Technology Forces Driving the Need for Selling-Chain Management
Business drivers highlight the importance of watching customer preferences and trends in selling-chain management. Just as important are the technology issues and trend that steer a company in a direction that will either position it for the future or for failure.
Managers should not make application investment decisions without a clear understanding of technology limitations. Many of the sales automation applications have mixed reputations in corporations due to vendors who made promises that didn’t come to fruition. The reasons for these failures are varied:
Integration was not a factor considered in the selection and implementation of applications.
Many of the then-current software solutions were unwidely or difficult to implement.
The breadth of product functionally did not meet business requirements.
Sales and marketing staff refused to use the products because they didn’t increase sales effectiveness.
The driving business forces and limitations of existing applications, coupled with the emergence of necessary enabling technologies, have companies scrambling to invest in sales automation solutions so they aren’t left behind by more technically advanced competitors. In order to understand where we’re going, however, we need to understand the application continuum.
The first generation of selling-chain solutions burst onto the marketplace in the form of sales force automation (SFA) software, which is used to manage the entire sales process by capturing data at every step, from lead generation to contract closing.
The first generation of SFA software included stand-alone, task-oriented tools, such as personal organizers (appointment calendars and address/telephone directories). The focus of these products was to coordinate and manage the diverse activities of a direct sales force throughout the entire sales cycle.
The reason for the lack of success is that SFA tools suffer from the following problems:
Limited, task-oriented functionally. These systems have archaic interfaces that are inflexible, have limited capabilities, and often require different sessions to access various core programs.
Functional Isolation. These products have limited back-office integration to perform such activities as inventory availability checks, fulfillment functions, real-time pricing, and account management, all of which emanate from sales-initiated customer contact.
Organizational resistance. No enterprise wants to buy an off-the-shelf sales automation solution. Almost every company views its sales processes as a unique, key part of its competitive differentiation. Although most companies realize the inefficiency of building and maintaining a custom application, they won’t accept a cookie-cutter approach either.
Limited view of the customer. Salespeople don’t sit at desks, so it’s difficult to tie them directly to the enterprise applications and provide a 360-degree view of the customer. Also, sales activities are organized by product or account for operational efficiency. Thus, incomplete understanding of the total customer situation propagates throughout the entire customer interaction and destroys sales opportunities.
Many sales applications are built for some limited subset of a product and functionality, which results in narrow process capabilities. For example, a banking sales application may serve only credit card, mutual fund, or insurance products.
The ability to take a customer view – an integral part of CRM – is thus severely restricted. This results in lower productivity from the sales force, more customer call-backs when needs can’t be met in one phone call, and an increased possibility of error when data has to be entered more than once.
Limited Sales Effectiveness:
The Need for More Integrated Applications
Salespeople are demanding the integration of sales applications into their enterprises’ back-office systems. The implications for any company are far-reaching because all departments will be affected. For example, with full integration, a completed sales transaction will book the sale automatically, update the demand forecasting model, affect the production and delivery schedules, update the customer relationship file, and provide input to the calculation of sales performance metrics.
Selling-chain management is defined as the application of technology to the activities in the whole life cycle of an order – from inquiry to order.
Companies will move away from automating discrete tasks, such as lead management, configuration, and pricing, and move toward an integrated infostructure that view order acquisition holistically, as an end-to-end process involving every department, from marketing to logistics.
In India, direct marketing is fast catching up as an instrument for promoting goods and services. What is direct marketing (DM)? What are its different forms? Why is it becoming so popular? To know more, read the following article.
When Shoppers’ Stop sends you a mailer detailing its latest season stock, what it is indulging in is direct marketing. In simpler terms, direct marketing means, sending a promotional message directly to consumers, rather than via a mass medium. Instead of putting up an advertisement on television, when a mailer is sent directly, a direct communication has been established with the customer.
Forms of Direct Marketing
Direct response advertising may be communicated in many forms: email, snail mail, telephone, print, computer or any other interactive medium.
