Period 3 Results

1
Period 3 Results
Economic Climate 115
2
Period 3 Results
3
Lessons for the Last Period

• D1 didnt make enough
• A1 gave their Sales Reps too much work in Channel
  2 A2 is cheaper in Channel 2
• B3 Sales Promotion of 255 doesnt go very far!
• C3 could do with more budget
• D2 had lowest marketing activity

4
Practice of Marketing Week 6The Future

• This week Level 2
• Next week (week 7) preparing for Level 3
• a video on Per Una or Fuse
• a briefing on the second product and its
  implications
• -- warnings about RD and numbers
• Are you going to launch a second product?

5
Price Differential between Channels
6
Weighting of Product Features
7
Competition

• What segment are they aiming at?
• Product Features
• Price
• Channel Strengths
• How effective is their selling?
• How effective is their advertising?
• What is their Reserve Fund balance?

8
Push is the product of

• Distribution Intensity (Relative Firms /
  Average for Industry)
• Sales Promotion Index
• Distribution Index
• Call Effectiveness Index
• Sales Rep Effort Index
• Adjustment factor for two products (if sales of
  product A are much less than product B, factor
  will be near to 1.0 - if sales are equal, factor
  is 0.7 - ie 40 more Sales Reps are needed)

Channel 1, Range 0.15-3.00 Channel 2, Range
0.22-2.00
9
Sales Promotion Index

• Amount of support or goodwill felt towards the
  firm by the dealers in the Channel caused by
  Sales Promotion
• 30 (Ch 1) and 80 (Ch 2) go to retail price
  reduction unit price reduction depends on
  volume
• Depends on RELATIVE amount of Sales Promotion -
  If every firm spends, the effect is largely lost
• High levels can increase Index up to 1.3 in
  Channel 1, 1.1 in Channel 2
• Effect also varies with Distribution Intensity
  strength (how many share the sum)

10
Distribution Index

• Relates size of Sales Force to Distribution
  Intensity
• Channel 1 - Decreasing Returns
• 9 _at_ 0 NST cover 30 of Dealers
• 20 _at_ 0 NST cover 60 of Dealers
• 32 _at_ 0 NST cover 90 of Dealers
• Channel 2 - Constant Returns (Linear)
• 3 _at_ 0 NST for each 10 of Dealers
• Ideal is 1.0 - more is inefficient,
• less is a waste

Number of sales reps in channel / number of reps
for 100 workload
11
The Formula (Channel 2)

• Number of Reps needed
• 3 x Distribution Intensity
• 10 x (1-nonselling time)

12
Call Effectiveness Index

• Depends on Sales Reps time between selling and
  non-selling (supportive) RELATIVE to
  competitors Sales Reps
• Non-selling Time / Average Non-selling Time
• Ranges 0.6-1.4 (Channel 1), 0.9-1.1 (Channel 2)

13
Sales Rep Effort Index

• Depends on Absolute amount of commission, and the
  amount relative to competitors. (Sales Reps talk
  to each other!)
• Varies 0.5-1.5 - at 1.5 saturation is reached
• ?( Commission / Average Commission) x ?(
  Commission / Initial Commission)

14
Hints

• Focused and Targeted
• Integrated and Co-ordinated
• Responsive and Flexible
• Conscious and Strategic
• More Profit More Budget More Marketing More
  Profit etc
• Increased Reserve Fund when we move to Level 3
  (week 8 Year 6 week after next)

15
Plan for the future

• Semester Weeks 7 and 8 video on Per Una
• Continue as usual move to Level 3 in Week 8
• At level 3 for weeks 9/10/11/12
• Assessment periods 10/11/12 (average of 3)
• Support through email
• Notices and updates through website
• Strategic marketing problems - Roger Kerin
• No Thursday Seminars on 12th November
  (Graduation)