SlideShare a Scribd company logo
DEPARTMENT OF BUSINESS ADMINISTRATION & RESEARCH
Shri Sant Gajanan Maharaj College of Engg., Shegaon
Sales and Distribution Management
Unit-2
Sales Planning
Setting
Objectives
Determining
operations to
meet objectives
Organising for
action
Implementation
Measuring
results against
standards
Re-evaluation
and control
Sales Planning
Mission Statement: It is a statement of purpose of the company,
which should be defined ideally vis-à-vis its target customers
Situation Analysis: Basically a SWOT. Internal audit can include
current marketing mix, size and growth of the market,
customer trends, etc.
External audit includes PEST i.e. Political, Economic, Socio-
cultural and Technological; which are basically broad
macroeconomic trends
Statement of Objectives: Objectives should follow the
S.M.A.R.T. principle; that is Specific, Measurable,
Achievable, Realistic & Time bound
Sales Planning
Generating & Selecting Strategies: How do you target, price, how to retain
customers recognizing at which stage they are – prospect, first time, repeat
customer, dormant, etc. You must take the right decisions based on your
SWOT.
Prepare the marketing program; do the budgeting and then implementation and
control
Sales function provides inputs vis-à-vis analysis of current marketing situation,
determining sales potential, generating/selecting strategies and in budget,
implementation and control…
Sales Budget
A sales budget consists of estimates of unit and rupee sales during
operating period as well as selling expenses; so as to estimate the
profit target.
Once the budget is set, it can be broken down by region, product
groups and/or account types
Also, sales budget talks about the optimum profitability in a given
period; since firms typically look for profit maximization in the
long term; while it seeks sales maximization in the current period.
Sales Budget
Purposes of sales budget:
1) It serves as a mechanism of control, as the company can
measure actual performance against benchmarks. According
to the degree of non conformance, revisions can be made in a
timely manner
2) Planning can be better done through sales budgets; where
planners try to maintain the balance between sales budget
and sales expenses; and how they may be optimized to meet
business objectives
Sales Budget
Sales budget: figures in ‘000 units
North South East West Total
A 80 25 32 40 177
B 90 45 12 57 204
C 30 70 60 34 194
Product
Region
Sales Budget
Sales department budget is the cost running the marketing function
in the budgetary period. It is normally split into 3
components:
1) Selling expenses budget: Costs attributable to the selling
process: Sales personnel salaries and commission, sales
training and sales expenses
2) Advertising Expenses: Expenses attributable to above the line
and below the line promotions:
a)Percentage of last year’s sales
b)Competitive parity in line with a larger player
c)Affordable method
d)Objective and task method
e)Long term ROI of advertising
3) Administrative expenses: Accounts staff, market research sales
administration, etc.
Sales Budget
Estimating selling expenses: In the long run, the goal is profit
maximization; but in the short run, one may have to incur loss
in pitching for new accounts, doing extensive follow up,
providing incentives for business development; mean that sales
optimization becomes the short term goal
The management may like to plan well in advance for the
accounting period immediately succeeding the current one.
After the sales target is made, activities are defined to achieve the
same; after which costs are estimated. For instance: the target
requires sales people to travel 1,00,000 km a year, and the
allowance per km. is Rs.8, the budgetary allocation would be
Rs.8,00,000…
Sales Budget
Also management can measure change in standard
costs over time
If standard costing is not possible, estimates like cost
per unit sale may be used. Companies may also adjust
this cost for inflation, changes in competitive
landscape, market conditions, etc.
Sales Budget
Planning styles:
1) Top down: The top management gives sales and profit
targets to various organizational units and unit heads make
plans to achieve those objectives
2) Bottom up: Unit heads and their subordinates team up in the
setting of the sales and profit objectives and also plans to
meet them.
Ideally the budgeting should be more democratically done, as the
top management is away from the realities in the field; but at
the same time, juniors may tend to understate what they can
achieve in the period.
Sales Budget
In the normal scenario, each division will make a budget and send
it to the next higher authority for approval
The division must also discuss its plans for the forthcoming period
for the sake of better evaluation. Every level must lead to more
conciseness in detail
If there is a cutback, then the division has to obviously decide
where to cut corners.
It will be similar for other departments, where they will present an
estimation of their costs.
Top management has to carefully evaluate and allocate budgetary
expenditure in the best interests of the company
Sales Budget
When there are budgetary deviations, there are two options:
1) Analyze if this is a result of poor performance
2) If there were genuine reasons, the budget itself can be
revised
Sales Budget
A budget is a plan expressed usually in
monetary terms. It is a process of allocating a
portion of an organization’s resources for its
various activities for a specified period of
time.
It helps in planning and coordination of the
organization’s activities. Sales budgets are
developed for the smooth functioning of the
sales function.
Cont.
Developing sales budgets serve two
purposes –
As a mechanism of control and
An instrument of planning.
There are several benefits an organization
derives from budgeting.
Cont.
They are –
• Improved planning
• Better communication and coordination
• Performance evaluation
• Psychological benefits
• Avoiding uncontrolled expenditure.
Cont.
Interlink Role
Marketing Plan
Sales Force BudgetSales Forecast
Types Of Budget
In practice, sales managers prepare three
types of budgets –
Sales budgets
Selling expense budget
Administrative budget
A sales budget gives a plan showing the
expected sales for a specified period in the
future.
Cont.
Selling expense budgets details the
schedule of expenses that may be incurred
by the sales department to achieve planned
sales.
Administrative budget specifies the
budgetary allocations for general
administrative expenses that would be
incurred by the sales department.
Methods For Budgeting
The different methods for budgeting include
the-
Affordability method
Percentage-of-sales method
Competitive parity method
Objective-and-task method
Return-oriented method.
Sales Forecasting
Sales forecasting is a difficult area of
management. Most managers believe they
are good at forecasting. However, forecasts
made usually turn out to be wrong!
Marketers argue about whether sales
forecasting is a science or an art. The short
answer is that it is a bit of both.
Cont.
Market Forecast refers to the estimates of
future sales of a company’s products in the
market.
Sales forecasting is very popular in
industrially advanced countries where
demand conditions are always uncertain
than the supply conditions.
Reasons for undertaking Sales Forecast
Businesses are forced to look well ahead in
order to plan their investments, launch new
products, decide when to close or withdraw
products and so on.
The sales forecasting process is a critical
one for most businesses.
Cont.
• Key decisions that are derived from a sales
forecast include:-
- Employment levels required
- Promotional mix
- Investment in production capacity
Types Of Forecasting
• There are two major types of forecasting, which
can be broadly described as macro and micro:
• Macro forecasting is concerned with forecasting
markets in total. This is about determining the
existing level of Market Demand and considering
what will happen to market demand in the future.
• Micro forecasting is concerned with detailed unit
sales forecasts. This is about determining a
product’s market share in a particular industry
and considering what will happen to that market
share in the future.
Selection Of Forecasting
 The selection of which type of forecasting
is use depends on the several factors which
can be described as:
(1) The degree of accuracy required – if the
decisions that are to be made on the basis of the
sales forecast have high risks attached to them,
then it stands to reason that the forecast should
be prepared as accurately as possible. However,
this involves more cost
Cont.
(2) The availability of data and information - in
some markets there is a wealth of available sales
information (e.g. clothing retail, food retailing,
holidays); in others 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 will happen to the overall size of the
market in the next five years?
Cont.
(4) The position of the products in its life cycle.
For example, for products at the “introductory”
stage of the product life cycle, less sales data and
information may be available than for products at
the “maturity” stage when time series can be a
useful forecasting method.
The Relationship of Forecasting to Budgets
Relation Sales Forecasts
Sales Budget
Production Budget
Direct Labor Budget
Cost of Goods Sold Budget
Budgeted P/L Statement
Budgeted Balance Sheet
Revenue Budget
Expenses
Budget
Factory O/H
Budget
Sales &
Administration
Expenses Budget
Revenue Budget
Purposes Of Short term Forecasting
• Appropriate production scheduling
• Reducing cost of purchasing R/M
• Determining appropriate price policy
• Setting sales targets and establishing
controls and incentives
• Evolving a suitable promotional program
• Forecasting short-term financial
requirements
Purposes Of Short term Forecasting
• Planning of a new unit or expansion of an
existing unit
• Planning of long-term financial
requirements
• Planning of man-power requirements
A common method of preparing a sales forecast
has three stages
1) Prepare a macroeconomic forecast – what will
happen to overall economic activity in the relevant
economies in which a product is to be sold.
2) Prepare an industry sales forecast – what will
happen to overall sales in an industry based on the
issues that influence the macroeconomic forecast.
3) Prepare a company sales forecast – based on
what management expect to happen to the
company’s market share.
Forecasting Process
Forecast Objective
Evaluate Result versus
forecast
Determined
independent and
dependent
variables
Total forecast
Procedure
Select forecast
Analysis method
Develop Forecast
Procedure
Gather & analyze
data
Present assumption
about data
Make & finalize
forecast
Cont.
Forecasting can be classified into qualitative
forecasting and quantitative forecasting.
The methods used in qualitative forecasting
are:
• user expectations,
• sales force composite,
• jury of executive opinion,
• Delphi technique and market test.
Cont.
The methods used in quantitative
forecasting are:
• time series analysis
• moving averages
• exponential smoothing regression and
correlation
• analysis, and multiple regression models
Control
Control was defined as “a process used by
managers to direct, regulate, and restrain
the actions of people so that the
established goals of an enterprise may be
achieved.”
Revenue control is clearly an important
goal of sales control, but it is not the only
one.
Sales Control
 Like any other control system, sales control
requires the establishment of standards, the
evaluation of actual performance and the
correction of deviation in performance.
 Sales control implies not only managerial action
with regard to actual sales, but it also embraces
all other marketing functions required for the
even flow of products or services form producers
to consumers.
Cont.
 All promotional and auxiliary efforts in marketing
require as much control as the actual selling
efforts demand.
 Nevertheless, control of promotional and auxiliary
efforts in marketing is more difficult and cannot be
exercised with that exactness which is possible in
case of actual selling efforts.
Cont.
 Because of their intangible performances,
ancillary activities in marketing are placed under
some broad measures of control, and they are
measured and appraised by managerial judgment,
skill or experience.
 The basic tool for controlling these efforts is to be
found in the sales expense budget .
 For controlling performances of salesmen, the sales
budget or in the absence of a sales budget, the
sales programme provides the standard for control.
Goals of Sales Control
• Optimize number of sales
• Maximize profit
• Control revenue
Systematic View
Sales Control
Behavioral Aspects Cost Aspects
Sales Effort Allocation of
Selling-Time
Performance
Expenses
Sales-function
Administration

