Many businesses and sales people are primarily concerned about the need to expand their market and product reach. Capturing a significant percentage of the market has cost organizations so much in investment in areas of advertisement, salary and wages, publicity and printed materials and many more. It is more worrisome if after investing so much in personnel and product development sales becomes discouragingly low.
I have had reasons to consults for organizations and the recurring questions have always been
• How do we ensure that our products are sold on a regular basis?
• What can we do to ensure that our marketing and sales team performs to their optimal level and capacity?
• How can we ensure a higher rate of product turnover and save ourselves the cost of inventory?
These and many questions bother business owners and sales people.
I will attempt to answer all these questions in this article by looking at strategies adopted by some leading organizations in the world and through my experience in direct sales and marketing.
My responses to these questions will be divided into two namely:
1. Natural Responses to the sales questions and
2. The 21st Century Practical Responses to the sales questions
From time immemorial farmers, hunters, artisans have effectively responded to the customer requirements for their products and services in the best possible ways that they know. Their solutions might appear simplistic but they are quite relevant in modern day and serves as springboard in tackling the 21stcentury sales challenges.
NATURAL RESPONSES TO THE SALES QUESTIONS
The communal nature of man portend that some basic rules are observes in living and at ensuring the preservation of human race. Work is seen by society as fundamental attribute of man starting from the so-called man-of-nature to his sophisticated 21st century high-tech counterpart, work (application of human effort to productive activities) is rated as a means for survival and in the preservation of the human race. The man of nature engages in subsistence farming and in no time realizes that his own personal effort could not satisfy his needs and therefore engaged in trade-by-barter. Trade-by-barter is a system of trading where produce were traded for another item of trade. For example a farmer that had need for palm oil would look out for someone with palm oil who has need say for his yams. Under the trade by barter, the major considerations for effective trade are trust and the confidence that both parties are honest in their commercial dealings.
However, in an attempt to capture the key profitability criteria and sales evaluation processes in the days of old, I have been able to identify the following as natural responses to the sales questions:
Hunting for uncommon animals, waiting longer to harvest bigger produce and the dexterity of the craftsmen placed higher values on goods and services in ancient times. Product quality are determined by the uncommonness of the product or based on its exoticness. Just the way it was then so it is today except for the fact that customers are consistently becoming accustomed to high quality product which are reasonably priced and competitive.
In todays market a firm needs to know what customers in it target market perceives as high quality because customer will pay for product that is perceived to meet their needs yet of the highest standard.
Organizations that want to capture a significant proportion of the market must not compromise on the quality rating, it must be noted that quality preserves and promotes firms – product image and gives it a reputation. Quality is today seen as a key point in competitive advantage and this account for the reason why poor quality products are no longer acceptable even in third world Nations.
Dimensions of Quality that the customers will reckon with
There are two Dimensions to quality, namely
• Tangible Elements
• Intangible Elements
TANGIBLE ELEMENTS OF PRODUCT QUALITY
|QUALITY CRITERIA STANDARD
|Operating Characteristics. Every product is judged by two major criteria namely the manufacturer promised performance standard and the users evaluation/assessment for a product. A good product based on performance must satisfy both criteria.
|Functioning. To gain patronage product features which are the range of functionalities, distinguishing characteristics wrap in its appearance and capabilities must be well prioritized and promoted to appeal to end users of that product. Features of a product is the first line of appeal while functionality is a determinant of a product survival in the market, hence, it is in the best interest of product to delivers satisfactorily what its promised.
|Probability of product Failure. The reliability of a manufactured product is defined as the probability that it will perform satisfactorily for a specified period of time under stated use and conditions. Product do fails but as a mark of quality a good product must meet the reliability criteria by a least 85% to 90%. Failures in product are quick judgment that one or more of the promised features are not performing optimally.
|Design Specification. Every product or service is an interpretation of customers need and for a product to meet these needs its specification and design must falls within the range of customers expectation. As a mark of quality product must necessarily conform to customers expectations.
|Economic Life Span. Product must live out its life span and must be seen to have provided the money equivalent over a period of time.
INTANGIBLE ELEMENTS OF PRODUCT QUALITY
|Look and Feel. Product must be appealing and properly packaged to command necessary attention.
|Human touch. Every product must have sense of humanity and appeal to the protection of the environment. The concepts of green product and environment-sensitive packaging that promote friendly disposal is taking centre stage.
|Customer Support. The customers want to be treated with respect and handle professionally. This is an element of the product that must not be rolled under the carpets.
