unit 2

C o n f i d e n t i a l

Unit-2 Sales Strategies and Sales Promotion

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Program : MBA Semester : I Subject Code : MK 0010 Subject Name : Sales, Distribution and Supply Chain

Management Unit number : 2 Unit Title : Sales Strategies and Sales Promotion Lecture Number : 1

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Sales Strategies and Sales Promotion

• Explain the concept of sales strategy formulation• Define sales forecasting and various type of forecasting techniques• Explain the purpose of sales budget

Objective

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Lecture Outline

LECTURE 1• Introduction• Formulation of Sales Strategy• Types of Sales Strategies

• Sales Forecasting• Sales Budget

LECTURE 2• Sales Quotas• Sales Territory• Sales Display

• Sales Promotion

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INTRODUCTION

• The sales organization is the initiator as well as the implementer of dealer support operations.

• Dealer-sales organization relationship often becomes the key to successful working operations within the organization.

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Formulation of Sales Strategy• Strategy formulation in case of sales would involve identification of the sales

goals and designing of a game plan, using the organizational resources at hand, to achieve those goals.

• The strategy formulation process can be shown as

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Types of Sales Strategies

The various types of sales strategies are discussed below:

Relationship strategy– Establishing and maintaining a partnership-type relationship

internally as well as with the customers is a vital aspect of selling.

Double-win strategy– In this strategy, both the customer and the salesperson come out of

the sale with a sense of satisfaction.– Thus the stage for a long-term relationship, repeat business and

future referrals.

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Instant service• One cannot survive in a highly competitive market without conforming to

the so called Q-C-D triangle – Highest Quality, Lowest Cost and Least Delivery times

Hard sell vs. soft sell strategy• Identifying potential customers is an important aspect of customer

strategy

Hard Sell Soft SellConcern for self Concern for customerCanned presentation Questions for discussionTalking ListeningPushing product Providing buying opportunities

Presenting features Presenting benefitsAdvocating without acknowledge

Acknowledging needs

Strategies for Identifying Customers

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Integrated sales strategies• Integrated sales strategies

integration is required between sales and distribution functions

Client-centered selling strategy• This focuses the entire selling

process and efforts on the client’s needs, problems and successes.

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Sales Forecasting

• Sales Forecasting is an estimate of sales during a specified future period which is tied to a proposed marketing plan and which assumes a particular set of uncontrollable and competitive forces.

The various methods of sales forecasting are:

• Survey method: Based on the opinion of buyers and consumers• Expert opinion: Opinions of executives and consultants are used to

forecast future sales.• Market studies method

• Market experiments are conducted on changing consumer behaviour, prices, advertising expenditure, etc.

• Sales force opinion method: It estimates the buyer's intentions from experienced personnel in the sales force.

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Sales Forecasting

Statistical methods• They are considered to be superior techniques of sales forecasting

because of higher reliability.

Commonly used statistical methods are:– Trend method– Graphical method– Time series method– Regression analysis

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Sales Budget

• A sales budget is a financial plan depicting how resources should best

be allocated to achieve the forecasted sales.

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THANK YOU

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Program : MBA Semester : I Subject Code : MK 0010 Subject Name : Sales, Distribution and Supply Chain

Management Unit number : 2 Unit Title : Sales Strategies and Sales Promotion Lecture Number : 2

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Sales Strategies and Sales Promotion

• Explain the importance of sales quotas• Discuss the concept of sales territories• Explain sales display concept• Describe execution of sales display and its execution• Explain the meaning of sales promotion and various tools of sales promotion

Objective

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Sales Quotas

• A sales quota refers to an expected routine assignment to sales units, such as territory, districts and branches, etc. Sales quotas are also assigned to individual salespeople over a particular time period and are used to plan, control and evaluate the selling activities of a company.

Types of sales quotas

• Sales volume quotas

Sales volume quotas include sales in rupees or product unit objectives for a specific period of time.

