Project Report On Computer Hardware Industry

Submitted to Dr V.V Gopal

Submitted by: GROUP 4 Ajay B.S Anil Kumar RV Gunasekar Tanviraj

This report gives a brief analysis of Computer Hardware Industry in terms of Sales process, Segmentation of the market CRM initiatives, Business Communication, Lost sales analysis and Key account management.

Acknowledgement
Its been a great pleasure for me to work under people of immense subject matter expertise and its time for me to acknowledge all of them, without their support this work would not have been fruitful. It is great pleasure and honor for us to owe gratitude to my guide Dr. V.V. Gopal for his remarkable guidance and constant encouragement for his scientific and personal concern throughout the course of investigation which led to successful completion of this work.

INTRODUCTION
The year 2012-13 has been another year with uncertainties and downtrends globally. Indian economy has also slowed down in spite of being one of the most promising and developing economies. Beyond all these economic forces certain industries exhibited growth above industry average. For example, As NASSCOM state, IT-ITeS industry grew at 16% and for the first time touched the mark of 100 billion USD in revenue. Though the main chunk of the 100 billion USD is contributed by the software and BPO, the remaining is amount contributed by hardware supplies. This low contribution by Indian computer hardware industry is because of the dominance of China, Malaysia, Taiwan, South Korea and etc. Placing the computer hardware industry under the spotlight, the Data by IDC says that the Indian PC market has grown against the negative trend across the globe. The article read, "Overall PC shipments for calendar year 2012 stood at 11 million units resulting in a year-onyear growth of 3.5 percent over 2011, according to IDC. Despite a drag on overall IT spending, the growth in the India PC market was driven by special projects like ELCOT and a spurt in consumer demand for notebooks. From the standpoint of "Business marketing" we might have to focus more on the industry's business/commercial market (Leaving out the consumer market). This focus on business market is also interesting because of the huge amount of the revenue it gives to the industry. Just to quote a sample, Out of the 2.23 Million notebooks sold in 2012, One entity called Elcot in Tamilnadu made order for 9, 05,000 notebooks. But the sad part is, A study on the commercial PC business market by Ramdas S, CRN says, "The market saw a negative dip of 1.5 percent compared to 2011 when the total commercial PC market was estimated at 5.9 million and is expected to slide further" Restraining forces of the business market: Though there are big player like IBM's Lenovo, Hewlett-Packard, Acer, Dell and others in the business with all the resources required. The sluggishness prevails due to various factors like, Slashing of IT budgets by small businesses and corporations: The global economic conditions are making them work on cost advantage with low margins. Thus the big corporations are not ready to spend much on anything due to the low budgets they are forced to work on. The lack of need to update the technology: Technology and products offered by the industry has not changed drastically in recent times so the need for change is not felt by the customers.

 Increase in the other forms of devices like tables and smart phones: The technology convergence has happened. More than computers the tablets are efficient for mails, presentations, power consumptions, space and more. Thus the trend is shifting towards the tablets Concept of BYOD (Bring your own devices): Organizations have employed a new technique to cut down on their cost by asking the employees to bring their own computers and notebooks to the workplace. Drivers of the business market: The import bill for electronic goods is predicted to the bigger than the oil import bill by 2020 if a domestic ecosystem for promoting manufacturing is not developed. Electronics Manufacturing Clusters Scheme (EMCs): The union cabinet has recently approved the proposal for the Electronics Manufacturing Clusters Scheme (EMCs), which will provide financial assistance and guidance for manufacturers. Software Technology Parks of India (STPI): The effective functioning of these parks as association are huge potential customers of computer hardware. People employed: There are about 25 lakhs people working in the IT industry alone, Where most of the individuals will do their days to day work on a piece of hardware. Computerization of industries: Most the industries in India are computerizing their firms. Even the government of India is implementing e-governance effectively. Thus by making a brief study on the computer hardware industry (Personal computer and Notebooks) we were able to find the abovementioned points along with the restraining and driving forces. These mentioned points along with the dropping growth rates shows the signals of a matured market. This fascinating fact that the computer hardware industry has stagnated, makes the group more interested to learn more about the industry under the business marketing context and study the industrys reaction to various marketing concepts and monitor the future.

