Project Report On Comprehensive Marketing Analysis Of Submitted in partial fulfillment of the requirements for the award of the degree of Bachelor of Business Administration (2007-2010) Submitted to: Submitted by: 1
Project Report
On
Comprehensive Marketing
Analysis
Of
Submitted in partial fulfillment of the requirementsfor the award of the degree of
Bachelor of Business Administration(2007-2010)
Submitted to: Submitted by:Dr. Rakesh Gupta Anshul AroraProject Guide Roll No: 0751921707
LALITA DEVI INSTITUTE OF MANAGEMENT & SCIENCES(Aff. to Guru Gobind Singh Indraprastha University)
1
ACKNOWLEDGEMENT
Nobody is born perfect in himself, it is some timely guidance, proper
teachings & blessings by the well wishers & seniors around us, who give
perfection & skills to make ourselves prepared for a walk on the path of
success. Through these lines I would like to extend my heartiest gratitude
for timely guidance & valuable information, which has contributed a lot
towards successful completion of my project.
I deem it a privilege to extend my special thanks to Rakesh Gupta
, my Project Guide for his whole-hearted support and valuable guidance,
which led to successful completion of my project. I am also thankful to my
colleagues and friends with whom I discussed the basic framework of this
project report and got several good ideas.
Hereby, I acknowledge the support of all.
Anshul Arora
BBA- 6th Semester
2
INDEX
Page No.
Reebok- History 5
Product Line, Product & Product’s Image 17
Organisational Structure & Organisational Structure 22
Advertising & Marketing 26
Swot Analysis 34
Buying & Selling Policy 39
Promotion 42
Training, Recruitment, Remuneration & Supervision 46
Selling Concept & Selling Methods 51
Layout & Display 55
Price Policy & Price Range 58
Sales Accounts, Cash Sales & Credit Sales 61
Achievements 63
Review 67
3
Name of
The Organization
4
DATE OF ESTABLISHMENT
AND
HISTORY OF THE ORGANISATION
The entire population of the world wears shoes. Once the
concept of wearing a pair of shoes was to protect the feet, but
as time passed, it became style. A lifestyle is the person’s
pattern of living in the world as expressed in activities,
interests and opinions. Lifestyle portrays the “whole person”,
interaction with his or her environment. Marketers have been
searching for relationships between their products and lifestyle
groups.
In an era of style, Reebok has created has created a niche
for itself among the young and old generation. It is a
multinational company that has become a part of peoples’
lifestyle around the world. In the case of the Indian population,
it has much interaction among the young generation.
Reebok, the leader of sports accessories in the world is a
well-known name in every household. It is one of the first
companies in the world to make shoes for special purposes for
5
example specially designed shoes for football, running,
basketball, cricket and tennis etc.
All the Reebok outlets in India and abroad are franchisees
and Reebok itself has a major role in their successful running.
Apart from these showrooms, it also supplies to retailers who
sell various other brands but it mainly concentrates in
franchisee showrooms.
Date of Establishment
Earlier there are a retain outlet in South Extension Part – II but
this retail outlet has been recently opened in South Extension
Part – I on 14th December 2001.
Normally the history of an organization is very important
aspect in the success of any retail outlet. Since Reebok has its
own brand image, which the company has built over the years.
This particular outlet has been able to attract a number of
customers through their attractive display and huge sales
promotional activities undertaken by Reebok itself.
6
Address and Location
The Reebok retail outlet, which I have chosen, is accessible to
the consumers who are living in South Delhi. The showroom is
situated adjacent to the Ring Road, at South Extension, Part I.
It is a huge showroom that keeps a wide range of shoes, and
other products. A number of people can be housed at the same
time on the floor of this Reebok showroom.
Address
Shop No. 5, Commercial Complex,
South Extension, Part-I
New Delhi.
The Franchisers of this showroom are
JEESE ENTERPRISES
Under agent – Teksons
7
TYPES OF RETAILERS
This Reebok showroom is a speciality store and is a
franchisee organization. The products are basically shoes,
apparels, sports equipment, health products etc. The horizon of
products is very limited, that is, there are only a few types of
product. According to the need of customers, specialty stores
are further divided into single-line stores, limited-line stores
and super-speciality stores. In today’s world, people love to go
and shop in a speciality store. In such a store, customers find
their own goods, although they can ask for assistance.
Customers complete their transactions by paying the cashier
for the item. The sales executives are kept to assists the
customers, who need assistance and information related to the
products.
Specialty Store: Narrow product line with a deep assortment,
such as apparel stores, sporting goods stores, furniture stores,
florists, and bookstores. A clothing store would be a single line
store, an men’s clothing store would be a limited line store, and
a men’s custom shirt store would be super specialty store.
