Well come back to the world of blogging with more in my portfolio


You will be wandering as I took  so many years without posting anything, I want to acknowledge my followers and future followers that l have decided to write more about marketing. I know this will surprise some of the readers but l didn’t run away from the posting about international trade and import and export and also I have added buying and selling in general to the list, so please check on my category listed on the blog.

WELLCOME CONTRIBUTORS IN FOLLOWING AREAS OF BUSINESS:

  • Marketing.
  • Import and export.
  • Strategy and competitive advantages in international trade. 
  • international trade and policies.
  • Current news on issues affecting Zimbabwe and southern Africa’s SME’s and Africa in general. 

For those willing to contribute on these topics can contact me here

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MARKETING AND SALES POLCIES

MARKETING AND SALES POLICIES

In order to survive, the objective of any concern cannot be other than the making of a normal profit in the long term, so any entrepreneurs in order to survive he/she has to put more research and development on marketing and sales policies in order to survive.

Sales organizations and management are therefore directed to that end. In its widest sense, the sales policy must cover the subordinate policies of all departments and all activities that have any direct bearing on the actual selling of goods and services. Generally, the sales policy is regarded as the regulating policy of the company to a largest sense, sales policy must cover the merchandising and marketing policies together with the pricing policy, advertising policy and the policy regarding the quality of the goods or services not forgetting after sale services. All these will make the company how it will survive in this global competitive environment. As Zimbabwean entrepreneurs mostly SMEs we cannot be crying babies to the situation on our economy saying the Chinese, Indians and etc have flooded our market with their products we have to known that almost 80% of these products are made by SMEs. You can take advantage of newly established IMPORT AND EXPORT AGENCY I there to help find the market for our products and services and source the products and all these on commission basis

It is more important that the sales policy is not laid down and executed in any dictatorial manner. Whilst it is the leading policy, it must be coordinated and balanced with them all.

Some of the more important aspects regarding the sales policy

With regard to production, it is more or less concrete to look at production capacity; the sales manager or director should be able to evaluate the production capacity quite accurately. Work study techniques will be able to evaluate and assess undue idle time and preventive maintenances time and also the value of extra machinery when the manager wants to buy one or the sub-contraction of any work. Consequently the sales department should be able to set its task ahead in accordance with an accurate assessment of present and future productive capacity.

The sales policy should not be regarded as the prime factor. If production can develop most economically in a certain way, it may well be that the sales policy must be brought into line with it and make the necessary arrangements to dispose of the new product that has became available. So the policies should be flexible and this will make the company read to diversify its products. It is evident that the textile concern can diversify its products by manufacturing fabrics and plastic packaging materials or similar products and this can be applied in any industry.

However, actual selling effort cost money, and it is usually very difficult to assess what selling and distribution costs are likely to be at different levels of production. So many external forces play their part and are difficult to assess. Nevertheless cost of selling and distribution must be met by the company and therefore the policy that controls these factors must always be considered in relation to the finance policy.

Please if you are interested share your thoughts and advise on business issues by emailing me sumaniumali@gmail.com

LET US PULL OUR SOCKS SO WE OPEN MORE COMPANIES AND IMPROVE WORKING CONDITIONS IN ZIMBABWE

Image being telling your worker to achieve either production or service, but first ask yourself is this request achievable? I noticed where l `m working at the moment we are told to maximize the productivity of the machines but at the same time being told to work at the slowest speed of the machines in other words below half the capacity of the machines. This situation is happening in many industries. Sometimes, entrepreneurs or managers tend to ask for unachievable production without overtime or putting many threats on the workers like firing or shutdowns mostly here Zimbabwe.

As SMEs we should make sure we have learned the skills of leading the workers, business development and so many skills at organizations like STRATEGICSYNERGY, businesslink although at the moment I have established business as import and export agent ( U M S IMPORT&EXPORT AGENCY ) I looking forward to be in contact with these type of organizations. Right we all know that a good job is hard to find particularly as the country is highly unemployed, but every entrepreneur knows a good employee is hard to keep. As entrepreneur, one must ensure his or her company is staffed with employees who look forward to coming to work every day for more than a paycheck. But how? This can only be achieved through employee motivation, as the moral of the workers improves also efficiency of the workers improves. Gone are the days of stick and carrot at workplace, although the carrot is still needed.

