Tag: Branding

Personal selling is oral communication with potential buyers of a product with the intention of making a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to “close the sale”

Personal selling is the interpersonal tool of the promotion mix. Unlike advertising, personal selling is two-way personal communication between salespeople and individual customers.

This communication may take place face-to-face, by telephone, through video conferences, or by other means. This implies that personal selling may be more trustworthy than advertising in more complicated selling situations.

Salespeople can be very effective in exploring the problems of the customers. They can compose the marketing offer to suit each customer’s special needs and negotiate terms of sale.

The role of the sales force varies from company to company. Companies that sell through mail-order catalogs, brokers, and agents do not maintain salespeople.

However, the sales force plays a critical role in companies selling business products. They work directly with customers and represent the company.

Salespeople employed in consumer goods-producing companies do not come into direct contact with the customers.

Nonetheless, their role is valuable because they work with wholesalers and retailers and help them be more effective in selling the company’s products.

Very often, salesforce works for both the seller and the buyer. They locate and develop new customers and communicate information about the company, its products, and services.

They perform selling task by approaching customers, presenting their products, answering objections, negotiating prices and terms, and closing sales.

Furthermore, salespeople provide services to customers, conduct market research, gather market information, and fill out sales call reports.

Simultaneously, salespeople represent customers to the company.

Personal Selling in the IMC

• Surveying: Educating themselves more about their customers’ businesses and regularly assessing these businesses and their customers to achieve a position of knowledgeable authority.
• Communicating: With existing and potential customers about the product range
• Mapmaking: Outlining both an account strategy and a solutions strategy (for the customer). This means laying out a plan, discussing it with a customer, and revising it as changes require.
• Selling: Contact with the customer, answering questions and trying to close the sale
• Guiding: Bringing incremental value to the customer by identifying problems and opportunities, offering alternative options and solutions, and providing solution with tangible value
• Fire starting: Engaging customers and driving them to commit to a solution
• Servicing: Providing support and service to the customer in the period up to delivery and also post-sale
• Information gathering: Obtaining information about the market to feedback into the marketing planning process

Conditions that favor personal selling:

• Product situation: Personal selling is relatively more effective and economical when a product is of a high unit value, when it is in the introductory stage of its life cycle, when it requires personal attention to match consumer needs, or when it requires product demonstration or after-sales services.
• Market situation: Personal selling is effective when a firm serves a small number of large-size buyers or a small/local market. Also, it can be used effectively when an indirect channel of distribution is used for selling to agents or middlemen.
• Company situation: Personal selling is best utilized when a firm is not in a good position to use impersonal communication media, or it cannot afford to have a large and regular advertising outlay.
• Consumer behavior situation: Personal selling should be adopted by a company when purchases are valuable but infrequent, or when competition is at such a level that consumers require persuasion and follow-up.

Sales promotion is a short-term incentive to initiate trial or purchase. Sales promotion is one of the elements of the promotional mix. The primary elements in the promotional mix are advertising, personal selling, direct marketing and publicity/public relations. Sales promotion uses both media and non-media marketing communications for a pre-determined, limited time to increase consumer demand, stimulate market demand or improve product availability. Examples include contests, coupons, freebies, loss leaders, point of purchase displays, premiums, prizes, product samples, and rebates.

Sales promotions can be directed at either the customer, sales staff, or distribution channel members (such as retailers). Sales promotions targeted at the consumer are called consumer sales promotions. Sales promotions targeted at retailers and wholesale are called trade sales promotions.

Consumer Thought Process

Meaningful Savings: Gain or Loss

Many discounts are designed to give consumers the perception of saving money when buying products, but not all discounted prices are viewed as favorable to buyers. Therefore, before making a purchase, consumers may weigh their options as either a gain or a loss to avoid the risk of losing money on a purchase. A “gain” view on a purchase results in chance taking For example, if there is a buy-one-get-one-half-off discount that seems profitable, a shopper will buy the product. On the other hand, a “loss” viewpoint results in consumer aversion to taking any chances. For instance, consumers will pass on a buy-three-get-one-half-off discount if they believe they are not benefitting from the deal. Specifically, consumers will consider their options because “…the sensation of loss is 2.5 times greater than the sensation of gain for the same value”.

Impulse Buying

Impulse buying results from consumers’ failure to weigh their options before buying a product. Impulse buying is “any purchase that a shopper makes that has not been planned…  sudden and immediate”. For example, if a consumer has no intention of buying a product before entering a store, but purchases an item without any forethought, that was impulse buying. Product manufactures want to promote and encourage this instant purchase impulse in consumers. Buyers can be very quick to make purchases without thinking about the consequences when a product is perceived to be a good deal. Therefore, sales companies “increasingly implement promotional campaigns that will be effective in triggering consumer impulse buying behavior” to increase sales and profits

Comparing Prices

Many consumers read left-to-right, and therefore, compare prices in the same manner. For example, if the price of a product is $93 and the sales price is $79, people will initially compare the left digits first (9 and 7) and notice the two digit difference. However, because of this habitual behavior, “consumers may perceive the ($14) difference between $93 and $79 as greater than the ($14) difference between $89 and $75”. As a result, consumers often mistakenly believe they are receiving a better deal with the first set of prices based on the left digits solely. Because of that common misconception, companies capitalize on this sales pricing strategy more often than not to increase sales.

Right Digit Effect

The right digit effect focuses on the right digits of prices when the left digits are the same. In other words, prices like $45 and $42 force consumers to pay more attention to the right digits (the 2 and 5) to determine the discount received. This effect also “implies that consumers will perceive larger discounts for prices with small right digit endings, than for large right digit endings. For example, in a $32-to-$31 price reduction, consumers will believe to have received a greater deal than a $39-to-$38 price reduction. As a result, companies may use discounts with smaller right digits to mislead consumers into thinking they are receiving a better deal and increasing profit. However, consumers also are deceived by the infamous 9-ending prices. “The right digit effect relates to consumers’ tendency to identify 9-ending prices as sale (rather than regular) prices or to associate them with a discount. For example, a regular price of $199 is mistakenly viewed as a sale or discount by consumers. Sales companies most commonly use this approach because the misinterpretation of consumers usually results in an increase of sales and profit.

Framing Effect

The Framing Effect is “the phenomenon that occurs when there is a change in an individual’s preference between two or more alternatives caused by the way the problem is presented”. In other words, the format in which something is presented will affect a person’s viewpoint. This theory consists of three subcategories: risky choice framing, attribute framing and goal framing. Risky choice framing references back to the gain-or-loss thought processes of consumers. Consumers will take chances if the circumstance is profitable for them and avoid chance-taking if it is not. Attribute framing deals with one key phrase or feature of a price discount that is emphasized to inspire consumer shopping. For example, the terms “free” and “better” are used commonly to lure in shoppers to buy a product. Goal framing places pressure on buyers to act hastily or face the consequences of missing out on a definite price reduction. A “limited time only” (LTO) deal, for example, attempts to motivate buyers to make a purchase quickly, or buy on impulse, before the time runs out.

Outside Forces

Although there are aspects that can determine a consumer’s shopping behavior, there are many outside factors that can influence the shoppers’ decision in making a purchase. For example, even though a product’s price is discounted, the quality of that product may dissuade the consumer from buying the item. If the product has poor customer reviews or has a short “life span,” shoppers will view that purchase as a loss and avoid taking a chance on it. A product can also be viewed negatively because of consumers’ past experiences and expectations. For example, if the size of a product is misleading, buyers will not want to buy it. An item advertised as “huge,” but is only one inch tall, will ward off consumers. Also, “the effects of personal characteristics, such as consumers’ gender, subjective norms, and impulsivity” can also affect a consumer’s purchase intentions. For example, a female will, generally, purchase a cosmetic product more often than a male. In addition, “some…shoppers may be unable to buy a product because of financial constraints”. Neither a discounted price nor a bonus pack has the ability to entice consumers if they cannot afford the product.

Promotional campaign process

1. Identify the target market (current users ,influencers, decision makers)
2. Identify the communication channel (Direct mail ,newspaper ad ,tvc )
3. Set the objective for the campaign (SMART goals)
4. Determine the Promotion mix
5. Develop clear and unambiguous messages
6. Allocate the budget
7. Evaluate the campaign effectiveness

Sales promotion is a type of Pull marketing technique. If you have a product which is new in the market or which is not receiving a lot of attention, then you can promote this product to customers via sales promotion. You can use various techniques like giving discounts on the product, offering 1 + 1 free schemes, etc etc.

Consumer Sales Promotion:

The consumer sales promotion involves application of the following tools:

• Samples:

Samples are offers of a free amount or a trial of a product for consumers. The sample might be delivered door to door, sent in the mail, picked up in a store found attached to another product or featured in an advertising offer. Sampling is the most effective and most expensive way to introduce a new product e.g., Hindustan Levers introduced Ariel Trial Pack for its detergent powder Ariel Micro System.

• Coupons:

Coupons are certificates which entitle a consumer to buy the product at reduced prices. These coupons can be mailed, enclosed in other products or attached to them or inserted in magazines and newspapers. Coupons are accepted as cash by retailers.

• Rebates:

Cash refund or rebate provides a price reduction after the purchase rather than at the retail shop. The consumer sends a specified ‘proof of purchase’ to the manufacturer, who ‘refunds’ part of the purchase price by mail. It is a good device for creating new user and to strengthen the brand loyalty.

• Price Packs:

Price Packs (also called cents-off deals) are offers to consumers as discount e.g., Rs.2 off on a Brooke Bond pack of 500 gms. Price Packs are very effective in stimulating short- term sales, even more than coupons. The price pack may be in the form of a reduced price pack (20 per cent extra Five-star at the same price) or a banded pack (tooth brush and tooth paste together).

• Premiums:

Premiums (or gifts) are merchandise offered at a relatively low cost or free, as an incentive to purchase a particular product. Reusable jars, key chains, containers.

• Prizes (Contests, Sweepstakes, Games):

Prizes are offers of the chance to win cash, trips or merchandise as a result of purchasing something. A contestant calls for consumers Co., submit an entry — a jingle, estimate, suggestion to be examined by a panel of judges who will select the best entries. In sweepstakes, the customers submit their names which will be included in a drawing of prize winners. A game presents consumers with some puzzle or missing letters. All of these tend to gain more attention than coupons and premiums.

• Patronage Award (Trading Stamps):

These are values in cash or other forms. Such awards are given to those customers who shop only at a particular place. i.e., when the customers are loyal to a particular shop. Then they are treated as patrons.

• Free Trials:

Free trials consist of inviting prospective purchasers to try the product without cost in the hope that they will buy the product.

• Product Warranties:

Product warranties are important promotional tools in sensitive consumer markets.

• Tie-In-Promotions:

They involve two or more brands or companies that team up on coupons, refunds and contests to increase their pulling power.

• Point-of-Purchase and Demonstration:

POP displays and demonstrations take place at the point of purchase or sale.

Dealer Promotion:

Sales promotion activities are conducted to stimulate consumer-purchasing and dealer-effectiveness.

1. There is a provision of free display material either at the point of purchase (POP) or point of sale (POS), depending on one’s viewpoint. Display reaches consumers when they are buying and actually spending their money.
2. Retail demonstrators are supplied by manufacturers for preparing and distributing the product as a retail sample, e.g., Nescafe instant coffee to consumers for trying the sample on the spot or demonstration regarding the method of using the product.
3. Trade deals are offered to encourage retailers to give additional selling support to the product, e.g., toothpaste sold with 30 per cent to 40 per cent margin.
4. Seller gives buying allowance of a certain amount of money for a product bought.
5. Buy-back allowance is given to encourage repurchase of a product immediately after another trade deal. A buy-back is a resale opportunity.
6. Seller gives free goods, e.g., one free with 11, or 2 free with 10 are common free deals.
7. Sales contests for salesmen are held.
8. Dealer loader (a gift for an order) is a premium given to the retailer for buying certain quantities of goods or premium for special display done by a retailer.
9. Dealer and distributor training for salesmen, which may be provided to give them a better knowledge of a product and how to use it.

Business Promotion:

Sales promotion plays a major role in consumer goods promotion and it is used in a limited way in the case of Industrial Goods. Industrial goods marketing may involve provision for financing, training of users, buy-back arrangements and even reciprocal trading. POP materials are used for items that are sold through industrial distributors who maintain show rooms.

The major use of exhibits are in conventions, exhibitions and trade fairs. Speciality gifts such as key chains, calendars, coffee mugs, pens with messages, logos, can be handed over to industrial customers which will serve as a reminder of the company.

• Joint Promotion:

Some years ago, in an unusual print ad, Mafatlal Fabrics endorsed Procter & Gamble’s new detergent product, Ariel. Not that it was only Ariel that stood to gain from this approach, Mafatlal too, gained mileage through the ad. This was, perhaps, the first noticeable instance of joint promotion on the part of two brands that hoped to gain in visibility.

• Exhibitions and Trade Fairs:

An exhibition stand or stall is a form of showroom, but it is a very distinctive form of showroom. It provides a temporary market place at which buyers and sellers meet. There are various types of exhibitions, international trade fairs, national and local fairs and exhibitions (usually sponsored by a chamber of commerce or trade association).

• Indian Fashion Scene:

The fashion industry has Rs.20,000 crore internal market and Rs.3,000 crore export market. About 50,000 jobs are generated each year in the fashion field. Stagnation in this field seems a distant fear as the fashion market is growing at a tremendous rate. Hence, fashion shows and exhibitions are becoming very popular as means of promotion.

• Exclusive Showrooms:

Generally, the showroom idea is used as a tool of distribution. Currently, in the face of growing competition and unfair undercutting by dealers, a number of consumer durable companies are opening plush, exclusive showrooms, arcades and galleries as powerful means of sales-promotion to boost their sales. Exclusivity plays the role of Unique Selling Proposition (USP) to increase the sales.

