Sdm 1.1
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This document discusses marketing policies related to sales, including product, distribution, and pricing policies. It provides details on key considerations for each type of policy, such as determining product lines, distribution intensity strategies, approaches to pricing relative to competition and costs. The document also discusses sales strategies, including account targeting, relationship strategies, selling strategies, and sales channel strategies. Overall, the document provides an overview of various sales and marketing policies and strategies that can guide a company's sales efforts.
Sdm 1.1
- 1. DEPARTMENT OF BUSINESS ADMINISTRATION & RESEARCH Shri Sant Gajanan Maharaj College of Engg., Shegaon Unit-1 Sales Related Marketing Policies
- 2. Brief Marketing Policies • Product Policies - What To Sell ? • Distribution Policies – Who to Sell ? • Pricing Policies – What price to Sell ?
- 3. Introduction • Sales related marketing policies directly influence the jobs of sales executives. • These policies provide the direction to organize ,manage and control the sales effort . • These are generally company governed and formulated policies which are administered by sales executives.
- 4. Product Policies – What to Sell ? • The products a company sells determines its basic nature. • These serve are guidelines for making product decisions. • They are derived from product objectives
- 5. Product Policies • Product Line Policy 1. Short line(specialization) or full line (wide selection) policies. 2. Governed by willingness to take risk. Narrower the line greater the risk. 1. Changes in Product Offerings -to determine the product tuning with market -to determine products which needs to be dropped or added
- 6. Product Policies 2. Reappraising the product line and line simplification -adding or removal of profitable and non profitable product lines and customer accounts. 3. Reappraising the product line and line diversification -relative to growth objectives 4. Ideas for new products -Internal and external sources for new ideas. 5. Appraisal of proposed new products. -criteria is profitability, nature and size of likely markets, competition, price policy, sales programs and legal implications.
- 7. Product Policies • Product Design Policy 1. Frequency of design change 2. Extent to which designs are to be protected from copying. • Product Quality and Service Policy 1. High quality products require less service and low quality products requires high service. 2. Guarantee policy – serves either protective or promotional purposes.
- 8. Distribution Policies – Who to Sell ? • Policies on Marketing Channels Channels should be chosen in order to obtain the optimum combination of profit factors. Time dimensions must be considered in addition to : 1. Sales Volume Potential 2. Comparative distribution costs 3. Net Profit Possibilities
- 9. Distribution Policies • Policies on Distribution Intensity Following distribution strategies are implemented by company : 1. Mass Distribution 2. Selective Distribution 3. Exclusive Agency Distribution
- 10. Pricing Policies • Policy on Pricing Relative to Competition 1. Meeting the competition 2. Pricing above the competition 3. Pricing under the competition • Policy on Pricing Relative to Costs 1. Full cost pricing 2. Promotion pricing 3. Contribution pricing
- 11. Pricing Policies • Policy on Uniformity of Prices to Different Buyers. Company choose between: 1. One-price policy (same price) 2. Variable price policy ( price determined by individual bargaining) “Here bargaining power of buyers varies with the size of transaction.”
- 12. Pricing Policies • Policy on List Pricing List pricing takes variety of forms most common being : Printing the price on package Sales personnel to suggest the resale price to buyers. • Policy on Discounts 1. Trade Discounts 2. Quantity Discounts
- 13. Pricing Policies • Geographical Pricing Policies 1. Free on Board (F.O.B) pricing – customer pays the freight 2. Delivered pricing – seller pays the freight 3. Freight absorption – compromise between delivered and F.O.B pricing. • Policy on Price Leadership Price changes by Market Leader and Followers Decision depends upon marketer’s relative market position and the image of leadership that it desires to build and maintain
- 14. Pricing Policies • Product Line Pricing Policy Different items in product lines compete with each other. Price space between the individual members of the line Bottom of line as ‘traffic builders’ and top of line as ‘prestige builders’ • Competitive Bidding Policy Industrial and government buyers solicit competitive bids from potential suppliers and award the business to the bidder offering the best proposal Decision depending upon various factors such as price, delivery dates, reputation for quality etc.
