Objectives of Personal Selling

Personal selling is used to meet the five objectives of promotion in the following ways:

 Building Product Awareness – A common task of salespeople, especially when selling in

business markets, is to educate customers on new product offerings. In fact, salespeople
serve a major role at industry trades shows (see the Sales Promotion tutorial) where they
discuss products with show attendees. But building awareness using personal selling is
also important in consumer markets. As we will discuss, the advent of controlled word-
of-mouth marketing is leading to personal selling becoming a useful mechanism for
introducing consumers to new products.
 Creating Interest – The fact that personal selling involves person-to-person
communication makes it a natural method for getting customers to experience a product
for the first time. In fact, creating interest goes hand-in-hand with building product
awareness as sales professionals can often accomplish both objectives during the first
encounter with a potential customer.
 Providing Information – When salespeople engage customers a large part of the
conversation focuses on product information. Marketing organizations provide their sales
staff with large amounts of sales support including brochures, research reports, computer
programs and many other forms of informational material.
 Stimulating Demand – By far, the most important objective of personal selling is to
convince customers to make a purchase. In The Selling Process tutorial we will see how
salespeople accomplish this when we offer detailed coverage of the selling process used
to gain customer orders.
 Reinforcing the Brand – Most personal selling is intended to build long-term
relationships with customers. A strong relationship can only be built over time and
requires regular communication with a customer. Meeting with customers on a regular
basis allows salespeople to repeatedly discuss their company’s products and by doing so
helps strengthen customers’ knowledge of what the company has to offer

The 7 stages of the personal selling process are:

1. Prospecting and qualifying

2. Planning the sales call (preapproach)
3. Approaching the prospect
4. Making the sales presentation and demonstration
5. Negotiating sales resistance or buyer objections
6. Confirming and closing the sale
7. Following up and servicing the account

Read more: http://wiki.answers.com/Q/Steps_of_personal_selling#ixzz1srXJvadQ

Sales force management systems are information systems used in CRM marketing and
management that help automate some sales and sales force management functions. They are
often combined with a marketing information system, in which case they are often called
customer relationship management (CRM) systems.

Sales force management systems are essentially the same thing as sales force automation system
(SFA).

A SFA, typically a part of a company’s customer relationship management system, is a system

that automatically records all the stages in a sales process. SFA includes a contact management
system which tracks all contact that has been made with a given customer, the purpose of the
contact, and any follow up that may be needed. This ensures that sales efforts are not duplicated,
reducing the risk of irritating customers. SFA also includes a sales lead tracking system, which
lists potential customers through paid phone lists, or customers of related products. Other
elements of an SFA system can include sales forecasting, order management and product
knowledge. More developed SFA systems have features where customers can actually model the
product to meet their needs through online product building systems. This is becoming more and
more popular in the automobile industry, where patrons can customize various features such as
color and interior features such as leather vs. upholstered seats.

An integral part of any SFA system is company wide integration among different departments. If
SFA systems aren’t adopted and properly integrated to all departments, there might be a lack of
communication which could result in different departments contacting the same customer for the
same purpose. In order to mitigate this risk, SFA must be fully integrated in all departments that
deal with customer service management.

Making a dynamic sales force links strategy and operational actions that can take place within a
department. the SFA relies on objectives, plans, budget, and control indicators under specific
conditions. In order to perform the objectives correctly, specific procedures must be
implemented:

Contents
[hide]

 1 Identifiable sales force management processes

 2 Components of sales force automation system
o 2.1 Open source sales force automation
 3 Mobile sales force automation application
 4 Advantages to the marketing manager
 5 Strategic advantages
 6 Disadvantages
 7 Encouraging use
 8 See also
 9 References
[edit] Identifiable sales force management processes
 Setting targets and objectives based on inputs (usually via a command center)
 Assigning actors responsible for achieving objectives
 Control processes for ensuring objectives are being achieved within
o a given time frame
o a given constrained context (customers and/or markets)
 System management to handle uncertain environments

The process usually starts from specific sales targets. The command center analyzes the inputs
and outputs established from a modeled control process and the sales force. The control process
enables the sales force to establish performance standards, measuring actual performance,
comparing measured performance against established standards and taking corrective action. The
sales managers adjust their actions based on the overall process.

Aside from the control process, the following metrics are implemented:

 Time management— Accurately measures the tasks and the fraction of time needed for each
task.
 Call management— Plan for customer interaction accounts for the fraction of command center
reps that comply with the process and have successful calls.
 Opportunity management— If the process is followed correctly then a sales opportunity exists.
The fraction of command center reps that use the tools, comply with the objective are all
measured.
 Account management— For multiple opportunities with a customer the account is measured by
the tools, process, and objectives.
 Territory management— For monitoring the account, the territory is measured by the number
of account reps and prospective versus active customers.
 Sales force management— Process includes training, IT systems, control, coaching, and is shared
across several people and departments.

