Unit 2 {Book}

Market communication

Role of Marketing Communications in B2B

Markets
Various marketing communications tools are used by B2B companies is to retain existing
customers, connect with new customers and focus on helping to turn prospective customers
into sales.

Therefore understanding the buying behaviour of your market, targeting the right prospects
and providing the right information/messages at the right time, through the right channels is
of the upmost importance. And as your B2B buyers are more likely than B2C buyers to
research and seek out information on the products they buy, it’s important that any
communication your buyer receives is targeted, highly relevant and easily accessible.

There are many ways you can reach out to your target market, both off line and online.
According to industry reports on where buyers go to gather information on products or
services, it seems that websites still remain the most popular destination with nearly half of
people saying they go straight to a company’s website if they are interested in finding out
more (B2B Marketing and Base One: Buyersphere report 2013).

Although it’s also good to know that traditional methods remain important with many buyers still
relying on material such as sales brochures or downloading pdfs for their information gathering.
Additionally, tools such as Social media are a growing influencer and source of knowledge so should
also be considered an important part of your marketing mix.b2b marketing communications tools
Below, we’ve put together a check list of the b2b marketing communications tools you should be
using to connect with your customers and enhance your sales

1. Website – A B2B website helps buyers connect with manufacturers,

wholesalers and exporters and vice versa. It acts as your online shop
window and is the most likely go-to place for any prospective customer or
end user wanting to investigate your services or products. B2B buyers aren’t
shoppers they’re researchers and therefore you need to ensure that your
website not only communicates the right level of information but also
appeals to your customers as well as end users – two distinct audiences with
two distinct demands. Your trade customers will require detailed, easily
accessible information on products, whilst your end users tend to take a
broader approach, being, attracted to you as a company, your
professionalism and what you have to offer. Therefore building an easy to
navigate, information rich, professional and clearly branded website to
satisfy all channels is essential. Taking into account how they use the site
and on what platform – mobile/tablet/laptop – also goes without saying.
2. Branding – Branding is said to directly affect lead generation and
ultimately sales. Get it wrong, by using the wrong messages and images and
 you’ll turn potential customers away. Create, develop and use it in the right
way and your brand will attract the right people for the right reasons.
3. Social media – As of 2012, 91% of B2B marketers now use social media
but its how you use it that counts. For B2B companies, businesses should go
deep, not broad. It’s better to become a master of one or two channels than
struggle in many. Social platforms allow you to establish your expertise and
credibility and also provide a method for feedback and discussion. Social
networks are more like a real-world networking event. Think about
Facebook, YouTube Twitter, LinkedIn, Google+ and possibly Pinterest. It’s
beneficial to choose one platform and one network to focus on initially, and
really n engage with your ideal customers there. As you master those
channels, you can then start to expand into other realms.
4. Technology – Treat technology and technological advances as your ally and
you could seriously improve your marketing communications. From
developing product Apps that your sales people can use as demonstration
tools to mobile websites, dealership sites, improved direct mail logistics and
3d printing, new technologies allow you to easily and effectively target and
connect with potential customers and improve your ‘pulling power’.
5. Lead Generation – Building a database from your own leads, gives you a
powerful marketing tool. Using a range of marketing techniques both online
and offline to generate and nurture leads will help to increase your potential
customer base, communicate to existing and potential customers and
promote your company’s offering. Your website, social media channels,
targeted email marketing, direct mail, exhibitions and telemarketing are all
tools to aid data capture and build your customer relationship marketing
(CRM).
6. Email Marketing – Used as an important CRM tool, it will help you retain
as well as gain customers. Well executed, targeted email campaigns to
potential buyers in the market or regular e-newsletters are an effective way
of engaging and staying in touch with existing and potential customers.
7. The Right Sales Team Support – Statistics show that a high percentage of
sales reps are typically not well enough prepared for initial sales meetings.
Making sure that your sales team or dealers are equipped with the most
relevant information is essential, so give them easy access to product details
and tech info through dealership sites, product apps; mobile friendly
websites and up-to-date, well branded sales literature and brochures. The
right information, accessible at the right time can make the difference
between a sale and a fail.
8. Traditional Marketing Techniques: Print, direct mail, and telemarketing
can still be a very effective way to target prospective customers in the B2B
world. Correctly targeted and effectively produced direct mail can be more
effective than email at converting potential customers, whilst trade shows
and exhibitions offer face to face meetings, data collection possibilities,
 strong brand messages and the demonstration of new products and
initiatives.

Consumer Communication process

Consumer communication and persuasion is an essential part of any Marketing
Strategy. In fact, it is the starting point of all improvement as consumer voices provide
companies with the data such as where they are lacking and what all they could do to
improve the product or service.

Do all companies listen to the consumer voices? Not really. It is only the ones which have an
effective consumer communication process in place, that are really able to focus on consumer
needs. Are you one of them? Let us take a look at the consumer communication process at
Suntory to understand the Consumer Communication Process.

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This company has set up a Customer Centre which takes up all inquiries, complaints, and
proposals from customers. Though most of the queries are answered, the customer voices are
sent across to related departments of the company. These departments analyze the gap
between the customer needs and the products and services. After doing so, the quality
improvements are suggested and the product development takes place in keeping with the
customer demands.

Consumer communication should be used effectively to drive maximum benefits to the

company. You must be thinking how. Let us look at few ways which will help you market
effectively even in a downturn.
 1. When economy is changing, it is all the more important to get the customer feedback. It is not
a good idea to fill their inboxes and mobiles with promotional messages. More so, you can
use online surveys to understand how they are thinking and what they want. You can then
make changes in your strategies, processes and so on to deliver the product that your
consumers are aiming for.
2. It is just not important to feed information to your consumers. Having a dialogue with them
from time to time is also important. You can use the email marketing newsletters to invite
them for such conversations. Apart from understanding their concerns, showing your
consumers that you care is also very important. This will have far-reaching consequence and
will benefit your company’s image.
3. Try and co-host an event with another local business. This will highlight your product’s image
in a positive manner. This is a kind of customer relationship building activity where you
interact face-to-face with the consumer and show him your expertise.
4. Consumers are becoming more and more environmentally aware these days. Anything against
the environment would put you in a bad light. So focus that your product or service is
following all the environment friendly standards. You can also show your concern by teaming
up with local charity and involving your consumers in the event too.

The above points can also be used for consumer persuasion too. Face-to-face meetings are
more effective in persuading people to buy your stuff. People can judge easily whether what
you are saying has substance or not. Therefore, try your level best to portray the positive
image of your product in a positive fashion. Once you learn the essence of consumer
communication, you would never have to look back.

Elements of the Communications Process

 The Message Initiator (the Source)

 The Sender
 The Receiver
 The Medium
 The Message
 The Target Audience (the Receivers)
 Feedback – the Receiver’s Response
 Medium can be:
 Impersonal (mass media)
 Interpersonal (with salesperson or a friend)
 Interactive (direct feedback possibility exists)

Marketing communications is essentially a part of the marketing mix. Promotion is what

marketing communications is all about.

Marketing communication aims at conveying a firm’s message as effectively and accurately

as possible.

The process is as follows: Sender, Encoding, Transfer Mechanism, Feedback, Response and
Decoding.

 Source: A source is also referred to as a sender. The sender has a message to convey to
others. The sender can be anyone from a brand manager (in a major corporation such as Nike
or Budweiser) to a salesperson in a smaller organization. At times, celebrities are used to
 endorse products and act as a sender for the product. It is always important to make sure that
the source is credible and trustworthy.
 A direct source can be a salesperson delivering a message about a product.
 An indirect source uses a well known public figure to draw attention to a product.
 Encode: The source encodes or translates ideas into a message. For example, a brand
manager decides to promote a new product.
 Message: After defining the target market, the marketer designs an effective message that
will achieve the communication objectives.
 Receiver: The receiver is the person or group with whom the sender attempts to share ideas.
Marketers want a response, the reactions of the receiver, after being exposed to the message:
for example, a consumer receiving the message about the new product.
 Decode: The receiver decodes or interprets the message. For a message to be decoded by a
receiver the way it was intended by the sender, the sender and receiver need to have common
experiences. In other words, a receiver may not decode a message the way it was intended to
if her background and experience differ greatly from the sender’s. A marketer has to be
sensitive to the intended audience.
 Noise: Noise interferes with or disrupts effective communication. This can include a poor
television or radio signal.
 Feedback: Feedback is monitoring and evaluating how accurately the intended message is
being received. This can be done by conducting market research. Essentially, this involves
asking consumers if they have seen the message, if they recall the message, and what their
attitude was towards the product.

Brand expression
Branding has many functions that go beyond its most basic requirement of
identification of a product. Branding, when done well, frames what consumers can
expect from a product and can become an important part of the proposition itself.
While creating a brand experience independent of the product is not always the goal
of marketing, creating distinctive brand positioning is needed.

 Coke stands for Happiness

 Apple stands for Creativity
 Harley-Davidson stands for Freedom
 How your brand expresses itself from its name, logo, corporate ID, packaging
design and copy, web design and copy all the annoying rules that fill its style
guide is the most tangible manifestation of your brand’s essence; intimations
before purchase of the brand’s soul, validation and reminder of its promise
after trial.
 No matter what industry, changing the culture is hard, lonesome, demanding
work. But in our experience, most higher education brands don’t need to
change their culture as much as they need to capture it and create a
consistent “Brand Experience.”
 Brand as motivational tool
 The roar of the dotcom revolution, reduced to the whimper of de-listed penny
stocks, left behind at least one important legacy. It changed forever the
employer/employee dynamic.
  Maybe it’s not as easy as it was to quit on Friday and find a better job by
Monday, but the revolving door of employee turnover hasn’t slowed
dramatically.
 Employers need to earn the loyalty of their employees. Employees need to be
reminded why they should get up and go to work. Off-site vision quests,
benefits and perks only go so far.
 Brand design extends your ad budget
 If you’ve got an unlimited ad budget, skip this section. The rest of you, trying
to squeeze every ounce of value from each hard-fought penny, listen up.
 In this world of fractured media the number (and cost) of messages needed
to hit your target between the eyes increases every season. Consumers are
multitasking and zoning out from ad saturation (or digitally avoid your
messages entirely). But these same consumers are meeting your brand face-
to-face on shelf or online.
 Brand design protects turf
 The current cycle of innovation is constant. The time you can afford to rest on
the laurels of product superiority is shorter than a pit stop. Today’s
improvement is tomorrow’s price of entry. No wonder companies are
becoming addicted to the heroin of R&D, minute “product improvements” and
promotions. Again, brand design can help.
 Your consumers’ connection with your brand results from its behaviour over
time. But the connection is sustained at the level of look, feel and voice. If
your consumers know most of the brands in the category are alike, what
criteria do they have left with which to make their choice?
 We’ve all stayed with brands we suspect have lost their original claim to
superiority because of an emotional connection. Their “voice” speaks to us.
Or, they make up for their deficits (or parity) with a great personality. We like
them more.
 Brand design or voice can’t cover up for product flaws. Bill Bernbach said:
“Nothing is worse for a bad product than good advertising.” But investment in
brilliant brand design can provide as much insulation against encroaching
competition as investment in product improvement R&D.