Examples: Athlete’s Foot, Tall Men, The limited, and the body
Shop.
8
Franchise Organization: Contractual association between a
franchiser (manufacturer, wholesalers, service organization)
and franchisees (independent businesspeople who buy the
right to own and operate one or more units in the franchise
system). Franchising has been prominent in dozens of product
and service areas. Examples: McDonald’s, Subway, Pizza Hut,
Jiffy Lube, Meindke Muffers, 7- eleven.
The other various types of retailers around the world are:
Department Store: Several product lines—typically clothing,
home furnishing, and household goods—with each line
operated as a separate department managed by specialist
buyers or merchandisers. Examples: Sears, JCPenney,
Nordstrom, Bloomingdale’s
Supermarket: Relatively large, low—cost, low—margin, high –
volume, self-service operation designed to serve total needs for
food, laundry, and household maintenance products. Super
markets earn an operating profit of only about 1 per cent on
sales and 10 per cent on net worth. Examples: Kroger,
Safeway, Jewel.
9
Convenience store: Relatively small store located near
residential area, open long hours seven days a week, and
carrying a limited line of high turnover convenience products at
slightly higher prices. Many have added takeout sandwiches,
coffee, and pastries. Examples: 7-Eleven, Circle K.
Discount Store: Standard merchandise sold at lower prices
with lower margins and higher volumes. True discount stores
regularly sell merchandise at lower prices and offer mostly
national brands. Discount retailing has moved into specialty
merchandise stores, such as discount sporting goods stores,
electronics stores, and bookstores. Examples: All- purpose:
Wal-Mart, Kmart, Specialty: Circuit City, crown Bookstores.
Off-price Retailer: Merchandise bought at less than regular
wholesale prices and sole less than retail: often leftover goods,
overruns, and irregulars obtained at reduced prices from
manufacturers or other retailers.
Factory outlets are owned and operated by manufacturers and
normally carry the manufacturer’s surplus, discontinued or
irregular goods. Examples: Mikasa (dinnerware), Dexter
(shoes), Ralph Lauren ( upscale apparel).
10
Independent off-price retailers are owned and run by
entrepreneurs or by divisions of larger retail corporations.
Examples: Filene’s Basement, loehmann’s T.J.Maxx.
Superstore: Averages 35,000 square feet of selling
space traditionally aimed at meeting consumers’ total needs
for routinely purchased food and nonfood items. They usually
offer services such as laundry, dry cleaning, shoe repairs,
check cashing, and bill paying. A new group called “category
killers” carry a deep assortment in a particular category and a
knowledgeable staff. Examples: Borders books and Music,
Petsmart, Staples, Home Depot, IKEA, and the Super Bazar in
India.
Combination stores are a diversification of the
supermarket store into the growing drug-and-prescription field.
Combination food and drug stores average 55,000 square feet
of selling space. Examples: Jewel and Osco stores.
Corporate Chain store: Two or more outlets commonly
owned and controlled, employing central buying and
merchandising and selling similar lines of merchandise.
Strongest in department stores, variety stores, food stores,
drugstores, shoe stores and women’s clothing stores. Their size
11
allows them to buy in large quantities at lower prices, and they
can afford to hire corporate specialists to deal with pricing,
promotion, merchandising, inventory control, and sales
forecasting. Examples: Tower Records, Fayva, Pottery Barn
Retailer Cooperative: independent retailers who set up
a central buying organization and conduct joint promotion
efforts. Examples: Associated Grocers, ACE Hardware.
Consumer Cooperative: A retail firm owned by its
customers. In consumer coops residents contribute money to
open their own store, vote on its policies, elect a group to
manage it, and receive patronage dividends.
TYPES OF CUSTOMERS
A customer may be defined as a different set of persons
who may be differentiated according to their age groups,
tastes, choices and preferences, and buying power. There may
be different sets of customers. According to their age groups
the choices, tastes and preferences may differ in their
approach. For example, when we talk about a teenage girl and
a cricketer then their choices will be different in approach
12
depending upon their age group and the way they are living
their lives.
Humans are customers to the Industries. In the case of
Reebok a person who is willing to buy or wear a pair of Reebok
shoes is a customer.
Customers are increasingly expecting higher quality and
service and also some customization. They perceive fewer real
product differences and show less brand loyalty. They can
obtain extensive product information from the Internet and
other sources, permitting them to shop more intelligently. They
are showing greater price sensitivity in their search for value.
But in spite of this the Reebok outlet at South Extension
Part-1 has major customer penetration, says Mr. Navneet, the
manager of the outlet. This means the percentage of
customers who buy from the outlet again and again is very
high. Thus, they are loyal to the company and the product.