Five major activities are involved in staffing a sales force. They must be divided into related
steps. The first step is plan the recruiting and selection process. The responsibilities associated
with this step are generally assigned to top sales executives, the field sales manager or the human
resources manager (pg. 131-132 Spiro/Rich/Stanton). The company wants to determine the
number and type of people needed, which involves analyzing the market and the job and
preparing a written job description (pg. 132). The qualifications of the job must be established to
fill the job. Second, the recruiting phase includes identifying sources of recruits that are consisted
with the type of person desired, selecting the source to be used and contacting the recruits (pg.
132). You need to weigh out the options and evaluate its potential effectiveness versus its costs.
Third, select the most qualified applicants. The selection phase has three steps, in the planning
phase there may be qualifications specified and in the first step it is necessary to design a system
for measuring the recruits against the standards from the planning phase. Then the system must
be put into effect with the new applicants and then making the actual selection is the final step.
Fourth activity is to hire those people who have been selected, just because one makes an offer
doesn’t mean that a job is done (pg. 132). One must convince a recruit that the job offers
everything that they need and want to get them to join a company or at least highly consider it.
The fifth activity is for them to assimilate the new hires into the company. This is done by
placing them under direction of an employee in the firm and possibly giving them a mentor to
help them feel comfortable working in the firm and going through the training programs.[citation
needed]

[edit] Components of sales force automation system

When considering sales force automation systems not all are created equal. They are like
selecting a new car. The systems can vary depending on what information the organization
needs. The application also has implications based on their size, organization rollup, demand of
new system, sales processes, and number of users.

Depending on what is needed, services can fall into 2 categories: on-premise software and on-
demand (hosted) software. With on premise software, the customer manage and purchase the
application. On-premise software has some advantages and disadvantages depending on what
customers need. The disadvantage of on-premise to some is the higher cost of the software along
with maintenance. Customization is also needed for some who use additional processes outside
of the normal out of the box solution. Time is also a factor. Many on-premise software takes
longer implementation times along with numerous testing and training sessions. The overall
advantage of on-premise software is looking at the overall return on investment. Using the
application for three to five years becomes more cost effective. Another advantage can be the
based on the amount of data. With on-demand you are held to a certain volume restriction, but
with on-premise your data restrictions are based on the storage size of your local hardware.[citation
needed]
The on-demand solution on the other hand takes shorter implementation time, less cost,
and tailored to meet the customers need.[citation needed]

[edit] Open source sales force automation

There are many SFA systems in the market. Small to medium size business and individual users
have the choice of using the Open Source SFA solutions, online or cloud SFA solutions, and
licensed SFA software solution. Open Source solutions regardless of application have become
extremely popular over years.[citation needed]

[edit] Mobile sales force automation application

A huge number of sales managers are always on the go. The growth of smartphones has reignited
the creation of mobile sales force automation systems. Most companies IT departments are aware
that adopting new abilities requires extensive testing. Despite the time needed to test such a new
product, it will pay off in the future for the sales department. Smartphones appeal to salespeople,
a part of a company's department that is extremely resistant to new technologies. Smartphones
are easy to carry and easy to use, great interface design, touchscreens and fast wireless network
abilities like 4G and 3G phones.more than 55% of global 2000 organization will deploy mobile
SFA project by 2011 and newer Smartphone platforms, such as Apple's iOS and Google's
Android, point to a future of increasing diversity in device selecting and support for sales force.
When implementing the mobile sales force automation application or during the first stage of
systems development life cycle, project teams will need to evaluate how prospective solutions
comprising mobile devices, software and support infrastructure and carrier services are packaged
to deliver optimal system usability, manageability and integrative abilities, as well as high
scalability, reliability and performance. It’s always good to put in mind that just like any new
technology, success comes with usability.

[edit] Advantages to the marketing manager

 Understanding the economic structure of an industry
 Identifying segments within a market
 Identifying a target market
 Identifying the best customers in place
 Doing marketing research to develop profiles (demographic, psychographic, and behavioral) of
core customers
 Understanding competitors and their products
 Developing new products
 Establishing environmental scanning mechanisms to detect opportunities and threats
 Understanding one's company's strengths and weaknesses
 Auditing customers' experience of a brand in
 Developing marketing strategies for each of one's products using the marketing mix variables of
price, product, distribution, and promotion
 Coordinating the sales function with other parts of the promotional mix, such as advertising,
sales promotion, public relations, and publicity
 Creating a sustainable competitive advantage
 Understanding where brands should be in the future, and providing an empirical basis to write
marketing plans regularly to help get there
 Providing input into feedback systems to help monitor and adjust the process

[edit] Strategic advantages

Sales force automation systems can also create competitive advantage:

 As mentioned above, productivity can increase. Sales staff can use their time more efficiently
and effectively. The sales manager can become more efficient and effective (see above). This
increased productivity can create a competitive advantage in three ways: it can reduce costs, it
can increase sales revenue, and it can increase market share.
 Field sales staff can send their information more often. Typically information can be sent to
management after each sales call, rather than daily or weekly. This provides management with
current information, which they can use while it is more valuable. Management response time
can be greatly reduced. The company can become more alert and agile.
 These systems could increase customer satisfaction if they are used with wisdom. If the
information obtained and analyzed with the system is used to create a product that matches or
exceeds customer expectations, and the sales staff use the system to service customers more
expertly and diligently, then customers should be more satisfied with the company. This can
 provide a competitive advantage because customer satisfaction leads to increased customer
loyalty, reduced customer acquisition costs, reduced price elasticity of demand, and increased
profit margins.

