Sales Development and Merchandising Report

This report discusses the concepts of sales development and merchandising in the retail context, specifically focusing on Walmart. It covers key components of product mix, market segmentation, buyer behavior, advertising media, and the influence of store design on customer spending. The report evaluates various promotional activities and personal selling techniques, concluding with recommendations for effective sales training programs.

SALES DEVELOPMENT AND MERCHANDIZING

Table of Contents
INTRODUCTION......................................................................................................................1
TASK A.....................................................................................................................................1
1.1 & 1.2 Key components of the product and how the product mix contributes to sales and
profit.......................................................................................................................................1
1.3 How market segmentation contribute to maximise sales.................................................3
TASK B......................................................................................................................................3
2.1 Factors affecting buyer behaviour....................................................................................3
2.2 Assessment of the advertising media that could be used for sales development
situations.................................................................................................................................4
2.3 Evaluation of the use of external merchandising to maximise customer volumes...........5
TASK C......................................................................................................................................6
3.1 Assessment of the influence of design and layout on customer spending.......................6
3.2 Review and evaluation of the effectiveness of internal merchandising materials............7
3.3 Evaluation of different promotional activities according to different scenarios..............7
TASK D.....................................................................................................................................8
4.1 Evaluation of personal selling techniques........................................................................8
4.2 Influence of operational design on sales revenue.............................................................9
4.3 Key principles that should be included in a sales training programme..........................10
CONCLUSION........................................................................................................................10
REFERENCES.........................................................................................................................11

INTRODUCTION
The term sales development must be a company’s lifestyle. An organization that
practices actively the sales development is involves in activities at all level that are developed
for enhancing sales. It contains each thing from development and research to sales plus
marketing. From the perspective of sales, the sales development is an enactment of manner in
which sales team of company reaches their target customers with the adequate services and
products. This is all about to ensure that the method utilized for new prospects is cost
effective and efficient in terms of developing right type of customers that are both loyal and
stay connected for long period with business. On the other side, the merchandisers ensure that
goods are presented at right time in right stores or online as well as at the correct price. While
the customer selects the lines, merchandiser decides about number of lines to be bought and
how much amount must be spend. Also, they analyse data for deciding selling prices and plan
price reductions plus promotions. In short, they attempt to increase profits and sales while
minimising costs and stock.
Here, in the present assignment both the concept sales development and merchandising
is being discussed in the context of retail scenario by taking example of Walmart Company.
One most fun and creative aspect to run a retail store is managing visual merchandising
elements along with effective sales development of retail environment. It means all things
from window display, a potential client first sees that attract them to store, to signage that
leads them nearby and displays of merchandising that catch their eye and influence them
ultimately to make purchase of something. Through the following paper, the researcher is
trying to explain components of products in business context and contribution of market
segmentation in maximising sales. Moreover, additional sales development techniques is
being described along with internal sales promotion and merchandising activities. At the end,
the report is summarized by explaining role of staff in increasing sales for the Walmart store.
TASK A
1.1 & 1.2 Key components of the product and how the product mix contributes to sales and
profit
A product is just a marketing offering, whether intangible or tangible that is required by
someone to consume and purchase. In this case one may believe decision of product are
exclusively focused on building plus designing consumable elements of ideas, services or
goods. In reality, while decisions about products consumable parts are extremely significant,
the total products includes more than what is actually consumed (Armstrong, Kotler and He,
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2000). The total product decisions plus offering faced by marketer can be divided into three
main components, such as:
Core benefits – People make decisions of buying that satisfy their requirements. Although
several needs are addressed through service or product consumption, few needs are not. For
example, consumers might require to be highly perceived by their group members or want a
commodity that is simple to use. In all such cases, the core commodity itself is the benefits
receive by customers from the product use (Belch and Belch, 2003).
Actual product – The main benefits are provided by the components that make up actual
commodity purchases by customer. For example, while returning home from shopping at
retail store, the customers takes out purchased item from their shopping bags, which is
referred to actual item.
