final Flashcards
Q3 2016: what marketshare did business ground transportation (rental company, taxi cabs) have vs. uber
Uber: 52%
others (hertz, alamo, avis, etc): 48%
Mary Barra is the CEO of…
General Motors (GM)
Is uber profitable?
No
Approx how much does Jeff Bezos own of Amazon?
16.9% (worth $69.3B)
What’s Bezos’ great business achievement at Amazon?
Insights/data driven customer segmentation technology: Figuring out what customers want before they pay
How does Bezos’ customer segmentation differ from ours in class?
He rejects personas. Instead uses data analytics to construct a much more refined view of each individual person.
What’s the significance of Amazon AWS?
their biggest revenue generator
What are Amazon’s customer value props?
- Operational efficiency
- customer focus
- innovation
What’s amazon’s culture like?
Small working teams, few frills and perks, customer-focused
What was 23andme’s problem in 2013?
No FDA approval for diagnostic analytics
Which university did Anne Wojcicki go to? What’s her company?
23and me; yale; played ice hockey
Which university did mary barra go to?
university of GM (general motors)
which university did travis kalanick go to?
UCLA (dropout)
23andme case study
market analysis (lay of land)
(used secondary market analysis)
competitors:
- color.com
- ancestry.com
size of market? is it growing? economic outlook? others' pricing? regulatory threats?
23andme case study
market research (primary)
things we don’t know about the market or our product that we need to answer
e.g. what genetic consumers care about and what value can we provide to you
23andme case study
customer segmentation
what demographic are we going after?
e.g. young, energetic, health-concious people
23andme case study
SWOT
strength:
easy to use kit
results will be unique to you
weaknesses:
no actionable insights from genetic data
Don’t specify a particular target market
industry regulations
opportunities:
increase advertising platforms
expanding globally
stay in compliance with FDA
threat:
color. com (cancer genetic screening: linked up with doctor advice) and ancestry.com
23andme case study
positioning statement
Who is target market, what unique value do you provide, why should customers believe in us?
23andme case study
message
empowerment/take ownership of future
key message in “Lean In”
women (and men): step up when opportunity come to take on more responsibility, take initiative –> justify promotion
What are the 4 P’s in Dexcom? (note: one is different)
Product, Price, Promotion, Partners (not Place)!
Because Dexcom, they produce diabetic products, needs to partner with other companies.
Which group in the technology adoption curve is most important for long-term success?
innovators -> early adopters -> early majority adopters -> late majority adopters
early majority (NOT early adopters)
What’s the sales process?
- Opening: BRIEFLY introduce self and purpose, generate/capture interest, brief & specific & creative bridge to presentation
keep questions to a minimum
“I’m Craig, I’m here to work with you to relaunch this product. - Fact finding:
- 1 don’t ask what you already know
- 2 customize questions to demonstrate you’ve done your homework
- presentation (FAB):
3.1 customize based on what you learned in (2)
3.2 but trust the flow of the sales piece (tested).
3.3 use visuals
3.4 demonstrate FAB:
facts, “so what? how is this different?”, benefit: what does this mean for you - Assess Interest/Answer Qs (Objections)
- Seek Commitment/Call to Action (Close)
What’s an objection in sales?
A question voiced in a concern. It’s not a rejection. Rejection would be walking away.
What’s Craig’s preferred method of gaining commitment?
Sales benefit close (I endorse this…)
Management case study #7: Brook Lodge, MI
1996: clinton wanted to execute health care reform. They were gonna slash pharma to make healthcare universal & free.
Craig’s employer, Upjohn co, wanted him to pull together an educational conference: bring in clinton’s top doctor to speak at summit
clinton’s dr. offended most important customers by saying she was anti immigrant doctors.
Craig was asked to ask Dr. to apologize.
Dr said: “screw that, I say what I think”
His colleague at upjohn said: “The views that she expressed are not ours, we’re sorry.”
What did Dr do?
Calculate hourly salary:
base salary = 60k
50 weeks/yr * 40 hrs per week = 2000 hours/year
base salary = 60k
base salary / (hours/year) = $30/hr
Foundational retirement strategies
- savings (foundation)- this often leads to the number that people have in their heads where they can make different choices and they dont ever wanna go below this number
- Pension (only certain companies/orgs/govt)- 1in3 americans
- Social security benefits (after retiring @ age 66-70)
- MMWUS: make money while u sleep
- inheritance
- part time job
Types of interviewers
- mr too good for you
- robot
- buddy turned confrontational
- pro
Who believes in dressing appropriately?
