Monday, March 14, 2011

ERP Functions: Marketing 2

In the last blog Here we have got know that driving force for any company starts with Sales/Marketing along with we also came to know two major steps of process flow in Sales/Marketing. Enquiry and Feasibility Study.


In the currently blog I continue discussing the next steps of Marketing  i.e. sending Quotation to the customer. It is not mandatory to send quotations to all the enquiries. The decision of regretting Quotation or accepting is taken after feasibility study. Some of the customers also mentions Validity Period for an Enquiry in which case quotation has to be reached before the Validity Period is over, otherwise the quotation will not be accepted by the customer as they might have accepted other quotations from different supplier by that time. All these factors are taken into consideration before sending quotation.


Major components of quotation are
    Quantity : Of Product.
    Rate: Per unit of product.
    Discount: On rate, described either in percentage or flat value.
    Packaging Charges: Per unit of product, described either in percentage or flat value.
    Terms and Conditions: Includes Payment Terms, Delivery Terms, Conditions on document to be submitted like test certificate, Purchase Order etc. Conditions on sampling approval before actual production etc.
         Taxes: Pertaining to the product and region of the customer. 

Along with these information acceptance of delivery schedule mentioned in the enquiry will also be part of quotation. In many industries to increase the credibility and transparency break up of cost calculation of the product/service is also present in the quotation. 

The quotation, thus, is the document which the customer refers to decide his purchase from the company. So, the data collected from feasibility study must be presented with utmost care and professionalism



However customer may not be satisfied with the quotation so there may be negotiations. This negotiations usually starts from company Marketing team's end.This leads to revisions and amendments in the quotation based on the negotiations. In certain cases customer may send revised enquiry also. In such cases, the process would restart. Once the negotiating parties reach an agreement, the final quotation is sent to the customer.



Quotation, then will be accepted by the customer. The purchase department of the customer sends Purchase Order to the company. The Purchase Order will have same details as in the final accepted quotation. There may be some minor changes and minor additional terms added by the customer. However major components like quantity, rate, payment and delivery terms will remain same. The Purchase Order from customer is usually received by marketing team of the company. This Customer Purchase Order(PO) is registered as Sales Order. Marketing department then verifies details of Customer PO and the delivery schedules accepts the same. Acceptance is intimated to the customer. Both these documents' copies are sent to mainly 3 departments. In some industries all the orders are consolidated and monthly despatch plan is circulated to the corresponding departments.


1. Planning :- To plan the material and production in accordance with delivery schedule in the PO (Despatch Plan).
2. Sales/Despatch :- To verify the correctness of delivery terms and to Despatch as per delivery schedule in the PO (Despatch Plan)
3. Finance :- To verify the correctness of payment terms and to receive the payment as per those terms.


In some cases customer may also request despatch plan and production plan. All negotiations on production, despatch, payments with customer is mainly done through marketing department. Therefore marketing department plays a very major role in any industry.


If Customer is God then Marketing is Priest. So, every company has to maintain a happy and satisfied marketing team to have continuous growth


This completes brief about Marketing operations. Further we will go into planning and production in coming weeks... Keep looking this space...

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