Strategi pemasaran

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Strategi pemasaran

  1. 1. STRATEGI PEMASARAN Arriffin Mansor 1
  2. 2. Value Creation Model: Value Creation/ Destruction Operating Income - ( Total Assets x WACC )Gross Profit - Cost Structure Current Assets + Fixed Assets + Long Term LiabilitiesRevenues - Cost of Goods Working Capital + Other Assets & Liabilities Inventory + Debtors - Creditors 2
  3. 3. Value Creation/ Destruction Operating Income - ( Total Assets x WACC )Gross Profit - Cost Structure Current Assets + Fixed Assets + Long Term LiabilitiesRevenues - Cost of Goods Working Capital + Other Assets & Liabilities Inventory + Debtors - Creditors3
  4. 4. THE STRATEGIC GAPS• HOW MUCH GROWTH IS LEFT IN MY CURRENT MARKETS? CUSTOMERS?• WHERE WILL MY FUTURE GROWTH COME FROM?• HOW WILL I CAPTURE MARKET SHARE?• WHAT ARE THE COMPONENTS OF MY DIFFERENTIATION STRATEGY?• WHERE DO I GENERATE PROFITS? WHERE COULD I GENERATE PROFITS?4
  5. 5. P Which segments / customers will we CUSTOMER TARGETS O concentrate on ? S I T Whom will we COMPETITOR I challenge for these customers? TARGETS O N I N What incentives will we provide to get them to CORE STRATEGY G buy from us… rather than from competitors?5
  6. 6. THE ACCOUNT PORTFOLIO Strong Weak High Selectively Invest / Grow Invest ACCOUNT ATTRACTIVENESS Manage for Maintain Cash /• Size Withdraw• Growth Low• Profitability BUSINESS STRENGTHS• Location• Purchasing criteria and processes • Product range• Current suppliers • Product efficacy• Status of customer • Service quality (prestige) • Price • Technical services • Reputation/image • Past experience • Quality of sales staff • Quality of relationships 6
  7. 7. ACCOUNT PORTFOLIO ANALYSIS Strong Strength of Position Weak High KEY TARGET Attractiveness: Attractiveness: Accounts are very attractive since they Accounts are potentially attractive offer high opportunity and sales since they offer high opportunity, but organization has strong position. sales organization currently has weak position with accounts. Sales call strategy: Sales call strategy: Accounts should receive a high level of Selected accounts should receive a sales calls since they are the sales high level of sales calls to strengthen organization’s most attractive the sales organizations position. accounts. AccountOpportunity MAINTENANCE WHY BOTHER Attractiveness: Attractiveness: Accounts are somewhat attractive since Accounts are very unattractive since sales organization has strong they offer low opportunity and sales position, but future opportunity is organization has weak position. limited. Sales call strategy: Sales call strategy: Accounts should receive no field sales Accounts should receive a moderate calls and a minimum of inside sales level of sales calls to maintain the resources. current strength of the sales organization’s position. And, efforts Low should be made to replace field sales calls with telephone sales.7
  8. 8. ACCOUNT SEGMENTATION AND PRIORITIZATION High KEY ACCOUNTS TARGET ACCOUNTS (Your competition’s Key Accounts) • 10-20% of your account base • Gets very little attention ACCOUNT ATTRACTIVENESS • 80% of your GP$ • Receives less than 50% of your resources MAINTENANCE ACCOUNTS WHY BOTHER? ACCOUNTS • 40-45% of your account base • 30-40% of your account base • Less than 5% of your GP$ • 10-15% of your GP$ • Receives 20-30% of your • Receives 30-40% of your resources resources • Creates 90% of your Low ―headaches‖8 Strong YOUR STRENGTH OF POSITION Weak
  9. 9. 10 LANGKAH RANCANGAN PEMASARAN 9
  10. 10. 3 ways of doing business – M. Porter Mass Product production Differentiation and cheap and premium pricing pricing strategi strategy Niche Marketing 10
  11. 11. 5 Langkah Rancangan Pemasaran` 11
  12. 12. Matlamat PerniagaanPTJ Pusingan Aset Gandaan Ekuiti • PTJ • PTA • PTE 12
  13. 13. CORPORATE PERFORMANCE ROS ROA ATOROE ASSETS EM EQUITY 13
  14. 14. PEMASARAN Rancangan Rancangan Pemasaran Jualan Strategi Pemasaran Rancangan KeuntunganMatlamat Pemasaran 14
