7.Marketing and Selling: Sales and marketing are differentBasic economicsMarketing; Channels ; Market CommunicationsStages in SellingControl and Commissions

Sales and marketing are differentMarketing: What and how to sellSelling: moving the productRelationship management

Marketing What?Product characteristics - ACCTOPrice sensitivityMarket CharacteristicsSizeDefensibleSustainableHow?ChannelsInformRoutes

Product or Service RequirementsKnow about itOpportunity to purchaseshelf spaceSatisfy a real or perceived needAffordable (but not too cheap)

A brief introduction to market analysisDesk researchExisting market or solutionsCompetition, actual and potentialDemographicsMarket surveysQualitativegroups, usability testingQuantitativeSurveys, test marketingDistribution channelsMarket Communications

Basic Economics IDemand curve: Price depends on volume

Elasticity e = P Q ---- ------- P Q

Supply CurveStable point is at intersection (Spider diagram)

Cost of Production

Chart3

11.8197.2

11.6186.4

11.4175.6

11.2164.8

11154

10.8143.2

10.6132.4

10.4121.6

10.2110.8

10100

9.89-0.8

9.68-1.6

9.47-2.4

9.26-3.2

95-4

Unit Cost

Unit Price

Profit/unit

Quantity

Money

Sheet1

0.21

1220

0

VolumeUnit CostUnit PriceProfit/unitRevenueExpenditureGross Profit

111.8197.21911.87.2

211.6186.43623.212.8

311.4175.65134.216.8

411.2164.86444.819.2

511154755520

610.8143.28464.819.2

710.6132.49174.216.8

810.4121.69683.212.8

910.2110.89991.87.2

10101001001000

119.89-0.899107.8-8.8

129.68-1.696115.2-19.2

139.47-2.491122.2-31.2

149.26-3.284128.8-44.8

1595-475135-60

168.84-4.864140.8-76.8

178.63-5.651146.2-95.2

188.42-6.436151.2-115.2

198.21-7.219155.8-136.8

2080-80160-160

Sheet1

000

000

000

000

000

000

000

000

000

000

Revenue

Expenditure

Gross Profit

Quantity

Money

Sheet2

000

000

000

000

000

000

000

000

000

000

000

000

000

000

000

Unit Cost

Unit Price

Profit/unit

Quantity

Money

Sheet3

Gross Profit

Chart2

1911.87.2

3623.212.8

5134.216.8

6444.819.2

755520

8464.819.2

9174.216.8

9683.212.8

9991.87.2

1001000

Revenue

Expenditure

Gross Profit

Quantity

Money

Sheet1

0.21

1220

0

VolumeUnit CostUnit PriceProfit/unitRevenueExpenditureGross Profit

111.8197.21911.87.2

211.6186.43623.212.8

311.4175.65134.216.8

411.2164.86444.819.2

511154755520

610.8143.28464.819.2

710.6132.49174.216.8

810.4121.69683.212.8

910.2110.89991.87.2

10101001001000

119.89-0.899107.8-8.8

129.68-1.696115.2-19.2

139.47-2.491122.2-31.2

149.26-3.284128.8-44.8

1595-475135-60

168.84-4.864140.8-76.8

178.63-5.651146.2-95.2

188.42-6.436151.2-115.2

198.21-7.219155.8-136.8

2080-80160-160

Sheet1

Revenue

Expenditure

Gross Profit

Quantity

Money

Sheet2

Unit Cost

Unit Price

Profit/unit

Quantity

Money

Sheet3

ChannelsDirect SalesDistributor/RetailerDistributors are your customersNationalInternationalChose carefully - changing is expensive and difficultKey sales Opinion formers

Direct salesBespoke -sales staff/ Customer relationship managercash flowMail order requirementsProductGuaranteesStockingSupportKey accountsMarket communications

Distribution ChannelTypical product40% manufacturerdevelopment, materials, overheads, profit, research30% distributorAdvertising, stocking, profit30% retailerLocal adverts, shop front, staff, profitInternationalLocalisationCountry agentcontrol/performanceTrade fairs DTI outward bound missionsEmbassy

Ballpark pricing

Sheet1

Sales price:1000.00

Factory price: (60%)600.00

Cost (30% of factory price)200.00

Net profit/unit (10% of factory price)60.00

Annual sales (Million):1.00(guess)

Profit M60.00

Set-up and fixed costs (M) :50.00(including initial marketing)

Stocking (6 months at cost)100.00

Capital need150.00

Payback time2.50years

Sheet2

Sheet3

Market CommunicationsTargetingAdvertisingImageMessageSales - MOPGeneral - Newspapers, TVSpecific - Trade press, specialist magazinesPRDirect mailList brokers1-2% responseControl and record-keeping

ExhibitionsExpensive, hard workMake it obviousPlace for meetings, not cold salesPreparationStandExhibitsManualTravel and accommodationBe attentiveFollow-upTimeliness

Sales techniques: listen to the customerNeedsConcernsAuthority

Stages in SellingProspectingPre-approachApproachSurveyProposalDemonstrationClose Service

ProspectingLocating the most likely buyersCold callingDirectors Guides, YearbooksLocal council offices, Chambers of CommerceInstitutional meetingsQualified ProspectsMarketing response: Advertising, PR, MailingsService organisation, exhibitionsHow many?10% result in a saleMaybe 2 calls per day

Pre-approachResearchWho are the decision makers?What is the management structure?What are their concerns?PreparationPresentationVisiting cards, brochures

ApproachListen, establish mutual groundContact buildingGeneralities

SurveyNeeds, requirementsConstraintsBudgetStructure, contacts, decision pointsTimescale

ProposalSell the benefits to the customerF.A.BU.S.PsPrice is not an issue; value isLifetime costService, reliability, reputationSales proposalIntroductionObjectivesRecommendationsBenefitsFinancial JustificationWarranty and serviceCompany BackgroundPrice and conditionsFollow-up

DemonstrationObjectivesAdministrationWho, where, maps, car parking, accommodationGreeting, seatingCatering: coffee, lunch or sandwichesScriptRehearse, and stick to the scriptPoints to emphasise, or notSum upAgree follow-up

Close Small step at a timeAdvantagesCustomers concernshidden agendaKickerDiscount, limited offer

ServiceRelationship managementcommunicationscontact pointRegular liaisonearly warningsSpec changes and the consequencesMeeting milestones

Planning and RecordsGraded Prospect List

Sales Forecasts

Call analysisSales Cost analysisCompany Contact Previous Contact Next ContactNameAddressPhoneFaxName Decision Makers Potential % Date Who Action Date Who Action

CompanyAmount------Time Analysis-------Product AnalysisCommentsQ1 Q2 Q3 Q4

Control and CommissionsControlSales organisation structureBy productGeographicalBy channel, key accountMeasurementCost per saleResponse rateTimelinessIndividual measures, targetsCommissionDont stintBasic salaryPay on delivery, or payment