Chapter12:Settingproductstrategy

Productdifferentiation
Form
manyproductscanbedifferentiatedinformsize,shape,orphysicalstructureofaproduct.
features
mostproductscanbeofferedwithvaryingfeaturesthatsupplementtheirbasicfunction.
customization
marketerscandifferentiateproductsbycustomizingthem.Theyhaveincreasedtheirabilityto
individualizemarketofferings,messages,andmedia.Masscustomizationistheabilityofa
companytomeeteachcustomersrequirements.
Performancequality
itisthelevelatwhichtheproductsprimarycharacteristicsoperate.Firmshoulddesigna
performancelevelappropriatetothetargetmarketandcompetition.
Durability
ameasureoftheproductsexpectedoperatinglifeundernaturalstressfulconditions
Reliability
itisameasureoftheprobabilitythataproductwillnotmalfunctionorfailwithinaspecified
timeperiod.
Repairability
itmeasurestheeaseoffixingaproductwhenitmalfunctionsorfails
Style
itdescribestheproductslookandfeeltothebuyer.Itcreatesdistinctivenessthatishardto
copy.
Design
thetotalityoffeaturesthataffecthowaproductlooksandfunctionsintermsofcustomer
requirement.

Servicedifferentiation
Orderingease
itreferstohoweasyitisforthecustomertoplaceanorderwiththecompany.
Delivery
itreferstohowwelltheproductorserviceisboughttothecustomer(speedandcare).
installation
itreferstotheworkdonetomakeaproductoperationalinitsplannedlocation.
customertraining
ithelpsthecustomersemployeesusethevendorsequipmentproperlyandefficiently.
customerconsulting
itincludesdata,informationsystems,andadviceservicesthesellerofferstobuyers.
Maintenanceandrepair
ithelpscustomerskeeppurchasedproductsingoodworkingorder.
returns
2waysofproductreturns
1. 1.controllablereturns itresultfromproblemsorerrorsbythesellerorcustomerand
canmostlybeeliminatedwithimprovedhandlingorstorage,betterpackaging,and
improvedtransportationandforwardlogisticsbytheselleroritssupplychainpartners.
2. 2.Uncontrollablereturns itresultfromtheneedforcustomertosee,try,orexperience
productsinpersontodeterminesuitabilityandcantbeeliminatedbythecompanyin
theshortrunthroughanyofthesemeans.

ProductsystemandMixes

Aproductsystemisagroupofdiversebutrelateditemsthatfunctioninacompatible
manner.
Aproductmixisthesetofallproductsanditemsaparticularselleroffersforsale.
Aproductmixshouldcontainthefollowingthings

1.Width;referstohowmanydifferentproductlinesthatthecompanycarries.
2.Length;referstothetotalnumberofitemsinthemix
3.depth;numberofvariantsofferedofeachproductintheline.
4.consistency;howcloselyrelatedthevariouslinesareinenduse,product
requirements,distributionchannels.
Productlinelength
Companyobjectivesinfluenceproductlinelength
1. createaproductlinetoinduceupselling.
2. createaproductlinethatfacilitatecrossselling.
3. createaproductlinethatprotectsagainsteconomicupsanddowns.
Acompanylengthensitsproductslineintwoways

Linestretching occurswhenacompanylengthensitsproductlinebeyonditscurrent
range,whetherdownmarket,upmarketorbothways.
Linefilling addingmoreitemswithinthepresentrange.

