 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketing is getting people to want your goods, selling them, delivering them to the buyers and getting paid for them.
Marketing means being active in every way which will help to increase sales. It is not enough to sit and wait for orders.
This is what you have to do:
· find out what customers want; next:
· choose the products or services you can offer to satisfy their wants;
· price and sell them;
· promote and advertise them;
· place them in the market and distribute them; and:
· make a profit at the end of the whole process.
FIND OUT WHAT THE CUSTOMERS
WANT
PRODUCE, PRICE, PROMOTE AND PLACE
THE PRODUCT
MAKE A
PROFIT
Choosing the goods to be made and sold means:
· deciding on the designs;
· deciding on the quality;
· deciding on the quantities you think you can sell.
People like something a little different from what their friends have-but not too different! People change their ideas slowly and like things which they know and have grown up with. If you make something too different, only a few people will buy it.
Think about the product you are going to make and sell. Try to imagine what the customers would like the product to be.
In the section on " Buying and selling " we said that business people must know their customers. They must find the right answers to many questions such as:
· Whom am I trying to sell to?
· What kind of designs, colours, sizes and so on do they like?
· Where are the customers-in the capital city, in the provinces, in smaller towns or in the country?
· When do they buy-all the year round, in winter, in summer, at holiday times?
· How many do they want, can they afford them and can I sell them?
Finding the answers to these questions and others is called market research. You may find out many facts from:
Figure
WHAT KIND OF PRODUCT DO MY CUSTOMERS WANT?
· WHICH DESIGNS?
· WHICH PRICES?
· WHICH SIZES?
· WHICH QUALITY?
1 Your own order books
2 Your sales representatives
3 Wholesalers and retailers you
sell to
4 Customers who use your
goods
5 Other manufacturers'
catalogues
6 The Chamber of
Commerce
One mistake some manufacturers make is to try to sell to everyone. They make too many different sorts of goods, or too many sizes or models of the same goods. It is sometimes difficult to decide what to make. If you are a tailor, should you make only men's white shirts, which you do very well, or should you make sports shirts or women's blouses or dresses...?
Figure
WIDE CHOICE-
HIGH
PRODUCTION COST
The more different goods or models you make, the more your customers have to choose from but the more it will cost you to make each article. This is because you will buy your different materials in smaller quantities; this will cost more and you will not be able to organise your production so well. Your competitors who make only one or two goods in large quantities can sell cheaper than you can.
If you are sure your product is good but it does not sell well, you should put more effort into your marketing. Do not try to make more different items but try to sell what you already make!
Figure
LESS CHOICE-
LOW
PRODUCTION
COST
Promotion includes every way you influence people so that they will buy your goods.
Advertising is telling people what you have to sell so that they want to buy your goods more than they do those of your competitors.
What you are selling, whom you are selling to and where customers live will decide what sort of advertising you use and what media you use. Media in advertising are the means used to tell people about your goods, except word of mouth.
Media include newspapers, magazines, radio, television, cinemas and posters.
If your goods are sold to very many people throughout the whole country you can use radio, local < newspapers, signboards on main roads, posters on buildings, or even television if you can afford it and your sales are big enough.
Industrial and trade customers are special. They use your goods to earn their living. They want to know how your goods will help their businesses and they want hard facts, not promises. To reach them you must advertise in trade journals and through well-prepared catalogues.
MEDIA YOU CAN USE TO ADVERTISE
YOUR GOODS
Where you want to promote your products to a few special customers, send special letters to each one personally. At the beginning of a new year you could even send calendars, diaries, pencils or notepads as gifts with the name of your business printed on them.
The owners of businesses, bankers and top managers will read personal letters while they throw away a circular letter. Make sure your letters are on the best kind of paper with an impressive letter-head and very well typed. If your typist is not good enough to do this, use a typing agency. This is the way to promote a good image of your business.
Retailers can display promotional material in their shops, on the counter and in the window. This is called point-of-sale advertising. It may be a cut-out cardboard figure or an eye-catching poster showing particular goods.
Ask new customers how they first heard of your product or service. You will then get a good idea of how well your name is known and how your business is thought of in the market.
Figure
A BUSINESS LETTER NEEDS:
· A NEAT HEADING
· CLEAR INFORMATION
· GOOD TYPING
Distributing means getting goods from the manufacturers to the final customers. It includes buying and reselling goods by wholesalers and retailers and the transport used to move them at each stage.
How you sell and distribute your products depends on:
· what the products are;
· who the customers are;
· where the customers are;
· how many customers or people you hope to sell to;
· how much they buy.