More Related Content

What's hot

Sales objectives and quotas
Sales objectives and quotasSales objectives and quotas
Sales objectives and quotas
Vipin Kumar
 
Sdm ch4
Sdm ch4Sdm ch4
Sdm ch4
Sivaraj Kumar
 
sales territories and quotas
sales territories and quotassales territories and quotas
sales territories and quotas
Sunil Chichra
 
Sales budget
Sales budgetSales budget
Sales budget
Indransh Gupta
 
Sales Quotas & Sales Territory
Sales Quotas & Sales TerritorySales Quotas & Sales Territory
Sales Quotas & Sales Territory
Amitabh Mishra
 
Sales quotas
Sales quotasSales quotas
Sales quotas
Tribhuvan University
 
Sales budget, quotas and sales territories
Sales budget, quotas and sales territoriesSales budget, quotas and sales territories
Sales budget, quotas and sales territories
Indransh Gupta
 
Sales forecasting
Sales forecastingSales forecasting
Sales forecasting
Wish Mrt'xa
 
Sales force evaluation and control
Sales force evaluation and controlSales force evaluation and control
Sales force evaluation and control
BHOOMI AHUJA
 
Sales forecasting and sales budgeting
Sales forecasting and sales budgetingSales forecasting and sales budgeting
Sales territory and management of sales quota
Sales territory and management of sales quotaSales territory and management of sales quota
Sales territory and management of sales quota
sanjay_sarkar
 
PPT of budgeting merchandise in retail store
PPT of budgeting merchandise in retail storePPT of budgeting merchandise in retail store
PPT of budgeting merchandise in retail store
Rajesh Roy
 