Direct marketing may lead to any one of the following three responses from the customer:-
- Inquiry (A credit card company calls you up and you make an inquiry about the interest rate)
- Order (You place a order after reading a mailer sent by Shopper’s Stop)
- Contribution (The local politician sent you an appeal requesting you to vote for him and you did so)
Need for Direct Marketing
With the rapidly escalating advertising spends, be it on television or radio by the various companies; customers have almost reached their saturation limits with respect to this traditional form of advertising. Many of them have also started distrusting the claims made by companies.
Direct marketing has become extremely popular due to the cost advantage. The typical spend on television by high power brands like Lux or Ariel is in the range of Rs. 50-100 crores every year. There is no way to objectively evaluate the return on investment. Every time an advertisement is aired, marketers are not able to quantify, how much of the spend actually gets noticed and propels the customer to make the purchase. Viewers are in the entertainment mode when they watch television and given the high profile advertising these days, it is not clear which advertisements actually register in the minds of viewers. An excess of 20 channels further accentuates this dilemma as marketers have to grapple with the tough task of deciding the channel on which to air their advertisement.
In such a scenario, the concept of direct marketing is an extremely lucrative option. When a credit card company say ICICI sends you a mailer, the cost to the company is less than Rs. 1/-. If the conversion rate is even 1 in every 100 which is a very pessimistic figure, the company has spent less than Rs. 100/- on getting the mindspace of that one customer. Given a budget of 50 crores, ICICI can actually send more than 50 crore mailers and can hope to get more than 50 lakh prospective customers to buy the product.
Thus, direct marketing is a very cost effective means of reaching the target audience.
In a developed country like the US, direct marketing has another advantage. Let us assume that a company thinks of a new product offering. In India, the company would have to advertise on television and this allows the competition to immediately catch up. However, when the new product mix is offered to customers through mail, it takes some time for the competition to learn of it and react.
But then the obvious question is why do companies not switch exclusively to direct marketing?
One of the reasons for companies not switching to direct marketing is the non-availability of data. In developed countries like the US, every citizen has a social security number through which they can be recognised. Databases are also available which contain the records of all US citizens with their contact numbers and addresses. This kind of information is not available in India and hence companies find it hard to contact the targeted group of customers in entirety.
To secure access to such data, companies sponsor events, wherein besides informing target customers about their products, they also get the database of all visitors to the fair from the organisers to further their direct marketing initiatives.
The size and geography of our country prevents companies from getting thorough information about the customers. In a country such as ours, where a majority of people reside in the rural areas, getting this information is quite a struggle.
Direct Marketing Media:
Direct marketing operates through the following media:-
- The telephone
This is probably one of the best media for direct marketing. Instead of depending upon a mailer or a television advertisement to convince the prospective customer, the company representative directly interacts with them and tries to clarify all doubts and apprehensions that they may have.
Kiosks are not very popular in India but work very well in the western world. When you make a call at a ZIP Phone Booth or an ICICI ATM machine, you are faced with a little more than just advertisements of different companies. Any further information you require is available on clicking a few buttons.
Most email users are faced with the ubiquitous junk mail. But when direct marketing companies send you junk mail, its effectiveness is questionable, but it is definitely cost effective. An issue that is raised is the customer irritation at unsolicited mail and the consequent negative publicity it may generate.
This means of direct advertising is very regularly used. Banks, shopping malls and other similar businesses send mailers informing you of their latest product offerings.
Potential in India
The potential for direct marketing in a country such as ours is huge. The only concern remains getting information about the various customers in order to contact them.
Companies need to make substantial investments in getting databases of target customers and once the data is in, they must cash on it by contacting the customers, offering them current products, taking feedback on the products and making necessary changes to meet their expectations.
In India most sectors dealing with consumer goods are likely to take to DM, the nature of using direct marketing will also vary with the image the company wants to portray. For instance a company like Mercedes would not use direct marketing to advertise its cars on kiosks the way Hyundai does. Hyundai uses kiosks since their cars have the potential to be the first cars, which people would buy and hence their target audience is a huge subset of the Indian population.
