Enterprises with strong financial potential will be able to equip modern machinery and technology. Because any investment in purchasing equipment must be calculated based on the financial situation of the enterprise, to ensure quality, reduce product costs, product selling prices, organize strong advertising and promotional activities to enhance competitiveness. In addition, with a strong financial capacity, enterprises are also able to accept losses for a short time to reduce product costs in order to maintain and expand market share for the enterprise to increase prices later, earning more profits.
Therefore, financial issues are always a matter of concern for managers. Not only that, in the economy, finance becomes a symbol of prosperity and competitiveness of each enterprise. A solid financial source will be the foundation for the enterprise, helping the enterprise gain the trust of customers.
1.1.2.3. Working environment
The operating environment includes factors within the industry and external factors for the business, determining the nature and level of competition in that industry. There are 5 basic factors: suppliers, competitors, potential competitors, substitute products, customers.
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- Supplier
Suppliers are very important to a business, they ensure that the business's operations are carried out stably according to a predetermined plan. In fact, suppliers are often divided into three main types:
- Supplier of equipment and materials
- Labor provider
- Provider of money and banking services, insurance…
So each business has relationships with many suppliers of the three types above at the same time. To ensure that the business's sales activities are carried out regularly and continuously, the problem is that the supply requirements must be sufficient in quantity, timely in time, guaranteed in quality and stable in price. Each deviation in the relationship with suppliers directly affects the business's sales activities and business performance.
- Competitors
Researching competitors is extremely important for businesses. Only when you have a thorough understanding of your competitors can you come up with appropriate strategies to create better, more outstanding products. Researching and analyzing competitors will help businesses understand the strengths and weaknesses of their competitors as well as better understand their own business situation. Thanks to that, you can plan and create effective business campaigns to help the company develop and always stand firm in the market.
- Potential competitors
Potential competitors are firms that are not yet present in the industry but may become competitors in the future when they enter the industry. When new firms enter the industry, they will try to exploit the new production capacity in the best way to gain market share. When new firms enter the industry, the profits of the firms will be shared. The entry of potential competitors is always a threat to the firm.
- Replacement products
Substitute products are products that can satisfy the same needs as current products, providing consumers with features and benefits similar to the business's products.
Therefore, substitute products are considered a threat to the operations of enterprises in the industry. Substitute products with more diverse features, uses, better quality but lower prices are dangerous substitute products. They can lead to the risk of reducing selling prices, reducing the number of products consumed and reducing the profits of enterprises, even completely eliminating current products. Substitute products are often the result of new technological improvements. Enterprises need to monitor the development trends of substitute products to fully identify the risks caused by substitute products.
- Client
According to Peter Drucker (American Management Researcher): “The only true goal of a business is the customer”. Therefore, in analyzing the business environment, it is impossible not to analyze the customer. This is the basis for businesses to grasp customer needs and create conditions to satisfy those needs in the best way.
Customers for any business must not forget that the customer is always right if the business wants to succeed and dominate the market. Customers who buy products from an industry or a business can reduce the profits of that industry, by demanding higher quality products or services, lower prices or perhaps by using one business against another.
1.1.3. Indicators for evaluating business sales activities
1.1.3.1. Plan completion target
The plan completion index is measured by the percentage between the amount of goods delivered and the
Actual sales out of total planned sales.
In there:
H ht : Complete the plan
Q tt : Quantity of goods sold in the period Q kh : Quantity of goods sold according to plan
1.1.3.2. Sales revenue
Sales is the number of products sold in a day, a month, a quarter or a year by a business. Sales is the total amount of money from sales activities in a certain period of time.
Apply revenue calculation formula:
TR = Q i * P i
In there
TR: Sales revenue.
Q i : Volume of goods i sold. Pi : Selling price of one unit of goods i.
Sales greater than costs show that the company is profitable.
High sales can bring many advantages to the company.
- Actual profit from business activities is the difference between total revenue earned and total expenses incurred by the business.
Π = TR – TC
Π: Profit achieved.
TR: Total revenue.
TC: Total cost.
- The greater the profit earned, the more effective the overall business operation and the greater the efficiency of the sales system, proving that the business's sales network is reasonable.
1.1.3.3. Selling expenses
The cost of goods sold indicator aims to determine the cost that the enterprise has spent to sell goods during the business period. The business process of a commercial enterprise includes purchasing and storing goods, organizing sales, and determining business results at the end of the period. Therefore, the enterprise needs to synthesize and calculate the cost of goods sold, purchase costs, management costs as well as sales revenue to determine business results.
Costs of commercial enterprise:
Total cost of sales, cost of sales items such as depreciation,
salary expenses, bank loan interest expenses.
Direct and indirect sales expenses, fixed costs, variable costs
Average labor capital used
Number of working capital turnover
Inventory cost
Cost of lost, unrecoverable goods
1.1.3.4. Market share
Market share is the portion of the product consumption market that a business occupies.
