Management of Selling in Supplies-4-Gardens - Case Study Example

Introduction Supplies-4-gardens Ltd. A ten year old company dealing in comprehensive range of garden products has a built up brand image of garden ornaments and a range of garden gnomes which are designed by the company and marketed through garden centers and retail outlets. Garden products being a part of white goods whose demand has to be recognized usually have a slower moving pace than the consumer durable goods (Curtis. T, 2006-07). The demand recognition for white goods happens only with relentless efforts of the selling staff which is one of the main functions of marketing. Sales personnel and marketing research team have to be inter-dependent with a co-operative relationship. Steps taken/ further steps required to highlight the problems and the reasons for such problems: In the case of Supplies-4-gardens, personal selling through market segmentation has been rightly undertaken by the company wherein the sales personnel are supposed to act as order creators and missionary selling agents to proactively ensure increase in the customer base at a faster pace in tandem to the industry growth at 10%. However, the present sales personnel are reactive acting as delivery sales persons and inside order takers resulting in a sluggish growth of just 5% growth per annum (Ashford. R, Lancaster. G, Massingham. L, ). Oldroyd, the Sales manager of the company, who has come from a fast growing consumer durable sector is unhappy about the performance of the company and is trying to gain the co-operation of the sales force for which he needs to motivate the staff who are highly paid irrespective of their performance. Their physiological, security and social needs are already been taken care of and for them to achieve better results, the esteem and self-actualization needs are to be generated in them through effective motivation (Maslow. H, 1954). In other words, while the hygiene factors of the sales staff are being taken care of by the company, it is the motivational factors like achievement, recognition, advancement, growth possibility and feeling of responsibility which can initiate better results to the company ( Herzberg. F, 1966). Oldroyd noticed that the staff of late was resorting to bad service techniques like lack of product knowledge, initiative, helping/problem solving nature etc. which can result into geometric progression of unhappy customers which may have a negative impact on the growth of the company (Moffatt. L, 2002). One more important point to be noted is that the marketing staff was not informed about the change in the database of the existing clientele on a regular base due to which designed catalogues of the company’s brand are being mailed even to non-existing customers thus resulting in an operative waste as more number of catalogues is ordered unnecessarily. Though, he could identify the problem, more emphasis has to be put on the reasons to this problem to achieve a result-oriented solution. For this, he conducted an observational sampling to know the unknown traits of the sales personnel for making policy decisions within a short period of time (Lancaster. G, Massingham. L, Ashford. R, 2002). The study reiterated that the staff was more used to traditional leadership style ( Turner. D, 1998) in which: 1. The company has lost its focus on the markets and its target customer’s needs. 2. The salaried staff with no incentive for improving sales was lethargic and highly risk aversive that they contacted only regular customers so that they need not take too much effort in marketing their products. 3. Least attrition rate though an advantage to the organization may not be very conducive to its growth as there is no possibility of any fresh ideas into the organization. 4. No efforts were taken to update the database of the retail outlets which means new opportunities are lost while mailing the catalogues to non-existing outlets may result in cold-calling and non-performing expenses. 5. No significant efforts were made towards marketing plans, setting up of product and service policies and improving the communications and selling skills of the staff. Current organization of the sales force: The sales staff and the marketing department do not properly understand the segment marketing needs and the selling process which has to be followed to ensure a successful sale (Lancaster. G, Massingham. L, Ashford. R, 2002). The selling process involves the following steps: Identification of market segments: In this case, the customers have been segmented into A, B and C type customers according to their requirements which the company is supposed to cater. Identification of customer needs and simulation: Though segments have been properly identified, their needs are not being assessed carefully by the sales staff nor are they communicated to the marketing department to customize products according to their needs. Relationships with the customers of the sales staff has been very cold and even the regularly visited customers find them to be quite distant and as such the customers are turning out to be indifferent to them which can be proved by the absence of new account creation. The presentation of the company’s products to the customers of late have become very customary and not with much enthusiasm to the result that the process of need creation to the customer, which is basic quality of selling management has been ignored and as