• Profit quotas

Profit quotas are particularly useful in multi product companies where different products contribute to varying levels of profits

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Sales Quotas

• Expense quotas

Expense quotas are related to selling costs within reasonable limits. Some companies set quotas for expenses linked to different levels of sales attained by their sales force

• Activity quotas

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Sales Territory

• A sales territory comprises of a group of customers or a geographical area assigned to a sales unit.

• The territory may or may not have geographic boundaries.• A company can develop and use sales territories for various reasons.

Some of the reasons are:• Obtain entire coverage of the market• Establish a salesperson’s responsibility• Evaluate performance• Improve customer relations• Reduce sales expenses• Allow better matching of salesperson to customer

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Sales Display

• “arranging systematically saleable goods so as to attract the attention of the customer”

• Through a sales display, the manufacturer shows the goods or services to the customer.

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Sales Promotion

• Sales promotion serves three essential roles: it informs, persuades and reminds prospective customers about a company and its products

• Sales promotions are short term incentives provided by the company to boost sales.

• Sales promotion includes several communications activities that attempt to provide added value or incentives to consumers, wholesalers, retailers, or other organizational customers to stimulate immediate sales.

• Sales promotion devices can include premiums, coupons, contests temporary price reduction, free goods, letter to traders, literature, educational, mental displays and trade shows.

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Objectives of sales promotion

•Encourage dealers to participate in display and sales contests •Gain advantageous shelf-space•Increase store traffic•Improve relationship with dealers•Block competitors’ moves•Motivate sales force•Supplement advertising and personal selling efforts•Deflect customers’ attention from price

•Increase sales volume•Speed up the sales for slow moving products•Check the fluctuations in sales•Attract new customers•Launch new product(s) and increase trial•Encourage repeat purchase•Clearance of excessive inventories•Motivate dealers

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Sales Promotion

Need and importance of sales promotion• Usage of sales promotion programs is to generate additional sales for

the product• To counter the competitive moves; to generate sales during off seasons;

to motivate people to use more of the same product• To generate trade and sales force support for a new product line or an

extension• To motivate retail and other members in the value network• To have additional inventory and to push the product in the market.

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Sales Promotion

Tools of sales promotion• Prize schemes: A prize scheme is designed for both the public and the

dealers.

• Trade fairs and exhibitions: They play a substantial role in selling goods of different varieties to different people. The main objectives: Meeting potential customers Making direct sales Discovering new applications for existing products Introducing new products.

• Free samples: To introduce a new product and as a sales tool to attract the attention of prospects.

• Correspondence: It can communicate very effectively with prospects as well as potential customers and established for it is better equipped to write letters.

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Sales Promotion

Catalogues:• It is from the catalogue files that one can get information required about

different products of a particular manufacturer.• The following purposes can be served by catalogues.• To get orders• To make the customers aware about the specifications• To provide detailed information• To solicit product sales.

Advertising novelties:• Small, interesting, or personally useful items, etc. can be used for sales

promotion.

An advertising novelty should meet the following requirements:• It should not be a high cost item.• The item should be eye-catching.• It should be useful.

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Sales Promotion

• Entertainment of customers: Entertainment is essential when a standardised product is sold in bulk lots.

• Sales contests: Main aim of sales contests is to motivate the sales personnel, increase sales and bring more profit to the company.

• Price-off: This is simply a reduction in the price of the product to increase sales and is very often used when introducing a new product.

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Sales Promotion

Refunds– Consist of straight cash, coupon values or a product offered to the consumer

in return for a proof of purchase

Point-of-sales materials– Point-of-sales (POS) materials are elements of sales promotion displayed at

the point of sales.– They display persuades, reminds and gives details to the consumers about a

specific brand

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Activity

If you have to sell a new brand of washing powder, try to analyze whether the type of specialization of the sales price is by product or by markets or by both.

Activity 1

If you had to sell a new model of car of an existing brand which type of promotion would you adopt? Why?

Activity 2

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THANK YOU

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unit 2

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