Sometimes ago l had to work at a small scale mine(in Zimbabwe also known as Korokoza) on my part time, I discovered that ,the owners and the people they put forward they were just people without leadership ideas. The working condition so poor to the extent of working without break time or launch hour, when it comes to pay that’s work without pay , half pay or pay after two month. As entrepreneurs both aspiring entrepreneurs and startups SMEs before we go any further into business let as equip ourselves with the right skills so that we can run business properly. Try to work with organizations like

IMPORT AND EXPORT AGENCY AGREEMENT

 

 

 

SAMPLE AGENCY AGREEMENT

AN AGREEMENT made this———- day of———– 2014

BETWEENT ———– of——————————————–

(here in after referred to as “The Principal”) of the

——————– Of —————————————————–

WHEREBY IT AGREED AS FOLLOWS:

  1. The Principal appoints the Agent as his selling Agent to the exclusion of others in ———————– (hereinafter referred to as The Territory).

     

  2. (a) The Principal shall not ,during the currency of this agreement ,and any subsequent Agreement entered into with the Agent arising through the operation of this agreement , Appoint any other selling Agent , intermediary or middleman of any description having the power to sale , or arrange the sale or otherwise assist in the sale of any of the Principal’s goods which are subject to this agreement as listed in (3) below.

     

     

     

    (b)Neither shall the Principal attempt to sell direct to the parties within the territory nor to buying offices located anywhere else in the world which he knows to be purchasing goods for sale within the territory. In this latter case the Agent is solely empowered to approach the buying office on the Principal’s behalf.

     

    (c)All enquiries received direct from the territory by the Principal will be referred to the Agent.

     

    (d)The Agent will be entitled to receive , as detailed in(5)below on all sales of the Principal’s goods within the territory, howsoever arising.

  3. The Principal manufacturers —————–and the Agent shall have the sole selling rights to all such goods in the territory.
  4. The agreement shall run for ——————-,the specific date of commencement being ————–.During this period each party shall be able to terminate the agreement providing he gives the other party three months notice in writing at the address or addresses indicated in this contract ,of the intended date of such termination .upon the natural expiry of the initial period ,the Agreement shall be renewed at yearly intervals thereafter, each party having the right to determine that agreement during such period provided he gives the other party six months notice in writing at the address or addresses indicated in this contract of such intended termination .Notice of termination under this contract must be sent to the other party by registered letter post.
  5. The Agent shall be entitled to commission of ——————— (%) of the net invoice value of each order placed with the Principal arising from the territory whilst this agreement is current and also to commission at the same rate on all goods ordered from the Principal outside the territory but with the intention that these goods be sold within the territory.
  6. (a) Payment of commission by the Principal to the Agent will ,in each case ,be to an address or account nominated by the Agent and will be in the form of ————–.Such payment will be made each and every ————————-.

    (b) The Principal undertakes to supply to the Agent at ——————–intervals with a written statement of the commission ,if any, due to the Agent. Such statement will provide a detailed account as to why commission is due , demonstrating the basis for calculated figure.

    (c) Upon termination of this agreement ,or any subsequent agreement ,unless the parties state otherwise in writing the Agent shall be entitled to commission at the rate above indicated and on the above basis on all other orders placed up to the date termination becomes effective.

  7. The Agent shall exercise all reasonable care and skill in the performance of his duties and shall act faithfully on behalf of the Principal. The Principal will do all things reasonably necessary to enable the Agent to earn his due commission and will supply him with all such information as he may reasonably require.
  8. (a) The Principal will provide the Agent with all necessary sample pattern, demonstration models, catalogues , price lists and sales literature generally to enable him to conduct the agency , and the Agent shall not be liable for any loss or damage to such samples or other of the aforesaid items whether or not caused or contributed to by the negligence or default of the Agent.

    (b) The Principal shall pay carriage, freight, customs and excise duties, insurances ,and other payments reasonably necessary in respect of the said samples and other items ,including the cost delivery to the Agent in the first place and their returns to the Principal or as the Principal may order on the termination of the Agency.

    (c) The Agent shall have a lien on any such samples or other items in his possession in respect of any moneys outstanding from the Principal by way of commission or expenses or any other sums due to him from the Principal.