Downmarketstretch(ThaiAirways NokAir)
Acompanypositionedinthemiddlemarketmaywanttointroducealowerpricedlineforany
ofthreereasons.
1.Shopperswantvaluepricedgoods.
2.wishtotieuplowerendcompetitors
3.findthatthemiddlemarketisstagnatingordeclining
Companymaywishtoenterthehighendofthemarketfor
1.moregrowth
2.highermargins

3.simplytopositionthemselvesasfulllinemanufacturers
Twowaystretch
Companiesservingthemiddlemarketmightdecidetostretchthelineinbothdirections
Linefilling referstoaddmoreitemswithinthepresentrange
Severalreasonsforlinefilling:
1.reachingforincrementalprofits.
2.tryingtosatisfydealerswhocomplainaboutlostsalesbecauseofmissingitemsintheline.
3.trytingtoutilizeexcesscapacity.
4.tryingtobetheleadingfulllinecompany
5.tryingtoplugholestokeepoutofcompetitors.
ProductMixpricing
1.productlinepricing companiesnormallydevelopproductlinesratherthansingleproducts
andintroducepricesteps.itistoestablishperceivedqualitydifferencesthatjustifytheprice
differences.
2.optinalfeaturepricing manycompaniesofferoptionalproducts,featurers,andserviceswith
theirmainproduct.Companiesmustdecidewhichitemstoincludeinthestandardpriceand
whichtoofferasoptions.
3.Captiveproductpricing someproductsrequiretheuseofancillaryorcaptiveproducts.Set
highmarkupsontheseproducts.
4.Twopartpricing servicefirmsoftenengageintwopartpricing,consistingofafixedfeeplusa
variableusagefee.
5.Byproductpricing theproductofcertaingoodsresultsinbyproducts(leftover)iftheyhave
valuetheyshouldbepriced(breadfromS&Psoldforfeedingfish)
6.Productbundlingpricing purebundlingoccursonlywhenafirmonlyoffersitsproductsasa
bundle.
Inmixedbundling,theselleroffersgoodsbothindividuallyandinbundle
Cobranding

Itisalsocalleddualbrandingorbrandbundling.Twoormorewellknownexistingbrandsare
combinedintoajointproductormarketedtogetherinsomefashion.
Advantages
cobrandingcangenerategreatersalesfromtheexistingtargetmarketaswellasopen
additionalopportunitieswithnewconsumersandchannels
itcanalsoreducethecostofproductintroductionbecauseitcombinestwowellknowimages
andspeedsadoption.Cobrandingmaybeavaluablemeanstolearnaboutconsumersandhow
othercompaniesapproachthem.
Disadvantages
Therisksandlackofcontrolfrombecomingalignedwithanotherbrandinthemindof
consumers
Riskofoverexposureiftheotherbrandshasenteredintoanumberofcobranding
arrangements.
Ingredientbranding
Itisaspecialcaseofcobranding.itcreatesbrandequityformaterials,components,orparts
thatarenecessarilycontainedwithinotherproducts.Itistrytocreateawarenessand
preferencefortheirproductsoconsumerswhillnotbuyahostproductthatdoesntcontainit.
Packaging
Packagingincludesalltheactivitiesofdesigningandproducingthecontainerforaproduct.
Variousfactorscontributetothegrowinguseofpackagingasamarketingtool.
1.selfservice effectivepackagemustperformsalestask:attractattention,describethe
productsfeatures,andmakeoverallimpression.
2.consumeraffluence Theyarewillingtopaymoreforconvenience,appearance,andprestige
ofbetterpackages.
3.companyandbrandimage packagescontributetoinstantrecognitionofcompanyand
brand
4.innovationopportunity innovationpackagingcanbringlargebenefitstoconsumersand
profitstoproducers.
Packagingmustachievethefollowingobjectives

1.identifythebrand
2.conveydescriptiveandpersuasiveinformation
3.facilitateproducttransportationandprotection
4.assistathomestorage
5.aidproductconsumption
Labeling
1.thelabelidentifiestheproductorbrand.
2.thelabelmightalsogradetheproduct.
3.thelabelmightdescribetheproduct.
4.thelabelmightpromotetheproductthroughattractivegraphics.