Sdm unit-4
Sdm unit-4Sdm unit-4
Sdm unit-4
Sivaraj Kumar
 
Planning, Sales Forecasting, and Budgeting
Planning, Sales Forecasting, and BudgetingPlanning, Sales Forecasting, and Budgeting
Planning, Sales Forecasting, and Budgeting
Nishant Agrawal
 
1 distribution cost analyis
1 distribution cost analyis1 distribution cost analyis
1 distribution cost analyis
Ashish Hande
 
Sales force evaluation
Sales force evaluationSales force evaluation
Sales force evaluation
Richa Singhvi
 
Distribution management & marketing mix
Distribution management & marketing mixDistribution management & marketing mix
Distribution management & marketing mix
Scarlett Voughn
 
Marketing effectively
Marketing effectivelyMarketing effectively
Marketing effectively
Saher Ibrahim
 
Sales budgeting Methods
Sales budgeting MethodsSales budgeting Methods
Sales budgeting Methods
folaiya
 
Ch4 management of territories
Ch4 management of territoriesCh4 management of territories
Ch4 management of territories
Srinivas Reddy Dwarampudi
 

What's hot (20)

Sales objectives and quotas
Sales objectives and quotasSales objectives and quotas
Sales objectives and quotas
 
Sdm ch4
Sdm ch4Sdm ch4
Sdm ch4
 
sales territories and quotas
sales territories and quotassales territories and quotas
sales territories and quotas
 
Sales budget
Sales budgetSales budget
Sales budget
 
Sales Quotas & Sales Territory
Sales Quotas & Sales TerritorySales Quotas & Sales Territory
Sales Quotas & Sales Territory
 
Sales quotas
Sales quotasSales quotas
Sales quotas
 
Sales budget, quotas and sales territories
Sales budget, quotas and sales territoriesSales budget, quotas and sales territories
Sales budget, quotas and sales territories
 
Sales forecasting
Sales forecastingSales forecasting
Sales forecasting
 
Sales force evaluation and control
Sales force evaluation and controlSales force evaluation and control
Sales force evaluation and control
 
Sales forecasting and sales budgeting
Sales forecasting and sales budgetingSales forecasting and sales budgeting
Sales forecasting and sales budgeting
 
Sales territory and management of sales quota
Sales territory and management of sales quotaSales territory and management of sales quota
Sales territory and management of sales quota
 
PPT of budgeting merchandise in retail store
PPT of budgeting merchandise in retail storePPT of budgeting merchandise in retail store
PPT of budgeting merchandise in retail store
 
Sdm unit-4
Sdm unit-4Sdm unit-4
Sdm unit-4
 
Planning, Sales Forecasting, and Budgeting
Planning, Sales Forecasting, and BudgetingPlanning, Sales Forecasting, and Budgeting
Planning, Sales Forecasting, and Budgeting
 
1 distribution cost analyis
1 distribution cost analyis1 distribution cost analyis
1 distribution cost analyis
 
Sales force evaluation
Sales force evaluationSales force evaluation
Sales force evaluation
 
Distribution management & marketing mix
Distribution management & marketing mixDistribution management & marketing mix
Distribution management & marketing mix
 
Marketing effectively
Marketing effectivelyMarketing effectively
Marketing effectively
 
Sales budgeting Methods
Sales budgeting MethodsSales budgeting Methods
Sales budgeting Methods
 
Ch4 management of territories
Ch4 management of territoriesCh4 management of territories
Ch4 management of territories
 

Similar to Sdm 2.0

Sales budget ,forcasting and control
Sales budget ,forcasting and controlSales budget ,forcasting and control
Sales budget ,forcasting and control
jack99
 
Unit 3.pptx
Unit 3.pptxUnit 3.pptx
Unit 3.pptx
GauravN12
 
24201324 sales-budget
24201324 sales-budget24201324 sales-budget
24201324 sales-budget
Anand Satsangi
 
ppt-of-sales-and-distribution-2.pptx
ppt-of-sales-and-distribution-2.pptxppt-of-sales-and-distribution-2.pptx
ppt-of-sales-and-distribution-2.pptx
Goldenxyz2000
 
Forecasting and budgeting
Forecasting and budgetingForecasting and budgeting
Forecasting and budgeting
Kumar K Sashi
 
Dynamic sales forecasting
Dynamic sales forecastingDynamic sales forecasting
Dynamic sales forecasting
Bhushan Ekbote
 
Forecasting and budgeting
Forecasting and budgetingForecasting and budgeting
Forecasting and budgeting
Kumar K Sashi
 
Sales budget
Sales budgetSales budget
Sales budget
sanya126
 
Avis bu
Avis buAvis bu
Avis bu
najma oudada
 
Sales Management Planning
Sales Management PlanningSales Management Planning
Sales Management Planning
Mathew Lawrence
 
Ch4 management of sales territories and quotas
Ch4 management of sales territories and quotasCh4 management of sales territories and quotas
Ch4 management of sales territories and quotas
pinkeshparvani
 
Sales Mgt
Sales MgtSales Mgt
Sales Mgt
Indransh Gupta
 
Sales budget
Sales budgetSales budget
Sales budget
Rishabh Sharma
 
Adman Lecture 6
Adman Lecture 6Adman Lecture 6
Bus169 Kotler Chapter 02
Bus169 Kotler Chapter 02Bus169 Kotler Chapter 02
Bus169 Kotler Chapter 02
Alwyn Lau
 
Mmi finance 3
Mmi finance 3Mmi finance 3
Mmi finance 3
gatecomro
 
Marketing Planning, Types of Marketing Planning
Marketing Planning, Types of Marketing PlanningMarketing Planning, Types of Marketing Planning
Marketing Planning, Types of Marketing Planning
Deekshith Nadar
 
The Marketing Plan
The Marketing PlanThe Marketing Plan
The Marketing Plan
Muhammad Ali
 
sales quotas
 sales quotas sales quotas
sales quotas
Kirti Gupta
 
marketing plan
 marketing plan marketing plan
marketing plan
Pooja Rani
 

Similar to Sdm 2.0 (20)

Sales budget ,forcasting and control
Sales budget ,forcasting and controlSales budget ,forcasting and control
Sales budget ,forcasting and control
 
