in this field and the number of companies using such means. In addition, the use of free telephone lines also facilitates communication and makes it free for the potential customer. 2. Stage in the purchase process. Asin the case of industrial products such as those aimed at the consumer, it is useful to consider the stages that a potential buyergoes through in the period in which he makes the purchase decision. Although there are several ways to conceptualize this process, in essence, it is that the potential buyer moves from a position of unaksciousness of one company and its products to another where he is convinced that the products and services of that company are best suited to his needs. For a given disbursement, advertising and ads are most effective in the early stages of the customer's movement from disrecognise to understanding. Personal selling is more cost-effective than other forms of

promotional activity during the conviction and purchase stages. This does not mean that "sales calls" or "customer search" are not an important area of sales activities, but, as you will see, those calls are much more effective if the customer already knows the company's products. The sales or customer search call is often associated with direct selling to the general public. These sales staff often rely on a previously prepared script, which has resulted in the term "canned sale" in the sense that somehow the same thing always comes out of each can. The script comprises a logical set of questions, and when the sales rep encounters an obstacle, he remembers what's in the script and the methods for overcoming it. The script covers a variety of techniques, from opening the sales interview to closing it. The biggest problem is making the initial call, and customer search suggests that this initial call should focus on getting information and then setting up the next appointment. In doing so, the foundation is laid to establish trust and create an alliance, because if the order of techniques is done too quickly and a "No" is obtained in response, then it will be very difficult to persuade the client to change his mind. It is best to wait for the right time, when the sales executive feels that a "Yes" is a more likely outcome. The Tack3 School of Sales Training was one of the first spreaders of these ideas in the United States, after World War II, and the approach gives practical advice on these issues: • • • • • • •

The importance of getting the right name from the person. Use questions to engage the lead. Ask initial grading questions before starting the sales argument. Don't ask for irrelevant information. Do not pretend to have knowledge that is not possessed. Do not sound too enthusiastic, for it can be interpreted as despair. Confirm the appointment in writing.

The sales call is often seen as negative, and adverse advertising sometimes accompanies these techniques. Several television shows have reported cases in which high-pressure techniques have been applied to customers who do not even warn. 3. Strategies of pushing versus halar strategies. One of the main determinants in the choice of promotional mixing is the degree to which a company decides to concentrate its efforts, in terms of its distribution channels. This may be better illustrated by comparing a pushing strategy with a pull strategy. One pushing strategy is the one that devotes your marketing efforts to boosting the product through distribution channels. The important thing is to ensure that distributors and retailers store the product in question. The idea is that if distribution channel members are induced to store the product, they

will want to ensure that the product reaches the final consumer. In general, a pushing strategy places great emphasis on personal selling and commercial promotion in the promotional mix. A halar strategy relies much more on advertising to promote the product to the end consumer. The essence of this approach is based on the idea that if sufficient demand is generated for end consumers of a product, the result will be that consumers will order the product from retailers. These will be requested from distributors who, at the same time, will contact the manufacturer. In this way the product is "flattered" by the distribution channel, by creating a consumer demand through assertive advertising. 4. Product lifecycle stage. There is evidence to suggest that promotional tools vary their relative effectiveness during the different stages of this cycle. In general, ads and sales promotion are very effective in the stages of introduction and growth of the lifecycle, while suggesting that the focus on personal sales should increase as the market matures and, over time, declines. Coordination of promotional efforts: Relationship between advertising and sales When analyzing the factors that affect the choice of promotional tools, it may seem that to some extent the latter are mutually exclusive; for example, you choose to focus on one of the two, advertising or sales. But it's not like that. The relationship between the various promotional tools, including personal sales, must be complementary and coordinated. Perhaps this obvious point would not need to be highlighted, if it were not for the fact that this complementary relationship is often misunderstood. It is in this part that the misunderstanding in the relationship between advertising and sales becomes more evident. It is unfortunate that many sales managers and their staff think advertising spending is a waste of resources for the company. Rarely, they argue, a customer simply buys a product because it is advertised; particularly when that customer is an industrial buyer. Because of this, the argument continues, it would be better if the money "wasted" in advertising was invested where it had an immediate and direct effect: on the sales force. Increasingly, evidence suggests the idea that advertising money wasted in industrial markets is misalted. Among the functions that advertising can perform in these markets are: 1. Corporate advertising can help build the reputation of the company and its products. 2. Advertising in particular is effective in raising awareness among potential customers. The sales representative facing a prospect who does not know the company and its products is more difficult to sell than those who can expand the relationship based on initial knowledge.

