sales plan: phase 2

Running head: SALES PLAN

SALES PLAN 13

Sale plan: phase 2

Name

Institution

Assessment of market size

Samsung Electronics controls a significant market share in its major products. As of the last quota of 2013, Samsung controlled 35% of the smartphone market, while Apple Inc, it closes rival controlled 13.4% (Shaughnessy, 2013). In the large size LCD panels, Samsung controls 26% of the market while its closest rival LG Display controlled 25.9% of the market share. Samsung’s market share of televisions stood at 17.2%, while that of its closest rival LG Electronics stood at 14.8%. In the digital cameras segment, Samsung controled 11.8% of the market share, while it main competitor Sony controled 17.4%. Additionally, Samsung controls 12% market share of application processors, 9% of hard-disk drives, 18.7% of lithium batteries, 97% of active-matrix OLEDS and 40% of NAND flash.

In 2013, Samsung became the globe’s largest Smartphone maker (Shaughnessy, 2013). Its market share increased as that of Apple hit a 3-year low. It recorded profits of £4.5 billon, which is an increase of 50% from 2012 profits. In the same year, the company shipped double the number of smartphones compared to Apple Inc. This is its biggest lead over Apple since 1997. Samsung’s market share in the smartphones market, which is it main product is driven by the rising demand for cheaper android devices in Latin America and Asia. Its handset division made a profit of £3.4 billion in the second quarter of 2013. During this same period, Apple’s iPhone made a profit of £3.4 billion (Shaughnessy, 2013). Additionally, the company made 27.7% of all phones sold globally in the same quarter. Apple lost ground to Samsung because it did not have new products to compete with Samsung’s Galaxy S4. According to Strategy Analytics, high prices, strong volumes and tight cost control strategies have boosted Samsung. However, industry experts predict that Apple may overtake Samsung when it launches the next iPhone generation (Shaughnessy, 2013).

Samsung and Apple control the largest share of the smartphone market, while LG, Lenovo and ZTE follow respectively. Samsung released its S4 and note3 smartphones in 2013, while Apple released iPhone 5 in 2012. Statistics from Strategy Analytics reveal that shipments of smartphones grew by 47% yearly from 156.5 million units in the 2nd quarter on 2012 to 229.6 million units in the 2nd quarter of 2013 (Shaughnessy, 2013).

Review of past performance

In the last quarter of 2012, Samsung reported quarterly revenues of 27.23 trillion Won, representing a 4% increase from the last quarter. This growth was mainly driven by sales in Galaxy note II and Galaxy note III. This performance was achieved despite economic uncertainties in the United States and Europe. Sales of the company’s LED TVs that target advanced markets and immerging markets have improved on a quarterly basis (Samsung, 2012). In the end of December of 2012, demand for home appliances decreased due to a slow global economy, but the company realized increased demand for high-end washers and refrigerators in the United States. During the same period, the company’s components business realized weak growth, but this was countered by high demand for value added products such as mobile DRAM and servers due to increased demand for mobile equipment. Additionally, the semiconductor business realized growth in the last quarter of 2012, while the panel segment realized minimal growth due to low demand for IT panels used for monitors and notebooks (Samsung, 2012). Wider losses were prevented by increased demand for OLED panels for smartphones and LCD panels for TVs.

Its memory and system LSI reported a 10% increase in revenue during this period. The memory chip and logic chip contributed 5.33 trillion Won and 1.42 trillion Won respectively. The profitability of the semiconductor business in due to a blend of high-margin products such as solid-state drivers (SSD), servers, and differentiated class NAND flash chips. Mobile application processors and tablet PC processors contributed to overall profitability. In the first quarter of 2013, the company expected limited demand for memory chips and because of the seasonal demand for mobile devices and PCs (Samsung, 2012). However, in the next quarters of 2013, the company realized increased demand for DRAM for servers and mobile equipment, which ensured profitability. Additionally, demand for SSDs and logic products remained strong for the entire 2013 as the company emphasized on products with high capacity, mobility and superior processing power.