[edit] Disadvantages
The major disadvantages in Sales Force Management Systems are:

 Difficulty in adopting the system

 Too much of time spent on Data Entry
 Losing personal touch in the process of automation
 Laborious process of continuous maintenance, information updating, information cleansing and
system upgradations
 Cost involved in Sales Force Automation Systems and Maintenance
 Difficulty in integration with other management information systems

[edit] Encouraging use

For all the reasons stated above many organisations have found it difficult to persuade sales
people to enter data into the system. For this reason many have questioned the value of the
investment. Recent developments have embedded sales process systems that give something
back to the seller within the CRM screens. Because these systems help the sales person plan and
structure their selling in the most effective way they give a reason to use the CRM.

[edit] See also

Sales Force Size - Sales Force Management Software
Sales Force Management we are talking here. In my last talk we talk about Structuring Sales Force.
Before that We talked Sales Force Automation, Sales Policies Formulation, Product Polices,
Distribution Policies and Pricing Policies.

Today we continue our talk on Sales Force Management and we talk about Deciding the size of
the Sales Force Team.

Deciding the size of the Sales Force:-

Under this activity management need to determine how many number of sales man required
meeting sales volume and profit objectives. If a company has too few sales persons, opportunity
for sales and profits go unexploited, and if it has too many, excessive expenditure for personal
selling reduce net profit. It is difficult perhaps impossible to determine exact number of
salespersons that a particular company should have. Three basic approaches are used in
approximating the sales force size they are:

 Workload Method
 Sales Potential Method
  Incremental Method

Personal selling objectives

1) To capture and retain a certain market share

2) To obtain sales volume in ways that contribute to profitability
3) To obtain some number of new accounts of given types
4) To keep personal selling expenses with in set limits
5) To secure targeted percentage of certain accounts business.

Formulating sales policies

Formulating sales policies is nothing but the policies related to marketing. These sales related marketing
policies delineate the guide lines within which the effort to reach personal selling objectives is made.
There are three major types:

1. Product policies (what to sell): The component policies related to product is

- Which product should find a place in the product line?
- Whether some of the existing products are to be dropped?
- Whether any new products are to be added?
- Whether product design or product quality needs to be changed.
- What models. Type, size, colours and packing are to be sold.
- How product service is to be provided.
- What kinds of product guarantees are to be given?

Following are the important errands involved in the successful management of the sales in the
organizations:
a) Setting personal selling objectives.
b) Formulating sales policies
c) Structuring the sales force
d) Deciding the size of the sales force
e) Designing sales territories
f) Developing the sales forecasts and sales budgets
e) Designing sales territories
f) Developing the sales forecasts and sales budgets
g) Fixing sales quotas/targets for individual sales territories/salesman

h) Creating the sales force:

1. Recruitment
2. Selection
3. Induction/orientation

i) Managing the sales force

1. Compensation
2. Motivation
3. Morale building
4. Sales coaching/supervision
5. Evaluation/appraisal
6. Training and development

j) Managing the marketing channels

k) Ensuring growth and developing new accounts
l) Sales communication and reporting
m) Sales coordination and sales controlling including sales expense control
n) Building the sales organization
o) Co-ordination with marketing management in the areas like, product mix, pricing, distribution,
advertising and sales promotion
p) Creating and maintaining right image for the company and its products in the market

Workload Method - Sales Force

Sales Force Management we are talking here. In my last talk we talk about Structuring Sales Force.
Before that We talked Sales Force Automation, Sales Policies Formulation, Product Polices,
Distribution Policies and Pricing Policies.

Today we continue our talk on Sales Force Management and we talk about deciding the size of
the Sales Force Team. There are 3 basic approaches used in approximating sales force size.

 Workload Method
 Sales Potential Method
 Incremental Method

We talk here Workload Method.

According to this method the basic assumption is that all sales personnel should shoulder
equal workloads. Management estimates the total workload involved in covering entire
companies market and divides by the workload that an individual sales person should
be able to handle, thus determining total number of sales people required. The companies
applying this approach generally assume that the interactions of three major factors –
customer size, sales volume potential and travel load – then determine the workload
involved in covering the entire market.

ref: Sales Force Automation & Lead Organizer Software

Posted by friend4all at 5:09 AM 5 comments Links to this post

Labels: CRM, Lead Organizer, Leadorganizer, Sales Force Automation, Sales Force Management
Software, Sales Force Team, Sales Management, Sales Policies, SFA, Workload

Friday, December 14, 2007

Sales Force Size - Sales Force Management Software
Sales Force Management we are talking here. In my last talk we talk about Structuring Sales Force.
Before that We talked Sales Force Automation, Sales Policies Formulation, Product Polices,
Distribution Policies and Pricing Policies.