Strategies:

 Discover an ideal in one of five fields of fundamental human values.

 Build your culture around your ideal.
 Communicate your ideal to engage employees and customers.
 Deliver a near-ideal customer experience.
 Evaluate your progress and people against your ideal.

Communication Mix: Components

The marketing communication mix, sometimes referred to as the promotion mix, is a set of
five tools that businesses use to communicate with their customers, prospects and
stakeholders. It doesn’t matter how large or small your organization is, or what kind of
products or services you sell, utilizing an effective marketing communication mix can help
you increase your revenue.

Elements of the Marketing Communication Mix

There are five key elements of the marketing communications mix: advertising, public
relations, sales promotion, personal selling and direct marketing. Some organizations also add
a sixth component, which is events and sponsorship.

Advertising refers to any paid promotion of products, services or ideas by an identified

sponsor. Organizations can advertise in a number of ways, such as on television, radio,
magazines, newspapers, billboards and online. It’s an effective way to reach large quantities
of people, but it can be very expensive as well.

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 what’s about to happen in the movie. They want to create 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.

Role of Communication Mix in Marketing

Communicating your company’s brand positioning and delivering it to the target audience is
the foundation of the organization’s marketing strategy. Designing the right marketing mix
involves the four P’s i.e. Product, Price, Place and Promotion. If you are in the field of
marketing communications, then you must coordinate your efforts towards the last P of the
marketing mix – Promotion. You need to develop strong sales and advertising messages that
will connect with your customers instantly and effectively highlight your product’s quality
and differentiation from other brands. Remember, while creating your promotional mix, you
should ensure that you can deliver your promises and are able to create a believable position
in the market. Company reputation is built over years but it just takes seconds to lose it
because of unethical promotions or inability to deliver to your customers. Therefore,
promotions are as important as your product or service quality, pricing and other offerings.
Creating an effective marketing communication mix through a well-researched strategy will
not only help your reach out to your customers but also help you adapt to the ever-changing
marketing environment.

1. Identifying target audience

If you don’t know who your audience is, you can’t decide on what to communicate, how to
communicate, when, where and who will communicate the company’s message. Therefore,
the first step to building a marketing communication mix is to identify your target audience.

2. Determine Communication Objectives

Companies must find out at what stage of buyer-readiness their consumers are presently in.
The six stages that consumers normally go through before buying a product are – awareness,
knowledge, liking, preference, conviction and purchase. For more insights on creating the
right marketing communications mix, skip right ahead to this course on effectively managing
your digital Marketing Campaign. You must design your communication mix so as to address
all these aspects as well as the organization’s objectives in delivering the message and
moving the target audience towards a favorable stage.

3. Delivering the Message

Your promotional messages must not only be catchy and hold the consumers’ attention but
also compel them to like your product and make a purchase. Putting the message content
together and choosing the appropriate communication media either through personal or non-
personal channels is an important part of delivering the right message at the right time.
 4. Setting up Promotional Budget

While there are innumerable ways to attract the customers, you need find out how much you
can spend on promotions. Budgeting based on the target consumers and industry
requirements is key to achieving promotional success.

5. Creating a Promotion Mix

Different companies have different marketing strategies wherein they use several promotional
tools like advertising, direct marketing, personal selling or online marketing etc. Each tool
has its own advantage and costs involved; therefore it is important for you to choose the right
marketing communications mix also called as promotion mix.

Customer acquisition process

Customer acquisition is the process of acquiring new customers for business or
converting existing prospect into new customers. The importance of customer
acquisition varies according to the specific business situation of an organization. This
process is specifically concerned with issues like acquiring customers at less cost,
acquiring as many customers as possible, acquiring customers who are indigenous
and business oriented, acquiring customers who utilize newer business channels etc.
The whole process should concentrate on following considerations:

 Primarily it is important to determine and focus on psychology of

customers, like how the customers feel and think and then selecting
the product segment to be presented to them.
 Concentrating on how the customers are influenced by the
surrounding environment like the business culture, technology, media
etc.
 Analysis of customer behavior and tendency while buying specific
range of product.
 Studying the customer’s limitation of knowledge processing power
which influence the decision making power.
 Finally it’s very important to engage best strategies for effectively
convincing new customers and improving marketing campaigns.

Customer acquisition techniques change with technological changes. There is always

a need to optimize and upgrade the traditional ways of marketing channels
available. Exploring new methods to entertain customers is important to remain in
competition and have high acquisition rate.

It allows the business to:

 Cover the cost of its expenses, including the cost of labor.

  Increase its profits over time.
 Reinvest in its own growth.
 Show evidence of growth to partners, investors, influencers and
other outside parties.

Acquiring a customer depends on how effectively the organization is able to build a

comprehensive relationship with that customer. When suppliers have healthy
relationship with customers, the revenue of the organization always increases as
customers tend to buy more and more. There is possibility that a satisfied customer
seek to buy special category of related products apart from the regular ones from
that particular supplier. For instance if a satisfied and loyal customer has a home
insurance policy from an insurance company then there are positive chances that he
could also insure his property and car if he is fully satisfied with the services of that
insurance company. This will definitely result in growth of business.

While acquiring, the nature of response provided to acquisition is the key aspect to
create an impressive opinion in customer’s mindset. Hence, the suppliers should
always have prompt, responsive and experienced executives to serve customers. For
example, if a customer calls and asks about some critical features of any product
and the executive fails to explain it or being non-responsive to most of his questions
then the customer could probably divert his way to some other organization for
better response which could definitely result in end of the deal and relationship with
that customer.

Improving customer acquisition is the primary challenge which an organization faces.

Hence it is important to identify critical approaches to enhance customer acquisition
power. This includes acquiring more number of customers or more number of
attractive customers at low cost. One of the best strategies to acquire new
customers is performing promotional campaigns. These campaigns should be
efficient and well targeted to customers. Encouragement of customer referrals can
also attract new customers. It is always a cost-free advocacy by customers to
provide referrals to supplier when they feel satisfied and encouraged and when they
have a healthy relationship with customers. These referrals or customer’s reference
of other customers act like a piece of cake for suppliers as there is no cost and
struggle involved in this.

Process:

Identify the target customers

The first step in the customer acquisition process is to identify your target audience,
the people who are most likely to purchase your products and services. Unless the
product or service your business sells meets a universal need, the best way to
promote your products and grow your business is by identifying one or two of the
best market segments for your business.
Identify where your target audience is

To enhance your customer acquisition process, you need to know where to find your
customers both online and offline. Once you identify the places your target audience
frequents, you can then develop strategies to target them there. As an example, if
your ideal audience frequents a particular social media site, you may want to
consider advertising there.

If you’re unsure where your target audience spends time, consider polling your
existing audience. You could also reach out to potential customers individually to
learn more about them, their interests and what sites they spend the majority of
their time on.

Start a blog

Blogging on your website is a highly effective customer acquisition method that

allows you to discuss different topics, demonstrate how much you know about the
industry and establish yourself as a source of authority. It also allows you to
regularly engage your audience, providing them with a resource they can go to for
information related to your niche. You could write for the blog yourself, task a
member of your team with doing the writing or outsource to a freelancer.

Create video content

Video content is very popular online, which is why you should consider creating
videos as part of your customer acquisition strategy. Create a mixture of educational
and entertaining videos. Your educational videos should provide your target
audience with valuable information about your industry, topics that are relevant to
your industry and your products and services. Your other video content should focus
on entertaining and engaging your target audience online.

Optimize your website for the search engines

Search marketing is also another important strategy that you should prioritize. Also
referred to as search engine optimization (SEO), this strategy involves modifying
your content to increase the likelihood that it will rank in the search engines. While
this strategy takes longer to grow than some of the others, once you optimize your
content, you can see a steady flow of clients into the business.

Build an email list

Email marketing is an effective way to maintain contact with customers as well as

potential buyers who have expressed interest in your products and services. As you
email your list, it’s important to monitor the behavior of your subscribers. For
example, take note of the links that your subscribers are clicking on within your
emails.

Also, pay attention to the emails that have the highest open rates or unsubscribe
rates. This information can help you create better content that your audience is
interested in, which can help you to increase customer acquisition and conversions.

Produce quality content frequently

Another effective customer acquisition strategy is to establish yourself as a

trustworthy source of information in your industry or niche. One way you can
accomplish this is by creating high-quality, useful content on a regular basis. Many
companies use social media, blogs or even email newsletters to establish themselves
as a reliable source of information and build trust for their brand.

Create gated content

Gated content is a different type of content marketing strategy that typically involves
creating an in-depth and highly valuable piece of content that potential customers
can access in exchange for personal information like their name and email address.
Relevant, gated content is an important part of a customer acquisition strategy since
it can help you grow your email list and generate more leads and, ultimately, sales.

Create a referral strategy

Referrals are a great way to increase the profitability of your business while keeping
marketing costs low. For this reason, a referral program is a powerful method for
acquiring new customers. The easiest way to encourage customers to refer your
products and services to your family and friends is by offering some kind of
incentive. Many businesses, for example, offer extra features or discounts to
customers who successfully refer other people to their products and services.

Track your customer acquisition

Once you have different types of content in place, it’s important to monitor incoming
leads to identify the acquisition channels for your new customers. Monitoring will
make it possible for you to determine which channels are most effective for
generating quality customers. It also helps you monitor word-of-mouth referrals and
determine whether the feedback from customers is positive. This can guide your
company decision-making to ensure any word-of-mouth referrals you receive are
positive.

Relationship communication
Identifying the Sales to Marketing Effort
Relationship and its Modeling
Sales and Marketing are both working towards the same goal: securing business and helping
their company grow.

Sales is a direct process in which the salesperson talks to the customer and steers them
towards making a purchase. This might be in person, over the phone, or using a digital
communication medium like email or even social media. The process might be very long,
taking place over multiple conversations in which the salesperson learns about the customer
and their pain points, and helps them understand how the product on offer can help solve
them.

It could also be a very short process consisting of a single conversation in which the
salesperson lays out the terms of the deal and processes the sale.

Marketing is a much more holistic process that is designed to increase awareness of a brand
or product to the target consumer as a whole. Rarely will a marketer deal one-on-one with a
customer.

The methods, tactics, and channels used by the marketing department look very little like
they did even 15 years ago. It’s primarily digital, including (but not limited to):

 Content marketing
 Social media marketing (SMM)
 Email marketing
 Organic traffic and search engine optimization (SEO)
 PPC ads
 Influencer marketing

1. Collaborate on sales content creation

A recent CSO Insights study showed that 32% of a sales rep’s time was spent looking for or
creating sales content. Creating content that sales teams can use in their proposals and
throughout the selling process is a major factor in an outstanding sales enablement strategy.

Both sales and marketing need to work together to understand their audience and create
targeted content that speaks directly to customers.