Augmented product – Marketers surround their actual commodities often with services and
goods that give extra value to the purchases of customers. While such aspects might not be
the main reason for drawing individuals to make purchase, for some its inclusion strengthens
the decision to buy anything whereas for others its failure force customers not to purchase
(Burris, 2016). The following are taken as part of augmented commodity:
 Customer service;
 Guarantee;
 Warranty;
 Accessibility;
 Complementary products.
With reference to product mix contribution to Walmart sales and profit it has been
analysed that product mix changes affect profitability and sales even if there is no
modification in pricing of product. It is equally true of costs and margins. For instance, the
price war of supermarket on milk drove high unit volumes however has two serious
influences on profitability category (Chand, 2015). The price war was undertaken on home
brand milk products. Although if pricing on such products was not altered, the value gap
enhances as the point of entry level price becomes much economical and some customers will
move to purchase inexpensive commodities while the premium items become relatively more
expensive. This demand shift in between products causes a mix influence on top of
reductions in generic commodities price. The dairy products of Walmart suffered a huge
profit influence as mix shifted against the products of high margin, which the company was
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using to support its high costs of overhead. It is an example of diagnostic, defensive use of
the effect of mix (Cummins and Mullin, 2010).
For the other viewpoint, it can be considered that organizations generally fight maturing
and commoditisation products with innovation. The margin and sales targets must be set as
proof that benefits are delivered by innovation. The effects of positive mix can become a
targeted KPI. Erosion of price is a market fact and generally out of the control of business but
improvement of mix must be a KPI, as it is influenceable. Hence, it is a valuable to separate
modifications in price from product mix changes (Doyle and Stern, 2006). Even though if
prices and quantity stayed the same, the sales value can change when the mix changes. Since
both prices and quantities do change and mix as well, separating the effect of mix is not so
simple. This can be done by calculating the combined impacts of quantity changes and mix
and then subtracting the effect of quantity (Egol, Peterson and Stroh, 2014). The left one is an
effect not defined by quality and price changes, which is called as mix effect, i.e.:
Volume effect - price effect - quantity effect = mix effect
1.3 How market segmentation contribute to maximise sales
Market segmentation is the procedure of determining main segments or groups within
the common market that share specific consumer habits and characteristics. Once the overall
market is broken into segments, organization can create programs of advertising for all
segment, focus it niches or one or two segments or create new products for appealing to
segments (Enright, 2013). Because marketers concentrate their activities of advertising on
particular segments, they can anticipate best outcomes from every segment than they can
expect from groups of customer treated as whole. For instance, if Walmart offers clothes for
both women’s and men’s, it would require to create a very large display and webpage to
include all merchandise that would cost a lot (Hunter, 2016). With this, the company may fail
to draw attention of possible clients by confusing them in choosing their best outfit. Hence, in
this regards the company has designed several sections at the store and categories at its online
site for specific segments of market, such as women between 20 and 35, men between 20 and
35, women between 35 and 50 and men between 35 and 50.
TASK B
2.1 Factors affecting buyer behaviour
Customer behaviour is designed as selection, consumption and purchase of services or
goods for the satisfaction of needs. There are distinct procedures comprised in buyer
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behaviour. Firstly, the customer tries to determine what products she/he would like to
purchase, than selects only such items that provides great utility. After the commodities
selection, the customer makes an estimation of available money that can be spend by them.
At last, they evaluates the commodities prevailing prices and makes decision regarding
commodities that should be consumed. Meanwhile, there are several aspects influencing the
customer purchases, like cultural, psychological, personal and social (Joseph, 2016).
Cultural factors - Cultural aspects have an important influence on behaviour of customer. It
is the most basic reason of person’s behaviour and wants. Children while growing up learn
about basic perception, wants and values from important groups and family. Hence, the
marketer at Walmart should always try to spot cultural moves that may point to new
commodities expect by customers.
Social factors – The buying behaviour of customers is also influenced by social aspects like
social status of an entity and groups with which he/she belongs to. Moreover, sub-cultures
contains in each culture that include people groups with common values. These sub-cultures
can include religions, nationalities, groups of people or racial groups sharing the same
physical location. At times a distinctive and substantial market segment is created by sub-
culture (Lam, 2001). For instance, the club culture or youth culture has quite different value
plus buying characteristics from the old “grey generation”.