such new avenues of marketing are lost which may be filled in by other company products. Huge gaps between the visits to the customer’s places may give an opportunity to the other company sales people who are more inclined to grab the opportunity of improving their sales. Minimal time spending at the customer’s places citing the reason of company policies etc. is a reflection of negative attitudes in the sales staff which has to be curbed by training the employees effectively to be positively biased towards their customers. Lack of negotiation preparation by the marketing department which can guide the sales staff whether to summarize or to extend discounts on the company’s products can be destructive in the sense the customer is more informed about the markets with the advent of internet and he would like to shop in for the best bargains. The staff was ineffective in influencing the customer while closing the sales with a no follow-up actions to explore new avenues of sales. Result of such disorganized sales force: All these accumulated together are resulting in a bad product/service delivery deteriorating the company performance not to mention about its growth. Research studies have proved that while a good service spreads in an arithmetic progression, bad service always spreads in a geometric progression as the customers are more cautious about the value they derive while spending. Satisfying a customer is the life blood of successful selling and if your customer is unhappy as in this case, ninety percent of them never bother to return. Instead, they just search for another worthy seller and the company loses their life spend in addition to their near and dear circles life spend. The remaining 10% who bother to complain prove to be very costly to the organization and even after giving utmost service to them, one can expect to retain only 65% of them reluctantly out of their personal needs. They would still provide only negative publicity advising their friends not to enter into any purchase agreements with the company unless there are no other alternatives (Moffatt. L, 2002). On the other hand, the white goods market is already plush with so many competitors who are trying to grab as many opportunities as possible that they keep an updated records of all the databases available and regularly follow-up the prospective customers only for a further disadvantage that even the most loyal of the customer of our company may jump into the other’s camp. They are successful marketers who can induce the customers to identify their needs and customize their products to suit the customer’s needs thus creating accounts for life in the cheapest manner. Case study of Microsoft and Google: One best example which can be cited here is that of the Microsoft inc. which created a platform on which various computer programs can be worked upon. Microsoft introduced windows as an add-on product to MS-DOS with the result that within one year of the introduction, 90% of the market was working on the windows platform and today, there is no computer without windows applications. http://en.wikipedia.org/wiki/Microsoft_Windows Later on, after grabbing the market share, though the company has been releasing newer updates, it was the Google inc. which was the most successful search engine that today more than 90% of the queries and ad-campaigns are posted on the Google websites. http://research.google.com/about.html Here, one needs to understand that the market was the same and the competitors are in fact increasing day by day. The magic of capturing the market is possible only if innovative ideas are transformed into easy to use products and marketed effectively so that the customer should find it irresistible to stay away from it. Even in the case study of supplies-4-garden, if the sales performance should be improved, it should be backed by strong products and aggressive selling techniques so that the customer should find the products attractive in comparison to the other products available in the market. As it is, the company is strong enough in creative product designing which is evident from the popularity of garden gnomes ordered by the customers. So, the immediate action which the company needs to take up is the improvement in the management of sales so that right products are marketed in the right way. Planning to improve the sales performance in the next six months: To achieve these objectives, the first important consideration would be the identification of the Porter’s five forces analysis wherein the potential threats to the products by the new entrants, substitutes are to be estimated, the supply chain logistics regarding the suppliers and buyers are to be conveniently established along with a study of the in sector changes. In this case, the threat of substitutes and new entrants are high with the disadvantage that the supply chain logistics could be broken down if the customers are not properly serviced. Hence a study of the customers would be more meaningful which could be accomplished with the STEEPLE model which deals with the: 1. Social/cultural trends of the population, 2. Technological innovation taking place in the market, 3. Economic issues like the boom, inflation or the recession timings which influence the customer’s buying decisions, 4. Product education and training to the customers that they understand the superiority of the company’s products in comparison to the other products, 5. The