Management Activities and Marketing Strategies - Assignment Example

1.0 INTRODUCTION: The aim of this report is to explore and analyse some best practices for sales and sales management, while taking into account thiscurrent climate of recession. It looks at how leading organizations are using some of this techniques and tools to succeed in this environment. . Technological advancements have changed the overall outlook of the sales industry and there are several additional elements which should be considered by the organisations. These elements will be explored and analysed in this report. The overall situation of the sales industry is changing due to the recession and changing trends in the market. Customers have become more selective and look for high value in return of their money. This has increase the competition among different companies in order to capture the larger share of wallet of the customers. As a result there has been increasing pressure on the sales team of the organisation. 2.0 TERMS OF REFERENCE: The writer is not a sales manager in an organization. It highlights and explores the impact in organizations and market of few methods used on sales and sales management in the current climate. 3.0 SITUATION ANALYSIS. 3.1 Introduction. This current recession has increased pressure on organizations and sales teams to be successful. It is critical for organizations to carefully analyse and explore the situation and factors influencing the industry in which an organisation operates and methods used for analysing their internal and external environment in order to come up with victorious sales strategies and tactics. 3.2 Overview of the Industry and Factors of Influence: Organisations need to carefully monitor and evaluate the overall industry and identify important trends or patterns. The exploration of the overall size and dynamics of the industry facilitate the organisation in the process of identifying different opportunities and threats and allow the organisation to understand the changing factors along with the important players of the industry. In order to target the customers the companies can use the demographics and psychographics factors. Miller et al (2011), stresses that psychological factors are crucial to identify the special psychological needs and preferences of the target market. It is important for organisations to monitor their competitors and seek to create a unique point of difference to give them that competitive advantage and differentiation from them. They need to be innovative to capture a larger market share and increase sales. Mitchell (xxxx) recommends creating a clear cut edge on their competitors on the basis of the effective and efficient customer relationship management with the help of the sales personnel and sales team. This can be seen at Louis Coupland, his company created a and unique selling point of difference, where sale phone is made after a sale to key customers, not to up sell but instead to ensure the customer is content with their purchases. For instance “48 months “, the new mobile network company was able to carefully monitor and explore the environment and differentiate themselves from their competitors in an unique innovative approach. The company was able to identify an opportunity in the market by targeting a size market and most importantly understanding the psychological needs of people falling in the age bracket of 18 to 22. Their successfully recognized their need to be in contact with their friends at lower rates. The company has been able to come up with a strong campaign “go conquer” to target this market share and set them into a 48 month contract. 3.3 External Environmental Analysis It is not possible for the organisations to operate in the industry without the influence and impact of the external factors. For this reason, it is important for the organisations to conduct thorough and comprehensive external environmental analysis. The external environmental analysis allows the organisation to identify and explore different opportunities and threats which should be considered in order to devise effective and efficient sales management strategy. Some of the most important methods in this regard are the PESTEL analysis, Porters five forces model, competitive map, etc. The PESTEL analysis tries to identify and explore the important factors in the political, economic, social, technological, environmental, and legal environment which will have direct influence on the operations and selling strategy of the organisation Jobber (2009). For instance the overall economic condition and environment in the Ireland is directly imposing serious challenges for the sales professionals. Economic crisis have resulted in decreasing the disposal income and spending power of people which is evident from the decreasing volume of the retail or car sales. This in turn has created additional pressure on the sales professionals to come up with some innovative and out of box strategy for increasing the sales. The Porter’s five forces model also allow the organisation to carefully monitor the external environment and identify the influence of some of the important external factors. The fiver market forces which are analysed by the Porter’s five forces model are showed on the below model. ( SOURCE XXX) GIVE SAMPLE 3.4 Internal Environmental Analysis Like external environment analysis, organisations use different strategic management tools and methods in order to analyse the internal environment witch will influence the sales strategy The SWOT analysis is the mixture of the internal and external audit. The opportunities and threats are derived with the help of the external environment