• Sponsorship:

Sponsorship consists of giving money or other support to a beneficiary in order to make the activities financially viable or to gain some advertising, public relations or marketing advantage. The support could consist of money, trophies or other items in kind. The beneficiary could be an individual or an organisation.

Publicity/Public Relations:

Publicity:

It is also called marketing public relations. Publicity is not paid for by the organisation. Publicity comes from news reporters, columnists and journalist. It comes to the receiver as the truth rather than as a commercial. Public relations and publicity taken together become the fourth major ingredient of promotion-mix. These activities are, however, not controllable by the firm. Every firm tries to create a good public relations so as to give good publicity.

Defective products, unfair trade practices, anti-social activities often result in unfavourable publicity, consumer ill-will, bad product image, increased consumer protests, Government regulations and so on. The firm, having a poor public image, will have lower sales and lower profits. Reducing the impact of bad news is as important as creating good publicity.

Under the social marketing concept, publicity and public relations are assuming unique importance in the firm’s promotion-mix. Consumerism is altering consumer attitudes not only towards products, but also towards the firm and dealers selling the products of the firm.

Public Relations:

Public relations have now become an important marketing function. The total process of building goodwill towards a business enterprise and securing a bright public image of the company is called public relations. It creates a favourable atmosphere for conducting business. There are four groups of public:

(1) Customers

(2) Shareholders

(3) Employees

(4) The community.

The marketers should have the best possible relations with these groups. Public relations complement advertising by creating product and service credibility. Effective marketing communication is not possible without establishing and maintaining mutual understanding between the company and its customers.

Integrated Marketing Communication tools refer to integrating various marketing tools such as advertising, online marketing, public relation activities, direct marketing, sales campaigns to promote brands so that similar message reaches a wider audience. Products and services are promoted by effectively integrating various brand communication tools.

Public Relation Activities

Public relation activities help promote a brand through press releases, news, events, public appearances etc. The, role of public relations officer is to present the organization in the best light.

PR is done to create goodwill in the market and present the product of the company in the positive light.

Promotion can be done through press releases, public appearances, event sponsorships, news, etc.

Personal Selling

Personal selling is also one of the most effective tools for integrated marketing communication. Personal selling takes place when marketer or sales representative sells products or services to clients. Personal selling goes a long way in strengthening the relationship between the organization and the end-users.

Personal selling involves the following steps:

• Prospecting: Prospecting helps you find the right and potential contact.
• Making first contact: Marketers need to establish first contact with their prospective clients through emails, telephone calls etc.An appointment is essential and make sure you reach on time for the meeting.
• The sales call: Never ever lie to your customers. Share what all unique your brand has to offer to customers. As a marketer, you yourself should be convinced with your products and services if you expect your customers to invest in your brand.
• Objection handling: Be ready to answer any of the client’s queries.
• Closing the sale: Do not leave unless and until you successfully close the deal. There is no harm in giving customers some time to think and decide accordingly. Do not be after their life.

Direct Marketing

Direct marketing enables organizations to communicate directly with the end-users. Various tools for direct marketing are emails, text messages, catalogues, brochures, promotional letters and so on. Through direct marketing, messages reach end-users directly.

Sales Promotion

Brands (Products and services) can also be promoted through discount coupons, loyalty clubs, membership coupons, incentives, lucrative schemes, attractive packages for loyal customers, especially designed deals and so on. Brands can also be promoted effectively through newspaper inserts, danglers, banners at the right place, glorifiers, wobblers etc.

Advertising

Advertising is one of the most effective ways of brand promotion. Advertising helps organizations reach a wider audience within the shortest possible time frame. Advertisements in newspaper, television, Radio, billboards help end-users to believe in your brand and also motivate them to buy the same and remain loyal towards the brand. Advertisements not only increase the consumption of a particular product/service but also create brand awareness among customers. Marketers need to ensure that the right message reaches the right customers at the right time. Be careful about the content of the advertisement, after all you are paying for every second.

IMC Planning Process

1. Get organizational buy-in.

Integrated marketing requires co-ordination between various functional silos within marketing media planning, buying, marcom, PR, sales, advertising agencies, PPC & SEO agencies and so on. Ensure the organization recognizes the need for integrated marketing and impresses this need upon all involved parties for smooth execution. Get ideas from different functional teams on their ideas and how they can contribute to an integrated marketing program. Set up clear collaboration processes and zero in on tools to help you do the same.

2. Do a SWOT analysis of your brand.

A soul-searching process that will tell you exactly where you stand in terms of your brands strengths, weaknesses, opportunities that can be explored and competitive and market forces that pose a threat to your brands growth. Identify your products key features that give it an edge over competition and how you can leverage the same to gain market share.

3. Choose the Best Communication Tools.

Based on what you intend to achieve with your communication and what kind of media consumption habits your target audience displays, pick the right type of communication tools to reach out to your audience. This means choose between advertising, PR, direct marketing, sales promotion and personal selling. Whatever options you zero in on, need to work in tandem and complement each other. This synergy between promotion tools is what gives integrated marketing its edge over regular marketing.

Within each type of communication tool, drill down to the actual media vehicles that will carry your message most effectively. So if you decided to go with advertising and direct marketing, decide what media you will advertise on, whether you will go with brochures or fliers or email campaigns to achieve your objectives.

Media mix decisions also depend on your budgets and the estimated ROI you hope to achieve from each media vehicle. Create exact budgets for each media vehicle to guide media buying decisions.

4. Test and Execute

Once you have decided on your messaging and media mix, its finally time to test your communication and roll it out to your target audience.

Communication testing can be done in many ways, depending upon the platform being tested. Website communication can be tested with multiple online tools, emails can be tested on the email marketing software that you use before being sent out, TV commercials can be shown to test markets to test effectiveness, conduct group discussions with the sample groups to see if your communication hits bulls eye.

Once testing is complete, fix any issues that you unearthed. Once the fixes are made, roll out your campaign across all platforms. Or in Nikes immortal words, Just Do It.

5. Measure Results and Track Progress

There is no way to know how well a campaign performed without measuring the results achieved against the objectives set out in the beginning. Obsessively track every step of your marketing campaign to see if your marketing efforts have moved the needle and how significant is the difference that the campaign has made to organizational goals.

Tracking and measurement against numeric objectives is even more important in the case of marketing communication as sometimes, communication is well received and appreciated by the target audience but it may or may not show concrete results.

Process

1. Review of Marketing Plan:

Before developing a promotional programme, it is important to understand where the company’s (or the brand) current position is in the market, where it intends to go and how it plan to get there. A marketing plan is a written document describing the overall marketing strategy and programme developed for the organization, a particular product line or a brand.

