Page 5: The role of Sales in getting the product to the consumer
The following example of the stages required to sell new product developments to customers illustrates the fundamental aspects of the sales role.
i. Creating concepts for new products
In order for Kraft to create new products or to prolong consumers' interest in existing products, the Marketing division analyses consumer needs to generate new ideas. They then discuss these with Sales to ensure that they believe customers will buy them. Additionally, Sales may identify consumer needs by working closely with customers and will then communicate these needs to Marketing.
ii. Communicating the final concept to Sales
Marketing and Category Development equip Sales with a sales rationale to present to their customers. The Sales and the Point of Purchase departments investigate methods of ensuring the product is prominently displayed in the stores. When compiled, this package becomes Point of Purchase material.
iii. Presenting the opportunity to customers
Any new Kraft product or development will need to be 'sold' to customers before they will agree to stock it on their shelves. To do this the Sales team invite all the key decision makers within their customers' organisation (e.g. buyers, merchandisers, supply chain managers) to a meeting, during which they will outline the benefits of the new product. It is vitally important that the customer sees the benefit of the product to them and to the consumer. Market research statistics will usually play a key role in illustrating the potential of the product along with persuasive rationales from the Sales team.
During the course of the meeting, the sales team will explain the key features of the product, present their evidence to show consumer need and will attempt to show how stocking the product will encourage purchase. Key features of the product could be a different flavour, a special pack size or new ingredients, whilst evidence of consumer need will be demonstrated by the use of market research which will show how the product matches consumers' requirements.
The brand name could be a benefit to the customer and may persuade them to stock the item. If it can be shown that consumers would be likely to visit the store specifically to buy the product because they are loyal to the brand, customers could receive the added benefit of consumers making additional purchases whilst in store.
The advertising support that Kraft's Marketing division has agreed for the product in order to help generate and sustain consumer interest is an additional sales tool.
Once buyers have decided that they would like to stock Kraft products, a price is negotiated as well as an in-store location and plans for special promotions. Kraft's business model is based on building strong relationships with retailers that help Kraft to achieve business growth.
iv. Year plan for the product
Once the buyer has agreed to stock a product, Kraft Account Managers work with Category Planning and Finance to create a promotional plan and sales targets for the year for that product. It is important to ensure that all aspects of the plan are communicated to all relevant departments (e.g. Customer Services must be able to answer any customer queries) and that all products are delivered on time to meet agreed customer service levels.
v. Working with Supply Chain
Sales work closely with the Supply Chain function to inform them of estimated sales volumes in order to enable them to instruct the factory to manufacture the quantity of product required. These sales predictions are constantly reviewed in the light of changing conditions to ensure their accuracy as the year progresses.
Planning is critical to make sure that customer orders are met and that the product is always available in store. Failure to meet orders would mean a loss of profits for both Kraft and their customer and also disappointment for consumers, which could damage long term relationships between both parties.
Kraft looks for high volume of products sold because the higher the volume of sales, the lower the unit cost as illustrated in the diagram.
vi. Product arrives in store
Even when the product has reached the stores, the Account Manager's role is not yet finished. Account Managers regularly visit stores to check that the product is in stock, that agreed promotions are running and that the product has the space on shelf as negotiated.
An important part of the Account Manager's role is to constantly evaluate the performance of the product within customers' stores. Aspects that are evaluated include the sale of stock compared with internal forecasts, profit made, the analysis of Kraft's share of the market for a product and customer feedback. This information is then used to create future plans, identify what worked well and what could be improved for next time.