A business can be defined in terms of three dimensions:
customer groups, customer needs, and technology. Consider,
for example, a small company that defines its business as
designing incandescent lighting systems for television studios.
13
Its customer group is television studios; the customer need is
lighting; and the technology is incandescent lighting. The
company might want to expand into additional business. For
example, it could make lighting for other customer groups,
such as homes, factories, and offices. Or it could supply other
services needed by television studios, such as heating,
ventilation, or air conditioning. Or it could design other lighting
technologies for television studios, such as infrared or
ultraviolet lighting.
Similarly, once the customers of Reebok were
sportspersons and athletes. It used to manufacture shoes
especially for this customer group. That is why, during the
eighties, Reebok launched a variety of sports shoes, which
gained a huge amount of popularity around the world. But as
time passed the company shifted its customers from sports’
specific to young teenagers, and adults. These people were
influenced by the new “fashion era” and Reebok started to
cater to these people also. Thus, Reebok shifted from the
specialist sports shoe market to the fashion-oriented market.
Moreover, apart from shoes it extended its product range by
14
adding products like apparels, sports equipment and other
health products.
This particular outlet has been successful in capturing the
market of adults and the fashion conscious teens. In brief, the
customers of this Reebok outlet are of the effluent class. The
outlet has been successful in collecting a considerable amount
of knowledge over the time about their market, brand
popularity and customers. The outlet passes this information to
the company. The company intern accumulates various
manufacturing processes that are important to fulfill their
customer’s needs and desires.
NO. OF EMPLOYEES
Employees have an important value in any form of
business, as they are the ones who make a valuable
contribution to upgrade the sales turnover for any organization.
It is hard to believe that an American Company, which
has a number of outlets around the world, has only six
employees in this outlet who are able to manage everything
efficiently. Among these six employees one is the manager -
15
Mr. Navneet, and three are sales representatives - Mr. Dinesh,
Mr. Sanjeev and Mr. Vishal. There is also one cashier and one
security guard. The sales representatives are of middle age,
which handle the customer service for the consumers. One
more person has been recently recruited to increase efficiency
in sales.
16
Product Line, Product
&
Product’s image
17
PRODUCT LINE, PRODUCT
AND
PRODUCT’S IMAGE
Reebok is known for its product. As Reebok’s products fall
under specialty goods, it is important to know about specialty
goods.
Specialty goods are goods with unique characteristics
or brand identification for which a sufficient number of buyers
is willing to make a special purchasing effort. Examples include
cars, stereo components, photographic equipment, and men’s
suits.
A Mercedes is a specialty good because interested buyers
will travel far to buy one. Specialty goods do not involve
making comparisons; buyers invest time only to reach dealers
carrying the wanted products. Dealers do not need convenient
locations; however, they must let prospective buyers know
their locations.
18
The product line of a Reebok retail outlet generally
consists of sports accessories. The product line is divided into
four sections:
1) Shoes
2) Apparels
3) Sports equipment
4) Exercising / health products
1) Shoes
Reeboks specialty is their shoes. They vary from shoes for
every day use to professional footwear. The outlet has
around 4000 different types of shoes. The outlet also sells
floaters and sandals which have gained a tremendous
amount of popularity among the youth.
2) Apparels
These include T-Shirts & shirts, track suits, shorts, socks
& caps which a quiet popular among teenagers,
sportsmen and professionals.
3) Sports Equipment
Sport equipment includes like Cricket bats & balls, Tennis
balls and gymnastic equipment.
19
4) Exercising / Health Products
It also sells exercising / health products like dumbles &
weights, skipping ropes etc.
Recently Reebok has launched its Iverson Collection which
consists of Tees, Singlets and 13 play off Basket Ball shoes.
PRODUCT IMAGE
Buyers respond differently to different products. Hence
every company tries to develop distinctive images for their
brand. Apart from Reebok many other sport companies like
Nike, have succeeded in convincing millions of young
consumers that a shoe is not simply a shoe, it is an attitude.
Identity and image needs to be distinguished. Identity
comprises the ways that a company aims to identify or position
itself or its product. Image is the way the public perceives the
company or its products. Image is affected by many factors
beyond the company’s control. The fact that image can have a
life of its own is exemplified by Nike’s problems in maintaining
its appeal to the fickle youth market.
20
Now the market is following perfect competition. There
are numerous buyers and sellers with no single firm able to
influence market prices. It is assumed that products are
identical in every respect and that the firm accepts the price
set by the market. Hence, the company likes to differentiate its
product by using latest designs with comfort.
The Reebok symbol represents Vector – an animal similar
to the Cheetah which runs very fast.