Segmentation of Computer Hardware Industry

Market Segmentation is dividing a market into groups of customers who have similar requirements for a product or service offering. Computer Hardware Industry can be segmented based on Macro and Micro factors. Macro variables: 1. Type of customer: Start-up companies which include Software, Banking (Financial institutions) and Insurance companies; Educational Institutions. 2. Company size: Net worth of the customers will be between 10Cr to 100Cr. 3. Customer location: A1 cities Delhi, Mumbai, Chennai,, Hyderabad, Kolkata and Ahmedabad; A cities- Pune, Bangalore, Kanpur and Vadodra [1] 4. Usage : Can be further divided into 4.1. Type: Orders vary based on units and specifications. 4.2. Frequency: Clients are advised to upgrade the systems every three to five years. Three in case of companies and 5 in case of Educational Institutions. Sophisticated labs in Educational Institutions would require yearly up-gradation. 5. Ticket Size: Mainly based on volume. Since computers are commoditized, its a volumes game. Based on requirement, ABC will cater to lot sizes from 20 (companies) to 500 (Educational Institutions) units.

Micro Variables: 1. Purchase intentions: 1.1 New Task: For new customers who are entering into business with ABC for the first time 1.2 Modified Re-buy: For already existing customers who would request for new specifications or it there are modifications in orders placed 1.3 Straight: Repeat purchase, mainly up gradation of existing systems (e.g. Memory capacity, motherboards or RAM) 2 Payment criteria: Part payments 60% before and 40% after delivery. 3 Product Range: Systems are priced based on the configuration, ranging from 15,000 INR to 55,000 INR

Segmentation of this industry can also be done by Nested Approach [2] as shown below. Industrial market is segmented layer by layer, from Demographics through Personal characters.

1. Demographics: It is the outermost nest consisting of broad general character of the market. It gives a broad description of company and relate to general customer needs and usage patterns. This can be further divided into 1.1 Industry: Software, Banking, Insurance and Educational Institutions 1.2 Company size: Net worth of 10Cr to 100Cr 1.3 Customer location: A1 cities Delhi, Mumbai, Chennai,, Hyderabad, Kolkata and Ahmedabad; A cities- Pune, Bangalore, Kanpur and Vadodra 2. Operating Variables: More precise identification of customers and generally include stable variables such as 2.1 Technology- Study of how technologically apt the customers are. For example, Software development would require state-of-the-art technology where as Educational Institutions may prefer for previous models as they are more sensitive to expenditure 2.2 User status (Brand or product)- if the customers are brand specific or if product performance is what matters 2.3 Customer capabilities- as to see how financially sound the customers are 3. Purchasing approaches: Determining the purchase function and structures of the customers. They include

3.1 Purchasing Function Organization: If the customers use a centralized or decentralized approach. A small software firm may use a centralized approach where there is only one key purchase decision making entity. Where as it is possible in Educational Institutions, each department such as Electronics, Mechanics, Computer Science may have autonomy to go for the purchases as and when required. 3.2 General Purchase policies: Some clients may require agreements based on suppliers cost, some may negotiate based on market price and some may use bids 4. Situational Factors: Can be in the form of urgency or order fulfillment, product application and size of the order. This would give a personalized edge to meet the needs of the customers. 5. Buyers Personal Characters: This refers to laying emphasis on the people involved in t he buying decision than the organization. It can be in terms of buyer-seller personality, buyer motivation, individuals perceptions and risk-management strategies. Some buyers are risk receptive and some are aversion in nature.

Target Segments: Organizations vs. Net worth

<1 Crores Software Co Banks Insurance Educational Inst

1 to 10 Crores

10 to 100Crores

>100Crores

Communication In Communication Hardware Industry

Marketing communications have an important role to play in communicating and promoting products and services not only to consumers but also to the business-to-business sector and to other organizations representing differing stakeholders. The development of partnerships between brands and consumers, and between organizations within distribution channels or networks, is an important perspective of marketing communications. Its an entity that links a business to the consumer, in the form of information, plugging the gap between consumers and the business.