Marketing plan included the following basic elements:

1. A detailed situation analysis that consists of an internal marketing audit and an external analysis of the market competition and environmental factors.
2. Specific marketing objectives that provide direction, a time frame for marketing activities, and a mechanism for measuring performance.
3. A marketing strategy and programme that include selection of target market(s) decisions and plans for the four elements of the marketing mix.
4. A programme for implementing the marketing strategy, including determining specific tasks to be performed and responsibilities.
5. A process for monitoring and evaluating performance and providing feed back so that proper control can be maintained and any necessary changes made in the marketing strategy or tactics.

A promotional programme is an integral part of the marketing strategy. It will give an idea of the role of advertising and other promotional mix element will play in the overall marketing programme.

2. Promotional Programme Situational Analysis:

The next step in developing promotional plan is to conduct the situation analysis. A situation analysis involves the internal analysis and external analysis. Internal analysis assesses relevant area involving the product/service offering and the firm itself.

The capabilities of the firm and its ability to develop and implement a successful promotional programme, the organization of promotional department and the success and failures of past programmes are reviewed.

The analysis study the relative advantages and disadvantages of performing the promotional functions. For example, the internal analysis may indicate the firm is not capable of planning, implementing and managing certain areas of the promotional programme.

If this is the case, it would be wise to look for assistance from an advertising agency or some other promotional facilitator. If the organization is already using an advertising agency, the focus will be on the quality of the agency’s work and the results achieved by past and/current campaigns.

The other aspect of internal analysis is assessing the strengths and weaknesses of the firm or the brand from an image perspective. Often, the image of the firm brings to the market will have a significant impact on its promotional programme.

Another aspect of the internal analysis is the assessment of the relative strengths and weaknesses of the product or service in comparison to its competitors, unique selling points or benefits it has, its price, design, packaging to help the creative personnel to develop advertising message for the brand.

External analysis focuses its attention on the firm’s customers, market segments, positioning strategies, and competitors . An important part of the external analysis is a detailed consideration of customers in terms of their characteristics and buying patterns, their decision processes, and factors influencing their purchase decisions.

Attention must also be given to consumer’s perceptions and attitudes, lifestyles, and criteria used in making purchase decisions often. Marketing research studies are necessary to answer some of these questions.

A key element of the external analysis is an assessment of the market. The attractiveness of various market segments must be evaluated and the decision made as to which segment (s) to target. Once the target markets are chosen, the emphasis will be on determining how the product should be positioned? What image or place should it have in consumers minds?

The external phase of the promotional programme situation analysis also includes an in depth examination of both direct and indirect competitors. While competitors were analyzed in the overall marketing situation analysis, even more attention is devoted to promotional aspects at this phase.

Focus is on the firm’s primary competitors;: their specific strengths and weaknesses; their segmentation, targeting and positioning strategies; and the promotional strategies they employ. The size and allocation of their promotional budgets, their media, strategies, and the messages they are sending to the market place should also be considered.

3. Analysis of Communication Process:

This stage involves to know how the company can effectively communicate with consumers in its target market. It involves the communication decision regarding the use of various sources, messages and channel factors. It involves the analysis of effects of various types of advertising messages might have on consumers and whether they are appropriate for the product or brand.

An important part of this stage of the promotional planning process is establishing communication goals and objectives. Communication objectives refer to what the firm wants to accomplish with its promotional programmes Russel Colley have identified 52 possible advertising objectives.

The communication objectives may include creating awareness or knowledge about a product and its attributes or benefits, creating an image or developing favourable attitudes, preferences or purchase intentions.

4. Budget Determination:

In budget determination, the two basic questions that should be asked includes what will the promotional programme’s cost? How will these funds be allocated. Budget determination procedure involves selecting the various budgeting ap­proaches and integrating them. At this stage, the budget is often tentative. It may not be finalized until specific promotional mix strategies are developed.

5. Developing the Integrated Marketing Communications Programme:

At this stage, decisions are made regarding the role and importance of each element and their coordination with one another. Each promotional mix element has its own set of objectives and a budget and strategy for meeting them.

Decisions must be made and activities performed to implement the promotional programmes. Procedures are developed for evaluating performance and making any necessary changes.

Two important aspects of advertising programme are the development of the message and media strategy. Message development, often referred to as creative strategy, involve deter­mining the basic appeal and message the advertiser wishes to convey to the target audience.

Media strategy involves determining which communications channels will be used to deliver the advertising message to the target audience. Decisions must be made regarding which types of media will be used (e.g., Newspapers Magazines, Radio, Television, bill boards etc.) as well as specific media selections such as a particular magazines or TV programme.

This task requires careful evaluation of the media options’ advantages and limitations, costs, and ability to deliver the message effectively to the target market.

Once the message and media strategies have been determined, steps must be taken to implement them. Most large companies hire advertising agencies to plan and produce their messages and to evaluate and purchase the media that will carry their advertisement.

However, most agencies work very closely with their clients as they develop the advertise­ments and select media, because it is the advertiser that ultimately approves (and plays for) the creative work and media plan.

6. Mentoring, Evaluation and Control:

This stage determine how well the promotional programme is meeting communication objectives and helping the firm accomplish its overall marketing objectives. This stage is designed to provide managers with continual feedback concerning the effectiveness of the promotional programme which is used as input to subsequent promotional planning and strategy development.

Key difference between Marketing and Selling

Marketing

Marketing is the process of identifying, anticipating, and satisfying customer needs and wants through the creation, promotion, pricing, and distribution of goods, services, or ideas. It involves understanding target markets, analyzing consumer behavior, and crafting strategies to deliver value while achieving organizational goals. Marketing encompasses activities such as advertising, branding, market research, and sales. It bridges the gap between businesses and consumers by communicating a product’s value proposition and fostering relationships. Modern marketing emphasizes customer-centric approaches, leveraging digital tools and data analytics to engage effectively with audiences, ensuring sustainable growth and competitive advantage in a dynamic marketplace.

Features of Marketing:

• Customer Orientation

Marketing revolves around the customer, focusing on identifying, anticipating, and fulfilling their needs and preferences. It emphasizes delivering value to customers to ensure satisfaction and loyalty, making the customer the centerpiece of all marketing activities.

• Value Creation

The essence of marketing is creating value for customers through goods, services, and experiences. It involves designing products or services that meet customer expectations while ensuring the price reflects the perceived value, fostering long-term relationships.

• Market Research

Marketing relies on research to gather insights about consumer behavior, preferences, and market trends. Effective market research helps businesses make informed decisions, segment their audience, and craft targeted strategies that resonate with specific customer groups.

• Exchange Process

Marketing facilitates the exchange of goods and services between buyers and sellers. This exchange process involves communication, negotiation, and transactions, ensuring that both parties derive value from the interaction.

• Continuous Process

Marketing is an ongoing process that evolves with changing consumer demands, technological advancements, and market conditions. It requires businesses to adapt, innovate, and remain dynamic to maintain relevance and competitiveness.

• Integrated Approach

Marketing integrates various functions, including product development, pricing, promotion, and distribution. By coordinating these elements, businesses ensure a seamless and cohesive strategy that effectively reaches their target audience and achieves organizational goals.

• Goal-Oriented

Marketing aims to achieve specific objectives such as increasing sales, enhancing brand recognition, and building customer loyalty. It aligns with the broader business goals of growth and profitability, ensuring that every marketing activity contributes to the organization’s success.

• Focus on Relationships

Modern marketing emphasizes building and nurturing long-term relationships with customers, suppliers, and other stakeholders. It aims to create trust and loyalty through personalized interactions, ensuring mutual benefits for all parties involved.

Selling

Selling is the process of persuading and convincing potential buyers to purchase a product, service, or idea. It involves direct interaction with customers to communicate the benefits, features, and value of what is being offered. The primary goal of selling is to address customer needs and create a mutually beneficial exchange that satisfies both the buyer and the seller. Selling requires skills such as effective communication, negotiation, and relationship-building. It focuses on closing transactions and often involves identifying prospects, handling objections, and ensuring customer satisfaction. While selling is a component of marketing, it is more transactional and deal-oriented.

Features of Marketing:

• Customer Orientation

The core of marketing lies in understanding and satisfying customer needs and wants. Marketers conduct research to identify customer preferences, behaviors, and pain points, ensuring that products or services meet their demands. This customer-centric approach builds long-term relationships and fosters loyalty.

• Value Creation and Exchange

Marketing focuses on creating value for both customers and businesses. It involves offering products or services that solve problems, fulfill desires, or improve the customer’s life. In return, customers provide value through monetary payment or loyalty, establishing a mutually beneficial exchange.

• Dynamic Environment

Marketing operates in a constantly changing environment influenced by factors such as technology, market trends, consumer behavior, and competition. Marketers must adapt strategies to stay relevant and competitive in response to these changes.

• Integrated Process

Marketing is not limited to a single function but integrates various activities, including product development, pricing, distribution, promotion, and customer relationship management. These functions work cohesively to achieve marketing objectives and create a seamless customer experience.

• Focus on Relationships

Modern marketing emphasizes building and maintaining strong relationships with customers, suppliers, partners, and other stakeholders. By fostering trust and engagement, businesses can ensure customer retention, repeat purchases, and positive word-of-mouth referrals.

• Use of Research and Data

Marketing relies heavily on research and data analytics to make informed decisions. Insights from market research, surveys, and consumer data help identify opportunities, predict trends, and tailor strategies to meet specific customer needs effectively.

• Profit and Growth Orientation

While customer satisfaction is a priority, marketing also aims to achieve business profitability and growth. Effective marketing strategies drive revenue, enhance brand equity, and create competitive advantages that contribute to an organization’s success.

• Communication and Promotion

Marketing involves communicating a product’s value proposition to the target audience. This includes advertising, personal selling, public relations, and digital marketing. Effective communication helps in creating awareness, generating interest, and persuading customers to make a purchase.

The SERVQUAL model, developed by Parasuraman, Zeithaml, and Berry, is a widely used framework for assessing and improving service quality. It focuses on understanding the gap between customer expectations and their perceptions of the actual service delivered. SERVQUAL evaluates service quality across five dimensions: Tangibles, Reliability, Responsiveness, Assurance, and Empathy. This model provides businesses with actionable insights to enhance customer satisfaction and loyalty.

Key Dimensions of the SERVQUAL Model

• Tangibles

This dimension refers to the physical aspects of a service, such as the appearance of facilities, equipment, personnel, and communication materials. Customers often associate the quality of service with visual elements. Modern, clean, and well-maintained physical facilities create a positive first impression. For instance, in the hospitality industry, the cleanliness of hotel rooms and the design of lobbies are critical tangible aspects.

Importance: Tangibles influence customer perceptions and enhance the overall service experience.

• Reliability

Reliability measures the ability of a service provider to deliver consistent and dependable service. Customers expect businesses to fulfill promises, whether related to delivery time, product quality, or support services. For example, an e-commerce company that guarantees next-day delivery must ensure timely fulfillment.

Importance: Reliability builds trust and long-term relationships with customers.

• Responsiveness

This dimension evaluates how promptly and effectively a business responds to customer inquiries, complaints, or requests. Customers value quick and courteous responses, whether through customer service representatives, email, or chat support. For example, airlines addressing flight delays promptly and offering solutions demonstrate high responsiveness.

Importance: Responsiveness fosters a sense of importance and care, improving customer satisfaction.

• Assurance

Assurance involves the knowledge, competence, and courtesy of employees and their ability to instill confidence in customers. This dimension is particularly significant in industries like healthcare, banking, and education, where customers seek trust and security. For instance, a knowledgeable bank representative who explains financial products clearly can boost customer confidence.

Importance: Assurance enhances trust and reduces perceived risks.

• Empathy

Empathy assesses the extent to which service providers understand and care about the individual needs of their customers. Personalized services, attentive listening, and addressing specific concerns are hallmarks of empathy. In retail, a salesperson who recommends products based on a customer’s unique preferences demonstrates empathy.

Importance: Empathy fosters emotional connections, encouraging customer loyalty.

Gap Model of Service Quality:

The SERVQUAL framework identifies five key gaps that can impact service quality:

1. Gap 1: Knowledge Gap

   The difference between customer expectations and the management’s understanding of those expectations. This often arises from inadequate market research or customer feedback.

   Solution: Conduct regular surveys and focus groups to understand customer needs.

2. Gap 2: Policy Gap

   The gap between management’s perception of customer expectations and the service standards they set. Poorly designed policies can lead to a mismatch between expectations and service delivery.

   Solution: Align service standards with customer expectations.

3. Gap 3: Delivery Gap

   The difference between established service standards and actual service delivery. This can occur due to inadequate employee training, poor resource allocation, or lack of motivation.

   Solution: Invest in employee training and improve operational processes.

4. Gap 4: Communication Gap

   The gap between promised service (through advertising or promotional materials) and what is actually delivered. Overpromising can lead to customer dissatisfaction.

   Solution: Ensure honest and realistic marketing communication.

5. Gap 5: Perception Gap

   The gap between customer expectations and their perceptions of the actual service received. This results from discrepancies in service quality at different touchpoints.

   Solution: Consistently monitor and address service quality issues.

Applications of the SERVQUAL Model:

• Customer Feedback

The SERVQUAL model helps organizations systematically gather and analyze customer feedback on service quality, enabling targeted improvements.

• Benchmarking

Businesses use SERVQUAL to benchmark their service quality against competitors or industry standards, identifying areas where they excel or lag.

• Employee Training

The insights from SERVQUAL highlight specific areas where employees need training, such as communication skills or technical knowledge.

• Service Redesign

By identifying gaps, the SERVQUAL model guides businesses in redesigning their service processes for better alignment with customer expectations.

Advantages of the SERVQUAL Model:

• Comprehensive Evaluation: It provides a detailed assessment of service quality across multiple dimensions.
• Customer-Centric: Focuses on customer expectations and perceptions, making it highly relevant for enhancing satisfaction.
• Actionable Insights: Identifies specific areas for improvement, enabling targeted interventions.
• Versatility: Applicable across various industries, from healthcare to retail.

Challenges and Limitations:

• Subjectivity in Perceptions: Customer perceptions of service quality can vary widely, making it difficult to generalize results.
• Dynamic Expectations: Customer expectations evolve over time, requiring continuous updates to the model.
• Resource-Intensive: Implementing the SERVQUAL model requires significant investment in surveys, data analysis, and staff training.

• Focus on Gaps: While useful, the model emphasizes identifying gaps rather than exploring strengths.

Promotion Mix

The Promotion Mix refers to the blend of several promotional tools used by the business to create, maintain and increase the demand for goods and services.

The fourth element of the 4 P’s of Marketing Mix is the promotion; that focuses on creating the awareness and persuading the customers to initiate the purchase. The several tools that facilitate the promotion objective of a firm are collectively known as the Promotion Mix.

The Promotion Mix is the integration of Advertising, Personal Selling, Sales Promotion, Public Relations and Direct Marketing. The marketers need to view the following questions in order to have a balanced blend of these promotional tools.

• What is the most effective way to inform the customers?
• Which marketing methods to be used?
• To whom the promotion efforts be directed?
• What is the marketing budget? How is it to be allocated to the promotional tools?

Elements of Promotion Mix

1. Advertising

The advertising is any paid form of non-personal presentation and promotion of goods and services by the identified sponsor in the exchange of a fee. Through advertising, the marketer tries to build a pull strategy; wherein the customer is instigated to try the product at least once. The complete information along with the attractive graphics of the product or service can be shown to the customers that grab their attention and influences the purchase decision.

2. Personal Selling

This is one of the traditional forms of promotional tool wherein the salesman interacts with the customer directly by visiting them. It is a face to face interaction between the company representative and the customer with the objective to influence the customer to purchase the product or services.

3. Sales Promotion

The sales promotion is the short term incentives given to the customers to have an increased sale for a given period. Generally, the sales promotion schemes are floated in the market at the time of festivals or the end of the season. Discounts, Coupons, Payback offers, Freebies, etc. are some of the sales promotion schemes. With the sales promotion, the company focuses on the increased short-term profits, by attracting both the existing and the new customers.

4. Public Relations

The marketers try to build a favourable image in the market by creating relations with the general public. The companies carry out several public relations campaigns with the objective to have a support of all the people associated with it either directly or indirectly. The public comprises of the customers, employees, suppliers, distributors, shareholders, government and the society as a whole. The publicity is one of the form of public relations that the company may use with the intention to bring newsworthy information to the public.

E.g. Large Corporates such as Dabur, L&T, Tata Consultancy, Bharti Enterprises, Services, Unitech and PSU’s such as Indian Oil, GAIL, and NTPC have joined hands with Government to clean up their surroundings, build toilets and support the swachh Bharat Mission.

5. Direct Marketing

With the intent of technology, companies reach customers directly without any intermediaries or any paid medium. The e-mails, text messages, Fax, are some of the tools of direct marketing. The companies can send emails and messages to the customers if they need to be informed about the new offerings or the sales promotion schemes.

E.g. The Shopperstop send SMS to its members informing about the season end sales and extra benefits to the golden card holders.

Thus, the companies can use any tool of the promotion mix depending on the nature of a product as well as the overall objective of the firm.

Communications mix and its role in Marketing

There are multiple components of a communications mix. The communications mix in marketing comprises of the various ways that a company can communicate with its customers. Because marketing communications is of utmost importance in today’s day and age, the communications mix and the marketing vehicles used within it are also important to marketing.

As can be seen from the concepts of marketing there were initially various different concepts which were used when manufacturing first started. They were the production concept, the sales concept etc.. However, slowly but surely we moved on to implement the marketing concept and today we generally use the customer concept in the market.

The key principle behind the marketing concept is that we should add value to our products so that the customer will automatically buy our products above that of competition. However, how will the customer know that we have value added products? This is the job of the Marcomm department and hence the communications mix is needed.

Generally when a company makes a marketing communications plan, it combines multiple forms of communication channels into the mix. This is done to ensure that the message of the company reaches the end consumer. It is also done to ensure repetition so that the customer recalls the brand because of the brand message being repeated in multiple channels at once.

The 6 most common variables of the communication mix are as follows.

1. Advertising

We are very well with the impact that advertising has on our purchase behavior. Advertising may be in many forms but the two most common forms are ATL advertising which includes television, radio and print and the other type is BTL advertising which majorly includes out of home advertising.

Advertising is strongly used by brands who have deep pockets or who have a lot of competitors in the market. Advertising requires that you have a unique advertising message as well. The more unique and impactful the message, the more is the connect between the brand which is advertising and the consumers.

2. Personal selling

Personal selling is the second most common method to communicate the benefits of your products to the end customer and convert him from a lead to a prospect and ultimately to your customer. This is the reason that many top companies and even small businesses nowadays are focused on personal selling.

If you enter a branded retail outlet, you will many times find that the company promoter is already present in the retail outlet. The reason that the company appoints their own brand promoter is because this ensures that the customer will have better attention from their individual brand. Along with this, the company’s salesman will also have more knowledge of product and competition as he has been dedicatedly hired by the brand.

If instead of a brand promoter, there was the retailers own salesman, he would have promoted any brand on the shelf. At the same time, the retailers salesman might not be as knowledgeable as the brand salesman because he has so many brands and products to sell. He gets overloaded and ultimately forgets the features of products he is selling. So, if a company wants to communicate the benefits of its products, convince and convert the customer, then personal selling with hand picked and trained executives is the best option.

3. Sales promotion

There are many different ways of running sales promotions and many different tips and tactics present depending on the sector you are in. Where trade discounts and freebies work very well in FMCG, in consumer durables, free services and value addition (free installation) works better then discounts.

Sales promotion also involves providing the consumer with an incentive for the purchase of the product. At the same time, it may involve giving incentives to dealers or distributors to get the product selling & moving in the market. The expenses in Sales promotion is lower and the investment is very less because it gets the product moving.

Sales promotions is increasingly being used as a tool especially after the rising popularity of e-commerce and online sales. Every other day you will see a “Sale” or “Deal” online which will be time bound and which customers will impulsively purchase. Due to some discount being given for certain amount of time, online retailers can move huge quantities of products across the country or the region they are selling in.

4. Public relations

Public relations is the art of spreading the news about your products or services in the public domain so that some hype is created and people talk to each other about it. One of the most commonly observed public relations exercise is when there is some news related to a Movie or related to a product which is published in the newspapers just before the movie is supposed to be released or the product is supposed to be launched.

Similarly, there are multiple public relation exercises which can be carried out by a brand. In today’s date, social media is one of the biggest platforms for public relations exercise. You will see a lot of news being published with regards to what is trending. Similarly, press conferences, face to face interaction with consumers, newspaper advertorials, involving the community are various ways that public relations exercises can be implemented.