The top three industries likely to reap maximum benefits from direct marketing: –
- Retail industry: Direct marketing is an ideal medium for the retail industry. The reason being the need of the retail industry to keep the customers informed of the latest offerings, which they have to make. For this, the database can be generated through loyalty programs, in which they procure the contact details of their regular customers and keep in touch with them through telephone or mailers.
- Financial services: With the increasing awareness of financial service products, companies may want to take first mover advantage by using direct marketing and then hooking on to the customers by offering them different products.
- Banks: In India, since the disposable income of the people is constantly on the rise, a number of banks offer credit cards and other loans. These services are very competitive and have different offerings at different times of the year. Hence, these banking services can also greatly exploit the advantages of direct marketing.
Media Spend Strategies:
Direct marketing does not make other forms of marketing void. If a new bank; say, Bank X has to enter India and sell credit cards; we cannot expect the bank to initially adopt direct marketing. The customers only seriously look at your offering if your brand name exists in the market. However, for you to build that trust among customers, television is the starting point. Television advertisements portray the seriousness with which the company is looking at the Indian market. If the customer sees Bank X’s credit cards advertisements on television, then he will think that the company is big and hence will then seriously look at the direct marketing claims made by the company.
Thus, direct marketing must supplement the other marketing initiatives taken by the company.
While several economic advantages have been sighted, several direct marketing efforts tend to fail because: –
- People get customers through direct marketing but do not know how to retain them, and hence lose them blaming it on direct marketing
- Marketers are not serious about direct marketing. Some marketers who are not convinced of this method, do not put in the required effort thus leading to poor results
- This method though cheaper, will get only individuals convinced. Hence, for a company / industry which is looking at getting thousands of customers in the first month, this means of marketing is not suitable. You would rather switch to television marketing which though more expensive is much faster in reaching the audience
- Direct marketing requires constant maintenance of communication with the customer because it sets an expectation in the customer’s mind that he will always be informed of any new offer
To sum up, we see that the advantages of direct marketing are enormous and very cost effective, provided the company believes in it and takes this marketing initiative very seriously. To sum it all, whether any company takes it seriously or not, direct marketing is here to stay.
If you associate the word ambush (n. the act of concealing yourself and lying in wait to attack by surprise) with only warfare, then you are mistaken. It also pervades the marketing sphere. What is ambush marketing? What are the issues involved?
India captain Sourav Ganguly and Irfan Pathan ask their sponsor Tata Indicom to withdraw ad campaigns featuring them during the course of the recently concluded International Cricket Council (ICC) Champions Trophy. UNI Report
Strict regulations published by Athens 2004 last week dictate that spectators may be refused admission to events if they are carrying food or drinks made by companies that did not see fit to sponsor the games. Staff will also be on the lookout for T-shirts, hats and bags displaying the unwelcome logos of non-sponsors. Stewards have been trained to detect people who may be wearing merchandise from the sponsors’ rivals in the hope of catching the eyes of TV audiences. Those arousing suspicion will be required to wear their T-shirts inside out.
TOI report, August 10, 2004
What is the link between these two seemingly unrelated sports events. The missing link is the unique marketing technique called, ‘Ambush Marketing’. Ambush marketing has been defined as,”… the practice whereby another company, often a competitor, intrudes upon public attention surrounding the event, thereby deflecting attention towards itself and away from the sponsor”. Often classified as a form of “guerrilla” marketing, the term was coined by the originator of cause-related marketing – Jerry Welsh – when he was at the American Express.
Why this trend?
One of the main reasons for the growth of Ambush Marketing is the hype surrounding mega events like the Olympics, FIFA World Cup or the ICC World Cup. Sports events were not commercialised earlier, this is a relatively recent phenomenon. For e.g. Kapil Dev and Sunil Gavaskar never used to get the kind of sponsorship money and endorsements, which say, Sachin Tendulkar or Saurav Ganguly get these days.
Smaller companies cannot afford the kind of amounts which larger conglomerates and multinationals like LG, Samsung, Coke, Pepsi, Reliance, etc pay for getting the sponsorships, which runs into millions of dollars. This is one of the basic reasons that is perpetrating ambush marketing.
Even larger companies cannot sponsor each and every event considering the colossal spends involved. All sponsorships have to make commercial business sense for the sponsor. Apart from the sponsorship fees the sponsor has to spend on TV, print and outdoor ads and related promotional activities at the point of purchase locations. Mr. Cameron Day estimates that for sponsorship to be successful, a brand needs to spend a lot of extra money on promotion around the event estimated to be around five times the cost of sponsorship.
Also the value of such mega events and mega spends on the brand visibility at times is dubious. After the Sydney Olympics, a published research conducted by CIA Medialab showed that 50 percent of the adults questioned didn’t know the names of any sponsors, even though 80 percent had watched the games. And to add insult to the injury, a number of competitor brands scored equal levels of recognition.
Ambush Marketing takes many forms. Two of the main forms are-
- Association Ambushing- the non-sponsor gives the impression of being an official sponsor by using words or symbols associated with the event; and
- Intrusion Ambushing- the non-sponsor piggybacks on the media and spectator exposure of the event by, for eg, advertising near event venues.
Different Strategies of Ambush Marketing
Researchers have identified five of the most commonly employed ambush marketing strategies:
- Sponsoring Media Coverage of an Event
Kodak’s sponsorship of the ABC broadcasts of the 1984 Los Angeles Olympics when Fuji was the official IOC sponsor.
- Sponsoring a Sub-Category within an Event
During the 1988 Olympic games at Seoul, Kodak secured the worldwide category sponsorship for the Games, while Fuji obtained sub-sponsorship of the U.S. swimming team.
- Making a Sponsorship-Related Contribution to a Players’ Pool
Ian Thorpe being sponsored by Adidas’ when Nike was the official clothing supplier for the Australian Olympic team. Thorpe was even photographed with his towel draped over Nike’s logo at a medal presentation ceremony to protect his personal contract with Adidas.
- Engaging in Advertising that Coincides with a Sponsored Event
Intense advertising done by a competitor during or around a sponsored event.
Other Imaginative Ambush Strategies
This could include either one or all of the following:
- “Hit squads” who target revellers on their way to and from the event implying association thanks to their physical presence near the venue.
- Associating the image of a winning athlete around the brand.
- Referring to a sporting event in advertising.
- Using marketing techniques to mislead the consumer e.g. offering event tickets as prizes
- Booking billboards near to event venues to fool consumers into thinking there is a link to the event.
- Handing out unofficial programmes and free merchandise to event attendees – inside and outside the venues.
- Distributing free samples of a non-sponsor brand product or giveaway items such as t-shirts or flags displaying the brand at the event.
- Entering and highlighting non-Olympics related sports activities e.g. former Olympic athletes, children’s athletic causes and programs etc. to underscore the non-sponsor’s commitment and dedication to the same generic thematic space which Olympic sports occupy.
Ambush marketing, often dubbed parasitic marketing, has raised several issues. The most important of which is the ethical aspect. Is it ethical on the part of companies to indulge in such activities? An IOC official dubbed the Fuji-Kodak episode as, “breaching one of the fundamental tenets of business activity, namely truth in advertising and business communications. The debate assumes greater significance because companies are alternating between sponsoring an event and indulging in ambush marketing. For instance, Pepsi sponsored the 1999 Cricket World Cup, but Coca Cola put hired people in the stadium and made them furl Coke flags, drink Coke, wear Coke tee-shirts etc., in full view of the world-wide TV audiences. In 2004, the tables were turned. Coca Cola sponsored Euro 2004, but Pepsi used its association with David Beckham and other players to produce a celebrity ad that successfully deflected and diverted viewers’ attention from Euro 2004.