2. Inform outbound emails

In an ideal world, all sales would be inbound with customers lining up to get their hands on
your product or service. But the reality is that, at some point, sales needs to be in charge of
sourcing and contacting their own leads.
To effectively do this, sales should work with marketing to be knowledgeable on what
marketing materials are already readily available. Marketing and sales can also work together
to create new, dynamic material that focuses on the winning strategies of each department.
This creates a unified brand image and voice.

3. Systemize lead scoring

Marketing and sales teams need to have an ongoing conversation about lead conversion —
what’s working, what’s not, who it’s working for, etc. Creating and converting MQLs to
SQLs and, ultimately, to win deals is an always moving target — that’s why it’s important to
ask these questions, to figure out why it’s working or not working.

Those changing results and targets of a company’s “why” increase the urgency for clear
communication and getting on the same page. Both sales and marketing teams need to create
one system for scoring and evaluating. The system is entirely conditional and depends
entirely on the product, the audience, and the buying cycle. Turning an MQL into an SQL too
soon can hurt conversion, so you need to find the sweet spot in the life cycle. This can only
be found by trial and error, communication, and evolution.

4. Develop buyer personas

Sales is the front line of any successful company. They know who’s buying and why those
customers are motivated to buy in the first place. Marketing understands the industry at large
and who they should be targeting. The best buyer personas are born from a mixture of
marketing research and insights from your actual customer base.

The sales team can provide important insights and generalizations on the leads they’re
interacting with the most, while marketing research can inform broader insights like patterns
and commonalities. Sales and marketing must direct their efforts at the same prospects and be
completely aligned on decisions and pricing.

Together, sales and marketing need to create comprehensive buyer personas to better target
their ideal customer, increase acquisition, and create targeted ads and pitches that are
symbiotic.

5. Leverage marketing to showcase your sales team’s expertise

Ideally, sales teams are brilliant at lead generation and closing sales but aren’t always their
own best advocates when it comes to selling themselves. That’s why they need your
marketing team’s power to create materials that showcase their expertise.

6. Hold regular meetings

Even the most amicable and aligned departments need actual face time to develop their
internal relationships and sense of how the other works. Hold regular meetings to discuss new
strategies, go over the results of current campaigns, and learn more about each team’s
processes. An added benefit is getting marketing’s feedback and insight on the sales team’s
agenda, and vice versa.

7. Break down barriers

Aligning your sales and marketing teams may require more than weekly meetings, and it
might take a refresh in terminology and perspective. Break down departmental barriers and
replace the concept of a sales funnel with a revenue cycle.

Work through the foundation of what that revenue cycle should look like. This is the time
when both sales and marketing get to flex their muscles and bring their expertise to the table.

Remember, some areas will overlap, but they may be called different things. The marketing
department may be focused on digital assets and ROI, while the sales team may be looking at
the same assets regarding what types of sales leads they generate. Work together to determine
the best lead generation techniques and ROI as a team instead of by department.

8. Use collaborative analysis

When you’re trying to align two departments, it’s not enough to just focus on KPIs and
collaborative practices. When you’re breaking down departmental barriers, the lines will
likely blur between what the marketing and sales teams are working on.

It’s important to analyze and measure the results as a team, which will help everyone get on
the same page about ROI and understand how collaborative efforts are impacting your
bottom line. Your team ROI may require both departments to analyze email campaigns or
lead generation data to determine what’s working and what’s not. Looking at these numbers
individually just pushes your teams back into a silo situation where the work becomes
fragmented.

MARKETING MIX MODELING (MMM)

Marketing mix modeling (MMM) is statistical analysis such as multivariate regressions on

sales and marketing time series data to estimate the impact of various marketing tactics
(marketing mix) on sales and then forecast the impact of future sets of tactics. It is often used
to optimize advertising mix and promotional tactics with respect to sales revenue or profit.

The techniques were developed by econometricians and were first applied to consumer
packaged goods, since manufacturers of those goods had access to good data on sales and
marketing support.[citation needed] Improved availability of data, massively greater
computing power, and the pressure to measure and optimize marketing spend has driven the
explosion in popularity as a marketing tool. In the recent times MMM has found acceptance
as a trustworthy marketing tool among the major consumer marketing companies. Often in
the digital media context, MMM is referred to as attribution modeling.

Marketing mix modeling is an analytical approach that uses historic information, such as
syndicated point-of-sale data and companies’ internal data, to quantify the sales impact of
various marketing activities. Mathematically, this is done by establishing a simultaneous
relation of various marketing activities with the sales, in the form of a linear or a non-linear
equation, through the statistical technique of regression. MMM defines the effectiveness of
each of the marketing elements in terms of its contribution to sales-volume, effectiveness
(volume generated by each unit of effort), efficiency (sales volume generated divided by cost)
and ROI. These learnings are then adopted to adjust marketing tactics and strategies, optimize
the marketing plan and also to forecast sales while simulating various scenarios.

Components of Marketing mix modeling (MMM)

Marketing-mix models decompose total sales into two components:

 Base Sales: This is the natural demand for the product driven by economic
factors like pricing, long-term trends, seasonality, and also qualitative
factors like brand awareness and brand loyalty.
 Incremental Sales: Incremental sales are the component of sales driven by
marketing and promotional activities. This component can be further
decomposed into sales due to each marketing component like Television
advertising or Radio advertising, Print Advertising (magazines, newspapers
etc.), Coupons, Direct Mail, Internet, Feature or Display Promotions and
Temporary Price Reductions. Some of these activities have short-term
returns (Coupons, Promotions), while others have longer term returns (TV,
Radio, Magazine/Print).

Elements measured in Marketing mix modeling (MMM)

(i) Base and incremental volume

The very break-up of sales volume into base (volume that would be generated in absence of
any marketing activity) and incremental (volume generated by marketing activities in the
short run) across time gain gives wonderful insights. The base grows or declines across
longer periods of time while the activities generating the incremental volume in the short run
also impact the base volume in the long run. The variation in the base volume is a good
indicator of the strength of the brand and the loyalty it commands from its users.

(ii) Media and advertising

Market mix modeling can determine the sales impact generated by individual media such as
television, magazine, and online display ads. In some cases it can be used to determine the
impact of individual advertising campaigns or even ad executions upon sales. For example,
for TV advertising activity, it is possible to examine how each ad execution has performed in
the market in terms of its impact on sales volume.

(iii) Trade promotions

Trade promotion is a key activity in every marketing plan. It is aimed at increasing sales in
the short term by employing promotion schemes which effectively increases the customer
awareness of the business and its products. The response of consumers to trade promotions is
not straight forward and is the subject of much debate. Non-linear models exist to simulate
the response. Using MMM we can understand the impact of trade promotion at generating
incremental volumes. It is possible to obtain an estimate of the volume generated per
promotion event in each of the different retail outlets by region. This way we can identify the
most and least effective trade channels. If detailed spend information is available we can
compare the Return on Investment of various trade activities like Every Day Low Price, Off-
Shelf Display. We can use this information to optimize the trade plan by choosing the most
effective trade channels and targeting the most effective promotion activity.

(iv) Pricing

Price increases of the brand impact the sales volume negatively. This effect can be captured
through modeling the price in MMM. The model provides the price elasticity of the brand
which tells us the percentage change in the sales for each percentage change in price. Using
this, the marketing manager can evaluate the impact of a price change decision.

(v) Distribution

For the element of distribution, we can know how the volume will move by changing
distribution efforts or, in other words, by each percentage shift in the width or the depth of
distribution. This can be identified specifically for each channel and even for each kind of
outlet for off-take sales. In view of these insights, the distribution efforts can be prioritized
for each channel or store-type to get the maximum out of the same. A recent study of a
laundry brand showed that the incremental volume through 1% more presence in a
neighborhood Kirana store is 180% greater than that through 1% more presence in a
supermarket.[6] Based upon the cost of such efforts, managers identified the right channel to
invest more for distribution.

(vi) Launches

When a new product is launched, the associated publicity and promotions typically results in
higher volume generation than expected. This extra volume cannot be completely captured in
the model using the existing variables. Often special variables to capture this incremental
effect of launches are used. The combined contribution of these variables and that of the
marketing effort associated with the launch will give the total launch contribution. Different
launches can be compared by calculating their effectiveness and ROI.

(vii) Competition

The impact of competition on the brand sales is captured by creating the competition
variables accordingly. The variables are created from the marketing activities of the
competition like television advertising, trade promotions, product launches etc. The results
from the model can be used to identify the biggest threat to own brand sales from
competition. The cross-price elasticity and the cross-promotional elasticity can be used to
devise appropriate response to competition tactics. A successful competitive campaign can be
analyzed to learn valuable lesson for the own brand. television & Broadcasting: the
application of MMM can also be applied in the broadcast media. Broadcasters may want to
know what determine whether a particular will be sponsored. This could depend on the
presenter attributes, the content, and the time the program is aired. these will therefore form
the independent variables in our quest to design a program salability function. Program
salabibility is a function of the presenter attributes, the program content and the time the
program is aired.

Developing Effective Communication

All marketing communications or advertising for your small business, whether delivered in
person, through promotions, or via traditional media, direct mail, or e-mail, need to
accomplish the same tasks:

 Impart information the prospect wants to know.

 Grab attention.
 Present offers that are sensitive to how and when the prospect wants to take
action.
 Affirm why the prospect would want to take action.
 Offer a reason to take action.
 Launch a relationship, which increasingly means fostering interaction and
two-way communication between you and your customer.

Identifying the Target Audience:

Even for the same product, the target audience may be different in different countries. For
example, certain consumer durables, which are used even by the low-income groups in the
advanced countries, may be used only by high-income groups in the developing countries. In
several cases the need satisfaction by the product varies between markets.

 Who marketers target will dictate?

 What is to say or convey?
 How it should be say?
 When it should be say?
 And where it should be say?

2) Determining Communication Objectives:

The communication objectives may also be different in some cases. For example, when the
product is in the introduction stages in a market, the emphasis of communication could be on
consumer education and creation of primary demand. In a market where the product is at
other stages of the life cycle, the communication objectives would be different.

3) Determining the Message:

The decisions regarding the message content, message structure, message format and
message source are influenced by certain environmental factors like cultural factors and legal
factors. The differences in the environmental factors among the countries may, therefore, call
for different messages so as to be appropriate for each market. In this stage companies need
to focus on:

 Message Content
 Message Structure and
 Message Format

4) Budget Decisions:

The size of the total promotional expenditure and the apportioning of this amount to the
different elements of the promotion mix are very important but difficult decisions.

5) Communication Tools / Mix Decisions:

The promotion decisions faced by export marketing management can be reduced to the
following:

i) What messages?

ii) What communications media?

iii) How much effort or money to spend?

6) Feedback of communication Strategy

After all, above steps and implementing the communication strategy then companies need to
get feedback and response from targeted audience. Monitoring and feedback provide a
continuous improvement process. So marketers should regularly measure and monitor the
effectiveness of marketing communication strategy and make changes as needed.

Sales responsibilities

Functions and Responsibilities of Sales Person

A salesperson is an important sales management position maintaining vital link between an
enterprise and customers, society, distributors, retailers and others. Nature of roles played by
a sales person is given as follows.
Diagnostic

This involves a salesperson probing and finding the cause of a problem, i.e., why a customer
often changes a brand or why a customer is loyal to a particular brand.

