CATALOGO MF 650 COMPLETO COM PEรAS DE TRANSMISSAO
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Chapter 2 sales and marketing strategy of sm es
1. SMALL AND MEDIUM ENTERPRISES (SMEs):
SALES AND MARKETING STRATEGY
Chapter 2
Sales and Marketing SMEs
Prepared Prof. (Dr.) Kao Kveng Hong
Ph.D., D.Litt., D.Sc.
Date: 06th July, 2014
4. ๏ Sales and Marketing relationship:
๏ Selling is an art and not a science, Necessary skills can be
increased by analysis and training.
๏ Personal selling is the part of Marketing, called marking
which is complemented by advertising and sales promotion.
๏ Without marketing one would not have prospects or leads to
follow up with, but yet without a good sales technique and
strategy, closing rate of a seller may depress him. The key to
success in marketing and in sales is balance (Lake, 2008) .
๏ The purpose of marketing is doing everything to reach and
persuade prospects. The sales process is doing everything to
close the sale and get a signed agreement or contract.
5. ๏ Sales and Marketing Relationship
๏ The sales process consists of interpersonal
interaction - cold calls and networking.
๏ If marketing is done effectively salespeople can
begin to move that prospect from a cold to a warm
lead, and hot at the final. It's all about balance
(ibid).
๏ As defined by Manning and Reece (2004), the
strategic marketing plan should be a guide for a
strategic selling plan. The plan includes the strategy
that you use to position yourself with your
customer before the sales call even begins.
6. ๏SMEsโ Marketing and Marketing Plan
๏ Marketing and sales are the two
complementary functions of any successful
business. It needs to promote, advertise and
sell the products or services to potential
customers.
๏ The business requires a target marketing
strategy and a team of sales representative
to provide service clients (DDD, 2006).
7. There are four steps of marketing plan that
SMEs should know
๏ Determine the needs of the customers (market research)
๏ Analyze the competitive advantages (marketing strategy)
๏ Select specific markets to provide service (target marketing)
๏ Determine how to satisfy those needs (market mix)- (John et al.,
1988).
๏ SMEs has the web and link to the search engine, and
advertising in TV, radio, magazine and newspapers (Sam,
2007).
๏ The SMEs marketing strategy built the brand image and
brand loyalty can support the sales strategies of SMEs on
more tactics to improve the sales.
8. ๏ Two-thirds of SMEs employers were lacking in Marketing
experiences. No formal training on customer care and sales
(Loudhouse, 2007).
๏ The following is the most common methods applied by SMEs of
consumer and food products in various countries for communicate their
brand:
๏ Consumers meetings:
๏ Invitations letters:
๏ Printing and distribution of leaflets:
๏ Article at Mass media
๏ Advertisements:
๏ Direct marketing: They can use the market or shop itself for a forum for person-to-
person marketing of their products.
๏ Word of mouth:
๏ Field visits: Many organizations organize regular meetings between consumers and
producers.
๏ Consumer newsletter
๏ Display information and photographs
๏ Participation in trade and food fairs
Another important means of communication is the Productโs packaging
and logo. Packaging should be attractive and be in line with the identity
of the products. (IFOAM, 2003).
9. ๏ Cohort marketing refers to all the marketing
activities that market their products to cohort target
of people to gain the dividends for their company.
๏ It assumes that cohorts are greatly influenced by
certain events taking place in their generation.
๏ A marketer who can recognize this difference and
use it to market his product can reap rich dividends
(Kotler, 2006).
๏ Cohort marketing is useful in tracking the
customerโs actual purchase and what is important to
him/her (ibid).
10. ๏ Sales strategy is the planning of sales activities such as
methods of reaching clients, competitive differences and
resources available.
๏ A strategic selling is a carefully conceived plan that is needed
to accomplish a sales objective (Zahorsky, 2007).
๏ Zahorsky (2007) developed his triple-tiered sales strategy of
SMEs as follows:
๏ Tier 1: Association: establish a relationship.
๏ Tier 2: Suppliers: Identify who sell to your customer. Learn their challenges
and look for partnering solutions.
๏ Tier 3: Customer: Work directly with customer and ask them what their
needs are and if your business may offer a possible solution.
๏ the sales strategies will actually be supported by marketing
strategies (Jobber, 1997).
๏ the success in personal selling rest on the critical ability to
create value for customers.
11. ๏ Kawasaki (2007), said that sales strategies are most
important for new SMEs. The basic sales tactical choices
of SMEs are: Sales promotion, Advertising, Public
relations, Printed materials, Personal Selling.
๏ SMEsโ sales strategies begin from the process of
effective selling skills to the contacting of all the
intermediaries (retailer and wholesalers, etcโฆ). Then
convince the intermediaries to sell the product or display
the product on the shelves.
๏ Moreover, to make solution of sales problem and
convince the intermediaries to accept the products, SMEs
must provide the advertisings, public relations and
marketing activities to support and build brand image of
the products. help the sellers and intermediaries easy to
sell the product to final consumers.
12. ๏ SMEs must spend the big budget to do the sales and
marketing activities such as advertising, sales promotion,
personal selling, etc.
๏ SMEs mostly get a fight back from the bigger firms by a host
of marketing action such as sales with attractive prices, after
sale service, warranties, etc. They can fight back with low cost
and create more value for customers (Lim et al., 2000).
๏ Singapore, the bigger firms were able to use the mass media
via television, along with their strong sales tactics; they could
dominant in huge market share.
The small is limitation of financial forces, SMEs had to be
contented with promotion through newspapers, magazines,
flyers, radio, and word of mouth.
13. ๏ Many SMEs got success by differentiated
themselves sufficiently from the bigger firms by
adapting to suit the local tastes or preferences.
๏ Manning and Reece in 2004 said โIn the past, a
salesperson could succeed by communicating value.
Today, partnerships are established and maintained
only when the salesperson creates customer value
within the sales processโ.
๏ To avoid provoke in the price war, SMEs maintained
the same prices of the large firmsโ prices
14. ๏ Hartley (1989) said that the most common key for motivating
sales representative and sales agents were commission. Ex:
Singapore, Thailand, etc...(Lim et al., 2000).
๏ The supported keys for sales strategies of SMEs in Iran were
standardized products and promotion strategies as first
priority and the second priority was on wholesaler, distribution
or network, and pricing.
๏ The research of Nordstrand and Ohman in 2005 showed that
the successful SMEs were taking the initiatives to Adapt to
consumer demands, setting right price, tradeshow and
promotion could support the sales tactics and strongly
improve sales volume.
15. ๏ The study also showed that a short distribution channel, and
thereby short distribution time, led to increase sales for SMEs.
๏ In Sweden, SMES used promotion by brochures, tradeshows
activities, homepage creation and relationship selling to
achieve the sales target. TV and Radio were not used much for
the image branding (Nordstrand and Ohman, 2005).
๏ Training, education and other sales activities were found
significant and has got greatest portion in sales volume for
SMEs (Afzal, 2007).
๏ In the social activities, such as wedding and funeral
ceremonies were the occasions for keeping personal contacts
and developing relationship, which would help for having good
business in future to the entrepreneurs.
16. ๏ The success of sales strategy is based on sales
forces that include technologies, good
salespersons and customersโ satisfaction.
๏ Towers Perrin indicated that using
technology (e-commerce), finding and keeping
good salespeople (appropriate individual), and
fixating on customers (customer relationship)
were the most important factor resulting sales
force success (ID, 2001).
17. โข LeBoeuf Michael says โEvery companyโs greatest assets
are its customers, because without customers there is
no companyโ (DDD, 2006).
โข To find out new customers, it is necessary to spend
budgets and time to create marketing activities leading
to sales strategy and the results are not exactly positive.
Maintaining the existing customers means that
maintaining the incomes
โข The existing customersโ relationship and building
customersโ loyalty will return the huge volume sales
revenues
18. ๏ Culture is defined as a set of values and beliefs that permeates the
organization. It usually emanates from a single person, the leader of
the team.
๏ Jonathan , says โSales management is covering from creating sales
culture in an organization to how to hold a decent sales meeting. It
takes on old problem and put forward active, tangible solutions that
are both plausible and devastatingly simpleโ.
๏ Jim Sahka, says โwe hire more โAโ players, increase every oneโs
selling skill, and create a sense of urgency- resulting in 40 per cent
quarter- over- quarter growthโ (ibid).
๏ Proactive sales manager needs to focus on the culture, because
the sales culture is as being like the infrastructure of a successful
team and company. All things will fall out from being a culture-
creator.
19. ๏ It was found that motivation was a key to an
organizationโs survival and prosperity (Rana, 2004).
๏ Different people are influenced in different ways
according to their stages in their careers, their gender
and the level of existing rewards.
๏ the idea to motivation mix, which represents the
combination of factors to be considered including
training, leadership skills, remuneration, and
incentive, management controls and feed back
mechanisms. These factors, which managers can
influence and control, will affect individualsโ to work
and, ultimately their job performance (Jobber, 1997).
