BM Report Final

8/13/2019 BM Report Final

1/25

Project Report On Computer

Hardware Industry Submitted to Dr V.V Gopal

Submitted by:

GROUP 4

Ajay B.S

Anil Kumar RV

Gunasekar

Tanviraj

This report gives a brief analysis of Computer Hardware Industry in terms of Sales process, Segmentationof the market CRM initiatives, Business Communication, Lost sales analysis and Key accountmanagement.


2/25

Acknowledgement

Its been a great pleasure for me to work under people of immense subject matter expertiseand its time for me to acknowledge all of them , without their support this work would not havebeen fruitful.

It is great pleasure and honor for us to owe gratitude to my guide Dr. V.V. Gopal for hisremarkable guidance and constant encouragement for his scientific and personal concernthroughout the course of investigation which led to successful completion of this work.


3/25

INTRODUCTION The year 2012-13 has been another year with uncertainties and downtrends globally.

Indian economy has also slowed down in spite of being one of the most promising anddeveloping economies. Beyond all these economic forces certain industries exhibited growthabove industry average. For example, As NASSCOM state, IT-ITeS industry grew at 16% and forthe first time touched the mark of 100 billion USD in revenue. Though the main chunk of the100 billion USD is contributed by the software and BPO, the remaining is amount contributedby hardware supplies. This low contribution by Indian computer hardware industry is becauseof the dominance of China, Malaysia, Taiwan, South Korea and etc.

Placing the computer hardware industry under the spotlight, the Data by IDC says thatthe Indian PC market has grown against the negative trend across the globe. The article read,"Overall PC shipments for calendar year 2012 stood at

11 million units resulting in a year-on-

year growth of 3.5 percent over 2011, according to IDC. Despite a drag on overall IT spending,the growth in the India PC market was driven by special projects like ELCOT and a spurt inconsumer demand for notebooks. From the standpoint of " Business marketing " we might haveto focus more on the industry's business/commercial market (Leaving out the consumermarket). This focus on business market is also interesting because of the huge amount of therevenue it gives to the industry.

Just to quote a sample, Out of the 2.23 Million notebooks sold in 2012, One entity calledElcot in Tamilnadu made order for 9, 05,000 notebooks. But the sad part is, A study on thecommercial PC business market by Ramdas S, CRN says, "The market saw a negative dip of 1.5percent compared to 2011 when the total commercial PC market was estimated at 5.9 millionand is expected to slide further" Restraining forces of the business market: Though there are big player like IBM's Lenovo,Hewlett-Packard, Acer, Dell and others in the business with all the resources required. The sluggishness prevails due to various factors like,

Slashing of IT budgets by small businesses and corporations: The global economicconditions are making them work on cost advantage with low margins. Thus the bigcorporations are not ready to spend much on anything due to the low budgets they areforced to work on. The lack of need to update the technology: Technology and products offered by theindustry has not changed drastically in recent times so the need for change is not felt bythe customers.


4/25

Increase in the other forms of devices like tables and smart phones: The technologyconvergence has happened. More than computers the tablets are efficient for mails,presentations, power consumptions, space and more. Thus the trend is shifting towardsthe tablets

Concept of BYOD (Bring your own devices): Organizations have employed a newtechnique to cut down on their cost by asking the employees to bring their owncomputers and notebooks to the workplace.

Drivers of the business market: The import bill for electronic goods is predicted to the biggerthan the oil import bill by 2020 if a domestic ecosystem for promoting manufacturing is notdeveloped.

Electronics Manufacturing Clusters Scheme (EMCs): The union cabinet has recentlyapproved the proposal for the Electronics Manufacturing Clusters Scheme (EMCs),which will provide financial assistance and guidance for manufacturers. Software Technology Parks of India (STPI): The effective functioning of these parks asassociation are huge potential customers of computer hardware. People employed: There are about 25 lakhs people working in the IT industry alone,Where most of the individuals will do their days to day work on a piece of hardware. Computerization of industries: Most the industries in India are computerizing theirfirms. Even the government of India is implementing e-governance effectively. Thus bymaking a brief study on the computer hardware industry (Personal computer andNotebooks) we were able to find the abovementioned points along with the restrainingand driving forces. These mentioned points along with the dropping growth rates showsthe signals of a matured market. This fascinating fact that the computer hardwareindustry has stagnated, makes the group more interested to learn more about theindustry under the business marketing context and study the industry s reaction tovarious marketing concepts and monitor the future.