(ii) Analyst

A salesperson analyses customer needs and market trends and identify the linkages.

Example:

A farmer prefers a motorcycle compared to a scooter, so marketer must segment rural middle
class for various types of motorcycles.

(iii) Information Provider

A salesperson is also an intelligent agent. He keeps the management informed of any

significant development in his territory, i.e., any strategic change of competitor etc.

(iv) Strategist

A salesperson being in the forefront of sales organization can command on time and route
plans of sales organization.

For Example:

A salesperson may at time make the announcement of a price change in his territory in such a
way that it will give him maximum benefit. Likewise, evolving a strategy to sell to an
aggressive customer is the role of a salesperson.

(v) Tactician
He is a tactician in the sense that he (or she) evolves tactics to win over the customer or
enhance distribution/retailer satisfaction. A tactic is a short-term action plan and is part of a
strategy, which is a long-term concept.

(vi) Change Agent

A salesperson acts as a Change Agent in his territory. For it is he who introduces new product
ideas and influences the life styles and consumption pattern by making new products and
services available in the territory and influencing opinion of manager to accept and
recommend the same to other salesperson.

Thus, the modern society owes a lot to salespersons, for it is they who help upgrade life style
and quality of living. The Selling process or The Selling Theories on which the salespersons
depend are Stimulus- Response Theory, Product Oriented Selling and Need-Satisfaction
Theory.

Other Functions Performed by a Sales Person

(a) Line functions

i. Achieves volume of sales

ii. Responsible for enhancing market share

iii. Responsible for profitability of the organization

iv. Attends to customer service.

(b) Staff functions

i. Provides assistance for ware housing In charge

ii. Provides assistance for Transport Department

iii. Provides assistance to Production Department regarding Product knowledge and

knowledge about specific customers.

(c) Line and staff functions

i. Helps General Sales Manager with sales fore-cost, market information and information
about competitors

ii. Helps Corporate Management in respect of product development, Diversification and

information about market and competitors.
Responsibilities of Sales Person

The duties and responsibilities of a salesman differ from one business to another depending
upon the nature of the business, the size of the business, the type of selling job, the sales
policies of the concern, etc. However, there are certain duties and responsibilities which are
common to all types of business.

Responsibilities of a Salesman

1. Selling

The fundamental duty of a salesman is selling. This duty includes meeting the prospects,
presenting and demonstrating the products, inducing the prospects to buy, taking orders and
effecting sales.

2. Guiding the buyers

A salesman should guide the buyers in buying the goods they want.

3. Attending to complaints

A salesman should attend to the complaints of the customers immediately and try to settle
their grievances quickly and sincerely.

4. Collection of bills

Sometimes, a salesman may be required to collect the outstanding bills relating to the goods
sold by him. In such a case, he has to collect the bills and remit the amount to his firm.

5. Collection of credit information

A salesman may, sometimes, be required to collect information about the credit-worthiness of

the customers. In such a case, he has to collect detailed information and submit it to his firm
in time.

6. Reporting

A salesman, especially a traveling salesman, is required to send daily, weekly or monthly

reports to his firm, providing information about the calls made, sales effected, services
rendered, route schedule, expenses incurred, business conditions, competition, if any, etc.

7. Organizing

A salesman, i.e., a traveling salesman, is required to organize his tour programme. He has to
prepare the route and time schedules for his tour so as to systematize his sales efforts.
 8. Attending sales meetings

A salesman is required to attend the sales meetings convened by his employer at periodical
intervals to discuss the marketing problems, sales promotion activities, sales policies, etc.

9. Touring

A traveling salesman has to undertake touring regularly to cover the sales territories assigned
to him.

10.Arranging for packing and delivery

A salesman, i.e., a counter salesman, has to arrange for the packing of the goods sold and the
delivery of the packages to the buyers.

11. Window and counter displays

A salesman, i.e., an indoor or counter salesman, has to arrange for the window and counter
displays of the products in an attractive manner so as to attract or induce the prospects to buy.

12.Promotion of goodwill

Every salesman has to build up satisfied clientele (i.e., customers) for his employer and
thereby promote the goodwill of his firm.

13.Recruiting and Training

Recruiting new salesmen, imparting training, by accompanying them while making sales
calls.

14.Working with Middlemen

Salesmen establish direct relations with middlemen — distributors, wholesalers, etc., and
collect market information and pass it on to their firm.

The Relationship communication process

Relationship Communication
Marketing focuses mainly on Establishing, Developing, Maintaining successful
exchanges with customers. In marketing vertical every relationship is an exchange
process where each one gives something in return for a payoff perceived to be or of
greater value.

Types of Relationships
  Value Added Exchanges
 Transactional Exchanges
 Collaborative Exchanges

Transactional Exchange

Centers on timely exchange of basic products at highly competitive market prices.

These types of transactions are autonomous in nature i.e. there is little or no
concern as to the needs of buyer or seller.

Example: A person goes in a shop and buys a toothpaste. The buyer wants a
toothpaste and the seller sells him one.

Transactional Exchanges

Packaging machines and products, cleaning and sanitizing technology and Products,
Commodity type products, Service activity where bidding is applied. Transactional
exchanges employ a type of arms-length relationship.

Collaborative Exchange

Exists when alternatives are few, market is dynamic, the purchase is complex and
the prices are high.

Main features include close information, social, and operational linkages and mutual
commitments.

Switching costs are highly esssential to collaborative customers. Trust is the main
factor and it there when one party has complete confidence in their partner’s ability
and integrity.

Managing Buyer Seller Relationships

a) Switching Costs

Value Drivers in Collaborative Relationships

c) Increasing Collaborative Relationships

d) Improving Transactional Customer Loyalty

Motivate the Employees

Dedicated employees are the key to a successful customer relationship strategy.

 1. Hire good people.
2. Invest in them to increase their value to the company and its
customers.
3. Develop challenging careers and align incentives to performance
measures.

Precaution to be Care:

Take care of your tone and pitch as well. Make sure you are not too loud or too soft.
Being loud might hurt the other person. Speak softly in a convincing way. The other
person must be able to understand what you intend to communicate.

An individual must interact with the other person regularly for the relationship to
grow and reach to the next level. Speaking over the phone. SMSing are ways of
communicating and staying in touch especially in long distance relationships where
individuals hardly meet.

Choice of words is important in relationships. Think twice before you speak.

Remember one wrong word can change the meaning of an entire conversation. The
other person might misinterpret you and spoil the relationship. Be crisp. Express
your feelings clearly. Do not try to confuse the other person. Being straightforward
helps you in relationships.

Try to understand the other person’s point of view as well. Be a patient listener.
Unless you listen carefully, you will never be able to communicate effectively.

Be polite. Never ever shout on your partner even if he has done something wrong.
Discuss issues and try to sort out your differences amicably. Abusing, fighting,
criticizing spoil the relationship and in adverse cases might end it as well. Being rude
is a crime in relationships.

Call preparation
Before you start making sales calls, it’s a good idea to prepare for them. A lack of
preparation means a much higher chance of things not going according to plan
when you make the call. Of course, preparing for a sales call can’t promise a
favourable outcome, but it’ll increase the chances of getting what you want from the
call.

Before you pick up the phone or charge into someone’s office to try and sell
something, do a little preparation. The idea is to develop a comfortable framework
where you have enough knowledge to get started and to ensure that you’re
prepared for certain eventualities on the call itself.

Steps:
Define Your Goals

Make your objectives clear. What do you want to accomplish before the call ends?
What does your potential customer want to achieve during this call?

Write down specific, targeted questions that are relevant to your potential
customer’s business, industry, pain points, needs, and buying behaviors. Be ready to
listen and take notes so that you can react to what the potential buyer says. Limit
your questions so that the meeting feels like a conversation, not an interview.

Call objectives include:

 Finding out the name (and other contact details) of the person who
buys services like yours.
 Scheduling a meeting with the person who buys services like yours.
 Getting the person to request marketing materials (such as your
portfolio, CV, corporate brochure, etc.).
 Getting the person to ask for a quotation on a particular project
 Closing a sale.

Structure the Call

Creating an informal itinerary for the conversation will help you maintain control.
First, practice how you’d start the meeting to point it in the right direction. Then,
map out how to shift the conversation from topic to topic so that you reach all
defined goals.

Know Your Value

The truth is that your potential customer is extremely busy. They only have a small
window of time to devote attention towards their buying decision. That means they
want to feel like they spent their time wisely when they talk to you.

Do you know the value you can provide to this potential buyer? How can you inspire
them to speed up their buying decision or move them to the next step in the sales
process?

Provide information that answers their questions, speaks to their needs, or explains
any concerns they may have. The call should end with your potential customer
having actionable steps to carry out and feeling positive about the experience.

Do Your Research
Basic information on your potential customer is essential, but it’s not always enough.
Sometimes you need to do your homework in order to understand the big picture as
well as the details about the specific challenges they face and how you can provide
the solution.

Before every sales call, you should check out the company’s:

 LinkedIn page as well as your potential customer’s professional

profile
 Twitter stream
 Website, particularly the About Us and News sections
 Their previous conversations with your company as recorded in your
CRM

Visualize Success

Think of how athletes prepare for an Olympic race. They control their breathing,
stretch and shake out their arms and legs. They visualize each step around the
track, picturing how hard to swing their arms, how wide to make each step, and how
much energy will be needed to push through the finish line.

This is how you should approach your sales calls. Like an athlete, a balance of
adrenaline and oxygen is what you need to maintain performance and focus.

Value Selling and Consequences

Value-based selling is a process of defining the real needs, measurable objectives,
possible impact on the potential customer’s bottom line, and pricing accordingly to
the value our product can deliver.

Value selling is a hot concept in the technology industry, and one that sales leaders
are researching and discussing frequently. Outcome selling is trending on a similar
curve. Unfortunately, too many leaders think these two motions are similar and
interchangeable.

Cost savings and financial outcomes are only part of the story. In fact, anchoring
around value selling can be detrimental to your sales efforts when used at the wrong
time and with the wrong buyer.

Here’s an example: let’s say you’re a hardware company selling a new Managed
Services offering. You formulate a calculation of how much money a customer will
save over the course of the next three years if they pay you to operate their
infrastructure rather than purchasing and managing it themselves. Maybe your
numbers are solid, and you’re confident you can stand behind your ROI
calculations.

Outcome selling is a new and better approach to enterprise technology sales that
centers around two objectives:

 Allowing the supplier to demonstrate how their solution contributes

to the achievement of the outcome.
 Providing priority business outcomes that your customer is trying to
achieve.

Outcome selling is about leading with insights; sharing your knowledge of what
other similar companies are doing and then building the connection between your
offering and their highest priority business outcomes. And here’s the thing you (the
supplier) are providing insight and input as to what those outcomes should be.

It’s not about saying that you understand their business better than they do; that
can come across as arrogant and alienating. However, you’re in a position to share
your insights and experience based on the fact that you’ve worked with dozens, or
even hundreds, of similar companies before. It is obvious why this approach would
be far more strategic and valuable to the customer.

Outcome-based selling is about being able to confidently articulate how your solution
contributes to:

 Financial goals
 Operating KPIs
 Priority business outcomes

Strategies:

Elevate The Conversation to A Business Level

The first key to effective value selling is to elevate your conversations to business-
level discussions. The conventional approach to sales is to identify a problem and
sell your solution to that problem. So, if you sell technology that delivers a
manufacturing solution, the easy or conventional wisdom is that you go in and
uncover problems that you can solve with that solution. Then, you have a
conversation with your prospect about manufacturing problems or supply chain
problems.

Requalify Every Opportunity in The Pipeline

In any crisis, sales leaders will take stock and reevaluate current opportunities; this
is the second key. Lately, we’ve been talking to our clients about their pipelines and
the fact that every opportunity must now be requalified. Business priorities have
shifted. Staff has changed. Some companies have had to adjust their business
models or make changes to their supply chain.

Ask Smart Questions

The third key explains how to best execute point one (driving a valuable business
conversation) and point two (continuous qualification). This third key focuses on the
questions you ask your prospect and your ability to understand their point of view
and circumstances and the context of the issues they face. To gain these insights,
you should ask thoughtful, deliberate questions that go beyond merely scratching
the surface of open-ended questions. You should prepare to approach a
conversation with pointed and specific probing questions in mind, as well as
confirming questions to ensure you have a mutual understanding.

By asking smart questions, you can position yourself to direct a value-based

conversation. This conversation is not about the product or service you are selling,
but instead is a discussion built on questions that uncover your prospect’s point of
view around the business issue and how this impacts their position and their
company’s results. Asking smart questions also lends itself to establishing your
credibility as someone they want to do business with.

Principles:

Focus on the value of solving their problem

That’s why the first principle of value-based selling is to focus on the value to the
prospect of dealing with the issue they have identified. If the prospect cannot
articulate the costs and consequences of the problem and the value of solving it,
their chances of getting their organisation to agree to invest in any solution is
remote as are your chances of winning.

It’s dangerous to assume that your prospect is fully aware of all of these costs and
consequences. In fact, a key role of the sales person in these early stages must be
to help the prospect recognise the full horror of sticking with the status quo. Almost
always, this will involve drawing their attention to aspects of the problem they may
not have recognised or even better introducing high-impact issues that they may not
have previously been aware of.

But if, despite all your efforts, the value of solving the problem remains unclear or
weak, it’s usually best to qualify out the “opportunity” and defer it for future
nurturing even if you appear to have a good solution fit.

Be specific about the value you offer

Marketers sometimes make a great deal of fuss about articulating your company’s
“unique value proposition”. But no matter how agonisingly carefully they are crafted,
these can only ever be generic statements designed to appeal to your target market
as a whole. Value-based selling requires that you get very specific about the value
you offer each prospect in effect you need a personally tailored unique value
position.

Rather than a broad description of all that you can offer, you’ll get much more
traction by selectively identifying and highlighting the small subset of your total
capabilities that are most relevant to successfully addressing the issue you have
identified. And you need to clearly explain how you deliver unique and relevant value
to every member of the decision-making team.

Create and capture mutually meaningful value in every interaction

If your contacts are serious decision-makers with substantial workloads, they will not
appreciate being involved in conversations and meetings that leave them wondering
why they just wasted their valuable time. So, the third core principle of value-based
selling is to seek to establish mutually meaningful value in every customer
interaction.

This value might be expressed by responding their questions simply, directly and
completely rather than leading them around the houses with an ambiguous or
deliberately obfuscated response. Or it might be expressed by sharing an insight that
causes them to think differently or by revealing a relevant fact they were previously
unaware of.

Facilitate their buying process, not your sales process

Conventional sales processes are all-too-often designed around the needs of the
seller, not the buyer. So, it’s hardly surprising that things the sales person sees as
important are often regarded by the prospect as irrelevant or (even worse)
profoundly irritating, while at the same time their interests and concerns are being
poorly served by the sales person.

That’s why your sales approach and the key stages in your sales pipeline and CRM
system must be designed around the key stages and milestones in your prospect’s
buying decision journey. Your sales activities, sales enablement tools and shareable
content must be designed to advance a well-qualified opportunity through their
buying decision process.

If you can’t contribute distinctive value, qualify out

The final principle is simple: if your solution doesn’t offer a distinctively different and
higher-value approach solving to the prospect’s identified problem than any of the
other options they are considering, you need to either do something about it or
qualify out.

Order fulfilment, Relationship building

Order fulfilment

The method by which a company processes a sales order to the customer’s

specifications, that understates its importance. Customers hold more power than
ever, are more informed and have higher expectations. Efficient order fulfillment is
key to your brand’s reputation, your company’s profits and your ability to retain
clients.

Order fulfillment is a process consisting of receiving and processing goods for

distribution to customers.

Order fulfillment means fulfilling a sales order to the customer’s specifications. That
is, delivering goods as promised at the time of sale. There are three main steps in
this process: receiving, processing and shipping.

Companies make money by selling goods, products and services to businesses or

direct to consumers. No matter whether you’re B2B or D2C, the sale is not complete
until the sold items are received by that customer. Order fulfillment is how
companies complete the sale and it’s at the heart of every business.

Process

Receiving inventory

Goods may come from a third party, another company department or a company
warehouse; a pipeline (as with oil, fuel, water or some other fluid product); as digital
data from a database; or in a variety of forms from other external or internal
sources.

In any case, the incoming inventory must be counted, inspected and inventoried to
ensure the proper amount was received and the quality is acceptable. SKUs or bar
codes on the arriving products are used in the receiving and storage processes, and
to retrieve goods from internal storage later.

Inventory Storage

Once goods are received in the fulfillment center, they are inventoried and either
immediately disbursed or sent to short- or longer-term storage. Items are ideally
stored just long enough to help organize the orderly distribution of goods for
existing sales, rather than to hold product for future sales.

Order Processing

An order processing management system dictates the product picking and packing
activities per each newly received customer order. In the online marketplace, order
management software can be integrated with the shopping cart on an ecommerce
website to automatically initiate order processing.

Picking

A picking team or automated warehouse robots select items from the warehouse
according to a packing slip’s instructions. The packing slip contains specific
information, such as a list of item SKUs, product colors, sizes, number of units and
location in the distribution center’s warehouse.

Packing

Packing materials are selected by a packing team or automated fulfillment robots to

achieve the lowest practical dimensional weight, which is calculated by multiplying
package length times width times height. Since space on delivery trucks is at a
premium, optimizing dimensional weight (or DIM weight) is important to speed
transport while also potentially lowering shipment costs.

Further, packing teams often include return shipping materials and labels in case the
customer wishes to exchange or return the item for a refund later.

Shipping

The order is sent to a transportation channel or shipping node to be shipped to the

customer. Shippers and carriers be they freight lines or airlines, FedEx, UPS, the U.S.
Postal Service (USPS) or other carriers determine freight billable costs by whichever
is greater: actual package weight or its dimensional weight.

Even if the actual weight is low, such as with a t-shirt, packing it in the lowest DIM is
often worth it to keep the packaging from adding significantly to the overall package
weight. Also, most carriers have packaging rules to optimize their own profits from
the shipping space they have available. Failing to meet those requirements can delay
shipments if carriers refuse to accept the order.

Delivery

It is common for shipping routes to include more than one carrier. For example,
FedEx may pick up a package at the fulfillment center that will later be delivered by
the USPS to the customer’s home. There are many reasons for these hybrid shipping
methods. One common example is that the USPS delivers even to remote areas
where most other commercial carriers do not. It’s simply more practical to use the
USPS for the last mile of delivery in those cases.

Relationship building

Relationship building skills are a combination of soft skills that a person applies to
connect with others and form positive relationships. In the workplace, relationship
building skills are essential for getting along with coworkers, contributing to a team
and building an understanding between yourself and others.

The following skill sets can typically be considered as essential skill sets to
developing successful relationship building skills:

Non-verbal communication skills

Non-verbal communication can have an impact on how you build relationships with
others. For instance, learning how to read body language can help you pick up on
other people’s emotions.

Interpersonal skills

Relationships are people-centered. To form successful and strong work relationships,

you should possess effective interpersonal skills. Being able to understand another
person’s perspective, showing respect when you feel it’s unwarranted or showing
compassion for your team can all be attributed to developing interpersonal skills.

Listening skills

Active listening is an essential part of communication, however, developing active

listening skills can sometimes be more effective than learning how to speak in a
meeting. Active listening encompasses making eye contact, being aware of non-
verbal cues and asking questions that show you are invested in the conversation.
This not only shows that you respect your team’s ideas, it can also show that you
care about all perspectives.

Verbal communication skills

Verbal communication is also essential to building strong relationships. For instance,

if you join a meeting with your colleagues, you can practice your verbal
communication by finding opportunities to contribute ideas and ask questions. This
can show that you are interested and open to hearing your team’s ideas as well as
motivated to contribute your thoughts, too.
Emotional intelligence

Emotional intelligence can be beneficial to develop overall and not just in the
workplace. However, being emotionally intelligent can mean that you observe the
dynamics in the office and find ways to contribute to your team, help solve conflict
and generally work from a place of understanding.

Empathy

Empathy is another key aspect of effective relationship building skills. Having

empathy for your friends and co-workers means you seek to understand their
feelings and emotions. When you actively practice empathy in the workplace, you
can show your teammates and managers your dedication to maintaining your work
relationships.

Networking skills

Building successful work relationships can also benefit from developing your
networking skills. Meeting new people, exchanging ideas with other professionals
and offering assistance to other business professionals can all help to boost your
networking skills. With effective networking skills, you can increase your professional
reach as well as form lasting professional relationships.

Team-building skills

Working as part of a team will almost always require effective relationship building.
Develop your teamwork skills by practicing effective communication, showing
respect for others’ ideas and contributing and assisting where it’s needed.

Relationship with Customers

Be transparent in your dealings. Keep your customers well informed. Communicate

with them through mails, SMses or over the phone. Your client has all the rights to
know even the minutest detail of a product. After all he /she is paying for the same.
Do not hide anything from them. They would in any case come to know about it and
it is always advisable if they come to know through you rather than from others.

Do not be after your client’s life to take quick decisions. Give them time and space.
Too much of phone calls will definitely spoil your relationship with the other person.
Moreover, if you are constantly bothering your client, in due course of time, he/she
would stop attending your calls. Rather than calling up the other person every single
day, a gentle reminder either through SMs or email can do the trick. After all, if
someone is convinced about your product, he/she would invest in any case; no
matter you call him/her once or twice.
Be polite in your conversations. Never use foul words in your speech. It is
completely unethical and unprofessional. For maintaining a healthy relationship with
your clients, you need to learn to keep a check on your words. Never be rude to
your clients.

Be a patient listener. Listen to what your clients have to say, rather than imposing
your own ideas on them. Do not go unprepared in any of your business meetings.
Remember, your client can ask you anything. If you do not know something at that
point of time, it is always better to check and get back to him/her later rather than
lying. Try to resolve all your client’s queries.

Try to give a personal touch in all your business meetings. Help your clients in taking
decisions. Give them the right suggestion.

Never speak ill about your competitors and their products. Such a behaviour is
completely unethical. If your products are genuinely good and have an edge over
competitors, your client would definitely invest in them. You do not have to be too
pushy.

Never ignore your client’s calls. If you have missed any of their calls, make sure you
call them later.

Do remember to take proper feedbacks. After sales service is one of the major
factors which plays a crucial role in maintaining healthy and long term relationship
with your clients. If your client is not satisfied with any of your products, replace the
same immediately. Action needs to be taken at the earliest. Do not keep issues
pending for long.

Always maintain a folder of personal information of your clients. Wish them on their
birthdays, anniversaries or any other special occasion. It would further strengthen
your bond with your client. Moreover, if you share a healthy relationship with your
client; trust me they will always come back to you. In fact they would not even think
of going to your competitors. Networking is the key to success in today’s business
scenario. Contacts help in the long run. Always remember to take business cards of
people you meet on a daily basis. Even if you are through with your deal, make sure
you are in constant touch with your client. Drop him at his office sometimes or call
him to your office for a cup of coffee.

Marketing Distribution: Distinctive nature

Industrial distribution is unique as there are several different methods of channeling
the products and services to industrial consumers. The type of product, the selling
price of the product and technical knowledge required to sell the product all play a
considerable role in selecting the proper sales or distribution channel. Unlike
consumer organizations, the decisions taken by the industrial organizations on
distribution channels is of great significance as the decisions involved are of long-
term nature that cannot be changed frequently. The industrial organizations carry
on certain important functions till the products reach the consumers like utilizing the
services of transportation companies for distribution, the services of warehouses for
safe storage of goods, inventory control, order processing and selection of marketing
channels. This necessitate taking important decisions like devising effective
communication tools, planning promotional activities, managing finances etc that
help in serving the consumers better.

 Size: Unlike consumer markets, the industrial markets tend to have

fewer channels of distribution. Even the industrial channel is shorter
in size as organizational buyers expect immediate product availability,
technical expertise and prompt after-sales service. This indirectly
demands investment in training and physical facilities for the
industrial organizations.
 Geographical Distribution: The industrial distributors are
concentrated highly in the industrial markets they serve and certain
other places that have large number of industries like large towns
and cities.
 Mixed channels: A combination of direct and indirect channels is
used by some industrial marketers to cater to different market
segments or when they have some resource constraints. To cater to
large-volume customers, industrial firms generally use their own
sales force, and to cover small scale organizations, they use
independent distributors. In case of large geographical territories,
due to resource constraints they use their agents called as
‘manufacturers representatives’.
 Intermediary characters: The intermediaries involved in industrial
marketing are technically qualified who maintain very close
relationship with industrial organizations. Industrial manufacturers
tend to depend more heavily on each member of the channel and
may do more to support that channel member. Industrial
distributors, brokers and agents are some types of intermediaries
used by industrial marketers to reach customers.

Types of Industrial MiddlemenThe industrial middlemen are the intermediaries

used by the manufacturers to deliver their products to the end users. They are
categorized based on the number and the extent to which they specialize in the
performance of certain functions. Different types of industrial middlemen are
manufacturers representatives (also called agents), brokers, commission merchants,
industrial dealers or distributors, value-added resellers (VARs), jobbers and drop
shippers.
 Brokers: Brokers are the middlemen who represent either the buyer
or the seller. They help the manufacturer to find potential buyers and
vice versa and take the commission when sales process is complete.
 Manufacturers Representatives: The manufacturers’
representatives (sales agents or manufacturers agents) are very
commonly seen middlemen who secure orders from existing and
potential customers. They provide relevant information on market
conditions to the manufacturers as well as customers. They are paid
a certain amount of pre-specified commission on sales and other
tasks performed to make the sales. Generally small and medium-
sized industrial firms use the services of agents in territories with low
market potential. Agents are cost-effective for them because
commission is paid as per the orders generated. The agents
particularly have good knowledge about the product, their target
market apart from excellent contacts with the buyers.
 Commission Merchants: They deal with large quantities of items
like raw materials. They are paid commission by the manufacturers
when they perform certain functions. Their general functions include
getting the raw materials inspected, negotiating during sales and
finally close the sales. They receive the commission based on the net
sales value as is compensated to agents and brokers.
 Industrial Distributors: Industrial distributors are the important
and most preferred middlemen that are typically small and
independent serving narrow geographic markets. They perform
functions like buying, transportation and warehousing, promotion
and selling, and offering credit. Because of such varied functions,
they are sometimes referred to as full function intermediaries. They
are offered trade discounts on the price list of the products as their
compensation. Industrial distributors are categorized as general line
distributors or mill supplies houses that stock wide variety of
products and sell to a diversified group of customers. They are
referred to as the supermarkets of industry. The products stocked by
them include maintenance repair and operating (MRO) supplies,
original equipment manufacturer (OEM) supplies, and equipment
used in the operation of a business, such as hand tools, power tools
and conveyors etc. The second type of distributors known as
specialized distributors specializes in products they handle or
customers they serve. Because of increase in specialized markets,
their numbers are increasing. Specialized distributors limit their
inventories to specific product range like bearings, office equipment
and supplies, electrical equipment and supplies, or abrasives etc. The
 third category called the combination house sell directly to industrial
customers as well as some other retailers or dealers.
 Value-added Resellers (VARs): They add some value or feature
to an existing product and sell to end-users as a new package. This
is found often in the computer industry, where a company purchases
computer components and builds a fully operational personal
computer. By doing this, the company has added value above the
cost of the individual computer components. Customers would
purchase a computer from the reseller to either save time or if they
do not have the skills to build a unit themselves.
 Drop Shippers: When an online marketer has certain concerns like
where to get the goods from, where to store them until they are
sold, and what amount to charge for shipping the goods to the
customers, then drop shippers come to the rescue of such marketers
who work with merchants to move the products. Drop Shipping is
generally used by web site owners, shop owners and mail order firms
who do not stock inventory of the products sold for future delivery
through mail order, catalog and internet advertising. Middlemen send
single unit orders for products to manufacturers, or major stocking
distributors, who in turn drop ship the merchandise direct to the
customers of the middlemen. Manufacturers providing drop shipping
services can gain additional sales, shift advertising costs to
middlemen, offer advertising material and reduce inventory
requirements. Middlemen who initiate drop ship orders shift the risks
of stocking inventory to the supply source, including storage,
insurance, overhead, and personnel by spending nothing on
inventory.
 Jobbers: They get orders from the customers and pass them to the
manufacturers. Though they do not handle the goods physically in
any form, they take the title to the products they sell. Jobbers
specialize in marketing bulky products like coal, iron ore etc, that are
transported in huge quantities and do not require assorting or
grouping of products.

Channel Design

Channel Strategy and design

Marketing channels are set of mutually dependent organizations involved in the process of
making product or service available for utilization. It is established in academic studies that
Marketing channels are the means by which goods and services are made available for use by
the customers. All goods go through channels of distribution, and marketing will depend on
the way goods are distributed. The direction that the product takes on its way from production
to the consumer is imperative because a marketer must choose which channel is best for his
particular product. It can be said that channel is the link between manufactures and
purchasers. Decisions about the marketing channel system are decisive for management.

The marketing channels chosen by marketers influence all other marketing decisions. The
firm’s sales force and advertising decisions depend on how much training and inspiration
dealers need. Further, channel decisions involve comparatively long-term commitments to
other firms. Holistic marketers guarantee that marketing decisions in all these different areas
are made to jointly maximize value.

Channel of distribution (Marketing channel)

In current competitive climate, big companies are using hybrid channels in any one area. The
firm must choose how much effort is needed to assign to push versus pull marketing. A push
strategy uses the manufacturer’s sales force and trade promotion to encourage intermediaries
to carry, promote, and sell the product to customers. This is suitable where there is low brand
loyalty in a category, brand choice is made in the store, the product is desired item, and
product benefits are well understood. In a pull strategy, the manufacturer uses advertising and
promotion to influence customers to ask intermediaries for the product, thus inducing the
intermediaries to order it. This is suitable when there is high brand loyalty and high
involvement in the category, people perceive differences between brands, and people choose
the brand before they shop. A marketing channel executes the work of moving products from
producers to consumers, beat the time, place, and possession gaps that separate goods and
services from those who need or want them.

Channel level: The producer and the final customer are part of every channel. There are
numerous channels by which goods and services are distributed. It is divided into direct and
indirect channel. In direct channel also known as zero-level channel, manufacturer and
customer deal directly with each other. There is no middleman in this channel. It consists of a
producer selling directly to final customers through door-to-door sales, Internet selling, mail
order, telemarketing, home parties, TV selling, manufacturer-owned stores, and other
methods.

In indirect channel, companies manufacture products in huge scale and sell these products to
middle man for example whole seller and retailers. This channel can be very expensive.
Manufacturer to Customer: Manufacturer produces the goods and sells them to the customer
directly with no mediator, such as a wholesaler, agent or retailer. Goods come from the
manufacturer to the user without an intermediary.

Manufacturer to Retailer to Consumer: Purchases are made by the seller from the
manufacturer and then the retailer sells the products to the consumer. This channel is used by
manufacturers that specialize in producing shopping goods.

Manufacturer to Wholesaler to Customer: Consumers can buy directly from the wholesaler.
The wholesaler breaks down bulk packages for resale to the consumer. The wholesaler
reduces some of the cost to the consumer such as service cost or sales force cost, which
makes the purchase price cheaper for the consumer.

Manufacturer to Agent to Wholesaler to Retailer to Customer: This type of distribution

involves more than one intermediary involves an agent called in to be the middleman and
help with the sale of the goods. An agent receives a commission from the producer. Agents
are useful when products or services need to move rapidly into the market soon after the
order is placed.

Market channels by which goods and services are distributed

Characteristics of Marketing Channels

Link between Producer and Consumer.

Flow of Goods

Remuneration.

Classification-Direct and Indirect.

Activities- Financing, Credit Facility

It is important to consider some factors when choosing appropriate marketing channel such as
product, market, company. It is observed that middle man plays vital role in distribution of
product in market channel. The core responsibility of intermediaries is to deliver products to
customers in their desired location. To accomplish this objective, they purchase goods and
store these and then ship to customers.

Marketing channel function performed by middleman.

Designing a Marketing Channel System

Designing a marketing channel system entails factors such as analysing customer needs,
establishing channel objectives, identifying major channel alternatives, and evaluating major
channel alternatives.
Analysing Customers’ Desired Service Output Levels: The marketer must recognize the
service output levels which its target customers want. Channels produce five service outputs:

1. Lot size: The number of units the channel allows a particular customer to
buy at one time.
2. Waiting and delivery time: The average time consumers of that channel wait
for receipt of the goods. Customers generally prefer fast delivery channels.
3. Spatial convenience: The extent to which the marketing channel facilitate
for customers to obtain the product.
4. Product variety: The variety provided by the channel. Usually, consumers
prefer a greater collection, which enhances the chance of finding what they
need.
5. Service backup: The add-on services such as credit, delivery, installation,
repairs provided by the channel.

