Sales Management Planning


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Sales Management Planning

  1. 1. Sales Management-Execution aspectPrepared ByMathew Lawrence
  2. 2. Special Focus on:• Sales Information System• Sales Planning Management• Sales Forecasting Management• Sales Budgeting
  3. 3. Which are ourlowest/highest margincustomers ?What impact willnew products/serviceshave on revenueand margins?Who are my customersand what productsare they buying?Which customersare most likely to goto the competition ?What is the mosteffective distributionchannel?What product prom--otions have the biggestimpact on revenue?
  4. 4. Sales Information System- Introduction• Sales management is about finding ways ofsatisfying customer wants and needs.• These wants and needs are satisfied with proper information-internal as well as external.• Early systems were paper-based systems but, with the emergence ofcomputers with large storage capacities and microcomputers withsimilar features, marketing information systems have become more"electronic" in nature. MIS (marketing information systems)• One can define a marketing information system “As one which scansand collects data from the environment, makes use of data fromtransactions and operations within the firm and then filters,organizes and selects data before presenting them as information tomanagement.”
  5. 5. Need for Sales Information System• Sales information system forms the base for- Planning, forecasting,budgeting, marketing research and other sales activities.• Decision making: Unfortunately, in many firms, it is often difficultto obtain information of the right kind.• Anticipation of customer demand: Every marketer needs up-to-dateknowledge about consumer needs and wants.• Significance of Analysing Competition: Marketers cannot survivewithout having information regarding nature, character and size ofcompetitors.• Marketing Planning: Marketing plans and programs are based uponinformation supplied by economic forecasts and market research
  6. 6. Data Warehouse/Data Warehousing• Data warehouse: A single, complete and consistent store of dataobtained from a variety of different sources made available to endusers in a what they can understand and use in a business context.• Data warehousing: A process of transforming data into informationand making it available to users in a timely enough manner to make adifference
  7. 7. Data Mining• Data mining (sometimes called data or knowledgediscovery) is the process of analyzing data fromdifferent perspectives and summarizing it intouseful information - information that can be usedto increase revenue, cuts costs, or both.• Data mining, the extraction of hidden predictive information fromlarge databases, is a powerful new technology with great potential tohelp companies focus on the most important information in their datawarehouses.• Data mining tools predict future trends and behaviors, allowingbusinesses to make proactive, knowledge-driven decisions.• Data mining tools can answer business questions that traditionallywere too time consuming to resolve.
  8. 8. Data Warehouse & Data Mining- Flow Chart
  9. 9. Sales Planning Management• Sales strategy is the game plan sales managers havefor achieving the enterprise level sales targets.• Every sales manager, based on his experience andunderstanding has some assumptions, goals and plansfor achieving what he needs to achieve.• For achieving the long-term targets sales strategy or game planneeds to be effectively executed on a day to day basis.• For any strategy to be executed, it first needs to be translated intoactionable terms. As it is, in most of the companies, the whole salesstrategy is not translated into operational terms.• In organizations, sales management system (SMS) is the singlelargest factor that decides what sales managers will execute andhow they execute.
  10. 10. Continue….• Some of the factors considered in Sales Planning are.........1) What kind of sales target we need to have.2) Which segment of customers do we serve and focus.3) What kind of service quality we offer.4) How do we differentiate our product.5) What kind of sales culture we build.6) Which of sales processes we focus on.7) Competitors8) Pricing9) Key U.S. P
  11. 11. Sales & ProfitTimeRupees0+-IntroductionGrowth MaturityDeclineIndustrySalesProduct Life Cycle- GraphIndustryProfits
  12. 12. Sales Forecasting Management• The Sales Forecast is the expected level of companysales based on a chosen marketing plan and an assumedmarketing environment.• It helps in the prediction of the future sales of aparticular product over a specific period of time based.• The three parameters that covers in the sales forecasting are-1) What customers say about their intentions to continue buying productsin the industry?2) What customers are actually doing in the market?3) What customers have done in the past in the market?• Ideal Sales Forecasting Calculation: Last years annual sales + (last yearsannual sales X rate of inflation) = next years sales forecast
  13. 13. Continued…..• There are two major types of sales forecasting which can be broadlydescribed as Macro and Micro:Macro level forecasting: It is concerned with forecasting markets intotal. This is about determining the existing level of market demandand considering what will happen to market demand in the future.Micro level forecasting: It is concerned with detailed unit salesforecasts. This is about determining a product’s market share in aparticular industry and considering what will happen to that marketshare in the future.
  14. 14. Continued…..• The selection of which type of forecasting is use depends on the severalfactors which can be described as:1) The degree of accuracy required – if the decisions that are to be made onthe basis of the sales forecast have high risks attached to them, then itstands to reason that the forecast should be prepared as accurately aspossible. However, this involves more cost.2) The availability of data and information - in some markets there is a wealthof available sales information (e.g. clothing retail, food retailing, holidays); inothers it is hard to find reliable, up-to-date information.3) The time horizon that the sales forecast is intended to cover. For example,are we forecasting next weeks’ sales, or are we trying to forecast what willhappen to the overall size of the market in the next five years.4) The position of the products in its life cycle. For example, for products atthe “introductory” stage of the product life cycle, less sales data andinformation may be available than for products at the “maturity” stage whentime series can be a useful forecasting method.
  15. 15. Forecasting ApproachSBURegionDistrictTerritorySales PersonSales QuotaSales QuotaSales PersonTerritoryDistrictRegionSBUTop- down/ Beak downBottom- up Build Up
  16. 16. Sales Budgeting• A budget is a plan expressed usually in monetary terms. It is portionof allocating a portion of an organizations resources for its variousactivities for a specified period of time.• It includes estimates of sales volume and selling expenses.• Sales volume budget is derived from the company sales forecast, -generally slightly lower than the company sales forecast to avoidexcessive risk.• It helps in planning and coordination of the organization’s activities.Sales budgets are developed for the smooth functioning of the salesfunction (Purpose)• Sales budget gives a detailed break-down ofestimates of sales revenue and selling expenditure.
  17. 17. Continued…..• In practice, sales managers prepare three types of budgets –1) Sales budgets: A sales budget gives a plan showing the expectedsales for a specified period in the future.2) Selling expense budget: Selling expense budgets details theschedule of expenses that may be incurred by the sales departmentto achieve planned sales.3) Administrative budget: Administrative budget specifies thebudgetary allocations for general administrative expenses thatwould be incurred by the sales department
  18. 18. Different methods of Budgeting• The different methods for budgeting include the-1) Affordability method: procedure used to set budgets, based onwhat the organization thinks it can afford to spend. At timesorganization may spend less than necessary to achieve a salestarget or fail to provide the necessary support to a new or decliningbrand.2) Percentage-of-sales method: procedure used to setorganizations budgets, based on a predeterminedpercentage of past sales or a forecast of future sales.Management usually determines the budgets percentagefigure, which is based on the industry average or thecompanys historical or previous years advertising spending.
  19. 19. Different methods of Budgeting (continued)3) Competitive parity method: budget allocation for based on theexpenditures of competitors. The practice is sometimescalled defensive budgeting or defensive spending, because it is basedon the idea that one should defend against competition by spendingas much (or as little) as ones competitor.4) Objective-and-task method: a budgeting method in which theamount to be spent on sales promotion, advertising, personalselling, etc is determined by the desired result of the activityand the nature of the tasks necessary to achieve it.5) Return-oriented method: a budgeting method where organizationcompensate the allocation of fund according to their activities orwe can say on the basis of the return.