Long Term Strategies For Increase Of Sales Volume (B)
What are the basic long term strategies for increase of sales volume?
Posted: May 2010
Sales volume is the core interest of every organization that is based on sales and profit. When the volume goes up, everything else is manageable ( margin, profit, numerical distribution, ... ). But when the volume goes down it is difficult to manage the business parameters. The sales does not goes up or down just by that. The company is managing and directing its sales volume through the portfolio and channels. There are different ways how the company can influence volume increase. The methods that increase volume in the long term are:
Brand Equity can be literally translated as the market value of the brand. The brand equity greatly depends of the marketing strategy and market approach. It also depends of the quality, portfolio and service level. The following is also influencing the brand equity...
Positioning in Sales Outlet is the strategic imperative for FMCG products, but to the other as well. First in the traffic flow, big displays, corporate block, promotional signs, etc. brings alertness of consumers and increases the shopping probability versus competition. The companies who invested in the sales force and their training are harvesting advantage versus companies that supply the market in the passive way.
Optimal Order Generation is the duty of the respective sales man. There is significant difference between „order taking“ and „order generation“. Order taking is useless process for the sales person that does not justify the existence of this position. If the all customers would impose orders, than they could easily e-mail it or fax it to your order entry office. Order generation is something different, since it involves sales person in the active role. Sales person is actively generating order, by checking the stock, sales of the previous period and proposing the order according the optimal order calculation. The calculation can be based on formula ORDER = SALES (previous period) X 1,5 – STOCK. With the respect of the 1,5 Formula the sales person is in position to build safety stock, in case that sales increase in the near future.
The sales person should also take care about optimal portfolio. The „optimal portfolio“ does not have the same meaning for the customer ( outlet owner ) and the sales person ( the company ). The customer usually focuses on the core portfolio, fast moving product that enable fast turnover and no shelf life expiry. On the other hand the interest of the company is to utilize opportunity in every possible category, therefore to send as wide range as possible. This enables the company to build stronger positions, block the competition and to increase the overall sales. The full portfolio effect enables the company to sell slow movers to, due to effect of „umbrella“. Stronger brands support weaker brands when they are positioned in a corporate block.
Logistic Service Level ( DIFOTAI ) is important for overall customer's satisfaction. Products that are Delivered In Full, On Time and Accurately Invoiced ( DIFOTAI ) are the base for the satisfied customers. The customers are appreciating full delivery, according their order, without missing products. The delivery schedule is another very important aspect of customer's satisfaction. Late or inaccurate delivery is a problem for every customer.
The small customers are usually having small stock, therefore the delay may lead to stock-out. The bigger customers have restricted period for delivery ( „Time Window“) due to the large number of suppliers that they are dealing with. In case that delivery is delayed, it will have to be postponed for a next time window. This leads to stock out and customer dissatisfaction. Therefore DIFOTAI is logistical condition that can strongly support the presence of the company in the market.
Corporate Social Responsibility (CSR) Image is the aspect of the business that has the growing importance for the companies. The producing and selling the product is not enough today. Today, in the age of information and medias, the public appearance of the company plays very important role. CSR company is the one who is environment, community and socially sensitive and respectful. The CSR activities should be carefully planned, prepared and executed. Any negative publicity raised from any issue should be treated through PR and CSR activity.