MODERN SALES
all , doing the wrong thing more efficiently is hardly a formula for success . It ’ s somewhat like making a stupid salesperson work hard . All this would do is to increase the chaos they cause ! At one time or another , sales force training experts all over the world have suffered the frustration of fine-tuning a professional sales force that is held back by an ineffective marketing strategy . At a fairly mundane level , problems related to poor delivery and poor product quality cannot be overcome by the sales force . At a more serious level , most companies still haven ’ t cottoned on to the fact that it is customers , not products that make profits . Yet accounting systems persist in measuring only product profitability . For example , a customer that demands Just-in-Time delivery to all of its outlets , daily sales calls , promotional support , and that takes one hundred days to pay its accounts , is very different from another customer taking a similar volume that only requires one central delivery , no sales calls , no promo ¬ tional support , and that takes only forty-five days to pay its accounts . Product profitability doesn ’ t measure any of this , with the result that sales effort is frequently misdirected . The trouble is , the more efficient the sales effort , the greater the damage ! At an even more serious level than this , illthought-out marketing strategies can cause severe financial problems for companies . Two examples of this follow .
New Product Launches It is a well-known fact that most new product launches fail . This , however , has more to do with poor marketing than with poor selling . In the 1960s ,
INDUSTRY / MARKET ATTRACTIVENESS
Figure 2 : Market segments : competitive strengths and attractiveness
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Medium
Low
research by Everett Rogers into how new products are diffused over time , showed clearly that about 16 % of any market are opinion leaders , and that no one else will buy a new product until this group has accepted it . Only then will the 34 % of the early majority come into the market . The remain ¬ ing 50 % are slow to enter the market , tend to be more conservative , and have less money , so price often becomes important . Yet , in spite of this well-proven research , companies still insist on launching new products to the whole market at the same time . Yet , about 85 % of customers are bound to reject any such overtures . The result of this is that the new product fails , mainly because of inappropriate targeting . The problem is merely exacerbated and the failure hastened by an efficient sales force who , alas , tend to get the blame . Yet it is sheer stupidity on the part of the marketing department , and has little to do with the sales force .
Product / Market Portfolios Another classic marketing error concerns product / market portfolios .
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3
High
2
4
BUSINESS / COMPANY STRENGTHS
Low
Figure 2 illustrates a number of market segments represented graphically according to their attractiveness to the company in terms of their likelihood of enabling the company to achieve its objectives ( the vertical axis ) and the company ’ s competitive strengths in these markets . Circle sizes represent their importance in terms of turnover . It is clear from this that markets in Box 3 are less attractive than those in in Boxes 1 and 2 , probably because they are mature markets . But , because of our strengths , we probably make plenty of money out of them . So , although not growing , they obviously need to be carefully and diligently managed for sustained earnings .
Box 1 has a number of very attractive markets , in which we have a strong position . These are clearly ripe for investment and for aggressive marketing and sales policies . Box 2 is similar to Box 1 , except that we do not have many strengths , so we obviously need to decide which ones we should choose to invest in to build strengths , as we are unlikely
30 ModernBusiness July 2016