Transcript Topic 10 Sales and Marketing

SALES AND MARKETING
LECTURE 11
Introduction

What is sales?


A sale is the important activity involved in selling
products or services in return for money or other
compensation.
What is marketing?

The process of planning and executing the conception pricing,
promotion, and distribution of ideas, goods and services to
create exchanges that satisfy individual and organisational goals.

Churchill and Peter, (1998)
Why business fail? (3Ms)



Money – insufficient operating capital and cash flow
Management – lack of skills and experience
Marketing – lack of research (knowing and assessing your
customer)
Marketing Definition




Introduce entrepreneur, business or company of the
products or services that can be offered to the society.
Increase the sales or services
Brings satisfaction, excitement to the customer to
continuously repeat the order.
Enhance the offer, sales methods, pricing, market area and
communication method to client.
Marketing concept
Customer
satisfaction
Total company
effort
The Marketing
concepts
Profit (or another
measure of longterm success) as an
objective
Cont…

The marketing concept suggests how organisations
should behave in terms of customers and competition.

Stress the belief that an organisation should aim all its
efforts at anticipating and satisfying its customers at a
profit
Stakeholders in marketing activities
Society at large
Customers Competitors
Owners
Organisational
Suppliers
Marketing
Lenders
Resellers
Activities
Special
interest
groups
Activities
Employees
Local
Communities
Government
Agencies
Development marketing mixes
Target
Market
Product

The product element is concerned with what marketers
offer to customers.



The management of existing products
The management of new products
The management of services
Price

Concerns the amount of money or other resources
marketers ask for their offerings


Pricing fundamentals
Management of pricing
Placement


Channels of distribution
Concerns how products and services are delivered to
markets to make them available for exchanges




Managing channels of distribution
Wholesaling
Physical distribution
retailing
Promotion


Communications
Concerns how marketers inform, persuade, and
remind customers about products and services






Integrated marketing communication
Advertising
Sales promotion
Publicity
Personal selling
Sales management
Entrepreneur roles towards marketing
1.
Choose the right and potential target market.
2.
Conduct market survey on customer’s needs and
desire.
3.
Offer products and services with variety of types,
characteristics, continuous enhancement and quality.
4.
Offer reasonable and competitive pricing or cheapest
among the competitors.
5.
Made available of the product and services to the
customer.
6.
Distribute widely the promotion information and able
to convince the potential customers.
MARKETING ENVIRONMENT
What is Marketing Environment?

Factors and general surrounding that effect business
marketing planning and the implementation.

2 categories:
i.
ii.
Internal Business Environment
External Business Environment
The importance to identify marketing
environment

Identify the business ability to offer and fulfill customer’s
needs

Identify business opportunity and obstacles. Example:
friends(supplier, vendor) or competitor?

Manage business based on up-to-date information
Internal Environment

Involve basic business offer to customer.

Factors that involves monitoring and control of the business as
follows:
Product and services
1.

Example: design, applicability, packaging, branding or serviceability etc.
Pricing
2.

Pricing method, basic cost & profit margin.
Distribution
3.

The best channel for distribution, distribution cost, distribution
efficiency etc.
Promotion
4.

Efficient promotion methods, promotion cost.
External Environment

Factors and issues surrounding that are beyond the
entrepreneur control.

Effect the marketing planning and implementation.



Direct (example: escalation of material raw price)
Indirect (example: disaster)
Basic component:




Society at surrounding and current market
Economy, politics and government policies
Competitor
Business development (example: use of the technology, business
management trend, changes in business support system)
Dimensions of the marketing
environment
Economic
Environment
Marketing
Strategy
Customer
Value and
Behavior
Natural
Environment
Example of questions by a Printing
shop
Environments
Sample Questions
Economic
What stage of the business cycle are we in? What industries with
major printing need are doing well in the current economic
climate?
Political and legal
What zoning laws affect our ability to open shops in areas of
potentially high growth? Are our advertising claims legal and
ethical?
Social
As the population of our community ages, will the demand for
resume printing service decline? If so, what needs will replace it?
How can we foster good community relations?
Natural
What are the costs and benefits of selling environmentally
friendly products such as recycled paper and double-sided
copies?
Technological
What technological developments are likely to affect printing and
desktop publishing?
Competitive
What other businesses offer printing services within a five-mile
radius? What is their rate schedule? Which potential customers
handle their own printing needs?
Sales Method
Sales Method


Entrepreneur can become as supplier, mediator or
retailer.
Sales method can be in the form of:



supplier to customer;
distributor, or retailer to customer;
supplier to mediator to customer.
Entrepreneur as supplier
Suppler
Mediator
Entrepreneur as supplier and
sell to mediator
Customer
Entrepreneur as mediator
and sell to customer
Sales Method (via Supplier)

Into 2 forms:

Direct selling with business premises


Factory, shop, kiosk or permanent office that can be visited by
customer.
Direct selling without premises


No specific premises or permanent premises for customer to visit.
4 forms;



Door to door (personal contact)
Catalogue, Post order and telephone order.
Internet (website, blog : e-bay, lelong.com)
Sales Method (via Mediator)

Most favorable method for supplier to sell their product
to other parties.

Most usual channel via mediator:



Sell via supplier
Sell via retailer
Sell via sales prepresentatives/agent/stockist.
Sales Forecasting
What is Sales Forecasting?

Estimation of identified customer purchasing.

Projection for future business term.

Sales forecasting can be produced in


Unit (product sold) or RM (sales)
for certain period of time (weekly/monthly/annually/specified
term)
The needs to forecast sales

As a sales projection for business

Actual sales vs. forecasted sales will indicate:



Less manpower during high sales or:
Miscalculation in purchasing raw material.
Forecasting can be used to estimate the needs and usage
of the resources. (example: purchasing of high quantity of
raw material when it is forecasted to have high sales)
Factors that influence sales forecast
Starts of business operation
1.
Sales for the initial stage of business operation is expected to
be less than the following months
Time taken for customers to know the existence of the
company, getting to know and convince with the new
company


Changes in seasonal demands
2.
Effected by school holidays, changes in weather, festivals etc.

Type of business or business sector
3.
2 types of business

1.
2.
Need to wait for a certain period of time to gain profit after capital
is invested in the business (example: construction, farming etc.)
No need to wait to gain profit after capital is invested in the
business (restaurant, retail shop)
Example of Sales Forecasting

Assume:




New business
Business operation starts on January until December
Estimate sales is in RM/month
Basic calculation for sales forecast:




Estimate sales per day = RM1000
Estimation of business operation = 24days/month (Sunday off
day)
Estimation total sales = RM1000 X 24 days
= RM 24,000/month. (Also known as average sales)
Average sales can be as a basis to estimate the following
months. (whether sales are higher, lower or maintain the same)
Month
Estimate Sales
(RM)
January
15 000
February
19 000
March
22 000
April
24 000
May
24 000
June
24 000
July
28 000
August
20 000
September
20 000
October
28 000
November
30 000
December
32 000
Total
286 000
Initial stage is estimated to be
lower than average sales
Estimated to be similar to
average sales
Sales are increasing or
decreasing from the average
sales depending on the seasonal
factor (e.g. school holiday,
festive season etc)
References
Ismail, B., Pawan, F., Abdul Kadir, MAB., Alipiah,N., Raya, R.,
Abdul rahman, R. and Abdul Karim, S. 2009. “Asas
Pengurusan Pemasaran”. UPENA, UiTM Shah Alam