21
Organizational Structure or
Organizational Pattern
22
ORGANIZATIONAL STRUCTURE
OR
ORGANISATIONAL PATTERN
To achieve the targets of the company, it is very important to
have a healthy organizational structure with direct
responsibilities and powers to the various departmental hearts.
It is now days, very difficult to handle the various departments
centrally, thus the practice has become to have various
departmental heads having their functions defined.
As far as organizational structure of a Reebok showroom is
concerned, it is very small. In the top level, there is one
manager whose role is to manage everything, right from sales
operations to handling grievances of customers and
employees. The manager himself handled both the selling and
purchasing departments. He exercises strategic supervision
and discharges his fiduciary responsibilities towards the
customers.
The middle level management consists of the sales
representatives and the cashier. The two sales representative
23
of the company look after the necessities of the customers. As
far as the customers of Delhi (who buy from them) are
concerned, are educated and do not need too much assistance.
Hence, the sales executives don’t face major problems in
selling the products.
The lowest level consists of the security. There is only one
security guard in the showroom. The manager says, “We do not
need more guards as there is no threat of any type within the
showroom.” This is the grassroot level of organizational
structure in case of this Reebok showroom.
24
ORGANISATION STRUCTURE
MANAGER
(Top level management)
SALES REPRESENTATIVES
(Middle Level Management)
SECURITY GUARD
(Low Level Management)
25
Advertising
&
Marketing
26
ADVERTISING & MARKETING
Advertising is omnipresent. It is every where. Advertising
is a powerful tool of business and marketing. But some others
say that advertising manipulates our needs and makes us buy
things, which we do not want.
Advertising is considered so powerful that doing business
today without advertising is like looking at a girl in a dark room.
Countering claims about the powerful persuasive nature of
advertising is one of the most notorious sayings in world of
advertising; “I know half the money I spent on advertising in
wasted; but I can never find which half.”
Advertisers spend huge amount of money on advertising.
In fact, the total estimated expenditure on advertising in India
in the year 2000 is projected to make the full contribution to
sales and profit. Well-planned and executed research is
essential to pinpoint assess within the advertising effort that
need improving. Otherwise mistakes or shortcomings in
advertising will badly affect sales measurements which are
thought to be a major yardstick for advertising effectiveness.
27
This would be true only when advertising is the dominant
contributor to sales, where sales response is immediate. But
since advertising does not work alone, sales record can not be
the role measure of advertising effectiveness. So evaluate
methods of measuring advertising effectiveness are adopted.
Reebok, the U.S. Company, has been advertising and
marketing since its inception. Reebok undergoes a tremendous
amount of advertising through television, video, newspapers
and magazines etc. Thus, the company itself promotes the
various outlets. Reebok uses many cricketers like Rahul
Dravid, Yuvraj Singh, Dinesh Mongia for its advertisements in
TV, Newspapers, magazines, and video etc. Through such an
advertising strategy, Reebok has been able to influence the
young generation in a big way.
Recently, Reebok has undergone a major advertising
campaign to launch its “Iverson Collection”. For promoting this
campaign, company has signed Dinesh Mongia, the new cricket
star who has gained tremendous amount of popularity in such
a short span of his career.
Specimens of advertisements by Reebok are given in the
following two pages
28
In the case of the retail outlet
The retail outlet itself also does advertising which is
mainly done through hoardings, boards and local
newspapers.
29
MARKETING MIX
Marketers use numerous tools to elicit desired responses
from their target markets. These tools constitute a marketing
mix.
Marketing mix is the set or marketing tools that firm
uses to pursue its marketing objectives in the target market.
McCarthy classified these tools into four broad groups
that he called the four Ps of marketing: product, price, place,
and promotion. The particular marketing variables under each
p are shown in figure.
30
The Four P components of the Market Mix
Marketing Mix
Product
Product
variety
Quality
Design
Features
Brand Name
Packaging
Sizes
Target
Market
Price
List Price
Discounts
Allowances
Payment
Period
Promotion
Sales
Promotion
Place
Channels
Coverage
Assortments
Locations
Inventory
Transport
31
Services
Warranties
Returns
Credit Terms Advertising
Sales Force
Public
Relations
Direct
Marketing
Marketing mix decisions must be made for influencing
the trade channels as well as the final consumers. The Figure
above shows the company preparing an offering mix of
products, services, and prices, and utilizing a promotion mix of
sales promotion, advertising, sales force, public relations,
direct mail, telemarketing, and Internet to reach the trade
channels and the targets customers.
Typically, the firm can change its price, sales force size,
and advertising expenditures in the short run. It can develop
new products and modify its distribution channels only in the
long run. Thus the firm typically makes fewer period-to-period
marketing-mix changes in the short run than the number of
marketing –mix decision variables might suggest.
