Sales push rocks confidence

Although many UK companies plan to expand their marketing teams to meet this year’s record sales targets, confidence among marketers has dipped

UK marketers are being asked to achieve record sales but their confidence has hit rock bottom, according to the Chartered Institute of Marketing’s (CIM) quarterly marketing trends survey.

Hard-to-achieve sales targets mean the number of marketers and sales people who will miss out on bonuses is likely to reach record levels this year.

The survey tracks past and future trends in marketing spend and confidence among UK marketers. Forty per cent of marketers described their sales targets as “very challenging”. This rose to 100 per cent for companies based in the North of England.

While current sales targets are the highest for five years, marketers’ confidence – tracked by the CIM’s “confidence index” – has dropped to the second lowest level on record.

Retail and financial services marketers are the most bullish in the service sector, but their optimism is not shared by the food, beverage and tobacco sector, where only 27 per cent expect to meet their sales targets.

Surprisingly, marketers in the UK vehicles sector are the least pessimistic. Continuing uncertainty over Rover’s Longbridge plant and Ford’s problems at Dagenham do not appear to have damaged marketers’ confidence in their ability to meet sales targets.

But the longer term effect of this uncertainty is highlighted by sales growth expectations for the coming year. Having been the leading sector in terms of sales growth last year – 17 per cent – the motoring industry predicts only 1.9 per cent growth next year. This figure is even lower than that for machinery and light manufacturing.

Funding that was diverted last year towards managing the “millennium bug” has been allocated across a wide spectrum of marketing activities.

Marketers are planning an increase in sales resources of just less than four per cent, and their spending priorities are clear. Spending on the Internet and intranets will rise by more than double the average: 8.2 per cent.

In a year with two huge international sporting events – the Euro 2000 football championships and the Olympic Games – it is surprising that sponsorship is the only area of marketing that will not see increased investment.

Net and intranet investment is the top priority for companies regardless of their size and location. The exception is Northern Ireland, where a decrease in Net spending appears to be part of a wider round of cuts. Only advertising looks likely to prosper.

While marketing and sales people could miss their bonuses, their ranks are expected to have swollen by the end of the sales year. Twenty-nine per cent of respondents report that their companies plan to increase, or substantially increase, staff levels. This compares with just 15 per cent which are reducing their staff.

Recruitment looks particularly strong in north-west England, where 11 per cent of companies are substantially increasing staff numbers. Many marketers may be looking at moving across the border from Wales, where 65 per cent of companies are reducing their marketing and sales teams.

Marketers working in the chemicals industry may also be seeking alternative employment in the not-too-distant future: 68 per cent of companies in this sector are reducing their staff.

It is clear what companies are hoping to achieve by employing extra staff. Higher margins and improved product specifications are a core focus for more than 50 per cent of the marketers questioned.

As you would expect in an economy with so many divergent components, the marketing focus varies enormously between sectors. While the service industries are focusing on margins, many production-based sectors are more interested in improving product specifications.

The adoption of markedly aggressive sales targets over the past six months has produced the predictable knock-on effects of anxiety that they cannot be achieved and a desire to increase sales volumes.

All of this points to the possibility of discounting later this year in a last-ditch attempt to make up expected shortfalls. But with indications that investment and staff levels are to rise, the marketing industry is reacting positively.

Factfile is edited by Julia Day. CIM corporate communications officer John Hilsdon contributed

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