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
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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
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