Note that the four Ps represent the sellers’ view of the
marketing tools available for influencing buyers. From a
32
buyer’s point of view, each marketing tool is designed to
deliver a customer benefit. Robert Lauterborn suggested that
the sellers’ four Ps correspond to the customers’ four Cs.
Four Ps Four Cs
Product Customer solution
Price Customer cost
Place Convenience
Promotion Communication
Winning companies will be those who can meet customer
needs economically and conveniently and with effective
communication.
The marketing mix of Reebok has a focused market. It
also has been campaigning on the product, price, promotion
and place.
33
SwotAnalysis
34
SWOT ANALYSIS
Internal Environment Analysis (strengths/weaknesses
Analysis)
This is one thing to decide attractive opportunities and
another to have the competencies to succeed in these
opportunities. Each business needs to evaluate its internal
strengths and weaknesses periodically. It can do so by using a
form like the one shown in the marketing Memo “Checklist for
Performing Strength/Weaknesses Analysis”. Management—or
an outside consultant—reviews marketing, financial,
manufacturing and organizational competencies and rates each
factor as a major strength, minor strength, neutral factor,
minor weakness, or major weakness.
Clearly, the business does not have to correct all its
weakness, nor should it gloat about all its strengths. The big
question is whether the business should limit itself to those
opportunities where it might have to acquire or develop certain
strengths. For example, managers at Texas Instruments (TI)
split between those who want TI to stick to industrial
electronics (where it has clear strength) and those who want
35
the company to continue introducing consumer electronic
products (where it lacks some required marketing strength).
Sometimes a business does poorly not because its
departments lack the required strengths but because they do
not work together as a team. In one major electronics
company, the engineers look down on the salespeople as
“engineers who couldn’t make it”, and the salespeople look
down on the service people as “salespeople who couldn’t make
it”. It is therefore critically important to assess
interdepartmental working relationships as part of the internal
environmental audit.
Strength
Reebok’s name has excellent branding and a high quality
image. People buy Reebok because its quality and
reliability. Consumers know they will get satisfaction by
wearing this brand.
Dealers and salesman who sell Reebok’s product are
knowledgeable and well trained in selling
36
It has an excellent service network. This enables the
outlet to stay ahead of competition, both in terms of
quality and pricing by ensuring timely supply of each and
every item needed in the showroom.
Teenagers and the young generation are crazy about this
product.
Reebok has its factory situated in Bijwasan, N.Delhi. This
helps to cut down the cost of production, which in turn
reduces the price of the products, as the company
doesn’t have to import their products from outside.
Weaknesses
It faces a lot of competition like Nike, Power, Phoenix etc.
In some places it has not been able to compete with the
Indian sports shoe manufactures because of it’s high
prices.
Its high prices have limited their range of customers.
Reebok caters to only the higher middle class and top
class of the society.
37
Opportunity
The fickle and design. This is because of the conscious
nature of the target market of young teenagers and
adults who like to buy the latest fashions.
Moving from the specialist sports shoe market to the
young and adult market.
New and innovative sports shoe designs.
Threat
The biggest threat is the popularity of other
manufactures.
For example: Companies like Nike have given major
sponsorship for cricket and other sports. Nike has also bought
the television rights for many cricket tournaments over the
years. Reebok has to increase its popularity on a regular basis.
38
Buying
&
Selling Policy
39
BUYING & SELLING POLICY
The Buying and Selling policy of this Reebok showroom
to be very simple. However, it would be better to know some of
the sales models used by various companies. Following are the
four models:
Models
1. Markov-process model: This model shows the
probability of moving from a current state to any future
state. Example: A branded packaged-goods manufacturer
can determine the period to period switching and staying
rates for her brand and, if the probabilities are stable, the
brand’s ultimate brand share.
2. Queuing model: This model shows the waiting times and
queue lengths that can be expected in any system, given
the arrival and service times and the number of service
channels. Example: Supermarkets can use the model to
predict queue lengths at different times of the day given
the number of service channels and service speed.
3. New-product pretest models: This model involves
estimating functional relations between buyer states of
40
awareness, trial, and repurchase based on consumer
preferences and actions in a pretest situation of the
marketing offer and campaign. Among the well-known
models are ASSESSOR, COMP, DEMON, NEWS, and
SPRINTER.
4. Sales-response models: This is a set of models that
estimate functional relations between one or more
marketing variables—such as sales force size, advertising
expenditure, sales-promotion expenditure, and so forth—
the resulting demand level.
Although, this unit is not using any special model of sales,
but it maintains its record on sales. They daily update their
accounts regarding their buying and selling.
41
Promotion
42
PROMOTION
Promotion includes all the activities the company
undertakes to communicate and promote its products to the
target market. Atlas has to hire, train, and motivate
salespeople. It has to set up communication and promotion
programs consisting of advertising, sales promotion, public
relations, and direct and on-line marketing.