Today we continue our talk on Sales Force Management and we talk about Deciding the size of
the Sales Force Team.

Deciding the size of the Sales Force:-

Under this activity management need to determine how many number of sales man required
meeting sales volume and profit objectives. If a company has too few sales persons, opportunity
for sales and profits go unexploited, and if it has too many, excessive expenditure for personal
selling reduce net profit. It is difficult perhaps impossible to determine exact number of
salespersons that a particular company should have. Three basic approaches are used in
approximating the sales force size they are:

 Workload Method
 Sales Potential Method
 Incremental Method

ref: Sales Force Management & Leadorganizer Software

Posted by friend4all at 2:51 AM 3 comments Links to this post

Labels: CRM, Leadorganizer, Sales Force Automation, Sales Force management, Sales Force
Management Software, Sales Management, Sales Management Software, Sales Policies, Salesman, SFA

Thursday, December 6, 2007

Pricing Policies - Sales Policies - Sales Force Management
Sales Force Automation is part of Sales Force Management . We were talking about Sales Policies
Formulation and we talk about product police and Distribution policies.

Today we are going to talk about Pricing Policies as part of sales policies formulation.
  Policy on pricing relative to the competition such as, setting the price of product to meet
the competition, pricing above the competition, pricing under the competition.
 Policy on pricing relative to costs. Full cost pricing, promotion pricing, contribution
pricing.
 Policy on uniformity of prices to different buyers.
 Policy on list pricing.
 Policy on discounts; trade discounts, quantity discounts.

ref: sfa software leadorganizer

Posted by friend4all at 6:14 AM 1 comments Links to this post

Labels: Leadorganizer, Personal Selling, Pricing Management, Pricing Policies Management, Sales Force
management, Sales Management, Sales Policies, SFA

Monday, December 3, 2007

Distribution Policies - Sales Policies - Sales Force Management
Sales Force Automation is part of Sales Force Management we are talking here. As a part of our talk about
sales force management we were talking about Sales Policies Formulation and we talk about product police
as part of sales policies formulation.

Today we are going to talk about Distribution Policies as part of sales policies formulation.

Distribution policies (who to sell): The component policies related to distribution are :

 Channel design and channel types

 Channel remuneration, motivation and training.
 Channel principal relations.
 Channel costs.

ref: sales force automation software

Posted by friend4all at 12:26 AM 3 comments Links to this post

Labels: Distribution Management, Distribution Policies, Leadorganizer, Marketing Management,

Marketing Polices, Price Management, Sales Force management, Sales Management, Sales Policies, SFA

Wednesday, November 28, 2007

Product Policies - Sales Policies - Sales Force Management
Sales Force Management we are talking here. Sales Policies Formulation was our last post and
before that we talk different aspect of Sales Force Management including Sales Force Management
and Sales Management-Task Involved, Setting Personal Selling Objectives.
Formulating sales policies is nothing but the policies related to marketing. These sales related
marketing policies delineate the guide lines within which the effort to reach personal selling
objectives is made. There are three major types:

1. Product policies (what to sell).

2. Distribution policies (who to sell).
3. Pricing policies.

we talk each of the about types of sales policies.

1) Product Policies (what to sell):-

 Which product should find a place in the product line?

 Whether some of the existing products are to be dropped?
 Whether any new products are to be added?
 Whether product design or product quality needs to be changed?
 What models, type, size, colors and packing are to be sold?
 What kinds of product guarantees are to be given?

Market analysis for product software

From Wikipedia, the free encyclopedia

Jump to: navigation, search

Market analysis for product software consists of a number of techniques that allow an
organization to collect and disseminate information from their external environment of software
products for use in determining their market strategy and actions. For example, market analysis
helps to determine critical strategies for new software products such as time-to-market length,
creating product differentiation, creating and preserving supplier credibility, developing effective
distribution channels, forming relationships with large customers, and managing market efforts
(Igel & Islam, 2001).

This topic has its roots in marketing discipline. Many types of market research techniques are
used to gather this information. Market analysis plays a large part in explaining the current
situation of a marketing plan. Marketing is very important to new product development because
software products have a short average lifespan of five years and incur 75% of the costs during
the research and development phase (Atkinson et al., 2004). Therefore, including market analysis
information early on in the product lifecycle can ensure resources are not wasted.