Roles of Communication:
Computers are such that they find application through various industries. Hence it is important to find right approaches depending on who the customers are and thus, they have different roles such as below: 1. For integrating: Here computers play a role in integrating different business processes in an organization, thus aiding the businesses to reach their goals and objectives, efficiently. E.g. Computers in Retail will help in keeping track of the inventories effectively, by coordinating with different departments. Computers could also play a role of integrating different businesses such as software and Banks/insurance/education/retail etc. 2. For information: All companies thrive on information pertinent to their business activity. They would want to communicate to the present and potential customers about the benefits of using their products, technical specifications and other benefits to the businesses if they adopt the products 3. For influencing: Influencing the existing customers, how they can upgrade their products for superior functioning and for potential customers, in what way computers can make their business processes efficient. 4. Image building: Mentioning of existing clients in the websites and catalogue will boost the credibility of the company. PR efforts will ensure that every possible contact point delivers positive and unified message on behalf of the company. Sponsorships and event

based marketing will help in building brand loyalty and other positive feelings towards a company 5. Employee orientation: Vision, mission, goals and objectives will help in aligning the internal stakeholders toward corporate strategy, thus directing them towards the organizational goals

Steps in Communication:
1. Determine communication objective 2. Identify the target audience 3. Determine promotional budget 4. Developing message strategy 5. Selecting Media 6. Evaluate promotional results 7. Integrate promotional program

Communication Model:
1. Objectives: To increase the market share of ABC computers in India to 20% by 2020 To be among the top 3 computer hardware manufacturers in India 2. Identifying Target Markets: Educational Institutions in India based on number of students greater than 2000. They include aided, unaided and residential schools Commercial Service Enterprises such as Software Co, Banks, Insurance and Hospitals with net worth between 10 to 100Cr (start ups and new establishments) 3. Promotional Budget: It would be a combination of Percentage of Sales and Objective & Task approach. 10% of sales will be set aside for promotions

 The share will be further divided as per following task: 1. Identifying target customers (existing and potential) 30% 2. Media selection and execution 20% 3. Personal Selling 40% 4. Contingency 10% 4. Message Strategy: ABC Computers frees you to focus on your business and transforms the way you use your PC to simplicity 5. Promotional Tools and Media: Objective is to cut across several industries as computers form a part of infrastructure that is a must to sustain varieties of businesses Advertising: India Business Journal, Indian Journal of Economics and Business and Emerald publications-> PRINT MEDIA Sales promotions: Trade shows such as Information Technology and Communication Expo* in Hyderabad (October); COM IT Expo* in Mumbai( November) *These are upcoming events scheduled for 2013) Public relations and publicity: Sponsoring events such as Tech fests, Seminars etc at Educational Institutions and Organizations (SAP); CSR activities to increase computer literacy etc. Direct Marketing: Database marketing, Permission Marketing, Direct mail and catalogue Personal Selling 6. Evaluation: Sales and Response rates Test markets Evaluation of PR activities -> Number of Clippings (No. of clippings in the print medium vs. No. of new releases sent out by company) and Impressions (No. of purchasers or subscribers of print medium in which clients name is mentioned) .

Customer Relationship Management

An effective means of building up on Customer Relationship Management is to focus on all the key stakeholders (those who have interests in company and are influenced by company activities). These include 1. 2. 3. 4. Employees Customers Suppliers and Others (Government, investors etc.)

CRM initiatives for each of the entities ensure an overall strong bonding which can sustain an organization. Every touch point of the entities should be a positive experience thus ensuring smoother transactions. CRM Initiatives: Customers Customers can be classified into Existing customers and Potential customers. Existing customers can be further divided in two categories based on the volume of the orders (bulk orders) and the frequency of orders (loyal customers who have been buying products from us).

For Existing/Loyal customers: Priority services (regular service, maintenance, up gradation, replacement etc.) to be provided to premium clients Better credit and payment terms and conditions such as payment in installments or waving off installation charges Dedicated customer service or single point contact for queries/solution; providing clients with hotline facilities where any form of complaints, queries, maintenance/replacement or service would be adhered to within 24 hours thus eliminating risk factor. Assistance can also be provided through video call facility for better clarity in passing on information. eCRM initiatives to address the clients over the phone(online) by means of newsletters and promotion of latest devices which could improve the overall performance of business process Carefully observing the business cycle of the clients and using up selling and crossselling techniques to enhance the value that the client or clients get from the

