The document discusses sales forecasting techniques. It covers estimating market demand, company demand, and developing a sales forecast in three stages. Several qualitative and quantitative forecasting methods are described, including judgment-based techniques like the jury of expert opinion method and Delphi method, as well as quantitative sales extrapolation and customer-based methods. The purpose, process, and key considerations in sales forecasting are also outlined.
The document discusses various methods for sales forecasting. It describes qualitative methods like jury of expert opinion and Delphi method which rely on expert judgments. Quantitative methods like naive method, moving averages, and exponential smoothing use past sales data to project future trends. Customer-based methods involve market testing of new products and surveying potential buyers to directly assess future demand. The goal of sales forecasting is to estimate future revenues in order to optimize supply chain management, production planning, and profitability.
The document discusses key aspects of sales force organization and compensation. It covers topics like designing sales territories, factors that influence territory and compensation plan design, different types of compensation plans including financial and non-financial components, and the steps to design an effective compensation plan. The goal is to prepare students for challenges of leading sales organizations and understanding important considerations for organizing the sales force and structuring their compensation.
This document discusses motivating salespeople and sales forces. It covers:
1. What motivates salespeople, including intrinsic factors like enjoying their job and extrinsic factors like pay and benefits.
2. Theories of motivation, including Maslow's hierarchy of needs, Hertzberg's two-factor theory, and Adam's equity theory.
3. Ways to motivate salespeople, such as financial rewards, recognition, training opportunities, and balancing work and personal life.
This document discusses key concepts related to sales budgets, quotas, territories, and control. It defines a sales budget as an estimate of sales volume and expenses set slightly lower than forecasts. Sales budgets are prepared by product, territory, salesperson, and customer. Quotas and territories are used to set performance standards, control results, and motivate teams. Territories assign exclusive areas to sales teams to reduce conflict and efficiently allocate resources. Control processes compare actual performance to targets and analyze expenses to ensure budget and objective achievement.
Ch3: Planning, Sales Forecasting, and Budgetingitsvineeth209
Strategic planning involves deciding an organization's long-term objectives and strategies. Sales strategy is developed from marketing strategy through marketing mix and promotional strategies. There are two approaches to sales forecasting - top-down breaks forecasts down from the market level while bottom-up builds forecasts up from individual salespeople. Sales budgets estimate sales volume and expenses for planning, coordination and control purposes.
1. The document discusses sales and cost analysis techniques used to measure performance, identify problems, and uncover sales opportunities.
2. It describes how to manage sales control through setting goals, comparing actual performance to targets, and taking corrective action. Common problems include external factors and inadequate information.
3. Various types of sales analysis are outlined, including analysis by region, sales representative, product, customer, and distribution channel to convert raw data into actionable insights.
The document discusses sales forecasting for a company. It defines a sales forecast as a prediction of expected sales based on past performance and market conditions. Some key benefits of sales forecasting include enhanced cash flow, production planning, and identifying sales trends. Factors that influence forecasting include the market size, market share, existing/new contracts, and economic predictions. Common forecasting techniques include analyzing historical data, manager/executive judgment, and forecasting methods like using past sales percentages or growth projections. The document outlines data needed for an accurate forecast, including economic/market information, products/services, the business model, customer segments, and past revenue/sales opportunities.
The document provides guidance for a company's test market launch in the second quarter. It outlines decisions needed regarding pricing, advertising, production, sales, and financial planning. Key decisions include setting prices and an advertising campaign, determining production levels, hiring a sales force, and ensuring financial targets are met through simulation and scenario planning. The goal is to discover customer demand and response while managing costs and cash flow during the launch period.
The document discusses various methods for sales forecasting. It describes qualitative methods like jury of expert opinion and Delphi method which rely on expert judgments. Quantitative methods like naive method, moving averages, and exponential smoothing use past sales data to project future trends. Customer-based methods involve market testing of new products and surveying potential buyers to directly assess future demand. The goal of sales forecasting is to estimate future revenues in order to optimize supply chain management, production planning, and profitability.