  15. 15. 5 Langkah Rancangan Pemasaran`1 • Titik pulang kos1 • Matlamat Pemasaran • Modal kerja dan Modal Tetap2 • Strategi Perniagaan • Segmentasi ,Sasaran dan profile pelanggan3 • Saiz dan nilai pasaran • Strategi 4 P4 • Positioning atau perletakan • Strategi Pemasaran melaui BSC perspektif5 • Metrik Pemasaran • Belanjawan Pemasaran6 15
  16. 16. STRATEGI PEMASARAN • Margin premium atau murah Harga • Kuantiti banyak x margin kecilProduk •Kualiti atau biasa •Faedah produk diterang dgn jelas • Media dan saluran yang sesuaiPromosi • Mesej yang sesuai • kesesuaianSaluran • Kos saluran 16
  17. 17. CashCREDITORS Working Stock capital debtors 17
  18. 18. Kehendak Manusia SELF ACTUALISATION EGO SOCIETY SECURITY BASIC 18
  19. 19. Interaksi Pemasaran PelangganOrganisasi Produk 19
  20. 20. Penetapan Harga 20
  21. 21. PEMASARAN STRATEGIK1. Senario Ekonomi Malaysia2. Campuran Pemasaran3. Analisis Pemasaran (SWOT & Audit)4. Kajian Kes5. Penyediaan Pelan Pemasaran Strategik6. Pembentangan 21
  22. 22. PEMASARAN STRATEGIKSenario Ekonomi Malaysia• Perniagaan ialah 1 unit drpd satu sistem ekonomi• Perubahan dalam sistem yg besar beri kesan kpd unit-unit sekeliling• Kepekaan kpd senario ekonomi semasa beri kemampuan untuk bertindak ikut rentak sealiran dgn ekonomi 22
  23. 23. PEMASARAN STRATEGIKPetunjuk-petunjuk utama ekonomi (key economic indicators):1. KNK (GDP)2. Indeks Komposit BSKL3. Belanjawan Negara4. Polisi Fiskal5. Polisi Kewangan 23
  24. 24. PEMASARAN STRATEGIKSenario Ekonomi Malaysia1. Kepentingan Usahawan2. Dunia Tanpa Sempadan3. K-Ekonomi4. Islam5. AFTA 24
  25. 25. PEMASARAN STRATEGIKApa itu Pemasaran Strategik?• Suatu usaha untuk mempertahankan keuntungan dan kelebihan kompetitif melalui satu Strategi Pemasaran yang komprehensif dan terkini• 3 elemen pokok dlm Pemasaran Strategik ialah S.T.P (segmentation, targeting, & positioning) 25
  26. 26. Sales Force Management Fall 1999 26
  27. 27. Product Life Cycle Impact: The Value Added Wall for HPBA Companies Value AddedSales Services Price Product Profits 27 Time
  28. 28. Profit Margin Management Sales Gross Margin Net Profit Net Profit Margin ÷ Cost of Goods Sold Sales Total Expenses28
  29. 29. Managing Assets: Inventory and Accts Rec. are the keys Inventory Sales Asset Accounts Turnover Current Assets Receivable ÷ Total Assets Fixed Other Current Assets Assets29
  30. 30. Calculating Return on Assets Sales Gross Margin Net Profit Net Profit Margin ÷ Cost Of Goods Sold Return on Assets Sales Total Expenses x Inventory Net Profit/ Sales Total Assets Asset Turnover Current Assets Accts Rec. ÷ Total Assets Fixed Other Current Assets Assets30
  31. 31. Sales management - Outline• Role of the sales force in corporate strategy• Trends in personal selling and sales management• Functions of the salesperson and sales manager• Course overview 31
  32. 32. Strategic Leverage of the Sales Force• Customer focus• Enhances customer loyalty• Source of competitive advantage 32
  33. 33. Enhances Customer Focus• Allows a targeted market segment approach – one customer at a time – customize sales calls and presentations by needs – important source of market knowledge and customer needs assessment 33
  34. 34. Develops Customer Loyalty• Creates high switching costs – salesperson (knowledge, expertise, relationship) creates product/service differentiation, particularly when competitors’ products deliver the same basic benefits• Loyalty reduces the customers’ price sensitivity 34
  35. 35. Source of Competitive Advantage• Creates a barrier to entry – costs of creating a sales force – market access• Creates a medium-to-long term competitive advantage – unlike advertising (medium-term) or pricing (short-term) 35
  36. 36. Trends in Personal Selling• Nature of the sales job: – Informed consultant: • knowledge of customers, industries and applications – Process (rather than event) driven – Team player – Customer advocate/Market feedback – Integration of promotional mechanisms (e.g. DTC) 36
  37. 37. Trends in Personal Selling• Nature of the sales manager’s job: – Decentralized management; greater span of control – Automation – Database targeting/customer data – Evaluated on team performance (rather than individual performance) – Reward in many ways (not just $$) 37