It's a wide field so this article is a sample of scientific work that has linked the fields of
marketing and product software. This consists of research in the fields of general market,
customer, and competitor analysis which can be seen as processes that are hierarchically grouped
under market analysis in the meta-process model from the figure below. There are many
processes that can be used for each of these three processes to acquire information from the
market. This article only lists a selected few for each.
Contents
[hide]

 1 General Market Characteristics for Product Software

 2 Customer analysis for product software
 3 Competitor analysis for product software
 4 References

[edit] General Market Characteristics for Product Software

Analysis of general market characteristics should lead to information about the market such as
definition, size, trends, and market segmentation. This analysis is needed to help develop and
maintain marketing strategies for product software and overall business strategies. The covered
methods and techniques to obtain this information are Porter’s five forces model, risk analysis,
marketing intelligence, and marketing decision support systems.Porter’s five forces analysis is
useful for software since it highlights many important factors that will be discussed in customer
and competitor analysis such as switching costs, brand equity, product differentiation, and price
of total purchase.

 risk analysis for product software*marketing intelligence

 marketing decision support systems

[edit] Customer analysis for product software

Customer analysis is needed to predict behavior and create demand forecasts for product
software. It is also necessary in the development of new products to help select the most
profitable choice. To analyze customers, aspects such as demographics, buying motivation, and
expectations are studied. Besides basing behavior on software only, customers also look at the
network externalities from software packages, such as manuals, add-ons, and training courses, to
make purchase decision.All of these subjects are useful for determining target groups (also
known as market segments).

Moreover, this information helps determine the optimal solution to the tradeoff between time-to-
market and quality. Market analysis results are important to help establish an optimal point
between the tradeoff of time-to-market and quality. While customers would love to have a short
time-to-market with lots of features and high quality, it is impossible for the vendor to find
financial success in this scenario. Therefore, a managerial decision must be made on the
resources and objectives for new product development. Risk analysis techniques can be used to
manage this trade-off decision (Carmel, 1995). With the heavy competition in most software
product markets, gaining early market acceptance is essential to achieving firm success
(Trondsen, 1996). This is not easy to do. Product complexity and rapid changes in requirements
increase the difficulty of rushing software products to market. There are some ways to relieve
this tension of time-to-market.The best way for a software company to remain competitive, is by
finding ways to include quality assurance activities during software development and at the same
time find ways to reduce the time-to-market. This is one of the key management decisions during
product development facing software companies.

Customers can be divided into two groups, consumers (an individual) and corporate buyers.
Consumers generally buy software for personal use on their home computer. While they behave
as individuals, they are influenced by the environment and the other people around them. For
consumers, psychological traits, such as risk-taker versus risk-avoider, play a great role in major
decisions by the individual. Many other factors play a role for corporate buyers of product
software. Businesses buy product software usually as an indirect material to help them increase
the effectiveness of their process. There is a complex interaction of individual and group goals
working during the decision-making process that are constrained by available resources. A
technique for dealing with the buying process in a firm is the buying center.

Many techniques are used to provide information on customers. Some examples are:

 Customer satisfaction dimensions

 Consumer surplus for software products
 Database marketing technique for software products

[edit] Competitor analysis for product software

The final major area of analysis in market analysis is the industry itself. By knowing what is
happening with competitors, a software company can adjust strategies to be more successful in
the marketplace. Companies should know about market share percentages, strength and
weaknesses, industry structure, and strategic groupings among other things to get a good picture
of what the competitive environment is like. Strategic groupings can be in the form of alliances
between product software firms.

Competitor analysis is especially important when it comes to new product introductions. There
are many advantages, especially for revenue, for a software company that can show major
enhancement to software or be first to market (Messerschmitt & Szyperski, 2004). This makes
competitor analysis particularly important because it can help a firm decide which new product
opportunities to pursue by what the market size will be following the actions of other
competitors. Research has shown that knowledge about the competitors’ strategies is very
important to help distinguish failures from the successes in product software (Cornish “Product”,
1997). Knowing what is going around in the software industry is essential for software firms to
be successful. Firms need to know which other software products their product must work with
(eg operating systems) to provide the most usability for the customer. Therefore, developing and
sustaining of architectural control can lead to competitive advantage (Messerschmitt &
Szyperski, 2004).

One author has made a list of industry characteristics for product software that affect marketing
strategies: emerging fragmented industry, end user competition and imitation, high level of
research and development intensity, high degree of integration with hardware, high degree of
specialization, complementary with hardware and computer services, high level of maintenance
and marketing costs (Rao & Klein, 1994). Competitor analysis is available to explore these areas
and others in greater depth to help a software firm determine their future goals and strategies.

Some techniques to conduct competitor analysis are

Brand strength analysis describes efforts to determine the strength a brand has compared with
its competitors.

Contents
[hide]

 1 Software companies
 2 See also
 3 External links
 4 References

[edit] Software companies

Software brand strength is hard to measure accurately. Techniques from competitor analysis can
be used to compare companies over time. Crowley and Zajas have analyzed how to determine
the benefits of strong brand names in the software sector. Quantitative marketing research by
sampling large customer bases using adaptive conjoint techniques and qualitative marketing
research by focus groups and observing customers in stores are examples of techniques they
recommend.

