Techniques of sales Promotion

Percentage of sales method In most cases and by most firms this percentage of sales method is used to determine the promotional budget of the company. So they more or less pull certain percentage of the sales made in a fixed period. Remember when I say fixed it can be for say last year or for several past years. This decision is more dependent on the current business scenario and current working of the company. It might be that the company may consider just last years sales figures under consideration as they may have made great sales. (So you may take one year or an average of several this depends on many condition in which the org functions). And ya , this can also be a forecasted sales of the year under certain conditions.

Unit of sales method For Biggies that build big products like two-wheelers auto-manufactures, and other consumer durable this is most preferred method of sales promotion Unit of Sales Method so here the base is UNITS of sales that are made. Here the figures of units are multiplied by fixed amount of money to reach the budge amount. For example: they might allocate $1000 per unit for sales promotions. (I did say its for Biggies so this amount might be big ..)

Competitive parity method Any marketers match or base their sales promotion budget to that of the major competitors. The logic attributed to this method is that the collective minds of the companies in the industry probably generate promotion budget that are close to optimal and any departure from the industry norms may lead to promotion war.

All you can afford method Here the amount used literally means All you can afford in other words all you are left with. So you pick all that is left after all other relevant allocations have been made. So normally this approach is used by Small fishes (small companies with small budget) or may be by some other firms that are big when they are introducing the new product. This approach is merely an availability oriented budget and kina unsophisticated. Apparently, there is no realization that in a competitive market situation, sales promotion mainframe sales in many ways.

Objective end task method As I said the promotional budget is determined by the overall promotional strategy of the organization hence objective end task methods is the one which is strategy driven. This is even the most popular technique to decide on sales promotions budget. So what do we do? We (Marketing Managers) start by making a thorough study i.e. understanding the market, the product, the offerings, the most crucial competition and consumer behavior in order to set the ultimate promotion objectives. Remember these objectives may relate to reach short term sales objectives .Remember this is sales promotions that are ultimately derives sales and sales and sales. These objectives may even relate to introducing a new product, stimulate trial, increasing distribution, etc., within a specified period of time. Now you determine how much money would be required to fulfill each of these tasks in order to achieve the promotion objectives. If the cost happens to be greater that money available then ether the objectives are refined or the funds are made available the contingency reserve or by reducing the budgets of the other promotional activities.

Ethics

in

Sales

and

Marketing

Increased scrutiny of corporate actions in todays business climate puts pressure on all facets of corporate structure to adhere to ethical business practices founded on principles that are honest, fair and transparent to the stakeholders. The sales and marketing profession is a driving force in our economy and should not be left untouched when scrutinizing ethical issues. A society where the consumer is confident of honest trade is one that will prosper.

While some would fear that the sales and marketing department would be the last place to go looking for ethical guideposts, we could venture that this should be the first place to build a culture with values that create a climate for sound business decision making and the practice of ethical behavior. The public face of corporations is often painted by brand identity, marketing messages delivered via various mediums and the sales representatives who deal directly with the buying public. With an aligned, sound code of ethics for marketing, sales and customer service, organizations would theoretically build consumer confidence and shareholder value. Of course, theory doesnt spell success. An important ingredient in developing an effective ethical culture is through strong exemplary leadership committed to these values. There are many examples of companies that weakly espouse a code of ethics through lip service but in reality, short term results are valued more highly than a longer term strategy and commitment to doing what is right. Unfortunately, some organizations are led by individuals who have given in to the pressures imposed by weightier shareholder centric rather than customer centric values. This ultimately has a bearing on how sales and marketing departments are managed and in part defines the overall corporate culture.

Ten

Point

Plan

for

Emphasizing

Ethics

in

the

Sales

&

Marketing

Culture:

1. Create a written code of ethics specific to the sales and marketing department. If you already have a written code of ethics, be sure it is widely communicated. While some companies have their sales and marketing staff sign their code of ethics, in reality this is only a preliminary step in communicating the value placed on ethics by the organization. The following steps will help transition from a written code to a code of practice.

2. Define the parameters for managerial decision making that will form the acceptable boundaries for managerial actions. According to Hosmer in Ethics of Management (McGraw Hill 2003), there is a balancing act that needs to take into consideration ethics, economics and legal concerns in the managerial decision making process.

3. Draft sales and marketing scenarios based on past experiences and use them as a basis for discussion at staff meetings. Discussion of ethical issues without finger pointing will help create a culture of open dialogue and stimulate ideas and valuable thought process.

4. Bring sales and marketing practitioners together during the planning phase to discuss the pros and cons of marketing campaigns and sales activities from an ethical viewpoint.

5. Require marketing proposals and sales campaign documents to spell out the ethical considerations of the author(s). Creating transparency begins with the creative process.

6. Implement a privacy policy and publish a privacy statement. Inform you clients and prospects about how you collect their data and what you use it for. Allow prospects and clients to opt-in and never sell or give out their information without their permission. 7. Use professional assessment tools to assist in sound hiring decisions. Professional assessment tools are one of the necessary components in the hiring process. Others include using scenario type, ethically based questions during the interview process and conducting thorough background checks.

8. Establish due process for dealing with any violation of your code of ethics. Without due process, your code of ethics could be flawed and unenforceable. Spell out in advance how due process would be accomplished and who is responsible for the jurisdiction.

9. Reward sound judgment and recognize ethical behavior that exemplifies the culture you wish to create. As with any type of reward and recognition, the best reinforcement of desired behavior is timely and applicable to the moment. Personal oneto-one acknowledgement by management is very important. Public recognition within your organization in newsletters and at staff meetings in equally important.

10. Practice exemplary leadership. Last but not least, leadership by example is one of the most powerful and proven methods of building a team that lives by a code. The price of exemplary leadership is high, but affordable, and the investment you make as a leader pays rewards that are immeasurable.

Sales people perform amid the convergence of three demanding masters: employer, customer and self. Each party has their own agenda and the sales person, who clearly has a personal agenda, is the arbitrator. The employer/seller is seeking sales, profit margin and correctly consummated closings. The customer/buyer is seeking solution, value and correctly consummated closings. The salesperson has the above objectives in mind and also their own income potential. The common desire is that the sale be closed correctly. All three parties want to leave the closing feeling pleased with the final result and process that lead to it. Critical to this three-way satisfaction is the sales person saying and doing the right things and not over-promising. True and correct disclosure is the basic tenet: disclosing to the customer what the product truly is, how it can solve problems and disclosing to their employer who the customer is and what they want. It is a challenging work of communication, that can easily be confused accidentally and deliberately. The deliberate error most often is caused by money. People, including sales people, sellers and buyers all have and will act oddly for money. Money can lead us astray. Sales people have the added pressure of variable income streams and the challenge of having great months and poor months. The question is, Will our sales people hold their ethical posture when times are bad? Micro-management is one tool to deal with this disclosure problem and many companies now use scripts and legal approval of any and all flyers or letters that a sales person might use. Misrepresentation is embarrassing and expensive. It can result in loss of business, loss of customers and worst-case scenario, class action suits. Ethical selling is an adjunct to micromanagement and an enhancement to any sales effort. Sales people need to know about the conflicted position that they are in and use their own ethical posture to bolster their customer relations and service. Ethical selling is developing trust: teaching individual sales people to act rightly, to say and print the right things; to not over-promise and make sure that buyers and sellers are fully informed. The customer is not always right. Not all customers should be sold to, and sometimes, customers should be fired. In every walk of life there are liars and thieves. Just as sales people can over-promise and not deliver, so too can customers. The promise of purchases is not the same thing as actually making the purchase. And paying for the purchase and the product performing as advertised complete the transaction. Sales people certainly know that all customers are not created equal. Some are large buyers and some are small. Some have prompt payment habits and some dont pay at all. Though we would prefer the large buyers who pay promptly, what we must truly avoid are those customers that never pay. These are the unethical customers that should be avoided. Do our sales people know to avoid them? Quality begets quantity. If and when sale people are ethical (courteous, responsible and honest) they can and will attract similar type customers. They will also be able to identify customers that may not be so. Unethical customers are to be avoided. The customer is not always right. Ethical selling involves both sales people and their customers. Can our sales people be ethical and also find like-minded customers?

Be ethical thyself and do business with same. Liars and thieves can and will play money games and lead a sales person astray. Are our sales people ethically secure? Competitors are not the enemy. Sometimes they will win the day and sometimes we will. No one wins every game they play, but how do we handle defeat? Do we disparage our competitors or our operations / fulfillment teams? Do we sulk and complain to anyone and everyone? Or do we examine the events and learn from them? Mistakes will happen and perfection is a very hard performance level to achieve and impossible to maintain for very long. Mis-communication does happen. Shipping delays occur and people do get sick and take vacations; all of which can cause a sale to not close correctly. Ethical sales people know this and can deal with these errors, and they can also communicate clearly what did occur and what might be done, without recrimination or assassination. Ethical selling provides a framework to accept both success and loss. Surely, success is the preferred outcome, but experience and character are most often acquired when we lose. Losing is not bad, if we learn and grow from it. Developing a personal code of ethics is critical in the development of successful sales people. I am coming from the mortgage industry, which is suffering now for many reasons and one is a market wide lack of ethical behavior. Too many players, sales people, sellers (lenders) and buyers (borrowers) are misbehaving. Too many loans have been closed that were not true and correct. Misrepresentation is not the only problem in the current mortgage crisis, but it is a contributory factor and there is truly no need for such and no excuse for such.