analysis and the strengths and weaknesses are identified with the help of the internal environment analysis. Jobber (2009). Appendix 1 illustrates Apple I-phone SWOT Analysis. The BCG Matrix provides a graphic representation for an organization to examine different businesses in its portfolio on the basis of their related market share and industry growth rates. Products can classified as high or low according to their industry growth rate and relative market share and therefore different strategies should be used as illustrated on the below figure. (SOURCE) In the case of Apple their I-phone can be considered a cash cow and their I-pad can be placed as a rising star. The Lifecycle analysis is that the products follow a specific pattern during the whole life and crosses several stages on the basis of sales and profits. These stages are presented in the figure below: One of the important elements in this regard is of the life extension of the product. Leading organisations are coming up with innovative strategies to extend the product life and avoid the stage of decline. For example, Coca Cola has been launching different variants of products sizes and flavours to extend their life product. 4.0 LINK BETWEEN MARETING AND SELLING EFFORT: It is essential for the organisations to create a synergy and harmony between the marketing and selling effort. 4.1 Marketing Strategy and Objectives of an Organisation: The marketing strategy should be devised keeping in view the objectives of the organisation. The marketing objectives should support the image of the organisation in the market to make sure that the consumers are properly targeted. For instance O´Reilly (2012) illustrates how Pepsi in a market strategy in trying to win back market share from Coca-Cola, uses Michael Jackson´s image in a new advert campaign which strategically coincides with the 25th anniversary of Bad and the advantages for consumers to download remixes of his biggest hits. 4.2 Role of Sales Function in the Delivery of Objectives: According to Jobber (2009) the role of a sales team has changed from just selling products to a more strategic partner in the organisation, some characteristics of modern selling are: Customer retention Database and knowledge management Customer relationship management Marketing the product Problem solving and system selling Satisfying needs and adding value Foley (2011:105) states “the first rule of selling is that people buy from people”. Furthermore Scaffie (2012) highlights that generating trust it can not only turn consumers into customers, but into loyal customers. At Clarks, the sales force advises to their potential customers as to when to buy shoes for their infant babies. This can result turning clients away at the time and losing a sale, however this tactic can also be described as emotional intelligence and in the long term generating trust and loyal customers. On the opposite side, if Clarks where to sell any type of shoes to the infant, it can leave the consumer with cognitive dissonance and due to this level of dissatisfaction, the end result is that the customer may not return again. 5.0 PROFILE OF BUYERS: The main element in the success of organisations and attracting customers is to keep in consideration the profile and preferences of the buyers. Wells (2009) states that “To sell more, you need to know what your customer’s need and want” The relationship between buyer and consumer has also changed because of advancement in technology and knowledge. Sinek (2012) explains that the organisations are losing contact with the customers and the human touch or element is being totally eliminated from the business resulting in customers not satisfied with this changing trend therefore do not have the same level of trust. Technology and social media in last few years have become highly successful in organisations. On the other hand Gillis (2012) points that “a customer can tear down a brand in a matter of weeks”. In this current environment and with so much technology and social media available, it is important to organisations to create a strong relationship with the buyers and customers. if not organisations have to go through different negative implications. Allen (1988: 24) explains that the customer is the person who actually wants the product, but it is also true that many “people who want a product may not be able to pay for it”. In this current recession value for money plays a crucial part in making a purchase decision. Scaffie (2012) states that is also important to differentiate between a need and a want of a product. For instant the prices is not as important in the case of a need for a prescription. 6.0 APPROACHES OF FORECASTING AND RECOMMENDATIONS Allen (1998:237-240) highlights that, the main problem to sales forecasting is to predict customer actions and future trends in buying goods, in addition in this current and fast moving world Miller et al (2011: 14) states “the only constant is change”. Forecasting as McKernan (2012) explains forecasting as the ability of a company to predict the future sales of a particular product over a specific period of time is based on past performance; he further argues that a forecast can be totally ineffective due to factors which are almost impossible to predict. Only last year Sony, a top leading company, had some of their premises hit badly by some unpredictable forces of nature, like the Tsunami in Japan or the major flooding in Thailand. Furthermore a fire also broke into a Uk premise. Despite the fact that Sony had 3 different forecasting systems in place all of them failed to forecast these incidents. The forecasting is not only about the future sales but also to being able to predict the changing environment. In the case of Sony, their external environmental analysis going forward should consider future changes as the global warming is taking a big part in today´s climate, therefore when developing future forecasting and company strategies, the impact of global warming into their organisation will need to be taken into account. 