Benefits to a company of good brand recognition include speeding up new product acceptance,
enabling market share penetration by advertising, and resisting price erosion. During the decision
process for software buying, usually 95% of customers buy a brand that they were previously
aware of, 90% buy a brand that they considered beforehand, and 80% buy the specific brand they
expected to. According to Crowley and Zajas, branding power measurement is an important way
that companies can keep track of their position in the software market.

[edit] See also

The American Marketing Association defines brand loyalty as:

1. "The situation in which a consumer generally buys the same manufacturer-originated

product or service repeatedly over time rather than buying from multiple suppliers within
the category" (sales promotion definition).
 2. "The degree to which a consumer consistently purchases the same brand within a product
class" (consumer behavior definition).[1]

In a survey of nearly 200 senior marketing managers, 69 percent responded that they found the
"loyalty" metric very useful.[2]

Contents
[hide]

 1 Purpose
 2 Construction
 3 Cautions
 4 See also
 5 References

[edit] Purpose
Brand loyalty, in marketing, consists of a consumer's commitment to repurchase or otherwise
continue using the brand and can be demonstrated by repeated buying of a product or service, or
other positive behaviors such as word of mouth advocacy.[3]

Examples of brand loyalty promotions

 My Coke Rewards
 Pepsi Stuff
 Marriott Rewards

[edit] Construction
Brand loyalty is more than simple repurchasing, however. Customers may repurchase a brand
due to situational constraints (such as vendor lock-in), a lack of viable alternatives, or out of
convenience.[4] Such loyalty is referred to as "spurious loyalty". True brand loyalty exists when
customers have a high relative attitude toward the brand which is then exhibited through
repurchase behavior.[3] This type of loyalty can be a great asset to the firm: customers are willing
to pay higher prices, they may cost less to serve, and can bring new customers to the firm.[5][6]
For example, if Joe has brand loyalty to Company A he will purchase Company A's products
even if Company B's are cheaper and/or of a higher quality.
From the point of view of many marketers, loyalty to the brand — in terms of consumer usage
— is a key factor.

Usage rate

Most important of all, in this context, is usually the 'rate' of usage, to which the Pareto 80-20
Rule applies. Kotler's 'heavy users' are likely to be disproportionately important to the brand
(typically, 20 percent of users accounting for 80 percent of usage — and of suppliers' profit). As
a result, suppliers often segment their customers into 'heavy', 'medium' and 'light' users; as far as
they can, they target 'heavy users'.

Loyalty

A second dimension, however, is whether the customer is committed to the brand. Philip Kotler,
again, defines four patterns of behaviour:

1. Hard-core Loyals - who buy the brand all the time.

2. Split Loyals - loyal to two or three brands.
3. Shifting Loyals - moving from one brand to another.
4. Switchers - with no loyalty (possibly 'deal-prone', constantly looking for bargains or
'vanity prone', looking for something different).

Factors influencing brand loyalty

It has been suggested that loyalty includes some degree of pre-dispositional commitment toward
a brand. Brand loyalty is viewed as multidimensional construct. It is determined by several
distinct psychological processes and it entails multivariate measurements. Customers' perceived
value, brand trust, customers' satisfaction, repeat purchase behavior, and commitment are found
to be the key influencing factors of brand loyalty. Commitment and repeated purchase behavior
are considered as necessary conditions for brand loyalty followed by perceived value,
satisfaction, and brand trust.[7] Fred Reichheld,[8] One of the most influential writers on brand
loyalty, claimed that enhancing customer loyalty could have dramatic effects on profitability.
Among the benefits from brand loyalty — specifically, longer tenure or staying as a customer for
longer — was said to be lower sensitivity to price. This claim had not been empirically tested
until recently. Recent research[9] found evidence that longer-term customers were indeed less
sensitive to price increases.

Industrial markets

In industrial markets, organizations regard the 'heavy users' as 'major accounts' to be handled by
senior sales personnel and even managers; whereas the 'light users' may be handled by the
general salesforce or by a dealer.
Portfolios of brands

Andrew Ehrenberg, then of the London Business School said that consumers buy 'portfolios of
brands'. They switch regularly between brands, often because they simply want a change. Thus,
'brand penetration' or 'brand share' reflects only a statistical chance that the majority of customers
will buy that brand next time as part of a portfolio of brands they favour. It does not guarantee
that they will stay loyal.

Influencing the statistical probabilities facing a consumer choosing from a portfolio of preferred
brands, which is required in this context, is a very different role for a brand manager; compared
with the — much simpler — one traditionally described of recruiting and holding dedicated
customers. The concept also emphasises the need for managing continuity.

[edit] Cautions
One of the most prominent features of many markets is their overall stability — or marketing
inertia. Thus, in their essential characteristics they change very slowly, often over decades —
sometimes centuries — rather than over months.

