Marketing Management
Dealing with Competition
In order to deal with the extreme competition in the market we have to keep in mind and analyze the following Competitive Forces and Threats:
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Threats of intense segment rivalry:--- A segment is unattractive if it already contains numerous, strong or aggressive competitors, Because there will be price wars, advertising battles and new product introduction will make it expensive to compete and vice versa. Threats of new entrants: --- The most attractive segment is one in which entry barriers are high and exit barriers are low. Few new firms can enter the market and poorly performing firms can easily exit. When both entry and exit barriers are high, profit potential is high, but firms face more risks because poorer performing firms stay in the market and fight it out. When both entry and exit barriers are low, firms easily enter and leave the industry. But the returns are normally low. The worst case is when entry barriers are low and exit barriers are high, here firms enter in good time but cannot leave in bad times. Threats of substitute products--- A segment is un-attractive when there are actual substitutes for the product. Threats of buyers growing bargaining power: --- A segment will also be unattractive if buyers possess strong or growing bargaining power. A better defense is to offer new and superior products. Threats of suppliers growing bargaining power: --- a segment is also un-attractive if the supplier in position to raise prices or decrease the quantity supplied. The best defense is to build win-win relationship with suppliers or use multiple supply sources
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Marketing Management
Identifying and Analyzing Competitors:
Normally we define competitors as companies that satisfy the same customer needs, e.g., a customer who buys a word processing package really wants writing ability-----a need that can be satisfied by pen, pencil and typewriter. Sometimes we do not identify our competitor at the right way and miss many opportunities, e.g., Coca-cola focused on its soft drink business, but ignored others like juices, coffees etc Who the competitors are? What are their products? What are their strategies? They are successful or not? How we will react to competitors? Etc Once a company identifies its primary competitors, it must ANALYZE and ascertain their strategies, objectives, strengths, and weaknesses, which is called SWOT Analysis. Competitors strive to maximize profits, sales growth (volume, revenue), market share, technological leadership, service leadership, or mix of these. The company must also monitor competitors expansion plans.
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Marketing Management
How to Manage Sales Force
Salespeople are notoriously difficult to manage. They hate details and paperwork, and they avoid sales managers like the plague. Office time equals non-selling time, because for them selling is a customer contact sport, and thus finding the time to manage them can be difficult. Good sales managers maximize the productivity of their salespeople in spite of these challenges.
Instructions
1. Evaluate your sales process. Ensure that it covers all of the necessary steps in selling your company's products or services and is easy to track, manage and communicate. 2. Assess your existing salespeople. Match the number of salespeople with your company's sales objectives, territories and average sales per rep. Identify each
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salesperson's level of knowledge about your business and industry and general sales ability. Remember that sales performance is a function not only of the individual, but also of the product being sold, the assigned territory and general market conditions. 3. Fix any deficiencies in your sales team. Let go of those unproductive salespeople who do not possess the desire or ability to improve. If necessary, hire new sales reps that fit your company's culture and objectives. Invest in sales training for all of your salespeople, and create a mentoring program that leverages the skills and experience of your top producers. 4. Optimize your compensation plan. Make sure your compensation plan is in line with industry standards, easy to understand and consistently applied. Focus it on rewarding sales performance according to your company's product or service, sales process and general culture. For your hunters, or salespeople who seek out and identify new sales opportunities, create a plan that's weighted toward commissions. For your farmers, on the other hand, who primarily manage existing customers; create a plan with a larger base salary. 5. Motivate your salespeople. In addition to monetary compensation, salespeople tend to be highly competitive and respond well to direct challenges. Maintain a program of sales incentives and contests that both creates healthy competition within your sales team and provides real rewards for extra efforts. 6. Track performance. Keep accurate records of performance by sales rep, customer and product or service. Use realistic metrics to identify which salespeople are effective to ensure that your new business pipeline is maintained. Use a customer relationship management (CRM) application to track sales and provide feedback to management on your sales team's performance. Also periodically attend sales meetings with your salespeople, to evaluate their selling skills and company knowledge.
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Marketing Management
7. Provide ongoing feedback. Meet with your salespeople at regular, planned intervals to go over their sales numbers, active opportunities, lost deals and any other issues that arise. Help your salespeople identify strengths and weaknesses in their sales tactics, and work with them to continuously improve. Ensure that no sales rep is surprised by the content of these meetings by also providing ongoing information as necessary.
Product Line
A product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges. For example, Nike produces several lines of athletic shoes, Motorola produces several lines of telecommunications products, and AT&T offers several lines of long-distance telephone services.
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Marketing Management
Product Mix
A product mix (or product assortment) consists of all the product lines and items that a particular seller offers for sale. Avons product mix consists of four major product lines: cosmetics, jewelry, fashions, and household items. Each product line consists of several sub-lines. A companys product mix has four important dimensions:
Width, Length, Depth, and Consistency.
Product mix width refers to the number of different product lines the company carries. For example, Procter & Gamble markets a fairly wide product mix consisting of many product lines, including paper, food, household cleaning, medicinal, cosmetics, and personal care products. Product mix length refers to the total number of items the company carries within its product lines. Procter & Gamble typically carries many brands within each line. For example, it sells eleven laundry detergents, eight hand soaps, six shampoos, and four dishwashing detergents. Product line depth refers to the number of versions offered of each product in the line. Thus, Procter & Gambles Crest toothpaste comes in three sizes and two formulations (paste and gel). Finally, the Consistency of the product mix refers to how closely related the various product lines are in end use, production requirements, distribution channels, or some other way. Procter & Gambles product lines are consistent insofar as they are consumer products that go through the same distribution channels. The lines are less consistent insofar as they perform different functions for buyers.
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