Sales and Sales Management - Research Paper Example

Sales and Sales Management Table of Contents 0. Introduction 3 2.0. Market Research of London (UK) 3 2 Overview of the Dairy industry of London 4 2.2. Porter Analysis of the Industry 5 2.2.1. Bargaining Power of the Buyers 5 2.2.2. Bargaining Power of Supplier 5 2.2.3. Intensity of Competition 6 2.2.4. Substitute Products 6 2.2.5. Threat of New Entrant 6 2.3. External Business Environment Analysis of UK 6 2.3.1. Political Environment 6 2.3.2. Economic Environment 6 2.3.3. Social Environment 7 2.3.4. Technological Factors 7 3.0. Customer Segmentation 7 3.1. Customer Segmentation on the Basis of Income 7 3.2. Customer Segmentation on the Basis of Age 8 3.3. Customers Segmentation on the Basis of Preference of Vegetarian and Non Vegetarian Dairy Products 8 4.0. Pricing Strategy 8 5.0. Client Proposition 10 6.0. Sales Strategy 11 6.1. Buyer Behavior 11 6.2. Sales Promotion 12 6.3. Sales Techniques and Channels 12 6.3.1. Direct Sales Techniques 12 6.3.2. Indirect Sales Technique 12 7.0. Conclusion and Recommendations 12 8.0. References 14 1.0. Introduction With changing course of conducting business, the approach of business units has also changed significantly. Advancement in technical aspects has largely contributed towards ensuring innovation and creativity within operations of the companies. It has been comprehended that the external business market has changed significantly in the recent years owing to which companies has to adopt diversified approach towards meeting the demands of the same. In this regard, the domain of sales of products and services in the market would be crucial to discuss. The ever-transforming demands and preferences of the customers has been one of the prime causes that have influenced the operations of the business at large. Correspondingly, emerging with new ideas of products and services within the business is a challenging notion for the business units owing to the complex and competitive external business environment (Career Solutions Training Group, 2010). In this particular research, focus has been levied on designing a sales plan for selling plant milk produced from flaxseed and rice in London market. Correspondingly, the review of the changing needs of the consumers makes it evident that the milk sector or market of London would be crucial to depict. The chosen market for this particular sales strategy of plant based milk is London, United Kingdom (UK). It is evident that the market is one of the most developed in the global domain, with high scale opportunities for the companies operating in the same. Considering the large base of customers in this particular industry, this market can be regarded as an appropriate choice for selling the product i.e. plant based milk. It is noteworthy and evident that milk is one of the primary supplements of daily diets of individuals all over the world. It is being consumed by people of different age groups in almost every nation within the globe. Owing to the popularity of the product within the marketplace, it can be regarded as appropriate to be chosen in this particular study (International Dairy Foods Association, 2015). The dairy industry of UK is deemed to have grown significantly in the recent years, owing to the ever-increasing demands of the products and services in this particular sector. Milk, which is one of the primary products amid the dairy items, has been substantially used in the households of UK. Additionally, an increase of around 19% in the use of milk based products in the nation in the year 2012 was recorded as compared to the preceding year. This aspect further depicts the UK or London market to be quite appropriate for milk products. 2.0. Market Research of London (UK) It is evident from the above brief that there has been a considerable incline in the milk sector of the nation i.e. UK, which can be considered as appreciative for the overall idea of selling plant based milk in the nation. Correspondingly, it can be determined that a proper and systematic analysis will need to be executed with regard to the dairy industry and market of London, prior to initiating the initiative of selling plant based milk and other associated products in the same. 2.1. Overview of the Dairy industry of London The dairy industry of London has enhanced substantially over the years owing to the increasing base of customers within the sector. The companies operating in this sector are benefitting from the growth of the overall sector in a significant manner altogether. This can be understood from the fact that number of customers in London market in these particular sectors has increased substantially in the recent times. Apart from direct consumption of milk, products made from the same have also increased in the recent years. However, there are certain declining indications, which must also be discussed apparently (NFU, n.d.). Notably, the sale of liquid milk in the year 2002 was around 85.3 litres per head per annum, which had decreased to 78.3 litres during the year 2011. However, the figure remained same for the subsequent year i.e. 2012, which reflects that the figure regained from its declining stage during the fiscal year 2012. In similar regard, it must also be mentioned that a significant incline can be seen in the figure relevant to semi-skimmed milk and skimmed milk in the market of UK. This can further act as a positive prospect for the notion of promoting plant based milk in this particular marketplace (Agriculture & Horticulture Development Board, 2014). The table below provided a clearer representation of the figures. Figure 1: Average household Purchase Source: (Agriculture & Horticulture Development Board, 2014) The above mentioned trend of the industry can also be justified with the increase in price of milk and milk based products. These deviations can possibly be owing to the decline in the products rate of milk, milk based products, and incline in demand for the same among others. It would be crucial to mention that this particular study is largely focused towards understanding the demand for vegan or plant based milk in the market of UK with specific focus on the market of London. It has been learnt that increasing intake of vegan milk is quite apparent among the people in UK. Vegan or plant based milk has become quite popular in the recent years in the UK and London, owing to various benefits associated with the same. In one of the report, it was claimed that animal based milk has certain negative impacts on the health of people, which could not be ignored at large. This aspect further pave the way for emerging with products that can act as appropriate alternative for plant based milk products and liquid milk. This has further influence the research to develop sales for products of milk acquired from plant seeds and rice, within the rapid growing dairy market of London, UK (Agriculture & Horticulture Development Board, 2014). 2.2. Porter Analysis of the Industry It has been noted form the above depiction that plant based food products is growing significantly in the recent years in the UK, owing to some of the issues associated with animal based milk and products associated with it. Correspondingly, it is also evident that owing to this transformation in the dairy market of the region, the overall industry has changed in its context and structure. 2.2.1. Bargaining Power of the Buyers This particular factor depicts the trend of the purchase behavior of the customers within any particular industry sector. Notably, the demand for plant based milk in the market of London is only in its initial stages and hence buying power of the customers will be quite challenging to determine in this context. Since the number of companies operating with plant based milk and associated products is quite marginal, wider availability of the products is still quite uncertain. Correspondingly, it can be depicted that the buying power of customers in this market is quite marginal with regard to plant based milk supplements (NFU, n.d.). 2.2.2. Bargaining Power of Supplier Notably, the concept of plant based milk is quite new in the market of UK and is evidencing steady rise in demand for the same. In this context, it can be determine that plant based milk is mainly produced from flaxseed and rice, which are less abundant as compared to other materials. This further enhance the level of power of the suppliers in bargaining, who are involved in delivering the same to the companies. This aspect further determines bargaining power of the suppliers in this particular sector of UK (NFU, n.d.). 2.2.3. Intensity of Competition There is only a few numbers of companies operating in the plant based milk sector of the UK. This can be justified from the fact that demands for plant based milk products are although inclining, but it is in the initial stage. It has been comprehended that companies such as first milk and Arla Foods UK, are among the notable names that is associated with the deliverance of plant based milk to the customers. This aspect depicts that there is every scope of new companies or seller of plant based milk to enter the market of London, with their products and services. This aspect also depicts the lack competitiveness in this particular market of London (NFU, n.d.). 2.2.4. Substitute Products The threat for substitute product is one of the largest in this particular industry sector. This can be justified from the fact that animal based milk and other dairy products are among the most preferable in the households of London. However, owing to certain health issues with animal’s milk, people began to see plant based milk as an alternative. Hence, it is apparent that threat of substitute is quite high since cow’s milk can readily replace plant milk (NFU, n.d.). 2.2.5. Threat of New Entrant The threat of new entrant is marginally high in this particular industry sector, owing to the aspect that there are very less number of companies operating in the same. Correspondingly, there is every chance that in course of time new companies will enter into this particular industry to leverage maximum opportunity provided by the same at large (NFU, n.d.). 2.3. External Business Environment Analysis of UK 2.3.1. Political Environment Politically, UK is one of the stable nations of the world, with less amount issues and conflicts relevant to politics. It has been learnt that conducting business in the political environment of UK is quite effective since it ranks among the 10 best nations for conducting business operations. The political scenario of the nation is quite flexible and allows business units to establish in this particular marketplace without the prevalence of fewer barriers (World Bank Group, 2015). Thus, it will be vital for entering the dairy industry of UK with plant based milk. 2.3.2. Economic Environment The economy of the nations is depicted to be quite stable despite of the aspect that it has experienced significant turmoil in the recent times. The country has one of the leading GDP rates in comparison to the other nations in the present day scenario. This economic stability of the nation can be regarded as extremely beneficial for any business unit including the business idea of offering plant based milk products (World Bank Group, 2015). 