Unit 3.pptx
Unit 3.pptxUnit 3.pptx
Unit 3.pptx
 
24201324 sales-budget
24201324 sales-budget24201324 sales-budget
24201324 sales-budget
 
ppt-of-sales-and-distribution-2.pptx
ppt-of-sales-and-distribution-2.pptxppt-of-sales-and-distribution-2.pptx
ppt-of-sales-and-distribution-2.pptx
 
Forecasting and budgeting
Forecasting and budgetingForecasting and budgeting
Forecasting and budgeting
 
Dynamic sales forecasting
Dynamic sales forecastingDynamic sales forecasting
Dynamic sales forecasting
 
Forecasting and budgeting
Forecasting and budgetingForecasting and budgeting
Forecasting and budgeting
 
Sales budget
Sales budgetSales budget
Sales budget
 
Avis bu
Avis buAvis bu
Avis bu
 
Sales Management Planning
Sales Management PlanningSales Management Planning
Sales Management Planning
 
Ch4 management of sales territories and quotas
Ch4 management of sales territories and quotasCh4 management of sales territories and quotas
Ch4 management of sales territories and quotas
 
Sales Mgt
Sales MgtSales Mgt
Sales Mgt
 
Sales budget
Sales budgetSales budget
Sales budget
 
Adman Lecture 6
Adman Lecture 6Adman Lecture 6
Adman Lecture 6
 
Bus169 Kotler Chapter 02
Bus169 Kotler Chapter 02Bus169 Kotler Chapter 02
Bus169 Kotler Chapter 02
 
Mmi finance 3
Mmi finance 3Mmi finance 3
Mmi finance 3
 
Marketing Planning, Types of Marketing Planning
Marketing Planning, Types of Marketing PlanningMarketing Planning, Types of Marketing Planning
Marketing Planning, Types of Marketing Planning
 
The Marketing Plan
The Marketing PlanThe Marketing Plan
The Marketing Plan
 
sales quotas
 sales quotas sales quotas
sales quotas
 
marketing plan
 marketing plan marketing plan
marketing plan
 

More from Ashish Hande

5 social ethical issues in sdm
5 social ethical issues in sdm5 social ethical issues in sdm
5 social ethical issues in sdm
Ashish Hande
 
4 wholesaling-and-retailing
4 wholesaling-and-retailing4 wholesaling-and-retailing
4 wholesaling-and-retailing
Ashish Hande
 
3 channel-information-systems
3 channel-information-systems3 channel-information-systems
3 channel-information-systems
Ashish Hande
 
2 management of channel-conflict
2 management of channel-conflict2 management of channel-conflict
2 management of channel-conflict
Ashish Hande
 
Telemarketing ppt-1
Telemarketing ppt-1Telemarketing ppt-1
Telemarketing ppt-1
Ashish Hande
 
Selling fab
Selling fabSelling fab
Selling fab
Ashish Hande
 
Personal selling
Personal sellingPersonal selling
Personal selling
Ashish Hande
 
Sdm 1.3
Sdm 1.3Sdm 1.3
Sdm 1.3
Ashish Hande
 
Sdm 1.2
Sdm 1.2Sdm 1.2
Sdm 1.2
Ashish Hande
 
Sdm 1.0
Sdm 1.0Sdm 1.0
Sdm 1.0
Ashish Hande
 
Sdm 1.1
Sdm 1.1Sdm 1.1
Sdm 1.1
Ashish Hande
 
Models of cb
Models of cbModels of cb
Models of cb
Ashish Hande
 
Models of cb 1
Models of cb 1Models of cb 1
Models of cb 1
Ashish Hande
 
CONSUMER BEHAVIOUR MODELS
CONSUMER BEHAVIOUR MODELSCONSUMER BEHAVIOUR MODELS
CONSUMER BEHAVIOUR MODELS
Ashish Hande
 
CONSUMER BEHAVIOUR INDUSTRIAL BUYING BEHAVIOUR
CONSUMER BEHAVIOUR INDUSTRIAL BUYING BEHAVIOURCONSUMER BEHAVIOUR INDUSTRIAL BUYING BEHAVIOUR
CONSUMER BEHAVIOUR INDUSTRIAL BUYING BEHAVIOUR
Ashish Hande
 
MODEL OF CONSUMER BEHAVIOUR
MODEL OF CONSUMER BEHAVIOURMODEL OF CONSUMER BEHAVIOUR
MODEL OF CONSUMER BEHAVIOUR
Ashish Hande
 
DIFFUSION OF INNOVATION
DIFFUSION OF INNOVATIONDIFFUSION OF INNOVATION
DIFFUSION OF INNOVATION
Ashish Hande
 
Cb personality and life style
Cb personality and life styleCb personality and life style
Cb personality and life style
Ashish Hande
 
Cb personality and life style 1
Cb personality and life style 1Cb personality and life style 1
Cb personality and life style 1
Ashish Hande
 
Cb 3.2
Cb 3.2Cb 3.2
Cb 3.2
Ashish Hande
 

More from Ashish Hande (20)

5 social ethical issues in sdm
5 social ethical issues in sdm5 social ethical issues in sdm
5 social ethical issues in sdm
 
4 wholesaling-and-retailing
4 wholesaling-and-retailing4 wholesaling-and-retailing
4 wholesaling-and-retailing
 
3 channel-information-systems
3 channel-information-systems3 channel-information-systems
3 channel-information-systems
 
2 management of channel-conflict
2 management of channel-conflict2 management of channel-conflict
2 management of channel-conflict
 
Telemarketing ppt-1
Telemarketing ppt-1Telemarketing ppt-1
Telemarketing ppt-1
 
Selling fab
Selling fabSelling fab
Selling fab
 
Personal selling
Personal sellingPersonal selling
Personal selling
 
Sdm 1.3
Sdm 1.3Sdm 1.3
Sdm 1.3
 
Sdm 1.2
Sdm 1.2Sdm 1.2
Sdm 1.2
 
Sdm 1.0
Sdm 1.0Sdm 1.0
Sdm 1.0
 
Sdm 1.1
Sdm 1.1Sdm 1.1
Sdm 1.1
 
Models of cb
Models of cbModels of cb
Models of cb
 
Models of cb 1
Models of cb 1Models of cb 1
Models of cb 1
 
CONSUMER BEHAVIOUR MODELS
CONSUMER BEHAVIOUR MODELSCONSUMER BEHAVIOUR MODELS
CONSUMER BEHAVIOUR MODELS
 
CONSUMER BEHAVIOUR INDUSTRIAL BUYING BEHAVIOUR
CONSUMER BEHAVIOUR INDUSTRIAL BUYING BEHAVIOURCONSUMER BEHAVIOUR INDUSTRIAL BUYING BEHAVIOUR
CONSUMER BEHAVIOUR INDUSTRIAL BUYING BEHAVIOUR
 