The document discusses key aspects of sales force organization and compensation. It covers topics like designing sales territories, factors that influence territory and compensation plan design, different types of compensation plans including financial and non-financial components, and the steps to design an effective compensation plan. The goal is to prepare students for challenges of leading sales organizations and understanding important considerations for organizing the sales force and structuring their compensation.
This document discusses motivating salespeople and sales forces. It covers:
1. What motivates salespeople, including intrinsic factors like enjoying their job and extrinsic factors like pay and benefits.
2. Theories of motivation, including Maslow's hierarchy of needs, Hertzberg's two-factor theory, and Adam's equity theory.
3. Ways to motivate salespeople, such as financial rewards, recognition, training opportunities, and balancing work and personal life.
This document discusses key concepts related to sales budgets, quotas, territories, and control. It defines a sales budget as an estimate of sales volume and expenses set slightly lower than forecasts. Sales budgets are prepared by product, territory, salesperson, and customer. Quotas and territories are used to set performance standards, control results, and motivate teams. Territories assign exclusive areas to sales teams to reduce conflict and efficiently allocate resources. Control processes compare actual performance to targets and analyze expenses to ensure budget and objective achievement.
Ch3: Planning, Sales Forecasting, and Budgetingitsvineeth209
Strategic planning involves deciding an organization's long-term objectives and strategies. Sales strategy is developed from marketing strategy through marketing mix and promotional strategies. There are two approaches to sales forecasting - top-down breaks forecasts down from the market level while bottom-up builds forecasts up from individual salespeople. Sales budgets estimate sales volume and expenses for planning, coordination and control purposes.
1. The document discusses sales and cost analysis techniques used to measure performance, identify problems, and uncover sales opportunities.
2. It describes how to manage sales control through setting goals, comparing actual performance to targets, and taking corrective action. Common problems include external factors and inadequate information.
3. Various types of sales analysis are outlined, including analysis by region, sales representative, product, customer, and distribution channel to convert raw data into actionable insights.
The document discusses sales forecasting for a company. It defines a sales forecast as a prediction of expected sales based on past performance and market conditions. Some key benefits of sales forecasting include enhanced cash flow, production planning, and identifying sales trends. Factors that influence forecasting include the market size, market share, existing/new contracts, and economic predictions. Common forecasting techniques include analyzing historical data, manager/executive judgment, and forecasting methods like using past sales percentages or growth projections. The document outlines data needed for an accurate forecast, including economic/market information, products/services, the business model, customer segments, and past revenue/sales opportunities.
The document provides guidance for a company's test market launch in the second quarter. It outlines decisions needed regarding pricing, advertising, production, sales, and financial planning. Key decisions include setting prices and an advertising campaign, determining production levels, hiring a sales force, and ensuring financial targets are met through simulation and scenario planning. The goal is to discover customer demand and response while managing costs and cash flow during the launch period.
This document discusses keys to successful sales territory management including defining territories, setting sales quotas, analyzing accounts, allocating time to territories, and calculating return on time invested. Territories group customers or geographical areas and are assigned to salespeople. Quotas may involve sales volume, profit, expenses, activities, and customer satisfaction. Account analysis includes differentiation by annual sales, priority levels, or multiple variables. Time allocation considers accounts, calls, travel, and non-selling activities. Return on time is calculated using break-even analysis of fixed costs, gross profit percentage, and sales required to cover costs.
The document provides an overview of sales forecasting including: defining sales forecasting and its importance; levels of forecasting; the sales forecasting process and common techniques; types of errors; and how sales forecasts are used in budgeting. Key points covered include common sales forecasting techniques like time series analysis and causal models; using forecasts in budget determination and allocation; and the role of sales forecasts in establishing budgets for departments like sales, production and administration.
Sales objectives are targets for how much of a product or service a company aims to sell. They should be specific, measurable, achievable, realistic, and time-bound (SMART). Multiple quantitative and qualitative factors should be considered when setting sales objectives. Quantitative factors include historical sales trends, market potential, and budget/profit projections. Qualitative factors include economic conditions, competition, and the company's mission. Sales objectives can be set using outside macro analysis of total market sales and projected market share, inside micro analysis of past company sales trends, or expense-plus analysis of required sales to cover costs and profits. The objectives should then be reconciled and adjusted based on qualitative factors. Sales forecasts help implement the objectives and can utilize
This document discusses various business concepts including positioning, sales forecasting, financing, and total quality management (TQM). It provides examples and recommendations for how to apply these concepts in different market segments, including traditional, low end, high end, size, and performance markets. Real-world examples are also given to illustrate applications of these concepts. The document aims to educate on important business strategies and how to properly analyze and apply them.
The document discusses forecasting market demand and sales budgets. It covers the importance of forecasting for marketing decisions, different types of sales forecasts and their uses. It also describes survey and mathematical forecasting methods, and that top management approves the final forecast. Knowledge of computers is important as they are used for forecasting and developing sales budgets.
A sales quota is a quantitative goal assigned to a sales unit for a particular time period that is used to direct and control sales operations. Quotas provide standards for measuring sales performance and obtaining tighter sales and expense control. They also motivate desired performance through incentives for surpassing quotas and recognizing superior performance. Effective quota systems involve participation by sales personnel, keeping them informed of their progress, and continuous managerial monitoring and control. Quotas can be based on sales volume, budget targets, expenses, activities, or a combination of factors.
The document discusses managing a sales force including designing the sales force structure, recruiting and selecting sales representatives, training the sales force, supervising and motivating sales representatives, and evaluating sales force performance. It also covers personal selling principles such as developing sales professionalism, negotiation skills, and relationship marketing strategies. The objectives of managing the sales force are to meet sales and profitability targets, satisfy customers, and improve selling, negotiation, and relationship-building abilities.
For all FCES-IANS students management of a sales force course .
you will find a simply notes with Arab Franco , to help you to understand the chapter easily
This document provides information about a group presentation on sales budgeting. It discusses key concepts like the meaning of a sales budget, objectives of sales budgeting, factors that influence sales budgets, and the importance and process of preparing a sales budget. The sales budget is the first component of the master budget and estimates future revenue and expenses for the sales department. It depends on sales forecasting and considers various internal and external factors.
The document discusses various topics related to sales forecasting and budgeting. It describes different types of sales forecasts including top-down and bottom-up approaches. It also outlines numerous sales forecasting methods such as test marketing, moving averages, regression analysis and more. Finally, it discusses developing sales budgets, including purposes, allocation methods, and the budget process.
The Presentation delivered at MBA Institutes deals with
1. Basis of Sales Territories Allocation
2. Basis of Sales Quota/ Target Allocation
Rich insights with interesting presentation made so that no participant can sleep
Sales management involves planning, directing, and controlling a company's personal selling efforts. It includes three main processes:
1. Formulation of the strategic sales program and integrating it with the company's overall marketing strategy.
2. Implementation, which involves selecting and training sales personnel to direct their efforts towards achieving corporate objectives.
3. Evaluation by developing methods to monitor and evaluate individual salesforce performance.
Roles and responsibilities of regional sales managersAMARBIR SINGH
Dear Friends,
Please find a small presentation on roles and responsibilities of regional sales manager.I hope this will help my manager friends.
Amar Bir Singh
The document discusses sales forecasting, including defining a sales forecast as an estimated amount of sales or units for a future time period based on a marketing plan and market environment. Sales forecasting is necessary to plan cash flow, production capacity, supplies, and hiring. Key factors considered in sales forecasting include past sales trends, economic conditions, pricing, promotions, and competitors' actions. The document then outlines the sales forecasting process, including defining potential market sizes and using top-down or bottom-up approaches to forecast sales at different levels.
Sales quotas are performance targets set for marketing and sales units like regions, branches, territories, and individual salespeople. Quotas are used to motivate performance, control results, and identify strengths and weaknesses. The main types of quotas are sales volume, profit, expense, and activity quotas. Sales volume quotas set targets for revenue, units sold, or points. Profit quotas factor in costs. Expense quotas limit spending as a percentage of sales. Activity quotas focus on non-sales tasks that support sales. Combining quotas can influence both selling and non-selling activities. Setting quotas involves considering territory potential, forecasts, past performance, management judgment, and salesperson input to make the objectives specific, measurable, attainable, realistic
Sales Territory Design should support your sales strategy. In this presentation by Sales benchmark Index, you will learn the 3 goals of territory design and how to choose the one that best supports your strategy.
