Page 51 - DMGT205_SALES_MANAGEMENT

Unit 4: Sales Strategy Formulation

1. Market Analysis Notes
2. Setting Objectives
3. Designing Sales Strategy.

4.1 Market Analysis (Step I)

Market analysis here means macro environmental analysis. This includes the analysis of social,
political, cultural, economic and technological factors which have a significant bearing on the
SWOT analysis of the firm.
The sales objectives are directly affected by corporate missions or goals. The macro environmental
analysis and the competitive situation helps in market analysis which helps in setting the
objectives of the firm.
Market analysis is a prerequisite to objective setting: The company would need to know:
1. The current size and growth rate of the market.

2. Consumer needs, attitudes and trends in purchasing behaviour.
3. Competitor analysis. It covers a whole lot of things and includes:
(a) Current strategy adopted by other firms. Some firms distinguish their product by
variations in product attributes, packaging and effective promotional technologies.
(b) Current performance including market share analysis.
(c) Their strengths and weaknesses.
4. Expectations to their future actions: The role and scope of functions are related to the
competitive situations facing its products in each of the markets it participates in. While
analysing the market it is necessary to see what type of competition exists. There can be
different types of competitions.
(a) Pure Competition: In this each seller is too small to effect the prevailing market price.
This competition exists in identical undifferentiated products. Sales effort is limited
to maintaining adequate supplies. All sellers products are identical so buyers are
indifferent as to which sellers they buy from. There are no artificial restraints on
price like government, trade associations, etc. All buyers are always informed about
all seller's prices.

(b) Monopolistic Competition: In this type of competition, there are large number of sellers
of a generic kind of product but each seller's brand is differentiated from every
other brand. Nearly every seller's brand of product, e.g., nail polish remover, pet
food, can be differentiated. Here sellers differentiate through unique packaging,
unusual distribution methods or pricing gimmicks and through promotional strategy
and through a blend of advertising and personal selling.
(c) Oligopolistic Competition: This type of competition has the following characteristics:

(i) Number of competitors are small but are individually identified and known
to each other.
(ii) Each competitor is large so that any change in his marketing strategy affects
the other competitors.
(iii) All the competitors are known to each other. In USA, oligopoly exists in
automobiles, computers, machinery, shoes, textiles, etc.

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