MARKETING NOTES
The marketing manager will need to consider:
How much can you sell?
The market size, trends and regional variations
How much do you want to sell? - your company's targets
How will you sell it? - number of sales staff and marketing mix
How well have you done? - how effective was your marketing mix after
selling
Did you achieve your target sales and how profitable was it?
The following notes should help you do this within the Melnikoff
exercise.
How much can you sell?
Market opportunities: How large is the market?
What are the trends? Where is the demand?
Overall market size: see marketing brief page 11
Trends & influences: for environmental changes, economic growth or
decline, see updates in quarterly Melnikoff News and Economy Board.
Regional variations in demand: buy marketing research information - see
price list.
How much do you want to sell?
Company strategy - arrived at by discussion and agreement with your
fellow directors. what market share do you wish to achieve? Do you want a large market
share - "pile 'em high and sell 'em cheap"? Or will you follow a niche strategy
- high price, differentiated image, smaller markets".
There is no one correct strategy - just appropriate strategies to
achieve your objectives.
How will you sell-the marketing mix (the 4 p’s)
Having decided how much you want to sell you need to select an
appropriate marketing mix:
Price:
Do not forget to exploit the price sensitivity of the markets! (See
marketing research list). You will only lose money for your company if you under price in
a non-price sensitive region. Not ALL CUSTOMERS CHOOSE A BRAND BY PRICE ALONE! Aim for a
range of £3-£4 around the expected market price.
Place:
Choose the regions in which you wish to sell. You may decide to restrict
your sales to 2 or 3 areas at the start and expand as your capacity, reputation and
financial strength increases.
In this exercise you will be expected to concentrate on sales to the trade
market (the 5 regions). You may also make sales on contract (by negotiation with the
marketing umpire); these will be restricted to a maximum of 25% of total sales (not of
your productive capacity).
Product:
You will notice the progress of the product life cycle during the
exercise. The introduction stage is usually Q's 3 & 4, with low sales and high
promotion concentrating on telling the market about the product.
Promotion:
You need to tell customers about your product--- first to educate the
market about the product; then to create brand preference; and once the market reaches
saturation to maintain brand loyalty.
Buy "units" of advertising
(referred to as "pages") by entering the appropriate number on
the form. Remember, some regions are more responsive to advertising than others (see
marketing research list - advertising sensitivity). If you wish to boost the response to
your advertising spend, you can, by earning merits with posters and "acted/sung"
TV or Radio ads.
Sales staff:
Trade market, how many do you need? Remember they can expect to sell 250
each per quarter when they start, providing you give them adequate advertising support and
your products are reasonably priced. This figure should increase as they become more
experienced.
Growth,
with increasing sales, may occur between Q's 5-7. At this stage
advertising will concentrate on establishing brand image. The onset of maturity occurs
around Q's 7 or 8. Sales growth will slow, and the market will be saturated. At this stage
you need to differentiate your product from that of your competitors. You can do this by
adjusting your marketing mix -increase promotion, short term added value sales promotion,
price changes or launch a new product.
To help you decide whether or not to invest in product development you
can buy a "Product Development Feasibility Study". (See marketing research
list). Then you can invest as much or as little as you wish each quarter.
You may also sell either raw materials or finished goods to other
Mash companies. Once the selling begins, you can buy information about where your
competitors are selling - see marketing research list.
How well have you done?
Once you start selling you need to check how your marketing mix
-strategy has worked.
Check for Stockouts on your sales slip.
If you have a stockout it means you could have sold more, but did not
have the stock to supply the trade, is it a production problem - you are not making enough
- or a sales problem - you are trying to sell more than you agreed. what can you do to
redress the balance?
If you have repeated Stockouts - try putting your prices up - while you
are selling as many as you can possible! (Profit is not a dirty work)
Check sales per sales staff. At the beginning this should be a minimum
of 250 per capita. If it is less than this you must try to decide why - Stockouts? or
marketing mix? Maybe you should buy some competitor analysis - see marketing research
list.
Check the figure for the total market: total sales / number of sales
staff
And work out the ratio for each region. This will tell you which areas
are giving you the best returns, in number of sales. These may always be your most
profitable areas - this depends upon your price and the number of pages of advertising.
Check sales per advertising unit - Where are you getting the best
response? What is the optimum level of advertising, per region?
Check out how your competitors are doing. You can buy information on
their location, pricing, advertising and product development spend (see marketing research
list).
Finally - how profitable is your sales effort? Check the level of
contribution to profit for each unit sold. How many extra units do you need to sell to
cover the cost of your marketing efforts, e.g. an increase in sales staff, wages or
commission; extra pages of advertising; sales promotion schemes; investment in product
development.
YOU SHOULD NOT LEAVE PROFIT TO CHANCE - YOU SHOULD KNOW HOW MUCH YOUR
MARKETING EFFORT COSTS AND HOW MANY EXTRA UNITS YOU NEED TO SELL TO MAKE THAT EFFORT
WORTHWHILE
