LITERATURE REVIEW OF MARKETING MIX AND SALES
Marketing - mix overview
Marketing is a social and administrative process that enables individuals and groups to satisfy their needs and desires through the creation, offering, and exchange of valuable products with others.
Satisfying human needs and wants is a complex process that requires identifying customer requirements for products or services and finding effective solutions to meet those needs Careful management and planning are essential to achieve success in this endeavor.
2001, Chartered Institute of Marketing (United Kingdom) has re-defined
“Marketing as the management process which is responsible for identifying, anticipating, and satisfying customer requirements profitably”
According to Essentials of Marketing (Nguyen Thi Van Anh, Dao Thi Minh Thanh, 2018), marketing can include many different functions such as:
Firstly, to best satisfy the need of society:
The primary function of marketing is to research and analyze market demands, enabling the development of effective solutions that enhance social production By focusing on this function, marketing activities aim to optimize both production and consumption within society, ensuring sustainable growth and meeting consumer needs.
Secondly, to enhance organization’s adaptability and competitiveness
Marketing activities enable companies to stand out from competitors while effectively meeting the needs of their target audience Additionally, by adapting marketing strategies to shifting demands, businesses can navigate unforeseen challenges, seize new opportunities, and swiftly respond to market changes.
To effectively address consumption and distribution challenges, businesses must adopt a comprehensive marketing strategy that includes an attractive pricing approach, well-organized distribution systems, and robust communication tools Additionally, investing in training and enhancing the sales skills of staff is essential for success.
Fourthly, to improve business and production efficiency
The primary objective of marketing is to enhance business production efficiency By addressing market needs, companies can achieve their own goals through effective marketing strategies Essentially, marketing activities focus on fulfilling social and market demands to align with the best interests of the company.
1.1.2.1 Definition and characteristics of Marketing mix
According to Philip Kotler and Gary Armstrong (2007), the marketing mix consists of a set of controllable tactical tools designed to elicit feedback from specific markets, encompassing the four key elements known as the 4Ps: Product, Price, Place, and Promotion.
The marketing mix is a fundamental model that outlines the key elements essential for effective brand marketing Traditionally, it comprises four key components known as the four Ps: product, price, promotion, and place This model, introduced by Edmund Jerome McCarthy in 1960, has gained significant popularity over the years and originally included 12 parameters that marketers considered as vital ingredients for success.
The evolution of the marketing framework has led to the refinement of 12 parameters down to four, simplifying its understanding The 7Ps Services Marketing Mix has emerged as a prominent model, gaining traction as it emphasizes the significance of services alongside traditional product-focused marketing models Proposed by Bernard H Booms and Mary J Bitner in 1981, this model expands the original marketing mix by introducing three additional Ps: people, physical evidence, and process, establishing service marketing as a distinct field of study Together, these elements constitute the comprehensive 7 Ps of service marketing.
❖ Characteristics of Marketing mix (E Jerome McCarthy.1960)
Figure 1.1 Marketing mix < Smriti Chand 2010>
Firstly, Marketing mix is the core of marketing process:
The marketing mix encompasses vital decisions regarding each of its elements To achieve optimal results, it is essential to assign appropriate weight to each component and ensure their integration, resulting in a synergistic effect that enhances overall effectiveness.
Secondly, Marketing mix has to be reviewed constantly in order to meet the changing requirements:
The marketing manager must continuously assess the market conditions and adjust the marketing mix accordingly to adapt to the evolving complexities of the marketplace.
Thirdly, Changes in external environment necessitate alterations in the mix:
In today's dynamic external environment, customer preferences are rapidly evolving, making them the most variable factor for many industries As brand loyalty and purchasing power fluctuate, marketing managers must conduct continuous market analysis to adapt the marketing mix accordingly.
Fourthly, Changes taking place within the firm also necessitate changes in marketing mix:
Technological advancements, shifts in product offerings, or alterations in operational scale can drive significant changes within a company These transformations necessitate corresponding adjustments in the marketing mix to effectively align with new business strategies.
Fifthly, Applicable to business and non-business organization:
The marketing mix is relevant for both business and non-business organizations, including clubs and educational institutions For example, educational institutions must offer appropriate courses (product), set reasonable fees (price), effectively promote themselves and their courses, and ensure that these courses are accessible at suitable locations.
Sixthly, Marketing mix helps to achieve organizational goals:
An application of an appropriate marketing mix helps to achieve organizational goals like increased profits and market share
A comprehensive understanding of the customer is essential across all four elements of the marketing mix The primary focus of the marketing mix is the customer, aiming to deliver optimal customer satisfaction.
