This essay describes an advertisement plan of Wincomp technologies, an authorized dealer for Hp (Hewlett-Packard) products in USA. Wincomp mainly sells and supplies computers and internet appliances for both office and home use. The first part of this essay discusses the six steps of developing an advertisement plan and the second part focuses on the most effective sales strategy that can be adopted and implemented by Wincomp.
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Step one: Projected sales
The first step in creating a firm’s budget involves the creation of a sales budget which predicts the total expected income sales and projected sales of the firm for the next fiscal year (Willings, 1925, p46). The graph below shows the annual sales of previous years and it will assist us in projecting the next financial year’s sales.
The annual sales increased by 3.5 percent (from $6,000,000 to $6,210,000) in 2010 and by 4 % (from $6,210,000 to $6,458,400 in 2011). Considering the same rate this year’s, 2012, sales will increase by 4.5% totaling to $6749028 i.e.
Projected net increase: 4.5% × $6,458,400 = $290,628
Total sales: $6,458,400 + $290,628 = $6,749,028
The actual percentage increase is developed by a formula that is explained in the second part of this article under sales forecasts.
Step two: Advertisement
Television and radio advertisements are the most common in this industry and just as any other advertisement media, it also has its merits and limitations. Marketers have developed a believe that the larger the number of people listening to, or viewing an advert the more effective the advert is.
At Wincomp we have discovered that this form of advertisements only leads to wastage of resources since only a small number of the entire population is interested. The wastage of resources is caused by the extremely expensive cost charged by the stations. Another dark side of this form of advertising is brought about by the inconsistency in the time the adverts are aired sometimes in the middle of programs or at the end by it is never consistent and the limited time in that, most adverts last for less than a minute.
Step Three: The most effective mode of advertisement
We are currently in the information age and the internet is the main source of information. The most effective mode of advertising in the current society would be via the internet using web banners. Some social networking websites such as facebook, twitter and my space have millions of registered members and advertising on this websites not only targets a large number of people but also helps in focusing on a certain group of in the larger population.
For instance, an advert may be customized to appear only on the walls of friends in facebook or twitter. The targeted customers can also be informed by advertising on websites that focus on specific fields and issues e.g. business related websites, institutional websites, blogs etc.
Step four: Wincomp advertising media
Wincomp has been advertising its products via the internet on several websites but most of these sites are not accessed by a significant number of people hence its limitations.
Step five: affordable advertisement media
Print media is an effective and the most affordable advertisement media that Wincomp can adopt. This includes business cards, magazines and news papers. Magazines that focus on electrical gadgets would the best and in the case of news papers the front or back page would work best.
Step six: measurement of success
The success of the advertisement at Wincomp is measured by a percentage increase in sales income. According to the projected sales mentioned earlier, a 4.5% increase is expected.
This is simply a plan that outlines how a firm can reach its customers with the aim of convincing them to buy their products (Wallace and Stahl, 2002, p 2). For this to be achieved, one needs to develop a sales budget, sales forecast and a sales presentation.
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The formula for calculating sales fore cast is written below.
Fore cast = no. of customers × purchases frequency (p.a.) × avg amount per purchase
The five percent increase in sales that Wincomp experienced in 2011 was calculated in the same manner. According to the records of Wincomp at the end of 2011, there were a total of 21528 customers, the frequency of purchases was 3times per annum and the average cost of every purchase was $100. Therefore the sales forecast would be
214528 × 3 × $100 = $6458400
N/B: This is amount is equal to the projected sales in figure 2 above
One unique thing about a sales budget is that it contains both the units expected to be produced and the estimated amount. In our case it’s the units received from the supplier, hp, not the units produced. The sales budget of most companies ranges from 5% to 10% of the total revenue.
|Wincomp technologies |
For the year ended 31-12-11
|Marketing and advert expenses||225000|
|Salaries and commissions||102500|
|Percentage of sales budget over the total revenue||7%|
The main aim of Sales presentation is to convince customers to choose your product over the others in the market (Shook, 1986, p 93). Most presentations are usually done using power point and they simply explain the additional benefits that a buyer enjoys from the products. Some of the things that one should consider and the steps to follow are discussed below
Steps to making a typical
The first step involves the collection of all relevant information about the target group and determining the most appropriate method approaching them.
Under this step things like consumption patterns, purchasing power and demographic distribution of the customers are considered. The next step involves inspiring and educating the end consumers about the products and their benefits over others in the market. Elimination of all hindrances that may make the consumer think otherwise about buying the products. The last step is the monitoring and evaluation step to ensure that the newly acquired customers are retained.
The success of any business is largely determined by the amount of profit the firm makes from its operations. For this to be achieved the firm needs to have and effective advertisement plan and a sales strategy as discussed in this essay.
Shook, R. L. (1986). The perfect sales presentation. Toronto: Bantam Books.
Wallace, T. F., & Stahl, R. A. (2002). Sales forecasting: a new approach : why and how to emphasize teamwork, not formulas, forecast less, not more, focus on process improvement, not forecast accuracy. Cincinnati, Ohio: T.F. Wallace & Co..
Willings, G. C. (1925). Sales budget practices and principles. New York, N.Y.: American Management Association.