2.3.3. Social Environment The society includes people from different parts of the world with diversified age group. Research suggested that annual consumption of milk and milk based products are quite high in this part of the world, which can further create utmost opportunity for the business entering into this market with plant based milk (World Bank Group, 2015). 2.3.4. Technological Factors Significant development has also been noted in the technological domain of the nation. The government of the nation is quite appreciative towards the prevailing technologies that can be efficiently used towards the development of the nation and business sector at large. In this regard, it is vital that management of companies including the one offering plant based milk needs to make extensive use within their business operations at large (World Bank Group, 2015). 3.0. Customer Segmentation Before penetrating into any particular industry sector, it is important to get a better understanding of the trend and structure of the target market with regard to the behavior of the buyers. It has been ascertained that the consumptions of annual milk and milk based products is quite high in the market of UK and it has been quite stable over the years since its existence. However, it would be crucial to mention that in this particular study, focus has been levied on marketing plant milk obtained from flaxseed and rice, which is deemed to be healthy and safe for consumption when compared to animal based milk products (NFU, n.d.). It has been learnt from the analysis that milk consumption is quite prevalent and common amid people of all age group in the contemporary scenario since it is regarded as one of the most important supplement within the day to day diets of people. However, the level of milk consumption amid people in the market of UK can differ on the basis of income and age among others. Correspondingly, the customers of the market of UK can be segregated or segmented on the basis of their age and income at large. Additionally, the customers can also be segmented based on their preference for vegan on non-vegetarian food and dairy products (NFU, n.d.). 3.1. Customer Segmentation on the Basis of Income Observably, income is an important aspect that determines the food habits of any particular individual in the present day scenario. It is often believed that vegan foods are cheaper when compared to animal protein. Therefore, it is evident that choosing animal protein over plant diet will certainly affect the budget of an individual. In this regard, the trend prevailing in London depicted that with higher income amid people, their spending on animal protein along with dietary supplements augments significantly. This aspect makes it quite apparent that the demand for animal based products increase on the basis of increase in income. Hence, higher income group will be one of the targeted customers for the selected product idea, which is plant based milk acquired or produced from flaxseed and rice (NFU, n.d.). 3.2. Customer Segmentation on the Basis of Age Age is one of the most vital determinants within the domain of customer satisfaction in the present day business context. Notably, with regard to milk consumption in London, the prominence of this particular factor augments significantly. It has been analysed with regard to the prevailing market trend of London that people in between the age group of 25-34 is one of the prominent customers with regard to the dairy industry of the nations. It is largely believed that the consumption of milk and other dairy products in this part of the world will get a significant boost in the future owing to the purchase behavior of this particular age group (BBC, 2015). Apart from that, the consumption of milk is also deemed quite popular amid kids and hence, they can be regarded as the potential customer base for this particular business idea at large (NFU, n.d.). 3.3. Customers Segmentation on the Basis of Preference of Vegetarian and Non Vegetarian Dairy Products This unique form of customer segmentation strategy that is selected in this particular sales plan is going to enhance the level of consumer satisfaction. It has been comprehended that the product idea that has been selected for this particular sales plan i.e. plant based milk will mainly target the people who are vegetarian with regard to their food habits. This is because of the fact that people with non-vegetarian food habits might show reluctance towards consuming milk produced from plants since they are quite prone to the consumption of animal based milk. This group of people can also be regarded as the potential target customers for the selected product idea (NHS, 2015). 4.0. Pricing Strategy This is the most vital parts for any particular business irrespective of the domain it operates. It will not be ambiguous to state that the purchase behavior of customers in the present day scenario is largely determined on the basis of pricing of the products and services. In this regard, the proposed business idea of selling plant based milk will set diverse pricing based upon the segregation of the customers. Notably, the customers for these particular products in the market of London have been segregated on the basis of their age, income and preferences of vegan and non-vegan diets. In this regard, it must be depicted that income of the customers in the market of London has been on a stable to increasing trend in the recent times. It has been ascertained that lower income groups within the market of London spend less in their fooding when compared to the higher income group (NFU, n.d.). The figure below depicts about the change in income and expenditure of the people in the nation over the last decade or so. Figure 2: UK Milk Demand Source: (NFU, n.d.) However, as per the latest reports, it can be ascertained that the personal and household income of the people of UK has been showing a marginal decline in the current scenario. The average household and personal income has shown significant decline in the past five years, which can also be determined from figure 3 below. Correspondingly, a penetrating pricing strategy will be adhered in the initial stages of selling the products to the customers segmented on the basis of income. Since, the income of people in London is depicting a declining trend, providing the product at a marginal cost in the initial stages would be quite crucial. With penetrating pricing, this aspect can be executed significantly. Figure 3: Annual Household Income of UK Source: (BBC, 2015) For the customers falling under the segment of age group a different set of pricing strategy will be adopted for selling the selected product. In this regard, a limited pricing strategy can be adopted by the business. This can be regarded as appropriate owing to the fact that it involves deliverance of products to the customers at a reasonable to low price. Since plant based milk are not quite popular in London, a low pricing strategy will be crucial to attract customers between the ages of 25-34 and kids, who also form the biggest customer base in the market of London. The third segmented customers in this regard are the people who are associated with the intake of vegan diets as their day to day nutritional supplements. Since, milk is one of the prime nutritional elements of any particular diet regime; it becomes prominent for people to consume the same irrespective of its rising cost. This aspect can further pave the way for the business to sell plant based milk products with quite a higher pricing strategy for this particular group of customers. 5.0. Client Proposition The above analysis primarily determined the most potential and widespread customer’s base of the market of London, UK. This is with the intention to launch the product ideas of plant based milk produced from flaxseed and rice in the most efficient manner altogether. In this regard, it can also be determined that creating value for the selected customer is one of the prime aims of any particular sales planning since it directly relates with the success of the same. Client’s proposition is a particular concept that clearly determines about how a particular business presents its products to the ultimate customers with regard to the benefits present in the same (Barnes & et. al., 2009). Notably, plant based milk has certain benefits, which can be used as an alternative for animal based milk. This can further be regarded as the base for enhancing the value for products offered by the business to the customers in the market of London. In the process of enhancing the value prepositions for the clients, which can mainly include the customers involved with vegan diets, specific benefits associated with the selected products should be highlighted for the ultimate customers. Notably, people who take vegan diets might not be able to get proper milk supplements since it usually comes from cow or any other animals. In this regard, they often seek to get a supplement that has equal value, when compared to that of animal milk. Correspondingly, the management of the proposed business products of plant based milk should take the approach of determining the target customers regarding the benefits that are associated with the product. The management will need to increase consciousness among customers who are involved with vegan diets that plant based milk can be effectively utilised as an effective alternative for cow’s or other animal based milk at large. This can also work towards enhancing the value of the products in the selected market of London. In similar regard, the process of client’s proposition, the customers should also be told about the negative aspects associated with the products. The management should convey the customer about how the plant based milk might lack various nutrients provided by animal or cow milk in a significant manner altogether. 6.0. Sales Strategy Appropriate sales strategy needs to be developed in order to ensure proper deliverance of the products to the ultimate customers. Various approaches need to be adopted while ensuring higher sales within any particular business sector. This aspect will also be considered crucial in this particular business of selling plant milk to the target customers, which mainly include the vegan customers of London. 