5/25

Segmentation of Computer Hardware IndustryMarket Segmentation is dividing a market into groups of customers who have similarrequirements for a product or service offering. Computer Hardware Industry can be segmented

based on Macro and Micro factors.

Macro variables:

1. Type of customer: Start-up companies which include Software, Banking (Financialinstitutions) and Insurance companies; Educational Institutions.

2. Company size: Net worth of the customers will be between 10Cr to 100Cr.3. Customer location: A1 cities Delhi, Mumbai, Chennai,, Hyderabad, Kolkata and

Ahmedabad; A cities- Pune, Bangalore, Kanpur and Vadodra [1]4. Usage : Can be further divided into

4.1. Type: Orders vary based on units and specifications.4.2. Frequency: Clients are advised to upgrade the systems every three to five years. Three

in case of companies and 5 in case of Educational Institutions. Sophisticated labs inEducational Institutions would require yearly up-gradation.

5. Ticket Size: Mainly based on volume. Since computers are commoditized, its a volumesgame. Based on requirement, ABC will cater to lot sizes from 20 (companies) to 500(Educational Institutions) units.

Micro Variables:

1. Purchase intentions:1.1 New Task: For new customers who are entering into business with ABC for the first time1.2 Modified Re-buy: For already existing customers who would request for new

specifications or it there are modifications in orders placed1.3 Straight: Repeat purchase, mainly up gradation of existing systems (e.g. Memory

capacity, motherboards or RAM)2 Payment criteria: Part payments 60% before and 40% after delivery.

3 Product Range: Systems are priced based on the configuration, ranging from 15,000 INR to55,000 INR


6/25

Segmentation of this industry can also be done by Nested Approach [2] as shown below.Industrial market is segmented layer by layer, from Demographics through Personal characters.

1. Demographics: It is the outermost nest consisting of broad general character of themarket. It gives a broad description of company and relate to general customer needsand usage patterns. This can be further divided into

1.1 Industry: Software, Banking, Insurance and Educational Institutions1.2 Company size: Net worth of 10Cr to 100Cr

1.3 Customer location: A1 cities Delhi, Mumbai, Chennai,, Hyderabad, Kolkataand Ahmedabad; A cities- Pune, Bangalore, Kanpur and Vadodra

2. Operating Variables: More precise identification of customers and generally includestable variables such as

2.1 Technology- Study of how technologically apt the customers are. Forexample, Software development would require state-of-the-art technologywhere as Educational Institutions may prefer for previous models as they aremore sensitive to expenditure

2.2 User status (Brand or product)- if the customers are brand specific or ifproduct performance is what matters

2.3 Customer capabilities- as to see how financially sound the customers are

3. Purchasing approaches: Determining the purchase function and structures of thecustomers. They include


7/25

3.1 Purchasing Function Organization: If the customers use a centralized ordecentralized approach. A small software firm may use a centralizedapproach where there is only one key purchase decision making entity.Where as it is possible in Educational Institutions, each department such as

Electronics, Mechanics, Computer Science may have autonomy to go for thepurchases as and when required.3.2 General Purchase policies: Some clients may require agreements based on

suppliers cost, some may negotiate based on market price and some mayuse bids

4. Situational Factors: Can be in the form of urgency or order fulfillment, productapplication and size of the order. This would give a personalized edge to meet the needsof the customers.

5. Buyers Personal Characters: This refers to laying emphasis on the people involved in t hebuying decision than the organization. It can be in terms of buyer-seller personality,buyer motivation, individuals perceptions and risk -management strategies. Somebuyers are risk receptive and some are aversion in nature.

Target Segments: Organizations vs. Net worth

100Crores

Software Co

Banks

Insurance

Educational Inst


8/25

Communication In Communication HardwareIndustry

Marketing communications have an important role to play in communicating andpromoting products and services not only to consumers but also to the business-to-businesssector and to other organizations representing differing stakeholders. The development ofpartnerships between brands and consumers, and between organizations within distributionchannels or networks, is an important perspective of marketing communications. Its an entitythat links a business to the consumer, in the form of information, plugging the gap betweenconsumers and the business.

