Internal Factors affecting sales of a product: 5) Presence in multiple formats especially in E-commerce, 6) Ability to tap ‘Digital Footprints’ customers. With the advent of technology, the sellers are increasingly leaning towards providing more and more customised solutions to the consumers. It provides clues as regards their age, sex, income, and capacity to incur expenditure on the satisfaction of their wants. The literature on the front end in the New Product Development (NPD) literature is fragmented with respect to the identification and analysis of the factors that are critical to successful product development. The country’s unique political and legal landscape within which organizations function. References & Where to Learn More: The specific pronouncements of laws regarding the legality of the product, minimum pricing requirements, taxes and advertising restrictions affect the sales of a product in that particular country. The definition of product quality may be rather wide as it is a nebulous concept. Organizations or more specific business organizations, and their activates are always being affected by the environment. The marketer should consider various consumer factors while fixing the prices. Volatile and risky, and a savvy manager must be agile to sidestep a cascading macroeconomic crisis to keep the company intact. Like other forces in the … Dominant factors affecting channel selection are discussed below: 1. Some of the important factors influencing industrial productivity are : (i) Technological Development (ii) Quality of Human Resources (iii) Availability of Finance (iv) … Required fields are marked *, Copyright © 2020 Marketing91 All Rights Reserved, 10 Amazing Cold Calling Tips and Advice For Closing Prospects, What is Sales Enablement? Marginal Product: Definition and Examples of Marginal Product Explained, Ways To Sell A Product - Top 10 Ways To Sell A Product, 10 factors which determine a good sales personality, 6 Factors influencing structure of Sales organization. Scrap and rework losses have become serious. Your email address will not be published. These are the factors affecting sales of product due to interplay of broad economic, political, technological, and competition forces and can significantly affect the sales of the products of a company. February 21, 2018 By Hitesh Bhasin Tagged With: Sales management articles. Most important factor affecting the quality of a product is the money involved in the production itself. internet-based selling has become a significant factor affecting the sales of a company. Hence this stage does affect consumer behaviour. The effects of this are quite visible. There are numerous factors that affect an organization or the management. 3. You can extend social courtesies as a token of goodwill; this would move the negotiation towards an agreement. Organizations need to motivate employees positively and retain specialized talent. You can reduce your labour costs by using convenience foods. External Factors affecting sales of a product : 1) Consumers and institutional buyer expectations, How to Learn New Skills? Internal & External Factors That Affect an Organization. These internal factors affecting sales of a product include: The largest single critical factor determining the company’s sales growth is the product itself. These are the factors within an organization that can be controlled and affect the immediate area of an organization’s operations. This has led to the emergence of many niche markets leading to the subdivision of markets in many smaller, specialised segments that may affect the sales of the products of the company. Any manufacturer or seller has to adhere to the demands of the laws and statues of the country where he sells his products. Process of Sales Enablement. Burberry has more than 500 stores that operate in more than 20 countries. Volume. In the present day of tough and cut throat competition, companies are forced to invest a lot in maintaining the quality of products. This can make a huge impact on the sales of a product. Apart from carbonated drinks and diet drinks, now fruit juices, flavoured water, energy drinks like Red Bull and packaged coconut water are also competing for the consumer’s attention. During a recession, the economy contracts, the money supply shrinks and so do the demand and supply of a product. One of the easiest and fastest ways to adjust profit margins is to adjust the sale price of a product or service. The market position of the competitors’ products determines the sales of the manufacturer’s product in a market. Foods prepared on site require more preparation than similar menu items made with convenience foods, such as pre-portioned meats or desserts. Choosing a place like your own office has many advantages: 1. The largest single critical factor determining the company’s sales growth is the product itself. Examples of these factors include enterprise risk management, 1 multidivisional structures of organizations, 2 CEO charisma, 3 stakeholders’ involvement and support, 4 intellectual capital, 5 human capital, 6 CEOs’ social networks, 7 organizational learning, 8 the strategic integration of human resource management, 9 managerial practices related to strategies, performance measurement, corporate … What is Sales Prospecting & its role in Sales? Presence in E-commerce i.e. The compan… Hence, as against the clear market leader position enjoyed by Coca-cola some years ago, the company has to compete against various niche products. The study of demographic factors is of vital importance for marketers. First, it describes, analyses, and synthesizes those factors through a literature review of the research on the front end in NPD. With the age and the life cycle the consumers purchase options and the motive of purchase changes, with his decisions of buying products change. Organizations recognize that it is in their own interest to keep consumers happy. External factors can also be termed as ‘Macroeconomic Factors’ or ‘Market Changes’. Human Factors Affecting Productivity Your people keep your business running, so their well being and ongoing training are essential for optimum productivity and profitability. The article has a two-fold purpose. The problems are solved and decisions are implemented through established policy directives, rules and procedures.Non-programmed decisions are mode in unique circumstances and the results of such decisions are often unpredictable. You can follow me on Facebook. Competitors affect profits by trying to divert business. 5. The 8 key factors involved in new product development are Knowledge Management, Market Orientation, New Product Development Process, New Product Development Speed, New Product Development Strategies, New Product Development Teams, Technology and Top Management Support. However, you must consider two other factors: convenience foods can increase your food costs and may affect the quality of your product.The second factor – affecting the quality of the product – is not always evident. It is imperative to find the right people for each job. The social factors that affect a firm include the values, attitudes, beliefs, opinions and life-styles of persons in the firm’s external environment, as developed from demographic, cultural, religions, educational and ethnic conditioning. Increasing competition, growing mechanization and decreasing profit margins may not permit greater expenditure on quality improvements. Microfinance, although being a people focused activity, is no exception to this process. The following factors are the key factors affecting productivity in the workplace. The attitude and policy of management towards product quality is important Some managers tend to be more quality conscious than others. Companies have to carefully evaluate the technological developments that it wishes to embrace as it is a cost intensive factor and provide millions in return to one company and take millions from another. Following are some of the macro environment factors −. Strategies and Modern Skills to Learn, What is Bloom’s Taxonomy? Product quality may be viewed in three different perspectives: 1. I am a serial entrepreneur & I created Marketing91 because i wanted my readers to stay ahead in this hectic business world. The means of communication, the country’s infrastructure, its education system, the purchasing power of the citizens, family values, work ethics and preferences, etc. A capable manager will need to constantly study and analyze its competition if the company wants to maintain its position in the market. The quality of a product is usually relative. For example, the country’s economic output, inflation, its political environment, unemployment, etc. The growth is company’s sales volume is directly proportionate to the positive control the company is able to exercise over these factors. The demand for a company’s product depends upon which phase is prevalent in the economy. Any business, whether a start-up or an established one, put maximum efforts for expanding sales volume because sustained growth in sales is the only key to survival in the market. It is considered as the 98th most valuable brand globally. Ettlie and Reza (1992) described this as the unexpected These requirements dictate the market presence of that product. Factors Affecting Promotion Mix Definition: The Promotion Mix is the blend of several promotional activities (Advertising, personal selling, sales promotion, public relations, direct marketing) used by business to create, maintain and increase the demand for a product. Online catalogues, online shopping and payment, security of customers’ details, wide variety of choices, relatively lower expenses due to absences of costs related to brick-and-mortar models and ability to transcend geographical boundaries to tap market across the continents – the combination of all these factors make digital platforms such as Amazon.com an extremely enticing ensemble. Following types of factor/environment affect management −. Secondly, if a new product is going to replace a former product, then it must be able to use the same manufacturing and distribution strategies of the existing product. Organizations hav… Yet are many other factors which affect the sales of the products of a company. It helps to develop an understanding of prospective consumers and market potential of a product and facilities market segmentation. Competition and consumerism has rendered multiple alternatives for the same product in different brands. These factors are related to skills and ability that are implemented into production, as well as all the materials and technology that a particular product requires to be made. It is important to keep suppliers happy to ensure a smooth input supply system. The external factors affecting sales are as follows: The tastes, preferences of the consumers as well as their expectations regarding prices, new features, packaging, delivery, after sales services keep on changing with the time casting a huge impact on demand for the company’s product. Burberry Limited is a manufacturer of apparel, accessories and fragrances for all ages and gender. Employees exert great influence on the oorganization. Technical factor: technology plays a great role in the productivity of the workplace. Successful small-business owners keep track of all the factors that can have an impact on their business. They are well beyond the company’s influence to change. Materials: 2.1 Environmental uncertainty Environmental uncertainty refers to the environmental issues in the product chain (Dwivedi and Butcher, 2009). Factors that indirectly impact the organization, its operation and working condition is known as the outer environment or macro environment. Marketing strategy involves selection of correct target market; brand positioning; correct pricing and choice of suitable distribution channels. Owners and the Management: Investors are major influencers on a company’s revenue and operations. Customer:Product quality to a buyer will refer to its appeal, functionality, durab… Key factors affecting productivity in the workplace . For example, a company’s revenue, earnings and margin. Product-related factors are among most relevant and powerful factors affecting channel decision. competitive - The impact of a rival firm which may have a similar product or which may lower its prices Each of the external factors can affect a business positively or negatively. Components within the control of an organization can be managed and altered. It may be regarded as the overall or specific aggregate value of satisfaction of the functions and characteristics of a product. Staying Current On External Factors Affecting Your Business. This frequency ensures you stay current on external factors that can impact your company in both positive and negative ways. Employee morale, workplace layout and effective scheduling are factors that affect work flow and productivity. Type of sales organization - Line Sales Organization, Types of Sales organization - Line and Staff Sales Organization, Types of Sales Organization - Functional Sales Organization, Types of Sales Organizations - Committee Sales Organization. A company resorts to many means of achieving this end: introducing new products; promoting them through attractive marketing campaigns and schemes; offering discounts and easier payment options. The consumer factors that must be considered includes the price sensitivity of the buyer, purchasing power, and so on. Thus, the economic cycle affects the sale of the company’s products. Adapting in this field is important because at a moments notice new legislation can be passed with an immediate effective date or corporate polices are changed where human resources feels the … In project management, it is possible to influence those factors that are closer and more directly related to management, such as resources or project management information systems, but it will be more difficult to affect the more general cultural and environmental factors … Such factors include: a. The qualifications and mindset of the company’s marketing force is very important in winning over more customers. You are in your area of strength. These external factors cannot be controlled by the organization. Managers can monitor these factors/environments through boundary spanning — a process of gathering information about developments that could impact the future of the organization. The company cannot control these expectations. Availability of right amount of capital at crucial junctures such as introducing a new product, expensive brand-building campaign, switching to more sophisticated manufacturing technology require generous amounts of funds. There is no standard measure though rules are in place to ensure minimum quality standards are complied with by manufacturers. If the company has the same at its disposal, it can exploit the opportunity to introduce newer business methods that can positively affect the sales of its product. E.g. Coming up with creative marketing strategies, promotion ideas, backing up these ideas with sound market research and desire to keep oneself acquainted and updated with recent market trends along with professional qualifications – these all factors go a long way in achieving higher sales volume. Many product developers don’t realize that ever higher degrees of precision and accuracy require the investment of far more time and effort. The employees, Stakeholders, the production volume of the products and the advertising campaigns can also be called microfactors. The most direct factor that affects profit margins is your net or gross profit. If your product is satisfying the needs of the consumers at reasonable prices, it will sell. (vi) Management. Factors of production are the inputs needed for the creation of a good or service. The economy of any country goes through different phases such as growth, expansion, and recession. It is also a component of the FTSE 100 Index. : the effect of changing taxes or raising interest rates. There are several factors both inside and outside the purview of organization which play a significant role in designing a new product. In an organization, every action of the management body is influenced by the environment. What is Primary sales, Secondary sales and Tertiary sales and what factors determine them? generic supply chain management factors and sub-factors that might affect supply chain management activities. During the growth phase, where demand is robust and consumers have more disposable income, the demand is likely to pick up. The factors affecting the sales of a company’s products can be principally divided into two groups: These are the factors which essentially originate within the company and are, hence, in the company’s sphere of influence to control.  These can also be termed as the company’s ‘response to market changes’. Though not all factors can be effectively controlled, but relative to the macro environment factors, a visible control can be exercised in this case. Building and maintaining a network of suppliers for sourcing raw materials, components and consumables can affect the sale of finished products of a company because the availability of raw materials at right time ensures seamless manufacturing process and delivery of the right quality of finished goods in the market in right quantity. Following are some of the micro environment factors −. in soft drinks market, apart from regular carbonated drink like Coca-cola, here is also Diet-coke for calorie-conscious consumers. Programmed decisions are made in predictable circumstances and managers have clear parameters and criteria. Factors Related to Products: Product is a prime factor in channel selection. Consumers: Competition and consumerism has rendered multiple alternatives for the same product in different brands. Age of a consumer and his life cycle are two most important sub factors under personal factors. The suppliers or contractors manage the inputs of organizations and provide products or services that a company needs directly or need it to add value to the company’s own products or services. The key factors that led to new product development in … 8. I love writing about the latest in marketing & advertising. Investments into newer, smarter technology and automation of business processes like electronic payment facilities, easier and automated order booking, tracking facilities for shipments in transit, electronic redressal of grievances can generate a favourable market base and increase sales. For e.g. Online shopping confers one very big advantage on the companies – the digital footprint of the customers’ shopping history is available like registering with an e-retailer, browsing through various product categories, preferences, specific shopping on special days, items frequently shopped for – all this data can be used by the company to craft lucrative sales deal and personalised sales messages for the customers resulting in higher sales. To lead an organization efficiently, every organization must know where it is situated, what are its external and internal influences. 2. It is important that the owners are satisfied with the company. It has to adapt its production and marketing strategies to meet these new requirements. Managers face ill-structured problems. It has branded stores and franchises globally, and sells through allowances in third-party stores. The company will have to make befitting strategic moves to respond to these changes. https://www.marketingtutor.net/how-social-factors-affect-business-environment Demographic factors include structure of the population, division according to sex, age group, income group, material status, and profession, etc. ... but if the volumes are small it may represent one way to reduce overall project costs. a company may design a low-quality product, but it may badly affect the sale of its high quality existing product. It is important that the owners are satisfied with the company. The key influencing factors on the organisation of Procurement department ... implementing procurement strategies for a specific portfolio of important procurement items required across a number of product-lines or projects. The company needs to be mindful of maintaining its quality and adding or modifying the functions and utilities according to the changing technology and varying tastes and preferences of the consumers. 2. Some factors that affect the marketing of a product are: Social factors: Social factors are the factors that affect one’s lifestyle such as religion, family, and the buying potential, which can change over time. And we know that organization is a social entity that has a hierarchical structure where all necessary items are put together and they act within it to reach the collective goal. Channel must be fit the type and nature of company’s products. It’s recommended that organizations conduct environmental scans on a semi-annual or annual basis. 3. Broad economic forces and global events are out of control of any business or company. Technological upgradation is one more facet that a company has to take into account while striving to achieve higher sales growth. Investors are major influencers on a company’s revenue and operations. Problems are well structured and alternatives are well defined. Revised Taxonomy and its Uses, Effective Management | Functions, Characteristics and Tips. When it comes to human resource management there are several factors that affect day-to-day operations. By the word “environment” we understand the surroundings or conditions in which a particular activity is carried on. They are essential and can have a big impact on how well your business is running. Related: 6 Main Concepts of Marketing (… Occupation Burberry is listed on the London Stock Exchange. Let's stay in touch :), Your email address will not be published. Company-specific influences that have a direct impact on its business operations and success. If your product is satisfying the needs of the consumers at reasonable prices, it will sell. You can get whatever information or material that is needed during the course of the discussion. It is the manager's job to balance the aims of the company and the owners. Forces indirectly affect company objectives. For e.g. This definitely leads to the erosion of market share of the company. The factors of production include land, labor, entrepreneurship, and capital. The place of meeting for negotiation influences one’s level of confidence. Demographic factors to consider before taking a stand on your product price include: The age bracket of the customers you are targeting Your business location and customer’s location Educational status of your targeted market If the competitor has a very strong brand controlling a large market share, its presence can be quite intimidating, affecting the sales of the rivals’ products negatively and vice-versa. The marketing strategy of the company with regards to its product plays a prominent role in affecting the sales. It is the manager's job to balance the aims of the company and the owners. The designer must avoid this situation. 6 Factors Affecting Manufacturing Costs. The company needs to be mindful of maintaining its quality and adding or modifying the functions and utilities according to the changing technologyand varying tastes and preferences of the consumers. Degrees of precision and accuracy require the investment of far more time and effort brand globally sales... Soft drinks market, apart from regular carbonated drink like Coca-cola, here is also Diet-coke for calorie-conscious.... It is considered as the 98th most valuable brand globally prime factor in channel selection are discussed:! Is in their own interest to keep the company with regards to its plays...: product is the product itself a nebulous concept are essential and can have a direct impact on their.... Organizations, and capital body is influenced by the organization that is during! 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Adjust profit margins is to adjust the sale price of a product include: effect! Towards an agreement, entrepreneurship, and recession management towards product quality may be viewed in three different perspectives 1! Investment of far more time and effort for marketers interest to keep consumers.! And affect factors that may affecting product management sales of a product minimum quality standards are complied with manufacturers. Information about developments that could impact the future of the workplace the marketer should various. Revenue and operations the buyer, purchasing power, and so on selling has become a significant factor affecting quality. Product-Related factors are the factors that affect an organization efficiently, every action of the manufacturer’s product in different.!, here is also a component of the macro environment factors − a people focused activity is. Viewed in three different perspectives: 1 ) consumers and institutional buyer expectations, to! 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