This stability has two very important implications. The first is that those who are clear brand
leaders are especially well placed in relation to their competitors and should want to further the
inertia which lies behind that stable position. This, however, still demands a continuing pattern
of minor changes to keep up with the marginal changes in consumer taste (which may be minor
to the theorist but will still be crucial in terms of those consumers' purchasing patterns as markets
do not favour the over-complacent). These minor investments are a small price to pay for the
long term profits which brand leaders usually enjoy.

The second, and more important, is that someone who wishes to overturn this stability and
change the market (or significantly change one's position in it), massive investments must be
expected to be made in order to succeed. Even though stability is the natural state of markets,
sudden changes can still occur, and the environment must be constantly scanned for signs of
these.

[edit] See also

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Presentation Description
1. Role of Marketing 2. Marketing Concepts 3. Marketing Objectives 4. Marketing Process

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Presentation Transcript
Slide 1:
The business activity of presenting products or Services in such a way as to make them desirable
PRODUCT MARKETING By Saima Yasmin Khan 2008.MS.EM.05 MSc .Engineering Management, Deptt. Of
IME University of Engineering & Technology, Lahore, Pakistan

Presentation Overview :
Presentation Overview 1. Role of Marketing 2. Marketing Concepts 3. Marketing Objectives 4. Marketing
Process

Role of product marketing :

Role of product marketing Product marketing in a business addresses four important strategic
questions: What products will be offered (i.e., the breadth and depth of the product line)? Who will be
the target customers (i.e., the boundaries of the market segments to be served)? How will the products
reach those customers (i.e., the distribution channels to be used)? Why will customers prefer our
products to those of competitors (i.e., the distinctive attributes and value to be provided)?

The Marketing Concept :

The Marketing Concept The marketing concept is the philosophy that firms should analyze the needs of
their customers and then make decisions to satisfy those needs, better than the competition. 1.
Focusing on customer needs before developing the product 2. Aligning all functions of the company to
focus on those needs 3. Realizing a profit by successfully satisfying customer needs over the long-term

Slide 5:
Step 1: EvaluationHow your product will best fit in marketplace Step 2: ReviewData analysis leads to a
clear plan of action Step 3: ExecutionProduct is managed to achieve success Marketing Objectives

Slide 6:
1.Situation Analysis 2.Marketing Objectives 4.Marketing Mix Decisions 5.Implementation & Control
3.Marketing Strategy Marketing Process

Slide 8:
1. Situation Analysis There are several frameworks that can be used to add structure to the situation
analysis 5 C Analysis company, customers, competitors, collaborators, climate. PEST analysis macro-
environmental political economic, societal, and technological factors SWOT analysis strengths,
weaknesses, opportunities, and threats

5 C Analysis :
5 C Analysis 1.Company Product line Image in the market Technology and experience Culture Goals
2.Collaborators Distributors Suppliers Alliances 4.Customers Market size and growth Market segments
Benefits that consumer is seeking, tangible and intangible. Motivation behind purchase; value drivers,
benefits vs. costs Decision maker or decision-making unit Retail channel - where does the consumer
actually purchase the product? Consumer information sources - where does the customer obtain
information about the product? Buying process; e.g. impulse or careful comparison Frequency of
purchase, seasonal factors Quantity purchased at a time Trends - how consumer needs and preferences
change over time 5.Climate (or context) The climate or macro-environmental factors are: Political &
regulatory environment governmental policies and regulations that affect the market Economic
environment business cycle, inflation rate, interest rates, and other macroeconomic issues
Social/Cultural environment society's trends and fashions Technological environment new knowledge
that makes possible new ways of satisfying needs the impact of technology on the demand for existing
products. 3.Competitors Actual or potential Direct or indirect Products Positioning Market shares
Strengths and weaknesses of competitors

PEST Analysis :
PEST Analysis 1.Political Analysis Political stability Risk of military invasion Legal framework for contract
enforcement Intellectual property protection Trade regulations & tariffs Favored trading partners Anti-
trust laws Pricing regulations Taxation - tax rates and incentives Wage legislation - minimum wage and
overtime Work week Mandatory employee benefits Industrial safety regulations Product labeling
requirements 4.Technological Analysis Recent technological developments Technology's impact on
product offering Impact on cost structure Impact on value chain structure Rate of technological diffusion
2.Economic Analysis Type of economic system in countries of operation Government intervention in the
free market Comparative advantages of host country Exchange rates & stability of host country currency
Efficiency of financial markets Infrastructure quality Skill level of workforce Labor costs Business cycle
stage (e.g. prosperity, recession, recovery) Economic growth rate Discretionary income Unemployment
rate Inflation rate & Interest rates 3.Social Analysis Demographics Class structure Education Culture
(gender roles, etc.) Entrepreneurial spirit Attitudes (health, environmental consciousness, etc.) Leisure
interests