Roles of Communication:

Computers are such that they find application through various industries. Hence it is importantto find right approaches depending on who the customers are and thus, they have differentroles such as below:

1. For integrating : Here computers play a role in integrating different business processes inan organization, thus aiding the businesses to reach their goals and objectives,efficiently. E.g. Computers in Retail will help in keeping track of the inventorieseffectively, by coordinating with different departments. Computers could also play arole of integrating different businesses such as software andBanks/insurance/education/retail etc.

2. For information : All companies thrive on information pertinent to their businessactivity. They would want to communicate to the present and potential customersabout the benefits of using their products, technical specifications and other benefits tothe businesses if they adopt the products

3. For influencing : Influencing the existing customers, how they can upgrade theirproducts for superior functioning and for potential customers, in what way computerscan make their business processes efficient.

4. Image building : Mentioning of existing clients in the websites and catalogue will boostthe credibility of the company. PR efforts will ensure that every possible contact pointdelivers positive and unified message on behalf of the company. Sponsorships and event


9/25

based marketing will help in building brand loyalty and other positive feelings towards acompany

5. Employee orientation : Vision, mission, goals and objectives will help in aligning theinternal stakeholders toward corporate strategy, thus directing them towards the

organizational goals

Steps in Communication:

1. Determine communication objective

2. Identify the target audience

3. Determine promotional budget

4. Developing message strategy

5. Selecting Media

6. Evaluate promotional results

7. Integrate promotional program

Communication Model:

1. Objectives: To increase the market share of ABC computers in India to 20% by 2020 To be among the top 3 computer hardware manufacturers in India

2. Identifying Target Markets: Educational Institutions in India based on number of students greater than 2000.

They include aided, unaided and residential schools

Commercial Service Enterprises such as Software Co, Banks, Insurance andHospitals with net worth between 10 to 100Cr (start ups and newestablishments)

3. Promotional Budget: It would be a combination of Percentage of Sales and Objective & Task approach. 10% of sales will be set aside for promotions


10/25

The share will be further divided as per following task:

1. Identifying target customers (existing and potential) 30%2. Media selection and execution 20%

3. Personal Selling 40%4. Contingency 10%4. Message Strategy:

ABC Computers frees you to focus on your business and transforms the way

you use your PC to simplicity

5. Promotional Tools and Media: Objective is to cut across several industries as computers form a part of

infrastructure that is a must to sustain varieties of businesses Advertising: India Business Journal, Indian Journal of Economics and Business and

Emerald publications-> PRINT MEDIA Sales promotions: Trade shows such as Information Technology and Communication

Expo* in Hyderabad (October); COM IT Expo* in Mumbai( November)*These are upcoming events scheduled for 2013)

Public relations and publicity: Sponsoring events such as Tech fests, Seminars etc atEducational Institutions and Organizations (SAP); CSR activities to increase computerliteracy etc.

Direct Marketing: Database marketing, Permission Marketing, Direct mail andcatalogue

Personal Selling

6. Evaluation: Sales and Response rates Test markets Evaluation of PR activities -> Number of Clippings (No. of clippings in the print

medium vs. No. of new releases sent out by company) and Impressions (No. ofpurchasers or subscribers of print medium in which clients name is mentioned) .


11/25

Customer Relationship ManagementAn effective means of building up on Customer Relationship Management is to focus on all thekey stakeholders (those who have interests in company and are influenced by company

activities). These include

1. Employees2. Customers3. Suppliers and4. Others (Government, investors etc.)

CRM initiatives for each of the entities ensure an overall strong bonding which can sustain anorganization. Every touch point of the entities should be a positive experience thus ensuringsmoother transactions.

CRM Initiatives:

Customers

Customers can be classified into Existing customers and Potential customers. Existing customerscan be further divided in two categories based on the volume of the orders (bulk orders) andthe frequency of orders (loyal customers who have been buying products from us).