3. Advertising helps the sales representative market new products by carrying some of the burden of explaining new features that help strengthen understanding. 4. The advertising used in return coupons can be used to open new accounts for the sales force. In general, the greatest benefit of advertising in industrial markets is seen not by a direct effect on sales revenue, but on reducing overall sales costs. Evidence suggests that, given the appropriate frequency, this reduction in sales costs to customers who were exposed to advertising may be up to 30 percent. Conversely, those who don't advertise may be at a disadvantage. The cost of selling to customers exposed to competitor advertising can increase by up to 40 percent. When marketing goods to the consumer, the brand and its image are very important and advertising is often thought to be the most effective promotional tool. However, personal sales and well-trained sales force contribute significantly to increasing market penetration, influencing distributors to allocate more shelf space to the company's products and persuading new distributors to store them. At all times, sales and advertising must be coordinated to achieve the company's objectives. It's important for sales executives to be informed about advertising campaigns. This should be used in sales: the theme of ads should be reinforced with sales submission. From sales strategies to tactics We have seen that several factors influence the establishment of strategies. It has been suggested that this influence is more direct when determining the relative emphasis that will be given to company-wide sales activity and promotional strategy. Sales strategies are also influenced by the marketing and sales goals specified in the marketing plan. Amarketing goal like increasing market share may mean that the sales manager must ensure next year's sales increase by 10 percent. Moreover, the planning document must specify the route or strategy by which it will be achieved; for example, "additional sales efforts should be directed to the opening of new accounts". Sales objectives and strategies therefore also arise directly from the planning process, after consultation and agreement with relevant staff. However, not all researchers support the merits of relationship marketing. For example, Shaw argues, "Traders must abandon their obsession with loyal customers, as this has become a distraction from basic sales work and tracking the origins of success in them." Once these strategic guides are agreed, a detailed set of activities should be developed within the planning process. The sales manager must determine the specific actions required to achieve the goals, i.e. tactics.

Tactics encompass the day-to-day activities of the sales function towards achieving marketing and sales objectives. Tactics also include actions to be taken in response to unexpected short-term events in the market, such as a special promotional effort by a competitor. Tactical decisions represent the "sync" between sales activities and cover many areas of decision; for example, the use of sales staff can be considered a tactical aspect of sales. In addition, the design of incentive systems should be part of a tactical plan designed to achieve sales targets within the framework of business strategies. The importance of tactical decisions should not be underestimated; even the bestformulated strategies fail because of a lack of proper tactics. As an example of the use and importance of sales tactics, we briefly present a purchasing aspect that is of vital interest to many companies, namely brand or supplier loyalty. Loyalty to the brand or supplier If we examine the purchase of goods and services over time, we find that many times the sequence of purchases of individuals indicates that they repeatedly purchase the same brand of a product or, if the product is industrial, are consistent in the purchase from a particular supplier. There is no doubt that there is loyalty to the brand or supplier. Moreover, cultivating this loyalty among customers often means a large part of tactical marketing and sales effort, which represents a substantial market asset for a company. If a long-term perspective, such as growing a customer's loyalty, is favored, it complements traditional techniques for cementing a brand. To be sure, as Martin insists, customer relationships with brands help isolate brands from competitors: "the customer-brand link can be seen as an important subset of relationship marketing." In addition, Reichhel and Schefter also support this theory when they claim that "the brand influences a large group of customers" and that they "seek stable longterm relationships," Curtis succinctly summarizes that "customers need to feel that they are part of the brand crusade." Before considering the role that sales tactics can play in this process of cultivating loyalty, it is important to explain precisely what brand loyalty means, a seemingly simple concept that leads to some misunderstandings. Let's go back to the newly shown purchase sequence. Although we have suggested that such a sequence is associated with a customer loyal to the brand, the existence of such a purchase arrangement for a customer does not in itself constitute evidence that this customer is loyal to the brand. There are several explanations for this purchasing behavior. One possible explanation is that this

customer concentrates much of their purchases at a distributor, and this one in particular only stores the X mark of this product; that is, the customer exhibits loyalty to the store, beyond the brand. Another possible explanation is that this customer does not give importance to the brand or supplier; it does not have a conscious loyalty to the brand, but rather only fell into the habit of buying it and does not take the trouble to change. In this second example, we can say that the customer must be reasonably satisfied with the brand he buys on an ongoing basis. If I didn't, or if I suddenly were dissatisfied, I'd make the decision to change. Either way, the fact is, this isn't a real loyalty to the brand. Loyalty to the brand or supplier exists when customers make a conscious decision to focus their purchases on a specific brand because they consider the supplier or brand to be superior to the others. There may be several reasons or bases for the perception of this superiority; for example, superior quality, better delivery and post-sale services, credit availability, or some combination of several factors. The concept of brand or supplier loyalty is complicated and care must ...