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Marketing and Sales
Marketing is the focal point of all business activities because production or purchase has no meaning unless a firm is able to market its goods and services. It is defined as the process of discovering the consumer wants and then translating them into products and services. It includes everything that a company does to get the customers buy its product. It is an integrated process of identification , assessment and satisfaction of human wants i.e. the focus is on the customer and his wants.
The concept of marketing is based on three fundamental ingredients :- (i) Profits through satisfaction of customers rather than maximisation of sales volume should be the objective of the firm; (ii) All planning, policies and operations of the company should be oriented towards the customers; (iii) All marketing activities of a firm should be integrated to achieve organisational goals. For a successful business, marketing campaign should concentrate on the target group of customers and determine a suitable marketing mix for them.
‘Marketing mix’ is a term which is used to describe the combination of the four inputs that constitute the core of a company’s marketing system. These inputs are product; price; promotion; and physical distribution. These elements of the marketing mix are interrelated because decisions in one area affect the others. Marketing mix is a dynamic concept as it keeps on changing with the changes in the market conditions and the environment.
The scope of marketing is very wide and can be understood in terms of three main functions of the entrepreneur,which include:- (i) functions of exchange or selling; (ii) functions of physical supply or storage and warehousing; and (iii) functions of facilitation or market research.
- Planning the production of need based goods
- Discovery of the market and the buyers for goods so produced
- Use of various promotional techniques for creating demand for those goods
- Determining the terms of sales and price, quantity, quality, nature of packaging, delivery etc for them
- Transfer of the title and possession of goods to the consumers
- Deciding upon the after sale-services to be provided to the customers.
Traditionally,the emphasis of the selling concept was on producing products and selling them by using strong persuasive means in order to increase sales volume and earn higher profits. There was no attempt made to determine the consumers’ needs and wants. But over the years, the selling concept has undergone a radical change because of change in the thinking of business organisations as well as increased competition. The modern concept of selling emphasizes more on selling of satisfaction to customers rather than selling a product to them. Thus the term selling is generally used interchangeably with marketing. But there should not be any confusion between the two terms. There exist some basic differences between them:-
Marketing concept is a wider term which includes selling. ‘Marketing’ has an integrated approach to achieve long term goals. It starts from a well-defined market and focusses on customer’s needs. It coordinates all the marketing activities that affects customers and produces the products that satisfy them. It aims at profit making by customer satisfaction. Whereas ‘Selling’ has a narrower and fragmented approach. It starts from the factory and focusses on the company’s existing products(seller’s needs). It involves heavy selling of the goods produced by using various promotional techniques such as personal selling,advertising,publicity and sales promotion. Thus, it aims at profit making by sales volume. In brief, marketing is customer oriented, while selling is production oriented.
Hence, effectiveness and efficiency in selling determines the volume of company’s profit and profitability. A company should therefore have a well defined selling strategy in order to maximise its profits.
Promotion implies the process of informing and persuading the prospective customers about the products or services of the firm, so that they keep patronising the firm. It means to create and maintain the demand for the product of the enterprise. In other words, the function of promotion is establishing the contact with the members of society, showing them how the products offered by the firm will satisfy their needs and creating among them the desire to buy the products. It also helps customers in differentiating the product of a particular firm from the competing products of other firms. It also seeks to assure the customers about the quality and price of the product so as to prevent their shifting from a particular brand of product to another brand of product.No business enterprise can sell its products unless it undertakes various promotional activities effectively. The need for promotional activities has increased in today’s globalise world because of widening of market, stiff competition, rapid advancement in technology and continuous changes in tastes and preferences of customers. Firms around the world use advertising as the most important promotional tool. It involves non personal dissemination of information about a firm’s product on a large scale to potential customers. Salesmanship is the oldest form of promotion used by the firms to directly and orally communicate with the customers in order to sell their product. While, sales promotion is another promotion technique used to supplement the other selling efforts of the firm.
- It is a non-personal form of presentation as there is no face-to-face direct contact with the customers.
- It is a paid form of communication as the advertiser has to pay for the space or time hired by him for advertising.
- It is done by identified sponsors i.e. the public is informed about the producer or the firm who is advertising its product.
A firm undertakes advertising with the following basic objectives:-
- To inform prospective buyers about the availability of a new product or service in the market.
- To persuade people to buy the product and thus create demand and expand market for it.
- To maintain the sales and market share in the face of intense competition. It also helps in retaining the product in the customer’s mind.
- To reach people who are inaccessible by other means of promotion.
- To educate customers about a particular product by explaining its various features and uses.
- To help create and enhance goodwill of a company.
The main types of advertising are :-
- Product advertising :- is designed to improve the sales of new or existing products.
- Institutional advertising :- is aimed at improving the reputation, image or goodwill of the enterprise.
- Constructive advertising :- is aimed at stimulating demand, introducing new products, attracting new customers and encouraging dealers’ interest in the product. It includes both product advertising and institutional advertising.
- Competitive advertising :- is designed to convince the consumers that the advertised product is superior to products of similar type. Also called combative advertising, its purpose is to fight competition in the market.
- Destructive advertising :- is negative in nature and its purpose is to spoil the image and goodwill of other businessmen.
Salesmanship or Personal Selling
- To introduce new product or service with personal touch.
- To create demand for the products such that it precedes supply.
- To clarify the doubts of customers personally.
- To create effective selling at least cost and secure repeated sales.