Figure
This can be seen very clearly in the table below.
|
What |
Who |
Where |
Point of sale |
Number of points |
Sold by |
|
Cheap clothes |
Poorer people |
Whole country |
Stores, shops, markets, etc. |
Very many |
Salesmen, owner to big store buyers |
|
Dear leather goods |
Wealthy people, tourists |
Capital city, tourist towns |
Department stores, hotels, boutiques |
Very few |
Direct by owner |
|
Chocolates and sweets |
Everyone, especially children |
Mostly towns |
Shops, markets, street sellers |
Very many |
Salesmen, wholesalers, retailers |
|
Kitchenware |
Middle-income households |
Mostly towns |
Department and hardware stores |
Not so many |
Salesmen, owner (big orders) |
|
Metal windows |
Builders |
Mostly big towns |
Wholesalers, builders |
Not so many |
Owner, salesman, catalogue |
|
Special tools and dies |
Engineering and plastic industry, etc. |
Capital, few big towns |
Manufacturer's factory |
Very few |
Owner, technical staff |
|
Standard tables and chairs |
Government, schools, institutes |
Mostly big towns |
Buyer's office, government or local officials |
Very few |
Owner |
You can see that there are different ways and places for selling goods. If you are selling to the Government, you will have to go through the usual procedures. In some countries, goods for the general public go from the manufacturer to a wholesaler, to another wholesaler, and then in smaller lots to retailers or market sellers.
Four or five lots of people may handle the goods, each taking a profit, before they reach the buyer if he or she lives in the country. This puts up the price of the goods to the people who want them. You will sell fewer goods this way. You must find the best sales channels for your goods.
Very few small manufacturers can employ many sales representatives to visit customers, if they are selling all over the country.
Wholesalers can do the job for you by buying bigger quantities of goods and breaking them down into smaller lots to sell to retailers or to other customers. They can do the selling for you.
DIFFERENT WAYS OF DISTRIBUTION
Figure Long Channel
Figure Medium Channel
Figure Short Channel
Wholesalers sell many different goods and may also sell the goods of your competitors. They will not always push your goods as hard as your own sales representatives do and they will only buy at a cut price, i.e. with a discount.
Wholesalers must not only make a profit to cover their costs but they must, if they are selling to retailers, allow them discount in order that they should have a profit.
If you sell to retailers you may make more profit but, if there are many retailers in different parts of the country, you may have problems of visiting them and of transporting the goods to them. Selling direct to retailers, if there are many, means that you must employ one or more sales representatives, even if you do some selling yourself.
In deciding what is the best means to use to sell and distribute your goods, you have to think about:
1. The cost of selling- will the cost of sales representatives' salaries and expenses be recovered by higher selling prices than a wholesaler might give you?2. Selling the goods -will sales representatives push your goods better than a wholesaler will? Can they sell enough -more than a wholesaler-to cover their costs and make a bigger profit?
3. Storage-goods for sale in distant parts of the country may be stored locally. Is it better to use a wholesaler or set up your own store in the region?4. Delivery - to deliver goods to other regions, is it better to have your own transport, hire lorries, use a common carrier or, for small parcels, use the mail?
THE LONGER THE CHANNEL, THE HIGHER THE SELLING PRICE
Figure
Figure
COMPARE SELLING THROUGH YOUR OWN SALES REPRESENTATIVES OR THROUGH A WHOLESALER
1 WHAT IS THE COST OF EACH?
2 HOW WELL DOES EACH PROMOTE YOUR PRODUCT?
3 HOW WIDELY CAN EACH COVER THE COUNTRY?
4 HOW QUICK IS EACH FOR DELIVERY OF YOUR PRODUCT?
All the people in the business, including you, are sales representatives for the business.
The letters you write, the way they are typed, the way the telephone is answered, how quickly you answer letters, what you do about complaints-these add up to giving people outside (people who may buy from you) a picture of a well-run business with a good owner and staff or a poorly run business with a bad owner and staff.
The sales representatives you employ to sell your goods also give people an idea about the kind of business you have. Selling can be a lonely and tiring job. Sales representatives' time may be wasted by people who do not keep appointments. Customers may even go out without leaving a message or keep them waiting for an hour or more. Some people do not think they must be polite to salespeople and are very rude. Yet sales representatives must be well dressed, polite and patient, they must never lose their temper and they must know about the goods they are trying to sell. They are ambassadors for the business and the company will be judged by how they act.
MAKE YOUR CHOICE
YOUR SALES PEOPLE ARE YOUR BUSINESS REPRESENTATIVES
Sales representatives must fit in with the sort of customers they visit. It is no good sending a rough person, however good at his work, to visit educated people. However, sales representatives visiting artisans and small traders must be simple people, able to talk to them in their own words. They must also know the jobs which the small traders do and how to use the product they are selling.
Train your sales representatives in your products, especially if they are technical (machines, tools, electrical goods, fertilisers, medicines and so on). Make sure that they have the education and technical knowledge to be able to talk to technical people. Many small manufacturers, farmers, builders and other people using technical products come to trust a sales representative who can give them good advice, not only on the goods he is selling, but about their businesses. They will see him or her when they will not see other representatives and they will buy the goods - your goods.
One important way in which you can help your sales representatives - and win more orders - is to make sure that all letters, enquiries, reports and complaints from customers are dealt with at once.