organization in addition to maximizing the business's profit. In doing so, the organization must ensure that the relationship with the client is not disrupted. Data security and extra privacy software bundled with hardware devices to be given at reasonable price for privileged clients Extended warranty and better terms and conditions such as additional 6 months warranty extension, liability for hardware failure etc. Operating by means of Cloud computing where companies can cost efficiently as payper-use on manage, maintain, and upgrade etc. system and connect with their customers streamlined in the cloud. In cloud based CRM system, transaction can be recorded via CRM database immediately. Follow up activities on any kind of queries or complaints adhered to; periodic calls to check if products are functioning well or if customers have any concern. Ensuring feedbacks are precisely addressed. A compact disc comprising of DO IT YOURSELF training would be provided to the customers so that minor fixes like networking, setting up LAN, hotspots etc. can be done without contacting the company Simplify experience at every moment of truth beginning from comprehensive and easy to use website to the sales executive in charge of the sales process Track client behavior at the most granular level such as transactions, complaints lost or displeasure experienced. If any customers lost, find out what went wrong and who they are presently doing business with Participation in International Trade Fairs showcasing the products would act as a potential means of attracting new customers Conducting conferences with existing clients of the same domain (IT/Banking/School etc.) and communicate to them how the industry trend is growing and how they can maximize value by upgrading to better products Sponsoring events and fests in educational institutions so as to increase brand image and thus developing a nexus with them for further transactions

For Potential customers: Concentrating every moment of truth (touch points) and making it memorable. Right from appealing websites to a professional sales executive Offering better terms and conditions in terms of payment and services rendered Provision of demonstration facility at the clients location or any place convenience to the client would be another way to impress the clients

Internal Stakeholders/ Employees Employees also called as Internal Stakeholders of an organization form a major factor in driving an organization. Hence it is necessary to build, sustain and improve the relationship with the employees. The company has to sell its idea first to the employees and then it can be successful in selling it to the customers. Some of the ways to motivate and develop good terms with the employees are as follows. Ensure the employees are clear about the company vision, mission, goals and objectives Clear and frequent communication of information by means of Training sessions, memos, newsletters, meetings etc. Engaging employees (union leader/representative) in planning and decision making so that the employees feel they play an important part in the companys decisi on making process Encouraging feedback and 360 degree appraisals for overall development of the relationships. By this, discrepancies can be quickly spotted, rectified and healthy relationship can be built Act fairly, respect and create trust among the people in an organisation to facilitate stronger bonding among the employees Support and promote creativity in any form such as making the assembling process efficient or means of saving components or design of the hardware etc. Provision of amenities such as gym, cafeteria, lounge etc. creating better ambience Strict adherence to work timings emphasising on effective working habits and not setting a wrong precedence to other co-workers to work for longer hours. Unfinished tasks within prescribed time would reflect inefficiency and should be ensured this does not influence co-workers to stretch for longer hours for the same work Social get-together for events, festivals, tree plantation drives, CSR initiatives etc. where employees can bring their friends/families and celebrate Finally, implementing effective incentive programs such as bonuses, perks, performance related pay etc.

Suppliers: Customer relationship management with respect to suppliers is the discipline of strategically planning for, and managing, all interactions with third party organizations that supply goods and/or services to an organization in order to maximize the value of those interactions. In practice, SRM entails creating closer, more collaborative relationships with key suppliers in order to uncover and realize new value and reduce risk.

A. SRM is the systematic creation and capture of post-contract value from key business relationships; B. It requires recognition that relationships are not an end in themselves. Successful relationships are an outcome and, for the buyer, that outcome can be measured in value terms, hence the recent vogue of talking about supplier value management; C. It is mostly about collaboration with strategic suppliers, but can still be adversarial. The business must be able to flex its application of SRM appropriate to the criticality of the specific supplier relationship; D. SRM needs to be completely integrated with strategic sourcing / category management processes. Its not something you design after the contract is signe d; A formal CRM team or office at the corporate level-The purpose of such a group is to facilitate and coordinate SRM activities across functions and business units. SRM is inherently cross-functional, and requires a good combination of commercial, technical and interpersonal skills. These softer skills around communication, listening, influencing and managing change are critical to developing strong and trusting working relations. A formal Relationship Manager or Supplier Account Manager role. Such individuals often sit within the business unit that interacts most frequently with that supplier, or may be filled by a category manager in the procurement function. This role can be a full-time, dedicated positions, although relationship management responsibilities may be part of broader roles depending on the complexity and importance of the supplier relationship (see Supplier Segmentation). SRM managers understand their suppliers business and strategic goals, and are able to see issues from the su ppliers point of view while balancing their own organizations requirements and priorities.