Chapter14:Developingpricingstrategiesandprograms
Settingtheprice
Step1:Selectingthepricingobjective
Survivalcompaniespursuesurvivalastheirmajorobjectiveiftheyareplaguedwith
overcapacity,intensecompetition,orchangingconsumerwants
Maximumcurrentprofittrytosetapricethatwillmaximizecurrentprofits.
MaximummarketshareTheybelieveahighersalesvolumewillleadtolowerunitcosts
andhigherlongrunprofit.
Maximummarketskimmingitiswhenpricesstarthighandslowlydropovertime.
Productqualityleadershipacompanymightaimtobetheproductqualityleaderinthe
market.
Manybrandsstrivetobeaffordableluxuries
Step2:DeterminingDemand
Forprestigegoods,thedemandcurvesometimesslopesupward.Someconsumerstakethe
higherpricetosignifyabetterproduct.However,ifthepriceistoohigh,demandmayfall.

PricesensitivityTheywillbelesspricesensitivewhen1.therearefewornosubstitutes
orcompetitors2.theydonotreadilynoticethehigherprice3.theyareslowtochangetheir
buyinghabits
4.theythinkthehigherpricesarejustified

Priceelasticityofdemand

**Alwaysputabsolutesighaftercalculationandiftheelasticityismorethanorequal1 the
demandis
elasticontheotherhandiftheelasticityislessthanitmeansdemandisinelastic.

Step3:EstimatingCosts
Fixedcostoroverheadwhichmeanscostthatdonotvarywithproductionlevelorsales
revenue.

Variablecostvarydirectlywiththelevelofproduction.
Totalcostsconsistofthesumofthefixedandvariablecosts.
Averagecostisthecostperunitatthelevelofproduction;itequalstotalcostsdivided
byproduction.
Accumulatedproduction;Thisdeclineintheaveragecostwithaccumulated
productionexperienceiscalledtheexperiencecurveorlearningcurve.
Targetcosting costschangewithproductionscaleandexperience.Theycanalso
changeasaresultofaconcentratedeffortbydesigners,engineers,andpurchasing
agentstoreducethemthroughtargetcosting.

Step4:Analyzingcompetitorscosts,prices,andoffers
Ifthefirmsoffercontainsfeaturesnotofferedbythenearestcompetitor,itshouldevaluate
theirworthtothecustomerandaddthatvaluetothecompetitorsprice
Step5:Selectingapricingmethod
3.Perceivedvaluepricing
Perceivedvalueismadeupofahostofinputs,suchasthebuyersimageoftheproduct

performance,thechanneldeliverables,thewarrantyquality,customersupport,andsofter
attributessuchasthesuppliersreputation,trustworthiness,andesteem.
Valuepricing
Theywinloyalcustomersbychargingafairlylowpriceforahighqualityoffering
EDLP(everydaylowpricing)isaretailerthatholdstoanEDLPpricingpolicychargesaconstant
lowpricewithlittleornopricepromotionsandspecialsales
Inhighlowpricing(endofseasonsales) theretailerchargeshigherpricesonaneveryday
basisbutrunsfrequentpromotionswithpricetemporarilylowerthanEDLPlevel.
Goingratepricing thefirmbasesitspricelargelyoncompetitorsprices.
Step6:Selectingthefinalprice
PricediscountsandAllowances
1.Discount:apricereductiontobuyerswhopaybillpromptly
2.Quantitydiscount:apricereductiontothosewhobuylargevolumes
3.functionaldiscount:discountofferedbyamanufacturertotradechannelmembersifthey
willperformcertainfunctions,suchasselling,storing,andrecordkeeping.
4.Seasonaldiscount:apricereductiontothosewhobuymerchandiseorservicesoutofseason.
5.allowance:Tradeinallowancesaregrantedforturninginanolditemwhenbuyinganew
one.Promotionalallowancesrewarddealersforparticipatinginadvertisingandsalessupport
programs.
PromotionalPricing
1.Lossleaderpricing:supermarketanddepartmentstoresoftendropthepriceonwellknown
brandstostimulateadditionalstoretraffic.
2.Specialeventpricing:sellerswillestablishspecialpricesincertainseasonstodrawinmore
customers.
3.Specialcustomerpricing:sellerswillofferspecialpricesinexclusivelytocertaincustomers.
4.Cashrebates:companiesoffercashrebatestoencouragepurchaseofthemanufacturers
productswithinaspecifiedtimeperiod.