Mary Barra
Examples of promotional materials
Product:
tagline, color/design/logo,
advertising, packaging, etc
ex. tesla-how far can i go? being green has never been this luxurious
What does FAB stand for?
Feature (fact)- what the product does
Advantage (so..)- how different (better)?
Benefit-what this means for you
What is FAB?
The sales message
Creating value in the mind of your customer
Flagship feature
the one primary feature you will build your sales message around
Pricing
- Regardless of the factors involved, the price of a product or service must cover the costs of the product/service as well as earn a reasonable profit
- what product/service is listed at
Cost
price paid for product/service
Value
is the ratio of perceived benefits to price
VALUE=perceived benefits/price
(demand driven factor(s) which can dramatically increase the price/cost equation)
3 Pricing Models
Products: 1. target cost pricing 2. cost plus pricing Services: 2. time and material pricing
Target Cost pricing
- products not easy differentiated
- market determines price (range)
- many competitors
- in order to make a profit you must make product fit into pricing structure
Cost Plus Pricing
- new or novel (unique) product
- you set the price
- market leader
- ex. tesla, iphone, rolex
- in order to maintain leadership and healthy profit margins: innovate, uphold premium brand image
Time and Material Pricing
- Due to variability in time and material, pricing is determined by amount of each provided to specific customer
- ex. accounting, law, engineering, uber, hotels, medical services, entertainment
Value Pricing
increasing product benefits while maintaining or decreasing the price
Profit
=total revenue-total cost
=(unit price x quantity sold)-(fixed cost+variable cost)
Sales Forecasting definition
the process for estimating future sales.
Sales Forecasting based on
- Past sales data
- Industry-wide comparisons
- Economic trends
- Market Research & Competitive Intelligence
*The only thing we know for certain about a Sales Forecast is that it will be “wrong”
Sales forecast budget
- managements best estimate of sales revenue for the budget period
- prepared by multiplying expected unit sales volume for each product times anticipated unit selling price
The “Ask”
- provide senior management with launch plan
- seeking approval to launch
- seeking guidance and counsel
- typically ask for people and money
Amazon customer value proposition
- Operational Efficiency?
- Customer Focus?
- Innovation?
- Amazon – few frills and perks vs. “other” tech giants
- Teams – “if it takes more than 2 pizzas to feed a work group, then the team is too big” (Bezos)
Crossing the chasm
getting the early majority
Majority adopters are
More cost averse
Less tech savvy
Less engaged
Less forgiving of product faults
No such thing as a social sales call
give them reasons to use your product on every sales call
Barack Obama’s speech in Pennsylvania
Speaking about Clinton trying to sway the state in her favor
Missed out on the “benefit” (what’s this mean for us), who cares about her visiting 100 countries
Important quote from textbook about sales from a J&J sales rep
“Best sales people are the ones you can look across the room and never know if they are talking business or just carrying on a conversation”
Why would there be an objection in sales?
- dont understand features and benefits
- disbelief about the product
- Unwilling (at present) to accept you (trust you)
- Concern or question about the company you represent
- Not convinced of the value of the product (e.g. text book)
Why do lots of people think they close a sale but few actually do?
“Before you close, you must earn the right to close”
- closing too soon (customer does not exhibit the buying signals/interest to “buy”)
- failing to close (failure of sales person to sense the buying signals from the customer)
When closing…
STFU
Sales Success Characteristics
likeable, trusted, competent
Three domains of judgement calls
- people (if you have bad people you are doomed, impossible to recover from poor people judgement)
- strategy
- crisis
Three phases in judgement
- preparation- sense and frame the issue
- the “call” itself- make the decision
- execute- make it happen while learning and adjusting
Base salary and benefits
- only known “hard” compensation
- biweekly usually
- drives personal/family budget, loan applications
- determined by MARKET PRICE, experience, existing base pay/what you’ve been paid
- no such thing as a wage gap for equivalent roles and people
Benefits
medical, dental, vision, stocks, ‘work perks’
base salary equation
Base Salary ($) ÷ hrs/year = dollars/hr
base salary depends upon
- Market price for the job
- Experience in the market (you)
- Male/Female????