20. ๏ Corruption and bureaucracy, The World Bank Report (August
12, 2004) on investment environment in Cambodia showed that
four fifth of the private companies equaled to 800 enterprises in
Cambodia mentioned that it was necessary to bribe to do
business in Cambodia.
๏ Selling with dumping prices of the smuggling imported
products caused many problems to the domestic products as
well as influenced the sales strategies of the enterprises selling
those products.
๏ The wholesalers dominated the prices of the products
produced by local manufacturers.
๏ The producers tried to unite as an association to maintain the
stability of prices, yet the effort was failed because of lack of
knowledge and experiences.
21. ๏ The fluctuation of Thai Bath and Vietnamese Dong currencies in term of
Cambodian Riel, mostly influenced the increase in the prices of consumer
products and lowered the level of sales revenue and sometime, they were
required to sell in the most competitive prices (Archarya, 2002).
๏ To compete with the imported Thai and others countriesโ goods, Cambodian
products need standard quality basis. The production location should be closed
to the resources where available, and this would make the low production cost
and, therefore, they could sell cheaply. Sometime they needed to pay the
informal payment to the police for their distribution.
๏ However, the producers felt reluctant about the future of the market whether
they could keep their standing or not because of the lack of quality machine for
making standard products, the lack of international standard labor forces and
skills, the loss in competition in the region, and high cost of operation on
marketing activities such as marketing event, sales activities, sales strategy and
advertisement (ibid).
22. ๏ The producers complained that Cambodia had become
the expensive economy because of high electricity cost,
high transportation cost, and informal payment.
๏ Debt payment of the intermediaries was a big problem for
the business owners because the producers needed money
to continue their next operations.
๏ Macroeconomic components such as dollarization, gross
national product (GNP) and level of income also had effect
on sales strategy and market in the country.
๏ SME Cambodia always advertised by word of mouth with
some sales tactics and strategy in brief of unprofessional
business plans.
23. ๏ Due to the high cost of advertisement, the sales
promotion to increase sales was done by flyers, word of
mouth and internet which were supported by CCC.
๏ The success of SMEs were due to teamwork capacity
building and differentiation the products from others.
๏ Many manufactures had failed because of low
technologies and techniques, lack of production skills,
and high cost of input. These caused decrease in the
standard of production and increase in the prices of the
productions.
24. ๏ Small and medium enterpriseโs success is based on sales strategies and
marketing campaigns. The success of sales forces and marketing campaigns
have depended on how team members have devoted their efforts and
worked together to promote the optimum productivities (MPDF, 2004).
๏ FCB (Cambodia) Co., Ltd, The research showed that 60 per cent of the
companies, comprising of small, medium and large firms, were situated in
Phnom Penh.
๏ The percentage of consumers having powers to purchase consumer
products in Phnom Penh was 60 and in provinces was only 40. SMEs owner
agreed that consumersโ goods especially foods and beverages had a very
large sales volume in Phnom Penh, i.e., about 60 per cent (FCB, 2006).
๏
๏ The local market of small enterprises (SEs) was very limited in Cambodia:
๏ Not so supported by the local people and
๏ The sales in the market were dominated by the imported and medium firmsโ products.
๏ The late debt payment by the retailers and wholesalers,
๏ Did not have their own professional sales strategies, marketing activities, advertising and business
plans. They sold the products through word of mouths announcements (CCC, 2005).
25. ๏ FCB Cambodia Co., Ltd. showed that the medium
enterprises (MEs) were finding difficulty to compete in
the market because of smuggling activities and unlawful
business operation. They had more clear-cut sales
strategy, marketing tactics and business plan than the
small enterprises.
๏ MEs had better technologies and skills to produce the
standard quality products than the SEs. One more thing
was that the MEs had the more budgets to make
advertisement, attract impression, build brand image
and stimulate sales (FCB, 2007).
26. ๏ The sales expectations: there were no considerable
differences between small and medium enterprises with
regard to their sales expectations during the special sales
periods such as Seven January Day, etc...
๏ On the whole, most of the surveyed small and medium
enterprises were benefitted increasing their sales due to
their promotion activities during the above periods.
๏ The most periods that consumer spent a lot are: Khmer
New Year, Chinese New Year, Pchum Ben Day, Water
Festival Day, Christmas Day, and International New Year
Day.
