Consumption: end or the beginning of the sales process?

15 May 2019 News

Consumption: end or the beginning of the sales process?

Consumption: end or the beginning of the sales process?

Opinion article by Prof. Fernando Santor, University Federal do Pampa

The reality of daily work, and its urgent problems that almost overlap between them, does not always allow time for some reflection on the task itself. Even because, by the habit itself, we consider the task a practical thing, leaving the reflection to the plan of the theorists. This text proposes that we suspend this position momentarily! So, the challenge of this article is to discuss a subject that is overrated when there is not much to do and underestimate when everything is to be done. As a rule, this mismatch can not be corrected. I am referring to the sale and, consequently, marketing and communication (although it is widely known, it is always good to point out that these concepts are close, but, significantly different) and the digital environment. The sale is overestimated when it should occur, precisely because, it seems, it is the reason for being of this particular moment: to sell. But the overestimation is incorrect if we consider that it depends on the recapitalization depending on the resource invested in the other stages. In a strategically well analyzed environment the sales effort is almost superfluous; Selling can not be a bet, a game or a sacrifice. If we consider what the sale depends on, we will therefore try to understand it in depth before this stage takes place, that is, precisely when it is underestimated. In strategic terms means understanding the scenario and planning the actions. Despite the simplicity of the phrase, it hides deployments that, in general, are ignored. It is on these points that we will stop here (we remember that these points are fundamental for both physical and virtual commerce).

If we consider what the sale depends on, we will therefore try to understand it in depth before this stage takes place, that is, precisely when it is underestimated.
There are two initial questions that should be properly pointed out:

A company (we will use the term “company” in the text to refer to the industry as much as it does to commerce and services), should recognize itself and recognize the scenario (s) where it operates. There are two ways to understand the market: (a) from the macroenvironment to the microenvironment or (b) from the microenvironment in the macroenvironment. The approaches are directly related to the way the company operates in the market in question. In the first case (a), it is understood that the market is linear and that companies have some control over the functioning of the means of production, distribution and consumption. In this first approach it is assumed that the consumer market will assimilate the products available within the balance between supply and demand. It is the perspective assumed by the Frankfurt School that analyzes, from a superstructure, the forces that work from top to bottom. This environment is not unrealistic but is limited to large companies (national and multinational) that have a highly competitive product, established brand and wide and unrestricted distribution. Therefore, it is not only commodities, but also branded products that have great penetration power in the most varied public. On the other hand, the other possible reading (b) implies the need to have a micro suitability in the macro because the product has a level of competition or diversification that fractionates the consumer market in scales or niches. There is a double effect here: the macroenvironment that determines the general rules and the microenvironment that determines the particular options and guarantees a certain level of managerial maneuver. This perspective is assumed by the Birmingham School, where force is also found in small processes. This difference (between a and b.) Seems to be too obvious but is usually overlooked when it comes to sales (but also to marketing and communication). Type b. companies act in the market as if they were of type a. and choose dissemination and sales tools based on the efficiency of the type a. companies. It is a very incoherent way of doing benchmarking and is, unfortunately, quite common;
The second initial question concerns the problem of departmentalization versus the need for a holistic view. Regardless of size, companies are divided into departments, which manage their activities in a semiautonomous or semi-articulated way (which is the same). This means that the division of the tasks to facilitate the work, facilitates the production, but hinders the possibility of a holistic view of the business, making problems difficult to solve (and even preventing the verification of the existence of the problem). In general, the organizational structure of companies does not favor the dialogue between strategy and creation, between production, distribution and sale. There is a centralized management that determines functions to be exercised and goals to be achieved. On the other hand, it is not a question of dissolving departments and integrating functions (although this is always a hypothesis, but requires a completely different business structure), but of understanding that departmentalization imposes constraints on the holistic view, giving even more emphasis to the limitation of administration as assessed by the Theory of Limited Rationality (which we recall is not only about it, but the impossibility of fully predicting all scenarios – internal and external – as the Classic Theory wanted).
The number one assumption for companies that want to be competitive is to focus on consumption before organizing their potential, operating in an opposite way to traditional, that is, matching their potential to the consumer market (a premise of Marketing 3.0).
With that in mind we can go a little further. Knowing the limits and the potentialities it is possible to know better the business itself and the scenario (s) where the company operates. We defend, therefore, that the management effectively potentiates its abilities by well knowing the tools available. This demands, above all, the assimilation of a way of conducting work that should not be imposed as a tool – punctual or departmental – but as a foundation, a principle of perspective in relation to the market in which it operates. Otherwise you would be incurring Marketing Myopia and the results may be the worst possible (due to the emphasis given to one point and the total or partial forgetfulness of the others).