5.lowinterestfinancing
6.longerpaymentterms
7.warrantiesandservicecontracts
8.psychologicaldiscounting:theshopmightsetafakeprice.
Differentiatedpricing
1.Customersegmentpricing:differentcustomergroupspaydifferentpricesforthesame
productorservice.
2.productformpricing:differentversionsoftheproductsarepriceddifferently
3.imagepricing:somecompaniespricethesameproductattwodifferentlevelsbasedon
imagedifferences.
4.channelpricing:dependondistribution
5.locationpricing:concertseats
6.timepricing:pricesarevariedbyseason,day,orhour

Chapter15:DesigningandManagingintegratedmarketing
channel

Marketingchannelsaresetsofinterdependentorganizationsparticipatinginthe
processofmakingaproductorserviceavailableforuseorconsumption.
Amarketingchannelsystemistheparticularsetofmarketingchannelsafirm
employs,anddecisionsaboutitareamongthemostcriticalonesmanagementfaces.
Hybridchannelsoccurswhenasinglefirmusestwoormoremarketingchannels
toreachcustomersegments. HPhasuseditssalesforcetoselltolarge
accounts,outboundtelemarketingtoselltomediumsizedaccounts,directmailwithan
inboundnumbertoselltosmallaccountsandsoon.

Channeldesigndecisions
Marketerswillanalyzecustomerneedsandwants,establishchannelobjectivesand

constraints,andidentifyandevaluatemajorchannelalternatives.

Channelsproductfiveserviceoutputs.
1. Lotsize;thenumberofunitsthechannelpermitsatypicalcustomertopurchaseonone
occasion
2. Waitinganddeliverytime theaveragetimecustomerswaitforreceiptofgoods.
3. Spatialconvenience howeasyforcustomerstopurchasetheproducts.
4. Productvariety
5. ServiceBackup
Typesofintermediaries
1.Exclusivedistributionmeansseverelylimitingthenumberofintermediaries.Itisto
maintaincontrolovertheservicelevelandoutputsofferedbytheresellers.Itrequiresacloser
partnershipbetweensellerandresellerandisusedinthedistributionofnew
automobiles,somemajorappliances.
2.Selectivedistributionreliesononlysomeoftheintermediarieswillingtocarryaparticular
product.Itcangainadequatemarketcoveragewithmorecontrolandlesscostthanintensive
distribution.
3.Intensivedistributionplacesthegoodsorservicesinasmanyoutletsaspossible.
Especiallysnackfoods,softdrinks,newspapers,candies,andgum.Itwillhelpcoverageand
salesbutinlongtermpricewarscanthenerodeprofitability,harmingbrandequity.
Salesforce persontoperson,butexpensiveInternet lessexpensiveDistributors create
sales
Ecommercemarketing

Itusesawebsitetotransactorfacilitatethesaleofproductsandserviceonline.
Onlineretailerscompeteinthreekeyaspectsoftransactionwhichare1.customer
interactionwiththewebsite2.delivery3.abilitytoaddressproblemswhentheyoccur.
Pureclickcompaniesarethosethathavelaunchedwebsitewithoutanyprevious
existingfirms.
BrickandClickcompaniesareexistingcompaniesthathaveaddedanonlinesitefor
informationorecommerce.
MCommerce Allowpeopletoconnecttotheinternetandplaceonlineordersonthe
move.