The document provides information about sales budgeting including definitions, uses, factors affecting compilation, and the budgeting process. It defines a sales budget as a financial plan depicting how resources should be allocated to achieve forecasted sales. It discusses how a sales budget is used as a working guideline, means of coordination, and surveillance tool. It also outlines factors like market conditions, competition, and financial capabilities that affect budget compilation. Finally, it provides an example of a company's sales budgeting process for a furniture company.
This document discusses sales budgets, quotas, and sales territories. It provides details on:
1) The purpose of sales budgets is for planning, coordination, and control. Sales budgets estimate expected sales volume and expenses, are broken down by product, territory, customer, and salesperson, and are finalized through coordination across departments.
2) Sales quotas set goals for marketing units like regions or salespeople. Quotas can be based on sales, expenses, profit, or activities. Quotas are used to measure performance, control activities and expenses, and motivate salespeople through incentives.
3) There are different types of quotas including sales volume, financial, activity, and combination quotas. Quotas
The document discusses different political systems around the world and how governments can influence global business activities both positively and negatively. It describes various types of political systems such as democracy, monarchy, theocracy, and totalitarianism. It also explains how governments can discourage global business through laws, trade barriers, taxes, and political risks. However, governments also provide incentives for global business through free trade zones, trade agreements, export assistance agencies, and tax incentives.
Traditionally, marketing research is responsible for environmental, market, and competitive studies. Environmental studies examine the national environments of global markets. Market studies determine market size and customer needs. Competitive studies provide insights about domestic and foreign competitors. Global marketing research is used for strategic and tactical decisions like market entry strategies, production facility locations, and product positioning. It provides information to avoid costly mistakes. Primary research methods include focus groups, observation, and questionnaires. Secondary data has advantages like low cost and availability but can be outdated or not applicable. Research must consider cultural differences across countries. Comparing studies internationally can be difficult due to market complexity.
This document discusses keys to successful sales territory management including defining territories, setting sales quotas, analyzing accounts, allocating time to territories, and calculating return on time invested. Territories group customers or geographical areas and are assigned to salespeople. Quotas may involve sales volume, profit, expenses, activities, and customer satisfaction. Account analysis includes differentiation by annual sales, priority levels, or multiple variables. Time allocation considers accounts, calls, travel, and non-selling activities. Return on time is calculated using break-even analysis of fixed costs, gross profit percentage, and sales required to cover costs.
The document provides an overview of sales forecasting including: defining sales forecasting and its importance; levels of forecasting; the sales forecasting process and common techniques; types of errors; and how sales forecasts are used in budgeting. Key points covered include common sales forecasting techniques like time series analysis and causal models; using forecasts in budget determination and allocation; and the role of sales forecasts in establishing budgets for departments like sales, production and administration.
Sales objectives are targets for how much of a product or service a company aims to sell. They should be specific, measurable, achievable, realistic, and time-bound (SMART). Multiple quantitative and qualitative factors should be considered when setting sales objectives. Quantitative factors include historical sales trends, market potential, and budget/profit projections. Qualitative factors include economic conditions, competition, and the company's mission. Sales objectives can be set using outside macro analysis of total market sales and projected market share, inside micro analysis of past company sales trends, or expense-plus analysis of required sales to cover costs and profits. The objectives should then be reconciled and adjusted based on qualitative factors. Sales forecasts help implement the objectives and can utilize
This document discusses various business concepts including positioning, sales forecasting, financing, and total quality management (TQM). It provides examples and recommendations for how to apply these concepts in different market segments, including traditional, low end, high end, size, and performance markets. Real-world examples are also given to illustrate applications of these concepts. The document aims to educate on important business strategies and how to properly analyze and apply them.
The document discusses forecasting market demand and sales budgets. It covers the importance of forecasting for marketing decisions, different types of sales forecasts and their uses. It also describes survey and mathematical forecasting methods, and that top management approves the final forecast. Knowledge of computers is important as they are used for forecasting and developing sales budgets.
A sales quota is a quantitative goal assigned to a sales unit for a particular time period that is used to direct and control sales operations. Quotas provide standards for measuring sales performance and obtaining tighter sales and expense control. They also motivate desired performance through incentives for surpassing quotas and recognizing superior performance. Effective quota systems involve participation by sales personnel, keeping them informed of their progress, and continuous managerial monitoring and control. Quotas can be based on sales volume, budget targets, expenses, activities, or a combination of factors.
The document discusses managing a sales force including designing the sales force structure, recruiting and selecting sales representatives, training the sales force, supervising and motivating sales representatives, and evaluating sales force performance. It also covers personal selling principles such as developing sales professionalism, negotiation skills, and relationship marketing strategies. The objectives of managing the sales force are to meet sales and profitability targets, satisfy customers, and improve selling, negotiation, and relationship-building abilities.
For all FCES-IANS students management of a sales force course .
you will find a simply notes with Arab Franco , to help you to understand the chapter easily
This document provides information about a group presentation on sales budgeting. It discusses key concepts like the meaning of a sales budget, objectives of sales budgeting, factors that influence sales budgets, and the importance and process of preparing a sales budget. The sales budget is the first component of the master budget and estimates future revenue and expenses for the sales department. It depends on sales forecasting and considers various internal and external factors.
The document discusses various topics related to sales forecasting and budgeting. It describes different types of sales forecasts including top-down and bottom-up approaches. It also outlines numerous sales forecasting methods such as test marketing, moving averages, regression analysis and more. Finally, it discusses developing sales budgets, including purposes, allocation methods, and the budget process.
The Presentation delivered at MBA Institutes deals with
1. Basis of Sales Territories Allocation
2. Basis of Sales Quota/ Target Allocation
Rich insights with interesting presentation made so that no participant can sleep
Sales management involves planning, directing, and controlling a company's personal selling efforts. It includes three main processes:
1. Formulation of the strategic sales program and integrating it with the company's overall marketing strategy.
2. Implementation, which involves selecting and training sales personnel to direct their efforts towards achieving corporate objectives.
3. Evaluation by developing methods to monitor and evaluate individual salesforce performance.
Roles and responsibilities of regional sales managersAMARBIR SINGH
Dear Friends,
Please find a small presentation on roles and responsibilities of regional sales manager.I hope this will help my manager friends.
Amar Bir Singh
The document discusses sales forecasting, including defining a sales forecast as an estimated amount of sales or units for a future time period based on a marketing plan and market environment. Sales forecasting is necessary to plan cash flow, production capacity, supplies, and hiring. Key factors considered in sales forecasting include past sales trends, economic conditions, pricing, promotions, and competitors' actions. The document then outlines the sales forecasting process, including defining potential market sizes and using top-down or bottom-up approaches to forecast sales at different levels.
Sales quotas are performance targets set for marketing and sales units like regions, branches, territories, and individual salespeople. Quotas are used to motivate performance, control results, and identify strengths and weaknesses. The main types of quotas are sales volume, profit, expense, and activity quotas. Sales volume quotas set targets for revenue, units sold, or points. Profit quotas factor in costs. Expense quotas limit spending as a percentage of sales. Activity quotas focus on non-sales tasks that support sales. Combining quotas can influence both selling and non-selling activities. Setting quotas involves considering territory potential, forecasts, past performance, management judgment, and salesperson input to make the objectives specific, measurable, attainable, realistic
Sales Territory Design should support your sales strategy. In this presentation by Sales benchmark Index, you will learn the 3 goals of territory design and how to choose the one that best supports your strategy.
The document provides information about sales budgeting including definitions, uses, factors affecting compilation, and the budgeting process. It defines a sales budget as a financial plan depicting how resources should be allocated to achieve forecasted sales. It discusses how a sales budget is used as a working guideline, means of coordination, and surveillance tool. It also outlines factors like market conditions, competition, and financial capabilities that affect budget compilation. Finally, it provides an example of a company's sales budgeting process for a furniture company.