  9. The Agent will forward to the Principal all enquires he may receive and shall not (without express authority in writing) enter into any contract on behalf of the Principal nor bind or attempt to bind them in way. Nor shall the Agent (without express authority in writing) receive any cheques or money on behalf of the Principal.
  10. The Principal shall forward all goods which they agree to sell to customers in the said area direct to such customers together with invoices and other documents in respect of any such sale but they will at all time of sending the customers any such invoices or other documents sent to the Agent a duplicate or copy thereof and they will also send a copy or duplicate of every order when received to the Agent.
  11. (a) The Agent may upon presentation of any account in respect of commission by the Principal request an extract from the account and other books of the Principal relating to such commission , and the principal shall deliver to the Agent an extract from all such relevant books

    (b) where the Principal fails to deliver such an extract or where the accuracy of such extract is disputed by the Agent ,the Agent shall be entitled either personally or by his accountant or other representative acting on his behalf , to inspect the relevant books and accounts of the Principal.

  12. The Agent shall not be entitled to commission on the amount of any invoice if such amount shall be wholly or partly lost by the reason of the insolvency of the customers, and in the event of any commission having already been paid in respect of such amount the same shall be refunded by the Agent to the Principal.
  13. (a) In the event of the agency lawfully being terminated by the Principal for any reason other than willful misconduct on the part of the Agent, the Agent shall be entitled to an amount to be paid to him by the Principal by way of compensation for loss of goodwill suffered by the Agent.

    (b) Such compensation shall be an amount equal to the average annual sum earned by the Agent in respect of commission under the agency during the five years immediately preceding the said termination.

    (c) In the event of the agency having subsisted for a shorter period than five years , the amount of the compensation shall be average annual sum of the entire period of the agency.

    (d) Where the Agent has completed more than five years as Agent to the Principal the amount in compensation shall be increased by 2.5% in respect of each completed year of service.

    (e) Such compensation is payable three months after the termination of the agency.

  14. The Agent shall not be liable to the Principal for any default on the part of the buyer.
  15. This agreement drafted in accordance with Laws of —————————– and any dispute must be settled in the ————— .

    In witness whereof the parties to the Agreement have signed their names below.

     

     

     

    Signature———————————– signature ———————————-

    For the Principal For the Agent

     


 

EU PRESSES AFRICAN NATIONS TO OPEN UP THEIER MARKETS.

EU PRESSES AFRICAN NATIONS TO OPEN UP THEIR MARKETS

The European parliament has set a target date of mid-2014 by which countries in southern African must open up their markets to exporters from the EU. This would create more opportunities for exporters and traders in the EU to do business with Africa. Many African countries have enjoyed free access to Eu markets since the 1970s as a results of several separate one-way trade agreements.EU exporters do not necessarily have free access to African markets however and the EU has been pressing these countries to open access for same years. Failure to comply with this latest EU ruling could mean they are no longer able to export duty free to European union countries.

If countries in southern africa resist that targets or fail to comply with these mesures these countries will be the ones to loss the market in EU countries. At the same time if we comply with the ruling we will benefit in the long run although this will open free access for EU exporters and broaden their market share.

What else? If we accept these ruling, remember most of exports are primary commodities and these needs to be competitive enough with these countries,are we really going to benefit?

Why do some firms grow in size?

Some firms grow in size because they want to maximize profits. Growing in size enables enjoy cost and revenue advantages for achieving this aim. This is also called economies of scale.

When the firm grows in size it means that it has expanded it scale of production: all factors of production has been increased. It does so in order to exploit potential economies of scale. These economies are cost-saving advantages that causes the cost per unit of good produced to fall downwards. For example,it may enjoy technical economies. Greater specialization of lab our increases lab our productivity. Other economies of scale are marketing, advertising, financial, economies of by-products, economies of research and economies of welfare.

As firm becomes bigger and bigger it may also enjoy external economies of scale. These may be technological improvements, economies of information, economies of concentration and economies of supporting companies. The effect of all these is the same , that is , the firm enjoys cost-saving advantages.

How does this enable the firm to achieve its objective of maximizing profits. Suppose the firm is in a PC market situation, then increasing the profit margin can only be achieved by lowering AC. It cannot raise the price because it is a price-taker in such a market. However, being able to lower the AC also enable it to lower the price! This enables the firm to increase its market share by drawing over its competitors’ customers. The market itself may grow in that present customers buy more and new customers come into the market; attracted by the lower prices. Finally , the firms enjoying economies of scale and lower AC , can lower prices to such a level that it squeezes other less efficient competitors out of the market.

Firms grow in size to make more profits and this is achieved by increasing the profit margin.This is achieved if increased scale lowers AC faster than AR (price) this is also achieved by selling a larger quantity, even if the profit margin is narrower. The total profit is still more.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

There are different basis for comparing the size of the firms such as the amount of equity, the number of work, the amount of sales, and the market share of a firm.

There are different basis for comparing the size of the firms such as the amount of equity, the number of workers,the amount of sales and the market share of a firm.The most used measure of the size of firm is by comparing the amount of equity.The larger the equity ,the larger would be the firm concerned, and vice versa.Generally,the public-owned companies are larger because the equity are the contribution of many thousands of people through the issue of shares.

This can also be measured by the number workers employed although this is distorted when comparing between lab our -intensive firm and a capital-intensive firm, giving us an opinion that lab our -intensive firm is larger in size than capital-intensive firm but the conclusion might be otherwise. We may use the amount of sales revenue as an indicator of the size of a firm Generally it is true that the larger the sales revenue .the larger will be the firm .But it becomes invalid when we are comparing firms from different industries ,because sales revenues is dependent on the price and quantity of the product sold. A high value-added industry would definitely boost higher sales than one with a lower value added. Market share can also be used to compare the size of the firm. Generally ,if the firm in an industry has the largest market share, it would be said as the largest firm in the market for that product .But again ,comparison across industries using this method would not confirm that a firm with a market share of 90% in car manufacturing industry is larger than one with a market share 40% in rubber industry. We conclude that the comparison of the size of different firms cannot be based on one method. A firm`s size must be judged based on its equity size, market share ,number of employees ,scale of production and level of technology before a conclusion can really be reached

 

An account for the simultaneous existence of firms of different sizes within the same industry

 


The size a firm takes is dependent on many factors. The firm may not grow indefinitely due to the technological differences, management skills , geographical reason and resource constraint. given the imperfect knowledge in the market, a certain new technology which allows for mass production is available to some producers and not the others. This may account for the difference in the same industry. The differences in management skills and the risk-taking nature between the entrepreneurs in different firms make the difference in firm sizes. Geographical barriers may divide the county into different markets of different sizes these can be the mountain range or the width of rivers. That’s the firms of the same industry serving these markets are of different sizes. Also immobility of resources such as capital, raw materials and labor may account for different firm size. for example, a firm may want to expand its production capacity, but the immobilitity and inavailability of labor in the region may restrict it. Lastly the size of the market and the barriers to entry also affect the size of the firm. Take the case of the oligopoly`s price-leadership, a dominating firm with the ability to term monopoly chooses to stay only as price leader because of inability to bar small firms from entering the market . However, what is most important underlying all the above is the availability and size of the market. Any size of the firm boils down to the market it serves and shares. For personalized service, its market is segmented, small but specific. For most other non-personalized products, the limit to size is the extent of market shared. The larger the size of the market, hence the firm size, the more the economies of scale reaped and the higher the profits earned.

What else? Depending on the countries, industries, etc what are some of the basis for comparing the size of the firm?

 

 

 

 

SAMPLE AGENCY AGREEMENT

AN AGREEMENT made this———- day of———– 2014

BETWEENT ———– of——————————————–

(here in after referred to as “The Principal”) of the

——————– Of —————————————————–

WHEREBY IT AGREED AS FOLLOWS:

  1. The Principal appoints the Agent as his selling Agent to the exclusion of others in ———————– (hereinafter referred to as The Territory).

     

  2. (a) The Principal shall not ,during the currency of this agreement ,and any subsequent Agreement entered into with the Agent arising through the operation of this agreement , Appoint any other selling Agent , intermediary or middleman of any description having the power to sale , or arrange the sale or otherwise assist in the sale of any of the Principal’s goods which are subject to this agreement as listed in (3) below.

     

     

     

    (b)Neither shall the Principal attempt to sell direct to the parties within the territory nor to buying offices located anywhere else in the world which he knows to be purchasing goods for sale within the territory. In this latter case the Agent is solely empowered to approach the buying office on the Principal’s behalf.

     

    (c)All enquiries received direct from the territory by the Principal will be referred to the Agent.

     

    (d)The Agent will be entitled to receive , as detailed in(5)below on all sales of the Principal’s goods within the territory, howsoever arising.

