In 1980, the Sherman Act was instated to protect both businesses and consumers. This economic legislation ensures fair pricing while still allowing for open competition through the restriction of price fixing. Price fixing is defined as “an agreement among competitors to raise, fix, or otherwise maintain the price at which their goods or services are sold” (Price Fixing, Bid Rigging, and Market Allocation Schemes 2). Some examples of price fixing include the holding of prices, eliminating discounts, adopting a standard formula for computing prices, and not advertising prices.

Price fixing can also be used to discriminate against other small businesses. Setting a price only within a certain area in order to eliminate competition or create a monopoly is illegal. Many states have also adopted a “Below Sales Cost” law. This law states that they may not sell goods below their cost with an anti-competitive intent. Price fixing is harmful to individuals, small businesses, and corporations (Price Fixing: What is it? 2).

I agree with the current laws that are in effect against price fixing. If price fixing were allowed to take place in the marketplace, there would be a dramatic rise in prices in various products. Gas stations would collaborate, causing the price per gallon to rise overnight. If the local market was flooded with price fixing in products such as gas and food, there would be no choice but to purchase products at an inflated price. If large companies sold products at a price lower than cost, smaller family owned businesses would fail within weeks. Thanks to the Sherman Act, there is still fair competition in the marketplace, but it is not so fierce that newly developing businesses crumble under the pressure.

The Sherman Act is strictly enforced today under the Federal Antitrust Enforcement Department. In 2000, a settlement was made with three of the United States' largest music retailers. These retailers followed a practice known as “minimum-advertised pricing” (or MAP). Through MAP, these retailers subsidized ads by retailers. In return for this, the stores agreed to sell CD's at or above a certain price, providing them with an unfair advantage over consumers. The companies agreed to pay $67.4 million and distribute $75.7 million in CD's to public and non-profit groups to settle the lawsuit (USAToday.com 2).

Ensuring fair competition is essential to maintaining low prices in the marketplace. Although competition itself is not unethical, it is unethical when companies work together to intentionally and unnecessarily increase profits at the expense of the consumer. Without the Sherman Act, prices would skyrocket in every industry. Thanks to the Sherman Act, we can be sure that we are being charged fair prices in our local market.

What is Sales Promotion?

Simply put, sales promotion is a marketing tool that offers the consumer a temporary price cutback. It occurs in such a way that the extra volume sold will be over and above what would have been sold without advertising and packaging alone.

Researchers have come to the concussion that the reason for the increase in sales promotion is attributed to increase in competition among manufacturers and sellers.

When Do You Actually Need a Sales Promotion?

That your product is doing badly in the market is not a sufficient reason for you to embark on a sales promotion. Just like advertising cannot sale a bad product, promotion cannot sales a bad product. Sales promotion basically boils down to exploring and taking advantage of key problems and opportunities. It is necessary that you be sure that promotion is what you actually need to solve the present problem before embarking on it.

When Is Sale Promotion Effective?

Sales promotion is most effective when there is a shortfall in brand performance where the business needs to:

Boost Trial Level

This works mostly with new entrants into the market. It becomes a way of encouraging consumers to try a particular product or service, especially when you are confident about the value of the product. Once consumers become familiar or hooked to the product/service, such promotion is often discontinued.

Increase Repurchase Level

This is commonly found in fast-moving consumer goods. The idea is also replicated in other products to an extent that a buyer may even end up buying a particular product for more than one reason/use.

Knowing When Promotion is Least Effective

A lot of products have moved from being brands to ordinary commodity by virtue of the frequency the engage in promotion. That underscores what we said earlier that promotions should not be used as a solution to accepting bad products.

Sales promotion will do little or no good to bad brands and declining brands.

Promotion as Brand Reenforcer

Sales promotion is not only meant to increase sales, it also helps in re-enforcing a brand. Branding, as a rule must complement advertising notions. But must work hand-in-hand to ensure the desired image and position is achieved.