6.1 Planning Methodology: There are several forecasting methods and techniques used by organisations. McKernan (2012) explains the Run Rate tool. This is also known as the sales conversion rate. This technique, analyses the outcome of the number of calls a sales team makes. The ratio outcome can be measured as follows, out of 20 calls made in total, 16 would be of prospect, and 8 could be considered as potential new pieces of business. For instance, for instance a call centre can use the Run Rate approach for forecasting the number of telesales required , to achieve the targeted sale. Knowing penetration levels of a company’s products is key to proper forecasting McKiernan (2012) stresses the need to identify this level of penetration and concentrate the sale force on products were the highest business profits are being generated. Another successful method to forecasting designed by McKiernan (2012) is the Ready Reckoner Calculator Disc, it manages the situation of monetary loses associated with discounts, this mechanism shows companies the incremental sales required for achieving the original gross profit. It takes into consideration profit margin percentages on a product or a service and the additional sales percentage that will be required versus the discount percentage given. For example if a sales persons gives a discount of a 5 % on a product with a 30% profit margin, the result in additional sales needed to achieve the original sales profit is 20%. 6.2 Selection on Method and Justification: In order to select an adequate method for forecasting, it is first important to gather the required information on the basis of which the forecast will be made. In the similar manner in order to predict or forecast the future sales and other related elements it is important to first collect the required information from different sources. These different sources can be employees of the organisation, customers, competitors reports, industry and market reports. It is important to plan for the method of forecasting in effective and efficient manner. It is highly important for the organisations to decide for the appropriate method in order to forecast the future sales and associated elements accurately. There is high importance of accurate sales forecasting as different factors are directly dependent on this forecasting. 7.0 HRM : PLAN FOR THE MANAGEMENT OF SALES TEAM At the moment the economic condition is not improving as desired after the economic crisis and therefore it has become a challenging time for businesses. In such a situation, managing a sales team is more complicated and more challenging. Organisations are reducing different expenses and therefore it has become a challenging time regarding the decisions about marketing and sales budget. One of the most important steps is to have proper planning to manage the sales team training as without proper planning of how to manage the sales team it would be difficult to handle them and to motivate them. 7.1 Recruitment and Selection: Recruitment and selection is one of the important steps in the overall process of planning for the management of sales team. It is important for the organisation to not only analyse the values and believes along with the skills and expertise of the individual. The below figure designed by Sinek (2009) highlights how all companies know what they do, some know how they do it but few know why they do it, their purpose, their believe. The Golden Circle Sinek states “people don’t buy what you do. They buy why you do it”. Organisations such as Apple have this concept at their core of their organization; their mission statement is “people with passion can change the world” People responds to inspiration. Therefore it is critical to select and hire sales candidates with the same values and believes. These candidates not only will work harder but they are also unconsciously able to deliver objectives. The current recession is also forcing companies to consider other aspects and include same on the job description such as the money collection side of the business in their job specs. Flemming (2012) argues that this method may not be a good practice, at it takes time away from the sales person to concentrate on the selling side, in addition it also adds a sour element to the customer relationship, however some companies are using it due to this current climate. But it should be approached in very delicate manner in order to keep a healthy relationship with the customer. Foley (2012) suggest that most successful sales people are introverts as they use their abilities as a good researcher to really know audience, know what matters to them, and figure out a product match. In addition McKiernan (2012) recommends to recruit sales people with the ability to ask Kipling´s 5W. This skill is useful in collection information to grasp the current situation and correctly define the problem. The 5W1H questions are what, where, when, who, why and how. This skill is considered as high emotional intelligence as it will enable sales people to understand their needs and provided meaningful points of difference. 