- Will consider your current (base) pay from current employer
- Can increase (or decrease) based on geographic location (COLA adjustments, hard to fill areas)
- Substantial range in Base Pay for sales positions (employers will pay handsomely for experience and established relationships)
Benefits
medical, dental, vision, stocks, ‘work perks’, 401k
Annual (pay) increases are contingent on the following (in most companies):
- Average increase (%) approved by the Board
2. Performance of the individual (Annual Review)
*$9.61/hour x 2,000/hour work year
20,000/year
three types of bonus plans
- Ranking Bonus Plan
- Goal Based Bonus Plan
- Commission Based Bonus Plan
ranking bonus plan
- Pro: Easy to understand, Easy to budget, Good for short term/”confusing” markets
- rarely used, mostly only in Finance and HR
- pits rep vs. rep base one first to last
- may limit rep sharing/cooperation
commission based bonus plan
- Pro: Highly motivating to (most) reps. Easy to understand and drives (hard selling) behavior. Often supported by Sales Mgmt., Finance, and Senior Mgmt
- Con: Does not account for variability among territories (potential, current established business). Useful for “launch period”, less effective for established product period
goal based bonus plan
Pro: Most common bonus plan design. Used often for established markets and products. Calculated “percent increase” (or $ increase) for each territory. Reps used to it. !Does factor “variance” among territories!
Con: Ever present “cloud” among Sales Reps (“how was my goal determined”)?. Often confusing calculation on goal determination.
base/bonus splits
Base to Bonus “splits” vary by industry and company. Typically, the range is between 60/40 (base/bonus) to 80/20 (base/bonus)
bonus plans are designed to
drive behavior”, reward top performers, be simple to understand and implement (measure), and create excitement (frenzy) among sales force. It’s easier said than done
Flame Broiler case study
Headquartered in Irvine, CA
Current CEO is initial creator of the Flame Broiler concept (1990s)- Young Lee
Currently 181 franchise stores (85% in So. CA)
Concept: healthy take out: chicken or beef with rice and veggies – and Flame Broiler “secret sauce” (soy sauce based)
Ideal franchise for “entry level” entrepreneurs
-Lower entry costs (vs. “fast food” or restaurants)
-Low inventory (limited menu)
-Seating area but majority business is walk-in/take-out
-Strong corporate training and guidance
Flame Broiler focus for success
- Food Quality (primary)
- Customer Service
- Store Cleanliness
- Attitude (employee “energy”)
Franchise requirements
$25,000 (one-time) franchise fee
$275,000 – 300,000 capital required (store build out)
Corporate guides in location and set-up specifics
5% royalty fee (corporate receives 5% of revenue)
3% marketing fee (handles all advertising)
Franchise store specifics
Goal is to net 10% profits (after expenses and taxes)
Determine franchise location based upon:
Other eating establishments
High density zip code (people!!!)
Blend of both lunch and dinner traffic
Healthy living/eating area
“Holes” (uncontrollable factors) could be:
Work force (low pay — $10-13/hour) is transient
Shrinkage (theft by employees)
Consumer change in eating habits
Flame Broiler (the corporation) — goes “under”, sells out, change in leadership impacts quality, etc)
Store manager (and employees) poor performers
The “Chipotle Effect” (E. coli)
Neighborhood changes (offices/stores close/move, gradual deterioration of neighborhood)
“We’re gonna give you a Million Dollars……We’re just not gonna give it to you all at once”
Frank Fletcher, V.P., Sales
The Upjohn Co.
if we are there long enough we’d make 1 M
two career paths
A. Progress through company (ladder)
B. Hip-hop from co. to co.
- no right way
- Hopping creates risk (and reward). Only 1 “rabbi”
- Single company (can) produce more narrow mind-set (1 company culture)
- Often times, you don’t have a choice (mergers, acquisitions, reduction if workforce (RIF)
- IF you switch careers (not companies), do it BEFORE you hit 50
Company A acquires Company B why?
- Products (revenue driver today)
- R&D, Technology (revenue for tomorrow, synergy with today’s own capabilities)
- People capital (very few)
- Customer relationships (sometimes)
is there ever an “equal partnership merger”?