  3. The Principal manufacturers —————–and the Agent shall have the sole selling rights to all such goods in the territory.
  4. The agreement shall run for ——————-,the specific date of commencement being ————–.During this period each party shall be able to terminate the agreement providing he gives the other party three months notice in writing at the address or addresses indicated in this contract ,of the intended date of such termination .upon the natural expiry of the initial period ,the Agreement shall be renewed at yearly intervals thereafter, each party having the right to determine that agreement during such period provided he gives the other party six months notice in writing at the address or addresses indicated in this contract of such intended termination .Notice of termination under this contract must be sent to the other party by registered letter post.
  5. The Agent shall be entitled to commission of ——————— (%) of the net invoice value of each order placed with the Principal arising from the territory whilst this agreement is current and also to commission at the same rate on all goods ordered from the Principal outside the territory but with the intention that these goods be sold within the territory.
  6. (a) Payment of commission by the Principal to the Agent will ,in each case ,be to an address or account nominated by the Agent and will be in the form of ————–.Such payment will be made each and every ————————-.

    (b) The Principal undertakes to supply to the Agent at ——————–intervals with a written statement of the commission ,if any, due to the Agent. Such statement will provide a detailed account as to why commission is due , demonstrating the basis for calculated figure.

    (c) Upon termination of this agreement ,or any subsequent agreement ,unless the parties state otherwise in writing the Agent shall be entitled to commission at the rate above indicated and on the above basis on all other orders placed up to the date termination becomes effective.

  7. The Agent shall exercise all reasonable care and skill in the performance of his duties and shall act faithfully on behalf of the Principal. The Principal will do all things reasonably necessary to enable the Agent to earn his due commission and will supply him with all such information as he may reasonably require.
  8. (a) The Principal will provide the Agent with all necessary sample pattern, demonstration models, catalogues , price lists and sales literature generally to enable him to conduct the agency , and the Agent shall not be liable for any loss or damage to such samples or other of the aforesaid items whether or not caused or contributed to by the negligence or default of the Agent.

    (b) The Principal shall pay carriage, freight, customs and excise duties, insurances ,and other payments reasonably necessary in respect of the said samples and other items ,including the cost delivery to the Agent in the first place and their returns to the Principal or as the Principal may order on the termination of the Agency.

    (c) The Agent shall have a lien on any such samples or other items in his possession in respect of any moneys outstanding from the Principal by way of commission or expenses or any other sums due to him from the Principal.

  9. The Agent will forward to the Principal all enquires he may receive and shall not (without express authority in writing) enter into any contract on behalf of the Principal nor bind or attempt to bind them in way. Nor shall the Agent (without express authority in writing) receive any cheques or money on behalf of the Principal.
  10. The Principal shall forward all goods which they agree to sell to customers in the said area direct to such customers together with invoices and other documents in respect of any such sale but they will at all time of sending the customers any such invoices or other documents sent to the Agent a duplicate or copy thereof and they will also send a copy or duplicate of every order when received to the Agent.
  11. (a) The Agent may upon presentation of any account in respect of commission by the Principal request an extract from the account and other books of the Principal relating to such commission , and the principal shall deliver to the Agent an extract from all such relevant books

    (b) where the Principal fails to deliver such an extract or where the accuracy of such extract is disputed by the Agent ,the Agent shall be entitled either personally or by his accountant or other representative acting on his behalf , to inspect the relevant books and accounts of the Principal.

  12. The Agent shall not be entitled to commission on the amount of any invoice if such amount shall be wholly or partly lost by the reason of the insolvency of the customers, and in the event of any commission having already been paid in respect of such amount the same shall be refunded by the Agent to the Principal.
  13. (a) In the event of the agency lawfully being terminated by the Principal for any reason other than willful misconduct on the part of the Agent, the Agent shall be entitled to an amount to be paid to him by the Principal by way of compensation for loss of goodwill suffered by the Agent.

    (b) Such compensation shall be an amount equal to the average annual sum earned by the Agent in respect of commission under the agency during the five years immediately preceding the said termination.

    (c) In the event of the agency having subsisted for a shorter period than five years , the amount of the compensation shall be average annual sum of the entire period of the agency.

    (d) Where the Agent has completed more than five years as Agent to the Principal the amount in compensation shall be increased by 2.5% in respect of each completed year of service.

    (e) Such compensation is payable three months after the termination of the agency.

  14. The Agent shall not be liable to the Principal for any default on the part of the buyer.
  15. This agreement drafted in accordance with Laws of —————————– and any dispute must be settled in the ————— .

    In witness whereof the parties to the Agreement have signed their names below.

     

     

     

    Signature———————————– signature ———————————-

    For the Principal For the Agent