Critical analysis of the strategies adopted for the Fabulous Foods sales plan

1.0 Introduction

The sales plan drawn by Fabulous Foods presents a fairly balanced plan highlighting the strengths and weaknesses of the company, opportunities arising from the external environment, sales objectives, strategies for the achievement of those objectives and a forecast of the expected results. These are elements that must be present for a sales plan to be complete. This plan seems to emphasise on the use of relationship strategies. Relationship strategies tend to focus on the creation of value to customers where the focus is mainly on customer satisfaction and retention (Meyer and Kolbe, 2005). The advantages of this approach are therefore directly linked to the generation of customer loyalty. This strategy, when implemented well is can ably lead to the achievement of the goals set as far as sales projections and customer loyalty is concerned.  

2.0 Analysis of strategies identified

2.1 Summary of strategy proposed

The company’s sales plan points towards the improvement of their distribution systems by creating lasting relationships with leading retailers in the country. This is a move that could be interpreted as an attempt to create a symbiotic relationship between FF and the giant retailers where FF can benefit by attracting the attention of the regular shoppers of those retailers. The plan also proposes to engage in the social media in order to reach out to the end consumers. The social media is known to be very effective in creating relationships as it tends to be personal and those interacting tend to develop a certain bond which can be very effective in promoting brand loyalty (Kotler and Lane, 2006).

The use of the social media also helps in exerting peer pressure on individuals who may be undecided by getting them to appreciate that people in their social circle are already consuming and enjoying such products. The use of marketing campaigns emphasise interaction between the sales people and the end consumers have also been emphasised. The use of tasting campaigns where customers are made familiar with the taste of the jams is aimed at getting them accustomed to the taste and eventually turn them into loyal customers. There’s a special bond that is often generated between people when they are interacting directly and relationship marketing tends to aim at tapping into such bonds where sales people strive to create memorable experiences for the target consumers and have them associate their pleasant experiences with the products being marketed (Strauss, 2008). Personal interactions between the end consumers and the sales persons is to be enhanced by providing sales people on the shelves in the supermarkets to help in convincing the undecided consumers to buy the FF products.   

2.2 Essentials and advantages of relationship strategies

Relationship marketing, unlike other marketing strategies mainly focused on sales, emphasises customer retention and the creation of lasting relationships. The main aim is to create brand loyalty among the consumers and there are very good reasons for this. To begin with, loyal customers are easy to reach out to. It costs less to advertise to loyal customers. Where a company like FF which is known for its edge in innovation wishes to introduce new products into the market, the loyal customers of their brand become the first people to adopt such products and help in accelerating the process of their acceptance in the market. Research in marketing communications suggest that it takes about 7-8 repetitions of the same message before it attracts the amounts of attention that would provoke action among the audience (Kotler and Lane, 2006). This implies high costs in terms of marketing. However, the number of repetitions needed for the loyal customers is much lower and this means that relationship marketing gets cheaper in the long run.

Loyal customers are also known to be more profitable in the sense that they will always be willing to pay a brand premium. The creation of a loyal client base through relationship marketing makes organisations less prone to price competition. Customers will in many cases be willing to ignore price differences and opt for their preferred products (Meyer and Kolbe, 2005). This makes relationship marketing very rewarding in that it reduces the cost of marketing while at the same time improving profitability by enabling the organisations to charge slightly higher for the products. The third advantage of promoting customer loyalty through relationship marketing is that the loyal customers created become very influential agents of the company through their involvement in the word-of-mouth marketing (Sorce, 2002). This marketing method is known to be one of the most effective mediums of marketing communications. Consumers tend to take word of mouth from independent sources very seriously as such recommendations tend to be devoid of the motive to influence purchasing behaviour for personal gain (Meyer and Kolbe, 2005). These advantages of the focus on customer satisfaction and retention through relationship marketing make the strategy suitable for Fabulous Foods.

2.3 Limitations of the relationship strategy

Relationship marketing is not without faults. To begin with, it requires a massive investment in terms of human resources in the short term. Relationships are mainly created through continuous interactions and they in most cases require that the personnel involved have very good people skills (Paparoidamis, 2008). Such skills tend to be uncommon and the strategy may therefore fail in the absence of aggressive training of the personnel involved. The second limitation is that the approach tends to lack the capacity to facilitate rapid growth in sales. This is the reason why it cannot stand alone and needs to be used in conjunction with other strategies such as the product and customer strategies.

3.0 Conclusion and recommendations

Fabulous Foods sales plan predominantly dwells on the relationship strategy where the use of the social media, physical presence of salespersons on the counters and the organisation of tasting expositions have been emphasised. However, these approaches are insufficient in bringing out the desired results. Additional approaches could include the use of loyalty schemes, value addition through delivery and others (Sorce, 2002). Loyalty schemes tend to work well in cases where there are substantial discounts for continuous or bulk buying.

Emphasis on the use of this approach ignores the strategic strength that the company has in relation to innovation. Having won several awards in innovation, it would be expected that the company’s sales strategy would emphasise on its ability to satisfy customer needs better than competitors. Whereas this approach would not be effective when used alone, it would certainly contribute to the effectiveness of the relationship strategy. The use of the customer strategy where market segments with peculiar characteristics are identified and marketed to would also enhance the effectiveness of the relationship strategy (Sorce, 2002). For instance, focus on housewives would entail an evaluation of the communication mediums that would be most effective in reaching out to them and the facilitation of interactions that would help establish a bond. It is therefore imperative that a multifaceted approach be taken in the sales plans where several strategies are used in synergy to maximise the impact.

The sales plan by Fabulous Foods can lead to greater success if other strategies dealing with product and customer strategies are factored in. The plan as currently constituted can only lead to modest results and should be enriched in order to realise the desired effects.  

References

Kotler, P., Lane, K.K., 2006. Marketing Management. 12^th Ed. Pearson Education

Meyer, M., Kolbe, L.M., 2005. Integration of customer relationship management: status quo and implications for research and practice. Journal of Strategic Marketing, 13, pp. 175-198

Paparoidamis, N.G., 2008. An empirical investigation into the impact of relationship selling and LMX on salespeople’s behaviours and sales effectiveness. European Journal of Marketing. 43(7/8), pp. 1053-1075

Sorce, P., 2002. Relationship marketing strategy. (Online) Available at: http://www.edsf.org/file_download/998be9c8-4138-48b0-b398-758dae309fd2 (Accessed 24 April 2012)

Strauss, R.E., 2008. Marketing planning by design: systematic planning for successful marketing strategy. Hoboken, NJ: Wiley