Faculty of Management studies, Sabaragamuwa University of Sri Lanka

1. Sales Objective
Analysis and Sales
Territory Analysis
Hemas Holdings (PLC), Sri Lanka
Group Assignment, Department of Marketing Management

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SALES OBJECTIVE ANALYSIS AND SALES TERRITORY
ANALYSIS OF HEMAS HOLDINGS (PLC)
GROUP ASSIGNMENT
Third Year First Semester
Department of Marketing Management
Faculty of Management Studies
SUSL

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ACKNOWLEDGEMENT
We take this opportunity
to express our profound
gratitude and deep regards
to our guide
Miss Kapuge
for her
exemplary guidance,
Monitoring and constant encouragement
throughout the course of this report…..

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ABSTRACT
This report investigates the sales objectives and sales territory establishment of a
selected organization. Though that we have selected the FMCG sector of “Hemas Holdings
PLC” and gathered the support of Planning Department and Sales Manager Mr. Ramesh
Baghavan to accomplish the task. In here, we discuss about how Hemas Holdings has
analyzed market potential and their sales forecasting methods under the topic of sales
objectives. Estimating of sales territories and deciding sales force size according to the
territories will be discussed under the heading of Territory establishment.

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Table of Contents
Chapter 1 .................................................................................................................................... 5
Introduction ............................................................................................................................. 5
1.1 Mission Statement........................................................................................................... 5
Chapter 2..................................................................................................................................... 6
Deciding Market Potential......................................................................................................... 6
2.1 AC Nielsen....................................................................................................................... 6
2.1.1 Market size by category volume................................................................................ 6
2.1.2 Market size by share................................................................................................. 7
2.2 Lanka Market Research Bureau ........................................................................................ 7
2.2.1 Socio Economic growth............................................................................................. 7
2.2.2 Gross Domestic Production....................................................................................... 7
2.2.3 Regional Habits........................................................................................................ 8
Chapter 3..................................................................................................................................... 9
Sales forecasting....................................................................................................................... 9
3.1 The projection of Past Sales Method................................................................................. 9
3.2 Time series analysis ........................................................................................................10
3.3 Survey of customer buying plan.......................................................................................10
Chapter 4....................................................................................................................................12
Establishing Sales Territories.....................................................................................................12
4.1 Estimating sales territories..............................................................................................12
4.1.1 Geographical basis ..................................................................................................12
4.1.2 Customer basis........................................................................................................13
4.1.3 Combination basis...................................................................................................14
Chapter 5....................................................................................................................................15
Deciding Sales territory size and Sales force size ........................................................................15

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5.1 Deciding sales territory size.............................................................................................15
5.2 Deciding sales force size..................................................................................................15
5.2.1 Store Keeping Units(SKU) .......................................................................................16
Reference...................................................................................................................................17
Chapter 1 INTRODUCTION
Hemas Holdings is a highly demanded company all over the world as it is a
multi-production company. When talking about the history of this company it has been
commenced operations in 1948. And now there are five major sectors with more than 20
subsidiaries that this company supplies its service. They are FMCG,Healthcare,
Transportation, Leisure and Strategic Investments. Hemas Holdings firstly created by Sheikh
HasannallyEsufally (MBE) as a pharmacy and trading company. After some decades it has
been transformed to a largely spread firm with several recognizable brands including Baby
Cheramy, Clogard. Kumarika, Diva, Godridge……..etc.
1.1 Mission Statement
“We are committed to delivering to our shareholders the best ever returns a listed company
has given over the first seven years of listing. For our employees, we are committed to
creating exciting new opportunities and a rising share of wealth. For our business partners,
we will be a winner to grow with. To our customers, from all quarters, we will deliver
excellence… every time. We are a responsible corporate citizen close to the lives of the
community. To the state, we are a future winner with the nation at heart.”

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Chapter 2 DECIDING MARKET POTENTIAL
Market potential is the entire size of the market for a product at a specific time. It
represents the upper limits of the market for a product. Usually market potential is an
estimate of the maximum possible sales opportunities present in a particular market segment
and open to all sellers of a good service during a stated future period.
When decide the market potential, Hemas Company look at AC Nielson data on the market.
They report on the market size by category volume & shares. In addition to that Hemas
company look at trends in market such as consumer behavior. This data are taken from
Lanka Market Research Bureau (LMRB).
2.1 AC Nielsen
When considering the FMCG category, they report on the market size by category volume
and shares.
2.1.1 Market size by category volume
Categories Sub categories Hemas product
1. Personal care sector
i. Baby and adult hair
care
ii. Skin care
iii. Fragrances
iv. Oral care
i. Baby heramy
ii. Goya, Paris
iii. Capri, Pro
iv. Clogard
2. Home care _ Diva
3. Paper products _ Nimex
4. Skin care _ Cheramy touch
5. Personal wash _ Velvet