7.2 Motivation, Compensation and Training Jobber 2009 summarises that motivation can improve the level of commitment and dedication of the individual and a better enthusiasm can be seen from the individual such as: Increases the creativity of the individual Improves the amount of effort an individual puts in Higher self-esteem An individual works more smartly Improves the usage of win-win negotiation techniques Some organizations use employee engagement as a tool to motivate. The Gallup Organization defines an engaged employee as one who is in the right role, is consistently productive and is psychologically committed to bringing their best effort. It is about the level of connection and commitment people have in their job and the enjoyment they experience each day. Doucet (2000) states that engaged members, are more productive and enjoy coming to work each day On the Gallup path illustrated below we can see that engaged employees tend to generate high performance business outcomes measured by increased sales, improved productivity, and bottom line profitability. The Gallup Path Sales managers play an important role in to engage their sales force. It really is down to the sales managers to ensure that basic needs of their sales force are meet and to progress to the next level in the Gallup engagement hierarchy of needs showed below, to achieve outstanding results from their sales forces and sustain organisational growth. McKiernan (2012) debates that Malow´s hierarchy of needs is outdated. He further explains that having fun is a key element to success and William Glaser’s 5 basic needs has a different and more modernized approach, the following image shows both the theories of William Glasser as well as Maslow. According to Glasser’s theory an individual starts to satisfy the needs at the top of the hierarchy and then move down whereas in Maslow and in Gallup theories an individual first satisfies the needs at the bottom and then move up. Training can improve the level of skills and thus the individual would be able to better utilise his skills that could improve the how an individual approaches the client, how he deals with the client and how he closes the sales. Different things included in training are shown in the figure below: Foley (2012) suggests that companies should move away from pyramid of control such as typically a bank organisational structure to pyramid of empowerment, where communications flows from the bottom to the top. Ikia operates with a unique business culture based on their belief of egalitarianism. Where executives regularly work on the shop floor or tend registered. This anti-bureaucracy stage highlights how companies can, not implement new training techniques but it also inspires motivation. Compensation is perceived by the employees as high value whereas on the other hand organisations sees compensation as a cost and try to hire individuals at lower compensation. Scaffie (2012) stresses that is key that companies find out what is of value to their each individual sales person and low cost to the company. At Google they give recognition to their employees in different ways, by way of vouchers to take meals home, rewarding people through work-life balance. flexibility with their working arrangements. Reddan (2012) discussed that salary was key element rewarding systems up to 5 years ago however in today’s environment job security has come a number one Mtichel (dkdkdk). , employees can be given small rewards instead of tickets of different countries and even these small rewards can help in improving the motivation level (Nolan). Different organisations have different philosophy to motivate, train and reward employees. Some rely on motivating employees by giving targets whereas some motivate them by giving different incentives even on achieving targets.. All the leading organisations value their employee efforts and make sure that employees are compensating & rewarded according to their individual needs and in return organisations obtain a greater level of commitment and dedication from their sales force. 8.0 CONCLUSION AND RECOMMENDATIONS: It is essential for the sales management to explore and analyse the overall size and dynamics and all other factors discussed in section 3.2 that have a direct influence in their industry before coming up with the final sale strategy. The sales strategy should be devised in such a manner that it can be adjusted and changed according to the changing factors, market situations and requirements. Apart from this the organisations should be considerate about the BCG portfolio while making any final decision. It is also important to make sure that the sales management activities are integrated with the marketing strategies in order to make sure that overall objectives of organisation are achieved and accomplished. As seen with Clarks, the sales force must have the ability to connect, empathise and recognise their customer needs. It the sales team that is more aware of the changing needs and preferences of the consumers and can contribute in the successful marketing and operational plans on the basis of these changing needs and demands. In order to improve the quality of the sales team, organisations need to consider some of the following suggestions: Incorporate creative solutions Create trust Identify specific needs Find opportunities on the extreme in this fast changing environment Culture fit for recruiting Provide more autonomy to employees when it comes to making decisions. Satisfy employees as this would lead to customer satisfaction Identify the needs of the individual and then reward him or her accordingly. Train employees as this would improve the level of skills and expertise Analyse the external and internal factors of the organisation that could influence the success. Revisit the forecast process and adapt same to current changing circumstances Read More