For customers to buy a product and ensure that they repeat their calls the issue of quality must be settled. Every product that will command a place in the market must honour its pledge of quality.
Price is another natural response to the customer buying decision. Except in the era of monopoly when you have one producer of an item dictating prices todays customer desire the very best quality at the cheapest possible price. In the traditional marketing environment price is a factor of product cost plus desired profit. But today we have moved speedily away from sellers market to what is called buyers market where prices are dictated by the forces of demand and supply or what we call market dictated price.
The fact that the customer demanded for cheaper products does not necessarily mean that quality must be compromised.
Customers are price sensitive and most prices are market susceptible hence cost must be closely controlled.
• Captivating Advertisement.
In traditional-market- setting a farmer or hunter with a big harvest or catch would display his produce or game conspicuously for prospective buyers to see. All possible means are adopted at drawing attention to the product. We have always run with the notion that the word of mouth, effective merchandising and display would help the seller sell. However, in modern day, advertisement has taken a much deeper dimension with billions of dollars dedicated to influencing the decision of the buyers in making buying decision.
In todays highly sophisticated market questions have been asked as to whether advertisement influences buyers decision or if only they drew attention to the product? Basically advertisement provides information aimed at influencing the decision of the buyers and often times it does mostly in the short run influences buying decision.
However, except the advertised product satisfied the customer needs and meets the claimed that it promised advertisement does not promote loyalty and repeat purchases.
THE 21ST CENTURY PRACTICAL RESPONSES TO THE SALES QUESTIONS
The distinction made between the natural responses of businesses in tackling the sales questions are consciously deliberate and this is not to say that the response of sales people in the 21st century is artificial or unnatural more so that the survival instinct in man would come naturally in matters of trade and the willingness to satisfy customers needs.
However, the 21st century customers are more sophisticated and conscious of their powers in dictating the direction of commercial transactions. In the words of Sam Walton There is only one boss-the customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else The marked difference between the then and now customer is due partly to the collapse of economic boundaries and the ease of doing business using the world-wide-web.Competitions are stiffer than it used to be and the customers can select from wider varieties.
WHAT INFLUENCES THE 21STCENTURY NIGERIAN CONSUMER TO BUY
My organization was some years back contacted by a mobile phone marker to promote and ensures visibilities for their range of mobile phones in Nigeria; these phones had been designed specifically for the Nigerian market without prior investigations of the needs of the consumers. Sad to say the product were rejected in the market because of the failure of the manufacturer to take the needs of the consumer into consideration in the design of its product.
Questions such as what does the customer need?
What is value for him?
How does he buy? And
Where does he or she buy?
These are strategic and important questions that should inform our product design and packaging. Mark and Spencer became one of the largest manufacturer and marketer in the world because of its sincere responses to these questions. Likewise, if you engage the Nigeria consumers you will get the very best out of them and build an enduring niche.
Value Driven-Product (VDP)
Customer would naturally assess the worth of a product based on its perceived benefits and likely gains from buying such a product. Where there is a low assessment of a particular product they tend not to buy or they will price it low or buy from a competitor whose product worth is considered higher.
The Nigerian buyers are value sensitive and would place their money where their benefits are perceived higher. Sellers and organization must take this into consideration because to a very large extent it will determine their success or otherwise in the market.
Peter F. Drucker, placed emphasis on the centrality of value as a driving force for success, when he said The customer never buys a product. By definition the customer buys the satisfaction of a want. The customer buys value.
Market-Sensitive-Selling Price (MSSP)
It is important to say here that consumers are influenced by various factors when making purchases decision, fundamentally, however, is their needs and the ability of a product in satisfying such needs. Haven said this; we must also be sensitive to pricing decision if we must sell in such a competitive and open market as Nigeria.
In traditional market, selling price is seen as a factor of product cost plus desired profit but today, profit is anchored on market dictated price less cost of product. This goes to show that most product pricing are market driven and customers are price-sensitive and as such cost must be controlled while quality remains the same.
Organizations have adopts different pricing strategy depending on what they intends to achieve either in the short, medium or long run. Some of the well known pricing strategies include
1. Premium Pricing
2. Market Penetration Pricing
3. Skimming Pricing
4. Economy Pricing
5. Bundle Sale Pricing
6. Psychology Pricing
Customer-Input and Partnership (CIP)
While the importance of R&D has been recognized world-wide in the conceptualization and design of product, its of note, however, that customers- partnering is now taking the centre stage in products formulation, design, marketing and sales. The idea of customer partnership places emphasis on the fact that since the products are meant for the consumers, then it is of utmost importance to take their opinions into consideration in terms of asking them to define the value that they would like to have in the product.
When the suggestions, opinions, feedbacks and complaints and criticisms are taken into consideration often times the products turns out well and acceptable to majority of the consumers.
Product Dependability Commitment (PDC)
Every organization either directly or indirectly makes pledges through their products. The claims made in terms of service deliverable are contractual obligations that must be kept. The truth about the Nigerian consumer is that they want to deal with companies that can be trusted to deliver on their pledges.
We must be careful and keep to our products claims; policies statements such as Money back 24 hours response time or free return policy should be kept judiciously because they tell more about the companys image and continuous existence.
Adaptability and Flexible Response Rate (AFRR)
The tastes of the Nigerian consumers are changing on a regular and continuous basis, hence, organizations must ensure that products and services have the ability to respond and conform to new situations as quickly as possible.
There are two dimensions to adaptability and they are:
• Product Flexibility. This refers to an organizations ability to quickly develop new lines of products and quickly modify existing ones to meet changing customers requirements.
• Process Flexibility is the capacity of an organization to produce in timely manners a broad range of product, move from one product to another and easily incorporate new or revised products and handle variations in the raw materials used.
Quite recently we saw the problems with the Galaxy Note 7 manufactured by Samsung; the flame bursting phone has not only negatively affected the revenue of Samsung but the GDP of South Korea as a Nation. The inability of Samsung to quickly respond to this calamity has given its arch-rival Apple huge advantage with its iPhone 7 and iPhone 7 plus. Apple through iphone 7 demonstrates quick and fast response to market requirements and this is what flexibility is all about.
According to Ewan Spence in Forbe.com As Samsungs hopes of smart phones dominance in 2016 literally burns down, Apple is not only ready to sweep in and save the consumer with iPhone 7 and iPhone 7 plus, it has been putting resources in place to quietly capture disappointed Note 7 users.
Timely Delivery and Up-to-date Product (TDUP)
Having consulted extensively in the Nigerian FMCG subsector and in the consumer goods market, it is necessary to conclude that consumers demands for up-to-date products and want them fast and quickly delivered. This requirement is one of the major reasons why online shopping or e-marketing has taken a place of prominence in Nigeria today.
For example, Toyota reckoned with the strategic advantage of time and boldly say that they can build and deliver custom-made cars anywhere in the world in just five working days that the order is placed.
Firm that can meet the demand of their consumers in a fast and timely manner tend to enjoy lowest cost of production and commend a greater share of the market.
Integrated Service Covenant (ISC)
It is high time that we embraced the fact that service is an important part of the total product. Sales do not end at the point where product is exchanged for cash, but moves on even unto after-sales services. It is a widely held opinion that service is highly correlated with market share.
For example, LG Electronics controls a high percentage of consumer electronics market in Nigeria by the singular reason of their unbeatable after-sales-service and fast responses to customer complaints.
Good customer service is the act of making commitment to care for the customer and retain their loyalty.
The Nigerian market offers huge opportunities for manufacturers and business concerns around the world. Nigeria commands the largest population in African and it is open to global trade. Understanding the Nigerian consumers gives competitive advantages to organizations and helps them command a significant share of the market. However, the peculiarity of the Nigeria is worthy of note. This article has been painstakingly researched and written to help organizations and sales people understand how to make the Nigerian consumers buy their products and gain a significant share of the market.
April Maguire, 6 Different Pricing Strategies which is Right for your Business A post in Pricing Strategy. 2016
Ewan Spence Samsung Surrenders to Apple As Note 7 Nightmare Gives Victory to iPhone 7 Forbes 2016.
Hamid Noori, Decision Tools for Operations Management. Laurier Business School Wilfred Laurier University. Mcgraw-Hill, Inc. 1976
Peter F. Drucker, Management Tasks, Responsibilities, Practices 1999
Other presentations and materials written by Kayode Ibukunoluwa-Micah
Sharing is caring!