Personal factors – It comprise variables like lifecycle stage, age, economic circumstances,
occupation, lifestyle (interests, demographics, opinions and activities), self-concept and
personality. These can explain to Walmart that why its customers preferences change as their
situation changes.
Psychological factors – This includes motivation, learning, attitudes, beliefs and perception
of individuals that affect their purchase decision (Neff, 2011).
2.2 Assessment of the advertising media that could be used for sales development situations
Walmart can use social media advertising for developing its sales and increasing
revenue of business. Instead of targeting users reactively who search a definite team, social
media ads will help the retailer in target proactively relevant users even before they start their
search. Social networks also good option for the company because of its reliable conversion
tracking, targeting options and prevalence on cell phones (Pujari, 2015).
Moreover, stretching beyond common geographic and demographic data, social media
ads has opened to behavioural, deeper interest and connection based methods of targeting.
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Such advanced options of targeting will not enhance the relevance of Walmart ads to its users
but also offer personalization, which is not attainable on other channels of advertising. The
following are these four options of advanced targeting:
Interest targeting – This will allow company to reach definite audiences by looking at their
self-reported skills, interests, users/pages and activities in which they are involved (Regan,
2008).
Connection/behavioural targeting – With connection targeting, the retailer will able to reach
people having specific connection with its app, event, group or page. Furthermore, the
behavioural targeting will allow company to reach individuals on the basis of purchase
intents or behaviours and device usage.
Lookalike targeting – This allow company to extend their custom audiences for reaching
similar or new users.
Custom targeting – With this the organization will able to reach customers by uploading a list
of phone numbers, email addresses, usernames or user IDs (Rosenau and Wilson, 2014).
2.3 Evaluation of the use of external merchandising to maximise customer volumes
Merchandising is the main part of retail sector to influence sales without directly
contacting customer using a range of promotional tools. The display standard and the way in
which merchandising is executed are very strong tool within the portfolio of retailers. The
complete image of store can be judged easily by attentive and care taken over the way in
which its sale material point is positioned. The products poor displays plus merchandising
outcomes in poor sales whereas well-presented and adequately marked products enhance
sales. Developing their own material could be cost effective for Walmart if adequately done.
The company should firstly decide the message, theme and price and then communicate it
simply as well as clearly. Moreover, it should stand posters on foamex board or utilize good
acrylic holders of poster that are simple to clean. Also, such posters should be changed by
retailer on regular basis, as the customers can get bored by seeing same posters for more than
two weeks (Shah, 2016).
Additionally, an adequate programme of merchandising will reflect seasonal trends plus
flexible enough for taking weather changes benefits. Hence, the main strength of Walmart
should be its ability to quickly react to modifications in product offerings. Display and
merchandising are as significant as any other factor of retail business. The company should
study their own trade pattern during the week, look at when and what sells. Also, it must
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flexible plus tailor presentations the customer’s needs. Besides this, in order to enhance sales,
Walmart should position the promoted items in a key hot spot. Buyers flow in shop dictate
about best hot spots, however as a thumb rule, a specifically attractive or eye catching place
would be at the centre and front of a window cabinet or display (Ulrich, 2003).
TASK C
3.1 Assessment of the influence of design and layout on customer spending
From signage to display, layout to lighting, an effective design of retail store supports
in attracting, inspiring and engaging customers. Not only combination of space, design,
lighting, music, colour and layout help in developing a distinct atmosphere at store but such
factors together influence the behaviour of shopper, brand loyalty and spending habits (Zott
and Amit, 2008). To continue with competition, what occurs in-store has never been more
significant as retailers strive for delivering an increased experience to customers and
ultimately enhanced sales. But developing an in-store atmosphere can be complex as unlike
retailers that offers products online only, the bricks and mortar experience of shopping must
be strong multi-sensory experience, which suggests genuine emotions of customers (Davies
and Chun, 2002).
The objective of store design is to display a commodity at its best benefit. It can attract
buyers to visit place, enhance the overall time they spend in the outlet as well as increase the
merchandise amount they purchase. An effective design of store offer a rewarding experience
of shopping that inspires repeat visits plus have long term influence on developing loyalty of
customers. Besides this, the layout of store outlines the total selling space and the manner in
which divides into definite selling areas. Also, layout includes aisle planning, area
arrangement and space utilization. It influences how the merchandise influence and presented
directly on what products noticed by customer while their visit at the store and further will
affect decision of purchase. In order to maintain the flow of circulation inside the outlet,
Walmart can use free-form layout. It is the simplest layout of the store where the merchandise
and fixtures arranged into free patterns in asymmetric patterns and on the sales floor. It well
suited in small fashion outlet, offer relaxing environment that allow buyers to look all
merchandise (Grönroos, 2001).
An effective store layout determinants are scare, as they mostly rely on services quality
and its delivery. But there are six main dimensions, which must be taken into consideration
while identifying appearance of good store namely, physical appearance, personal interaction,
problem solving, premises and store convenience. Moreover, the convenience at store and
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physical appearance impact are most basic tool of marketing for retailers to create
competitive edge as well as to increase shopping experience of customers. The retail store
physical experience can have great influence on whole service quality, high future
consumption and high retention of customers respectively (Jacinto and et.al., 2008).
3.2 Review and evaluation of the effectiveness of internal merchandising materials
The space of selling is most significant part of store and hence efforts to use every
square foot would support Walmart in increasing its sales. One recognized manner to do this
is by interior displays, which display merchandise effectively to customers. While planning
internal merchandise displays, the company should remember that image and theme
presented on exterior site must be supported by the store interior to offer customers with
consistency (Sheridan, Moore and Nobbs, 2006). The interior display purpose is to create
merchandise desire, demonstrate what is presented and encouraged both planned and impulse
buying. Three main goals of outlet must be to: project the store image, motivate buyers to
spend money and keep minimum expenses. Advertising and promotion dollars are wastes or
less effective when efforts are not made in the outlet for adequate merchandising of products.
In-store promotions and well-designed displays are important for reliable theme and to
support the customers in finding items advertised (Kwok and Uncles, 2005).
Even though the percentage of in-store decisions of purchase may change by type of
product and store, it is critical point of selling. Information given by POPAI (Point of
Purchase Advertising Institute) shows that nothing impacts on the purchase decision of
customers more than ads used when the sale is made actually, i.e. the purchase point.
Moreover, it has been found by many researchers that 64.8% of every purchase decision were
made inside the store only. It comprised impulse purchases together with substitutions as well
as generally planned purchase where customer had a product in mind and not brand. Also, it
has been indicated by many people that they bought the commodity, as they saw it well
presented (Lam and et.al., 2001). The main design principles utilized in display are emphasis,
balance, colour, rhythm, proportion, harmony and lighting. Such principles apply to all
displays including interior and window (Majumdar, 2005).
3.3 Evaluation of different promotional activities according to different scenarios
The following are different promotional activities that can be used by Walmart in different
situations:
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Public relations – Organizations have to make regular and fair communication with its public
including stockholders, employees, channel members, customers, potential investors, general
public and government. A company can be considered as unethical when it pollutes the
natural environment and sells defective items. In such case, it will not only face trouble in
identifying employees but may attract unwelcome interference of government. Hence, public
relations can be used by retailer to handle false rumours for their offerings. If a commodity
manufactured by company turns out be dangerous or defective than the public relations help
in convincing public that it was a sincere mistake and because of corporate inefficiency or
greed (Mont, 2002).
Advertising – There are various kinds of advertising. In relation to product ads, the pioneering
advertising seeks to develop brand and product awareness as well as to inspire among
customers appreciation for its prospects. The persuasive or competitive ad seeks to convince
buyers either of the product performance or how it is excellent in some manner in comparison
to others (Piller and Walcher, 2006).