SWOT Analysis :
SWOT Analysis Situation Analysis /\ Internal Analysis External Analysis Strengths Weaknesses
Opportunities Threats | SWOT Profile Internal Analysis Company culture Company image Organizational
structure Key staff Access to natural resources Position on the experience curve Operational efficiency
Operational capacity Brand awareness Market share Financial resources Exclusive contracts Patents and
trade secrets External Analysis Customers Competitors Market trends Suppliers Partners Social changes
New technology Economic environment Political and regulatory environment

Slide 12:
1. Specific :Be precise about what you are going to achieve 2.Measurable :Quantify your objectives
3.Achievable :Are you attempting too much? 4.Realistic : Do you have the resource to make the
objective happen (men, money, machines, materials, minutes)? 5.Timed : State when you will achieve
the objective (within a month 2. Marketing Objectives SMART objectives

3. Marketing Strategy :
3. Marketing Strategy Describe your target market Which segment? How will we target the segment?
How should we position within the segment? Why this segment and not a different one? (This will focus
the mind). Define the segment in terms of demographics and lifestyle. Show how you intend to 'position'
your product or service within that segment. strategic marketing decisions

Slide 14:
The selected strategy may aim for any of a variety of specific objectives, including optimizing short-term
unit margins revenue growth market share long-term profitability, or other goals Targets of marketing
strategy

Slide 15:
To achieve the desired objectives, marketers typically identify one or more target customer segments
which they intend to pursue. Customer segments are often selected as targets because they score highly
on two dimensions: The segment is attractive to serve because it is large, growing, makes frequent
purchases, is not price sensitive (i.e. is willing to pay high prices), or other factors. The company has the
resources and capabilities to compete for the segment's business, can meet their needs better than the
competition, and can do so profitably. The implication of selecting target segments is that the business
will subsequently allocate more resources to acquire and retain customers in the target segments than it
will for other, non-targeted customers.

Slide 16:
In conjunction with targeting decisions, marketing managers will identify the desired positioning they
want the company, product, or brand to occupy in the target customer's mind. This positioning is often
an encapsulation of a key benefit the company's product or service offers that is differentiated and
superior to the benefits offered by competitive products. For example, Volvo has traditionally positioned
its products in the automobile market in North America in order to be perceived as the leader in
"safety", whereas BMW has traditionally positioned its brand to be perceived as the leader in
"performance." Ideally, a firm's positioning can be maintained over a long period of time because the
company possesses, or can develop, some form of sustainable competitive advantage. The positioning
should also be sufficiently relevant to the target segment such that it will drive the purchasing behavior
of target customers.

:
The 4 P's of Marketing Marketing decisions generally fall into the following four controllable categories:
Product Price Place (distribution) Promotion These four P's are the parameters that the marketing
manager can control, subject to the internal and external constraints of the marketing environment. The
goal is to make decisions that center the four P's on the customers in the target market in order to
create perceived value and generate a positive response. 4. The Marketing Mix Decisions

Slide 18:
Brand name Functionality Styling Quality Safety Packaging Repairs & Support Brand Warranty
Accessories & services The term "product" refers to tangible, physical products as well as services. Here
are some examples of the product decisions to be made: PRODUCT 1.Product Decisions

Slide 19:
Pricing strategy (skim, penetration, etc.) Suggested retail price Volume discounts and wholesale pricing
Cash & early payment discounts Seasonal pricing Seasonal Bundling Price flexibility Price discrimination
Some examples of pricing decisions to be made include 2.Price Decisions

3.Distribution (Place) Decisions :

3.Distribution (Place) Decisions Distribution channels Market coverage (inclusive, selective, or exclusive
distribution) Specific channel members Inventory management Warehousing Distribution centers Order
processing Transportation Reverse logistics Distribution is about getting the products to the customer
Some examples of distribution decisions include

4.Promotion Decisions :
4.Promotion Decisions In the context of the marketing mix, promotion represents the various aspects of
marketing communication, that is, the communication of Information about the product with the goal of
generating a positive customer response. Promotional strategy (push, pull, etc.) Personal selling & sales
force Marketing communications budget Sales promotions Public relations & publicity Advertising
Marketing communication decisions include

Slide 22:
At this point in the process, the marketing plan has been developed and the product has been launched.
Results of the marketing effort should be monitored closely. As the market changes, the marketing mix
can be adjusted to accommodate the changes. Often, small changes in consumer wants can addressed
by changing the advertising message. As the changes become more significant, a product redesign or an
entirely new product may be needed. The marketing process does not end with implementation -
continual monitoring and adaptation is needed to fulfill customer needs consistently over the long-term.
5. Implementation and Control

Slide 23:
Start-up costs Monthly budgets Sales figure Market share data Consider the cycle of control Remember
that there is no planning without control. Control is vital 5. Marketing Controls

Slide 24:
The market success of any existing or new product is based on strong marketing to create and
communicate meaningful customer value. A comprehensive structure of advertising, public relations
development and product marketing strategies is required to build the life-support system for the
product success.

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