Go back to the drawing board and relook at whether you've given your customer what they desire, more than just what they need. Connect with them on a level that's beyond their heads. In other words, get to their hearts. Give them a good enough reason to stay with you. Let them experience what your brand can do for them by creating an environment that supports that experience. It's hitting on their senses.

Take for example, Starbucks. It is a brand that has been well documented in the area of brand experience. Think about it. It has positioned itself as more than just a coffee joint. It has become a coffee culture; a place where people not just go drink coffee, but they go to connect, to bond and to socialise. Besides just a quality cup of coffee, it has given a cup of coffee a heart and a soul. Customers want to be associated with that brand so much so that it has become a lifestyle, something they desire and something some aspire to have.

There are many successful brands alike that have created brand experiences. They take their customers beyond just the physical attributes to a whole new level. It's building a whole culture around the brand that makes the brand sticky. The greater the brand experience, the more the customers would want to participate and own the brand.

If you think about it, you know them pretty good after all they're your customers, your business depends on them and their ability to buy your product from you.

You know what they want and when they are going to need it.

You know how much they want and how soon before they re-order again.

You know how much they are willing to pay and how quickly they pay.

This gives you an idea of their needs and the financial health of their company.

After all, they are your customers.

Do you think this information has any value to you?

Of course it does. It helps you maintain your inventory, letting you know when to buy and reorder, what to reorder, how long will it take for your accounts receivable to be healthy in order to help you continue to grow, how much is going out on accounts payable.

If your customer is expanding do you need to think about expanding your operation as well?

As a supplier you need to know all of this and more.

Another way to look at it is that since you know so much about this Customers Company that you really are a Consultant for your Customer.

Wait a minute!

Is this what you're saying?

I just took you from a Supplier to a Consultant?

Hey and I only did it in a couple of sentences.

How can you become a Consultant for your Customer?

Think about it.

You know this company, you depend on this company and in some cases you really can't do without this company.

Sit down and identify the old Business School SWOT about your customer.

Now if you're saying what is SWOT, then we need a little Business School recap.

SWOT stands for Strength, Weakness, Opportunity, Threats.

Now depending on your relationship with your Customer, you might be able to sit down

together and create your SWOT Analysis together. If not, do it yourself.

Bring in your people one day and sit down and develop a SWOT Analysis.

Now this would be across the board for you, it would consist of manufacturing, shipping sales, marketing and even your accounting department. Bring them in and don't give them any boundaries or limits. Let this be an open meeting and anyone can say anything they want. Remember, there are no stupid questions just stupid people who wouldn't let the questions be asked. This is the future of your customer and what are their chances of surviving for without them, how long would you last?

The most important question you have to ask yourself is, if this customer disappears one day, do you survive?

After your people have completed your SWOT Analysis, put on paper, then sit down with your Customer and go over it. Show them how your company can be of assistance in growth or maybe in delivery of product. You might invest in a new computer system that will help your customer's sales force order directly from you or in a new transportation system.

You customer might even offer to come in and help pay some of the investment that you are about to lay out because they can see how much it will help them in the long run.

What will be the end result?

Well if your customer is smart and they better be for your sake. They will see that you are interested in their growth, because if they grow you will grow.

You have actually become a consultant or if you want to think of it another way, a partner that is interested in their growth and success.

Sitting at my kitchen table the other morning I decided, as I always do, to read some stories in the newspaper. I like our local newspaper as the writers they have working for them are very good and very thorough in the stories they are trying to translate.

I started reading some articles in their business section. One article I picked out in particular was talking about a handful companies and their stock prices as they are rising and falling based on certain factors and how society may be contributing to them. But what caught my eye was not the article itself but the advertisement located directly to its right on the page. The advertisement clearly stood out from the article, which I am sure was the company's intent when they ran it.

This advertisement was segmented away from the article by being boxed in with a thick dark border so as readers could tell it was not part of the article itself. Now I have seen advertisements like this before so it was nothing new, but it did remind me of the importance of how to relay what you are selling to the reader in the form of information as opposed to a “buy it now” type of advertisement.