The principal objective of the outlet is sale-promotion.
Sales-promotion objectives are derived from broader promotion
objectives, which are derived from more basic marketing
objectives developed for the product. The specific objectives
for sales promotion vary with the target market. For
consumers, objectives include encouraging purchase of larger-
size units, building trial among nonusers, and attracting
switchers away from competitors’ brands. For retailers,
objectives include persuading retailers to carry new items and
higher levels of inventory, encouraging off-season buying,
encouraging stocking of related items, offsetting competitive
promotions, building brand loyalty, and gaining entry into new
retail outlets. For the sales force, objectives include
encouraging support of a new product or model, encouraging
43
more prospecting, and stimulating off-season sales. See the
Marketing Memo “Sales Promotions as Brand Builders”.
Coupling the new Nike Air shoe with advertising featuring
Michael Jordan was a touch of marketing inspiration. The US
basketball star, top of his chosen sport, was signed up to
promote the new product in a multimillion- dollar deal that
added a new dimension to sports sponsorship. The marketing
campaign developed links between Nike and Jordan’s athletic
ability and image. Reebok hit back with its own design, the
Reebok Pump shoe, but it was forced to use Shaquille O’Neal, a
major basketball star but second to Michael Jordan. Thus
around the turn of the decade, Nike’s market share rose from
25 percent in 1989 to 28 percent to 21 percent.
Building on this success, Nike realized that such
promotion provided powerful support for the brand. Over the
next few years, this was enhanced by the heavy funds Nike
was prepared to invest. For example, in 1995 Nike invested
almost US$1 billion in sports marketing compared with
Reebok’s spending at around US$400 million. This investment
in sports marketing was much higher than previous sums. It
44
was developed after Nike had assessed the results of its heavy
advertising campaigns earlier in the 1990s.
45
Training,
Recruitment, Remuneration
&
Supervision
46
TRAINING, RECRUITMENT,
REMUNERATION & SUPERVISION
“Training refers to the teaching / learning activities
carried on for the primary purpose of helping members of the
organisation to acquire and apply the knowledge, skills,
abilities & attitude needed by that organisation”
Many companies send their new representatives into the
field almost immediately, supplied with samples, order books
and a description of the territory. Much of their selling is
ineffective. A vice president of a major food company once
spent a week watching 50 sales presentations to a busy buyer
for a major supermarket chain. Here is what he observed:
The majority of salesmen were ill prepared, unable to
answer basic questions, uncertain as to what they wanted to
accomplish during the call. They did not think of the call as a
studied professional presentation. They didn’t have a real idea
of the busy retailer’s needs and wants.
47
Today’s customers expect salespeople to have deep
product knowledge, to add ideas to improve the customer’s
operations, and to be efficient and reliable. These demands
have required companies to make a much higher investment in
sales training.
Today, new sales reps may spend a few weeks to several
months in training; the median training period is 28 weeks in
industrial-products companies. Training time varies with the
complexity of the selling task and the type of person recruited
into the sales organization. At IBM, new reps receive extensive
initial training and may spend 15 percent of their time each
year in additional training.
Sales training programs have several goals:
Sales representatives need to know and identify with the
company.
Sales representatives need to know the company’s products.
Sales representatives need to know customers’ and
competitors’ characteristics.
Sales representatives need to know how to make effective
sales presentations.
48
Sales representatives need to understand field procedures
and responsibilities.
Reebok does train its employees with the help of latest
techniques like cassette tapes, videotapes, CD-ROMs etc. A
trainee can practice sales calls with a screen actor who
portrays a buying executive in a particular industry. The actor –
buyer responds differently depending on what the trainee
says.
Recruitment is the process of discovering sources of
manpower to meet the requirement of staffing schedule and to
employ effective measures for attracting that therefore
manpower in adequate numbers to facilitate effective selection
of an efficient working force.
Recruitment is carried out through common sources -
Such as:-
Advertisements,
State employment Exchange Agencies
Private employment Agencies
Present Employees.
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Reebok outlets generally recruit its employees through
Advertisements, Private employment agencies and Present
employees.
Remuneration
The salary of the salesman is decided both by the owner
and the manager of the outlet on the basis of their experience,
capabilities, way of talking and presenting the product to the
customers and way of convincing the customer etc. Above all
this work performance of a salesman decides what salary he
may get.
The salesmen are also given commission if they exceed the
target sale. Bonus is also given to the salesmen once a year on
Diwali.
Supervision
The manager Mr. Navneet does the work of supervision. He
keeps a regular check whether the customers have any
problems with the salesman. He sees to that the salesman
treats every customer equally and nicely.
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Selling Concept
&
Selling Methods
51
SELLING CONCEPT AND SELLING METHODS
THE SELLING CONCEPT
The selling concept holds that consumers and
businesses, if left alone, will ordinarily not buy enough of the
organization’s products. The organization must, therefore,
undertake an aggressive selling and promotion effort.
This concept assumes that consumers typically show
buying inertia or resistance and must be coaxed into buying. It
also assumes that the company has a whole battery of
effective selling and promotion tools to stimulate more buying.
The selling concept is practiced most aggressively with
unsought goods, goods that buyers normally do not think of
buying, such as insurance, encyclopedias, and funeral plots.
These industries have perfected various sales techniques to
locate prospects and hard-sell them on their product’s benefits.
The selling concept is also practiced in the nonprofit area
by fund-raisers, college admissions offices, and political parties.
A political party vigorously “sells” its candidate to voters. The
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candidate moves through voting precincts from early morning
to late evening, shaking hands, kissing babies, meeting donors,
and making speeches. Countless dollars are spent on radio and
television advertising, posters and mailings. The candidate
flaws are concealed from the public because the aim is to make
the sale, not worry about post purchase satisfaction. After the
election the new official continues to take a sales-oriented
view. There is little research into what the public wants and a
lot of selling to get the public to accept policies the politician or
party wants.
Most firms practice the selling concept when they have
over capacity. Their aim is to sell what they make rather than
what the market wants. In modern industrial economies,
productive capacity has been built up to a point where most
markets are buyer markets (the buyers are dominant) and
sellers have to scramble for customers. Prospects are
bombarded with TV commercials, newspaper ads, direct mail
and sales calls. At every turn, someone is trying to sell
something. As a result, the public often identifies marketing
with hard selling and advertising.
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But marketing based on hard selling carries high risks. It
assumes that customers who are coaxed into buying a product
will like it; and if they don’t, that they won’t bad-mouth it or
complain to consumer organizations and will forget their
disappointment and buy it again. These are indefensible
assumptions. One study showed that dissatisfied customers
may bad-mouth the product to 10 or more acquaintances; bad
news travels fast.
Selling Methods
Direct selling: At this showroom of Reebok only direct counter
sales takes place. No commodity is sold on our installment
basis. No credit sales take place and there is no home delivery
service.
In case of counter sales, first of all the bill is made, of which
one receipt is given to the customer and the other is with the
cashier, who after checking the total article purchased by the
customer and counting the total amount of the bill, will give the
delivery. No orders are accepted through telephone or mail
order service. Credit cards like Visa, American Express etc. are
accepted.
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Layout &
Display
55
LAYOUT AND DISPLAY
Layout and display are among the most important factors
of sales promotional activities. It is done to attract and catch
the eyes of the people about the kind of products and variety
of products in which the outlet engages. Layout includes the
interior display of goods. On the other hand, display or window
dressing is the exterior show up of the outlet.
The moment we enter this outlet all we think about is –
SPORTS. There is a huge display board at the entrance, which
is very colorful and attractive.
The customer/visitor is so stunned by seeing the display
of the product that they hardly consult the sales executives.
The outlet adopts the powerful mode of visual presentation
rather than scripts. Visual presentation is much powerful than
any printed material.
Shoes are kept on attractive racks so that the customer
can touch, feel and try out the shoes. There are three or four
mannequins, which are dressed attractively with apparels
made by Reebok. Shirts and shorts are also on racks and there
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is also a try room where the customer tries out the garments.
Thus the customer can be fully satisfied by trying out
everything which he buys from the showrooms.
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Price Policy
&
Price Range
58
PRICE POLICY AND PRICE RANGE
Price Policy : Price policy calls for the producer to establish a
price list and schedule of discounts and allowances that
intermediaries see as equitable and sufficient.
Price Decision
Prices are a key positioning factor and must be decided in
relation to the target market, the product-and-service
assortment mix, and competition. All retailers would like to
achieve high volumes and high gross margins. They would like
high Turns x Earns, but the two usually do not go together.
Most retailers fall into the high-markup, Earns, but the two
usually do not go together. Most retailers fall into the high-
markup lower-volume group (fine specialty stores) or the low-
markup, higher-volume group (mass merchandisers and
discount stores). Within each of these groups are further
gradations. Thus Bijan’s on Rodeo Drive in Beverly Hills prices
suits starting at $1,000 and shoes at $400. At the other
extreme, Odd Lot Trading in New York City is a superdiscounter
that sells odd lots and closeouts at prices below those of
normal discounters.