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In Sri Lanka there are about 250 000 outlets around the country. But Hemas consider only 80
000 outlets when calculating sales potential. They decide their sales potential under five
categories. Thus when they determine market potential they measure the entire FMCG
market sales value according to these five categories. Those categories are mentioned below.
2.1.2. Market size by share
In addition to category volume AC Nielson determine the market potential by measuring
market shares of FMCG market. They measure the market share by concerning the buying
habits of the consumers and the market growth of the FMCG products.
Ex:
 Hemas flagship brand Baby Cheramy continued to maintain its stance as the
market leader in the baby care category
 Diva detergent continued to be market leader in terms of volume generated.
2.2 Lanka Market Research Bureau (LMRB)
LMRB provide the data about market trends such as consumer behavior. They focus on the
goods, which are used by a household. Here market potential is determined by concerning
market trends (consumer behaviour)
They use some rates to decide consumer behavior. Those rates are discussed below.
2.2.1. Socio Economic Growth (SEG)
They categorize SEG to two sub categories as SEG- 1 and SEG -2.
SEG – 1 denotes the group of the person who are in the high level of the society and
SEG – 2 denotes the group of the person who are in the low level of the society.
Ex:
If we consider about toothpaste products of Hemas Company, SEG-1 category person use the
Colgate toothpaste and SEG-2 category person use the Denta toothpaste.
2.2.2 Gross Domestic Production (GDP)
Table 2.1

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In the past, when consider about consumer behavior people mostly focused about their food
items. But recently, as a new trend, people more aware about their cosmetics items than foods
items.
Ex:
When selecting their cosmetic items consumer tend to select best option among cosmetic
items such as perfume, cream, shampoo etc. To illustrate that Hemas offer their cream under
many categories such as baby cream, fairness cream, sun cream, body lotion. (Baby cheramy,
Cheramy touch, Paris)
2.2.3. Regional habits
As the people consumption habits are different from one region to another region, they offer
different products to different regions.
Ex:
Hemas invested in Bangaladesh to manufacture the Kumarika oil. Thus, Kumarika oil is
produced by considering their consumption habits.

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Chapter 3 SALES FORECASTING
Businesses are forced to look well ahead in order to plan their investments, launch
new products, and decide when to close or withdraw products and so on. For their success,
organizations use various strategies. A good sales forecasting methodology also helps
business run more efficiently. So Hemas Holdings company realize that Sales Forecasting
is the process of estimating what their business’s sales are going to be in the future .Sales
forecasting is an integral part of business management. Without a solid idea of what your
future sales are going to be, you can’t manage your inventory or your cash flow or plan for
growth. The purpose of sales forecasting is to provide information that organization can use
to make intelligent business decisions.
Therefore Hemas Holdings Company used various sales forecasting methods for
planning their sales for achieving their target profit. Because well managed companies do not
rely upon a single sales forecasting method but use several. Company used following sales
forecasting method for their sales planning.
3.1 The projection of past sales method
the projection of sales past sales method of sales forecasting takes a variety of
forms. The simplest is to set the sales forecast for the coming year at the same figure
as the current year’s actual sales, or the forecast may be made by a set percentage to
last year’s sales. In the following, you can see chart of the historical data of the
Hemas Holding Company.
Annual results 2012 2013 2014 2015
(e)
2016
(e)
Sales
Million LKR
Released
Forecast
Spread
21 410
20 894
2,5%
26 098
25 667
1,7%
32 833
31 053
5,7%
33 477 34 863
Operating income
(EBITDA)
Million LKR
Released
Forecast
Spread
3 183
3 083
3,3%
3 793
Operating profit
(EBIT)
Released
Forecast 2 276
3 379
2 939 3 591 4 573