1.1.2.2 Components of Marketing mix for service
Sales and Sales effectiveness
According to Philip Kotler (1980): Sales is a form of direct introduction of goods and services through exchanges, communication between the buyers and potential customers to sell goods
Sales is a dynamic process where the seller actively learns about and explores the needs and desires of the buyer, ultimately creating tailored solutions that satisfy both parties' long-term interests.
1.2.1.2 The role of sales in an organization
Sales are essential to an organization's success, serving as the crucial link between potential customers' needs and the products or services offered to meet those needs Their unique role significantly influences the overall performance and growth of the business.
Sales are a fundamental aspect of business, serving as a crucial link between production and consumption This vital stage facilitates the smooth circulation of goods, ensuring a consistent reproduction process and playing a significant role in both production growth and overall socio-economic development.
Every business fundamentally exists to produce and supply goods that fulfill social needs Consequently, production and sales are intricately linked within a business strategy If sales efforts are ineffective, it can lead to stagnation in production.
Sales activities are a key indicator of a company's performance, reflecting its overall business situation The effectiveness of an enterprise is evaluated based on the volume of goods sold and the profits generated from these sales Additionally, the costs associated with sales activities significantly influence a business's income and profitability.
Sales activity serves as a powerful competitive tool in a highly competitive market By enhancing sales volume, a business demonstrates its improved capabilities and strengthens its competitive advantage.
Sales objectives are goals that are used to define sales strategy, performance management and incentives (John Spacey, 2017)
Sales objectives serve as a clear roadmap for the sales team, guiding them in achieving the company's overall goals Each objective includes specific, measurable action items that ensure both individual and team goals are met Companies often set sales objectives that emphasize key performance indicators to drive success.
• Increasing upsells and cross-sells
• Cutting the time sales reps spend on non-sales tasks
Sales objective should consider setting follow SMART pattern
✓ Specific: A clear explanation of the objective and its steps
✓ Measurable: Ensure there are metrics that you can measure the objective’s success
✓ Achievable: The objective should be realistic, but still challenging
✓ Relevant: Make sure that the objective is consistent with your business’s and team’s goals and strategy
✓ Timetable: Set out an accurate and clear timescale for the objective
A sales process serves as a structured framework designed to help sales representatives meet their objectives and consistently achieve desired performance levels It outlines a repeatable series of steps, each accompanied by specific actions that salespeople undertake to transform potential customers from leads into paying clients The sales process typically encompasses several fundamental stages, as identified by Ngo Minh Cach (2010).
Figure 1.3 The seven step Sales process
Every sale begins with generating leads, which can be achieved through diverse prospecting methods including marketing strategies, networking at live events and trade shows, leveraging social media, utilizing purchased lists, cold calling, and gaining referrals The prospecting process is essential for identifying potential buyers who have shown interest in your products or services or who fit specific demographics, industries, or characteristics that indicate potential interest.
The second stage help sales rep in preparation for initial contact with a potential customer, researching the market and collecting all relevant
Preparation Prospecting and Initial Contact
Following Up, Repeat Business & Referrals information regarding product or service At this point, sales person need to develop sales presentation and tailor it to potential client’s particular needs
To excel in sales, a top salesperson must first identify the client’s needs and pain points, gaining a deep understanding of the prospect's challenges and motivations for considering a purchase This insight enables the sales team to customize their pitch or demonstration to effectively address each prospect's unique situation Additionally, it helps anticipate objections, allowing the team to proactively address any concerns that may hinder the potential customer's decision to move forward with the solution.
In this stage, sales representatives effectively communicate the value that customers will gain from purchasing a product or service By aligning the customers' needs and desires with the specific features and benefits of the product, sales reps can demonstrate how the offering meets their expectations and enhances their experience.
❖ Step 5: Handling objection and negotiation
Sales professionals must actively listen to the concerns of prospects and address them effectively It’s essential for sellers to emphasize the features that hold the most value for potential customers, demonstrating how these benefits can help them achieve their desired outcomes After presenting a proposal or following a sales pitch or demonstration, prospects typically raise questions or objections that need to be acknowledged and resolved.
The final step in the sales process is where prospects either commit to a purchase or decide to halt their decision Although this may appear to be the most crucial phase, its success relies heavily on the proper completion of all preceding steps During this stage, prospects agree on terms and pricing, often engaging in negotiations to reach mutually beneficial agreements All objections must be resolved, and every detail regarding delivery and fulfillment needs to be finalized Additionally, this phase may include introductions to other team members within the company who will manage the subsequent steps.
❖ Step 7: Following Up, Repeat Business & Referrals
Building a strong relationship with customers encourages them to make repeat purchases and consider additional products or services Satisfied customers also serve as valuable sources of referrals for new business To maintain this relationship, businesses should engage in consistent marketing communications, including updates on new offerings, industry news, e-newsletters, and interactive rewards programs.
Sales effectiveness is the capacity of a company's sales team to successfully navigate each phase of the customer buying journey, ultimately securing business under favorable terms and within an appropriate timeframe.
The impact of Marketing – mix strategy on Sales effectiveness
1.3.1 The impact of Product strategy on sales effectiveness
According to Kotler and Armstrong (2012), a product is anything offered to a market to satisfy customer needs and wants, making it the cornerstone of the marketing mix As the first element of the 4Ps, a product significantly shapes a company's image, necessitating careful planning to ensure a positive first impression To foster profitable customer relationships, businesses must deliver high-quality, high-performance products that align with consumer desires, thereby enhancing customer satisfaction and establishing a competitive edge Effective product strategies can attract a larger customer base and boost sales effectiveness Research by Owomoyela, Oyeniyi, and Ola (2013) indicates that product quality directly influences customer loyalty, which in turn drives sales Therefore, companies should standardize product quality to ensure consistent customer experiences and maintain high standards across broader markets.
Therefore, a good product strategy will facilitate for salespeople to build trust with customers, convert potential customers into paying customers and improve sales effectiveness for the company
1.3.2 The impact of Price strategy on sales effectiveness
According to Ngo Minh Cach (2010), price is the second element of the marketing mix and represents the value assigned to a product or service As the sole factor that generates revenue, it significantly influences customer decisions regarding service usage Given the intangible nature of services, pricing plays a crucial role in shaping customer perceptions of quality This influence manifests in two key ways: directly affecting customers' purchasing power and impacting their psychological responses.
Consumers view price as a crucial indicator of both quality and profitability, often associating higher prices with superior quality while perceiving lower prices as a sign of diminished value (Kamakura and Russell, 1993; Milgrom and Roberts, 1986; Woodside et al., 1977) Research shows that price serves as an indirect measure of product quality, suggesting a positive correlation between price and perceived quality (Selvakumar and Vikkraman, 2011) Consequently, pricing strategies significantly influence consumer purchasing behavior, directly impacting revenue and sales effectiveness.
The payment methods employed in a company's pricing strategy significantly influence consumer buying psychology and impact sales effectiveness Different forms of payment, such as cash, checks, and credit/debit cards, vary in their transparency and affect the perceived pain of payment Cash is the most transparent method, as consumers physically part with money, making them acutely aware of their spending In contrast, paying by check or voucher is less transparent and less painful, as no physical cash is exchanged Credit and debit cards further obscure the transaction's cash value, detaching consumers from the economic reality of their purchases Additionally, emerging payment technologies like automatic payroll deductions and mobile payments offer even less transparency, often leaving consumers unaware of the transaction altogether.
Research indicates that less painful payment methods lead to positive consumer outcomes, such as a greater willingness to purchase, increased willingness to pay, and enhanced satisfaction at the point of sale, ultimately boosting a company's sales effectiveness.
1.3.3 The impact of Place strategy on sales effectiveness
The "place" in the marketing mix refers to the various locations, distribution channels, and methods used to deliver products to customers It encompasses factors such as the company's location, distributor networks, storefronts, online presence, and logistics A thorough understanding of the business's positioning is crucial, as it significantly impacts long-term success Key considerations include the availability and proximity of raw materials and labor, closeness to customers and competitors, as well as infrastructure and transportation costs.
2017) According to Kotler & Armstrong (2012), retailers should be location near their target customers thus ensuring accessibility
In fact, service providers may choose the following distribution options and strategies (Ngo Minh Cach, Nguyen Thi Mui.2009):
A narrow distribution strategy emphasizes the development of a single service while utilizing a broad distribution channel, leading to enhanced customer satisfaction and higher conversion rates This approach can significantly boost sales effectiveness However, it carries risks such as over-specialization, which may not address the diverse needs of customers, and challenges in persuading organizations that prefer a comprehensive suite of services from a single provider.
A centralized distribution strategy allows organizations to offer a range of services while concentrating on specific market segments By focusing on core service types, businesses can allocate resources more effectively, enhancing customer satisfaction This approach meets the needs of customers who prefer accessing multiple services within a single system, ultimately driving loyalty and engagement.
A diversification strategy involves offering a range of services through an extensive distribution system across the market, which enhances market expansion and boosts customer access This approach leads to a higher percentage of repeat customers who are satisfied with their initial purchase, ultimately improving sales effectiveness Therefore, businesses should tailor their distribution strategies based on available resources to maximize sales efficiency during different business periods.
1.3.4 The impact of Promotion strategy on sales effectiveness
A company's promotion strategy involves a strategic blend of promotional activities, public relations, personal selling, sales promotions, and marketing efforts aimed at effectively communicating product value to customers and fostering strong relationships with them (Kotler and Armstrong, 2012).
Promotion in marketing encompasses the strategies and tools companies utilize to persuade potential consumers to purchase their products or services An effective promotion strategy enhances sales by attracting customers and significantly influencing their purchasing behavior Promotions can drive customer purchases, attract new clientele, entice customers away from competitors, encourage existing customers to explore different offerings, and stimulate business during slower sales periods.
Promotions significantly influence consumer behavior, impacting key aspects of purchase decisions, including brand choice, timing, quantity, and brand switching Due to the short duration of sales promotions, customers often experience urgency, which reduces their tendency to compare alternatives Research by Ailawadi and Neslin (1998) indicates that consumer promotions encourage larger purchases and faster consumption, leading to increased sales and enhanced profitability.
Effective promotion strategies can significantly enhance a company's product visibility, leading to increased customer data acquisition and enabling sales teams to attract new clients, ultimately boosting sales effectiveness Conversely, ineffective promotion strategies result in limited customer accessibility, which negatively impacts the company's overall sales performance.
1.3.5 The impact of People strategy on sales effectiveness
People are a crucial component of the marketing mix, encompassing everyone involved in a product or service, whether directly or indirectly In services, production and consumption occur simultaneously, leading to a tailored customer experience that meets individual needs The role of people in service delivery is vital, as they are essential for executing transactional marketing and fostering customer relationships Modern marketing relies heavily on Customer Relationship Management (CRM), with people serving as the foundation for the relationship between companies and consumers (Tim Friesner, 2014).
In the service industry, the role of sales consultants is crucial as their expertise significantly shapes customer perceptions and experiences regarding product quality These professionals act as business consultants, aligning with their clients' objectives and offering innovative solutions By showcasing strategic value and providing tailored advice, knowledgeable salespeople can enhance customer satisfaction and foster loyalty Their support, especially during after-sales interactions, leaves a lasting positive impression, ultimately leading to higher conversion rates and encouraging customers to refer new clients to the business.
THE STATUS OF MARKETING MIX AND SALES
Introduction to Viet Nam Green Earth Joint Stock Company
2.1.1 General about GEM Joint Stock Company
- Full name: VietNam Green Earth - Information Technology and Communication Join Stock Company (VietNam Green Earth JSC)
- Address: No.02, Nui Truc, Kim Ma Ward, Ba Dinh District, Ha Noi
- Fanpage: https://www.facebook.com/GEMDigitalAgency/
Viet Nam Green Earth - Information Technology and Communication Join Stock Company, abbreviated as VN Green Earth JSC, was found on 9 th March
Founded in 2016, GEM Agency specializes in advertising and marketing, driven by a team passionate about digital platforms Committed to delivering innovative marketing campaigns in the 4.0 era, GEM Agency aims to provide valuable solutions for every customer.
GEM, with its dynamic and talented team, is emerging as a vital asset in the marketing landscape for businesses Over nearly four years of operation, GEM has established a robust digital marketing system, serving close to 1,200 clients nationwide The company has also developed three innovative 4.0 technology solutions to enhance digital marketing operations.
Figure 2.1 Gem's organizational structure diagram
GEM is structured into three primary departments, each with a specialized function overseen by a Board of Directors This board comprises three members: Founder and CEO Ms Nguyen Thi Kim Oanh, Vice Director Mr Nguyen Quoc Chinh, who focuses on development orientation and business strategy, and Vice Director Mr Le Phuong Tuan, responsible for marketing expertise.
The Departments of GEM include:
The digital marketing department is tasked with designing and executing marketing campaigns, providing relevant content, and engaging audiences through social media while monitoring website traffic Its key responsibilities include developing innovative digital marketing strategies utilizing PPC, SEO, and SEM techniques to drive traffic to the company website and enhance awareness of the company’s products and services.
This department is further split into 3 small teams: Creative Team; Team Ads Online; Team Account Management
The accounting department is responsible for recording and reporting the cash flows, both in and out, of a company Their works include:
- Monitoring accounts payable (money out) and accounts receivable
- Building reporting and financial Statements
- Monitoring revenue and expenditure, building payroll
- Provides the data number for the business activity analytical, comparing between the business terms to defined the best business program
Administration department is the link between GEM's various departments and ensures the smooth flow of information from one part to the other
- The department plays a role of an adviser and assister to other departments in Gem
- It provides logistical assistance to the entire company In doing this, it makes sure it provides offices for all staff and office equipment needed by staff
- The administration department is responsible for supervising the work done by the staff
Product developers play a crucial role in creating new products and enhancing existing ones to better satisfy customer needs They collaborate closely with marketing, technical, and manufacturing teams throughout the entire product development process.
This department consist of 2 divisions: Research and development Department and Product deployment Department
GEM Digital is a digital marketing agency dedicated to enhancing conversion optimization for businesses on technology platforms Their services encompass GEM Audit, Web Optimization, and Digital Marketing Strategy, all aimed at improving online performance and driving growth.
GEM Audit is a comprehensive service designed to measure, analyze, and enhance all indicators of Digital Marketing, developed by GEM This service evaluates various activities related to content, advertising, conversion efficiency, and user behavior By utilizing GEM Audit, businesses can gain valuable insights and improve their digital marketing strategies effectively.
✓ Timely update team performance, Digital Marketing costs
✓ Maximize conversion rates on Digital channels
Web Optimization is a comprehensive service designed to enhance your website's performance, attract potential customers, and reduce advertising costs This innovative offering combines Website Audit and Marketing Automation solutions to ensure optimal results for your enterprise.
Web optimization solution is equivalent to using 4 services at the same time: Website Audit, Basic SEO, Marketing Automation and Lead Generation
A comprehensive digital marketing strategy consulting service focuses on brand development for businesses across digital platforms This guide aims to enhance online presence by defining the target audience, conducting competitive analysis, setting goals, and establishing key performance indicators, while also evaluating the current user journey.
GEM offers a comprehensive range of digital marketing services, along with innovative solutions and tools designed to enhance the effectiveness of marketing, sales, and market research for businesses After over four years of dedicated research and development, GEM has successfully launched three digital marketing solutions that stand out in the market.
GEM Audit, GEM Auchat and GEM Qualtrics
GEM Auchat, part of GEM Digital's Auto Marketing and Sales solutions, seamlessly integrates with Facebook, websites, and landing pages to enhance customer interaction and automate marketing efforts After two years of research and development, GEM Digital has established Auchat as a unique solution in the market, distinguished by its exceptional features tailored to meet customer care needs and streamline marketing processes.
✓ Send mass messages in order to marketing and sale automatically
✓ Scan information of all former customers
✓ The messaging scenario ensure a personalized level, suitable for each customer and business
GEM Qualtrics is an advanced online customer survey platform that offers detailed evaluation and analysis of results through sophisticated data analysis methods It enables businesses to access, analyze, and share data seamlessly from anywhere, eliminating the need for hardware, operating systems, or maintenance.
2.1.2 The company's business res1ults from 2017 to 2019
Table 2.1 Income Statement (From 2017 to 2019)
4 Costs of goods sold 11 VI.2 29,343,051,125 32,881,650,707 36,545,105,861
In which: Loan interest expenses 23 621,195,333 810,856,433 508,796,150
14 Total accounting profit before tax 50 6,874,260,506 7,612,636,926 7,454,631,188
Source: Accounting Department at GEM, 2020
From the data learned during the internship at the company, it is possible to see the change of some indicators in income statement
From 2017 to 2019, the company's sales revenue experienced significant growth, rising from 47,383,968,181 VND in 2017 to 52,053,208,449 VND in 2018, an increase of 4,669,240,269 VND By 2019, revenue peaked at 55,955,639,073 VND, driven by the signing of large contracts and the successful market deployment of two new solutions, Gem Qualtrics and Gem Auchat These innovations contributed to a consistent increase in sales and indicated positive prospects for the company's sustainable development.
In 2018, revenue growth slowed to 7.497%, a decline from the 9.85% growth rate observed in 2017 This significant drop in revenue growth warrants careful examination to understand the underlying reasons for the decrease.
In 2018, sales deductions amounted to 156,940,788 VND, reflecting a significant growth rate of 34.04% compared to 2017 However, in 2019, these figures declined by over 18.7%, resulting in deductions of 127,589,031 VND The primary reasons for sales deductions include discounts offered to customers purchasing multiple services simultaneously and reductions for services that did not meet initial commitments.
Evaluation marketing mix and sales effectiveness at GEM from 2017 to 2019
2.2.1 Actual sales effectiveness status at GEM
The Team Account Management at GEM functions as a dedicated sales department, crucial for effectively distributing the company's services to customers This division is structured into small groups, each responsible for various business tasks, ensuring a streamlined approach The sales process at GEM encompasses several fundamental steps that guide their operations.
Figure 2.2 Sales Process at GEM (Source: Account Management Dep’t)
Salespeople find customers through market research, social media, or get customer data from marketing department
Identifying needs and problems of customers
After collecting customer data, sales representatives will reach out to gain deeper insights into customer needs, including the digital channels they utilize, website traffic, and conversion rates, ultimately aiming to schedule appointments with them.
• Step 3: Identifying needs and problems of customers
From the collected information, the consultant will conduct an analysis the situation of the customer to identify the needs of the customer
Salespeople meet customers, learning more about their problems and objectives, then consulting appropriate services solutions Salesmen can receive more requests from the customer via email, phone
Marketing department evaluate the digital marketing channels systems of customers; analyze the situation and deliver achievable results
The sales contract is created by the sales staff following mutual agreement from both parties The sales team arranges an appointment or sends the contract via email to customers, after which both parties sign the document.
• Step 7: Measure, report details periodically
Throughout the contract implementation, GEM will provide the customer with detailed reports on a weekly or monthly basis, depending on the contract duration These reports, typically prepared by the responsible salesperson, will outline the progress of implementation, compare achieved results to the initial plan, and detail associated costs This transparency helps customers stay informed and builds trust in GEM's services.
To have better understand a company’s target market, GEM has conducted market research in the following methods:
During a customer observation session, a salesperson from the company takes detailed notes while observing an ideal user interact with their product or a competitor's This process allows them to gain valuable insights into customer behavior and attitudes towards the services offered by GEM, as well as the level of interest from potential customers.
Effective data collection and analysis through the company's computer system allows for a clear understanding of current product sales and popular services This insight enables the company to develop targeted strategies to enhance sales performance and optimize inventory levels for other products.
Surveys are essential tools for assessing customer satisfaction and future desires regarding a company's products and services These can be conducted through on-screen questionnaires or email, featuring a mix of open- and closed-ended questions GEM actively engages in research by distributing evaluation forms to both existing and potential customers after they have utilized their products and services for a certain period, allowing the company to collect valuable feedback.
Over the past four years, GEM has consistently aligned its activities with customer needs, diversifying its solutions and services to enhance customer satisfaction Market research has enabled the company to identify its strengths, weaknesses, opportunities, and challenges, allowing for the development of targeted sales strategies and policies that improve competitiveness in the market.
❖ Sales effectiveness objectives and Sales strategy plan
To enhance sales effectiveness, GEM must establish clear objectives and develop targeted sales strategies The board of directors sets these objectives, which are then communicated to the Account Management department and assigned to employees Monthly sales effectiveness goals are determined based on market research, growth trends, sales performance, and competitive analysis, with quarterly summaries aimed at promoting employees, particularly within the Account Management team, to boost sales and competitiveness Once the sales objectives are defined, the Account Management department formulates a sales strategy for board approval Upon approval, the department assigns personnel to implement tailored sales strategies for small groups, ensuring that each member has specific sales targets to achieve.
Table 2.2 Sales effectiveness objectives (Source: GEM, Annual sales report)
In 2018, management set a sales target of a 9.0% increase from 2017, aiming for approximately VND 51,648,525,317 The company's revenue growth significantly exceeded this goal, reaching 9,854% by year-end However, in 2019, the target was raised to 9.5%, equating to VND 56,998,263,252, but actual sales growth fell short at 7.497%, resulting in an incomplete plan This year, GEM is also focusing on expanding its distribution network into major cities, particularly targeting Ho Chi Minh City To enhance efficiency, GEM has organized its sales force by product lines, ensuring each team specializes in specific services This specialization is crucial for GEM's products, which demand technical expertise Sales personnel must possess strong sales and product knowledge, along with negotiation skills to effectively engage large corporate clients within tight timeframes.
2.2.2 Evaluating the sales effectiveness through a number of criteria
Sales play a crucial role in a company's business activities, making the evaluation of sales effectiveness essential This effectiveness directly reflects the overall business performance and can be assessed through key criteria such as sales volume, costs, and profits, all of which are detailed in the income statement.
Table 2.3 GEM's sales disparity between 2017-2019
(Extract Income statement at GEM from 2017-2019)
From 2017 to 2019, GEM JSC experienced steady sales growth, increasing from over 47 billion VND in 2017 to nearly 56 billion VND by 2019 Notably, the sales growth rate in 2018 compared to 2017 was 9.85%.
In 2019, the digital marketing sector experienced significant growth, with an increase of nearly 7.5%, attracting numerous domestic and international businesses and intensifying competition This heightened competitive landscape resulted in a decline in the sales growth rate for GEM JSC, causing the company to fall short of its sales effectiveness targets for the year.
Table 2.4 GEM's Cost disparity between 2017-2019
In which: Loan interest expenses
(Extract Income statement at GEM from 2017-2019)
GEM's expense types showed a correlation with revenue fluctuations, with total expenses, cost of goods sold, and selling expenses making up the largest share of total revenue From 2017 to 2019, selling expenses consistently represented over 22% of annual sales, increasing to 24.57% by 2019 Notably, selling expenses surged by 17% in 2019 compared to 2018, reflecting a significant rise in sales during that period.
In 2019, GEM experienced a profit increase of only 7.5%, indicating a decline compared to the previous year This suggests that despite GEM's significant efforts to enhance sales effectiveness, the management of selling expenses was inadequate, resulting in suboptimal sales performance.
Table 2.5 GEM's Profit disparity between 2017-2019
(Extract Income statement at GEM from 2017-2019)
The impact of Marketing - mix strategies on sales effectiveness at GEM
2.3.1 The impact of Product strategies on Sale effectiveness at GEM
GEM JSC is implementing a strategy to diversify its digital marketing services to meet evolving market demands The company prioritizes the research and development of new services, employing a dedicated team to gather insights on customer preferences and industry trends This collaborative approach between the research, technical, and marketing departments aims to enhance customer choices and attract new clients and partners By introducing innovative solutions, GEM seeks to improve sales effectiveness and increase profitability while also focusing on the enhancement of its existing services and products.
Over 4 years of operation in the field of Digital Marketing, GEM has been constantly investing resources to create tools and solutions to completely overcome the problems that remain in the process of operating the marketing digital platforms and sales tools 100% of GEM solutions and services have achieved 3 factors:
• Usefulness: They are created to solve one or one group of business problems
• Automated: all solutions / tools are built on automatic, intelligent and highly updated technology
• Ease of use: 1 product is good but difficult to use, they are not considered finished products
With these guidelines, GEM Digital will focus on developing more and more technology marketing / sales solutions to help businesses keep up with the 4.0 marketing trend in the world
GEM currently provides 3 services and 2 digital marketing solutions Specifically, 3 services include: GEM Audit; Web Obtimization; Digital Marketing Strategy and 2 solutions Group: GEM Auchat and GEM Qualtrics
GEM offers a variety of smaller service packages within its product and service lines to cater to the diverse needs of customers in digital marketing By implementing a strategy of product diversification and continuous improvement of existing offerings, GEM enhances its customer attraction, boosts sales, and strengthens its market competitiveness, ultimately leading to improved sales effectiveness.
2.3.2 The impact of Price strategies on Sale effectiveness at GEM
The company's pricing strategy is currently reactive, heavily influenced by competitor prices, which often leads to delays in updates from the market research department This lack of timely adjustments hinders effective price changes and creates ambiguity in the pricing policy, making it difficult to attract long-term customers to service packages For instance, the GEM Auchat service is priced at 250,000 VND for monthly registration and 240,000 VND for a six-month commitment, contributing to challenges in meeting sales targets and overall sales effectiveness.
The company offers two payment methods: cash payment and bank transfer To incentivize timely payments, large customers can benefit from a discount policy upon contract completion This approach not only enhances customer appreciation but also encourages on-time payments, leading to increased spending on the company's products and services Consequently, this strategy boosts revenue, enhances brand awareness, and improves overall sales effectiveness.
JSC applies is focused on the brand and product quality of the company, thereby helping customers evaluate the quality of the product compared to competitors in the market
2.3.3 The impact of Place strategies on Sale effectiveness at GEM
GEM's distribution channel is primarily organized through direct distribution, allowing for enhanced control over service quality Given the specialized nature and high technical requirements of its products and services, this direct approach ensures that customers receive a consistent and high-quality experience.
By leveraging a robust sales force and distribution channels, the company fosters direct relationships with both existing and potential customers This approach allows GEM to effectively meet market demands while gaining valuable insights into customer preferences Furthermore, it reduces circulation and consumption costs, enhancing price competitiveness and creating a significant competitive advantage, ultimately leading to improved sales effectiveness.
The direct channel may boost workload for salespeople and dilute resources due to moderate service production and consumption A lack of specialization can hinder sales effectiveness, while capital stagnation restricts market expansion and places all associated risks on the company.
GEM is actively developing indirect distribution channels that leverage artificial intelligence (AI) to provide automated customer advice This innovative approach allows customers to access the company's services through online platforms, eliminating the need for scheduled meetings with counselors By enhancing convenience for customers, GEM aims to attract a larger client base, ultimately boosting sales and improving overall sales effectiveness.
2.3.4 The impact of Promotion strategies on Sale effectiveness at GEM
GEM, an agency specializing in advertising and marketing, opts for cost-effective advertising through technology platforms like Google, Facebook, YouTube, Instagram, and LinkedIn instead of traditional television ads As a result, over 80% of customers are now aware of the company through these social media channels, significantly enhancing brand awareness and attracting more clients.
To enhance customer relationships and promote its products, GEM actively participates in technology product fairs, where it engages in direct marketing and consulting with customers about its services This strategy effectively boosts sales of the company's offerings.
To boost consumption and enhance sales effectiveness, GEM implements attractive promotions designed to draw in customers and increase profits The company offers incentives for customers making substantial payments, providing varying discount rates based on contract value—such as a 5% discount for contracts worth 200 million VND and discounts ranging from 7% to 10% for contracts exceeding 300 million VND Additionally, GEM engages in activities like offering free consultations on marketing strategies and providing complimentary analysis reports on digital marketing channels.
Thanks to the company's promotions has attracted a large number of customers and sales in those times spiked
In today's business landscape, where traditional advertising is becoming less effective, public relations is crucial for shaping a company's image and promoting its products and services However, GEM primarily concentrates on internal PR initiatives, fostering employee cohesion through various activities such as birthday celebrations, sightseeing trips, travel excursions, and holiday festivals.
At the end of each year, the company hosts a closing ceremony to recognize individuals with exceptional achievements and top sales performance This event serves as a significant motivator for employees, encouraging them to enhance their sales effectiveness.
This is one of the very practical activities to create a motivating environment for employees, improve the efficiency of production and business activities
GEM currently employs a team of 12-15 direct sales consultants, organized into specialized small teams, each responsible for a specific service This structure ensures high expertise in each GEM offering, allowing salespeople to effectively present the company's products and address customer needs This personalized approach is the primary sales strategy that significantly enhances GEM's sales performance Additionally, GEM has developed a user-friendly sales system on its website, enabling customers to easily browse the product catalog and pricing information.
Achievements and limitations of marketing mix solution on sales effectiveness
In its four years of operation, the newly established company has fostered a strong sense of unity among its leadership and employees, enabling it to navigate the challenges of market inexperience The management recognizes the crucial role of effective sales strategies in developing a suitable marketing mix and gaining a competitive advantage.
The company is dedicated to providing high-quality services that are meticulously researched and designed to meet customer expectations As part of its commitment to excellence, the company continuously develops new offerings to address the diverse needs of its clientele.
• The direct distribution channel system responds to the needs and answers customers' problems in a timely manner
• Advertising activities on social networking channels are effective, attracting many interested customers
• All services and all behaviors of employees are striving to perform the best way to serve customers
• Clear processes strategy helps customers and businesses more easily visualize the service
The company has launched specific marketing strategies through timely marketing information and market research Thanks to these achievements, the company's sales are constantly improving year by year
Besides the achievements, the company still has many limitations affecting the sales effectiveness over the years
Ineffective cost control in business activities, particularly in selling expenses, has negatively impacted the company's profits Additionally, rising costs have led to increased product prices, diminishing the company's price competitiveness in the market compared to its rivals.
• Company has not focused on external PR activities to build a reputation; Email-marketing activities have not brought high efficiency
To enhance sales effectiveness, companies must prioritize the recruitment and training of their Human Resources, as inadequate resource allocation and insufficiently qualified salespeople hinder performance A lack of focus on training programs has resulted in sales staff not fully understanding the products, making it challenging to persuade larger clients and leading to low conversion rates Addressing these issues is crucial for improving staff qualifications and boosting overall sales success.
• The company's brand is not big enough to convince large customers
In addition, infrastructure is also a weakness of the company when there is only