Everyone wants growth. Business plans and strategies are designed in line with what growth is desired. Customer engagement programs, visibility, promotion, etc are budgeted to reach the objective. These are then downloaded to the entire system so that everyone is prepared to meet the goal. According to me these and many other are the various methods that companies take to drive the business to growth. As long as companies take decisions that do not disturb the price, it’s okay but the moment they start discounting, things fall apart.
Being a market entry strategist, with the clients that I have worked with, I have always advised them ‘never to discount a brand’. Yet, I see so many companies who use these resorts to meet short term business targets by jeopardizing the long-term vision of the business. This article will talk in detail about my views and opinion on discounting.
There is a particular set of people in the business of sales who do not understand anything but discounts. They are victims of the so-called sales targets. Without having a deeper knowledge of how discounts works, only to get to the volumes they end up convincing the management to give discounts (sometimes deep discount). The result is that they get a good chunk of orders from the market, give them to the distributor who then raises primary order to the company, and sales number increase, resulting in targets being met. This is usually followed by a wine and dine party in celebration that the number was achieved. That’s short-term. Now let us look at what are the long-term consequence of this strategy.
Business starts as normal the next month but this time the numbers do not happen. The monthly meeting is done justifying how discounting helped in getting the sales up. Based on past records and data (depends on how you analyse it), the management can see that how discounting had increased the business in that particular month. Being convinced the management now sets a quarterly budget for discounts. The happy sales team now works on the same phenomenon of taking the orders, billing the distributor, and reaching the numbers. The first month goes well. However, what seemed easy in the first month becomes a little difficult in the second month and very difficult in the third month. Somehow, because of the limited knowledge, they are unable to foresee that they have caused damage that is beyond repair.
Starting your own business might seem to be a daunting task, especially when you have no one to back you through the process.Having a great idea and turning the idea into reality has a huge difference in actions that are to be done to make it possible.
Getting your startup ready and fully functional might require some thoughtful steps to be done.So start taking notes as by the end of the article you will be aware of all the things you need to make a good start-up business plan.Begin with a brief description of your ideasHaving something in mind and putting it on paper has a huge difference in terms of clarity.
A briefly described business plan can help you and the people around you get a better understanding of exactly what the idea is and how you want it to take further.
A documented brief will help you recognize the requirements that you will need to kickstart your business.
The amount of initial money investment, resources, workplace, etc needs to be very clear and defined.Prepare a business strategyThe second thing that ticks down the list is defining the business strategy.
Now it's time you think about how will you make your business operational in terms of functional and management aspects.Define a process that works well with your business plans.
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