For Existing/Loyal customers:

Priority services (regular service, maintenance, up gradation, replacement etc.) to beprovided to premium clients

Better credit and payment terms and conditions such as payment in installments orwaving off installation charges

Dedicated customer service or single point contact for queries/solution; providingclients with hotline facilities where any form of complaints, queries,maintenance/replacement or service would be adhered to within 24 hours thuseliminating risk factor. Assistance can also be provided through video call facility forbetter clarity in passing on information.

eCRM initiatives to address the clients over the phone(online) by means of newslettersand promotion of latest devices which could improve the overall performance ofbusiness process

Carefully observing the business cycle of the clients and using up selling and cross-selling techniques to enhance the value that the client or clients get from the
http://en.wikipedia.org/wiki/Cross-sellinghttp://en.wikipedia.org/wiki/Cross-sellinghttp://en.wikipedia.org/wiki/Cross-sellinghttp://en.wikipedia.org/wiki/Cross-selling


12/25

organization in addition to maximizing the business's profit. In doing so, the organizationmust ensure that the relationship with the client is not disrupted.

Data security and extra privacy software bundled with hardware devices to be given atreasonable price for privileged clients

Extended warranty and better terms and conditions such as additional 6 monthswarranty extension, liability for hardware failure etc.

Operating by means of Cloud computing where companies can cost efficiently as pay-per-use on manage, maintain, and upgrade etc. system and connect with theircustomers streamlined in the cloud. In cloud based CRM system, transaction can berecorded via CRM database immediately.

Follow up activities on any kind of queries or complaints adhered to; periodic calls tocheck if products are functioning well or if customers have any concern. Ensuringfeedbacks are precisely addressed.

A compact disc comprising of DO IT YOURSELF training would be provided to thecustomers so that minor fixes like networking, setting up LAN, hotspots etc. can be donewithout contacting the company

Simplify experience at every moment of truth beginning from comprehensive and easyto use website to the sales executive in charge of the sales process

Track client behavior at the most granular level such as transactions, complaints lost ordispleasure experienced. If any customers lost, find out what went wrong and who theyare presently doing business with

Participation in International Trade Fairs showcasing the products would act as a

potential means of attracting new customers Conducting conferences with existing clients of the same domain (IT/Banking/School

etc.) and communicate to them how the industry trend is growing and how they canmaximize value by upgrading to better products

Sponsoring events and fests in educational institutions so as to increase brand imageand thus developing a nexus with them for further transactions

For Potential customers:

Concentrating every moment of truth (touch points) and making it memorable. Right

from appealing websites to a professional sales executive Offering better terms and conditions in terms of payment and services rendered Provision of demonstration facility a t the clients location or any place convenience to

the client would be another way to impress the clients


13/25

Internal Stakeholders/ Employees

Employees also called as Internal Stakeholders of an organization form a major factor in drivingan organization. Hence it is necessary to build, sustain and improve the relationship with theemployees. The company has to sell its idea first to the employees and then it can be successful

in selling it to the customers. Some of the ways to motivate and develop good terms with theemployees are as follows.

Ensure the employees are clear about the company vision, mission, goals and objectives Clear and frequent communication of information by means of Training sessions,

memos, newsletters, meetings etc.

Engaging employees (union leader/representative) in planning and decision making sothat the employees feel they play an important part in the companys decisi on makingprocess

Encouraging feedback and 360 degree appraisals for overall development of therelationships. By this, discrepancies can be quickly spotted, rectified and healthyrelationship can be built

Act fairly, respect and create trust among the people in an organisation to facilitatestronger bonding among the employees

Support and promote creativity in any form such as making the assembling processefficient or means of saving components or design of the hardware etc.

Provision of amenities such as gym, cafeteria, lounge etc. creating better ambience Strict adherence to work timings emphasising on effective working habits and not

setting a wrong precedence to other co-workers to work for longer hours. Unfinishedtasks within prescribed time would reflect inefficiency and should be ensured this doesnot influence co-workers to stretch for longer hours for the same work

Social get-together for events, festivals, tree plantation drives, CSR initiatives etc. whereemployees can bring their friends/families and celebrate

Finally, implementing effective incentive programs such as bonuses, perks, performancerelated pay etc.