  38. 38. Importance of Effective Sales Management• Expensive part of marketing strategy• Cost of call: – Overall average: $157 – ($239 for a value-added selling environment) 38
  39. 39. Sales and Marketing Management39
  40. 40. Drivers Of/Barriers to Change What’s driving you to What’s stopping you from making these make these changes? changes?40
  41. 41. DIFFERENTIATING CUSTOMER SEGMENTS Customer SegmentELEMENT OFSTRATEGY KEY / TARGET MAINTENANCE WHY BOTHER• Order Processing Top priority. Secondary priority. Lowest priority.• Technical Support Top priority Secondary priority. Not available.• Training Yes. Yes. Hourly fee. Not available.• Fill Rates X% Y% 100%. No backorders ship complete.• Returns Yes. No restocking Yes, restocking fee Only if over $Y, fee. of $X. restocking fee of $X.• On-time Stock items same Stock items same Stock items shipped Shipment day if order place day if order placed within 48 hours. by 4:00 p.m. before 1:00 p.m.• Product Mix Stock & non-stock Stock and non stock Stock, in stock only. from stock & non- from stocking stock suppliers. suppliers only.• Non-stock Yes. Yes, from stocking No non-stocks. Sourcing suppliers only.• Minimum Order No minimum. No min. on stock $200. Size 41 items; $200 minimum on non-stock items.
  42. 42. Perspectives on the Sales Management Function Traditional View New View Manager of Scarce Do-er Resources Responsible for Volume Profit Planning Long Term and Short Short Run Term Customer Types and Individual Customers Segment Differences Field Work Rather Systems for Market Than Desk Work Analysis, Planning and Control Driver Leader Developer of Sales Developer of People42
  43. 43. Changing Business Environment TheLeads to Selling Changing Selling Ballgame EnvironmentResulting in  Better Understanding of Customer’s Needs Harder to Get and Hold Customers and It Costs  Better Selectivity More!  Better Selling Strategies  Better Time & Territory Implications Management 43
  44. 44. THE INTEGRATED MODEL Sales Force Drivers People and Culture Sales Force Activity Customer Results Company Results44
  45. 45. PURPOSE OF A BUSINESS• Purpose of a business is to create a customer.• Profit is only a test of management decision making.• Profit is required to maintain the customer.• A business only has two primary functions, sales and innovation, everything else is just cost. INNOVATION MARKETING The world according to Peter Drucker45
  46. 46. THE LOGIC Clarifying and Translating the Focus and Strategy  Clarifying the focus  Gaining consensusCommunicating and Strategic Feedback andLinking Learning  Communicating and Clarifying the Focus  Articulating the focus and educating  Setting goals BALANCED SALES TEAM strategy  Facilitating strategy  Linking rewards to review and learning performance measures Planning and Target Setting  Setting targets  Aligning strategic initiatives  Allocating resources  Establishing milestones 46
  47. 47. STRATEGY DEVELOPMENT Strategic Value Customers Extrinsic Value Customers (leveraging supplier’s (buying beyond product value) enterprise competencies) Create Create new extraordinary value through value for a few INCREASE sales efforts very large BENEFITS customers REDUCE Lessen cost COST and effort of acquisition Intrinsic Value Customers47 (buying on product value alone)
  48. 48. Functions of the Salesperson• Prospecting• Communicating: two-way• Allocating & coordinating: company resources, time• Servicing• Helping define marketing strategy 48
  49. 49. Functions of the Sales Manager• Communicate expectations: tell salespeople what you expect them to do• Make the work doable: an important component o the SM role here is removing obstacles to performance• Evaluate and give feedback: reward successful behavior, apply corrective actions for behavior that is not acceptable 49
  50. 50. Course Overview• Effective Personal Selling• Strategic Issues• Tactical Issues• Industrial Settings – informed buyers – discipline of repeat purchase – often genuine differentiation is possible 50