- 16. Corporate Strategy Corporate Mission SBU Definition SBU Objectives Corporate Management Sales Strategy Strategy Types Strategy Execution SBU Management Strategy Level Key Decision Areas Key Decision Makers Organizational Strategy Levels
- 17. Strategy Level Key Decision Areas Key Decision Makers Marketing Strategy Corporate Management Target Market Selection Marketing Mix Dev. Integrated Mkt Comm. Business Strategy SBU Management Account Targeting Strategy Sales Channel Strategy Relationship Strategy Organizational Strategy Levels
- 18. Corporate Strategy Development Process • Analyze corporate performance and identify opportunities and threats • Determine corporate mission and objectives • Define strategic business units • Set objectives for each strategic business unit
- 19. Definition of Strategic Business Units (SBUs) Cravens (1991) An SBU is a single product or brand, a line of products, or a mix of related products that meets a common market need or a group of related needs, and the unit's management is responsible for all (or most) of the basic business functions."
- 20. Salary plus incentive Prospective and new accounts Provide high service levels particularly pre- sales service Product/market feedback Build sales volume; Secure distribution Build SBU Objectives and the Sales Organization Compensation System Primary Sales Tasks Sales Organization ObjectivesMarket Share Objectives
- 21. Compensation System Primary Sales Tasks Sales Organization ObjectivesMarket Share Objectives Salary plus commission or bonus Call on targeted current accounts Incr. service levels to current accounts Call on new accounts Maintain sales volume Consolidate market position through concentration on targeted segments Secure additional outlets Hold SBU Objectives and the Sales Organization
- 22. Compensation System Primary Sales Tasks Sales Organization ObjectivesMarket Share Objectives Salary plus bonus Service most profitable accounts eliminate unprofitable accounts Reduce service levels and/or inventories levels Reduce selling costs Target profitable accounts Harvest SBU Objectives and the Sales Organization
- 23. Compensation System Primary Sales Tasks Sales Organization ObjectivesMarket Share Objectives SalaryDump inventory Eliminate service Minimize selling costs and clear out inventory Divest or Liquidate SBU Objectives and the Sales Organization
- 24. Business Strategy and the Sales Function • Low-cost supplier • Differentiation • Niche Pursue large customers Minimize cost Compete on price Seek customers who are low price shoppers Compete on non-price benefits Provide high quality customer service Seek customers who are not low price shoppers Serve a distinct target market not served well by others Provide high quality customer service Seek customers who are not low price shoppers
- 25. Personal Selling-Driven vs. Advertising-Driven Marketing Communications Strategies When Message Flexibility is Important When Message Timing is Important When Reaction Speed is Important When Message Credibility is Important When Trying to Close the Sale When Low Cost per Contact is Important When Repetitive Contact is Important When Control of Message is Important When Audience is Large Personal Selling Advertising
- 26. Target Market Situations and Personal Selling Target Market: A definition of the specific market segment to be served Personal Selling-Driven Promotional Strategies are appropriate when: – The market consists of only a few buyers that tend to be concentrated in location – The buyer needs a great deal of information – The purchase is important – The product is complex – Service after the sale is important
- 27. Integrated Marketing Communications The strategic integration of multiple marketing communications tools communicating a consistent message in the most effective and efficient manner.