27. ๏ Except the two sales strategies i.e., โBuy more and then get
more special discountโ and โSpecial Discount for Wholesalerโ, in all
the other seven sales strategies, there were significant
differences between small and medium enterprises.
๏ Medium enterprises were found to be more benefitted from
the sales strategies compared to small enterprises during the
special periods.
๏ the sales expectations of SMEs during different special periods
shows that the difference between small and medium enterprises
was not significant due to their sales strategies.
๏ Both the small and medium enterprises used different sales
strategies to promote their sales during the special periods.
๏ This is clear from the achievements in the sales expectations of
the SMEs during the special periods and on different sales
strategies used by the SMEs in the special periods.
28. ๏ Both small and medium enterprises is using different kinds
of push and pull sales tactics.
๏ But more percentage of medium enterprises was following
different push and pull sales tactics as compared to small
enterprises.
๏ Except the sales tactics โsponsoring the equipment for
product displayโ and โ distributing discounted couponโ, in all
the other 10 push and pull sales tactics cases, the percentage
of medium enterprises using these sales tactics was more
than that of the small enterprises.
๏ The small enterprises were at a lower level in applying the
professional push and pull sales tactics as compared to
medium enterprises.
29. ๏ Both small and medium enterprises used push and pull
sales tactics such as Sponsoring the Equipment for Product
Display, Trading Off the Old Products before Launching the
New Products, Providing Advertising Support, Providing
Added Value to Intermediary, Providing Sample Sales
Materials or Tools, Making Intermediary Meeting,
Distributing Discounted Coupon, Giving Special Discount,
Providing Incentive Prize, Providing Sample Product,
Providing Compound Products and Making Lucky Draw in
the study area.
๏ But the percentage of medium enterprises using push and
pull sales tactics was more compared to small enterprises.
30. ๏ In order to motivate the sales staff, the SMEs in the
study area provided the incentives like giving
bonus, promoting the staff in his/her job, giving
commission, providing tour package, providing
training, giving certificate of excellence, increasing
the salary, giving gift/prize and providing health
care/health insurance services to the staff.
๏ But the percentage of medium enterprises
providing these services to the staff was more than
that of small enterprises.
31. Creation of Activities and Participation in Events
โข The Some strategies are using by SMEs, such as Participating in
Trade Fairs, Distributing Leaflets, Advertorial and Press Release
through Mass Media, Conducting Advertising Campaign, Making
Direct Marketing, Selling through Agent or Distributor, Providing
Product Warranty, Satisfying Customers for Word of Mouth
Advertisement and Facilitating Field Visit for Customers, on
creation of activities and participation in events were used by
small and medium enterprises.
โข Except the sales strategy โFacilitating Field Visit for Customersโ, in
the cases of other above mentioned sales strategies, the medium
enterprises were found to be using more compared to small
enterprises.
32. Incentives for the Staff
Type of Incentive
Small Enterprises Medium Enterprises Total
Number % Number % Number %
Bonus 23 71.88 29 90.63 52 81.25
Promotion in job 9 28.13 25 78.13 34 53.13
Commission 14 43.75 16 50.00 30 46.88
Tour package 10 31.25 13 40.63 23 35.94
Provision training 2 6.25 10 31.25 12 18.75
Excellence certificate 2 6.25 4 12.50 6 9.38
Increase in salary 0 0.00 1 3.13 1 1.56
Health care/ Health insurance 0 0.00 1 3.13 1 1.56
Provision of gift/ prize 3 9.38 0 0.00 3 4.69
Total 32 100.00 32 100.00 64 100.00
33. ๏ The marketing strategies of SMEs were started from
building brand image of the product through
advertising in TV, press, radio, magazine, leaflet,
brochure and other outdoor activities in the developed
countries, and later on, the sales strategies came out
with sales promotion and tradeshow activities.
๏ Proper management is important to build a strong
sales team and influence the sales performance. Low
management performance forces the sales down. To
motivate the sales staff and other human resources,
good leadership and organization behavior are
necessary. The factors such as social impact,
economic crisis, market competition and technologies
affect sales a lot.
34. ๏ In Cambodia, the sales strategies of SMEs were mostly
on direct sales force and some on annually tradeshows
activities. The sales promotions through leaflets,
brochures and word of mouth were used by the SMEs in
the country. But these were not sufficient to compete
with foreign or large firms.
๏ Corruption, high cost of production, lack of finance, lack
of skills and low technologies forced the SMEs in
Cambodia to have low quality products. As a result, the
SMEs faced difficulty to complete with the large and
foreign enterprises.