Sales promotion – Distinct approaches of promotion will be adequate for Walmart depending
on customer decision process stage that wishes by company’s marketer to influence. The
marketer prior to purchase, is required to develop decision among customers to purchase the
specific brand and product. In such case, samples can be used for inducing trial. Through the
stage of purchase, when customers are actually presented in the store, the marketer can put
efforts to make sure that customer will select one particular brand. Here, coupons and point
of purchase displays will be applicable. After the stage of actual purchase, intend of marketer
can be to influence buyers to again choose the same brand in future or to influence
repurchase. In this case, the company can provide coupon inside the package for drawing
future purchase (Neslin, 2002).
TASK D
4.1 Evaluation of personal selling techniques
Personal selling involves person to person communication where Walmart may attempt
to use this technique for customer relationship management. Personal selling is one of the
main element of marketing communication ix at Walmart, where sales personnel persuade
customers to try new products or package deals. Personal selling techniques should be
evaluated by assessing its contribution in the company’s whole promotional effort. It should
be noted that the costs of personal selling might at times be higher, but the returns would also
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be good (Ogawa and Piller, 2006). There are various quantitative and qualitative criteria to
evaluate Walmart’s sales force efforts as listed below:
 Quantitative Measures
o Order size / no of orders obtained / no of orders cancelled
o Sales Volume in terms of unit sales or Euro volume / Percentage of sales target
achieve
o Gross margin by customer type or product category
o Number of new accounts created and collections per account
o Number of sales calls on potential new calls
o Average expense per sales calls
o Number of customer complaints resolved Qualitative Measures
o Knowledge of sales persons regarding Walmart’s products and policies
o Knowledge of competitors products and strategies
o Customer knowledge
o Sales presentation skills
o Communication and interpersonal skills
o Follow-ups and customer relationship
o Timely submission of reports
Personal selling provides Walmart the opportunity for having two-way exchange of
information therefore sales representatives required to have skills of conveying the message
effectively. So evaluation of the personal selling effort is significant for the sales department
and assessment of the contribution of personal selling in areas of non-sales-oriented criteria
should also be considered (Papasolomou and Vrontis, 2006).
4.2 Influence of operational design on sales revenue
Walmart’s operations management involves several approaches that are focused on
maximizing the sales performance. Walmart’s operation management objective is to
maximize revenue by supporting generic cost leadership strategy (Mont, 2002). The company
employs various qualitative and quantitative productivity measures related with business
process and human resources especially in the domain of personal selling and sales persons
such as “revenues per sales unit”, “rate of stock-out”, and “order filling duration”.
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Walmart put focus on maximizing revenues per sales unit which involve measuring
both the average sales revenues per store, and total sales revenues per sales team. Further,
they want to minimize the rate of stock-out which refers to the situations where insufficient
inventories of a certain products are identified. Similarly, the duration of order filling should
be minimize which reflect the amount of time that would be required to fill inventory
requests in the stores. Successful achievement of these criteria contributes to Walmart’s
operational performance which have strategic significance to revenue maximization objective
(Neslin, 2002).
4.3 Key principles that should be included in a sales training programme
The following are some principles to be considered by Walmart in its sales training
programme:
Teach skills not trait – Instead of trying to alter individual personality, the company should
concentrate in training skills that can be learned and taught.
Support and reinforce skill – While training, provide sales employees with several
opportunities to check on how effectively they are executing skills and give necessary
coaching.
Teach the adequate skill – The organization should only teach skills to employees that lead to
tangible results.
Execute skill-based metrics – If company actually want its sales to integrate talents into their
routine performance than should measure the outcomes of application of that specific skills
(Perry and Bodkin, 2000).
CONCLUSION
The above report concludes that adequate segmentation of overall market should be
done by retail sector to target offerings and generate appropriate sales. The marketer in store
should be aware about needs of different buyers, as their purchasing behaviour changes due
to social, culture and psychological effects. Moreover, it is given that social media has
become the most important mode of advertising and attracting customers towards company.
In addition to advertising, the company should make eye-catching merchandising and display
both inside and outside of the store for drawing customers. Different promotional activities
can be used by retailer depend on the purchase stage of customers to increase their repeat
purchase for the same commodity. Moreover, to sustain brand loyalty and increase image
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