Suppliers:

Customer relationship management with respect to suppliers is the discipline of strategicallyplanning for, and managing, all interactions with third party organizations that supply goodsand/or services to an organization in order to maximize the value of those interactions. Inpractice, SRM entails creating closer, more collaborative relationships with key suppliers inorder to uncover and realize new value and reduce risk.


14/25

A. SRM is the systematic creation and capture of post-contract value from key businessrelationships;

B. It requires recognition that relationships are not an end in themselves . Successfulrelationships are an outcome and, for the buyer, that outcome can be measured in

value terms, hence the recent vogue of talking about supplier value management; C. It is mostly about collaboration with strategic suppliers, but can still be adversarial. Thebusiness must be able to flex its application of SRM appropriate to the criticality of thespecific supplier relationship;

D. SRM needs to be completely integrated with strategic sourcing / category managementprocesses. Its not something you design after the contract is signe d;

A formal CRM team or office at the corporate level-The purpose of such a group is tofacilitate and coordinate SRM activities across functions and business units. SRM isinherently cross-functional, and requires a good combination of commercial, technicaland interpersonal skills. These softer skills around communication, listening,influencing and managing change are critical to developing strong and trusting workingrelations.

A formal Relationship Manager or Supplier Account Manager role. Such individuals oftensit within the business unit that interacts most frequently with that supplier, or may befilled by a category manager in the procurement function. This role can be a full-time,dedicated positions, although relationship management responsibilities may be part ofbroader roles depending on the complexity and importance of the supplier relationship(see Supplier Segmentation). SRM managers understand their suppliers business andstrategic goals, and are able to see issues from the su ppliers point of view whilebalancing their own organizations requirements and priorities.

An executive sponsor and, for complex, strategic supplier relationships, a cross-functional steering committee. These individuals form a clear link between SRMstrategies and overall business strategies, serve to determine the relative prioritizationamong a companys varying goals as they impact suppliers, and act as a dispute

resolution body.

Government:

Government s decisions, support and permissions play an important role for smoothfunctioning of business. For an organisation to gather the support from the government, it hasto do more than just abiding the rules and regulation enforced by the government. Thegovernment has all rights to intervene into the company under any circumstances, if the


15/25

company fails to comply by the standards be it environmental norms or taxation or labour actsetc. Hence it is necessary for an organization to follow the rules and regulations and be in goodterms with the government and regulating bodies.

The Organization should be clear with data which include all tax related issues tomaintain good relationship with the government and the investors. The accounts,transactions should be maintained and updated with the internal and externalgoverning departments at regular intervals.

The manufacturing of the hardware parts and the assembly should be done with greatresponsibility towards the environment, the methods and processes used in themanufacturing and the distribution systems should be eco-friendly and should reducethe ecological effects caused to the environment. Use of paper, plastic and other non-biodegradable materials has to be reduced

The organization must take care of the quality and standards set by the government andregulating bodies. The company should take responsibility of all the quality and designof the products it supplies and implement all the requirements mentioned by theregulatory bodies.

The organization has to invest in public development to get into better relationshipswith the government and investors. CSR initiatives would also help them in increasingawareness of the brand, maintaining relations with authorities and increase theircustomer base

Initiatives such as funding renovation of public property such as Government educational

institutions, police stations, providing accessories to traffic police etc. would act as ways by ofmaintaining healthy relation with the Government


16/25

LOST CALL ANALYSISBelow is the Lost Call Analysis of the Computer Hardware industry of ABC. The underlyingassumption for this analysis is that we are among the top players in the Indian market and our

competitors would be XYZ Computers in the segments we are targeting.

Lenovo, HP and Dell which are considered as holding No.1 and No.2 position on the world PCmanufacturing market [ IDC and Gartner report 2013] [3]. Since we are targeting a differentsegment of organizations of net worth 10Cr to 100Cr, there would not be threat from Dell, HPor Lenovo.

ABC Company is the leading manufacturer or PC and Laptops Headquarter at Bangalore andspread over all the Metros and capitals of all the 28 states in India. Hence, we would have 28authorized dealers in India exclusively to cater to various businesses and institutions such as

Companies, Banks, Government set ups and Educational Institutions .