Tackling the Problem
Despite the weakness of the existing legal system, organisers are increasingly turning to it for protection. Thus the organising committee for the Sydney 2000 Olympic Games successfully got approved the Sydney 2000 Games (Indicia and Images) Protection Act 1996. The Act was the centrepiece of the action plan to reduce the incidence of ambushing at the 2000 Olympic games. Similarly, the International Cricket Council (ICC) lobbied with the South African government to get the Merchandise Marks Amendment Act 2002 passed. The legislation even contained provisions to jail directors of companies that engage in ambushing activities. ICC has also incorporated a clause which mentions that players are not allowed to endorse products that are in direct conflict with the ICC’s official sponsors for a period of 45 days before, during and after an ICC tournament is held. While educating the public on the real sponsors could be a solution, there is the possibility of actually reinforcing awareness of the rival.
Event organisers and sponsors can curb ambush marketers by:
- Preventing tickets from being used as competition prizes;
- Policing the event more strictly for “ambushers” and denying them access;
- Using event regulations and participation agreements to restrict the rights that participants can grant their own sponsors (e.g., what athletes may wear or carry when they compete).
- Following a spectator ticketing policy that prevents people from bringing certain items into the viewing areas.
- Entering into additional sponsorship contracts with or securing exclusive rights from key participants and major stakeholder groups (athletes, teams, event organisers and broadcasters); and,
- Controlling the manufacture and distribution of licensed merchandise.
The labels ambusher and sponsor are not moral labels. The marketing decision to sponsor or not is a commercial decision based on the cost-benefit or trade-off analysis of the whole commercial proposal. So, today’s sponsor is tomorrow’s ambusher as seen in the Pepsi-Coke example above. Ambush marketing is the practical reality when companies routinely compete in the market place for the mind and wallet share and the loyalty of the consumers in the same thematic space day in and day out.
As a perceptive analyst wrote, “There is no limit to human ingenuity. As such, ambush marketing at the margins will arguably always occur.”
Marketing combines many activity like market research present development distribution pricing , Advertising personal selling etc. to survey and satisfied consumers needs where meeting the organization goal. The goal of marketing is to build and managed profitable customer’s relationship marketing seek to attract new customer’s by promising superior value and to keep and grew current customers be delivery satisfied marketing is a social and managerial process. Where by individuals and groups obtained what they need and want through creating and exchanging products and value with others.
The core concept of marketing is needs, wants, and demands marketing offers products, services, expenses value, satisfaction, exchanges, and transition, relationship market wants are the from assumed by human needs. He shaped by cultural and individual personality. When backed by buying power, hats became demands. Comparison address needs by putting froth and value proposition a set of benefits that they promise to consumers to satisfy their needs. The value proposition is fulfilled through a market offer that is the combination of products services information, experience offered to a market to satisfy a need or want.
Marketing management is the art and science of choosing target market and building profitable relationship with them this involves getting keeping, and growing customers through creating delivery and communicating superior customers, value marketing management is customer management and demand management. There are four compacting marketing orientating of marketing management.
The product concept.
The selling concept.
The marketing concept.
The societal concept.
The product Concept:-
The product concept holds the consumer’s favors products that are available and highly affordable. The product concept holds that consumers favor product that offers the most in quality performance and innovative futures.
The selling concept:-
The selling concept holds that consumers. Will not by enough of the organizations sell and promoting afford?
The marketing concept:-
The marketing concept that achieving organizational goals depends on determining the needs and wants of to much target markets and delivery the desire satisfaction more effectively and efficiently in the competition environment.
The societal concept:-
Holds that generating customer satisfaction and long rum societal and well being are the keys to both achieving the companies’ goals and fulfilling its responsibilities.