- 28. Buying Situation Buying Center Organizational Buyer Behavior Account Buying Process Buying Needs Account Targeting Strategy Relationship Strategy Salesperson Sales Strategy Sales Channel Strategy Selling Strategy The Sales Strategy Framework
- 29. Business or Industrial Organizations Major Category Types Users: purchase products and services to produce other products and services Organizational Buyer Behavior: Types of Organizations Original Equipment Manufacturers (OEM): purchase products to incorporate into products Resellers: purchase products to sell
- 30. Major Category Types Government Organizations Federal, State, and Local Government Agencies Organizational Buyer Behavior: Types of Organizations Public and Private Institutions Institutions
- 31. Organizational Buyer Behavior: Buying Situations Straight Rebuy Buying Situation – Routinized Response Behavior Modified Rebuy Buying Situation – Limited Problem Solving New Task Buying Situation – Extensive Problem Solving
- 32. Organizational Buyer Behavior: Buying Center • Initiators • Users • Gatekeepers • Influencers • Deciders • Purchasers
- 33. Organizational Buyer Behavior: Buying Process Phase 1: Recognize Problem/Need Phase 2: Determine Item Specs/Quantity Needed Phase 3: Specify Item Specs/Quantity Needed Phase 4: Identify and Qualify Potential Sources Phase 5: Acquire and Analyze Proposals Phase 6: Evaluate Proposals/Select Suppliers Phase 7: Selection of Order Routine Phase 8: Performance Feedback/Evaluation
- 34. Control Cost in Product Use Situation Few Breakdowns of Product Dependable Delivery for Repeat Purchases Adequate Supply of Products Cost within Budget Limits Want a Feeling of Power Seek Personal Pleasure Desire Job Security Want to be Well Liked Want Respect Personal Goals Organizational Goals Personal and Organizational Needs
- 35. Sales Strategy: Account-Targeting Strategy The classification of accounts within a target market into categories for the purpose of developing strategic approaches for selling to each account or account group.
- 36. Sales Strategy: Relationship Strategy A determination of the type of relationship to be developed with different account groups.
- 37. Transaction Solutions Partnership Collaborative Characteristics of Relationship Strategies Goal Sell Products Add Value Time Frame Short Long Offering Standardized Customized Number of Customers Many Few
- 38. Sales Strategy: Selling Strategy A planned selling approach for each relationship strategy. Developing efficient and effective selling strategies is an important sales management task.
- 39. Matching Selling and Relationship Strategies Transaction Solutions Partnership Collaborative Commitment Cost to Serve High High Low
- 40. Sales Strategy: Sales Channel Strategy Ensuring that accounts receive selling effort coverage in an effective and efficient manner. Sales channel options include: – The Internet – Industrial Distributors – Independent Representatives – Team Selling – Telemarketing – Trade Shows
- 41. Sales Channel Strategy: The Internet Used strategically to: • Increase Reach • Gather Information about Customers • Showcase New Products • Conduct Surveys • Enhance Corporate Image • Obtain Feedback • Service Existing Customers
- 42. Sales Channel Strategy: Industrial Distributors Essentially, channel intermediaries that: • Have Their Own Sales Force • May Represent One Manufacturer; Several Non-competing Manufacturers; Several Competing Manufacturers • Take Title to the Goods and Normally Carry Inventory
- 43. Sales Channel Strategy: Independent or Manufacturers’ Reps Outsourcing the selling effort to individuals or organizations that: • Sell complimentary products from non-competing manufacturers. • Do Not Take Title to the Goods or Carry Inventory • Are Paid for Performance • Have Control over the Selling Effort • May Control Access to Customer Information
- 44. Sales Channel Strategy: Team Selling Multiple individuals from the selling organization working together to develop and expand relationships with one or more accounts. The salesperson typically coordinates the team’s selling efforts.
- 45. Sales Channel Strategy: Telemarketing Using the telephone as a means of customer contact. This low- cost method of customer relationship management may replace field sales force for certain accounts. When integrated with field sales force, activities include: – Prospecting, Qualifying Leads, Conducting Surveys – Taking Orders, Checking on Order Status, Handling Order Problems – Following Up for Repeat Business
- 46. Sales Channel Strategy: Trade Shows • Generate Leads • Test Market New Products • Introduce New Products • Close Sales • Gather Competitive Information • Service Existing Customers • Enhance Corporate Image Events at which the company exhibits its wares. Used by organizations to: