1. Alina Rafikova
Andreas Schelter
Andrew Geoffric Hyles
Dimitur Ivanov
Johannes Streibich
Katharina Klug
Preetham Samuel
Sudharshan Sharma Ravi Sankar
Industrial Marketing Management
ANALYSIS OF THE SALES FORCE IN
GERMANY AND THE UNITED KINGDOM
2. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Introduction
Headquarters in Kronach
Consumer electronics industry
Traditional manufacturer
Premium segment
Paper
Sales force management process in Germany and the UK
New challenges
Family owned retail shops vs. huge electro chains
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3. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Agenda
1. Loewe Business Profile
2. Germany:
Market, Sales Process and Organization
3. United Kingdom:
Market, Sales Process and Organization
4. Sales Force Comparison of Germany and the U.K.
5. Suggestions for improvement
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4. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Loewe Business Profile
Founded in 1923 by Sigmund and David Loewe
Radio manufacturing company
Electrical, electronic and mechanical products and systems
Consumer and communication technology
1931 first electronic television
1979 TV with fully integrated chassis
1998 first TV with internet access
1998 first flat-screen television
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5. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Loewe Business Profile
Vision
Reach sophisticated people
Establish LOEWE as leading
premium brand for home entertainment
Mission
Provide timeless design
Incorporate latest technology
Aspiration to be user friendly
Product portfolio
Television with different technology and design
Audio systems
Speakers
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6. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Agenda
1. Loewe Business Profile
2. Germany:
Market, Sales Process and Organization
3. United Kingdom:
Market, Sales Process and Organization
4. Sales Force Comparison of Germany and the U.K.
5. Suggestions for improvement
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7. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Germany as a market for Loewe
GDP per capita: €31,500
Traditionally strong performance on the German market by Loewe
Focus on the niche market
Increasing importance of mass producers in the premium sector
In 2011 Samsung overtook Loewe regarding market shares of high-price TVs
Competitors are already able to access the high-end market
Germany as Loewe’s main source of revenues
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German market Foreign markets
76% 24%
30.6%
15.5%
9.8%
Overall LCD TV market in Germany (01-03/2011)
38.4%
€ 2,000+ LCD TV market in Germany (01-03/2012)
10.4%
30.4%
8. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Niche market entrance by competitors
previously active in only mass market
Stagnation of the German market of TV
devices
Changing market structure due to
demographic changes
Threats
Developing online market sales
Growth of the 3D TV market
Further development of comprehensive
entertainment solutions
Growth in other segments like audio and
sound systems
Opportunities
SWOT Analysis Germany
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High-end quality
Strong brand recognition
Customizable products
Superb picture quality
Broad partnering network
Strong contact to the end user
Flexibility of a medium-size company
Strengths
High research costs
Low capacities
High unit production costs
Weaknesses
10. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Loewe‘s sales concept
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Superstores
Mail-order
selling
Online sales
Other distribution
channels
Specialist retail On-site service and qualified
advice as one of Loewe’s major
USPs
Indirect, face-to-face distribution
channel
(Direct sales only at Loewe
Galleries at Harrods and Selfridges)
Customers need to be able to experience the products
and to put Loewe’s marketing promises to a test
Overriding importance of the POS experience
11. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Distinct, predefined requirements:
Exterior store design
Product range, brand & product
presentation at the POS
…
Loewe‘s retail cooperation pyramid
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110
475
607
Galleries
Partner Plus (Reference)
Partner
+Level of
Cooperation
∑ 1192
Cooperation level dependant on:
Space for Loewe products
Share in the overall sales of the
respective retailer (“Shop-in-Share”)
Annual revenues
€ 170.4 million
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Loewe‘s retail cooperation levels
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Partner Partner Plus Partner Plus Reference Galleries
5
TVs / store
10 - 12
TVs / store
20
TVs / store
< 25 %
of store sales
25 – 30 %
of store sales
70 – 80 %
of store sales
Shop fitting expenses
~ € 60.000
50
50
20
80
5-year business plan:
(Failure rate of 2-3%)
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Retailers
Feedback within the sales organization
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Loewe Handelssenat
Fairs & road shows
Area Managers
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Agenda
1. Loewe Business Profile
2. Germany:
Market, Sales Process and Organization
3. United Kingdom:
Market, Sales Process and Organization
4. Sales Force Comparison of Germany and the U.K.
5. Suggestions for improvement
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15. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Porter‘s Five Forces - United Kingdom
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Television
market
(United Kingdom)
Rivalry among existing firms
Nine main competitors
Highly polarized market
Shrinking / stagnant market
Rather similar technologies
Threat of new entrants
High share of fixed costs
Significant capital necessary
Complex retail distribution
grids
Bargaining power of buyers
No switching costs
Transparent market
Product similarities
Threat of substitute products
Internet entertainment
Tablets / smartphones
Bargaining power of suppliers
Limited number suppliers
Technological dependence
(Sharp)
HIGH
LOW
LOW
HIGH
HIGH MEDIUM
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GDP per capita € 27,700
Slow, but ongoing growth tendency in 2012/13
Highly polarized consumer
electronics market:
No member of the European Monetary Union
Currency difference and risk of potential exchange rate fluctuations:
The GBP depreciated by 35 % between Sept. 2008 and June 2009
Legal system is based on common law
The UK as a market for Loewe
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3rd largest market
in Europe
40.5%
13.9%11.9%
Market size: € 3,12 billion
Overall LCD TV market in the UK (01-03/2012)
17. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Low market share
Minor brand awareness
Weak partnering network
Limited brand experience
Weaknesses
High-end quality
Customizable products
Flexibility of a medium-size company
Strengths
Economic slowdown
Shrinking consumer electronics market
Exchange rate fluctuations
Niche market entrance by competitors
previously active in only mass market
Threats
Online growth via John Lewis
Significant profit potential
Growth in other segments like audio and
sound systems
Opportunities
SWOT Analysis United Kingdom
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18. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Loewe’s UK retailer pyramid
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10
23
32
Galleries
Partner Plus
Partner
Customer
installers
Annual revenues
€ 6.2 million
+Level of
Cooperation
∑ 143
78
19. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Customer installers in the UK
Installation professionals
Limited number of annual projects
Specialization on home automation installations
No or only small office Limited POS possibilities
50 receive direct deliveries, 28 source via nearby Loewe Galleries
Loewe needs to emphasize other advantages:
Substantial achievable margins
Easy and versatile integration into home automation systems
Exclusive brand image
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20. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Department stores as key accounts
Department stores account for the majority of revenues
in the British consumer electronics market
Shop-in-shop concept with Loewe staff
Control of the brand’s transportation, particular
products can be selected
Flagship-store effect Brand awareness
30 stores 6% of consumer electronics turnover
Employees receive a share of annual profits
Low fluctuation rates
Efficient online store (Orders linked to closest store)
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Direct sales
Indirect sales
21. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Agenda
1. Loewe Business Profile
2. Germany:
Market, Sales Process and Organization
3. United Kingdom:
Market, Sales Process and Organization
4. Sales Force Comparison of Germany and the U.K.
5. Suggestions for improvement
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22. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Recruitment- Sourcing of new talent
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Does not contract
recruitment agencies
Contracts recruitment
agencies
6-8 Loewe promoters attract
new potential workforce
Only little promotion
Cooperation programs like
“Loewe academy”
Only few collaborations
23. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Profile of prospective Sales Manager
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Ability
to sell
Commercial
background
Experience
Analytical &
Conceptual
Marketing
expertise
Technical
under-
standing
Experience
with
retailers
24. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Selection process
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Vacant job
Respective department analyses &
determines
HR department gets involved and selects
applicants for interview
Interviews are conducted by respective Sales
Manager + support by HR department
Sales Manager decides, HR assists
25. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Selection process
Potential RSM has to pass approximately three different
interviews.
Applies at least to some extent the “law of three”
New RSM has to pass a six-month probation time
No formal influence in the recruitment of its indirect
salesforce
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26. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Training- Direct Sales Force
A high emphasis on well-trained sales personnel
New RSM´s receive a first training in Kronach
RSM´s are continuously trained during the year in
technological as well as management topics
Mentor system within the company safeguards that valuable
expertise descends
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27. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Training– Direct Sales Force
First training in the UK, then more intensive trainings at the
Loewe Headquarters in Kronach
RSM get further trainings through Web sections or get
updated by their supervisors
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28. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Training- Indirect Sales Force
Main representative of the Loewe brand to the end consumer
Receive free standard product training
Aims to create a new generation of store ownership
&
“ProCollege”: Ranges from basic training to Bachelor of Arts in
“Retail Management”
3500 - 4000 attendants/ year
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29. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Training- Indirect Sales Force
Sends at least one person from its retailers to ProCollege
training sections in Germany
After they were educated in the trainings, they share their
knowledge with their subordinates and colleagues.
Customer installers are the group of retailers that attends
most trainings from Loewe.
Retailers are also trained by other retailers
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30. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Evaluation of the Sales Force
Contracts the personal targets according to the area,
opportunities and buyers power of the market
Main indicators:
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31. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Compensation- Direct Sales Force
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80%
20%
Renumeration
33. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Compensation- Indirect Sales Force
Remuneration = high margin
Rewards galleries with awards
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34. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Geographical sales organization
Area
Manager 1
Area
Manager 2
Area
Manager n
Store 1
Store 2
Store 3
Store n
…
…
…
Loewe’s German sales organization
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North / East South / West B-to-B Customers
…
Hotels
Hospitals / Clinics
Loewe Germany
MANAGING DIRECTOR
SALES DIRECTOR
Board of
Directors
Key Accounts
5 % of sales
35. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Customer-oriented sales organization
Loewe’s UK sales organization
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Loewe UK Ltd
MANAGING DIRECTOR
SALES DIRECTOR
North
Partner
Plus
Partner
South
Customer
Installers
Galleries
Partner
Plus
Partner
Key
Accounts
International
B2B Customers
Loewe Germany
MANAGING DIRECTOR
20 % of sales
36. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Agenda
1. Loewe Business Profile
2. Germany:
Market, Sales Process and Organization
3. United Kingdom:
Market, Sales Process and Organization
4. Sales Force Comparison of Germany and the U.K.
5. Suggestions for improvement
28.01.2016 42
37. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Online solutions
Problems e-commerce:
Totally transparent
Anonymous internet mass market
No personal customer contact
Service issues
Example: John Lewis
Link of the online orders directly to the department store
Online store of retail business partners
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38. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Online solutions
Online store on LOEWE’s website
Control on presentation and service
Link to closest business partner
Distribution grid in Germany
Advantages e-commerce:
Possibility to order 24/7
Possibility to order from any places
Time saving
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39. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Online solutions
Combination of e-commerce with personal service
Provision of an online e-mail contact
Special mobile version of the website
Use social media
Free marketing possibility
Target group
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40. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Online solutions
Age distribution of Facebook users in June 2012
Source: http://de.statista.com/statistik/daten/studie/39471/umfrage/Nutzer-von-Facebook-nach-Alter/
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13 – 24 years
25 – 34
35 – 44
45 – 54
55+
41. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Presence at key locations Also other retail
Enhancing brand awareness in the UK
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“The world’s leading international
luxury fashion destination, a one-
stop-shop for the most exclusive
brands in fashion, beauty and food.”
LONDON
BRISTOL
DUBLIN
MANCHESTER
EDINBURGH
BIRMINGHAM
LEEDS
Department stores in highly
frequented locations
Specialization on luxury goods
POS-stands in the entrance hall
Win-win situation: Dept. stores & Loewe
Implementation of QR-Codes
42. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Enhancing brand awareness in the UK
Expand the distribution grid in the UK
Flagship stores / Loewe Galleries at key locations
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Region Millionaires Growth until 2020
London and South East 287,000 35%
Midlands 92,000 30%
North West 64,000 35%
South West 56,000 30%
Yorkshire 44,000 28%
Scotland 40,000 38%
Wales 22,000 27%
North East 14,000 46%
Wealth in 2010 and predicted growth until 2020:
5
43. Hyles . Ivanov . Klug . Rafikova . Samuel . Schelter . Sharma . Streibich
Enhancing brand awareness in the UK
Expand the distribution grid in the UK
Flagship stores / Loewe Galleries at key locations
28.01.2016 49
Edinburgh / SCO
Scottish capital
UK's favorite domestic holiday
alternative to London
(4m visitors / year)
“Compact” city center
Princes street
44. Alina Rafikova
Andreas Schelter
Andrew Geoffric Hyles
Dimitur Ivanov
Johannes Streibich
Katharina Klug
Preetham Samuel
Sudharshan Sharma Ravi Sankar
Industrial Marketing Management
THANK YOU FOR YOUR ATTENTION