PERFORMANCE-PRICE MAP OF ABC COMPUTERS:

Objective: The end result of this analysis should be to identify and track where ABC Computersis losing on its existing and potential clients. Also, it would act as a manual in what the companycould do to regain its lost business.


17/25

Best way to identify the reasons for losing out sales opportunities is to have an in-depthdebriefing sessions with lost or ex-clients. Lost clients even wait until the last minute to tell thefirm about the break-up.

Through lost call analysts, ABC can

1. Can know why existing clients left2. What potential clients are looking for3. Issues identified across ex-clients and account managers4. Know the strategies the competitors used and their result5. Let ex-clients tell us how to beat the competition6. Learn steps that needs to be taken to win back the clients7. Protecting existing clients8. Learn how to improve on competitor ideas and innovations

To begin with, below is the Lost Call Data Form which needs to be filled by all the authorizeddealers and should be filled once for every 6months for every opportunity lost.

LOST CALL DATA FORM

PART A

Date:______

Name of the Client:

Location:

Type of Business:

Product ordered: Laptop/ Desktop

Quantity ordered:

Specifications:

Price quoted:

Value of the Order:

Associate in-charge of the quote:


18/25

PART B

To whom was the order given: _________

Type of order: Full/ Part

If Part, is there any scope of bringing back the customer? _______

Type of purchase: New Task/ Straight Buy/ Modified Re-buy ________

If New Task:

1) Was Demo arranged for the customer representative?2) If yes, was it held at customers location or ABCs premises? 3) If it was ABCs premises,

i) Who was in charge of the Demo?ii) What were the issues/challengers/problems discussed?iii) Were necessary logistics and accessories available for the Demo?iv) Any uncertainties?

4) If it was clients location, i) Who represented ABC? (Details of the Team)ii) Was the representative present on time?iii) Details to whom the Demo was made (Name, designation)iv) Contact with any gatekeepers?

5) Details of discussions and negotiations had with the customer6) What are your reasons for losing the order/deal

If Straight Re-buy,

1) Person in charge of the account2) Reason for losing the orders3) Is there scope to re-gain the contract?4) Steps taken to win back the order

If Modified Re-buy,

1) What were the specifications modified?2) Can we address the new specifications requested?3) If yes, what were the reasons for forgoing the order?4) Were there any faults/bugs in our earlier delivery?

5) If yes, who was the specifications in charge and were the issues addressed?


19/25

Action Taken:

Since it is businesses accounts we are catering to, it is important that we develop and build along term relationship with the customers. Computer manufacturing industry has evolved into

hyper-competition where it is difficult to sustain a steady competitive advantage as technologyis continuously evolving. Hence every moment of truth should reflect on how customers canreduce their risks by doing business with us.

It is important to have a well trained and qualified staff at every point of contact withthe customer. Hence, appropriate class room and on the job training has to be providedfor clear and detailed presentation. By this, the associates will be capable to effectivelypresent the products and add value. The sales executive should get involved in the firstthree stages of the buying process, understand requirements clearly and assist indeveloping specs and make the offer to meet requirements better than competitors.Help can be taken from industry experts for clarity of requirements.. To a great degree,ABC would distinguish itself from the competitors with the sales force (people).

Be proactive and anticipate the future needs of clients, by having a relationship plan andtesting with the existing clients.

Know the clients Key Business Issues and schedule quarterly Hows Business meetingswith senior executives. By this, ABC can constantly be in touch with the clients thus re-enforcing the relationship [4]

Collaborative relationship with existing clients, who can be referred to other businesses,thus ensuring solution provision along with computer apparels. For example, since weare targeting start ups (software developers) and institutions such as education,insurance, finance etc, software providers can be referred to institutions. By this,institutions can benefit from software providers and in return, the start ups can acquireclients. ABC would play the role of integrating different verticals, thus a chance to bearthe competition. Marketing our fellow partners or personal allies before a competitorbeats us to it.

Electronic purchasing should be possible for a straight re-buy situation with automaticre-order system for saving time and cost of purchase executives.

Informal way of building relationship with key influential buyers or purchase decisionmakers outside the purchase department will help in having good rapport with thecustomers.

