Marketing Strategies

Marketing strategies are required to increase the sales and profits of any business. At the planning stage it will be recognized that there is a gap between the business current sales and the potential sales that can be achieved. This is called the sales performance gap.

For example the performance gap can be measured in the following way:

Existing unit sales 15,000 units per month at an average price of $12.50 gives total actual sales of  $187,500. However, given that the production capacity of the plant is 25,000 units per month – it is then important to find ways of increasing sales (through marketing strategies) to ensure full utilization of production capacity.

What follows are some marketing strategies that can be used to increase sales easily and at low cost:

1.  Better product mix – certain products that you sell might be of low profit (lower gross profit margin) so it is important to get the product mix right. For example certain products might require that you carry higher inventory or have more service facilities – this invariably costs more.

2.   Better customer mix – as certain products are unprofitable so are certain customers. For example some customers will cost a lot to retain in terms of service and time.

3.   More sales calls – in very basic terms the more sales calls you perform the potential to make more sales increases.

4.   Better sales calls – targeted sales calls have a better probability of working out rather than merely increasing the number of sales calls. Do your homework before visiting your customers – this increases your chances of success exponentially.

5.   Increase price – one of the easier but tricky methods of increasing your sales – as this might actually lead to a drop in sales. Read this note on pricing

6.   Reduce discounts – this too can boost your bottom-line

7.   Charge for deliveries – improve the delivery and increase the number of delivery channels that can be used to distribute. Offer a faster means of delivery to entice the client.

8.   Others – depending on the industry that you are in there might be other ways of boosting sales – just stop and think about it for a minute – while looking at all the points mentioned above. May be a combination of the above factors might lead to higher sales rather than using individual techniques.

The Ansoff matrix or Product-market matrix has been used successfully by many businesses over a number of decades.

The Ansoff matrix emphasizes four methods of increasing sales:

1.   Market penetration – this is selling more of existing products to existing customer – perhaps by following techniques mentioned above.

2.   Market development – this is the selling of existing products to new markets. This can be achieved by increasing the geographic scope of distribution. It can also be achieved by changes in mindset, for example in the marketing of baby shampoo – targeting adults by promoting the mild nature of baby shampoo.

3.  Product development – this is the selling of new products to existing customers. Example is the development of the ‘Walkman’ which was a completely new product but first sold to existing music enthusiasts.

4.   Diversification – selling new products to new customers.

The marketing strategies mentioned above are all used in the marketing plan template. To download the marketing plan template go here.

Marketing plan template

The following methods can also be used to increase your sales:

1. Developing multiple income streams for your business is priority number 1. Consider this example, the laundry that you drop off your clothes you notice that the same owner always working there. Low-profit potential, right? What you don’t know might be that he has two other collection centers in key locations in the city working for his laundry. He has built up investments and protected part of his income from taxes. He refers some of his customers to a carpet cleaning company and receives commissions, aggressively markets fur, suede and leather cleaning services, sells own brand of spot removers and has five independent contractors operating neighborhood pick-up and delivery dry cleaning routes.

2. Sales are more often that not linked to the ownership or control of a particular concept, product or service.

3. The service industry in the US is showing a staggering rate of increase. So if you are selling a hard good think about how you can be marketing a service.

4. If you are selling a service think of the many ways you can be selling other hard goods – look at the example of the laundry mentioned above.

5. Know the power of multiplication – so long as you own exclusive rights to a product there is no limit to the growth that can be achieved.

6. Direct marketing is one of the fastest growing categories of business.

7. Use an info-product to introduce what you are selling especially if it is of a complex nature and requires lots of information before the decision-maker can decide to buy. Info-products such as brochures and manuals can also build credibility and trust leading to more sales.

8. Another important way to increase sales is through celebrity endorsements. This type of advertising seems to attract a lot of free publicity. So if you got the right product for the right celebrity it could be one of the most potent of marketing strategies.

9. Importance of synergy in marketing strategies - always remember to use as many marketing strategies as possible. They tend to generate more sales as a combination rather than a single strategy

It is also important to note that most business in trying to increase sales suffer from loss in profits this is discussed in the following article.

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