The advertisement I was looking at was in the form of an article. The article told a story and painted a visual picture of what the product was, how it was used and who could benefit most from using it. It gave a variety of statistics, that although I did not personally verify, I am sure they can be validated with a little research.

This means of advertising to your customers appeals on a personal level. It doesn't matter if you are advertising in the newspaper, a magazine, on TV, radio or on the internet. The most affective forms of advertising today hit potential customers on an emotional level. This particular story does just that.

Imagine if you sold a product. Your product is used to help prevent fires in the home. You begin to write and advertisement in the form of an article that talks about how many homes are lost each year due to fires, how many lives it claims and so on. This makes your product appeal to them before they even know what it does. Now paint a picture to the reader as to how your product can reduce those numbers. Can you see how this form of advertising can be beneficial to you and the customer? Of course you can.

Before you submit your next advertisement, you should think about turning it into an article where you can paint an emotional picture for the reader. It may be the difference between some sales and a whole lot of sales.

Business Owners

There are three ways you can own a business. These are:

1. Sole proprietorship - a business owned by one person only. This gives the business owner an unlimited personal liability of all debts of the business.
2. Partnership - two to five people make up a partnership. Each person is personally liable for the debts of the partnerships.
3. Corporation - it is formed by at least five persons. A corporation is a legal entity itself which is separate from its owners or shareholders.

Types of Business

There are many different forms of businesses. These include:

• Manufacturing - involved with the processing of raw materials to work-in-process to finished goods. Companies that make shoes or shirts for instance fall under manufacturing.
• Service business - from the word itself, it offers basically services to customers. Common examples would be car repair service, singers or the hotel industry which is basically a service industry.
• Retailers and distributors - refer to the middlemen who act as the link between manufacturers and consumers. Grocery stores or supermarkets are considered retailers and distributors.

Agriculture and mining are businesses which are concerned with supplying materials. Rice farmers and gold miners fall under this category.

Financial businesses provide services to manage client's financial investments. This includes banks and insurance firms.

Information businesses sell intellectual properties such as book publishers or music producers.

Utilities businesses provide public services such as communication or telephone, electricity and others.

Real estate businesses are engaged with properties and lands such as apartments, buildings and home development.

Transportation businesses refer to providing transportation to the public such as airlines, bus companies and trains.

Whether a business is looking to gain new customers or just retain the ones they already have, adding a bit of personal touch for customers can only help. Getting a birthday card from your insurance company for every member on your policy just might make you think twice before switching carriers. Getting a postcard in the mail reminding you about your anniversary while also promoting that month's special offer just might make you think about getting your loved one a piece of jewelry. Though these things may sound like common sense, not that many places are taking advantage of this opportunity.

It may be because they just don't want to take the time, or may be they think they'd be prying into customer's personal lives, whatever the reason, people have to break the strict business mentality and add a personal touch. If they can't see that a little personal touch can help their business, then simply call it targeted marketing!

Online marketplaces such as Amazon do it all the time. They know you bought an iPod online, so why not promote iPod accessories via the web and email directly for you. While this isn't that personal, the point is that they pointed out that they know something about you (you own an iPod). Churches offer a similar service when they mail you a postcard for a young-adult group that meets weekly. How did they know you were a young-adult? Because you wrote your age on a guest card a few weeks ago. While there are many more examples of personal touch and targeted marketing, the point that needs to be made is that we have only scratched the service of what is able to be tracked. Image the possibilities of personal touch in your business, church or organization.

Keeping in contact with customers is very important. When ever they have a question or query you should reply ASAP, and if you don’t, then the customers might become inpatient and change there minds about buying from you.

Even a simple newsletter is good enough. Newsletters can inform people about your website e.g. what discounts you have available and the next time your going to maintain your site. If you do this regularly then customers know that you are very reliable as you keep in contact mostly all the time.

Not a newsletter? Well you can even send an email about updates of your products, e.g., what new products you have in stock and what’s sold out.

Want to go even further? A forum would help you even better. A forum can make a huge difference, as they are fast, quick and easy to use.

MSN Messenger and Yahoo Messenger can also help. There’s not much work you have to do for it. Just make an email address (on hotmail or yahoo) and then download MSN Messenger or Yahoo Messenger, and then you’re done!

You don’t just have to use the Internet to communicate; you can give customers a telephone help line, or even allow them to send you letters through the post.

Products

You should first research different types of product categories, as you might already know; Computers Products, Video Games/Consoles and Electronics are big and are selling everywhere. You can pick any category of your choice but the main thing it must do is make sales and force people to buy from you.

Products that you are selling should be marked at competitive prices. They shouldn’t be to low, as you might not get enough profit, and they shouldn’t be too high as customers would think they are too expensive.

Product descriptions also play a vital role. If customers don’t know what they’re getting then there will be confusion all the way round. So you have to make sure that you put enough detail into Product Descriptions.

Product titles also should be clear. They are the first things that customers look at.

Advertising

Again, advertising is another major step in getting sales. The best way to get started is to submit your store to major search engines such as Google, Yahoo, MSN, and AltaVista etc. Free Search Engine Submission doesn’t really help a lot, so you should normally go for the paid submissions, but it’s up to you.

Then you can move onto other things such as posting flyers, adding your site to signatures of emails and forums etc.

Logos and Slogans

Logos are very important as well. A good-looking logo makes your company look good and professional. A simple, old and boring logo can drive customers away from your store. A good logo doesn’t have to be a fancy picture, with multicolour text, it can be anything. But it must stand out from the rest; people must recognise it and should be unique and simple.

Slogans are phrases or words, which sound catchy and represent a company. Well know slogans such as Mc Donald’s (I’m loving it) & Pizza Hut’s (You do the Maths, we do the Pizzas) are remembered very well as they are catchy and they stick in your head all of the time. Before making up a slogan, you have to make sure that you, yourself can remember it and that it sounds catchy.

Store Layout

The looks and feel of your store also do affect your sales. If you have a very poor design then there’s a very high chance that customers won’t buy from, but if your layout looks professional then customers would go for it.

Even by placing a PayPal or a Nochex logo, customers see that you are using safe payment methods, which use high security.

You should also place some information about what you’re selling on your Main Page. Pictures of your products also help

In-depth knowledge of the service provided keeps customers glued to such a service provider. Customers are not convinced of their service providers knowledge until they try others in order to know whether there is an alternative.

The cost of services provided is very sensitive, it is like a magnet: it attracts and repels customers.

Smiling of course is to some people a gift which naturally radiates, but to some people it has to be learned. Customers are more comfortable in a place where their business transaction are conducted in a joyful mood rather than where bold faces are kept.

Service providers who keep a joyful mood and smile to their customers are attractive to customers who want to ask questions. When such question are honestly answered, these customers find it difficult to leave.

A good business environment are like bees that are attracted to a sweet flower. People are attracted to any service provider with a perfect business environment.

• CRM as a competitive strategy - a strategic view
• Customer satisfaction and loyalty
• Relationship: selection and retention
• Customer service and service marketing
• Sales Force Automation (SFA)
• Implementation of CRM

Key concepts of CRM are:

• Comprehensive strategy:

  CRM at one end links itself to SCM - supply chain management and on the other hand the customer service and customer care. This makes a comprehensive strategy.

• Acquiring:

  This is about prospecting. Using effective sales promotion methods, prospective buyer can be acquired. It is about developing new customer as well as converting competitor's customers.

• Selection:

  You can't please all people at all times. You may not be able to serve and satisfy all the customers at the same time. There may be customers who may not be willing to have long time relationships with you. As a consequence you need to have selectivity in the customers as well.

• Retaining:

  Once a right customer is selected, we need to provide the customer with a good product and a better service which exceeds the customer requirements. Only then can the customer be satisfied and retention of a customer can be possible.

• Partnering:

  Partnership is about constantly striving to create better value for each other i.e. the buyer and the seller.