We refer to the implementation of the Marketing Information System (MIS), with the support of CRM, the DataBase Marketing, Customer Service, the Benchmarking, and BSC (Balanced Scorecard). We know it is so entangled with acronyms and a ton of processes, documents and people involved. But we can not fool ourselves. It is, first, a position in relation to the market for companies who want to set their share of the market share. Due to the limited space, we will explain each point very briefly and we will articulate them for the efficiency of the communication and marketing processes with a view to improving sales.

The number one assumption for companies that want to be competitive is to focus on consumption before organizing their potential, operating in an opposite way to traditional, that is, matching their potential to the consumer market (a premise of Marketing 3.0). It is not a matter of considering that “the consumer is always right” as a way of showing some empathy, but rather of proactively striving to heal the demands of the consumer market (whether patent or latent). Both traditional and innovation production can benefit from this perspective. Thus, the MIS is fundamental. The MIS has three basic sources of information: internal secondary data (data produced by the company in its daily activities such as: human resources, suppliers, times and processes, sales, projections, etc.); external data (data produced by research institutions such as consumption index, inflation, legislation, etc.); and the primary data (specific and directly applied research to solve a specific problem). The roles of the other acronyms cited above are now clearer: CRM, DataBase, Customer Service and Benchmarketing, which serve as subsidies for internal secondary data and mainly for primary data; the BSC enters as a management tool of the elements with a view to the implementation of the strategies.

The BSC (Balanced ScoreCard) is a strategic management system, in addition to traditional financial control, which monitors long-term strategies and was created by the Harvard Business School. Through this system – which is organizational and not a computer system (as well as CRM) – it is possible to guide all the activities of the company in order to produce value (besides the price) for the product to be sold. Each step (from conception to sale) is previously designed focused on the demand previously evaluated and analyzed through the systems and processes mentioned above.

From this perspective, with a focus on the consumer market, it is possible to be more efficient in implementing the strategies and defining the place of the company in the market. From these guide lines, well defined and followed in an exemplary fashion, it is possible to boost marketing and communication in terms of positioning, differentiation, segmentation, relationship, brand and even digital presence (which in contemporary business is a reality that is impossible to escape, but which, unfortunately, is very poorly operationalized in several cases). Just as a general rule, we accentuate that digital presence is not the same as being on the internet (creating websites, profiles on social networks, etc.). It is assumed that, in the present state of affairs, all companies should already be there. It happens that digital presence is the set of actions that the company employs to become known and influential in the internet, seeking visibility and interaction with its target audience (that is, much more than expanding the number of available media. It is, therefore, the content management, positioning and relationship with the consumer, and this is more complex than restricting the activity to an IT service).

The reversal of the consumer perspective (what Marketing 3.0 calls an inverted pyramid) corresponds to the way the brand stands or is positioned in the market for consumers. It represents your reputation (which is broadly the same as digital presence)! It is about showing relevance, building credibility, becoming influential, getting closer to your customers, and getting engagement. All this depends on the good knowledge about demand before launching into production. Knowing the audience you are dealing with allows you to use the information you extract for not only more efficient communication or better targeted marketing strategies but also better business decisions such as product targeting or service optimization . In the moment that a company offers value, problem solving or a good relationship the sale and the price become secondary. The market of type a., punctuated in the initial questions of this text, is inaccessible for a great part of the companies and, therefore, it is incoherent to act as if it were so. A company that wants to become a reference needs to understand what it means to be a benchmark for the target consumer. For this, the tools are already available (and were cited above). The strength of the company lies in its ability to find the best niche and to adapt to it (constantly). It is difficult, it is arduous, but it is the most correct to be done so that the result can be achieved. We understand that there is much information and little detail here, but we consider that it is enough to draw attention to what is currently needed.

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