Page 170 - Finance for Non-Financial Managers

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Business Planning
Marketing and Sales Plan—Generating Interest and Making
the Sale
Give the availability of the product or service, the company’s 151
sales and marketing organization (or organizations, if these are
separately managed) must determine how it will interest the
company’s potential customers and then sell enough of its
products to reach the sales goals it has set. Representative
goals might include hiring and training more sales people,
launching a targeted marketing campaign to raise brand aware-
ness, introducing five new products during the year, opening
and staffing three sales offices, and reducing customer com-
plaints about product delivered vs. sales representations.

The Dilemma of the Tour Bus
Industry in 2002
This client’s customers are travel companies that put
together vacation packages that include use of buses to transport
travelers. In this segment of the travel industry, there are bus compa-
nies that own and rent out buses for holiday travel events.These bus
companies have been experiencing multiple pressures on their sales as
a result of three factors:
• pricing pressures from customers in a market where vacation travel
is still 25% below normal due to the aftermath of 9-11
• high replacement cost for new buses combined with falling trade-in
prices for their older buses, causing greater demands on their cash
to periodically upgrade equipment
• dramatically rising insurance costs from insurers looking to replace
loss reserves damaged by 9-11 claims.
Any bus company must address these challenges in its operating
plan to have any chance of achieving the stated revenue and gross
margin goals. For example, a company might offer its customers extra
services that deliver high value in the customers’ eyes without raising
its costs too much, thus lowering the price resistance from customers.
A company might also sharpen its search for better financing and hold
buses a few months longer than normal, thus lowering somewhat the
bus replacement cost pressures.Also, a company might shop more
aggressively for insurance coverage and raise deductibles to help lower
insurance costs. Perhaps the best solution might be a combination of
all these options.