  51. 51. PEMASARAN STRATEGIKPetunjuk-petunjuk utama ekonomi (key economic indicators):1. KNK (GDP)2. Indeks Komposit BSKL3. Belanjawan Negara4. Polisi Fiskal5. Polisi Kewangan 51
  52. 52. Pyramid Metrics 52
  53. 53. Course Overview (continued)• Effective Personal Selling – What is effective personal selling? – Business to business selling and the Buyclass Framework (Case: Lawford Electric) 53
  54. 54. Course Overview (continued)• Strategic Issues – Vertical Integration (Case: Jamestown) – Control Systems – Structuring the Sales Force(Cases: Wright Line & Siebel Systems – Sales Force Allocation: Deployment & Organization (Case: Syntex) – Territory Assignment & Design – Strategy for Optimal Sales Productivity 54
  55. 55. Course Overview (continued)• Tactical Issues – Sales Analysis (Case: Milford A) – Performance Evaluation (Case: Milford B) – Compensation (Case:Mary Kay Cosmetics) & Motivation (Case: IMAGE) – Selection (Case: IDS) & Training – Information Systems/Sales Force Automation (Case: Profiling at National Mutual) – Sales Force Automation 55
  56. 56. Personal Selling“Everybody lives by selling something.” Robert Louis StevensonCareers in Sales High demand but not a career for everybody, but, good experience early in any career… Negative perceptions $…$…$ 56
  57. 57. Personal Selling 7 stepsSelling Process 1. Prospecting 2. Customer Profile 3. Approaching 4. Presenting/Demonstration 5. Handling Objections and Questions 6. Closing 7. Follow-up 57
  58. 58. Personal SellingSales force activities – Cultivating new clients – Communication – Selling – Servicing – Information gathering – Allocating scarce resources 58
  59. 59. Personal SellingObjectives Units or $ sold Market share by territory Target profit per sale Maximize sales per $ cost Maximize number of sales calls per period …but these mostly conflict…? 59
  60. 60. Personal SellingSalary versus Commission control…incentive security…fairness simplicity…flexibility 60
  61. 61. Personal Selling4 E’s 1. Energy for long hours 2. Enthusiasm for job, product 3. Empathy for customer 4. Ego, victory, desire to win 61
  62. 62. Blowing in the Wind VideoAnnoying Sales Promotion Works 62
  63. 63. Cost-Volume-Profit Graph Total RevenueRevenue Profit Total Cost Y Loss X Unit sold X = Break-even point in units Y = Break-even point in revenue 63
  64. 64. Profit-Volume GraphProfit I = (P - V)X - F Slope = P - V Units Loss Break-Even Point In Units -F 64
  65. 65. Example 3The Rapid Meal has two restaurants that are open 24hours per day. Fixed costs for the two restaurantstogether total $450,000 per year. Service varies from acup of coffee to full meals. The average sales check foreach customer is $8.00. The average cost of food andother variable costs for each customer is $3.20. Theincome tax rate is 30%. Target net income is $105,000. 65
  66. 66. Example 3 Cont’dCompute the total dollar sales needed to obtain thetarget net income.How many sales checks are needed to break even?Compute net income if the number of sales checksis 150,000 66
  67. 67. Multiple-Product ExampleAssume the following: Regular Deluxe Total PercentUnits sold 400 200 600 ----Sales price per unit $ 500 $750 ---- ----Sales $200,000 $150,000 $350,000 100.0%Less: Variable expenses 120,000 60,000 180,000 51.4Contribution margin $ 80,000 $ 90,000 $170,000 48.6%Less: Fixed expenses 130,000Net income $ 40,000 =======1. What is the break even point?2. How much sales revenue of each product must be generated to earna before tax profit $50,000? 67
  68. 68. Pulangan terhadap ekuiti Gandaan Pusingan Ekuiti Pulangan Aset terhadap Jualan 68
  69. 69. Pulangan Prestasi Utama PTE PTA PTJ 69
  70. 70. KEY PERFORMANCE INDICATORS A/E = J/A = GANDAAN PUSINGAN HUTANG MODALU/J = UNTUNG BERSIH 70
  71. 71. KEY PERFORMANCE INDICATORS A/E = J/A = GANDAAN PUSINGAN HUTANG MODALU/J = UNTUNG BERSIH 71
  72. 72. Maximising ROS strategies 72
  73. 73. Maximising ROA strategies 73
  74. 74. Maximising ROE strategies 74
  75. 75. Costs plus profitVariable Fixed Profit Price costs costs 75
  76. 76. Harga Pengilang 76
  77. 77. Harga Jual 77
  78. 78. Kos Overhead Syarikat 78
  79. 79. Overhead Kilang 79
  80. 80. OVERHEAD JUALAN 80
  81. 81. Total Capital 81
  82. 82. Financial Leverage: Assets Liabilities82
  83. 83. Harga Kilang 83
  84. 84. Harga Produk 84
  85. 85. Value Chain 85
  86. 86. Strategy Map: Capture a Cause Effect Relationship from the Bottom Up Stakeholder Improved More rapid and Returns on accessible Investments services Internal Process Economic Reduce Re-Activities Establish Web Model Process thru ABC/M Based Self Services& GrowthLearning Expand Global Leadership Knowledge Facility Reach Development Management Investments Facilities and IT Human Capital Fixed Assets Infrastructure 86
  87. 87. Managing Assets: Inventory and Accts Rec. are the keys Inventory Sales Asset Accounts Turnover Current Assets Receivable ÷ Total Assets Fixed Other Current Assets Assets87
  88. 88. Perspektif BSC 88
  89. 89. Perspektif BSC 89
  90. 90. Perspektif BSC Kewangan Pelanggan Proses DalamanPekerja dan Kemahiran 90
  91. 91. KOS DAN HARGA 91
  92. 92. Strategi PemasaranPerspektif KPIs 92
  93. 93. Matlamat Pemasaran • untungPTJ • Jualan • JualanPTA • Jumlah Aset • AsetGE • Ekuiti 93
  94. 94. Produk isi Intangible Jaminan Bungkusan 94
  95. 95. Kualiti Produk keselamatan economy 95
  96. 96. STRATEGI PEMASARAN PULANGAN TERHADAP Kurangkan kos tingkatkan JUALAN jualanPULANGAN PUSINGAN Jualan tunai dan belianTERHADAP ASET secara kredit EKUITI GANDAAN Sewa jangan beli EKUITI Jika beli dengan pinjaman bank 96
  97. 97. Rancangan Pemasaran 97
  98. 98. PEMASARAN Strategi PerletakanSegmentasi 98
  99. 99. Marketing Plan Marketing Product Place Price Promotion Objectives Have web Increase Reduce Price of New Product Penang basedMarket Share product A promotion Gain New Add benefits Direct selling Higher margin networking Customers Market Better Existing klang Reducing Price CRM Penetration brochures valle channel by 3% Using webImprove Sales Reduce Change packing Increase Price based Margin marketing costs marketing 99
  100. 100. Strategi Pemasaran perspektif BSC • Tingkatkan • Tambah Pulangan Pelanggan • Syer pasaran • Nilai Jualan Matlamat Kepuasan Kewangan Pelanggan Pekerja & Proses Latihan Dalaman • Kompetensi • Masa • Teknologi penyampaian baru • Kos menurun 100
  101. 101. Rancangan Pemasaran• Analisis kos, volum dan untung.• Belian atau harga kilang• Tunai + penghutang + stok• Kos Penghantaran• Overhead Pemasaran 101
  102. 102. 14 Langkah Rancangan Pemasaran Analisis Kos Strategi Matlamat Segmentasi volum dan Pemasaran – Pemasaran Pelanggan untung 4ps Belanjawan 7 Langkah Pengurusan Perletakan Belian atau menjual Jualan Produk harga kilang Ramalan Kos Overhead Modal Kerja Jualan Bualanan Penghantaran Pemasaran Belanjawan Metrik Pemasaran Pemasaran 102
  103. 103. COMPTENCY DEVELOPMENT Identified Assessment Areas of Role competencies result improvement Action planDr. MG Jomon, XIMB
  104. 104. Current Sales Trend 104
  105. 105. Musical stairs 105
  106. 106. Soalan soalan jika ada 106
  107. 107. “Bottom Line” A business can no longer rely on the uniqueness of their products to retain customers or grow new sales revenue. Customers will align their business with strategic suppliers who understand their business and bring a unique offering which adds value by impacting their ―bottom line‖ through increased sales revenue or reduced costs107
  108. 108. Inadequate Sales Performance Aware of what No How can goals and standards was expected be made clear? Yes Aware of own No How can the salesperson performance be sensitized? Yes Uncontrollable Yes How to avoid, eliminate, negative factors or ignore? No Yes Lack of ability How to train? No Yes Lack of want-to How to motivate?108
  109. 109. Evaluating Sales Performance Data Analysis Information Observation Sources Interview109
  110. 110. Possible Situations... Fix the Causes of the problem problem are fixable (ROTI) Causes of the problem Forget the are fixable, but problem not work fixing or Terminate Causes of the problem the person are not fixable110