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Million LKR Spread 15%
Pre-Tax Profit (EBT)
Million LKR
Released
Forecast
Spread
2 406
2 031
18%
3 047
2 766
10%
2 354 2 665
Net income
Million LKR
Released
Forecast
Spread
1 658
1 552
6,8%
2 409
1 845
31%
1 861 2 107
EPS
LKR
Released
Forecast
Spread
3,22
3,01
7,0%
4,68
3,97
18%
5,00 6,60
Announcement Date 05/29/2012 05/29/2013 05/30/2014
Annual Publication
Hemas Holding PLC
This company used those data and they realized their business situation. After they
compare the their present and past data according to the that Hemas Holding company
forecast their future sales as well as in order to plan their investments, launch new products,
decide when to close or withdraw products and so on.
3.2 Time Series Analysis
Hemas Holding PLC used Time Series Analysis for their sales forecasting.
The time series analysis method, predicts the future sales by analyzing the historical
relationship between sales and time. Properly forecasting sales helps you plan and
prepare for the months and years ahead, allowing you to control costs and focus on
successful growth strategies. A good sales forecasting methodology also helps your
business run more efficiently so Hemas Holding Company used this for their short
term operating sales forecast. As well as they identified the influence of some facts
such as Long term trends, cyclical changes, seasonal variation and irregular
fluctuation for their products like baby care (baby Cheremy products),Hair
care(Kumarila,Dandex Shampoo),Oral care(Clogard Toothpaste),Female Fragrances
(Goya,Capri) so on. According to that, they decided their sales plan.
3.3 Survey of Customers Buying Plan.
What more sensible way to use this approach for forecasting their sales.
Hemas company always tries to satisfy their customer need. Customers are the key
Table 3.1

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factor for organization need for achieving their goals. Therefore they closed to the
customer and through the survey get the information regarding their products.
Example: we can get Hamas Pharmaceuticals Hemas Surgical & Diagnostics.
Their pharmaceutical network is unrivalled in its size and efficiency, standing strong
as the leading sales and distribution matrix in Sri Lanka. All of the country’s pharmacies,
private hospitals, supermarkets, and other private and government institutions are included in
this network, benefiting from the optimized logistics and personalized service that we offer.
Their team of Sales and Marketing Representatives is in constant contact with Doctors,
Pharmacists and Healthcare Professionals, informing them of the latest developments in
medical research and in cutting edge Pharmaceuticals. Thus creating an immediate supply
and demand dynamic that is rewarding both them and their principals.
Hemas Holding Company through survey they can determine the cause and effect
relationship of variables, such as customer demand, worker productivity, advertising and
promotion. For example, hiring an additional salesperson has an impact on sales.
Demographic trends, such as an influx of consumers with high household income, can also
have an effect on sales. Greater advertising and promotion affects sales, as well. According to
that, company decides their sales.

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Chapter 4 ESTABLISHING SALES TERRITORIES
Establishment of sales territories facilitates matching selling efforts with sales
opportunities. Sales personnel are assigned the responsibility for serving particular grouping
of customers and prospects and provide contact points with the markets. As a leader in the
personal care sector, Hemas brands encompass a range of products for babies and adults in
hair care, skin care, toiletries, fragrances and oral care. Moreover, home care, paper products,
skin care, personal wash and traded brands acts as a major role in FMCG sector of Hemas
Holdings. Establishment of sales territories is the most crucial part to distribute these
category products among the customers within the island and overseas.
4.1 Estimating sales territories.
Considering the above sales forecasting results and estimated market potential, sales
territories are established with the help of research institutions.there are mainly three sources
to establish sales territories. Estimation is done according to these three bases.
4.1.1 Geographical basis
As the products of Hemas Holdings have spread in a large area the product network
has been sub divided in geographical vise. They serve 75000-80000 outlets all over the
country among 250000 of whole market outlets. Most commonly, the population of each area
has been taken into account and then assigned the territories regarding each area. Generally
they estimate sales territories in geographical basis as follows:
Outlets
500
Territories
10
1 Loan
1 territory (may be
a district)

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According to above diagram Hemas Holdings consist with about 160 territories and 16 loans.
The sales force is divided in regards with these each territory.
 International market
Hemas FMCG category products are exported directly to countries such as Maldives,
Lebanon, Bangladesh, Belize,New Zealand, Zambia, Malaysia, Pakistan, Australia, and The
Middle East. Basically, they export Kumarika, Baby Cheramy, Clogard, Nimex, Goya and
Pro Sport. The international market territories are decided according to sales agents of each
country.
4.1.2 Customer basis
Customer basis is used to estimate the territories when the customer preferences are
different to each other. Hemas holdings divide their customers mainly into 3 categories as
Whole sellers, retailors and individual customers.
 Whole sellers
The company currently handling over 200 whole sellers around the country which
distributes FMCG products to their customers. The territories are designed according to the
size of the whole sellers and divided in to categories as large scale whole sellers and small
scale whole sellers. As Hemas provides FMCG products, the supply chain should move faster
and fill the gaps within channels. Hence Hemas has efficient sales force to fulfill this
requirement.
 Retailors
Hemas holdings has over 75000 retail outlets all over the island within super markets,
small general stores, counter markets and normal stores. These retail outlets are mostly
handled by the wholesellers and products are provided according to their preferences such as
amount, type and bulk purchases.
Figure 4.1