Chapter16:Managingretailing,wholesaling,andlogistics

MajorTypesofStoreRetailers
SpecialtyStoresCarriesanarrowproductlineinarelativelysmallstore.Providehigh
levelofserviceandsalesexpertise.
DepartmentstoresOfferservicetocustomer
SupermarketLarge,lowcost,highvolume,selfservicestoredesignedtomeetperishable
market(TOP)
ConveniencestoreItissmallstore,selfservice,tendtoopenallday
DrugstorePrescriptionandpharmacies,healthandbeautyaids
DiscountstoreStandardorspecialtymerchandise;lowprice,lowmargin,highvolume
stores

ExtremeValueSellinggeneralmerchandiseproductsOffpriceretailersLeftover
goods,irregularmerchandisesoldatlessthanretails
SuperstoreHughsellingspace

Chapter17:DesigningandManagingintegratedmarketing
Communicatioins
Marketingcommunicationsmixconsistsofeightmodesofcommunications
1.AdvertisingAnypaidformofnonpersonalpresentationandpromotionofideas,goods,or
servicesbyanidentifiedsponsorviaprintmedia.
2.Salespromotionavarietyofshorttermincentivestoencouragetrialorpurchaseof
aproductorserviceincludingconsumerpromotions.

3.Eventsandexperiences
4.Publicrelationsandpublicity
5.Directmarketing
6.interactivemarketing onlineactivitiesandprogramsdesignedtoengagecustomersor
prospectsanddirectlyorindirectlyraiseawareness
7.WOMmarketing
8.personalselling
Developingeffectivecommunications
1.Identifytargetaudience
Theprocessmuststartwithacleartargetaudienceinmind:potentialbuyersofthecompanys
products,currentusers,deciders,orinfluencers,andindividuals,groups
2.Determinecommunicationsobjectives
2.1Categoryneedcreateprimarydemandoranewtotheworldproductsuchaselectric
carswillalwaysbeginwithacommunicationsobjectivesofestablishingcategoryneed.
2.2Brandawarenessfosteringtheconsumersabilitytorecognizeorrecallthebrandwithin
thecategory
2.3Brandattitudehelpconsumersevaluatethebrandsperceivedabilitytomeeta
currentlyneed.
2.4Brandpurchaseintentionmoveconsumerstodecidetopurchasethebrandor
takepurchaserelatedaction.Promotionaloffersshouldbepresentedtothecustomers
3.Designthecommunication
Massagestrategy whattosay,themanagementsearchesforappeals,themes,orideas
thatwilltieintothebrandpositioningandhelpestablishpointsofparityorpointsofdifference
Creativestrategy dependsonhowamessageisbeingexpressed,andonitscontent.
Informationalappeals;itelaboratesonproductorserviceattributesorbenefits.
Problemsolutionads,productdemonstration,productcomparison,testimonialsfrom
endorsers

Transformationalappeals itelaboratesonanonproductrelatedbenefitorimage
Negativeappealssuchasfear,guilt,andshametogetpeopletodothings(brushtheir
teeth,haveanannualhealthcheckup)
Positiveemotionalappealssuchashumore,love,pride,andjoy
Messagesourcedeliveredbyattractiveorpopularsourcescanachievehigherattention
andrecall,whichiswhyadvertisersoftenusecelebritiesasspokespeople.
Threefactorsforcreatingsourcecredibility
Expertise itisthespecializedknowledgethecommunicatorpossessestobacktheclaim.
Trustworthiness describeshowobjectiveandhonestthesourceisperceivedtobe.
Likability describesthesourcesattractiveness.
4.Selectthecommunicationchannels
Personalcommunicationchannelslettwoormorepersonscommunicatefacetofaceor
persontoaudiencethroughaphone,surface,mail,oremail.
Advocatechannelsconsistofcompanysalespeoplecontactingbuyersinthetargetmarket.
Expertchannelsconsistofindependentexpertsmakingstatementstotargetbuyers.
Socialchannelsconsistofneighbors,friends,familymembers,andassociatiatestalkingto
targetbuyers.
Nonpersonalcommunicationchannelsarecommunicationsdirectedtomorethanone
personandincludeadvertising,salespromotions,eventsandexperiences,andpublic
relation.Forexample,Media,salespromotion,eventsandexperience,PR
5.Establishthetotalmarketingcommunicationbudget
5.1Affordablemethod itsetsthecommunicationbudgetatwhattheythinkthecompanycan
afford.Itleadstoanuncertainannualbudget,whichmakeslongrangeplanningdifficult
5.2Percentageofsalesmethod somecompaniessetcommunicationexpendituresata
specifiedpercentageofcurrentoranticipatedsales
5.3Competitiveparitymethod competitorsexpendituresrepresentthecollectivewisdom
oftheindustry,andthemaintainingcompetitiveparitypreventscommunicationwars.