No, never, someone bought someone, one has the upperhand
“Minnesota” and “South Dakota”
Run the gauntlet (clime the ladder)
or
Master current (one) role
Self development
you are responsible for your own development not your manager
You are responsible for your career (trajectory, path, opportunities)
Oh, PERFORM FIRST!
UCSD Basketball case study
the point is that wins are what always matter more, not specs
District manager vs. rookie rep case study
- District manager decides not to go on the cruise with ihs family because his position is too important to miss the sales meeting
- Rookie rep wants to take a week off around christmas time and asked regional director. he went on vacation with the condition that he will sell like crazy after. he is new and has less experience so its not as bad if he takes a week off
Customer deciles in marketing and sales in the diabetes market. What is their range? What does the number mean?
see photo on phone/whatsapp for how to fill out decile chart.
Deciles range from 1 (worst) to 10 (best). Someone in 10 bucket means that this person generates a lot of revenue/prescriptions/whatever.
Management case study:
sales rep wants to move from Fargo to Minneapolis – she has 3yrs sales experience and a great track record. She comes and says there’s an opening in Minneapolis…. wants to move and continue sales there even though it’s new territory… asks you for approval.
Choices:
1) do nothing
2) say yes
3) say no
say yes b/c she’s proven to be valuable. If she were a 3 month rep then say no.
Management case study:
Toronto, Canada
Sent sales trainer to conference. Trainer went to dinner with thought leader Dr J one time and charged his own dinner and Dr J dinner to company card. But we later found out that Dr J wasn’t at the conference.
Sales trainer admitted he took his wife out to dinner and paid using company credit card, apologized for mistake.
Choices:
1) do nothing
2) stern warning
3) fire him
Fire him because you need to set an example for how shitty behavior will be dealt with: someone who is untrustworthy will not change overnight
Byetta market basket:
What’s byetta?
diabetes drug
Life Expectancy greaseboard session:
As a marketer, where would you enter the market? Red states or blue states?
What types of product/service categories would provide value?
Blue states; go where people have money and have an interest in life expectancy
Nursing homes, fitness coaches, etc.
Life Expectancy greaseboard session:
where is the highest and lowest life expectancy in the US? Why?
Highest: Colorado, California
Lowest: West Virginia (high smoking), South/North Dakota (native Americans), Mississippi (poor, bad diet)
Life Expectancy greaseboard session:
How long will it take to change the unhealthiness of lowest life expectancy states?
a) years
b) decades
c) generations
generations… very long time
Do you have to measure marketshare in dollars revenue only?
False. Can measure it in terms of units of product sold, for example.
or # of prescriptions
you’re pitching tim cook as a marketing exec at apple. what basic practical questions will tim cook ask?
what’s your:
price, # units, production cost, revenue (# units * price)
value = ?
value = perceived benefits / price
profit = ?
profit = total revenue - total cost = (unit price * quantity sold) - (fixed cost e.g. rent + variable cost e.g. labor)
pricing objectives
sales revenue, market share, unit volume, survival, social responsibility
who makes a sales forecast and budget? marketing or sales dept?
marketing
case study: estancia hotel - training new reps
craig training new sales reps. they flew out to a hotel where they had training. night before, the reps had dinner on company credit card and kept on ordering wine without asking for the price. racked up a massive bill. what did craig do?
- do nothing
- make them pay
- stern discussion next morning
he did nothing back then, but he regrets it and should’ve made them pay
case study: tijuana hotel - training new reps
2 reps flown out to sales training location. they got drunk, hungover next day and said they were feeling too shit to do sales training. Craig had stern talk and decided to let them sleep it off and resume training later.
Later discovered that one of the reps brought his girlfriend along on the sales trip too. What did craig do?
- nothing
- fire both reps
- stern warning
he fired both to set an example, because all the other classmates were doing well and he didn’t want to reward shitheads, especially not the one who brought his gf on a work trip
does the government use customer segmentation as a marketing tool or is that discriminatory/racist?
yes they do!! US Navy runs ads targeted toward young men.
what’s mary barra’s leadership style?
methodical, logical, provocative questions that stimulate thinking, consensus approach (tries to get everyone on same page, not just a dictator)
does market analysis talk about your product or service?
no!
what does mary barra think American consumers want in a car?
americans stereotypically want everything! they want a sexy AND practical car, not just either.