Political, legal and environmental conditions prevailing in the market to estimate the immediate future demand of the products. (Curtis. T, 2006-07). Once the target customers and their needs are identified along with the potential five forces which determine the demand for our products, it is the job of the sales manager to arrive at the target sales volumes to effectively serve the various segments of customers’ viz. A,B &C. For this, he needs to check whether the four P’s of marketing i.e. the Product, Price, Place and Promotion are in lines to achieve the targeted volumes of sales. As the first three products, price and place are already well-positioned in the market, it is the promotion which has to be improved instantly by giving written communication to the sales staff about the targeted sales for the particular period and the incentives like commissions and other intangible offers which the management is ready to bestow to the sales personnel on successful achievement of the targets. Negative rewards may also be planned in case the staff is not responding to the motivational offers and if needed, authority and power can be exercised to get the control into the hands. Once the staff comes into the control, Fiedler’s contingency model of leadership which deals with leadership according to the interrelationship of situational variables has to be followed (Fiedler. F, 1967). This would create a sense of responsibility and proactive nature in the selling staff which can create miracles in the sales volumes front. The other hurdle to be overcome at this point would be to train the changed co-operative staff on the lines of good service perspectives which the customers value the most. The parameters of good service can be simply outlined as follows: Treat every customer individually, especially and not collectively. Going that extra mile to solve the queries and needs of the customers. Surprise and delight the customers every now and then so that they long to continue the relationship with the company. Conversant with the products so that customer’s needs are well answered. Finding new customers through referrals, contacts and database updating. Transforming the staff of the organization into helpful and knowledgeable employees who can lead the customers to their satisfaction. Management of staff shifts to cope up with different segments of the customers and excellent service even in busy periods. Communication of refund policies and no quibble promises. Honest approach attitude to be developed in the sales staff to guide the customers. Sales staff should act as trouble solvers and come forward to take up that extra effort in case of any further hardship to win over the customer long-term relationship. They should not be short-term oriented and as the staff has been staying in this company from many years, emphasizing this policy would not be a problem. Even after taking all these steps, if any customer is dissatisfied with the product, then databases have to be checked for the genuineness of the customer and properly compensated for the trouble he had to win over his life spend to the organization. If the customer is found to be playing tricks with the organization, the case has to be handled smoothly to reject his plea in the most subtle manner (Moffatt. L, 2002). Once the methodology of good service has been explained to all the employees of the organization, follow-up actions have to be taken up to ensure that the staff is well in line with the organization’s requirements. They have to be inspired to understand the customer’s viewpoint and needs at the first instance so that the right products are prescribed to fill those needs. Instant responsive action goes a long way in personal selling that the customer gets excited about the service and communicates his good feelings to other people also. Conclusion: Thus the improvement of sales in any organization can happen only with a team effort of the organization as a whole led by the manager who is more participative in nature that he discusses the problems with the staff, sets the targets, describes the aims and objectives effectively, studies the markets for the staff to perform properly, designs products according to the customer’s needs based on the information given by the selling staff, and also checks on follow up actions so that the required goals are always intact and achieved according to the time horizon set up by the company. References: Curtis, T. (2006-07), Marketing in Practice, (Pg.52), Butterworth Heinemann Publications, U.K. Fiedler, F.E. (1967), A theory of Leadership Effectiveness, Mc. Graw-Hill, New York. Herzberg, F. (1966), Work and Nature of Man, World Publishing, Cleveland. Lancaster, G. Massingham, L. Ashford, R. (2002), Essentials of Marketing, (Ch. 10), Mc. Graw Hill Publishing Co. – London. Maslow, A.H. (1954), Motivation and Personality, Harper & Row Publications, New York. Moffatt, L. (2002), Ahead of the Game, Mc.Grawhill International Ltd., U.K. Simonds, T. (1995), Managing People & Activities, Black Well Publishers, U.K. Turner, D. (1998), Liberating Leadership, Industrial Society, England. Internet References Anonymous (2007), Microsoft Windows. Available from: Wikipedia, Web site: http://en.wikipedia.org/wiki/Microsoft_Windows [Accessed: August 29, 2008]. Anonymous (2008), About Google Research. Available from: Wikipedia, Web site: http:// research.google.com/about.html [Accessed: August 29, 2008]. Read More