MODEL OF CONSUMER BEHAVIOUR
MODEL OF CONSUMER BEHAVIOURMODEL OF CONSUMER BEHAVIOUR
MODEL OF CONSUMER BEHAVIOUR
 
DIFFUSION OF INNOVATION
DIFFUSION OF INNOVATIONDIFFUSION OF INNOVATION
DIFFUSION OF INNOVATION
 
Cb personality and life style
Cb personality and life styleCb personality and life style
Cb personality and life style
 
Cb personality and life style 1
Cb personality and life style 1Cb personality and life style 1
Cb personality and life style 1
 
Cb 3.2
Cb 3.2Cb 3.2
Cb 3.2
 

Recently uploaded

220711130097 Tulip Samanta Concept of Information and Communication Technology
220711130097 Tulip Samanta Concept of Information and Communication Technology220711130097 Tulip Samanta Concept of Information and Communication Technology
220711130097 Tulip Samanta Concept of Information and Communication Technology
Kalna College
 
Temple of Asclepius in Thrace. Excavation results
Temple of Asclepius in Thrace. Excavation resultsTemple of Asclepius in Thrace. Excavation results
Temple of Asclepius in Thrace. Excavation results
Krassimira Luka
 
Gender and Mental Health - Counselling and Family Therapy Applications and In...
Gender and Mental Health - Counselling and Family Therapy Applications and In...Gender and Mental Health - Counselling and Family Therapy Applications and In...
Gender and Mental Health - Counselling and Family Therapy Applications and In...
PsychoTech Services
 
Andreas Schleicher presents PISA 2022 Volume III - Creative Thinking - 18 Jun...
Andreas Schleicher presents PISA 2022 Volume III - Creative Thinking - 18 Jun...Andreas Schleicher presents PISA 2022 Volume III - Creative Thinking - 18 Jun...
Andreas Schleicher presents PISA 2022 Volume III - Creative Thinking - 18 Jun...
EduSkills OECD
 
Bonku-Babus-Friend by Sathyajith Ray (9)
Bonku-Babus-Friend by Sathyajith Ray  (9)Bonku-Babus-Friend by Sathyajith Ray  (9)
Bonku-Babus-Friend by Sathyajith Ray (9)
nitinpv4ai
 
Pharmaceutics Pharmaceuticals best of brub
Pharmaceutics Pharmaceuticals best of brubPharmaceutics Pharmaceuticals best of brub
Pharmaceutics Pharmaceuticals best of brub
danielkiash986
 
Oliver Asks for More by Charles Dickens (9)
Oliver Asks for More by Charles Dickens (9)Oliver Asks for More by Charles Dickens (9)
Oliver Asks for More by Charles Dickens (9)
nitinpv4ai
 
BÀI TẬP BỔ TRỢ TIẾNG ANH LỚP 8 - CẢ NĂM - FRIENDS PLUS - NĂM HỌC 2023-2024 (B...
BÀI TẬP BỔ TRỢ TIẾNG ANH LỚP 8 - CẢ NĂM - FRIENDS PLUS - NĂM HỌC 2023-2024 (B...BÀI TẬP BỔ TRỢ TIẾNG ANH LỚP 8 - CẢ NĂM - FRIENDS PLUS - NĂM HỌC 2023-2024 (B...
BÀI TẬP BỔ TRỢ TIẾNG ANH LỚP 8 - CẢ NĂM - FRIENDS PLUS - NĂM HỌC 2023-2024 (B...
Nguyen Thanh Tu Collection
 
220711130100 udita Chakraborty Aims and objectives of national policy on inf...
220711130100 udita Chakraborty  Aims and objectives of national policy on inf...220711130100 udita Chakraborty  Aims and objectives of national policy on inf...
220711130100 udita Chakraborty Aims and objectives of national policy on inf...
Kalna College
 
RESULTS OF THE EVALUATION QUESTIONNAIRE.pptx
RESULTS OF THE EVALUATION QUESTIONNAIRE.pptxRESULTS OF THE EVALUATION QUESTIONNAIRE.pptx
RESULTS OF THE EVALUATION QUESTIONNAIRE.pptx
zuzanka
 
How to Fix [Errno 98] address already in use
How to Fix [Errno 98] address already in useHow to Fix [Errno 98] address already in use
How to Fix [Errno 98] address already in use
Celine George
 
INTRODUCTION TO HOSPITALS & AND ITS ORGANIZATION
INTRODUCTION TO HOSPITALS & AND ITS ORGANIZATION INTRODUCTION TO HOSPITALS & AND ITS ORGANIZATION
INTRODUCTION TO HOSPITALS & AND ITS ORGANIZATION
ShwetaGawande8
 
Elevate Your Nonprofit's Online Presence_ A Guide to Effective SEO Strategies...
Elevate Your Nonprofit's Online Presence_ A Guide to Effective SEO Strategies...Elevate Your Nonprofit's Online Presence_ A Guide to Effective SEO Strategies...
Elevate Your Nonprofit's Online Presence_ A Guide to Effective SEO Strategies...
TechSoup
 
220711130082 Srabanti Bag Internet Resources For Natural Science
220711130082 Srabanti Bag Internet Resources For Natural Science220711130082 Srabanti Bag Internet Resources For Natural Science
220711130082 Srabanti Bag Internet Resources For Natural Science
Kalna College
 
Philippine Edukasyong Pantahanan at Pangkabuhayan (EPP) Curriculum
Philippine Edukasyong Pantahanan at Pangkabuhayan (EPP) CurriculumPhilippine Edukasyong Pantahanan at Pangkabuhayan (EPP) Curriculum
Philippine Edukasyong Pantahanan at Pangkabuhayan (EPP) Curriculum
MJDuyan
 