Public relations is an important part of the communications mix. It helps in building a strong brand image and a brand can slowly release the information therefore keeping the public attention intact. In fact, if you notice, information about a movie which is going to be big starts coming in newspapers much before the movie launch date is announced.

This is nothing else but Public relations wherein the marketing manager wants the public to be hooked to whats about to happen in the movie. They want to create a hype. Off course, some movies (like the latest star wars franchise) would rather hide their details then show it to public.

5. Direct marketing / Internet marketing

In the last few years, Digital marketing was giving tough competition to television advertising as well as newspaper advertising. As of end quarter of 2016, digital marketing has practically overtaken Television advertising and has a major spend amongst all media.

Off course, the benefit of digital advertising is that even small businesses can get involved and it is not as costly as Television advertising. As a result, the overall revenue generated from digital advertising is much more then television or newspaper. But even then, not only small businesses, even top brands take part in digital marketing because it helps the brand in reaching the end consumer.

The key attraction of digital marketing is the personal connect that the brand makes with the consumer. Your email box, your facebook wall, your twitter feed are your private space and via social marketing, brands can enter this private space and make a connection. The brand which really does good campaigns can actually walk away with a large population of digital followers.

6. Packaging

Although packaging is supposed to be a part of the marketing mix and not the communications mix, lately, due to competition and the increasing rivalry between businesses, even packaging is considered as an important medium of communicating with your consumers.

The packaging of the product is the last point of sales for the company. When the consumer is standing in a retail aisle, he or she has a plethora of products in front of them to choose from. Many a times, the decision is made looking at the overall packaging of the product as well as the information written on the product.

If a customer wants an aloe vera shampoo, he might look at the packaging and decide against an Anti dandruff shampoo. However, if the packaging is poor, and the distinguishing feature is not mentioned clearly, the consumer might ignore the product altogether. As a result, BECAUSE even packaging communicates to the consumer, it is now considered as an element of the communications mix.

So overall, the above 6 media vehicles are the ones which are considered as the communications mix. Whenever a brand wants to communicate to their consumers, they will use one of the above methods to do the same.

Service Marketing refers to the promotion and management of services rather than physical products. It involves strategies aimed at delivering value and building customer satisfaction through intangible offerings. Unlike goods, services are intangible, inseparable from the service provider, variable, and perishable. Service marketing focuses on understanding customer needs, managing service quality, and ensuring effective communication. It includes the 7 Ps of marketing: Product, Price, Place, Promotion, People, Process, and Physical Evidence. The goal of service marketing is to differentiate a service offering, build strong customer relationships, and enhance service delivery for long-term success.

Features and Characteristics of Services:

• Intangibility

The most defining feature of services is their intangibility. Unlike physical products, services cannot be touched, seen, or owned. This makes it difficult for customers to evaluate the service before purchase. For instance, customers cannot physically examine or test the quality of a service like they can with a product. This characteristic makes marketing more challenging as businesses must focus on building trust, using testimonials, offering guarantees, and emphasizing the expertise of service providers. Examples of intangible services include education, healthcare, and consulting.

• Inseparability

Services are inseparable from the service provider. This means that the production and consumption of services occur simultaneously. The service provider and the customer are both involved in the service delivery process. For example, in a hair salon, the service (a haircut) is being produced and consumed at the same time. Unlike products that can be produced in bulk and stored for later sale, services are delivered in real-time. The quality of service is highly influenced by the interaction between the customer and the service provider, making customer experience crucial to service marketing.

• Variability (Heterogeneity)

Services are highly variable and can differ from one instance to another, even when offered by the same provider. The quality of service can vary depending on the provider, time, place, and circumstances. This variability can arise due to human factors (such as the mood or skill of the service provider) or environmental factors (like service conditions). For instance, the quality of customer service in a restaurant might differ from one day to the next, depending on the staff or service conditions. As a result, consistency in service quality becomes a challenge for service providers.

• Perishability

Services are perishable, meaning they cannot be stored, saved, or inventoried. Once a service is offered and consumed, it cannot be reused or resold. For instance, an empty hotel room for a night cannot be sold once the day has passed. This characteristic forces service providers to manage supply and demand carefully. To avoid loss of revenue, they must ensure that their service capacity matches the demand at any given time, often using strategies such as price adjustments, promotions, or reservation systems to manage fluctuations in demand.

• Simultaneous Production and Consumption

As mentioned earlier, the production and consumption of services occur simultaneously. This characteristic differentiates services from products, which can be produced and stored before being consumed. In services, the customer is often present during the service process, such as in a hospital during a medical consultation or at a gym during a workout. This simultaneous interaction between the customer and the service provider can influence the quality of the service, as customer participation plays an important role in the final outcome.

• Lack of Ownership

When customers purchase services, they do not gain ownership of anything tangible. They may benefit from the outcome of the service, but they cannot possess it. For example, when a customer buys a flight, they do not own the airplane; they simply enjoy the benefits of the service (the journey). This contrasts with product marketing, where the consumer gains ownership of the physical product. The lack of ownership makes services more difficult to market since the customer is purchasing an experience or benefit rather than a tangible asset.

• Customer Participation

In many services, the customer’s participation is required for the service to be effective. For instance, a customer’s involvement in a fitness training session, an educational course, or even a consultation with a financial advisor is essential for the service to deliver its intended results. The level of customer participation can affect service quality, and customers are often active collaborators in the service process. This characteristic underscores the importance of customer satisfaction and engagement in service delivery, as the final outcome is partially dependent on their involvement.

• Service Delivery Channels

Service delivery in services can be carried out through various channels, including in-person, over the phone, or through digital platforms. For example, education can be delivered through classrooms, online classes, or blended learning methods. Similarly, banking services can be provided in-branch, through ATMs, or via online banking platforms. The rise of digital technology has expanded service delivery channels, offering new ways to provide services remotely or via digital interfaces, thus improving accessibility and convenience for customers.

Challenges of Services:

• Intangibility

The intangibility of services is one of the greatest challenges in marketing and managing them. Since services cannot be seen, touched, or owned, it becomes difficult for customers to evaluate them before purchase. This challenge forces businesses to focus on creating strong brand reputations, using testimonials, and providing guarantees to enhance customer confidence. To address this challenge, service providers often use physical evidence, such as well-designed offices or uniforms, to make the service feel more tangible and credible.

• Inseparability

The inseparability of services means that they are produced and consumed simultaneously. This presents a challenge for service providers in maintaining consistent quality, as the service is influenced by the interaction between the service provider and the customer. In industries such as healthcare or education, the service is dependent on both the skills of the provider and the participation of the customer. Managing this interaction requires continuous training, proper recruitment, and systems to maintain service quality across all customer interactions.

• Variability (Heterogeneity)

Services are often heterogeneous, meaning that their quality can vary from one service encounter to another, even if the same provider delivers them. Variability can arise from factors such as the skills and mood of the service provider, customer expectations, or environmental conditions. This poses a challenge for service businesses that aim to offer a consistent customer experience. Standardization and quality control mechanisms are essential to minimize variability, though total uniformity is often impossible due to the human aspect of service delivery.