Display panel business reported a profit of 1.11 trillion Won in the last quarter of 2012, which represented a 5% drop compared to the third quarter of 2012. Despite the slow economic recovery in mature markets, increased panel demand in emerging markets and China was reported. Stable sales of tablet panels and TVS offset the limited growth in the monitor panel and notebook business. Stable growth was achieved by the company in the last quarter of 2012 through strengthened sales of panels and enhanced product mix. Increased sales of narrow bezel panels and led panels for premium TVs were realized in 2012. However, Samsung’s TV panel sales decreased during the same point in 2011. In 2013, market for large size TV panels continued to grow. Strong sales in the table panel business were also reported throughout 2013. Due to the seasonality of the panel demand, growth in the first quarter of 2013 was slow but recovered in March due to new product launches by manufacturers. During the same period, growth in the in IT-related business and network businesses was stifled by price wars in the fourth quarter. However, increased sales were realized in the Long-Term Evolution (LTE) wireless broadband technology and sales of notebook PCs. Although growth in the Smartphone market was stable in 2012, pricing competition and launch of new products pacified growth in 2013. Sales in 2013 were driven by emerging markets and LED televisions. The company has differentiated strategy of emphasizing on premium models for mature economies and region-specific models for emerging markets. The demand for digital appliances was low in the last quarter of 2012, but the company increased sales of high-end washers and refrigerators and the European and American markets (Samsung, 2012).

The company realized limited growth in 2012 in the table market. This was attributed to fierce competition from Kindle Fire and iPad. The company experimented with different versions of its Galaxy Tab line of tablets to determine what resonates well with its target clients. The company expects that its galaxy note version will resonate well with customers.

Setting top-level sales quotas

Since Samsung Electronics operates in territories that are headed by a regional sales manager, the sales quotas expected of each territory manager will be $ 105 million. The territory manager will be responsible for ensuring that this sales quota is achieved. Additionally, the territory sales manager will be responsible for coordinating country sales managers who will head Samsung’s operations in each country. The country sales manager will coordinate the sales functions of sales associates located in Samsung stores.

Each Samsung store will have a sales force of five employees who will handle all the sales functions of the store. Each sales agent will be allocated $1,000 per quarter, while each region will be allocated $3.5 million per quarter. Samsung generates most of its sales from smartphones; therefore, each region will be allocated $ 1 million for the sales activities of Samsung smartphones. $500,000 will be allocated to each region for the sales activities of other Samsung products. Considering that the target market for Samsung’s products is determined by income, age and demographics, each region will be allocated $ 1 million for the sales activities that target various groups.

Competencies, skills, personalities and profile

Samsung’s corporate culture is based on the philosophy of using technology to create superior products and services that contribute to a better society. The company is guided by five core values that influence every cooperate decision. The company maintains a clean organizational culture; adheres to laws and required ethical standards; care for the environment, health and safety; is a socially responsible corporate citizen; respects customers, employees and shareholders. The sales force will be required to have certain competencies, personalities, skills and profile in order to align with the company’s culture, products and customers (Kotler, 2009).

The sale people who will be required by Samsung Electronics must have people skills. People skills include the ability to be a good talker and a listener at the same time. Additional people skills that are necessary for a sale person are patience, respect and the ability to pick up social cues. This skill will enable the sales person to connect the real requirements of the client to the solutions offered by Samsung. Another trait that will be important for this position is charisma. A sales person must be able to have anyone he meets at his or her palm very quickly. This will help the sales person to get other people to like the product or service offered by Samsung. According to Kotler (2009), charisma helps the salesperson to be likeable and this in turn helps in making sales. Another useful characteristic that will be required is having a hunter’s mentality. This ability enables the salesperson to be constantly in search of the next opportunity to make sales. Working for Samsung as a salesperson demands that the individual be able to search for contacts, information, and leads that place them in a position to create many sales accounts as possible.

Having the discipline to follow up is another useful trait that will be required from the salesperson. Having a strategic follow-up strategy enables salesperson to gain many sales especially when dealing with Samsung’s corporate clients. Considering that rejection is part of selling a product or service, resilience is a useful sales trait. A successful salesperson is not discouraged easily and takes rejection as a challenge. Empathy is another useful trait that will be required from salespersons at Samsung. A salesperson must be able to relate to clients and help them in making the right choices regarding services and products. Empathy is important in maintaining customer loyalty, and in a competitive industry such as electronics, this trait is very useful. Confidence will be another useful trait demanded from the salespersons. They must be confident in every aspect of their work and grab every opportunity that comes their way. Lastly, the salesperson will be required to be hold themselves to performance benchmarks that exceed those of their management teams (Kotler, 2009). Since mangers cannot tell the true potential of a sales associate, the individual must be able to put himself at higher performance standards.

Skills for each person

Regional sales manager

The regional sales manager will be part of the SGE mobile team with the key role of supervising field sales officers to ensure channel management and improve sales and business development. The key responsibility is to work directly with channel partners and distributors to meet Samsung’s objectives of sales turnover realization and market share. The job responsibilities include channel development, sales planning; sell out programs, distributor management, target setting and realization, cooperative marketing implementation, structured communications to distributors and key retailer management. Certain requirements and competencies will be necessary for the individual to perform effectively in this position. The individual should be analytical in order to synthesize intricate and diverse information. The individual must be able to identify problems, fix them in a timely manner, and be able to gather and analyze information. Additionally, the person must have good judgment, leadership skills that motivate and inspire. Other useful competencies for this position include delegation skills, excellent communication skills, and planning and organizing skills, priority setting, strong drive for results, and strong interpersonal skills.

Country sales manager

The person will be in charge of distributing Samsung products, effective management of the sales team, information flow and services to branches and distribution channels and marketing. The person will be expected to work with the president of SGE, IT sales group, home appliances sales group, head of department at AV sales group and HHP sales group to ensure the availability of Samsung products and services. The key competencies and skills for this position include strong presentation and communication skills, good commercial acumen and quantitative aptitude, persuasion and analytical skills, strong interpersonal skills and customer focus, ability to work under minimal supervision, consultative sales approach and extensive sales thinking and strong drive for results. Additionally, the individual must have a warm personality, be creative, focus oriented and resourceful.

Sales associate

The sales associate will report to the sales manager. He/she will be responsible for promoting electronics with the store, wireless and cellular data devices and accessories. They must provide superior customer service and customer enquiries and meet the sales quotas. Other responsibilities include participating in promotional activities and maintaining inventory. The individual for this position must be able to exceed daily sales quotas, have excellent interpersonal, customer service, communication and organizational skills, be created and motivated team player and have management potentials (Lancaster, 2005).

Recruiting the sales force

An effective sales force is important for the success of Samsung. Several strategies will be used in recruiting a sales force of Samsung electronics. The first step is creating a profile of the Samsung’s ideal salesperson that suits the different sales positions. Considerations that will be incorporated in developing the candidate’s profile include customer base, product or service, and marketing strategy the will aid in defining the ideal candidate. The next step will be to write an effective job advertisement. The information that will be included in the advertisement include a description of Samsung and its brand, information on the expectations from prospective employees, details of what is expected from sales executives, and information that markets the company in order to attract top quality talent. The third step will be creation of a recruitment strategy. This step will entail enlisting the help of recruiting professionals. The credentials of the potential candidates will be examined to determine if they have personalities, competencies and skills required for the job. Additionally, the recruitment team will be educated on the qualities of the ideal candidates, the job description and the recruitment strategy. A system of filtering applications will also be developed and implemented at this stage. The filtering strategies that will be utilized include knowledge and aptitude tests, telephone screenings and questionnaires. After the filtering process, the candidates will be invited to a face-to-face interview. The interviews will gauge the qualities and the experiences that the candidates posses and if necessary a second interview will be conducted for the sales managers. The last step will be recruiting through many channels as possible. Some of the channels that will be utilized during this stage include placing advertisements in the internet, Samsung website, trade journals, newspapers and job listing websites; referral programs, hiring a recruiting firm; and attending recruitment events and job fairs.

Training the sales force

Two types of training will be adopted in training the new sale force for Samsung Electronics. The first training is company specific training that encompasses details about Samsung Electronics, its organizational culture, details of its products and services, the expected sales process, tools and the resources. Training the new sales force will entail sitting the new employees with the company’s customer service team, which is familiar with every aspect of the company, and will instill this knowledge into the new employees.

The second training will be on selling techniques, software and technology. Strategies that will be used in this training include how the training will improve company sales and in turn their earnings, giving particular examples of how to use the sales techniques and making the training interesting and entertaining. Participation of the new sale force during training will be encouraged through questions and discussions. The effectiveness of the training will be determined by giving them a filed experience in their new positions. Through this, it will be possible to determine if the employee grasped the training or requires additional training. If the employees will require additional training, internal training and external training will be utilized (McClay, 2010). Internal training will be the most effective because it is cheap and can be tailored to meet the needs of the employees. Additionally, a reward system will be established for sales associates who have applied the new sales techniques and succeeded. Ethical standards will be included in the training of the new sales force. The ethical standards comprise Samsung’s standards of business conduct and ethics. This will ensure that all the new employees have the knowledge to act legally and ethically (McClay, 2010).

Compensation plan for the company

Measuring the success of the sales force will be the vital element that will be used to compensate the sales force at Samsung. According to Cichelli (2010), Effective sales goals will be established in order to determine the employees who meet these objectives. The main goal that will determine the compensation scheme is meeting the set sales quotas. Additional elements that will be incorporated in measuring performance include customer relationships, initiative, teamwork and flexibility. These performance metrics will be communicated t the sales force and the company will publish the performance scorecards regularly.

The compensation formula that will be adopted by Samsung will be a blend of base salary and variable pay. The base salary will make up 60% of the compensation, while commission will make up 40% of the pay. The compensation formula will be determined by factors such as role of the sales person, the type of selling and the sales cycle of the business. The formula that will be used is:

Compensation ($) = Salary ($) + [Sales ($) x Commission (40%)

The sales plan will meet the needs of the sales force based on objectives. These objects include internal equity, comparable to competitors in the industry and commensurate with outcomes and effort. It will also reward superior performance (Cichelli, 2010). The objectives of the company that will be met by the compensation plan include attracting and retaining a quality sales force, rewarding superior performance, encourage specific activities and provide a balance between costs and outcomes. A commission of 40% is not large to encourage neglect of other areas and it motivates the sales force. This percentage suits the electronics industry because it is competitive, requires the creation of new markets, and emphasis is placed on high volumes.

References

Cichelli, D. J. (2010). Compensating the sales force: A practical guide to designing winning sales reward programs. New York: McGraw-Hill.

Kotler, P. (2009). Gary Armstrong. Principles of Marketing. Washington, DC: Pearson Education Inc/Prentice Hall.

Lancaster, G. (2005). Management of Marketing. New York: Routledge.

McClay, R. (2010). Fortify your sales force: Leading and training exceptional teams. San Francisco, CA: Pfeiffer.

Pride, W. M., & Ferrell, O. C. (2008). Marketing. Boston: Houghton Mifflin Co.

Samsung Electronics. (2012). Samsung Electronics Announces Earnings for Fourth Quarter in 2012. Retrieved from http://www.samsung.com/us/aboutsamsung/news/newsIrRead.do?news_ctgry=irnewsrele ase&news_seq=20358

Shaughnessy, H. (2013).Samsung Rises To Nearly Double Apple's Smartphone Sales. Forbes. Retrieved from http://www.forbes.com/sites/haydnshaughnessy/2013/04/26/samsung- rises-to-nearly-double-apples-smartphone-sales/