Market share = Sales revenue of the company / Total revenue of the market
Or Market share = Number of products sold by the enterprise / Total products consumed by the market
Market share shows the proportion of a company's own products sold compared to the total products sold in the market. To compete for market share against competitors, companies often have to have appropriate pricing policies through necessary discounts, especially when entering new markets.
In addition, consider relative market share.
Relative market share = Company's share of sales / competitor's share of sales
or Relative market share = Number of products sold by the enterprise / Number of products sold by the competitor
competitor
o If the relative market share is greater than 1, then the competitive advantage belongs to the business.
o If the relative market share is less than 1, the competitive advantage belongs to the competitor.
o If relative market share is 1, then the competitive advantage of the business and its competitors are the same.
Market share is the number one important concept in marketing and strategic management.
modern. The company that captures the largest market share will have the advantage of dominating the market.
Because of the strategy of gaining market share, many companies are willing to pay large costs and sacrifice other benefits. However, gaining a large market share also brings the company countless benefits.
1.1.3.5. Output of goods sold
The amount of goods sold during the period is determined by the formula
Q x = Q n +Q condition - Q ck
In there:
Q x : Volume of goods sold during the period. Q n : Volume of goods imported during the period. Q đk : Volume of goods in stock at the beginning of the period. Q ck : Volume of goods in stock at the end of the period.
1.1.3.7. Indicators for evaluating product consumption speed
K = (Ct+1) / Ct*100%
In there:
K: Product consumption rate.
Ct: Sales revenue last year.
Ct+1: Sales revenue this year.
K < 100%: This year's consumption is lower than last year's and the consumption rate is decreasing.
K = 100%: Consumption rate remains unchanged, business has not grown.
K > 100%: This year's consumption rate is greater than last year's, the business has
growth trend
1.1.4. Some sales policies of the enterprise
1.1.4.1. Product policy
According to Philip Koler (2002), "A product is anything that can satisfy a need or want and is offered to the market for the purpose of attracting the attention and purchase of consumers."
According to C. Marx: "A product is the result of the labor process that can satisfy certain human needs through buying and selling and exchanging on the market." In a market economy, people consider a product to be anything that can be applied to meet market needs and bring profits to businesses.
From the Marketing perspective, a product is considered a system that includes the physical aspects of the product, packaging, design, brand, etc., information from the manufacturer and business, and information from the market provided by customers.
For manufacturers and businesses, before bringing a product or service to market, it is not only about the production stage but also about researching the constant changes in customer demand.
Student: Nguyen Thi Thuy Thu 21
When considering product strategy, businesses need to consider the following issues:
- Are old products on the market accepted?
- Is the new product really new compared to the old product when it is launched on the market?
- Outstanding features of the new product compared to the old product
- Regulations on product quality
Depending on the type of product that the business chooses to make the most effective sales. Any product with quality and suitable price will attract the attention of customers and they will come back to buy the business next time.
1.1.4.2. Product pricing policy
Price in exchange is the monetary expression of the value of goods, and at the same time expresses economic relations such as supply - demand, accumulation and consumption, competition...
Pricing is one of the four most important components of the marketing mix, which includes product, price, place and promotion.
Pricing strategy in marketing is understood as the methods and research plans to determine the most attractive and competitive price for the business's products/services in the market. Pricing policy is not stable and long-term because the market changes, prices also change, forcing businesses to introduce new pricing policies to be accepted.
Price is very important because it will determine the profit of the business and then the survival of the brand, its impact is profound on many subjects of business life.
In practice, a firm can choose its pricing objective from among
following goals:
- Pricing to ensure a predetermined income level
- Pricing to target sales
- Pricing to maximize profits
- Pricing aimed at developing market segments
- Pricing aimed at competition
The company's pricing policy includes:
- One price policy
- Skimming price policy
- Penetration pricing policy
- Flexible pricing policy
- Introductory price policy
- Market price policy
1.1.4.3. Sales service
According to Mr. Bill Huigens, a specialist in the hotel service industry, “Perfect customer service is you, your business, giving relationships to customers; related to trust, loyalty, friendliness and respect.”
A good customer experience means you have provided good enough customer service and that service has completely met the customer's expectations.
On the other hand, poor customer service causes complaints, which leads to lost customers, reduced revenue, word of mouth about your poor service, and then they will turn to your competitors.
Businessmen consider sales service as a sharp weapon to compete and gain an advantage in the market. It can be seen that the service will help businesses sell more products and gain more profits. The service process supports before, during and after sales. Pre-sales service is to prepare for the sales market, advertising and introducing to attract customers' attention. Service during the sales process is to demonstrate quality and create trust and respect from customers. After-sales service is to create demand for customers.
1.1.4.4. Sales staff policy
People are the deciding factor in the success or failure of a business. A business with a good sales team will sell a lot of products. Sales staff are the external face of the business and have the most important direct influence on the buying behavior of customers. Sales forces are often divided into three types: