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To date this much actual
cash has been spent to develop our product $
Next year, we would like to
have $
from sales of this product.
Advertising.
In our industry,
Advertising Age reports that established companies in our
product/market area typically have an advertising budget that is
equal to % of their targeted sales.
Product introduction. If we are introducing a new product,
we believe (or we are advised) that we must spend
% more than this "steady state" ratio of advertising
for Year 1.
Company
positioning.
Especially if our company
has not already advertised other products extensively (i.e., if
our company is brand new), then we believe (we are
advised) that we must allocate
% on top of the above advertising budget in order to
establish the company's credibility and visibility in the
market. This, plus other activities plus certain parts
of our staff cost, define the company's Marketing
requirement.
Overall promotional program.
We are willing
and able to commit $
actual cash to next year's promotional program. This
will be used in stages as follows:
1st quarter
$
2nd quarter
$
3rd quarter
$
4th quarter
$
We will define target sales
revenue results by quarter. Here’s what we think should
happen:
1st quarter
$
2nd quarter
$
3rd quarter
$
4th quarter
$
“Cash-flow”
for the year's sales program, therefore, should look something
like this:
|
|
1st quarter |
2nd quarter |
3rd quarter |
4th quarter |
Year
|
|
Targeted Sales
Revenue |
$ |
$ |
$ |
$ |
$ |
|
Budgeted
Marketing Expense |
$ |
$ |
$ |
$ |
$ |
|
Budgeted
Advertising Expense |
$ |
$ |
$ |
$ |
$ |
|
Budgeted Selling
Expense |
$ |
$ |
$ |
$ |
$ |
|
|
|
|
|
|
|
|
Net Cash-Flow
Contribution |
$ |
$ |
$ |
$ |
$ |
Suggestion: No
later than 15 days prior to the end of each quarter, you should
make a specific decision as to how you will continue your
program in the subsequent quarter. In other words, if it’s
working, you may wish to accelerate your commitment of sales
resources. If your results for a given quarter are less
than what has been targeted, you may or may not wish to cut back
or terminate the effort in the subsequent quarter. You
could decide instead to increase your efforts.
But whatever you do will be
the result of a conscious decision related to an
explicit appreciation of the facts as they then exist.
You will not simply be drifting along and hoping for the best.
-
Develop a product
with specific utility – functions, features, and potential benefits that
are relevant for an identified set of potential users.
-
Identify such users
as specifically as possible – in the form of an actual means for reaching
them – names, titles, addresses, phone numbers, common "events" where
you and they can be face-to-face, either individually (an in-person
“call”) or collectively (an industry conference) or through some
intermediary (direct mail letter or via print-media or other types of
advertisement).
-
Truly
understand the issues that your
intended users see as “hot.”
Differentiation Strategies
Surprise To Win: 3 Strategies
Buzz Marketing
-
Relate those issues to the functional capabilities
of your product and then back to the
potential benefits that users would realize if they were to start
using your product.
-
Figure out
pricing
and terms.
Figure out any additional “collateral” to be associated with
selling/purchasing the product (added benefits, incentives, etc.).
-
Communicate
the simple facts that the product exists
and that it is available for
purchase and is ready to use immediately.
-
Help the
targets identify their own situation
with the characteristics of the product.
Selling
Is Problem Solving
-
Motivate
the targets
to take some type of pro-active action (calling for more info, calling you
to chat, inviting you to come see them, inviting you to call them,
showing up to participate at an “event”).
-
Ask for the order.
It's amazing how many companies never actually ask their targets to make
a purchase decision.
-
Design and implement your
sales follow-up program
(1) to cement this present sale, (2) to establish that your company is
the solution source (to support future sales opportunities), and
(3) to get referrals and personal introductions to other likely sales
candidates.
Creating Customer Value: 9 Questions To Answer
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