Do Business Well

Many companies find that after their first few years they hit a sales plateau. Up to a certain volume, business comes easy. Then there comes a time when it seems as if the next sales dollar is very elusive. Ironically, the sales ceiling usually hits just at the point where profits start.

A variation of this dilemma is the seasonal sales phenomenon. I know of one motorcycle parts distributor who made huge profits eight months out of the year, only to lose almost all of it in the winter months. Continue Reading »

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Your ability to get articles written about your company or by your company’s executives imparts an image of success that can be used with brochures and other written material to help close sales. Beyond these tools, though, there’s another that is often the most effective—what I refer to as “love letters.” Love letters are written compliments from your customers or clients. Whether they’re used by your salespeople to impress prospects or in your business plan to impress investors, they can be extremely effective.

Isaw one example of a particularly effective use of love letters on Sunset Boulevard in Los Angeles, in the window of a store specializing in custom-made men’s shirts. I was drawn to the window because my father was in that business some years back and I had worked in his store. Continue Reading »

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The following findings, kindly supplied by Gurpal Dhensa, Brunel University, are based on an exploratory study into the nature of loyalty which was conducted by means of face-to-face interviews with managers from both dotcom companies and a traditional high street retailer in September 2001.

In earlier times, marketers could understand consumers well through the daily experience of selling to them. But as firms and markets have grown in size, many marketing decision-makers have lost direct contact with their customers and must now turn to consumer research for enlightenment. Organizations now spend more money than ever Continue Reading »

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Disadvantages

Retailers have been slow to take up e-Retailing. This is to some extent under standable in the light of the many disadvantages and problems. Retailers, for example, may lack the technical know-how, the substantial investment required or the order fulfilment capabilities. Set-up costs start from around £20,000 fo a small site, up to £500,000 for a large operation. And set-up costs are only th start: Datamonitor estimates that high street retailers are spending more o ongoing costs than on setting up new sites.

DISADVANTAGES OF E-RETAILING FOR RETAILERS

* May lack know-how and technology

• Substantial set-up, investment and ongoing costs

* Complex logistics of fulfilment

• e-Selling less powerful than face-to-face — uptake slow for goods selected by taste or smell

* Fewer impulse purchases

* Legal problems

Less role for traditional high street retail expertise

• Pressure on margins and prices in-store

* After-sales care difficulties

There can be legal problems. For example, if purchaser and supplier are ni_l
different countries, there may be conflict between the laws of the two countries.’
A further disadvantage is that e-Selling is less powerful than face-to-face selling

(it is easier to say ‘no’ to a computer). This viewpoint is linked to a concern of raditional high street retailers that e-Retailing offers a diminished role for their expertise. For example, there are obvious difficulties with products sold by `atmosphere’ — touch, feel, smell — and with impulse purchases. In addition, consumers have a perception of lower prices online. This puts pressure on margins for e-Retailing, and can lead to shoppers expecting consistent low prices in store. Finally, after-care can be difficult, especially if the shopper is overseas.

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`Place’ (Convenience in the 4- Cs) means the elements of the marketing mix that marketers use to enable customers to access the benefits of a product or service. Traditionally, this has meant ‘channels of distribution‘ through (e.g.) various wholesaler and retailer combinations. Viewing from the ‘convenience for the customer‘ (4-Cs) perspective gives a more customer-orientated focus. This is a vital decision area for the e-Business for three reasons. First, relatively small local companies can widen their market and even export (e.g. Botham (www.Botham.co.uk), to be described further in Chapter 9). Second, many e- Businesses aim to gain competitive advantage by using e-Systems to de-layer the distribution chain. For example, Dell (www.dell.co.uk) supplies customers directly, rather than through distributors, wholesalers or retailers. Third, distribution is an area where some e-Businesses have been severely criticized for failing to deliver customer service (see Chapter 9 for more details).

Place elements of the marketing mix have been changing rapidly over recent decades, and these changes impact in many ways on the marketing operations of the e-Business. First, the growth of retailer power has involved major retailers taking more control of their supply chains. The involvement of wholesalers has been reduced, tending to give way to contract logistics (under retailer control). At the same time, supply chains have become more efficient, with computer network links between suppliers and retailers — many still based on EDI. Predating the Internet, EDI is based on privately owned third-party computer networks. Stock levels have been reduced using techniques such as JIT and Enterprise Resource Planning (ERP). Control of the physical distribution, ordering, invoicing and payment systems, particularly for major retailers, is often still carried out using EDI networks such as Tradanet (www.gegxs.com/gxs/ products/product/traser). Increasingly, though, retailers such as Tesco are allowing Internet access to their suppliers for real-time electronic point-of-sale (EPOS) data. Trusted supplier partners can thus respond more quickly to changes in customer demand. Continue Reading »

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