- To provide valuable feedback to the managers.
Salesmen may be classified into the following categories on the basis of their employers:-
- Manufacturer’s salesmen:- are employed to sell products either directly to consumers or to the wholesalers or retailers. They have specialised knowledge about the products of their employers. They may be either creative salesman or dealer-servicing salesman. The former are engaged in creating outlets for a new product and contact the dealers to persuade them to handle the product. While the latter, provide services to the dealers of their employer’s products.
- Speciality salesmen:- deal in high value goods like computers, automobiles, machines, television sets, etc. They meet the potential customers and explain the usefulness of their product. They also help in the installation of the product at the customer’s place.
- Wholesaler’s salesmen:- generally calls on the retailer’s and book orders. They provide information about the availability of the product to the retailers and help them in getting the supplies.
- Retailer’s salesmen:- deal directly with the consumers. They may be either counter salesmen or outdoor salesmen. The former attends the customers who call at the store. While the latter, visits the prospective customers by carrying samples of goods to persuade them to buy goods from them.
Success of personal selling depends upon the skills of the salesman, the framework in which he works, as well as his knowledge and experience. An effective salesman should be completely aware of the product and should be able to convince the prospective buyer. He should also know well about the company/firm he is representing and be able to answer all the queries of the customer’s. To be effective, a salesman should have the knowledge of the following types:-
- Knowledge of self :- He should be able to make the best use of his personality by continuously assessing himself and analysing his qualities in the light of the requirements of his job.This will help him to improve upon his strengths and overcome his weaknesses through training and experience.
- Knowledge of firm :- He should be fully conversant with the history of the firm. He should have a thorough knowledge of the objectives, policies, standing and organizational structure of his firm. Such knowledge will help him to utilize the strong points of the firm in personal selling.
- Knowledge of product :- He should be able to convince customers about the features and utility of the product by removing their doubts and objections. Thus, he should have full knowledge about the nature of the product, manufacturing details, terms and conditions of sale, distribution channels used and promotional activities.
- Knowledge of competitors :- In order to prove the superiority of his product, he must have full knowledge about the competitive products, their positive and negative features. Knowledge of competitors’ sales policies, their brands and prices, etc, is also helpful.
- Knowledge of customers :- In order to be successful, he must use the right appeal and approach. He should be able to understand the prospects correctly and quickly and to motivate and win them permanently. He should, therefore, have complete knowledge of the nature and type of customers (their age, location, sex, income, education, etc.) and their buying motives (low price, convenience, prestige, fashion, etc).
- Knowledge of selling techniques :- Above all, he should be well-versed in the principles and techniques of salesmanship. He should pay undivided attention to the customer, be courteous and sympathetic towards customers, never loose patience, consider customer as the king, aim to build permanent customers and goodwill, serve the customer in the best possible manner, etc.
Personal selling has the advantage of being more flexible in operation in contrast to mass or impersonal selling through advertising. Salesmen can tailor their sales presentation to fit the needs, motives and behaviour of individual customers. They can observe the customer’s reaction to a particular sales approach and then make necessary adjustment on the spot. The seller can select the target market for its product and concentrate only on the prospective customers. Personal selling is more effective as compared to other tools of promotion because it leads to actual sales.
- To introduce new products and to acquaint the customers how to use the product.
- To acquaint the customers about the utility of the product.
- To effect spot buying and to attract new customers.
- To increase sales during slack periods and to increase profits of the firm.
- To improve the public image/goodwill of the firm.
The important sales promotion methods are :-
- Distribution of free samples :- is an expensive but powerful tool of sales promotion used to gain consumer acceptance and to popularise the product. It is an effective device of sales promotion as the consumers can test the product before buying it. The sample may be delivered door to door, offered in retail stores or fairs. This device is suitable for introducing new products such as soaps, drugs, cosmetics, perfumes, tea, etc.
- Coupons :- is a certificate that entitles its holder to a specified saving or discount on the purchase of a particular product. The customers present their coupons to retailers and get the product at a much reduced price. Coupons may be issued by the manufacturers either directly by mail or through the dealers. They are also issued through newspapers and magazines.
- Premium :- is the offer of an article free of cost or at a nominal price on the purchase of a specified product. It helps to increase the immediate sales.
- Trading or bonus stamps :- are issued by retailers to customers who buy goods from them and its purpose is to increase customer loyalty. The number of stamps given to a buyer depends upon the amount of purchases made by him.
- Point of purchase materials :- include banners, signs, photos, posters and other in-store promotional tools. They are demonstrated or displayed at the place where the customer makes actual purchases as they remind them about the brand name and promote impulsive buying.
- Prize contests :- under it, consumers are given rewards for analytical or creative thinking about the products in the form of slogan writing, sentence completion, problem solving quiz, etc. It helps to create consumers’ interest in the products, provide new ideas for advertising and may reveal buying motives.
- Trade fairs and exhibitions :- are an important technique of sales promotion as they have wide appeal .These helps in introducing the firms and their products to the public at large. Under this, business fims are allotted stalls wherein they display or demonstrate their products.
- Merchandising aids :- refers to the services provided to induce commercial buyers to purchase goods in large quantities. It includes training in stores layout and inventory control, advertising, product demonstration, etc.
- Clearance sale :-at reduced prices may be organised on important festivals or other occasions. Such sales attract a large number of customers and help to clear accumulated stocks.