5.4Objectiveandtaskmethod suchastoremindcustomersandincreasesalesby10%
6.DecidingonthemarketingMix
Factorstoconsider
1.Typeofproductmarket communicationsmixallocationsvarybetweenconsumerand
businessmarkets.Consumermarketerstendtospendcomparativelymoreonsales
promotionandadvertising;businessmarketerstendtospendcomparativelymoreon
personalselling
2.Productlifecyclestage introductionstageoftheproductlifecycle,advertising,events
andexperiences,andpublicityhavethehighestcosteffectiveness.Advertising,eventsand
experiences,andpersonalsellingallbecomemoreimportantinthematuritystage.
BrandAshouldimproveredesignproductsandcommunicationforBrandBneededtobe
improved.
Coordinatingmedia multiplevehicle,multiplestagecampaignstoachievemaximumimpact
andincreasemessagereachandimpact
Manycompaniesarecoordinatingtheironlineandofflinecommunicationsactivities.

Chapter18:ManagingMasscommunications

Advertisingcanbeacosteffectivewaytodisseminatemessages,whethertobuild
abrandpreferenceortoeducatepeople.

Informativeadvertisingaimstocreatebrandawarenessandknowledgeofnewproducts
ornewfeaturesofexistingproducts.
Persuasiveadvertisingaimstocreateliking,preference,conviction,andpurchaseofa
productorservice.
Somepersuasiveadvertisingusescomparativeadvertising.
Reminderadvertisingaimstostimulaterepeatpurchaseofproductsandservices
Reinforcementadvertisingaimstoconvincecurrentpurchasersthattheymadetheright
choice.
Placeadvertisingoroutofhomeadvertisingisabroadcategoryincludingmanycreative
andunexpectedformstograbconsumersattention.
Billboardusecolorful,graphics,soundsandsoon.
Publicspacesareplacedonmoviescreens,onairplanes,andinfitnessclubs,hotel,and
otherpublicareas.
ProductPlacementpayfeesonmovieortelevision
Pointofpurchaseincludesadsonshoppingcarts,cartstraps,aisles,andshelves,as
wellaspromotionoption.

DecidingonMediatimingandallocation
1.Continuity;advertisersusecontinuousadvertisinginexpandingmarketsituationswith
frequentlypurchaseditems.(conveniencegoods,buyoften)
2.Concentration;callsforspendingalltheadvertisingdollarsinasingleperiod.Thisone
isusedforonesellingseasonorrelatedholiday.
3.Flighting;advertiseduringaperiodfollowedbyaperiodwithnoadvertising(runandthen
stop)itisusefulwhenfundingislimited.thepurchasecycleisinfrequent,andseasonal.
4.Pulsing;itiscontinuousadvertisingatlowweightlevels,reinforcedperiodiacallybywavesof
heavieractivity.Itistomaintainminimumlevelbutincreasespecification combiningflighting
+continuityEvaluatingadvertisingeffectiveness
Communicationeffectresearch calledcopytesting,seekstodeterminewhetheranadis
communicatingeffectively.Marketersshouldperformthistestbothbeforeanadisputinto
mediaandafteritisprintedorbroadcast.Pretestcriticsmaintainthatagenciescandesignads
thattestwellbutmaynotnecessarilyperformwellinthemarketplace.Proponentsmaintain
thatusefuldiagnosticinformationcanemergeandthatpretestsshouldnotbeusedasthesole
decision.
Saleseffectresearch

whatsalesaregeneratedbyanadthatincreasesbrandawareness.