Providing greater service outputs denotes increased channel costs and higher prices for
consumers. The triumph of discount resellers (online and offline) designates that many
consumers will accept lower outputs if they can save money.

Establishing Objectives and Constraints

Another factor in designing a marketing channel system is that marketers must declare their
channel objectives in terms of targeted service output levels. In competitive conditions,
channel institutions should coordinate their functional tasks to reduce total channel costs and
still offer desired levels of service outputs. Generally, planners can recognize several market
segments that want different service levels. Successful planning needs to determine which
market segments to serve and the best channels for each. Channel objectives differ with
product characteristics. Channel design is also affected by numerous environmental factors as
competitors’ channels, monetary conditions, and legal regulateons and limitations.

Managing and Administering channel members

Channel Design Decisions, Selecting Channel

Members
CHANNEL DESIGN DECISIONS

Designing a marketing channel system involves analyzing customer needs, establishing

channel objectives, identifying major channel alternatives, and evaluating major channel
alternatives.

Marketing channels are set of mutually dependent organizations involved in the process of
making product or service available for utilization. It is established in academic studies that
Marketing channels are the means by which goods and services are made available for use by
the customers. All goods go through channels of distribution, and marketing will depend on
the way goods are distributed. The direction that the product takes on its way from production
to the consumer is imperative because a marketer must choose which channel is best for his
particular product. It can be said that channel is the link between manufactures and
purchasers. Decisions about the marketing channel system are decisive for management.

Selection, Motivation and Evaluation of

intermediaries
Identify Major Channel Alternatives

Other decisive factor in developing market channel is to recognize alternatives. Companies

may select array of channels to approach customers, each of which has distinctive strengths
as well as limitations. Each channel alternative is explained by

The types of available intermediaries

(ii) The number of intermediaries needed; and

(iii) The terms and responsibilities of each channel member.

Types of Intermediaries entails a firm needs to discover the types of intermediaries available
to run its channel work. Some intermediary merchants such as wholesalers and retailers buy,
take title to, and resell the products. Agents such as brokers, manufacturers’ representatives,
and sales agents chase customers and may bargain on the producer’s behalf but do not take
title to the merchandise. Facilitators, including transportation companies, independent
warehouses, banks, and advertising agencies, help in the distribution process but neither
neither take title to goods nor negotiate purchases or sales.

Companies should recognize pioneering marketing channels. Number of Intermediaries

indicates that to choose intermediaries to use, companies can adopt one of three strategies:
exclusive, selective, or intensive distribution. Exclusive distribution means severely limiting
the number of intermediaries. Selective distribution depends on more than a few but less than
all of the intermediaries willing to carry a particular product. In intensive distribution, the
producer places the goods or services in as many outlets as possible. This strategy is usually
used for items such as snack foods, newspapers, and gum. Terms and Responsibilities of
Channel Members signify that each channel member must be treated courteously and given
the opportunity to be lucrative. The main constituents in the “trade-relations mix” are price
policy, conditions of sale, territorial rights, and specific services to be performed by each
party. Price policy assists the producer to ascertain a price list and schedule of discounts and
allowances that intermediaries see as equitable and sufficient.

Evaluating the Major Alternatives

The Company must assess each alternative against suitable economic, control, and adaptive
criteria. The firm should verify whether its own sales force or a sales agency will create more
sales and it estimates the costs of selling different quantities through each channel.
Managing Marketing Channel

In order to maximize profit, companies must manage their marketing channel effectively.
Management of marketing channel refers to the process of analysing, planning, organizing
and controlling its marketing channel. In marketing channel two different activities occur.
One is the establishment of physical distribution system and other is management of
marketing objectives. Management of marketing channel involves all functions of marketing
mix which include product, price, physical distribution, program and people. The physical
distribution system and channel structure is established through which products flow in the
marketing channel.

Marketing Mix Activities In Marketing Channel Management: (McCalley, 1996)

To Mange marketing channel, firms must adopt motivational strategies such as paying higher
slotting allowances, offering higher trade discount, providing strong promotional and
advertising support, training channel member sales people, giving high level logistic support.
Management professional stated that after a firm has selected a channel system, it must select,
train, motivate, and evaluate individual intermediaries for each channel. It must also modify
channel design and arrangements over time.

Selecting Channel Members: For successful management, Companies must have to choose
talented channel members cautiously because for customers, the channels are the company.
Producers should decide what features distinguish the better intermediaries and scrutinize the
number of years in business, other lines carried, growth and profit record, financial strength,
cooperativeness, and service reputation of potential channel members. If the intermediaries
are sales agents, producers should assess the number and character of other lines carried and
the size and quality of the sales force. If the intermediaries want exclusive distribution, the
manufacturer should assess locations, future growth potential, and type of customers.

Training and Motivating Channel Members: It is a major responsibility of a company to

examine its intermediaries in the same way it views its customers. It needs to establish
intermediaries’ needs and build a channel positioning such that its channel offering is tailored
to provide superior value to these intermediaries. To enhance intermediaries’ performance,
the company should offer training, market research, and other capability-building programs.
The company must also continually strengthen that its intermediaries are to jointly gratify the
needs of end users. Producers differ greatly in channel power, the ability to change channel
members’ behaviour therefore the members take corrective actions. Often, gaining
intermediaries’ collaboration is a major challenge. Sometimes, Producers try to forge a long-
term affiliation with channel members. The manufacturer must talk clearly what it expects
from its distributors in the way of market coverage and other channel issues and may
ascertain a compensation plan for adhering to these policies. Motivating channel members
takes numerous forms in order to gratify the requirements at each level in channel.
Profitability is major Motivational force for whole seller for product selection. When profit
motivation is satisfied, whole seller will look for marketing programs offered by producers to
sell products to retailers. Whole seller checks the credit option and terms of payment when
assessing the profit option for business when dealing with particular supplier. Retailers are
mainly concerned with maintenance of product supply and availability. It is observed in
market that when customers cannot get product in one retail shop, they immediately search
for it in another retailers. But retailers do not want to lose customers. Another interest of
retailers is profitability of the product.

Motivational consideration for channel members: (McCalley, 1996)

Evaluate Channel Members: To successfully manage market channel, producers must

assess intermediaries’ performance at regular intervals against such standards as sales-quota
attainment, average inventory levels, customer delivery time, treatment of damaged and lost
goods, and cooperation in promotional and training programs. A producer will occasionally
determine that it is paying particular intermediaries too much for what they are actually
doing. Producers should establish functional discounts in which they pay specific amounts for
the intermediary’s performance of each agreed-upon service. People who are not performing
must be given extra training or counselling.

Modifying Channel Arrangements: Channel arrangements must be reassessed regularly

and altered when distribution does not work as planned, consumer buying patterns change,
the market develops, new competition occurs, inventive distribution channels appear, and the
product moves into later stages in the product life cycle. No marketing channel remains
successful over the entire product life cycle. Early purchaser might be willing to pay for high-
cost value-added channels, but later buyers will change to lower-cost channels. In highly
competitive markets with low entry barriers, the best channel structure will transform over
time. The company may add or drop individual channel members, add or drop particular
market channels, or develop a new way to sell merchandise. The process of adding or
dropping an individual channel member needs an incremental analysis to decide profitability
of company. Additionally, marketers adopt data mining to analyse customer shopping data as
input for channel decisions. The most complicated decision is whether to modify the overall
channel scheme. Channels can become old-fashioned when gap occurs between the existing
distribution system and the ideal system to gratify customer’s needs and wants.
The most challenging face of channel management is the maintenance of control over all
parts of distribution flow and marketing activities. Marketers have to undergo legal issues in
controlling marketing channels therefore they need to develop successful channel programs
that will stimulate the action planned without creating conflict among competitive channel
members.

To summarize, market channel is medium through product from raw material move to
costumer. In designing market channel it is important to comprehend customer’s need. The
task of managing marketing channel falls to marketing and sales managers. These people
directly involve with channel members and company’s competitors. They know how to find
valuable information for good management decisions. To organize marketing channel, it is
imperative to gather relevant information. It assists in writing accurate and detail market
profile statement. Most marketing channels are created with one or more intermediaries
between the manufacturer and consumer.

Direct & Indirect channels

Business Marketing Channels: Direct and

Indirect Distribution Channels
Distribution channels in marketing are one of the classic “4 Ps” (product, promotion, price,
placement a.k.a. “distribution”). They’re a key element in your entire marketing strategy —
they help you expand your reach and grow revenue.

B2B and B2C companies can sell through a single distribution channel or through multiple
channels that may include:

 Wholesaler/Distributor
 Direct/Internet
 Direct/Catalog
 Direct/Sales Team
 Value-Added Reseller (VAR)
 Consultant
 Dealer
 Retail
 Sales Agent/Manufacturer’s Rep

Here are three examples of distribution channels in marketing:

SELL THROUGH A SELL THROUGH A

DIRECT TO END
DEALER VAR (VALUE-
USERS
NETWORK ADDED RESELLER)
 You have a sales team
that sells directly to
Fortune 100
companies.
You have a second
product line for small
businesses. Instead of
using your sales team, you
sell this line directly to
end-users through your
website and marketing
campaigns.
You have two markets
and two distribution
channels.
You sell a product
through a geographical
network of dealers who
sell to end-users in
their areas. The dealers
may service the
product as well.
Your dealers are
essentially your
customers, and you have a
strong program to train
and support them with
marketing campaigns and
materials.
You sell a product to a
company who bundles
it with services or other
products and resells it.
That company is called a
Value Added Reseller
(VAR) because it adds
value to your product.
A VAR may work with an
end-user to determine the
right products and
configurations, and then
implement a system that
includes your product.

To create a good distribution program, focus on the needs of your end-users.

 If users need personalized service, you can utilize a local dealer network or
reseller program to provide that service.
 If your users prefer to buy online, you can create an e-commerce website
and fulfillment system and sell direct; you can also sell to another online
retailer or distributor that can offer your product on their own sites.
 You can build your own specialized sales team to prospect and close deals
directly with customers.

Wholesalers, resellers, retailers, consultants and agents already have resources and
relationships to quickly bring your product to market. If you sell through these groups instead
of (or in addition to) selling direct, treat the entire channel as a group of customers – and they
are, since they’re buying your product and reselling it. Understand their needs and deliver
strong marketing programs; you’ll maximize everyone’s revenue in the process.

Best Case Neutral Case Worst Case

You’ve used one or
more distribution
channels to grow your
revenue and market
share more quickly
than you would have
otherwise.
You’re using one or more You probably aren’t
distribution channels with hitting your revenue goals
average success. because your distribution
You may not have as many strategy is in trouble.
channel partners as you’d like, With your current system,
but your current system is you may not be effectively
working moderately well. reaching your end-users; your
prospects probably aren’t
 getting the information and
Your end-users get the service they need to buy your
information and service product.
they need before and after You devote resources to the
the sale. program, but you wonder Your current system may also
whether you’d be better off be difficult to manage. For
If you reach your end-user building an alternative example, channel members
through wholesalers, VARs distribution method — one that may not sell at your
or other channel partners, could help you grow more suggested price; they don’t
you’ve created many aggressively than you are
successful marketing follow up on leads you
growing now. deliver; they don’t service the
programs to drive revenue
through your channel and product very well and you’re
you’re committed to their taking calls from angry
success. customers.

Distribution Channels Concepts & Steps

Before you begin

You can evaluate a new distribution channel or improve your channel marketing /
management at any time. It’s especially important to think about distribution when you’re
going after a new customer segment, releasing a new product, or looking for ways to
aggressively grow your business.

Evaluate how your end-users need to buy

Your distribution strategy should deliver the information and service your prospects need.
For each customer segment, consider:

 How and where they prefer to buy

 Whether they need personalized education and training
 Whether they need additional products or services to be used along with
yours
 Whether your product needs to be customized or installed
 Whether your product needs to be serviced

Match end-user needs to a distribution strategy

 If your end-users need a great deal of information and service, your

company can deliver it directly through a sales force. You can also build a
channel of qualified resellers or consultants. The size of the market and your
price will probably dictate which scenario is best.
 If the buying process is fairly straightforward, you can sell direct via a
website/catalog or perhaps through a wholesale/retail structure. You may
also use an inbound telemarketing group or a field sales team.
  If you need complete control over your product’s delivery and service,
adding a channel probably isn’t right for you.

Identify natural partners

If you want to grow beyond the direct model, look for companies that have relationships with
your end-users. If consultants, wholesalers or retailers already reach your customer base,
they’re natural partners.

Build your distribution channel

If you’re setting up a distribution channel with one or more partners, treat it as a sales
process:

 Approach the potential channel partner and “sell” the value of the
partnership.
 Establish goals, service requirements and reporting requirements.
 Deliver inventory (if necessary) and sales/support materials.
 Train the partner.
 Run promotions and programs to support the partner and help them increase
sales.

Minimize pricing conflicts

If you use multiple channels, carefully map out the price for each step in your channel and
include a fair profit for each type of partner. Then compare the price that the end-user will
pay; if a customer can buy from one channel at a lower price than from another, your partners
will rightfully have concerns. Pricing conflict is common, and it can jeopardize your entire
strategy, so do your best to map out the price at each step and develop the best solution
possible.

Drive revenue through the channel

Service your channel partners as you’d service your best customers and work with them to
drive revenue. For example, provide them with marketing funds or materials to promote your
products; run campaigns to generate leads and forward them to your partners.

Introduction to Logistics and Supply chain

Management
The term “Supply Chain Management” was coined in 1982 by Keith Oliver of Booz, Allen
and Hamilton Inc. But the discipline and practice has been in existence for centuries.

The terms Logistics and Supply Chain Management are used interchangeably these days, but
there is a subtle difference that exists between the two.
‘Logistics’ has a military origin, and used to be associated with the movement of troops and
their supplies in the battlefield. But like so many other technologies and terminologies, it
entered into the business lexicon gradually and has now become synonymous with the set of
activities ranging from procurement of raw materials, to the delivery of the final polished
good to the end consumer.

In a typical business scenario, many organizations work in tandem (knowingly or

unknowingly) to get the final product in hand of the end consumer. The supply chain is a
network of these organizations that coalesce with each other (downstream or upstream) to
make the final shipment successful.

A group of farmers, a cotton mill, a designer and a tailor is the least number of stakeholders
you can expect from a regular shirt you wear every day

Introduction to Logistics and Supply Chain Management (SCM)

Logistics is generally seen as a differentiator in terms of the final bottom line of a typical
“hard and tangible goods” organization; enabling either a lower cost or providing higher
value.

While a lower cost is mostly a one-time feel good factor and has been the traditional focus
area in logistics, high value comes into the picture much later and may be tangible or
intangible in a good’s initial stages.

So while an organization like Zappos may look costly at a first glance, the extraordinary
customer service due to robust policies is a value which more than offsets the slightly higher
cost.

Logistics is concerned with both materials flow and information flow. While the materials
flow from the supplier to consumer, the information flows the other way round. It is not only
concerned with inventory and resource utilization, customer response also falls under the
ambit of logistics.

In simple terms, logistics can be seen as a link between the manufacturing and marketing
operations of a company. The traditional organizations used to think of them separately, but
there is a definite value addition in integrating the two due to the interdependence and
feedback channel between the two.

The level of coordination required to minimize the overall cost for the end consumer gets
tougher to achieve as the number of participants in a supply chain increase, as an extremely
efficient flow of material and information is required for optimization.

Logistics cover the following broad functional areas: network design,

transportation and inventory management.

Manufacturing plants, warehouses, stores etc. are all facilities which form key components in
the network design. Transportation: the cost and consistency (reliability) required out of the
transportation network determines the type and mode of the movement of goods and also
affects the inventory.

Buffer (or safety) stock is the reserve stock held to safeguard against shortages or unexpected
surge in demand, to avoid “stock-outs”. Fewer inventories with negligible stock-outs — the
hallmark of an efficient logistical system

Basic concepts of Logistics and SCM

Inventory Planning

Organizations want to minimize the inventory levels due to its almost linear relationship with
the cost. Yet if the demand is forecasted accurately, there would ideally be no need for
inventory and the goods will move seamlessly from warehouses to customers.

 That would have been awesome, but it is deep into the ideal world zone. In
the real world, the forecasted numbers can only take you so far and some
inventory has to be maintained to satiate any surges in demand; the cost of
unhappy consumers who are not serviced is often huge, and is immeasurable
in most cases.
 Yet overstocks lead to increase in working capital requirements, insurance
costs and blocked resources which could have been productive someplace
else.
 Making a business forecast has largely been a gut-based process, but is
changing rapidly in the era of data-based decision making. The forecast
depends on the historical baseline for sales, seasonality (soft drinks have
higher sales volume in May), recent trends (Samsung is losing out to
competitors when it comes to phones, a declining trend), business cycles
(economies go through expansion and contraction every few years),
promotional offers (up to 50% off can drive the average fashionista mad)
etc.

Transportation

The kind of transportation employed by an organization is a strategic decision (it usually

accounts for around 1/3rdof the total logistics cost) based on the required level of risk
exposure, customer service profiles, geographic area covered etc. Truck shipments take more
time for delivery compared to air transport (customers with relaxed turnaround times); is
cheaper but necessitates maintenance of higher inventory levels.

 Transportation serves the purpose of not just product movement, but storage
as well (not very intuitive). Time spent for delivery means saved time for
warehousing, and many times the cost to offload and reload shipments can
be greater than the cost of letting the goods stay in the transportation
vehicles itself.
  Two basic thumb rules apply for transportation decisions: truck load (TL)
shipments are better than less-than-truckload (LTL) shipments as storage
space is a perishable commodity (just like a commercial airline does not
want to fly with empty seats), and the cost per kilometer decreases as the
distance increases (two 500 km shipments is usually more expensive than a
single 1000 km shipment).
 The factors which determine the economies of transportation decisions
include but are not limited to: distance between the starting and destination
points, and density (higher density products take less space — space
constraints outweigh weight constraints by a huge margin), stow ability
(spherical packaging will lead to more empty spaces compared to cubical)
and volume of the goods. Different modes of transport serve different
strategic ends (rail, road, air, water etc).
 FlipKart has eKart for its logistical operations and warehousing, whereas
smaller e-commerce players generally outsource their operations to
specialized logistics players such BlueDart, DHL and now Delhivery.

Packaging

The end goals differ: can either be done for end consumers or for logistical considerations.
The packaging will then depend on the end goal; form factor plays the lead role when
packaging goods for the end consumers, while function plays the lead role in packaging for
logistical operation.

Warehousing

It is the back-end building for storing goods. Based on the needs of the organization, it can be
in-house or outsourced.

 Primary functions of a warehouse are product movement and storage.

Activities such as offloading of the goods coming from the suppliers, the
intermediate packaging (if required), and shipping to other destinations
(retailers or end consumers) are handled in the warehouse. Similarly, they
can also serve as a storage house for handing peak consumer demand to
avoid stock out of items, and acts as a buffer between the starting point
(usually manufacturing plant) and ending point (think about a typical retail
outlet).

Different distribution strategies can be adopted by an organization based on its needs and
infrastructure in place, namely:

 Cross-Docking: Relies on minimal processing at the warehouse level and

facilitate seamless connection between “incoming” and “outgoing” goods
through technologies such as bar code scanners; becoming increasingly
important due to established structured communication between retailers
 and manufacturers; best for high velocity goods with predictable demand
patterns.
 Milk Runs: The delivery guy is out to deliver items from a single supplier
to multiple retailers or to pick up items from multiple suppliers for a single
retailer (An Indian Doodhwala can literally teach a thing or two about this,
hence the naming we think).
 Direct Shipping: A supplier directly ships to a particular retailer without any
intermediaries. Mostly happens with big-name stores with huge good
volumes, and very frequent replenishments. Big savings on time.
 Hub and Spoke Model: Hub serves as the central node for nearby places,
and the spokes depend on the hub for their needs (think of a metropolitan
and various tier-2 cities in its proximity).
 Pooled Distribution: Region is the most important factor driving this
strategy. Delivers to every destination point in a geographical area, smart for
handling peak time loads and LTL shipments. Plus one for the planet as a
bonus!

Human : Arteries :: Logistics : Information

Traditional paper-based information systems are increasingly on their way out, and electronic
exchanges are making rapid inroads into the logistical process flow. The initial investment in
electronic systems is recouped quickly by cost savings due to better operational efficiency
and enhanced customer service. Advances in electronic data interchange (EDI), artificial
intelligence and wireless communication is partly responsible for this intelligent shift.

 The principal information flow can be subdivided in two main streams: one
for planning (looking into the future) and the other for operational flows (in
the past and present). Plans are to be made for production, storage and
movement of goods. Manufacturing constraints (internal) and expected sales
(external) are the key areas focused upon. Operating flows refer to the
information generated (or required) to serve the orders to the customer.
 Enterprise Resource Planning (ERP) is a fancy term used by IT people for
one-stop, integrated packages to support multiple functions across an
organization. It serves as a central destination to capture data which aids in
making optimal decisions, while also serving as a repository to better
understand the current business scenario and plan for any future needs.

Green Supply Chain Management: Lean Practices

Green is the new way to go about things, and the myth that profits and environment cannot go
hand in hand is evaporating fast. Commitment to lean practices is a promise to do away with
inefficiencies in the system to reduce wastes and have a minimal impact on the environment.

The emphasis on continuous product flows, standardization within the organization/industries

and a greater integration between producers and consumers — all these have contributed to
efficient supply chains with gradually decreasing waste levels.
Information is often the key differentiator when it comes to successful supply chain practices,
and the organizations that share information with each other based on the premise of trust and
long-term business viability will often have decisive competitive advantage over
organizations that do not share critical information upstream and downstream.

The best part is everybody winning — organizations, end consumers and Mother Nature.