Chapter 1
Background of cross selling
The cross selling strategy is a new technique which is now recently used as to boost up the launching of new product in the form of complimentary with an existing product. Franchises which were introducing new products became an expensive task to sell to the new customers; as the profit was less most of the capital would flow towards the new launch which actually decreased the profit. In order to save this loss new strategies were introduced in the market there were several trials in practice one of them was “The cross selling strategy ”this was not something new to the market but was an old strategy which is now being used as a tool to speedily decrease the loss suffered during the launch of the new product. Before the vendor would totally be focused on his side of satisfaction, cross selling method proved to be an effective way in which both sides were satisfied, which built up a strong relationship between the two sides. The need aroused when the companies would suffer large losses in the market when it launched a new product it could not get the new customers to his side the bond between the two side was not strong so there was a need and necessity for a new technique by which there would be a good and strong bond in the relationship.
It was seen that there was 15% odd against the new buyer to buy the a new product for the existing customer it was 50%, odd against buying a new product where as it is easier for the existing customer to accept the new product from the same franchisee as it has build up strong bond between seller and buyer. A new customer has many hurdles which lets him thinks more than thrice to accept the new product but if it is in the form of complimentary or discounted with an existing product as well as if the customer has old relationship with that franchise then it's easier and cheaper to sell the new product as the hurdles are less in case of an old customer. The cross selling strategy was totally based on the customer and seller relationship this relationship is personal which must be built on person at a time only. The change in the mind set of the seller and buyer brought this new evolution in the process of buying and selling this made an huge impact in the banking sector as introducing more flexible and profitable policies, where as the fast food franchisee made a huge impact on the buyers decision.
Risk is inherent in almost every business decision. more so in capital budgeting decisions as they involve costs and benefits extending over a long period of time during which many things may changing accordingly with the decision implemented it assured a balanced and uniquely calculated risk in financial sector is often preferred the investment in terms on new products analysis lies on the 70% outcome to maximize the profit in terms of good relationship with deliberate satisfaction things should be change in unanticipated ways the average cost of capital was used for evaluating every investments of the firm.
The cash flow stream of a conventional project compromises of three basic components
Given the critical importance of the cash flow forecast in the project evaluation, adequate care must be taken to guard against certain biases which may lead to over statement or understatement of true project profitability.
This can be favourable to the scenario of cross selling in which is low risk of capital investment can unveil the new policies. The cross selling policies are in the form of piles and bundle form, in which sectored piles are flown out in organised way so that it targets the known market mentality and the trusted buyers. Knowledgeable observers of capital budgeting believe that profitability is often overstated because the initial investment is under estimated and operating cash inflows are exaggerated.
The principal reasons for such optimistic bias appear to be as follows
Efficient Cross Selling Market Hypothesis
According to the efficient market hypothesis security prices available information and respond to new information no sooner it becomes available. Eugene Fama Suggested that it useful to distinguish three levels of efficiency weak form semi strong form and strong form.
The idea that intense competition in capital market leads to fair pricing of securities is indeed very sweeping. No wonder it has been challenged by many and Benjamin Friedman refers to as a credo a statement of faith and not a scientific proposition.
Cross selling has totally overruled all the possible risk in capital management in pursue of the fact it doesn't flow out the policies to an abstract buyer, though it aims at the attachment with the older policies and compiling it in which the buyer gets taste of the complimentary aspect of this strategy the buyer also gets relief off the risk in acquiring the policies as a bargain opts it for the change the new policies may have some drawback of its own at first it is always overlooked as there is low calculated risk in acquiring the packages as side bonus as soon as it hits the market the diffusion starts gaining its and the policies are readily accepted by the buyers which eventually leads to the overall satisfaction of the sellers and buyers both alternatively.
In the most popular trading technique, filter rule, an investor trades a stock when the price change exceeds a filter value set for t. As an example, an investor using a 5 percent filter would envision a positive breakout if the stock were to rise 5 percent from some base, suggesting that the stock price would continue to rise. A technician would acquire the stock to take advantage of the expected continued rise. In contrast, a 5 percent decline from some peak price would be considered a breakout on the downside, and the technician would expect a further price decline and would sell any holdings of the stock and possibly even sell the stock short. Studies of this trading rule have used a range of filters from 0.5 percent to 50 percent. The results indicated that small filters would yield above-average profits before taking account of trading commissions. However, small filters generate numerous trades and, therefore, substantial trading costs. When these trading commissions were considered, all the trading profits turned to losses. Alternatively, trading using larger filters did not yield returns above those of a simple buy-and-hold policy. Researchers have simulated other trading rules that used past market data other than stockprices.6 Trading rules have been devised that consider advanced-decline ratios, short sales, short positions, and specialist activities. These simulation tests have generated mixed results. Most of the early studies suggested that these trading rules generally would not outperform a buy-and-hold policy on a risk-adjusted basis after commissions, although several recent studies have indicated support for specific trading rules. Therefore, most evidence from simulations of specific trading rules indicates that most trading rules tested have not been able to beat a buy-and-hold policy. Therefore, these results generally support the weak-form EMH, but the results are not unanimous.
Customer Relationship Management
It has ambient process which is undergoing in todays banking sector, the customer relationship has become more priority then other section of the business projects it has been observed that customer relationship is the key fact which decides the future of the next financial projects it is generally based on the direct consultant of a customer to the seller, the relationship becomes more prominent when their is direct communication between the two customer relationship doesn't lays emphasis upon the counselling of the party with the seller but also the previous records and nature of the customer with increasing market competition there has to a thorough study of the previous data collected about the sales commencement and how the buyers reacted after the new policies were introduced. The whole study and data interpreted can be used a software which guides and help to relieve the data and execution are readily available in the software market the most common one example for this kind of software is Microsoft CRM.
How computer generated programs are simplifying cross selling
by one on piece of paper and retrieving it to a file piling up and then keeping in a rack whenever needed look for and turn the pages not matter how eel it was organised, it would take allot more hours to adjudicate and then forward it so there aroused a need of a more compactable digital way to make things work in an organised and symmetrically in within a seconds of time where a phenomenal theory suggests “time is money”
Personal information managers (PIM) and contact management systems (CMS) which were introduced in 1980s. Could organise names, addresses, and phone numbers for all of Of all the business contacts. Products such as ACT and GoldMine initially combined scheduling functions with contact It was time consuming and hectic to keep on entering the names and address telephone numbers one management. These Softwares initially were working as digital diaries for mass storage which would in todays generation act a diary which would store more than a thousand data entry there no obligation on the creation it enhanced and open the door for the creation of the new softwares which would lead the road for the invention of the more advanced types such as Microsoft CRM.
CRM is totally based on the .NeT technology created and framed by the Microsoft Production Not only does Microsoft CRM have functionality for sales, customer service, and now marketing, it takes great advantage of the Internet, or more specifically, Web services. This Web service lays emphasis on what is called as. strategy. In a short way it can be said that, Web services enable applications to be easily integrated, which rapid coverts the your business strategy not only in internet scenario but also in real time business needs.
