Chapter 3

Sales and marketing planning

Objectives
After studying this chapter, you should be able to:
1. Understand and appreciate the differences between sales and marketing strategies
2. Appreciate where the key concepts fit into the planning process
3. Identify component parts of the communications mix
4. Differentiate between objectives, strategies and tactics for sales and marketing

Key concepts

● branding ● PEST/PESTLE/STEEPLE analysis

● budget ● push and pull strategies
● cold calling/canvassing ● sales forecast
● external audit ● sales planning process
● inside-out planning model ● strategy
● internal audit ● SWOT analysis
● outside-in planning model ● TOWS matrix
● promotional mix

3.1 Sales and marketing planning

To be effective, sales activities need to take place within the context of an overall strategic
marketing plan. Only then can we ensure that our sales efforts complement, rather than
compete with, other marketing activities. Accordingly, sales strategies and management are
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 3.2 The planning process

afforded a more holistic perspective and tend to cover the whole organisation. Hence, the
current general consensus is that sales strategies and tactics may only be arrived at, imple-
mented and assessed against a framework of company-wide objectives and strategic planning
processes.1 There is also a consensus that most organisations will compete on either cost
leadership or quality, and service either a large or small (niche) market.2 The sales strategy
will need to link the external drivers of the industry and market segment with these overall
firm objectives and capitalise on opportunities. Before discussing sales strategies and tactics,
the nature and purpose of strategic market plans and the place of selling in these plans are
outlined and discussed.

3.2 The planning process

The nature of the planning process is outlined in Figure 3.1. This process can be likened to
that of operating a domestic central heating system. We first determine the temperature
required, timing, etc. (setting objectives) and procedures that must be followed to make sure
that this is achieved (determining operations). Next, we have to implement appropriate pro-
cedures, including ensuring that the necessary resources are available (organisation). At this
stage we can commence operation of the system (implementation). Finally, we need to check
how the system is operating – in particular, the temperature level that has been reached
(measuring results). Any deviations in required temperature are then reported and corrected
through the thermostatic system (re-evaluation and control). The important thing about
planning is that it is designed to implement the selected strategies to deliver the organisa-
tion’s objectives (see Section 3.3). This planning process can be described through the acro-
nym MOST, which describes the process from the general to the specific: mission, objective,
strategy, tactics.

Determining
Organising
Setting operations
for
objectives necessary
action
to meet objectives

Measuring
Re-evaluating results
Implementing
and against
controlling standards

Figure 3.1 The planning process

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 Chapter 3 Sales and marketing planning

3.3 Marketing planning

There is no universal way of establishing an ideal marketing plan; nor is the process simple
in practice because every planning situation is unique. Conceptually, the process is straight-
forward and consists of a series of logical steps. The marketing plan (see Figure 3.2) can be
portrayed as a hierarchy consisting of three levels:
● Objectives: where does the firm wish to go or what does the firm wish to do or be?
● Strategies: how does it intend to get there?
● Tactics: which precise route does the company intend to take and what specifically does
it intend to do?
Figure 3.2 illustrates the link among objectives, strategies and tactics.

Business definition (corporate mission or goal)

As a prerequisite to the determination of marketing plans, careful consideration should be
given to defining (or redefining) the overall role or mission of the business. This issue is best
addressed by senior management asking and answering the question ‘What business are we
in?’ The definition of the role of a business should be in terms of what customer needs are
being served, rather than in terms of what products or services are being produced. For
example, the manufacturer of microcomputers might define the company as being in the
business of rapid problem solving. In the automobile industry, a company such as Volvo™ is
in the business of providing transport for the family; another company, such as BMW™,
provides fast transport as well as confers status. Both companies are about more than just
manufacturing cars.
This process of business definition is important. Not only does it ensure that a company
thinks in terms of its customers’ wants and needs, but also in terms of the planning pro-
cess – it forms a focusing mechanism for more detailed aspects that follow. This is closely

Objective 1 Objective 2 Objective 3

Strategy 1 Strategy 2 Strategy 3

Tactic 1 Tactic 2 Tactic 3

Objectives: Where do we intend to go?

Types – each requires its own strategy
Strategies: How do we intend to get there?
Several may be evaluated but only one employed
Tactics: What is the precise route to be taken?
There may be several tactics for one strategy

Figure 3.2 The link among objectives, strategies and tactics

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 3.3 Marketing planning

linked with branding. Marketing objectives ‘sit beneath’ the organisational objectives and
relate to how the organisation is going to position the product or service within a defined
competitive market. Examples of marketing objectives may be to convey the brand values
to a target market, gain a particular market share in a market segment, or to launch a new
or revised product into a specific market.

Situation analysis/marketing audit

The precise content of this step in preparing the marketing plan will vary from company to
company, but will normally consist of a marketing analysis and then an analysis of strengths,
weaknesses, opportunities and threats (SWOT) that relate to the organisation. The audit
should include both internal and external analyses. This could also include a PEST analysis
of macro-external factors (political, economic, socio-cultural and technological dimensions)
prevailing in its market environment and/or a Porter’s Five Forces analysis of the industry
conditions.3

Market analysis (or marketing audit)

Examples of data and analysis required under the internal audit include:
1 Current and recent size and growth of market. In the multi-product company, this analysis
needs to be made in total, by product/market and by geographical segment.
2 Analysis of customer needs, attitudes and trends in purchasing behaviour.
3 Review of the current marketing mix.
4 Competitor analysis, including an appraisal of:
● current strategy;
● current performance, including market share analysis;
● their strengths and weaknesses;
● expectations as to their future actions.
A review of the culture at Microsoft® reveals areas of possible strength and weakness.

Microsoft’s soul
Steve Ballmer (CEO of Microsoft from January 2000 to February 2014) talked about Microsoft’s
soul to a staff conference at its headquarters in Seattle.
In this talk he highlighted the ‘bright side’ and the ‘dark side’ of the organisation.

On the bright side he said that the company:

● Is exceedingly competitive;
● Is self-critical;
● Is honest;
● Is totally about intelligence;
● Is stocked with some of the brightest people;
● Loves technology.
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 Chapter 3 Sales and marketing planning

On the ‘dark side’ he said that the company:

● Is too reliant on ‘brilliant executives’;

● Is opinionated;
● Internal competition is exceeding fierce;
● Departments view one another as ‘enemies’;
● Lacks teamwork;
● Is not decisive;
● Often focuses on the wrong issues.

As well as analysing internal factors, the existing competition, demand and supply, poten-
tial new entrants should be appraised.
The external audit consists of an analysis of broad macro-environment trends – political,
economic, socio-cultural and technological (PEST) – that might influence the future of the
company’s products. This original description was first extended to SLEPT with the introduc-
tion of legal factors, and then to PESTLE with the introduction of environmental factors, and
now to STEEPLE with the introduction of ecological factors.4
Both internal and external audits are deliberate and detailed coverage of the internal and
external elements that have been described. They can be carried out by people within market-
ing or from other departments and, most importantly, they must have the backing of top
management as they are central to both the marketing planning and corporate planning
horizons of the company.

Application of PEST analysis to Corus

Corus, an international company producing a wide range of steel products as part of the Tata
Steel™ group, examined its construction strategy in light of the external environment to identify
future market needs. By linking Corus competencies and technical knowledge to future market
needs, Corus aims to develop products that give the company a competitive advantage in
construction using steel products. PEST analysis is a powerful tool that can be used to help
analyse the external construction environment. This analysis involves examining the current
situation with regard to the following factors.

Political
International government policies and directives – for example, planning and environmental
issues, including sustainability – affect the construction industry. Often, the regional government
will have some involvement in steel production and there may be a political agenda effecting
employment, pricing or supply.