• Perishability

Unlike products, services are perishable; they cannot be stored, inventoried, or saved for later use. This creates a challenge for service providers in managing capacity and demand. For example, an empty hotel room or an unsold airline seat results in lost revenue, as those opportunities cannot be recaptured. To manage perishability, businesses must forecast demand accurately, optimize service capacity, and use pricing strategies such as discounts or promotions to encourage demand during off-peak times.

• Customer Involvement

Many services require a high level of customer involvement in the delivery process. For example, in education, the outcome of the service is highly dependent on the student’s participation. Similarly, in fitness, customer involvement is critical for achieving desired results. High customer participation requires companies to ensure that customers are engaged, informed, and satisfied throughout the service process. This challenge emphasizes the need for effective communication and customer education to ensure that the customer knows their role in service delivery.

• Managing Customer Expectations

Service businesses must manage customer expectations, which can be a challenge due to the subjective nature of services. Customers have different needs, desires, and perceptions, which can lead to dissatisfaction if the service fails to meet expectations. Overpromising or failing to communicate effectively can result in poor customer experiences. To address this challenge, service providers must set realistic expectations, provide clear communication, and focus on delivering a service that matches or exceeds customer expectations. This can be achieved by consistently delivering on promises and maintaining high-quality standards.

• Employee Dependence

In service industries, employees play a crucial role in the delivery of services. The quality of service is often influenced by the skills, attitude, and behavior of employees, making it essential to recruit and retain qualified personnel. Employee turnover, lack of motivation, or inadequate training can negatively impact service quality. Therefore, service providers need to invest in staff development, continuous training, and creating a positive work environment to ensure that employees deliver high-quality, consistent services.

• Service Innovation and Differentiation

In a competitive service industry, businesses must continuously innovate and differentiate their offerings to stay ahead. Since services are intangible and their quality is often subjective, service providers face the challenge of finding unique ways to stand out. This can be particularly difficult in industries with little differentiation, such as fast food or retail. Service innovation can involve new service offerings, better customer experiences, or incorporating technology to enhance service delivery. It is important for businesses to understand customer needs and preferences to develop innovative services that offer a competitive advantage.

Sales Performance Review or analysis is a crucial part of a company’s overall performance management system. It involves evaluating the effectiveness of the sales efforts, identifying areas for improvement, and aligning sales strategies with organizational goals. This process allows organizations to track how well their sales teams are performing, assess the return on investment in sales activities, and determine whether sales objectives are being met.

Importance of Sales Performance Review:

Sales performance review is important for several reasons:

• Identifying Trends: Reviewing sales performance helps identify trends, both positive and negative, which can be leveraged to improve sales strategies.
• Goal Alignment: It ensures that the sales team’s activities are in alignment with the company’s overall objectives and sales targets.
• Resource Allocation: Analyzing sales performance helps companies allocate resources effectively, ensuring that efforts are focused on the most profitable areas.
• Motivation and Recognition: It helps identify top performers, providing an opportunity for recognition and motivating other sales personnel to improve.

Key Metrics for Sales Performance Review:

A successful sales performance review should include key performance indicators (KPIs) to assess various aspects of sales activity. These metrics are:

• Sales Volume: Measures the total number of products or services sold during a specific period. It is one of the most basic but important metrics.
• Revenue and Profit: Revenue indicates the total income generated from sales, while profit focuses on the net income after expenses. Both are crucial to understanding the financial contribution of the sales team.
• Sales Growth: Compares the current sales figures to previous periods to measure growth. This helps assess whether the sales team is improving over time.
• Conversion Rate: The percentage of leads or prospects that are converted into actual sales. A high conversion rate indicates a strong sales process.
• Customer Acquisition Cost (CAC): Measures the cost associated with acquiring each new customer. This helps understand the efficiency of the sales efforts.
• Customer Retention Rate: Measures how well the sales team maintains relationships with existing customers, ensuring repeat business and long-term customer loyalty.
• Sales Cycle Length: The average time it takes to close a deal from the initial contact to final sale. A shorter sales cycle generally reflects an efficient sales process.

Process of Sales Performance Review:

• Data Collection:

Gathering relevant sales data from various sources, including CRM systems, sales reports, customer feedback, and financial records.

• Performance Evaluation:

Analyzing the collected data using KPIs and other metrics. Performance is compared against pre-established targets or benchmarks.

• Trend Analysis:

Examining sales trends over different periods (monthly, quarterly, or annually) to identify patterns in sales activities, market demands, and customer preferences.

• Identify Strengths and Weaknesses:

Determining areas where the sales team has excelled (e.g., high conversion rates, increased revenue) and areas that require improvement (e.g., low customer retention, long sales cycles).

• Root Cause Analysis:

Identifying the underlying factors contributing to performance issues, such as inadequate training, poor sales strategies, market competition, or external economic conditions.

• Team Review:

Conducting team meetings or one-on-one sessions to discuss individual and team performance, share feedback, and brainstorm improvements.

• Set New Targets:

Based on the analysis, adjusting sales targets, refining strategies, and setting goals for the next period. The updated goals should be realistic, measurable, and aligned with the overall business objectives.

Sales Performance Review Methods:

Different methods and approaches can be used for sales performance review, depending on the company’s needs and resources.

• Self-Assessment:

Sales representatives evaluate their own performance, highlighting their achievements, challenges, and areas for improvement. This can provide valuable insights into the individual’s perspective.

• Managerial Review:

Sales managers conduct performance evaluations, assessing each salesperson’s output against set targets and providing guidance for improvement. Managers may also provide qualitative feedback about behaviors and skills.

• Peer Review:

Colleagues provide feedback to each other. This method promotes collaboration and provides a different perspective on performance.

• 360-Degree Feedback:

Combines feedback from managers, peers, subordinates, and customers, providing a comprehensive view of performance from multiple angles.

Challenges in Sales Performance Review:

• Subjectivity:

Managers’ biases can influence the assessment, leading to subjective evaluations that may not fully reflect the salesperson’s actual performance.

• Incomplete Data:

If the sales data collected is incomplete or inaccurate, it can lead to incorrect conclusions and ineffective strategies.

• Lack of Consistency:

Inconsistent evaluation methods or criteria across teams and periods can make it difficult to draw meaningful comparisons.

• Resistance to Feedback:

Sales representatives may resist feedback or perceive performance reviews as punitive rather than constructive, affecting morale and performance.

Action Based on Sales Performance Review:

• Training and Development:

Addressing skill gaps by providing additional training, especially for areas where sales teams are underperforming.

• Strategy Adjustment:

Revising sales strategies, such as adjusting target markets, offering new incentives, or improving the sales pitch, based on the performance analysis.

• Setting New KPIs:

Adjusting or introducing new key performance indicators to better align the team with the business goals.

• Incentive and Recognition Programs:

Recognizing top performers through incentives and rewards to motivate them and set an example for the rest of the team.