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 Individual customers
Sometimes the territories are estimated according to individual consumer preferences
which changes due to demographic variables ( age, gender, income) , Life style variables(
middle aged, young unmarried, teenage, old age) and behavioral variables (frequency of
buying, buying patterns, loyalty). The territories are made considering each segment and
number of customers in each segment. As the company addresses whole island market, it
serves about 20 million of consumers.
Ex: When considering “Velvet” soap products:
 Rose & Pomegranate for soft,youthful skin
 Milk & Almond for soft, nourished skin
 Sandalwood & Venivel for soft, radiant skin
 Kohomba & Aloe for soft,clear skin
 Purple Lotus & Lavender for soft, glowing skin
4.1.3 Combination Basis
Sometimes the territory sizes are estimated by concerning both of above facts;
geographical basis and customer basis. In this situation first, customer preferences are
estimated according to each geographical area and secondly territories are sub divided
considering the number of customers in each segment.
Ex:
When considering skin care category, first it concerns about how the market demand
spread for “ Cheramy Touch”, “Paris” and “Goya” . Then the demand is fulfilled according to
each district or territory.
Skin Care Products
Cheramy Touch Paris Goya
No. of
customers
(‘00)
No. of
Territories
No. of
customers
(‘00)
No. of
Territories
No. of
customers
(‘00)
No. of
Territories

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Colombo 1256 120 981 90 1456 140
Kandy 876 80 768 70 998 100
Ratnapura 543 50 432 40 765 70
Badulla 412 40 301 30 523 50
Galle 765 70 595 60 897 90
Chapter 5 DECIDING SALES TERRITORYSIZE AND SALES FORCE
SIZE
5.1 Deciding Sales Territory Size
After selecting basic control unit for creating sales territories, sales potential for each
selected control unit is estimated. Sales potential of selected control units will help to frame
sales territories. In this step, prospective customers are identified and contacted to have the
idea of estimated sales by them. This is done with the support of data collected through
research bureaus. Basically the planners of Hemas Holdings plan these territories with the
purpose of reducing the travelling time of sales force as they provide FMCG products. In
this step, planner decides the number, size and shape of the sales territory.
Ex: Number of sales territories for each district for personal care products ( Clogard, baby
Cheramy, Goya, Paris, Capri, Pro, Kumarika, Gold, Dandex)
District No. of Sales territories
Colombo 32
Gampaha 25
Kandy 12
Ratnapura 12
Badulla 10
This each territory includes 300 of outlets within the area.
5.2 Deciding Sales Force Size
Table 4.1
Table 5.1

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As earlier emphasized, the company serves more than 75000 outlets all around the
country. An efficient sales force has been assigned to each territory to fulfill this task. There
are about 250 sales reps in FMCG category. The concept, “Store Keeping Units” (SKU) has
been introduced to simplify the task of sales force and it gives the opportunity to easily
identify the each sales rep’s task.
5.2.1 SKU (Store Keeping Units)
This is used to bundle the whole market outlets in to fragments. There are 3 types of SKUs
which are used by the company. They are:
- 70 outlets= 1 SKU
- 40 outlets = 1 SKU
- 120 outlets = 1 SKU
When considering this, 120 outlets sets are used as 1 SKU mostly in high populated areas
such as Colombo and Gampaha. Moreover, 40 outlet sets are used in low population areas
and 70 outlet sets are used in medium population range area. To decide these numbers, they
usually concerns about
- Population of the area
- Customer trends ( Trend towards cosmetic items than food items within youngsters
and teenagers)
- Seasonal trends (New Year, Christmas, Ramazan and Deepawali)
Then these SKUs are distributed among the sales force to reach the consumers. Usually a
one sales rep should serve 30 -40 outlets per day and 15 to 20 SKU’s per month in high
populated areas. This will be changed according to seasonal trends as demand increases in
those time periods.

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Reference:
 Annual Report, 2012/2013, Hemas Holdings Plc
 http://www.hemas.com/
 Sales Management Decisions, Strategies and Cases, Richard R Still, Edward W
Cundiff, Norman A P Govoni, 5thEdition, 1998, AsokeK Ghosh,Prenticehallof India
(pvt) ltd, M-07, Connaught Circus, New Dilhi

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Special Thanks:
Our special thanks to Sales Manager Mr. Ramesh Baghavan , Planning Department and
Hemas Holdings staff for their great corporation to gather information.
Group Members:
 10/MS/017 B.S.Chathuranga
 10/MS/051 W.H.A.Imesh
 10/MS/122 W.M.G.L.Weerasingha
 10/MS/154 R.B.B.H. De Silva
 10/MS/178 K.N.S.Jayasekara
 10/MS/201 W.M.N.Lakmali
 10/MS/222 E.G.R.W.Nissanka
 10/MS/217 N.P.Wanninayaka