Acompanysshareofadvertising(spendingofadverfortotalbudget)expenditures
producesashareofvoice(proportionofcompanyadvertisingofthatproducttoall
advertisingofthatproduct)thatearnsashareofconsumersmindsandheartsand
ultimatelyashareofmarket.
Salespromotionisakeyingredientinmarketingcampaigns,consistsofacollectionof
incentivetools,mostlyshortterm.Itisdesignedtostimulatequickerorgreater
purchaseofparticularproductsorservicesbyconsumersortrade.

Majorconsumerpromotiontools
1.samples

offerofafreeamountofaproductorservicedelivereddoortodoor.

2.Coupons

certificatesentitlingthebearertoastatedsavingonthepurchaseofaspecificproduct.

3.Cashrefundoffers(rebates)

provideapricereductionafterpurchaseratherthanattheretailshop.

4.Pricepacks(centoffdeals)

offerstoconsumersofsavingofftheregularpriceofaproduct.Areducedprice
packisasinglepackagesoldatareducedprice.Abandedpackistworelated
productsbandedtogether(suchasatoothbrushandtoothpaste)

5.Premium(gifts)

offeredatarelativelylowcostorfreeasincentivetopurchaseaparticularproduct.

6.Frequencyprograms

providingrewardsrelatedtotheconsumersfrequency

7.prizes

offersofthechancetowincash,trips,ormerchandiseasaresultofpurchasing
something.Asweepstakesasksconsumerstosubmittheirnamesindrawing.

8.Pratonageawards

valuesIncashorinotherformsthatareproportionaltopatronageofacertain
vendororgroupofvendors.Morelongtermprogram

9.Freetrials

invitingprospectivepurchaserstotrytheproductwithoutcostinthehopethatthey
willbuy.

10.Tieinpromotions

twoormorebrandsorcompaniesteamuponcoupons,refunds,andsoon.

11.Crosspromotions usingonebrandtoadvertiseanothernoncompetingbrand.
12.Pointofpurchase(POP)displaysanddemonstrations

Chapter19:managingpersonalcommunication

Directmarketingistheuseofconsumerdirect(CD)channelstoreachanddeliver
goodsandservicestocustomerswithoutusingmarketingmiddleman.
Interactivemarketing
theinternetprovidesmarketersandconsumerswithopportunitiesformuchgreater
interactionandindividualization.

Designingthesalesforce
1.Salesforceobjectives
2.Salesforcestrategy
3.salesforcestructure
4.salesforcesize
5.salesforcecompensation
SalesForceObjectivesandStrategy
1.Prospecting
searchingforprospectsorleads.
2.Targeting
decidinghowtoallocatetheirtimeamongprospectsandcustomers.
3.communicating
communicateinformationaboutthecompanysproductsandclosingsales.
4.selling approaching,presenting,answeringquestions,overcomingobjections,andclosing
sales.
5.servicing
providingvariousservicestothecustomers
6.informationgathering

conductingmarketingresearch
7.allocating
whichcustomerswillgettheproductfirstSalesforcesize

Groupcustomersintosizeclassesaccordingtoannualsalesvolume
establishdesirablecallfrequencies
multiplethenumberofaccountsineachsizeclass
determinetheaveragenumberofcallsasalesrepresentativecanmakeperyear(per
onesale)
dividethetotalannualcallsrequiredbytheaverageannualcallsmadebyasales
representative

Supposethecompanyestimatesithas1,000Aaccountsand2,000Baccounts.A
accountsrequire36callsayear,andBaccountsrequire12,sothecompanyneedsa
salesforcethatcanmake60,000salescalls(36,000+24,000)ayear.Iftheaveragefulltime
repcanmake1,000callsayearthecompanyneeds60.
Salesforcecompensation

Thefixedamount,asalary,satisfiestheneedforincomestability.Thevariableamount,
whethercommissions,bonus,orprofitsharing,servestostimulateandrewardeffort.
Expenseallowancesenablesalesrepstomeettheexpensesoftraveland
entertaining.Benefits,suchaspaidvacations,sickness,oraccident
benefits,pensions,andlifeinsurance,providesecurityandjobsatisfaction.