An executive sponsor and, for complex, strategic supplier relationships, a crossfunctional steering committee. These individuals form a clear link between SRM strategies and overall business strategies, serve to determine the relative prioritization among a companys varying goals as they impact suppliers, and act as a dispute resolution body.

Government: Governments decisions, support and permissions play an important role for smooth functioning of business. For an organisation to gather the support from the government, it has to do more than just abiding the rules and regulation enforced by the government. The government has all rights to intervene into the company under any circumstances, if the

company fails to comply by the standards be it environmental norms or taxation or labour acts etc. Hence it is necessary for an organization to follow the rules and regulations and be in good terms with the government and regulating bodies. The Organization should be clear with data which include all tax related issues to maintain good relationship with the government and the investors. The accounts, transactions should be maintained and updated with the internal and external governing departments at regular intervals. The manufacturing of the hardware parts and the assembly should be done with great responsibility towards the environment, the methods and processes used in the manufacturing and the distribution systems should be eco-friendly and should reduce the ecological effects caused to the environment. Use of paper, plastic and other nonbiodegradable materials has to be reduced The organization must take care of the quality and standards set by the government and regulating bodies. The company should take responsibility of all the quality and design of the products it supplies and implement all the requirements mentioned by the regulatory bodies. The organization has to invest in public development to get into better relationships with the government and investors. CSR initiatives would also help them in increasing awareness of the brand, maintaining relations with authorities and increase their customer base

Initiatives such as funding renovation of public property such as Government educational institutions, police stations, providing accessories to traffic police etc. would act as ways by of maintaining healthy relation with the Government

LOST CALL ANALYSIS

Below is the Lost Call Analysis of the Computer Hardware industry of ABC. The underlying assumption for this analysis is that we are among the top players in the Indian market and our competitors would be XYZ Computers in the segments we are targeting. Lenovo, HP and Dell which are considered as holding No.1 and No.2 position on the world PC manufacturing market [ IDC and Gartner report 2013] [3]. Since we are targeting a different segment of organizations of net worth 10Cr to 100Cr, there would not be threat from Dell, HP or Lenovo. ABC Company is the leading manufacturer or PC and Laptops Headquarter at Bangalore and spread over all the Metros and capitals of all the 28 states in India. Hence, we would have 28 authorized dealers in India exclusively to cater to various businesses and institutions such as Companies, Banks, Government set ups and Educational Institutions.
PERFORMANCE-PRICE MAP OF ABC COMPUTERS:

Objective: The end result of this analysis should be to identify and track where ABC Computers is losing on its existing and potential clients. Also, it would act as a manual in what the company could do to regain its lost business.

Best way to identify the reasons for losing out sales opportunities is to have an in-depth debriefing sessions with lost or ex-clients. Lost clients even wait until the last minute to tell the firm about the break-up.

Through lost call analysts, ABC can 1. 2. 3. 4. 5. 6. 7. 8. Can know why existing clients left What potential clients are looking for Issues identified across ex-clients and account managers Know the strategies the competitors used and their result Let ex-clients tell us how to beat the competition Learn steps that needs to be taken to win back the clients Protecting existing clients Learn how to improve on competitor ideas and innovations

To begin with, below is the Lost Call Data Form which needs to be filled by all the authorized dealers and should be filled once for every 6months for every opportunity lost.