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Retailers must also pay attention to pricing tactics. Most
retailers will put low prices on some items to serve as traffic
builders or loss leaders. They will run storewide sales. They will
plan markdowns on slower-moving merchandise. For example,
shoe retailers expect to sell 50 percent of their shoes at the
normal markup, 25 percent at a 40 percent markup, and the
remaining 25 percent at cost.
Some retailers have abandoned “Sales pricing” in favor of
everyday low pricing (EDLP). EDLP could lead to lower
advertising costs, greater pricing stability, a stronger image of
fairness and reliability, and higher retail profits. General
Motors’ Saturn division states a low list price for its cars and its
dealers don’t bargain. Wal-Mart also practices everyday low
prices. Feather cites a study showing that supermarket chains
practicing everyday low pricing are often more profitable than
those practicing sales pricing.
Price Range : The price range of this Reebok Retail Outlet is
different in the case of apparels and shoes. For apparels the
price range is from Rs. 379 to 1400. In the case of shoes price
range is from Rs. 990 to Rs. 7990.
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Sales Accounts, Cash Sales
&
Credit Sales
61
SALES ACCOUNTS, CASH SALES
AND CREDIT SALES
In this Reebok outlet, the cash book is a self record and all the
sales proceeds are entered into the cash book. The auditor
annually checks these entries of accounts at the end of every
financial year. No discount is given to the customers as Reebok
has fixed prices. This outlet also does not carry out credit sales.
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Achievements
63
ACHIEVEMENTS
As a retail outlet :
Since the history of this retail outlet is very small, its
major achievement is attracting almost all type of customers is
such a short time. Another achievement of this outlet is that
customers come to this outlet not only to buy shoes but
apparels and other sports accessories. Customers of South
Extension now know that they will be satisfied if they buy from
this outlet as they can buy original Reebok products. Moreover,
the customer can try out whatever he buys. Thus the outlet has
achieved a good name in the market.
As a company:
Nike was profitable and continuing to develop its role as a
specialist US sports shoe manufacturer with no production
facilities in its home country. Then along came competition in
the form of a new sports shoe manufacturer, Reebok. From a
start-up company in 1981, Reebok went into battle against
Nike under its founder and chief executive, Paul Fireman.
Reebok launched a strong and well-designed range of sports
shoes with great success. By the mid-1980s, Reebok had
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equalled Nike’s annual sales in a fierce competitive battle. In
1987, Reebok was clear market leader with sales of US$991
million and a market share of 30 percent, compared with Nike
sales of US$597 million and a share of 18 percent.
Part of the problem and opportunity for both
manufacturers was the fickle and design-conscious mature of
the target market: young, hip teenagers and adults buy the
latest fashions. Both Nike and Reebok realized that, in order to
build volume, it was necessary to move from the specialist
sports shoe market to wider adoption by this much target,
fashion-aware teenage and young adult market. This was the
battleground that was initially captured by Reebok with good
products and a campaign of public relations that was highly
disrespectful of Nike. Mr. Fireman criticized Phil Knight as being
‘just a shoe guy’ who saw himself as being ‘a big-time presence
in sports’. In response, Mr. Knight responded by saying that he
‘hated’ his competitor and that ‘the most innovative piece of
R&D equipment they have is the copy machine’. One author of
a book on Nike commented: ‘Paul Fireman was installed as a
devil figure inside Nike, and he remains a dark presence to this
day’.
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To hit back against Reebok, Nike then began to invest
considerable sums on developing new and innovative sports
shoe designs. The most successful of these was begun in the
late 1980s, the Nike Air shoe. ‘It was an intuitively simple
technology to understand’, said John Horan, publisher of sports
Goods Intelligence, a US industry newsletter. ‘It’s obvious to
consumers that if you put an airbag under the foot, it will
cushion it’. But it was not until 1990 that the Nike Air shoe was
launched and began to deliver success for Nike. Thus the
1980s were both the decade of difficulty and the time for
renewal. Nike had learned about the heat of competition and
the need for innovation and continual R&D in its shoe designs.
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Review
67
REVIEW
Reebok has been successful in maintaining its brand
image and brand positioning among the Delhites and the Indian
Consumer. But, there is a wide range of Indian population who
prefer to buy and wear Indian shoes as they are available at
cheaper prices. In spite of this the Reebok outlet in South
Extension is considerably doing well as far as sales is
concerned.
The outlet has been able to live up to the expectations of
consumers as far as quality and service is concerned. On the
other hand the management has been able to run its operation
in the minimum possible cost; for example employing only
three sales representatives who handle all the sales
themselves.
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BIBLIOGRAPHY
www.reebok.com
http://en.wikipedia.org/
http://books.google.co.in/
www.google.com
www.topmensmagazines.com
Various first hand data provided by personnel at Reebok
Showroom, South-ex
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