For every transaction or delivery, it should be the executive in charge of the deal toregularly take feedback of the customers about the products and anything they wouldlike to be improved in terms of delivery and service. By this, implicit cues can be used todetermine what their future requirements might be like.


20/25

If pricing is an issue, favorable options of means of payments shall be provided alongwith offers.

If there is a possibility for getting back the lost order, the sales executive should stresson what it is that competitors offer in contrast to ABC. Price should be quoted in such a

way that it is within the price range and value can be increased by increasing thebenefits and less emphasis on cost reduction.


21/25

KEY ACCOUNT MANGEMENT

Key Account Management is a strategy used by suppliers to target and serve highpotential customers with complex needs by providing them with special treatment in the areasof marketing, administration and service.

To make key account management work well requires mastering four areas: strategy,organization, process, and technology. The four work in concert; getting one or two rightwithout adequate attention to the others is the difference between baseline and highperformance.

Strategy

Determine Which Customers Qualify. Criter ia include a customers existing and likely futurerevenue growth and strategic position in its industry. By these measures, some smaller


22/25

company accounts merit key account designation, as do channel partners that are growingthrough mergers.

To prevent sales people from being spread too thinly, take care to focus finite resourceson the handful of accounts worth designating as key, and to have a consistent definition across

regions and parts of the organization.

Organization

Align the Sales Organization. Supplement with a system to share awards among thesales force and ensure that each person shares his or her knowledge about the customer;engage the extended team in planning and execution. Review and build organizational capacityto support key accounts with in accepted cost-to serve parameters.

Synchronize the Organization with the Customer. When possible, have single account

leads paired with the customers similar functional head for product, supply chain, marketing,and operations. Work at the custome rs pace, rather than a pace set by internal operations.Select a Team with the Right Set of Skills to Develop a Robust Account Plan. This should be across-functional team composed of dedicated and indirect personnel (such as supply chain andmarketing) not the same old sales team built around established relationships. Whenconsidering how to grow the account, it pays to tap fresh thinking from subject-matter expertsand support staffs, which are sometimes outside of the account team.

Process

Define the Key Account Planning Process and Link with Annual Business Planning andBudgeting Processes. Account planning typically is viewed as an annual reporting activity witheach step in the process timed to annual reviews, customer reviews, budgeting and businessforecasting. More frequent, regular meetings will help to keep the team coordinated, so thatday-to-day activities stay aligned to the strategic objectives. And define a responsibilityassignment matrix for support personnel, so their roles are clear.

Conduct Regular Key Account Review Meetings to Monitor the Action Plan and SalesResults, Integrated Into Company-wide Review Cycles. Instead, one should regularly take the

pulse of customer expectations and the extent to which the services provided meet thoseexpectations. Introduce a quality assurance process to ask the difficult questions and breakthrough impediments.

Update the Key Account Power Map Frequently. Youve got to keep tabs on whom youknow and whom you dont. Maintaining the power map ensures that the team has an accuratepicture of the different players within the customer, their perceptions, social styles, and


23/25

relationships. It also helps to identify areas of the business where the supplier has noestablished relationships, or where competitors are making inroads. Establish Joint Processeswith the Customer. This is particularly useful concerning product improvements andmeasurement of results. Joint processes help foster a true partnership.

Technology

Establish a Common Repository of Account Information. Customer insights are oftendispersed widely throughout an organization, leading to duplicate efforts compiling andanalyzing information or one-off exercises that dont get scaled up. A common repositoryshould include the customer profile, power map, sales data, win/loss analysis, and internalorganizational charts. The goal is to foster coordinated communication at both tactical andoperational levels, promoting one common message.

Action plans can even be automated to automatically track assignments and status.Make the Sales Plan Visible to All Team Members Electronically. Some companies demonstratea lack of trust in their own team (which becomes evident to the customer) by limiting visibilityto account objectives, relationships, and strategies. Yet for key account management tosucceed, each team member must share a sense of responsibility and ownership in developingthe account. Sharing all information is central to that philosophy.

The benefits of key account planningA majority of companies believed that strategic plans for individual key accounts were

beneficial. The earliest benefit was that the key account manager and the company overall gained a better understanding of the customer, thus meeting the customer s need for aproactive approach. Respondents commented that they thought they knew a lot about theirkey accounts until they started the information-gathering necessary for a strategic plan. It was clear thereafter that their knowledge had been superficial. The new insight into the customerled logically to new thinking about how to do business with them. At the very least, the needfor new contacts was identified. At best, new comprehensive solutions to help customers meettheir strategic objectives could be explored. This is attractive to customers; purchasingdecision-makers are impressed with suppliers who are easy to do business with. Some of themapplied great emphasis to this as a feel good factor. Where suppliers had thought strategicallyabout solving cus tomer hassle in using their product, they were rewarded with a higher shareof spend.

Customer involvement is undoubtedly a benefit as it usually leads to customercommitment to the supplier plan, reducing risk and enabling follow-through planning to otherfunctions to ensure efficient application of resources. Although some customers were reluctantto contribute to supplier strategic planning, most welcomed being involved at an early stage.


24/25

Most suppliers were nervous about that, although there is evidence of the costeffectiveness of supplier-customer co-operation, e.g. in supply chain integration.

Both suppliers and customers regarded having a strategy for a key account as preferableto no strategy. Customers were critical o f suppliers who were loose cannons.charging off in

different directions. Suppliers realised that good strategy based on good analysis led to a consistent rationale for activity which fed into other plans within the organisation in an effective way. Intangible benefits within the supplier organisation included the value oforganisational learning about the customer and the value of the companys capabilities. Thiswas true particularly where cross-functional teams were involved in planning.

The benefits to KAM planning went beyond the financial, and included: Better customer understanding New thinking Customer involvement and buy-in Sharing of information Formulation of strategy Guidance for implementation Learning Better management overview / customer portfolio management

KAM Plans provided the basis for much better management insight in decision-making, andvisibility throughout the company of expectations concerning key account activity.


25/25

Reference[1 ] Recommendations of Sixth Pay Commission . Government of India. Retrieved on 07September 2013

[2] Benson P.Shapiro, Thomas V.Bonoma. How to Segment Industrial Markets . HarvardBusiness Review 1984

[3]http://www.sltrib.com/sltrib/money/56582387-79/percent-decline-shipments

[4] Allan S. Borres, Michael G. Cummings, Larry Bodine . Anatomy of lost cost opportunity .Retrieved from http://www.sagemarketing.com

[5] http://www.crn.in/news/hardware/2013/04/26/commercial-pc-market-toshrink

[6] http://www.crn.in/news/hardware/2013/03/01/indian-pc-market-has-grownidc

[7] http://www.ficci.com/sector.asp?secid=87

[8] http://appleinsider.com/articles/13/04/11/consolidation-in-struggling-pcmarket- considered-inevitable-as-sales-plummet

[9] http://www.computerweekly.com/news/2240181282/PC-market-crashes
http://www.sagemarketing.com/http://www.sagemarketing.com/http://www.sagemarketing.com/http://www.crn.in/news/hardware/2013/04/26/commercial-pc-market-toshrinkhttp://www.crn.in/news/hardware/2013/04/26/commercial-pc-market-toshrinkhttp://www.crn.in/news/hardware/2013/04/26/commercial-pc-market-toshrinkhttp://www.crn.in/news/hardware/2013/03/01/indian-pc-market-has-grownidchttp://www.crn.in/news/hardware/2013/03/01/indian-pc-market-has-grownidchttp://www.crn.in/news/hardware/2013/03/01/indian-pc-market-has-grownidchttp://www.ficci.com/sector.asp?secid=87http://www.ficci.com/sector.asp?secid=87http://www.ficci.com/sector.asp?secid=87http://appleinsider.com/articles/13/04/11/consolidation-in-struggling-pcmarket-http://appleinsider.com/articles/13/04/11/consolidation-in-struggling-pcmarket-http://appleinsider.com/articles/13/04/11/consolidation-in-struggling-pcmarket-http://www.ficci.com/sector.asp?secid=87http://www.crn.in/news/hardware/2013/03/01/indian-pc-market-has-grownidchttp://www.crn.in/news/hardware/2013/04/26/commercial-pc-market-toshrinkhttp://www.sagemarketing.com/

BM Report Final

Documents

Transcript of BM Report Final