  111. 111. THE SALES REPRESENTATIVE THINKS…1. What is expected of me?  The Planning Process Priorities Programs Processes The Numbers2. How am I doing? 3. How do I need to change? The Feedback Process The Adjustment Process Metrics Corrective actions Performance Appraisals Continuous Improvement Field coaching KIP’s, PIP’s Meetings  New planning for the Compensation future111
  112. 112. QUOTES FROM PERFORMANCE APPRAISALS• ―This individual has talents but has kept them well hidden.‖• ―Combs his hair to one side and appears rustic.‖• ―A quiet, reticent, neat appearing individual— industrious, tenacious, diffident, careful, and neat. I do not wish to have this person as a member of my staff at any time.‖• "His leadership is outstanding except for his lack of ability to get along with his subordinates.‖• ―He hasn’t any mental traits.‖• ―He needs careful watching since he borders on the brilliant.‖• ―Believes sincerely in the power of prayer and it is astonishing to note how many times his prayers are answered.‖• ―He never makes the same mistake twice but it seems to me that he has made them all once.‖• ―Gives the appearance of being fat due to the tight clothes he wears.‖ 112
  113. 113. QUOTES FROM PERFORMANCE APPRAISALS–2 • ―Is keenly analytical and his highly developed mentality could best be used in the research and development field. He lacks common sense.‖ • ―An independent thinker with a mediocre mentality.‖ • ―Recently married and devotes more time to this activity than to his current assignment.‖ • ―Tends to create the impression of unpositive personality through needless and undiscerning gentility and soft spokenness.‖ • ―Of average intelligence except for lack of judgment on one occasion in attempting to capture a rattlesnake for which he was hospitalized.‖113
  114. 114. The Key Challenge G.M. Sales Productivity = C.O.S. Where: G.M. = Gross Margin Dollars C.O.S. = Cost of Sale in Dollars Implications 1. Less discounting. 2. Selling higher margin products. 3. Selling more product lines to each customer (cross-selling). 4. Being more selective and discriminating in qualifying potential buyers. 5. Better use of selling time (deployment).114
  115. 115. SUMMARY Sales Efficiency Sales EffectivenessDefined Getting in front of Using skills and abilities customer at minimum to maximize sales cost potentialMechanisms Working harder: Working smarter:for improving – time management – coaching – incentives – skills training – call reports – account strategies – territory designMeasures – penetration – success rates – call rates – repeat business – cost / call – sustainable margins115
  116. 116. MOVING TO ACTION • Efficiency: – Can be driven top down • Effectiveness: – Acting differently – Hard to drive top down – Salespeople and managers do it Source: The Klompmaker Consulting Group116
  117. 117. Logistics – A Strategic Perspective• Measured by Cost• Technology allows firms to manage inventory they cannot see and sometimes do not own• Disintermediation• Creating wholesaler value117
  118. 118. Two Views of Inventory Management Velocity Level118
  119. 119. Inside the Buyer’s Mind• What do you offer?• What do you offer that no one else has?• What do you offer of value?• Does it really fill my need?• Is it real world?• Will it work?• Will it work in our environment?• How will it impact our people?• How could it impact our success?• Will senior management buy in?• Will my people use it?• How will we produce as a result of the purchase?• How will we profit as a result of the purchase?• Do I trust the people I’m buying from both as people and for their ability to deliver what they promise?• How will it come together?• How do we buy it?• Do I have the comfort to sign off now?119
  120. 120. ABC Analysis Based on Annual Dollar Volume Annual Dollar Volume Percentages 1 2 3 4 Item Annual Usage Annual Usage % of Total Unit Cost (units) (dollars) Dollar Usage 1 4.00 1,000 2 2.50 1,500 3 3.00 5,000 4 30.00 4,000 5 31.00 10,000 6 1.20 8,000 7 25.00 1,500 8 20.00 100 9 8.00 625 10 6.00 2,000 Total 100% 1. Now rank the answers from the highest annual dollar usage to the lowest: 1 2 3 4 Item Annual Usage % of Total Cumulative % Classification (dollars)120

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