LOST CALL DATA FORM

PART A
Date:______ Name of the Client: Location: Type of Business: Product ordered: Laptop/ Desktop Quantity ordered: Specifications: Price quoted: Value of the Order: Associate in-charge of the quote:

PART B
To whom was the order given: _________ Type of order: Full/ Part If Part, is there any scope of bringing back the customer? _______ Type of purchase: New Task/ Straight Buy/ Modified Re-buy ________ If New Task: 1) Was Demo arranged for the customer representative? 2) If yes, was it held at customers location or ABCs premises? 3) If it was ABCs premises, i) Who was in charge of the Demo? ii) What were the issues/challengers/problems discussed? iii) Were necessary logistics and accessories available for the Demo? iv) Any uncertainties? 4) If it was clients location, i) Who represented ABC? (Details of the Team) ii) Was the representative present on time? iii) Details to whom the Demo was made (Name, designation) iv) Contact with any gatekeepers? 5) Details of discussions and negotiations had with the customer 6) What are your reasons for losing the order/deal If Straight Re-buy, 1) 2) 3) 4) Person in charge of the account Reason for losing the orders Is there scope to re-gain the contract? Steps taken to win back the order

If Modified Re-buy, 1) 2) 3) 4) What were the specifications modified? Can we address the new specifications requested? If yes, what were the reasons for forgoing the order? Were there any faults/bugs in our earlier delivery?

5) If yes, who was the specifications in charge and were the issues addressed?

Action Taken:
Since it is businesses accounts we are catering to, it is important that we develop and build a long term relationship with the customers. Computer manufacturing industry has evolved into hyper-competition where it is difficult to sustain a steady competitive advantage as technology is continuously evolving. Hence every moment of truth should reflect on how customers can reduce their risks by doing business with us. It is important to have a well trained and qualified staff at every point of contact with the customer. Hence, appropriate class room and on the job training has to be provided for clear and detailed presentation. By this, the associates will be capable to effectively present the products and add value. The sales executive should get involved in the first three stages of the buying process, understand requirements clearly and assist in developing specs and make the offer to meet requirements better than competitors. Help can be taken from industry experts for clarity of requirements.. To a great degree, ABC would distinguish itself from the competitors with the sales force (people). Be proactive and anticipate the future needs of clients, by having a relationship plan and testing with the existing clients. Know the clients Key Business Issues and schedule quarterly Hows Business meetings with senior executives. By this, ABC can constantly be in touch with the clients thus reenforcing the relationship [4] Collaborative relationship with existing clients, who can be referred to other businesses, thus ensuring solution provision along with computer apparels. For example, since we are targeting start ups (software developers) and institutions such as education, insurance, finance etc, software providers can be referred to institutions. By this, institutions can benefit from software providers and in return, the start ups can acquire clients. ABC would play the role of integrating different verticals, thus a chance to bear the competition. Marketing our fellow partners or personal allies before a competitor beats us to it. Electronic purchasing should be possible for a straight re-buy situation with automatic re-order system for saving time and cost of purchase executives. Informal way of building relationship with key influential buyers or purchase decision makers outside the purchase department will help in having good rapport with the customers. For every transaction or delivery, it should be the executive in charge of the deal to regularly take feedback of the customers about the products and anything they would like to be improved in terms of delivery and service. By this, implicit cues can be used to determine what their future requirements might be like.

If pricing is an issue, favorable options of means of payments shall be provided along with offers. If there is a possibility for getting back the lost order, the sales executive should stress on what it is that competitors offer in contrast to ABC. Price should be quoted in such a way that it is within the price range and value can be increased by increasing the benefits and less emphasis on cost reduction.

KEY ACCOUNT MANGEMENT

Key Account Management is a strategy used by suppliers to target and serve high potential customers with complex needs by providing them with special treatment in the areas of marketing, administration and service.

To make key account management work well requires mastering four areas: strategy, organization, process, and technology. The four work in concert; getting one or two right without adequate attention to the others is the difference between baseline and high performance.

Strategy
Determine Which Customers Qualify. Criteria include a customers existing and likely future revenue growth and strategic position in its industry. By these measures, some smaller

company accounts merit key account designation, as do channel partners that are growing through mergers. To prevent sales people from being spread too thinly, take care to focus finite resources on the handful of accounts worth designating as key, and to have a consistent definition across regions and parts of the organization.

Organization
Align the Sales Organization. Supplement with a system to share awards among the sales force and ensure that each person shares his or her knowledge about the customer; engage the extended team in planning and execution. Review and build organizational capacity to support key accounts with in accepted cost-to serve parameters. Synchronize the Organization with the Customer. When possible, have single account leads paired with the customers similar functional head for product, supply chain, marketing, and operations. Work at the customers pace, rather than a pace set by internal operations. Select a Team with the Right Set of Skills to Develop a Robust Account Plan. This should be a cross-functional team composed of dedicated and indirect personnel (such as supply chain and marketing) not the same old sales team built around established relationships. When considering how to grow the account, it pays to tap fresh thinking from subject-matter experts and support staffs, which are sometimes outside of the account team.

Process
Define the Key Account Planning Process and Link with Annual Business Planning and Budgeting Processes. Account planning typically is viewed as an annual reporting activity with each step in the process timed to annual reviews, customer reviews, budgeting and business forecasting. More frequent, regular meetings will help to keep the team coordinated, so that day-to-day activities stay aligned to the strategic objectives. And define a responsibility assignment matrix for support personnel, so their roles are clear. Conduct Regular Key Account Review Meetings to Monitor the Action Plan and Sales Results, Integrated Into Company-wide Review Cycles. Instead, one should regularly take the pulse of customer expectations and the extent to which the services provided meet those expectations. Introduce a quality assurance process to ask the difficult questions and break through impediments. Update the Key Account Power Map Frequently. Youve got to keep tabs on whom you know and whom you dont. Maintaining the power map ensures that the team has an accurate picture of the different players within the customer, their perceptions, social styles, and

relationships. It also helps to identify areas of the business where the supplier has no established relationships, or where competitors are making inroads. Establish Joint Processes with the Customer. This is particularly useful concerning product improvements and measurement of results. Joint processes help foster a true partnership.

Technology
Establish a Common Repository of Account Information. Customer insights are often dispersed widely throughout an organization, leading to duplicate efforts compiling and analyzing information or one-off exercises that dont get scaled up. A common repository should include the customer profile, power map, sales data, win/loss analysis, and internal organizational charts. The goal is to foster coordinated communication at both tactical and operational levels, promoting one common message. Action plans can even be automated to automatically track assignments and status. Make the Sales Plan Visible to All Team Members Electronically. Some companies demonstrate a lack of trust in their own team (which becomes evident to the customer) by limiting visibility to account objectives, relationships, and strategies. Yet for key account management to succeed, each team member must share a sense of responsibility and ownership in developing the account. Sharing all information is central to that philosophy.

The benefits of key account planning

A majority of companies believed that strategic plans for individual key accounts were beneficial. The earliest benefit was that the key account manager and the company overall gained a better understanding of the customer, thus meeting the customer s need for a proactive approach. Respondents commented that they thought they knew a lot about their key accounts until they started the information-gathering necessary for a strategic plan. It was clear thereafter that their knowledge had been superficial. The new insight into the customer led logically to new thinking about how to do business with them. At the very least, the need for new contacts was identified. At best, new comprehensive solutions to help customers meet their strategic objectives could be explored. This is attractive to customers; purchasing decision-makers are impressed with suppliers who are easy to do business with. Some of them applied great emphasis to this as a feel good factor. Where suppliers had thought strategically about solving customer hassle in using their product, they were rewarded with a higher share of spend. Customer involvement is undoubtedly a benefit as it usually leads to customer commitment to the supplier plan, reducing risk and enabling follow-through planning to other functions to ensure efficient application of resources. Although some customers were reluctant to contribute to supplier strategic planning, most welcomed being involved at an early stage.

Most suppliers were nervous about that, although there is evidence of the cost effectiveness of supplier-customer co-operation, e.g. in supply chain integration. Both suppliers and customers regarded having a strategy for a key account as preferable to no strategy. Customers were critical of suppliers who were loose cannons.charging off in different directions. Suppliers realised that good strategy based on good analysis led to a consistent rationale for activity which fed into other plans within the organisation in an effective way. Intangible benefits within the supplier organisation included the value of organisational learning about the customer and the value of the companys capabilities. This was true particularly where cross-functional teams were involved in planning. The benefits to KAM planning went beyond the financial, and included: Better customer understanding New thinking Customer involvement and buy-in Sharing of information Formulation of strategy Guidance for implementation Learning Better management overview / customer portfolio management KAM Plans provided the basis for much better management insight in decision-making, and visibility throughout the company of expectations concerning key account activity.

Reference
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