If there is an enquiry or a complaint which you cannot answer at once, because you must study it or get more information, send a letter or even a postcard saying that you have received it and will reply as soon as you have the information.
KNOWLEDGE OF YOUR PRODUCT HELPS YOUR SALES REPRESENTATIVE TO SELL
Figure
Remember - your sales representative is the person who has to go back and see the customer, and the customer will be angry with him or her if you do not reply. Quick replies and politeness will build your representative up and build your business up in the eyes of customers.
Good sales records are very important. The more different goods or products you sell, the more important sales records are.
From good sales records you can find out:
· whether your sales are rising, falling or about the same from month to month or year to year;· which goods or products are selling well, which are selling badly, which have sales that are going up or going down;
· in what regions the sales are best, worst or merely average;
· which designs or models customers like best;
· how your sales representatives are doing;
· how new products are selling;
· if older products are losing sales.
By having this information easily to hand you can watch your sales. If you see sales going down, you must find out why.
WATCH YOUR
SALES
This can be due to different causes:
· one of your competitors may be making a special drive for sales;· your products may be going out of date;
· you may have a bad sales representative;
· customers may be unhappy with your quality (too many faulty goods), your deliveries (late, not in the right quantities) or your service.
Good sales records make it possible to see changes in sales, to find out why they are happening and, if they are bad, to do something to make them better before it is too late.
Figure
Good accounts mean that you can see what sales figures mean in terms of money, so that you can see on which products you are making a profit and on which a loss.
It is no good selling your goods or services if you do not get paid for them or if your customers take so long to pay that you have to borrow money and pay interest to finance your materials and the wages of your employees.
Accounts receivable is the name given by accountants for the money owed on goods or services which have been invoiced but not yet paid for.
Most small retail shops sell for cash and refuse to give credit. They know that if they begin, some people will never pay them.
You must have clear rules for payment - make sure your customers know them - and stick to them. Then there can be no misunderstanding. (We know that big and important customers like governments will sometimes break your rules, and you cannot refuse them.)
Have your rules clearly printed on quotations and invoices and well displayed in your shop. You can help to speed up payments by offering discounts to those who pay quickly and making the slow payers pay something extra (a penalty). These may be:
· discounts - 2 1/2 per cent off for cash or payment within 15 days (see below);· penalties - 2 per cent interest per calendar month to be charged after 30 days from the date when payment is due.
Try to look ahead. If you must give a big credit, check the customer's record for payments. Your bank can help you. If the person is known as a very bad payer, it may be better to refuse the order. If he or she is someone important who can help you get other orders, you may even have to lose money. You must decide.
HAVE CLEAR RULES FOR PAYMENT AND
MAKE SURE YOUR CUSTOMERS KNOW
THEM
Do not forget that your prices must allow for discounts to people who buy big quantities - government contracts, wholesalers and trade customers such as other manufacturers. It is often also trade practice to give a discount (e.g. 2½ per cent) for cash payments which are made within 30 days. This helps to increase the inflow of cash. Remember: think out what your discounts can be and what reduction in price you can give to get a big order.
You can also help yourself by sending out your invoices as quickly as possible after the dispatch of the goods - with the goods if you can or by the next post.
DISCOUNTS FOR QUICK PAYMENTS HELP TO GET CASH IN FAST
Figure
You can only get your invoices out quickly if you have good records so that information can be quickly and easily put on the invoices.
You should also make sure that your invoices give exact details of what customers are paying for, so that they cannot delay payment by disputing the invoice.
Look at these two invoices:
Figure
If your customer wants to dispute the first invoice, it can waste a lot of time. If the work was done on word of mouth only, you may have to cut the price you ask. In the second invoice, each item is clearly stated. If there are any questions, you can check each item with your customer.
You do not want to take a customer to court. It will surely cost you money. You can buy printed forms with reminders that payments are due. One type has three parts. They can be sent out every 14 days. In each one the wording is tougher. But in the end, you must decide if it is worth taking a non-payer to court.
TO GET YOUR MONEY, BE:
1 STRONG BUT POLITE
|
6th April 1986 Dear Mr. Slow, In checking our ledgers we notice that your account for 40,000 NU has remained unpaid for over two months. Me would be grateful to have your cheque in full payment by return of post. Yours sincerely, A. Manufacturer
|
2 THEN, THOUGH
|
20th April 1986 Dear Sir, In spite of our earlier letter to you, there has been no cheque from you yet, in settlement of your outstanding balance. Please send your cheque immediately upon receipt of this letter, and telephone me to confirm that your cheque is in the post. Yours faithfully, A. Manufacturer
|
3 THEN, EVEN MORE I TOUGH
|
4th May 1986 Sir, In spite of two reminders to you, your outstanding balance still remains unpaid. Unless the amount is settled within seven days of the date on this letter, we will be obliged to initiate legal action for recovery of the debt. Yours faithfully,
A. Manufacturer |
 |
 |
