SALES AND MARKETING

1. SALES AND MARKETING LECTURE 11

2. 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)

3. 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)

4. 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.

5. Marketing concept Customer satisfaction Total company effort The Marketing concepts Profit (or another measure of long-term success) as an objective

6. 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

7. Stakeholders in marketing activities Society at large Customers Competitors Owners Suppliers Organisational Marketing Lenders Resellers Activities Special interest groups Activities Government Agencies Employees Local Communities

8. Development marketing mixes Product Price Target Market Placement Promotion

9. 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

10. Price • Concerns the amount of money or other resources marketers ask for their offerings • Pricing fundamentals • Management of pricing

11. 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

12. 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

13. Entrepreneur roles towards marketing • Choose the right and potential target market. • Conduct market survey on customer’s needs and desire. • Offer products and services with variety of types, characteristics, continuous enhancement and quality.

14. Offer reasonable and competitive pricing or cheapest among the competitors. • Made available of the product and services to the customer. • Distribute widely the promotion information and able to convince the potential customers.

15. MARKETING ENVIRONMENT

16. What is Marketing Environment? • Factors and general surrounding that effect business marketing planning and the implementation. • 2 categories: • Internal Business Environment • External Business Environment

17. 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

18. Internal Environment • Involve basic business offer to customer. • Factors that involves monitoring and control of the business as follows: • Product and services • Example: design, applicability, packaging, branding or serviceability etc. • Pricing • Pricing method, basic cost & profit margin. • Distribution • The best channel for distribution, distribution cost, distribution efficiency etc. • Promotion • Efficient promotion methods, promotion cost.

19. 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)

20. Dimensions of the marketing environment Economic Environment Political and Legal Environment Competitive Environment Customer Value and Behavior Marketing Strategy Social Environment Technological Environment Natural Environment

21. Example of questions by a Printing shop

22. Sales Method

23. 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 Customer Entrepreneur as supplier and sell to mediator Entrepreneur as mediator and sell to customer

24. 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)

25. 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.

26. Sales Forecasting

27. 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)

28. 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)

29. Factors that influence sales forecast • Starts of business operation • 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 • Effected by school holidays, changes in weather, festivals etc. • Type of business or business sector • 2 types of business • 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)

30. 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)

31. 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)

32. 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