• Interactive communication:

  A clearly planned and focused two way, interactive communication is a very essential ingredient of CRM. A meaningful communication will always be an Interactive Communication.

• Technology + people:

  CRM is all about people and relating people to technology. This is all automation of people is all about!

• Mutually beneficial longterm relationship:

  It is all about the long-term relationship of the buyer and the seller. This overall results in the mutual benefit of both resulting in a long-term relationship.

Customer delight needs to be created instead only satisfying the customer. Customer service is about giving facilities and services that the customer asks for, or delivering service that is expected in today's competitive world. Most products require additional or long-term support from the organization. These traditional services include delivery, installation, lessons-in-usage, instruction manuals, repairs and maintenance etc. Customer care (and also customer delight) is going beyond the "expectation check list". Customer care is being proactive in developing relationship with your customer. Always remember “Good customers are worth keeping for life”. Great services can create a great experience and customer delight.

Customer Retention:

The point to be remembered always is that a repeat customer is the best customer. 6:1 is the ratio which means - you need to spend 6 times the money you spend in retaining an existing customer. Another view point is 5% increase in retention of customer can add 25% to 125% increase in profit. Essentially, retention is the key. However, not all your customers are worth retaining. You should select the customer for retention. These customers should be the right ones with whom you wish to establish a long term benefit for mutual benefit.

There are a number of benefits for selection of the right customer for an organization:

• It reduces cost
• It increases profitability
• It helps create goodwill for your organization
• It gets you good word-of mouth publicity
• It improves the possibility of greater customer satisfaction and loyalty

Thus, it's needless to say - select the right customer, have the right understanding of their needs and evolve a right way to satisfy them.

The Service Marketing Triangle

The Service Marketing Triangle shows the relationship and linkage between three elements of service marketing - Company, Customers and Employees. Three types of marketing happen between these 3 elements.

• Company to customers: External Marketing
• Company to employees: Internal Marketing
• Employees to customers: Interactive Marketing

External Marketing:

Internal Marketing:

Interactive Marketing:

Sales Force Automation (SFA):

SFA is Sales Force Automation. Understanding SFA begins with the study of basic selling process and the importance of FAB (Features, Advantage and Benefits) approach to selling. It then moves to the technology of Automating Sales process.

SFA is a technological tool to help sales people acquire and retain customers, which helps in reducing administrative cost and provides good basis for account management. It increases better selling chances for the Salesperson and more business for the company. SFA helps in the following ways:

• It helps a company to get customer retention and hence increase profits
• Customers get better information, better products or services, faster responses to their queries and hence this results in Customer Satisfaction

The reasons why SFA is important to CRM are:

• Reduction in cost of selling
• Increased revenue
• Easy availability of customer information
• Increased sales force mobility
• Meeting increased customer expectations

CRM Implementation:

The most difficult part of CRM is implementing it. Implementing CRM - making it a reality is the real challenge and the purpose of any CRM initiative. When do you say that CRM has happened? When:

• Your customer is more than satisfied; he/she is delighted
• Your customer attrition rate is minimal. Thus, the selected customer is retained.
• The bottom line improves: the profits multiply

Implementation starts with questioning the basics of your business; defining business, redefining your strategy, setting up plans, implementing and evaluating the CRM. Implementing CRM is about creating a change and an urge in your organization to become customer centric. The first important factor taken into consideration while implementing CRM should be people; because CRM is nothing without people. Secondly, technology and the process play should be taken into consideration. A good product or service, sound process, technology and able people are some of the important baseline requirements to begin with the CRM initiative.

Unless you have the CRM merits in place, it is not possible to judge if you are going in the right direction. CRM evaluation has to be in place and predefined before you begin implementing CRM.

Common causes of CRM failure:

• Treating CRM = Technology + Automation
• Large-scale systems with long-term promise are better
• Old organizational mindset
• Lack of CRM understanding
• Poor strategy and planning
• Lack of skills essential for CRM
• Inefficient or inappropriate software
• Lack of commitment