Contiguity Of Various Message Forms - Rupam Chandra.pptx
Contiguity Of Various Message Forms - Rupam Chandra.pptxContiguity Of Various Message Forms - Rupam Chandra.pptx
Contiguity Of Various Message Forms - Rupam Chandra.pptx
Kalna College
 
مصحف القراءات العشر أعد أحرف الخلاف سمير بسيوني.pdf
مصحف القراءات العشر   أعد أحرف الخلاف سمير بسيوني.pdfمصحف القراءات العشر   أعد أحرف الخلاف سمير بسيوني.pdf
مصحف القراءات العشر أعد أحرف الخلاف سمير بسيوني.pdf
سمير بسيوني
 
How to Manage Reception Report in Odoo 17
How to Manage Reception Report in Odoo 17How to Manage Reception Report in Odoo 17
How to Manage Reception Report in Odoo 17
Celine George
 
THE SACRIFICE HOW PRO-PALESTINE PROTESTS STUDENTS ARE SACRIFICING TO CHANGE T...
THE SACRIFICE HOW PRO-PALESTINE PROTESTS STUDENTS ARE SACRIFICING TO CHANGE T...THE SACRIFICE HOW PRO-PALESTINE PROTESTS STUDENTS ARE SACRIFICING TO CHANGE T...
THE SACRIFICE HOW PRO-PALESTINE PROTESTS STUDENTS ARE SACRIFICING TO CHANGE T...
indexPub
 
220711130083 SUBHASHREE RAKSHIT Internet resources for social science
220711130083 SUBHASHREE RAKSHIT  Internet resources for social science220711130083 SUBHASHREE RAKSHIT  Internet resources for social science
220711130083 SUBHASHREE RAKSHIT Internet resources for social science
Kalna College
 

Recently uploaded (20)

220711130097 Tulip Samanta Concept of Information and Communication Technology
220711130097 Tulip Samanta Concept of Information and Communication Technology220711130097 Tulip Samanta Concept of Information and Communication Technology
220711130097 Tulip Samanta Concept of Information and Communication Technology
 
Temple of Asclepius in Thrace. Excavation results
Temple of Asclepius in Thrace. Excavation resultsTemple of Asclepius in Thrace. Excavation results
Temple of Asclepius in Thrace. Excavation results
 
Gender and Mental Health - Counselling and Family Therapy Applications and In...
Gender and Mental Health - Counselling and Family Therapy Applications and In...Gender and Mental Health - Counselling and Family Therapy Applications and In...
Gender and Mental Health - Counselling and Family Therapy Applications and In...
 
Andreas Schleicher presents PISA 2022 Volume III - Creative Thinking - 18 Jun...
Andreas Schleicher presents PISA 2022 Volume III - Creative Thinking - 18 Jun...Andreas Schleicher presents PISA 2022 Volume III - Creative Thinking - 18 Jun...
Andreas Schleicher presents PISA 2022 Volume III - Creative Thinking - 18 Jun...
 
Bonku-Babus-Friend by Sathyajith Ray (9)
Bonku-Babus-Friend by Sathyajith Ray  (9)Bonku-Babus-Friend by Sathyajith Ray  (9)
Bonku-Babus-Friend by Sathyajith Ray (9)
 
Pharmaceutics Pharmaceuticals best of brub
Pharmaceutics Pharmaceuticals best of brubPharmaceutics Pharmaceuticals best of brub
Pharmaceutics Pharmaceuticals best of brub
 
Oliver Asks for More by Charles Dickens (9)
Oliver Asks for More by Charles Dickens (9)Oliver Asks for More by Charles Dickens (9)
Oliver Asks for More by Charles Dickens (9)
 
BÀI TẬP BỔ TRỢ TIẾNG ANH LỚP 8 - CẢ NĂM - FRIENDS PLUS - NĂM HỌC 2023-2024 (B...
BÀI TẬP BỔ TRỢ TIẾNG ANH LỚP 8 - CẢ NĂM - FRIENDS PLUS - NĂM HỌC 2023-2024 (B...BÀI TẬP BỔ TRỢ TIẾNG ANH LỚP 8 - CẢ NĂM - FRIENDS PLUS - NĂM HỌC 2023-2024 (B...
BÀI TẬP BỔ TRỢ TIẾNG ANH LỚP 8 - CẢ NĂM - FRIENDS PLUS - NĂM HỌC 2023-2024 (B...
 
220711130100 udita Chakraborty Aims and objectives of national policy on inf...
220711130100 udita Chakraborty  Aims and objectives of national policy on inf...220711130100 udita Chakraborty  Aims and objectives of national policy on inf...
220711130100 udita Chakraborty Aims and objectives of national policy on inf...
 
RESULTS OF THE EVALUATION QUESTIONNAIRE.pptx
RESULTS OF THE EVALUATION QUESTIONNAIRE.pptxRESULTS OF THE EVALUATION QUESTIONNAIRE.pptx
RESULTS OF THE EVALUATION QUESTIONNAIRE.pptx
 
How to Fix [Errno 98] address already in use
How to Fix [Errno 98] address already in useHow to Fix [Errno 98] address already in use
How to Fix [Errno 98] address already in use
 
INTRODUCTION TO HOSPITALS & AND ITS ORGANIZATION
INTRODUCTION TO HOSPITALS & AND ITS ORGANIZATION INTRODUCTION TO HOSPITALS & AND ITS ORGANIZATION
INTRODUCTION TO HOSPITALS & AND ITS ORGANIZATION
 
Elevate Your Nonprofit's Online Presence_ A Guide to Effective SEO Strategies...
Elevate Your Nonprofit's Online Presence_ A Guide to Effective SEO Strategies...Elevate Your Nonprofit's Online Presence_ A Guide to Effective SEO Strategies...
Elevate Your Nonprofit's Online Presence_ A Guide to Effective SEO Strategies...
 
220711130082 Srabanti Bag Internet Resources For Natural Science
220711130082 Srabanti Bag Internet Resources For Natural Science220711130082 Srabanti Bag Internet Resources For Natural Science
220711130082 Srabanti Bag Internet Resources For Natural Science
 
Philippine Edukasyong Pantahanan at Pangkabuhayan (EPP) Curriculum
Philippine Edukasyong Pantahanan at Pangkabuhayan (EPP) CurriculumPhilippine Edukasyong Pantahanan at Pangkabuhayan (EPP) Curriculum
Philippine Edukasyong Pantahanan at Pangkabuhayan (EPP) Curriculum
 
Contiguity Of Various Message Forms - Rupam Chandra.pptx
Contiguity Of Various Message Forms - Rupam Chandra.pptxContiguity Of Various Message Forms - Rupam Chandra.pptx
Contiguity Of Various Message Forms - Rupam Chandra.pptx
 
مصحف القراءات العشر أعد أحرف الخلاف سمير بسيوني.pdf
مصحف القراءات العشر   أعد أحرف الخلاف سمير بسيوني.pdfمصحف القراءات العشر   أعد أحرف الخلاف سمير بسيوني.pdf
مصحف القراءات العشر أعد أحرف الخلاف سمير بسيوني.pdf
 
How to Manage Reception Report in Odoo 17
How to Manage Reception Report in Odoo 17How to Manage Reception Report in Odoo 17
How to Manage Reception Report in Odoo 17
 
THE SACRIFICE HOW PRO-PALESTINE PROTESTS STUDENTS ARE SACRIFICING TO CHANGE T...
THE SACRIFICE HOW PRO-PALESTINE PROTESTS STUDENTS ARE SACRIFICING TO CHANGE T...THE SACRIFICE HOW PRO-PALESTINE PROTESTS STUDENTS ARE SACRIFICING TO CHANGE T...
THE SACRIFICE HOW PRO-PALESTINE PROTESTS STUDENTS ARE SACRIFICING TO CHANGE T...
 
220711130083 SUBHASHREE RAKSHIT Internet resources for social science
220711130083 SUBHASHREE RAKSHIT  Internet resources for social science220711130083 SUBHASHREE RAKSHIT  Internet resources for social science
220711130083 SUBHASHREE RAKSHIT Internet resources for social science
 

Sdm 2.0

  • 1. DEPARTMENT OF BUSINESS ADMINISTRATION & RESEARCH Shri Sant Gajanan Maharaj College of Engg., Shegaon Sales and Distribution Management Unit-2
  • 2. Sales Planning Setting Objectives Determining operations to meet objectives Organising for action Implementation Measuring results against standards Re-evaluation and control
  • 3. Sales Planning Mission Statement: It is a statement of purpose of the company, which should be defined ideally vis-à-vis its target customers Situation Analysis: Basically a SWOT. Internal audit can include current marketing mix, size and growth of the market, customer trends, etc. External audit includes PEST i.e. Political, Economic, Socio- cultural and Technological; which are basically broad macroeconomic trends Statement of Objectives: Objectives should follow the S.M.A.R.T. principle; that is Specific, Measurable, Achievable, Realistic & Time bound
  • 4. Sales Planning Generating & Selecting Strategies: How do you target, price, how to retain customers recognizing at which stage they are – prospect, first time, repeat customer, dormant, etc. You must take the right decisions based on your SWOT. Prepare the marketing program; do the budgeting and then implementation and control Sales function provides inputs vis-à-vis analysis of current marketing situation, determining sales potential, generating/selecting strategies and in budget, implementation and control…
  • 5. Sales Budget A sales budget consists of estimates of unit and rupee sales during operating period as well as selling expenses; so as to estimate the profit target. Once the budget is set, it can be broken down by region, product groups and/or account types Also, sales budget talks about the optimum profitability in a given period; since firms typically look for profit maximization in the long term; while it seeks sales maximization in the current period.
  • 6. Sales Budget Purposes of sales budget: 1) It serves as a mechanism of control, as the company can measure actual performance against benchmarks. According to the degree of non conformance, revisions can be made in a timely manner 2) Planning can be better done through sales budgets; where planners try to maintain the balance between sales budget and sales expenses; and how they may be optimized to meet business objectives
  • 7. Sales Budget Sales budget: figures in ‘000 units North South East West Total A 80 25 32 40 177 B 90 45 12 57 204 C 30 70 60 34 194 Product Region
  • 8. Sales Budget Sales department budget is the cost running the marketing function in the budgetary period. It is normally split into 3 components: 1) Selling expenses budget: Costs attributable to the selling process: Sales personnel salaries and commission, sales training and sales expenses 2) Advertising Expenses: Expenses attributable to above the line and below the line promotions: a)Percentage of last year’s sales b)Competitive parity in line with a larger player c)Affordable method d)Objective and task method e)Long term ROI of advertising 3) Administrative expenses: Accounts staff, market research sales administration, etc.
  • 9. Sales Budget Estimating selling expenses: In the long run, the goal is profit maximization; but in the short run, one may have to incur loss in pitching for new accounts, doing extensive follow up, providing incentives for business development; mean that sales optimization becomes the short term goal The management may like to plan well in advance for the accounting period immediately succeeding the current one. After the sales target is made, activities are defined to achieve the same; after which costs are estimated. For instance: the target requires sales people to travel 1,00,000 km a year, and the allowance per km. is Rs.8, the budgetary allocation would be Rs.8,00,000…
  • 10. Sales Budget Also management can measure change in standard costs over time If standard costing is not possible, estimates like cost per unit sale may be used. Companies may also adjust this cost for inflation, changes in competitive landscape, market conditions, etc.
  • 11. Sales Budget Planning styles: 1) Top down: The top management gives sales and profit targets to various organizational units and unit heads make plans to achieve those objectives 2) Bottom up: Unit heads and their subordinates team up in the setting of the sales and profit objectives and also plans to meet them. Ideally the budgeting should be more democratically done, as the top management is away from the realities in the field; but at the same time, juniors may tend to understate what they can achieve in the period.
  • 12. Sales Budget In the normal scenario, each division will make a budget and send it to the next higher authority for approval The division must also discuss its plans for the forthcoming period for the sake of better evaluation. Every level must lead to more conciseness in detail If there is a cutback, then the division has to obviously decide where to cut corners. It will be similar for other departments, where they will present an estimation of their costs. Top management has to carefully evaluate and allocate budgetary expenditure in the best interests of the company
  • 13. Sales Budget When there are budgetary deviations, there are two options: 1) Analyze if this is a result of poor performance 2) If there were genuine reasons, the budget itself can be revised
  • 14. Sales Budget A budget is a plan expressed usually in monetary terms. It is a process of allocating a portion of an organization’s resources for its various activities for a specified period of time. It helps in planning and coordination of the organization’s activities. Sales budgets are developed for the smooth functioning of the sales function.
  • 15. Cont. Developing sales budgets serve two purposes – As a mechanism of control and An instrument of planning. There are several benefits an organization derives from budgeting.
  • 16. Cont. They are – • Improved planning • Better communication and coordination • Performance evaluation • Psychological benefits • Avoiding uncontrolled expenditure.
  • 17. Cont. Interlink Role Marketing Plan Sales Force BudgetSales Forecast
  • 18. Types Of Budget In practice, sales managers prepare three types of budgets – Sales budgets Selling expense budget Administrative budget A sales budget gives a plan showing the expected sales for a specified period in the future.
  • 19. Cont. Selling expense budgets details the schedule of expenses that may be incurred by the sales department to achieve planned sales. Administrative budget specifies the budgetary allocations for general administrative expenses that would be incurred by the sales department.
  • 20. Methods For Budgeting The different methods for budgeting include the- Affordability method Percentage-of-sales method Competitive parity method Objective-and-task method Return-oriented method.
  • 21. Sales Forecasting Sales forecasting is a difficult area of management. Most managers believe they are good at forecasting. However, forecasts made usually turn out to be wrong! Marketers argue about whether sales forecasting is a science or an art. The short answer is that it is a bit of both.
  • 22. Cont. Market Forecast refers to the estimates of future sales of a company’s products in the market. Sales forecasting is very popular in industrially advanced countries where demand conditions are always uncertain than the supply conditions.
  • 23. Reasons for undertaking Sales Forecast Businesses are forced to look well ahead in order to plan their investments, launch new products, decide when to close or withdraw products and so on. The sales forecasting process is a critical one for most businesses.
  • 24. Cont. • Key decisions that are derived from a sales forecast include:- - Employment levels required - Promotional mix - Investment in production capacity
  • 25. Types Of Forecasting • There are two major types of forecasting, which can be broadly described as macro and micro: • Macro forecasting is concerned with forecasting markets in total. This is about determining the existing level of Market Demand and considering what will happen to market demand in the future. • Micro forecasting is concerned with detailed unit sales forecasts. This is about determining a product’s market share in a particular industry and considering what will happen to that market share in the future.
  • 26. Selection Of Forecasting  The selection of which type of forecasting is use depends on the several factors which can be described as: (1) The degree of accuracy required – if the decisions that are to be made on the basis of the sales forecast have high risks attached to them, then it stands to reason that the forecast should be prepared as accurately as possible. However, this involves more cost
  • 27. Cont. (2) The availability of data and information - in some markets there is a wealth of available sales information (e.g. clothing retail, food retailing, holidays); in others 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 will happen to the overall size of the market in the next five years?
  • 28. Cont. (4) The position of the products in its life cycle. For example, for products at the “introductory” stage of the product life cycle, less sales data and information may be available than for products at the “maturity” stage when time series can be a useful forecasting method.
  • 29. The Relationship of Forecasting to Budgets Relation Sales Forecasts Sales Budget Production Budget Direct Labor Budget Cost of Goods Sold Budget Budgeted P/L Statement Budgeted Balance Sheet Revenue Budget Expenses Budget Factory O/H Budget Sales & Administration Expenses Budget Revenue Budget
  • 30. Purposes Of Short term Forecasting • Appropriate production scheduling • Reducing cost of purchasing R/M • Determining appropriate price policy • Setting sales targets and establishing controls and incentives • Evolving a suitable promotional program • Forecasting short-term financial requirements
  • 31. Purposes Of Short term Forecasting • Planning of a new unit or expansion of an existing unit • Planning of long-term financial requirements • Planning of man-power requirements
  • 32. A common method of preparing a sales forecast has three stages 1) Prepare a macroeconomic forecast – what will happen to overall economic activity in the relevant economies in which a product is to be sold. 2) Prepare an industry sales forecast – what will happen to overall sales in an industry based on the issues that influence the macroeconomic forecast. 3) Prepare a company sales forecast – based on what management expect to happen to the company’s market share.
  • 33. Forecasting Process Forecast Objective Evaluate Result versus forecast Determined independent and dependent variables Total forecast Procedure Select forecast Analysis method Develop Forecast Procedure Gather & analyze data Present assumption about data Make & finalize forecast
  • 34. Cont. Forecasting can be classified into qualitative forecasting and quantitative forecasting. The methods used in qualitative forecasting are: • user expectations, • sales force composite, • jury of executive opinion, • Delphi technique and market test.
  • 35. Cont. The methods used in quantitative forecasting are: • time series analysis • moving averages • exponential smoothing regression and correlation • analysis, and multiple regression models
  • 36. Control Control was defined as “a process used by managers to direct, regulate, and restrain the actions of people so that the established goals of an enterprise may be achieved.” Revenue control is clearly an important goal of sales control, but it is not the only one.
  • 37. Sales Control  Like any other control system, sales control requires the establishment of standards, the evaluation of actual performance and the correction of deviation in performance.  Sales control implies not only managerial action with regard to actual sales, but it also embraces all other marketing functions required for the even flow of products or services form producers to consumers.
  • 38. Cont.  All promotional and auxiliary efforts in marketing require as much control as the actual selling efforts demand.  Nevertheless, control of promotional and auxiliary efforts in marketing is more difficult and cannot be exercised with that exactness which is possible in case of actual selling efforts.
  • 39. Cont.  Because of their intangible performances, ancillary activities in marketing are placed under some broad measures of control, and they are measured and appraised by managerial judgment, skill or experience.  The basic tool for controlling these efforts is to be found in the sales expense budget .  For controlling performances of salesmen, the sales budget or in the absence of a sales budget, the sales programme provides the standard for control.
  • 40. Goals of Sales Control • Optimize number of sales • Maximize profit • Control revenue
  • 41. Systematic View Sales Control Behavioral Aspects Cost Aspects Sales Effort Allocation of Selling-Time Performance Expenses Sales-function Administration