6.1. Buyer Behavior The first step that can be taken into consideration while developing effective sales planning would include analysing the behavior of the buyers. This aspect can be aligned with the buying pattern of the customers within the dairy industry. Notably, it is quite evident that within the industry of London, the customer often seeks to get the milk or other dairy products delivered directly to the customers. It is one of the widely used options by the companies for selling the milk products. Apart from this, the companies also use the strategy of selling the products directly to the customers from a particular shop. Customers usually seeks to get fresh milk or dairy products, which are further fulfilled by the companies operating in this particular sector by delivering products to the customers on a daily basis (Cespedes, 2014). This aspect needs to be taken into consideration while selling the products of plant based milk for the customers in London. 6.2. Sales Promotion The business of selling plant based milk products will need to be promoted efficiently in the market of London. In this regard, the company will need to adopt efficient marketing strategy for promoting themselves and the products in the market. This can be done with the adoption of print, digital and online medium in the domain of marketing or advertising the products and services (Cespedes, 2014). 6.3. Sales Techniques and Channels There are certain specific techniques that prevail, which can be used by the company to deliver the final product to the customers in the market of London. Some of the prevailing sales techniques that can be adopted by the company include direct sales and indirect sales (Cespedes, 2014). 6.3.1. Direct Sales Techniques Direct sales mainly include selling directly to the customers. For the business of selling plant based milk, the concept of direct sales can be adopted significantly. In this regard, the business will need to adopt selling products through shops where direct interaction with the customers in London could be ascertained. With this particular approach, the company will not only be able to sale the products, but would also be able to build better relationship with the customers at large (Cespedes, 2014). 6.3.2. Indirect Sales Technique Indirect sales are also important to get widespread customer base and increased sales in any particular business unit. Indirect can be the use of representative to sell products to the customers on behalf of the business (Cespedes, 2014). The business selling products of plant based milk can align with logistic companies involved in daily delivery of dairy products to the customers. With this approach, the company can sell products by delivering the same on a daily basis to the customers. This can increase the sales for the overall business in a significant manner altogether. 7.0. Conclusion and Recommendations From the overall analysis, it is quite apparent that entering into a new market with a particular product or services involved varied strategies that need to be adhered. In this context, it is apparent that in order to boost the sales of a particular business in any particular industry for a specific marketplace, the role of effective market research or survey is quite crucial. It has been comprehended from the analysis of the study that owing to the changing context of the present day business sector, companies seek to take innovative decisions and approaches in each of the domains of business so that utmost sustainability and competitive advantage can be attained at large. It has been comprehended that this particular aspect is also prevalent in the domain of sales and sales management. In order to ensure utmost sales for a particular products or services, companies need to conduct extensive promotions for the same by understanding the needs of customers of a particular region. This aspect can also be affirmed with support from the findings of the research where focus has been levied on developing market entry strategy of a particular business, while entering into the market of London. Notably, proper market research has been conducted prior to entering into the market with a particular product i.e. plants based milk produced from flaxseed and rice. Hence, the importance of systematic execution of business activities is quite apparent in this context. From the overall study, it can be recommended that companies must ensure proper analysis of a particular market as well as product in order to establish and enhance business operations in a significant manner altogether. 8.0. References Agriculture & Horticulture Development Board. Diary Statistics. Diary Co, pp. 1-80. BBC, 2015. Average Income Back to Pre-Crisis Levels, says IFS. Home. [Online] Available at: http://www.bbc.com/news/business-31711854 [Accessed March 14, 2014]. Barnes, C. & et. al., 2009. Creating and Delivering Your Value Proposition: Managing Customer Experience for Profit. Kogan Page Publishers. Career Solutions Training Group, 2010. 21st Century Business: Customer Service, Student Edition. Cengage Learning. Cespedes, F. V., 2014. Aligning Strategy and Sales: The Choices, Systems, and Behaviors That Drive Effective Selling. Harvard Business Press. International Dairy Foods Association, 2015. Importance of Milk in Diet. Home. [Online] Available at: http://www.idfa.org/news-views/media-kits/milk/importance-of-milk-in-diet [Accessed March 14, 2014]. NHS, 2015. The Vegan Diet. Home. [Online] Available at: http://www.nhs.uk/Livewell/Vegetarianhealth/Pages/Vegandiets.aspx [Accessed March 14, 2014]. NFU, No Date. Compete to Grow. A Vision and Strategy for The British Dairy Industry. [Online] Available at: http://www.nfuonline.com/nfu-dairy-strategy-compete-to-grow/ [Accessed March 14, 2014]. World Bank Group, 2015. Ease of Doing Business in United Kingdom. Home. [Online] Available at: http://www.doingbusiness.org/data/exploreeconomies/united-kingdom [Accessed March 10, 2015]. Read More