Means managing markets to bring profitable exchange relationship by creating value and satisfying need and wants in others wants marketing are process by which individual and groups obtain what they need and want by creating and exchanging product and value with other creating exchange relationship include work like seller research for buyers identify need good marketing offer. Set price for desire them promote then and stored them activities such as product development, research, communicates distributing pricing and services the core marketing activities and finally all there factors are economical, physical, technology, legal, social cultural.
Modern marketing companies are improving their customer’s knowledge and customer communications. They are targeting profitable customers, then innovative way to capture and keep the customers.
They are forming more direct communication and building testing customer’s relationship. Emplacing more on target market media and angering them marketing communication they are delivering full and consisting message every customer contacting in other words to days companies are connecting in new ways to deliver superior value to their customer.
Customer relationship management is the over all process of between building ands maintaining profitable customer relationship by delivering superior customer value and satisfaction the aim of customer relationship management is to produce high customers equity, the total combine customer life time values of the entire companies customer.
The key to building tasting relationship is the creation out superior customer value and satisfied and companies need to understand the determinants of there important elements. To days competitive environment with best production affords by the companies will make choice for customer to choose product and services based their buying decision on their perception of value.
Customer satisfied result when a company’s performance as full filled buyer’s expectation companies not only store to gain customers but perhaps more importantly to retain and grew store of customer.
A product is defined as:
“Anything that is capable of satisfying customer needs”
This definition includes both physical products (e.g. cars, washing machines, DVD players) as well as services (e.g. insurance, banking, private health care).
The process by which companies distinguish their product offerings from the competition is called branding. For most companies, brands are not developed in isolation – they are part of a product group.
A product group (or product line) is a group of brands that are closely related in terms of their functions and the benefits they offer (e.g. Dell’s range of personal computers or Sony’s range of televisions).
There are two main types of product brand:
(1) Manufacturer brands
(2) Own-label brands
Manufacturer brands are created by producers and use their chosen brand name. The producer has the responsibility for marketing the brand, by building distribution and gaining customer brand loyalty. Good examples include Microsoft, Panasonic and Mercedes.
Own-label brands are created and owned by distributors. Good examples include Tesco and Sainsbury’s.
The main importance of branding is that, done well, it permits a business to differentiate its products, adding extra value for consumers who value the brand, and improving profitability for the company.
Businesses should manage their products carefully over time to make sure that they deliver products that continue to meet customer wants. The process of managing groups of brands and product lines is called portfolio planning.
Two models of product portfolio planning are widely known and used in business:
- The Boston Group Growth-Share Matrix, and
- GE Market Attractiveness model
Businesses need to regularly look for new products and markets for future growth. A useful way of looking at growth opportunities is the Ansoff Growth matrix which suggests that there are four main ways in which growth can be achieved through a product strategy:
- Market penetration – Increase sales of an existing product in an existing market
- Product development – Improve present products and/or develop new products for the current market
- Market development – Sell existing products into new markets (e.g. developing export sales)
- Diversification – Develop new products for new markets
The advantage of a smaller number of suppliers is that a closer relationship can be built with your suppliers. This can lead to long-term relationships, trust, information sharing, and exploiting the individual strengths of the organizations. However, by having fewer suppliers, the risk of something occurring to your source of
an item is increased because of a lack of redundancy.
2. What would be the different steps or elements in a supply chain for a service? Give an example.
Generally, the supply chain is shorter since there is very little, if any, raw material or component parts.
3. How has technology accelerated the trend toward disintermediation?
Better communications allows the gap to close between suppliers and customers regardless of their location in the world.
4. What are the main differences between having a vendor’s employees working in your manufacturing operation and you haring your own employees to do the same work?
The vendor’s employees have direct access to the vendor’s database and can provide the needed information in a shorter period of time.
5. Identify all of the steps in the supply chain for a hamburger that you buy at McDonald’s. How might this supply chain differ for a McDonald’s located in a developing country?
The steps would be growing of the food and manufacture of paper product (wrappers, etc.) to processing of the food, to distribution to the stores, to the customer. The availability of certain foods in developing countries could alter this system.