Economic
The health of the economy and interest rates affect demand for commercial and residential
property. Many governments throughout the world are using taxation as a means to encourage
improvement of environmental performance. (For instance, some countries use a climate
change levy or aggregates and landfill taxes.) The global construction industry is increasingly

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 3.3 Marketing planning

interested in whole-life costs of buildings, which include initial capital costs, operating and
maintenance costs – understanding how better design can improve all these elements.

Social
Changes in the birth/divorce rates and the average number of people living in a household
affect the demand for housing. Increasing crime, an ageing population and people’s well-being
are part of the social dimension. Corus makes sure that major social trends and changes and
their possible implications for demand for its products are carefully monitored and assessed.

Technology
New construction technologies affect working practices – for example, in the building industry,
constructing more component systems in factories rather than on building sites.

PEST analysis can be extended to SLEPT through the addition of legal factors, including legisla-
tion that regulates industry. A PESTLE analysis is extended further and includes two additional
factors.

Legislation
In many parts of the world, the construction industry has poor safety and environmental pro-
tection records. This has led many governments to look towards improving the performance
of the industry in terms of safety and environmental performance through new legislation.

Environmental
Two of the main environmental issues are meeting the Kyoto Agreement in reduction of carbon
dioxide from the burning of fossil fuels, and reducing waste going to landfill.
Note: When using PESTLE as a tool for analysis it is possible to get overlap with a specific
issue that can be put into two sections. What is important is to identify the changes and to
understand the impact those changes will have on the construction industry.
The factors identified in the analysis are concerned with the current situation. However, it is
essential to plan for the future through forecasting events over future years using factors from
the PESTLE analysis. For example, if we take the development of new products in the construc-
tion industry, Corus must think and plan several years ahead. This is partly due to the need to
have accreditation for products and partly due to the range of uses to which the new product
could be put. Marketing will need to identify the key segments to target, and the sales teams
will need briefing on how to position the offer to the customers. This is a testing regime, carried
out by an independent body against relevant international standards and building regulations.
On successful outcomes of the tests, a performance certification is issued for the specific prod-
uct in the specific application – generally stating the structural, fire, acoustic, thermal and dura-
bility performance of the product. This is important, as the construction industry is generally
conservative and hence, to introduce a new product, it is essential to have third-party validation
that the product will perform as the manufacturer states. Achieving this accreditation can take
up to two years and it then takes a substantial amount of time to develop the product for today’s
construction industry.
The process of forecasting future events is known as ‘road mapping’. It allows companies
such as Corus to understand changes in PESTLE factors over time and to identify how these
affect the construction industry and link product developments to these changes. It also allows
Corus to identify market opportunities, develop products to meet these and identify which
existing technologies can manufacture them.
Sources: [Link] with permission; [Link]

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 Chapter 3 Sales and marketing planning

Analysis of strengths, weaknesses, opportunities and threats

Management must make a realistic and objective appraisal of internal company strengths and
weaknesses in the context of potential external opportunities and threats (SWOT analysis).5
Opportunities for the future of a business and threats to it stem primarily from factors outside
the direct control of a company and, in particular, from trends and changes in those factors
that were referred to earlier as the macro-environment – namely political, economic, socio-
cultural and technological factors. These may also be connected to what the company’s com-
petitors are doing. It is important to recognise that the determination of what constitutes an
opportunity/threat, and indeed the appraisal of strengths and weaknesses, must be carried
out concurrently. An ‘apparent’ strength – for example, a reputation for quality – becomes a
real strength only when it can be capitalised on in the market-place.
A SWOT analysis is not a lengthy set of statements; it is simply a number of bullet points
under each heading that have been derived from the external analysis and internal audit. It
should be short and uncomplicated as it is from the SWOT that marketing strategies are
generated. Please note that the strengths and weaknesses are internal factors (within the
control of the organisation) and opportunities and threats are external factors (outside the
control of the organisation).
A brief SWOT analysis of the health and beauty company Boots™ could include what is
illustrated in Figure 3.3.

Strengths Weaknesses

1 The company is well established in the national 1 Not all the staff have the same level of experience and
market-place in health and beauty products training so that there is inconsistent customer
2 The locations on high streets offer easy accessibility to service
existing and potential customers 2 Not all stores carry the same range and the layout of
3 The company has a good reputation as a supplier of stores can be confusing
prescriptions 3 Employees are sometimes unable to be fully knowl-
4 It has well-trained employees on the shop floor edgeable about the wide array of products and ser-
vices offered by the company
5 Boots Advantage Card offers one of the most generous
loyalty schemes within the UK market-place 4 Registration for the Advantage Card is not consist-
ently encouraged within the stores

Opportunities Threats

1 The markets for over-the-counter medication and 1 Supermarkets also sell over-the-counter remedies
health supplements are growing such as headache tablets and some vitamins (e.g.
2 Consumers are becoming increasingly more inclined Vitamin C dissolvable fizzy tablets)
to self-medicate 2 Many of Boots’ products are more costly than when
3 The pharmacists employed within the stores can offer sold in cheaper retail outlets (e.g. Superdrug,
advice on such ailments as flu or even allergic reactions Poundland)
4 In some areas, it is less time consuming and more 3 Many of its more expensive beauty products (e.g. hair
convenient to consult a pharmacist at Boots than to dryers) can be purchased more cheaply online
get an appointment to see a doctor or visit a hospital

Figure 3.3 A SWOT matrix for Boots

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 3.3 Marketing planning

Statement of objectives
On the basis of the preceding steps, the company can now determine specific objectives and
goals that it wishes to achieve. These objectives, in turn, form the basis for the selection of
marketing strategies and tactics.
A company may have several objectives. Although marketing objectives usually tend to
support business objectives, business and marketing objectives may also be one and the same.
It should be pointed out that there are several types of objectives, such as financial and cor-
porate objectives. Additionally, objectives may be departmental or divisional. However,
regardless of the type or format, each objective requires its own strategy.
Objectives are needed in a number of areas – production objectives or financial objectives
among many others. In a market-driven company, marketing objectives are the most impor-
tant as they reflect customer needs and how the company can satisfy these. In a market-
driven company, marketing plans come first in the overall corporate planning process. The
objectives of other areas must then be consistent with marketing objectives. In sales-led com-
panies the volume of sales is more critical, and will inform both marketing and sales activities.
In addition to this element of consistency, objectives should be expressed unambiguously,
preferably quantitatively, and with an indication of the time span within which the objectives
are planned to be achieved. The acronym SMART describes the requirement for such objec-
tives: specific, measurable, achievable, realistic and time-related.6
This time span of planned activities often gives rise to some confusion in planning litera-
ture. Marketing plans are often categorised as being short range, intermediate range and long
range. The confusion arises from the fact that there is no accepted definition of what consti-
tutes the appropriate time horizon for each of these categories. What is felt to comprise long-
term planning in one company (say five to ten years) may be considered intermediate in
another. It is suggested that the different planning categories are identical in concept,
although clearly different in detail. Furthermore, the different planning categories are ulti-
mately related to each other – achieving long-term objectives requires first that intermediate
and short-term objectives be met. The following criteria are necessary for setting
objectives:
1 Ensure objectives focus on results
● Because the effects of marketing activity are essentially measurable, sales and market-
ing strategies should enable the quantification of marketing achievement.
2 Establish measures against objectives
Return on investment.
●
3 Where possible have a single theme for each objective
●Imprecise objectives such as ‘reduce customer defections by 20 per cent through best-
in-class service’ are not acceptable. There are at least two objectives here and each
should be quantified.
4 Ensure resources are realistic
● Best practice: attempt to answer common marketing problems through the use of test
and roll-out plans.
● Because testing enables roll-out costs to be estimated reasonably accurately, this should
ensure that campaign running costs are realistic. (Although overheads or labour cost
may not be.)

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5 Ensure marketing objectives are integral to corporate objectives and that sales objectives align
with them
● This is indisputable because there will be a serious mismatch if corporate objectives
differ from marketing objectives (e.g., a company’s general corporate objectives refer
to the expansion into new member countries of the European Union, whereas current
marketing objectives only refer to current member countries).

Example of establishing an objective

Saga Holidays™ – meeting the needs of empty nesters
Saga Holidays was set up to provide holidays for people over 50 years of age with a high pro-
portion of leisure time – people defined as either ‘retired’ or ‘empty nesters’. The holidays would
be outside school holidays and other peak periods.
Original objective: Sell long-stay holidays and cruises
Success: Negotiating strength
But what were the options for business expansion?
either 1 Sell holidays to other market sectors
or 2 Sell other products and services to established customers.

So, what did Saga do?

Instead of expanding out of a profitable market segment into less profitable segments, Saga
met other needs of the retired/empty-nester market by selling insurance, savings plans and
other suitable products. The business is thus now defined as a retired-market service provider
rather than merely a specialist holiday organisation.
Saga followed what Michael Porter would term a ‘focus business strategy’, as opposed to a
‘differentiation strategy’ or ‘cost leadership strategy’.
In today’s competitive market, it is not uncommon for companies to diversify their product
offering to an established customer base. With customer acquisition, customer service and
database management costs already met, this may indeed be the most profitable expansion
option.
Saga offers a practical example of ‘What would our customers want to buy from us next?’

A most important document in a company is the annual marketing plan, which the sales
manager plays a key part in preparing. The remainder of this chapter discusses planning in
the context of the preparation of this annual document.

Determine sales and market potential and forecast sales

A critical stage in the development of marketing plans is the assessment of market and sales
potential followed by the preparation of a detailed sales forecast. Market potential is the
maximum possible sales available for an entire industry during a stated period of time. Sales
potential is the maximum possible portion of that market that a company could reasonably
hope to achieve under the most favourable conditions. Finally, the sales forecast is the portion

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 3.4 Generating and selecting strategies

of the sales potential that the company estimates it will achieve. The sales forecast is an
important step in the preparation of company plans. Not only are the marketing and sales
functions directly affected in their planning considerations by this forecast, but other depart-
ments, including production, purchasing and human resource management, will use the sales
forecast in their planning activities. Sales forecasting, therefore, is a prerequisite to successful
planning and is discussed in detail in Chapter 16.

3.4 Generating and selecting strategies

Once marketing objectives have been defined and market potential has been assessed, con-
sideration should be given to the generation and selection of strategies. In general terms,
strategies encompass the set of approaches that the company will use to achieve its
objectives.7
This step in the process is complicated by the fact that there are often many alternative
ways in which each objective can be achieved. Although several strategies may be evalu-
ated, only one strategy can be employed, giving rise to the formula: one strategy per
objective. For example, an increase in sales revenue of 10 per cent can be achieved by
increasing prices, increasing sales volume at the company level (increasing market share)
or increasing industry sales. At this stage it is advisable, if time consuming, to generate
as many alternative strategies as possible (as was shown in Figure 3.2). In turn, each of
these strategies can be further evaluated in terms of their detailed implications for
resources and in the light of the market opportunities identified earlier. Finally, each
strategy should be examined against the possibility of counter-strategies on the part of
competitors.
The example that follows was provided by PR Artistry and concerns one of its clients,
MCRL. It provides an illustration of how the planning process is implemented through the
application of what the company has termed GOSPA.

GOSPA for MCRL

GOSPA is a corporate performance management process that implements and produces meas-
urable results. It stands for goals, objectives, strategies, plans and actions.
Using this process improves communication, control, morale, measurement and perfor-
mance through a set of easy-to-implement steps. It gives management a structure for business
planning, change, restructuring, measurement and consistent communication after an initial
short training period. It is appropriate for organisations, both large and small.

Goals in relation to press relations for MCRL in Europe

G1 To build a strong brand and market for MCRL by raising awareness in the press and among
potential customers within the retail sector in the UK, France, Italy and Germany.
G2 For MCRL to be an immediate shortlist choice as a supplier to the ‘Enterprise Service Bus’
in terms of content integration and digital media/store-innovation projects within retailers
in the UK, France, Italy and Germany.
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Objectives
O1 Implement a regular press-release service, issuing a target of one release per month per
country to a specific target press list, concentrating on quality rather than volume, starting
January 2008.
O2 Produce articles and opinion pieces for the target press using James Pemberton, Michael
Jaszczyk and Mike Camerling to position MCRL as the company that provides the
technology for retailers to adopt what is next in retail, starting January 2008.
O3 Produce additional case studies of customers to illustrate how MCRL applications can
benefit customers, in-store staff, operations and IT departments, starting January 2008.
O4 Monitor forward feature opportunities in target publications, contributing relevant and
authoritative material whenever possible, beginning December 2008.
O5 Provide a coordinated approach to the press in the UK, France, Italy and Germany.

Strategies
S1 To target three distinct audiences within retailers – marketing, operations and IT. To agree
key messages for each of these audiences (e.g., for IT to give advice and guidance as to how
to provide the ‘Enterprise Service Bus’ concept).
S2 For Mary Phillips of PR Artistry to work with James Pemberton of MCRL to produce an
opinion piece per quarter for proactive placement with the retail press.
S3 To build a selected list of target publications in each country and a target list of freelance
writers in the retail sector. Possibly three sub-lists dealing with the three target audiences
mentioned in S1.
S4 Proactively identify and target forward features in the target press on a continuous basis,
making submissions wherever possible.

Plans for January, February, March

P1 Produce media lists for each country.
P2 Prioritise the first six press releases for each country:
● Metro – shopping list management
● HIT – PSA in use since July at Dohle Retail Group
● Wincor Nixdorf partner release regarding retail management system (RMS)
● PSA uses Flash MX for the first time
● Retail framework to integrate with portable shopping systems (PSS) to bypass point of
sale (POS)
● MCRL and RMS certified SIF (store integration framework) by IBM
P3 Write and issue the first three press releases.
P4 Agree and prioritise the first two opinion pieces – possible topics:
● MCRL provides the infrastructure necessary for retailers to benefit from the next wave of
in-store systems, including in-store digital media, kiosks, PSA, PDA and intelligent scales.
● Digital signage – MCRL shows the right approach to get meaningful return on invest-
ment (ROI) metrics and a sustainable and manageable solution. ‘There’s more to it than
just hanging a few screens with TV commercials.’
● Flash comes of age to make the shopping experience easier and more fun.
P5 Write and get the first two articles placed.

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Actions
A1 Meeting in Paris on 9 December – MCRL, PR Artistry (PRA) and MN.
A2 PRA to write the first press release and then PRA and MN to introduce MCRL to the target press.
A3 Agree topic for the first opinion piece.
Source: [Link]

Examples of strategies
We begin by supposing that the objective is to maximise profit from dealings with established
customers.

Strategy 1: Targeting
To the marketer, targeting is equivalent to segmentation. A segmentation/targeting strategy
may be based on any or all of the following:
● value (high or low consumption, value of goods purchased);
● customer preference (telephone/email ordering service, type of products/services purchased);
● life stage (status of relationship between supplier and customer: active/lapsed/dormant
customer/months since last purchase).
At this point it is important to emphasise that:
● segments must be potentially profitable, otherwise it is not financially recommendable for
a firm to have this as its target segment;
● segments are not mutually exclusive (one can be in a single adult household but have
children);
● segments are not stable (people change – someone may get married, then get divorced
and go back to being in a single adult household).
Hence, a consumer may fall into more than one segment or different segments at different
times. If the segment requires a special effort to reach or appeal to it, then it must have suf-
ficient potential purchasing power to justify the effort.

Strategy 2: Pricing
In line with the classic marketer’s approach, the following pricing strategies may be adopted:
● make short-term tactical reductions;
● establish price premiums;
● elevate perceived quality.
Thus, the classic principle of elevating the perceived quality of a brand so that it can com-
mand a higher selling margin may be adopted. Additionally, a discount has more value if the
worth of what is being discounted is understood.
Discounting is, of course, prevalent in all marketing. In fast-moving consumer goods
(FMCG) markets it tends to be driven by competitive or retailer pressures. Often, tactical cuts
are seen as defensive.
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Strategy 3: Customer retention

Because advanced technology enables suppliers to track the progress of an enquirer or cus-
tomer, focus is increasingly shifting from mere product profitability to the profitability of
customer relationships. However, customer profitability will be determined by:
● the cost of acquisition;
● the losses of customers or would-be customers at various key stages in the relationship.
Key stages in the customer relationship could be revised as:
● enquiry;
● conversion to customer;
● repeat purchase;
● up-trade;
● threatened dormancy;
● recovery.
The probability of loss usually declines with the length of the relationship. In consumer mar-
kets (but not in business markets), most often the duration of a relationship outweighs rate of
spending in determining the lifetime value of the relationship. Here, a customer database will
not only facilitate measurement of this relationship, but more importantly enable corrective
action to be undertaken more easily. Thus, an offer may be triggered to prevent the customer
becoming dormant or lapsing. Lapsing occurs when the relationship between a buyer and a
seller is terminated for good. Consequently, if the customer fails to respond and does go dor-
mant, further offers may be made to recover the customer and re-start the relationship/recovery
as well as to prevent lapsing of the relationship. Additionally, there could be a customer develop-
ment and retention strategy, which could provide the means to retain customers. There may be
a retention strategy based on customer care and a development strategy based on sales promo-
tion. (This is discussed later in this book in Chapter 10 on Relationship selling.)
From this list of alternative strategies, a choice must be made with regard to the broad
marketing approach that the company considers will be the most effective in achieving objec-
tives. This must then be translated into a strategy statement, which must be communicated
to and agreed with all those managers who will influence its likely degree of success or fail-
ure. Once again, the specific contents of such a strategy statement will vary between compa-
nies, but as an example a strategy statement might encompass the following areas:

1 A clear statement of marketing objectives.

2 A description of the choice of strategies for achieving these objectives.
3 An outline of the broad implications of the selected strategies with respect to the following
key areas in marketing:
● target market;
● positioning;
● marketing mix;
● marketing research.

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At this stage, the strategy statement should give a clear and concise indication of the focus
of the major marketing efforts of the company. Once this has been discussed and agreed, a
detailed plan of action can be prepared.
There are many tools available for generating strategic options, the most popular of which
are the Boston Matrix and the GE/McKinsey Matrix. A description and application of such
tools is more appropriate to corporate strategy and strategic marketing-planning texts and
does not fall within the sphere of this text. However, analysis using the product life-cycle
concept and diffusion of innovations is appropriate in this context and these have been dis-
cussed in Chapter 1. SWOT analysis is a useful method for generating strategies. A number
of stages are necessary:
1 Evaluate the influence of environmental factors (PESTLE) on the company.
2 Make a diagnosis about the future.
3 Consider company strengths and weaknesses in relation to all key areas of the company.
4 Develop strategic options.
For example, in Figure 3.4 let us consider the case of a specialist, low-volume, UK sports car
producer.

Strategic possibilities using SWOT analysis

As an illustration, here are two strategic possibilities for the sports car producer mentioned
in Figure 3.4. Use existing strong, well-established brands to raise production levels through
automation to market to other European countries (S1, S2, W1, W2, O2, T2). Raise the basic
price (S4, W3, O1, T1, T2).
This application of the use of the SWOT matrix, which in essence takes elements of SWOT
and brings them together to form marketing strategies, is termed the TOWS matrix. It was
first proposed by Weihrich.8

Strengths Weaknesses
1 Well-established brand name 1 Production only semi-automated
2 In business since 1920 2 Maximum production 30 units per week
3 Cult following 3 Long waiting list
4 Low price 4 Only sold in UK, USA, Germany, Holland,
Belgium and Scandinavia
5 Consistently good press reviews

Opportunities Threats

1 USA market can take twice its allocation 1 Some purchasers not prepared to wait
2 Other European countries would like to 2 Other volume manufacturers now produc-
purchase ing niche models like this

Figure 3.4 SWOT matrix for a sports car producer

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 Chapter 3 Sales and marketing planning

Preparing the marketing programme

The strategy statement prepared in the previous section provides the input for the determina-
tion of the detailed programme required to implement these strategies. The first step in the
preparation of this programme is the determination of the marketing mix. Detailed decisions
must be made with respect to product policy, pricing, promotion and distribution. Care
should be exercised to ensure that the various elements of the marketing mix are integrated
(i.e., that they work together to achieve company objectives in the most effective manner).
At this stage of the planning process, what has previously been an outline plan for guiding
decision making becomes a detailed operational plan, and this section is inevitably the lengthi-
est part of the planning document. It is on the basis of this part of the plan that day-to-day
marketing activities and tactics of the company will be organised, implemented and assessed.

Allocating resources – budgeting

Having made detailed decisions with respect to the elements of the marketing mix, the next
step is to assemble a budget for each of these elements. In most companies, limited resources
ensure that managers from the different functional areas have to compete for these scarce
resources. It is likely that much discussion will take place between those responsible for each
element of the marketing mix. In addition, it may be found that initial marketing objectives,
strategies and detailed plans for the marketing programme to achieve the forecast level of
sales may, in the light of financial and other resource constraints, be unrealistic. In this event,
modifications to the original plan may have to be made.
It should be noted that, at this stage, an estimate can be made of both costs and revenues,
and a forecast profit-and-loss statement prepared.

Implementation
The procedure so far should have resulted in the preparation of a detailed document setting
out what is to be done, when it will be done, who is responsible and estimated costs and
revenues, as well as agreed time frames for the various activities in the plan. Once approved,
details of the marketing plan should be communicated to everyone involved. This communi-
cation is an essential and sometimes neglected aspect of marketing planning. Many compa-
nies have elaborate marketing plans that are not implemented because key people have not
been informed or have not agreed the proposed plan.

Control
Finally, the plan should contain an outline of the control mechanisms that will be applied.
This should include details of major objectives and key parameters in the measurement of the
degree of success in achieving the objectives, thereby enabling corrections and modifications
to be made as the plan unfolds. This control part of the marketing plan should specify what
is to be measured, how it is to be measured and what data are required for measurement. It
may also include details of what action is to be taken in the light of deviations from the plan.
This contingency planning is a key feature of any planning process, recognising as it does that
plans need to be flexible in order to accommodate possible unforeseen or unpredictable
changes in the market. The overall marketing planning process is summarised in Figure 3.5.

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 3.4 Generating and selecting strategies

Corporate mission
or go l

External audit Analyse current

Internal audit
Macro-environment market situation
market
o io ultur l OR
analysis
e hnologi l r eting udit
ono i
nviron ent l
oliti l
eg l n lysis
ologi l trengths
e nesses } intern l
ortunities
hre ts } e tern l

t te ent o
r eting ob e tives

eedb

Forecast sales
OR
Determine market
and sales potential
Action as
a result
o
eedb
Generate and
sele t str tegies

re re r eting rogr e
r eting i

Allocate necessary
resour es budgeting

Implement plan

Measure and
control

Figure 3.5 An overview of the marketing planning process

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Chapter 3 Sales and marketing planning

3.5 Selling in the marketing plan

We have examined how marketing plans are prepared. The sales function has an important
role to play in this process, and we now look at the nature of this role and, in particular, the
contribution that the sales function makes to the preparation of the marketing plan and how
the sales function itself is influenced by the marketing plan.

Contribution of the sales function

Throughout the planning process, alternative courses of action need to be identified and deci-
sions taken as to which of these alternatives is the most appropriate. Contingency planning
measures such as these involve identifying alternatives and choosing between them, which
requires accurate and timely information. A key role of the sales function in the planning
process is the provision of such information. This becomes clearer if we examine some of the
stages in the planning process where the sales function can make a valuable contribution:
(a) analysis of current market situation (marketing audit);
(b) determining sales potential/sales forecasting;
(c) generating and selecting strategies;
(d) budgeting, implementation and control.

Toyota
By constantly finding out what its customers will want to buy next, Toyota has achieved profit-
able line extension and replacement. In fact, by being able to make additional low-cost sales
to its established customers, Toyota has not only achieved sustainable competitive advantage
through customer retention, but is also in a stronger position to invest in expansion.
Toyota has now become the world’s largest vehicle manufacturer, employing more than a
quarter of a million people on six continents.
Source: [Link]

Analysis of current market situation (marketing audit)

The proximity of the sales function to the market-place puts it in a unique position to con-
tribute to the analysis of the current market situation facing the company. In particular,
the sales department is often well placed to contribute to the analysis of customer needs
and trends in purchasing behaviour. The sales manager can also make a valuable contribu-
tion in terms of knowledge about competitors and their standing in the market-place. This
informational role of sales managers should not be ignored because, through the sales
force, they are ideally equipped to provide up-to-date, accurate information based on feed-
back from customers. Sales executives, in particular, due to the ongoing contact they have
with customers, can provide an organisation with valuable information about the changing
needs and wants of the customers. However, the sales executives will need to understand
how their contribution fits into the process and be reassured that their contribution is
valued.
66
 3.5 Selling in the marketing plan

Determining sales potential/sales forecasting

As we see in Chapter 16, an important responsibility of the sales manager is the preparation
of sales forecasts for use as the starting point for business planning. Short-, medium- and
long-term forecasts by the sales manager form the basis for allocating company resources in
order to achieve anticipated sales.

Generating and selecting strategies

Although decisions about the appropriate marketing strategies to adopt rest with marketing
management, the sales manager must be consulted and should make an input to this decision.
Again, the sales function is ideally placed to comment on the appropriateness of any sug-
gested strategies and likely to have a clearer idea of the possible benefits and challenges, as
well as revenues and costs. Further, the marketing strategies selected are likely to impact on
sales strategies, and there should be synergy in the planning process.
Although in practice this is not always the case, management (and the sales manager in
particular) should actively encourage sales staff to comment upon the appropriateness of com-
pany marketing strategies. The field sales force is at the forefront of tactical marketing and can
more realistically assess how existing target markets will respond to company marketing initia-
tives. Indeed, the fact that there are front-line people who benefit from the most contact with
customers should not be overlooked, as they are able to advise and influence customers.

Budgeting, implementation and control

Preparation of the sales forecast is a necessary precursor to detailed marketing plans. The
sales forecast is also used in the preparation of the sales budget.
On the basis of the sales forecast, the sales manager must determine what level of expendi-
ture will be required to achieve the forecasted level of sales, as well as the type of sales team
required to deliver predicted sales. The important thing to remember about this budget is that
it is the cornerstone of the whole budgeting procedure in a company. Not only the activities
of the sales department, but also of production, human resource management, finance and
research and development will be affected by this budget. Because of this importance, sales
budgets are discussed in detail in Chapter 16. At this stage it is sufficient to note that in prepar-
ing the sales budget, the sales manager must prepare an outline of the essential sales activities
required to meet the sales forecast, together with an estimate of their costs. The precise con-
tents of the annual sales budget will vary between companies, but normally includes details
of salaries, direct selling expenses, administrative costs and commissions and bonuses.
Having agreed the sales budget for the department, the sales manager must assume
responsibility for its implementation and control. In preparing future plans, an important
input is information on past performance against budget and, in particular, any differences
between actual and budgeted results. Such ‘budget variances’, both favourable and unfavour-
able, should be analysed and interpreted by the sales manager as an input to the planning
process. The reasons for budget variances should be reported, together with details of any
remedial actions that were taken and their effects. A second important consideration is a
determination of how the sales resources are going to deployed to provide the required
results. Part of this will be to evaluate the customer portfolio and configure the sales team so
that they are able to interact with the various customers appropriately. The customer port-
folio can consist of anything from very small, individual accounts to very large, multinational,
multidivisional accounts. These customers have various requirements and have to be

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 Chapter 3 Sales and marketing planning

managed differently to meet their needs. The management of different customer groups will
be discussed in more detail in Part 3.

3.6 Influence of marketing plan on sales activities: strategies and tactics

Any planning process is effective only to the extent that it influences action. An effective
marketing planning system influences activities, both strategic and tactical, throughout the
company. The classical marketing approach favours the inside-out planning model proposed
by Schultz, Tannenbaum and Lauterborn (2000) (see Figure 3.6).9
However, the reverse planning model outside-in is also popular with many organisations.10
Figure 3.7 shows a customer orientated, outside-in planning sequence, starting with a calcu-
lation of the cost per sale to current customers, then to lapsed customers and prospects on
the database, and finally to new customers. The cost-per-sale calculations determine the sales
target in each case and provides guidance for the marketing budget.
This process is followed by a strategy for each discrete customer segment. A product may
not, for example, be offered to each segment at the same price. Similarly, types of communi-
cation will be different for each segment. Further, the sales process required to serve each
segment will need to be selected, and the right mode of interaction confirmed. The segment
strategies will, ideally, be tested against reasonable alternatives. The most successful alterna-
tives on testing will then be rolled out to the remaining population in each segment.
Although the inside-out model is financially driven and could arguably be considered to
be closely aligned to the organisation’s objectives, capabilities and resources, it is far less safe
than the customer-orientated planning model. Perhaps this influence is most clearly seen
through decisions relating to the marketing programme or marketing mix. Sales strategies
are most directly influenced by planning decisions on the promotional element of the market-
ing mix. Here we will consider briefly the notion of a ‘mix’ of promotional tools, outlining the
considerations in the choice of an appropriate mix and the implications for sales strategies.

Monetary objective

Costs

Contribution margin

Marketing funds

Allocations againstprospects

Communication choices

Implementation

Figure 3.6 Inside-out planning model

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 3.6 Influence of marketing plan on sales activities: strategies and tactics

urrent usto er s les ob e tive

tive files s les ob e tive

d t b se s les ob e tive

ot l s les ob e tives

eg ent str tegies

o uni tions l n

est est est

oll out

Figure 3.7 Outside-in planning model

In particular, the important and often misunderstood relationship between advertising and
selling is explained and discussed. We conclude this section by examining briefly the nature
of sales tactics.

The promotional mix

Earlier in this chapter we suggested that an important facet of marketing planning is the
preparation of a marketing programme, the most important step in this preparation being
the determination of the marketing mix – product, price, distribution and promotion. Selling
is only one element in the promotion part of this mix. It is customary to refer to the promo-
tional mix (or, more correctly, the ‘communications mix’) of a company. This traditional
promotional or communications mix is made up of four major elements:
1 advertising
2 sales promotion
3 publicity/public relations
4 personal selling.
To these traditional elements can now be added:

5 direct marketing
6 interactive marketing (internet marketing), digital marketing and social media.
In most companies, all four traditional elements can contribute to company sales, but a
decision has to be made on where to place the emphasis. This decision is made at the planning
stage. In addition, it is important that the elements of the promotional mix work together to
achieve company objectives. An important planning task of management is the coordination
of promotional activities.
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Several factors influence the planning decision on where to place emphasis within the
promotional mix. In some firms, the emphasis is placed on the sales force, with nearly all the
promotional budget being devoted to this element of the mix. In others, advertising or sales
promotion are seen as being far more efficient and productive than personal selling. Perhaps
the most striking aspect of the various promotional tools is the extent to which they can be
substituted for each other. Companies within the same industry differ markedly in where
they place the promotional emphasis – a fact that makes it difficult to be specific about devel-
oping the promotional mix within a particular company.11 As a guide, some of the more
important factors influencing this decision are now outlined.
1 Type of market: As we explained in Chapter 1, one of the major distinctions between types of
markets is that which exists between business and consumer markets, and hence B2B and
B2C marketing. As we saw, the application of the marketing mix elements will often differ
when marketing in each of these markets. For example, we saw that, generally, advertising
and sales promotion play a more important role in the marketing of consumer products,
whereas personal selling plays the major role in marketing to business buyers. We examined
some of the reasons for this in Chapter 1, but a major reason for differences between B2B and
B2C marketing stems from differences between business and consumer buyer-behaviour pro-
cesses, which are outlined in Chapter 4. An obvious contrast is the marketing of fast-moving
consumer goods (FMCG), with the marketing of often highly technical, expensive capital
goods to industry. Despite this, it is a mistake to conclude that advertising does not have a
role to play in the marketing of industrial products. Indeed, the contribution of advertising
is often undervalued by sales personnel and discounted as a waste of company resources. The
relationship between advertising and sales is considered later in this chapter.
The ‘new’ promotional mix increasingly involves e-commerce possibilities, and this is high-
lighted through developments in this field and the numbers of companies using this facil-
ity. In addition, the use of freephone facilities, mobile communication and the internet are
making communication easier for the potential customer. These more contemporary issues
are highlighted in the two examples that follow.
2 Stage in the buying process: In Chapter 4, it is suggested that for both industrial and con-
sumer products it is useful to consider the stages through which the prospective purchaser
passes en route to making a purchase decision. Although there are a number of ways in
which this process may be conceptualised, essentially it consists of the potential purchaser
moving from a position of being unaware of a company and/or its products, to being con-
vinced that its products or services are the most appropriate to the buyer’s needs. The
sequential nature of this process is shown in Figure 3.8.
For a given outlay, advertising and publicity are more effective in the earlier stages of
moving potential purchasers through from unawareness to comprehension. Personal sell-
ing is more cost effective than other forms of promotional activity at the conviction and
purchase stages. This is not to suggest that contacting new customers, or ‘cold calling’, is
not an important area of sales activity but, as we see later, such cold calling is rendered far
more effective if the customer is already aware of the company’s products.
‘Cold calling’ or ‘cold canvassing’ is carried out in B2B markets where salespeople contact
organisations that may be interested in their offer, but it is also associated with direct sell-
ing to the general public. Such sales personnel often rely on a previously prepared sales
script, and this has given rise to the term ‘canned selling’, in that it comes out of a tin can,

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 3.6 Influence of marketing plan on sales activities: strategies and tactics

Unawareness

Awareness

Comprehension

Conviction

Purchase

Figure 3.8 Stages in the buying process

so to speak. The script (or playbook) comprises a logical set of questions, and when the
salesperson meets an obstacle they remember what is in the script and methods of over-
coming it.
The selling process covers a range of techniques, from opening the sales interview to
closing techniques. The major problem lies in making the initial call, and cold calling or
canvassing training suggests that this initial call should be about fact finding to gain infor-
mation and then setting up the next meeting. This is particularly important when the
salesperson is aiming to establish a longer-term selling relationship in B2B contexts. In so
doing, the foundations are being laid for establishing trust and building an alliance,
because if the order is requested too early in the process and the answer is ‘No’, it is sub-
sequently difficult to persuade the customer to change their mind. Better to ask for the
order later when the salesperson has ascertained that they can meet the customer’s needs
and a ‘Yes’ answer is a more likely outcome.
The Tack School of Sales Training was one of the earliest disseminators of such
approaches in the United States after World War II, and the approach gives practical advice
on such matters as:
● the importance of getting the person’s name right;
● using open questions to engage the prospective customer;
● asking initial qualifying questions before commencing the sales pitch;
● not requesting irrelevant information;
● not pretending to have knowledge you do not possess;
● not sounding too enthusiastic as it might be interpreted as desperation;
● confirming appointments in writing.12

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Cold canvassing may be viewed negatively, and adverse publicity is sometimes attached
to such techniques. A number of television programmes have highlighted cases where
high-pressure techniques have been applied to unsuspecting customers. However, it is a
very important part of sales activities, as all buyer/seller relationships have to start
somewhere.
3 Push versus pull strategies: One of the most important determinants in the choice of pro-
motional mix is the extent to which a company decides to concentrate its efforts in terms
of its channels of distribution. This can perhaps be best illustrated if we contrast a push
strategy with that of a pull strategy.
A push strategy is one in which the focus of marketing effort is aimed at pushing the prod-
uct through the channel of distribution. The emphasis is to ensure that wholesalers and
retailers stock the product in question. The idea is that if channel members can be induced
to stock a product, they in turn will be active in ensuring that your product is brought to
the attention of the final customer. In general, a push strategy entails a much greater
emphasis on personal selling and trade promotion in the promotional mix.
A pull strategy relies far more heavily on creating awareness, interest and promoting the
product to the final consumer. The essence of this approach is based on the notion that if
sufficient consumer interest can be generated for a product, this will result in final con-
sumers asking retailers for the product – hence demand will be created. Retailers will then
ask wholesalers for the product, who will contact the producer. In this way the product is
‘pulled’ through the channel by creating consumer demand via such mechanisms as asser-
tive advertising. (Channel management is considered in detail in Chapter 10 and, in par-
ticular, the diminishing role of wholesalers is examined.)
4 Stage in the product life-cycle: Chapter 1 introduced the concept of the product life cycle.
There is evidence to suggest that different promotional tools vary in their relative effective-
ness over the various stages of this cycle. In general, advertising and sales promotion are
most effective in the introduction and growth stages of the life cycle, whereas it is sug-
gested that the emphasis on personal selling needs to increase as the market matures and
eventually declines.

Coordinating promotional efforts: relationship between marketing

and selling
In discussing factors affecting choice of promotional tools, it may have appeared that to some
extent these tools are mutually exclusive – for example, one chooses to concentrate either on
advertising or personal selling. This is not the case. The relationship between the various
promotional tools, including personal selling, should be complementary and coordinated.
Perhaps this obvious point would not need to be stressed were it not for the fact that, often,
this complementary relationship is misunderstood. Nowhere is this misunderstanding more
evident than in the relationship between advertising and selling.
It is unfortunate that many sales managers and their sales forces believe that expenditure
on advertising is a waste of company resources. Very rarely, they argue, does a customer
purchase simply because a product is advertised, particularly where that customer is an
industrial purchaser. Because of this, the argument continues, the money ‘wasted’ on adver-
tising would be better spent where it will have a direct and immediate effect – on the sales
force. Increasingly, evidence suggests that the notion that advertising money is wasted in
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 3.6 Influence of marketing plan on sales activities: strategies and tactics

industrial markets is misplaced. Among the functions that advertising can perform in such
markets are:
1 Corporate advertising can help to build the reputation of a company and its products.
2 Advertising and direct marketing are particularly effective in creating awareness among
prospective clients. The sales representative facing a prospective client who is unaware of
the company or product faces a much harder selling task than the representative who can
build on an initial awareness.
3 Marketing can aid the sales representative in marketing new products by shouldering some
of the burden of explaining new product features and building comprehension.
4 Webinars, case studies and reports may be used to open up new leads for the sales force.
Overall, by far the greatest benefit of advertising in industrial markets is seen not through a
direct effect on sales revenue, but in the reduction of overall selling costs. Evidence suggests
that, given adequate frequency, this reduction in selling costs to customers exposed to adver-
tising may be as high as 30 per cent. Conversely, non-advertisers may find themselves at a
disadvantage. The cost of selling to customers exposed to competitors’ advertising may be
increased by as much as 40 per cent.
In marketing consumer goods, branding and brand image are very important, and adver-
tising – in particular, transformational and informational advertising – is generally thought
to be the most effective promotional tool. However, personal selling and a well-trained sales
force can contribute significantly by promoting brand loyalty, and increasing market penetra-
tion by influencing buyers to commit to the brand, stockists to allocate more shelf-space to
company products and persuading new dealers to stock them.
At all times, sales and marketing should be coordinated to achieve company objectives. It
is important for sales personnel to be informed about company advertising and promotional
campaigns. This advertising should be utilised in selling – the advertising theme being rein-
forced in the sales presentation.

From sales strategies to tactics

We have seen that a number of factors influence the setting of sales strategies. It has been
suggested that this influence is most direct in determining the relative emphasis to be given
to sales activities in overall company and promotional strategy.13 Sales strategies are also
influenced by the marketing and sales objectives that may be specified in the marketing plan.
As an illustration, a marketing objective of increased market share may mean that the sales
manager has to ensure that sales in the forthcoming year increase by 10 per cent. Further-
more, the planning document should specify the route or strategy by which this objective will
be accomplished (e.g., ‘additional sales effort is to be targeted on the opening of new
accounts’). Sales objectives and strategies, therefore, also stem directly from the planning
process, after consultation and agreement with relevant personnel.
However, not all researchers support the merits of relationship marketing and, opposing
this outlook, Shaw argues: ‘Marketers must stop their obsession with loving customers since
it has become a distraction from the basics of selling and tracking the origins of sale suc-
cess’.14 Nonetheless, the areas of customer relationship marketing and customer relationship
management have been growing, and have been increasingly aligned with sales. This will be
discussed in depth in Chapter 10 on Relationship selling and in Chapter 11 on Multi-channel
selling. Having agreed these strategic guidelines, a more detailed set of activities must be
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built into the planning process. The sales manager must determine the specific actions
required to achieve sales goals (tactics).
Tactics encompass the day-to-day activities of the sales function in the achievement of
marketing and sales objectives. Tactics also include actions that need to be taken in response
to unexpected short-term events in the market-place – for example, a special promotional
effort by a competitor.
Tactical decisions represent the ‘fine tuning’ of sales activities and encompass many
decision areas covered in greater detail elsewhere; for example, the deployment of sales
personnel – territory design and planning (Chapter 15) – can be considered a tactical aspect
of sales. Similarly, the design of incentive systems (Chapter 15) should form part of a tactical
plan, designed to accomplish sales goals within the framework of sales strategies.
A key tactical decision that sales managers should make is the degree to which salespeople
are left to their own initiative when carrying out their responsibilities. For example, in a
tightly controlled system, salespeople are given no or very limited scope to move away from
centrally set instructions regarding such decisions as pricing, selling processes and tech-
niques, and call scheduling. In a loosely controlled system, salespeople are given much free-
dom in negotiating prices, adapting their selling approach to different customers and setting
their own call schedule.15
The importance of tactics should not be underestimated; even the best-formed strategies
fail for want of proper tactics. As an example of the use and importance of tactics in selling,
we consider briefly an aspect of purchasing that is of vital interest to many companies –
namely, brand/supplier loyalty.

Brand/supplier loyalty
If we examine the purchase of products and services over time, we find that often the
purchasing sequence of individuals indicates that they repeatedly buy the same brand of a
product or, if the product is an industrial one, they consistently buy from a particular supplier.
These are habitual purchases and tend to be referred to as low-involvement products. For
such individuals, if we imagine that the brand or supplier in question is called X, the purchas-
ing sequence would be as shown below:

Purchase occasion 1 2 3 4 5 6
Brand purchased/supplier X X X X X X

There is no doubt that brand/supplier loyalty does exist. Moreover, the cultivation of such
loyalty among customers often accounts for a significant part of tactical marketing and sales
effort, representing, as it does, a substantial market asset to a company. Additionally, while
Reichheld and Schefter16 also support this theory when they claim ‘a large group of custom-
ers are influenced primarily by brand’ and that these customers “are looking for stable long-
term relationships’, Curtis17 succinctly summarises that “customers need to feel that they are
part of a brand’s crusade’. This means that, increasingly, customers want to have a sense of
connection with the brand. This is referred to as ‘brand belonging’.
Before considering the part that sales can play in this process of cultivating brand loyalty,
it is important to explain precisely what is meant by ‘brand loyalty’ – an apparently simple
notion that gives rise to some misunderstanding. Let us return to the purchasing sequence
just shown. Although we have suggested that such a sequence is associated with a brand-loyal
customer, the existence of such an array of purchases for a customer does not, of itself,
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 3.7 Conclusions

constitute evidence that this customer is brand loyal. There are a number of possible explana-
tions for this purchasing behaviour. One such explanation might be that this customer con-
centrates much of their purchasing in one particular retail outlet and it so happens that this
particular retail outlet only stocks brand X of this product – therefore, the customer exhibits
loyalty, but to the store rather than the brand. Another possible explanation is that this cus-
tomer pays little regard to the particular brand or supplier; they are not consciously brand
loyal at all, but rather have simply slipped into the habit of purchasing this brand and cannot
be bothered to switch. This is an example of low involvement. In this second example, it is
true to say that the customer must be reasonably satisfied with the brand being purchased
consistently. If this was not the case, or the customer became dissatisfied, they would then
make the decision to switch. Nevertheless, the fact is that this is not true brand loyalty. Some-
times consumers repeatedly choose a product based on price. If a cheaper product is avail-
able, they would be likely to switch.
True brand or supplier loyalty exists when customers make a conscious decision to con-
centrate their purchases on a particular brand because they consider that supplier or brand
superior to others. There may be a number of reasons/bases for such perceived superiority
(such as superior quality, better delivery and after-sales services, the availability of credit, or
some combination of these or other factors). For example, consumers purchase Ecover™
cleaning products because they are considered and have been proven to be more environ-
mentally friendly. In discussing possible reasons for brand/supplier loyalty, we enter the
realms of motives, perceptions and attitudes. These more complex behavioural areas are
discussed in Chapter 4.
The concept of brand/supplier loyalty is a difficult one, and care should be taken in interpret-
ing the often-conflicting evidence for its cause. Nevertheless, there are some indications that
the salesperson can play a key role in helping to establish brand/supplier loyalty among a
company’s customers. One of the reasons for this is that learning theory suggests we have a
tendency to repeat experiences that give us pleasure and to avoid those that do not. Among the
most powerful and lasting impressions that serve as a source of pleasure or displeasure in pur-
chasing activities are experiences in the face-to-face encounters with sales staff. Consequently,
organisations are finding that the sales team is able to create, and co-create, value through its
interactions with customers. Favourable attitudes and behaviour of sales personnel in dealing
with their customers can contribute significantly to the creation of brand/supplier loyalty.

3.7 Conclusions

A framework for sales strategies and tactics has been established. We have seen that these
are developed and operated within the framework of marketing planning. The sales function
makes a valuable contribution to the establishment of marketing plans – providing, as it does,
key data on customers, markets, competitors, sales forecasts and budgets. In turn, selling
activities are directly influenced by decisions taken at the marketing planning stage, and it
is important that sales strategies are aligned with organisational and marketing strategies.
In the meantime, the increasingly essential role of the customer should not be ignored. One
of the three key elements of a market orientation is achieving a customer focus (the other
two being competitor focus and internal coordination). The importance of the customer and
how they interact with the organisation will be discussed in depth in Chapter 10 on
Relationship selling.
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 Chapter 3 Sales and marketing planning

We have looked at planning decisions for the marketing programme or marketing mix and,
specifically, at the communications mix in a company. Factors such as type-of-product mar-
ket, steps in the buying process, push versus pull strategies and stage in the product life cycle
have all been shown to influence promotional and, consequently, sales strategies. Finally, we
examined sales tactics, the relationship between advertising and selling, and the important
area of brand/supplier loyalty. It was shown that advertising plays a key role in aiding the
sales effort, reducing selling costs and easing the sales task. Brand/supplier-loyal customers
are a valuable asset to any company, and the sales force is central to the establishment and
maintenance of such customer loyalty.

PRACTICAL EXERCISE

Auckland Engineering plc

Harold Horne, sales manager for Auckland Engineering plc – a well-established engineering company
in Bishop Auckland, County Durham, received the following memo from D.C. Duncan, his recently
appointed marketing director.
Memo
To: H. Horne, Sales Manager
From: D.C. Duncan, Marketing Director
Date: 16 January 2018
Subject: Preparation of annual marketing plan
You will recall that at our series of preliminary meetings to discuss future marketing plans for the
company, I suggested that I was unhappy with the seemingly haphazard approach to planning.
Accordingly, you will recall it was agreed between departmental heads that each would undertake to
prepare a formal input to next month’s planning meeting.
At this stage I am not seeking detailed plans for each product market; rather, I am concerned that
you give thought to how your department can contribute to the planning process. Being new to the
company and its product/markets, I am not fully up to date on what has been happening to the
market for our products, although as we all know our market share, at 35 per cent, is down on last
year. I would particularly like to know what information your department can contribute to the
analysis of the situation.
To help in your analysis I have summarised below what came out of our first planning meetings:
1 Business definition: It was agreed that the business needs re-defining in customer terms. An
appropriate definition for our company would be ‘Solutions to engine component design and
manufacturing problems’.
2 SWOT analysis: Our main strengths are:
● excellent customer awareness and an image of reliability and quality;
● sales force is technically well qualified;
● manufacturing flexibility second to none – we respond quickly and effectively to individual
customer needs.
Our main weaknesses are:
● prices approximately 10 per cent above industry average;
● spending higher proportion of turnover on advertising than most main competitors;
● sales force not skilled in generating new leads.
Our major opportunities are:
● some major competitors having difficulty keeping customers because of quality and delivery
problems;
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 3.7 Conclusions

●recent legislation means research and development programme on new TDIX component,
emphasising lower exhaust emission levels, should prove advantageous;
● recent and forecast trends in the exchange rate should help export marketing efforts;
● buyers in the industry seem prone to switching suppliers.
Our major threats are:
● our largest customer threatening to switch owing to our higher-than-average prices;
● apart from TDIX programme, we have not been keeping pace with rapid technological change
in the industry;
● some major export markets are threatened by possibility of import restrictions.
3 Objectives:
Financial:
● to increase return on capital employed by 5 per cent;
● net profit in the forthcoming year to be £4 million.
Marketing:
● sales revenue to be increased to £35 million in the forthcoming year.
4 Marketing strategy:
Target markets:
● major manufacturers of diesel engines worldwide.
Positioning:
● highest engineering quality and after-sales service in supply of specialist low-volume diesel
engine components.
I would welcome your comments on my analysis, together with any views on the appropriateness
of the objectives I have set.
For the next meeting, I suggest that, as sales manager, you give some thought to where the relative
emphasis should be placed in our promotional effort. As I have mentioned, we seem to be spending
an excessive amount on advertising compared with our competitors. Perhaps you could give me your
thoughts on this, as I understand you were in favour of raising our advertising budget from 1 per cent
to 2 per cent of turnover last year. As you are aware, from a limited budget, we must decide where
to place the relative emphasis in our communications mix. Perhaps you can indicate what you feel
are the major considerations in this decision.

Discussion questions
1 Give a brief outline of ways that Sales Manager Harold Horne can contribute to the marketing
planning process at Auckland Engineering.
2 Looking at Duncan’s analysis of the previous meeting, what issues/problems do you see that are
of relevance to the activities of the sales force?
3 How would you respond to Duncan’s comments on the promotional mix and, in particular, to his
comments about the level of advertising expenditure?
4 What is the logic in conducting a SWOT analysis in this context?

Examination questions
1 Explain the differences between marketing strategies and sales strategies.
2 What is the relationship between objectives, strategies and tactics?
3 Discuss the component parts of the communications mix.
4 What is the relationship between SWOT analysis and the TOWS matrix?
5 Select a company of your choice and conduct a PEST(LE) analysis and then build a SWOT matrix
for that company.
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Chapter 3 Sales and marketing planning

6 What is meant by contingency planning and when is it required in the marketing planning
process?
7 What do you understand by the setting of sales objectives in the context of the marketing planning
process? Give three examples of objectives for an organisation of your choice.

References
1 Piercy, N.F. and Lane, N. (2009) Strategic Customer Management: Strategizing the Sales Organization.
Oxford: Oxford University Press.
2 Porter, M.E. (1985) Competitive Advantage: Creating and Sustaining Superior Performance. New York: Free
Press.
3 Porter (1985) op. cit.
4 Grant, R.M. and Jordan, J. (2012) Foundations of Strategy. Chichester, UK: John Wiley & Sons Ltd.
5 SWOT Analysis (2013) [Link].
6 Setting SMART Objectives, 321, CMI [Link]
231-Setting_Smart_Objectives.pdf (accessed 16 September 2017).
7 Grant, R.M. and Jordan, J. (2012) Foundations of Strategy. Chichester, UK: John Wiley & Sons Ltd.
8 Weihrich, H. (1982) ‘The TOWS matrix: A tool for situational analysis’, Long Range Planning,
15(2):54–66.
9 Schultz, D.E., Tannenbaum, S.I. and Lauterborn, R.F. (2000) Integrated Marketing Communications.
New York: McGraw-Hill.
10 Witcher, B.J. and Chau, V.S. (2014) Strategic Management, Principles and Practice. Andover, UK: Cengage
Learning.
11 Biemans, W.G. (2010) Business-to-Business Marketing: A Value-Driven Approach. Maidenhead, UK:
McGraw-Hill Higher Education.
12 Tack, A. (1989) Increase Your Sales the Tack Way. Aldershot: Gower.
13 Cuevas, J.M., Donaldson, B. and Lemmens, R. (2016) Sales Management, Strategy, Process and Practice,
4th Edition. London: Palgrave Macmillan.
14 Shaw, R. (1999) ‘Customers are about sales, not false friendships’, Marketing, January:20.
15 Darman, R.Y. and Martin, X.C. (2011) ‘A new conceptual framework of sales force control systems’, Journal
of Personal Selling & Sales Management, 31(3):297–310.
16 Reichheld, F. and Schefter, P. (2000) ‘E-Loyalty’, Harvard Business Review, July/August:105–13.
17 Curtis, J. (2000) ‘Get some decent exposure’, Revolution, 12 July:32–6.

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