This document discusses sales budgets, quotas, and sales territories. It provides details on:
1) The purpose of sales budgets is for planning, coordination, and control. Sales budgets estimate expected sales volume and expenses, are broken down by product, territory, customer, and salesperson, and are finalized through coordination across departments.
2) Sales quotas set goals for marketing units like regions or salespeople. Quotas can be based on sales, expenses, profit, or activities. Quotas are used to measure performance, control activities and expenses, and motivate salespeople through incentives.
3) There are different types of quotas including sales volume, financial, activity, and combination quotas. Quotas
The document discusses different political systems around the world and how governments can influence global business activities both positively and negatively. It describes various types of political systems such as democracy, monarchy, theocracy, and totalitarianism. It also explains how governments can discourage global business through laws, trade barriers, taxes, and political risks. However, governments also provide incentives for global business through free trade zones, trade agreements, export assistance agencies, and tax incentives.
Traditionally, marketing research is responsible for environmental, market, and competitive studies. Environmental studies examine the national environments of global markets. Market studies determine market size and customer needs. Competitive studies provide insights about domestic and foreign competitors. Global marketing research is used for strategic and tactical decisions like market entry strategies, production facility locations, and product positioning. It provides information to avoid costly mistakes. Primary research methods include focus groups, observation, and questionnaires. Secondary data has advantages like low cost and availability but can be outdated or not applicable. Research must consider cultural differences across countries. Comparing studies internationally can be difficult due to market complexity.
Chapter 4 part 1(The Political Economy of International Trade)mbamgtjnu
This document discusses agricultural subsidies provided by wealthy countries and their negative impacts. It notes that the EU and US provide billions in subsidies annually to domestic farmers. This leads to surplus production that is dumped on world markets, lowering prices and hurting farmers in developing countries. For example, US cotton subsidies reduced world cotton prices by 50% since the mid-1990s, costing Brazil $640 million in lost revenues. The document advocates reducing subsidies to give developing countries fairer access to global markets for economic growth.
Tariff barriers are import duties that create obstacles to international trade by limiting the flow of imported goods. Non-tariff barriers also restrict imports but through means other than tariffs, such as quotas, import licensing requirements, product standards, and government procurement policies. International commodity agreements aim to stabilize prices of primary commodities through quotas, buffer stocks maintained by international organizations, or bilateral contracts between major importers and exporters.
global businee managemetn:tariffs and non tariffs barriersShashank Singh
This document discusses tariff and non-tariff barriers faced by India's seafood export industry. It provides an overview of India's seafood export performance and details some of the key markets. While tariffs are generally low, non-tariff barriers like sanitary standards and rejections due to antibiotic residues present challenges. Adopting standards like ISO 9000 can help address some non-tariff barriers and provide export privileges. Overall, the industry has grown but still faces obstacles that international trade agreements and regulations can impact.
This document discusses global marketing research and international marketing. It provides an overview of key topics like the objectives and challenges of global marketing research, cross-cultural considerations, and common marketing mistakes due to poor research like New Coke. Examples are given of research failures for products introduced in India. The process of international marketing research is outlined in 6 steps.
Demand forecasting involves estimating future demand for a product or service. It can use both qualitative methods like expert opinions and quantitative methods like analyzing historical sales data. There are various forecasting techniques for different time horizons, from short-term methods like surveys to long-term statistical methods like time series analysis and regression. Common statistical forecasting methods include trend projection using techniques like moving averages, as well as causal models like regression and simultaneous equations.
This document discusses segmentation, targeting, and positioning in marketing. It defines segmentation as dividing the market into groups with distinct needs, and discusses different bases for segmentation including geographic, demographic, psychographic, and behavioral factors. It also outlines levels of segmentation from mass to niche marketing. Targeting involves selecting attractive market segments to focus on, while positioning is about creating the right perception of a product in the minds of consumers relative to competitors. Effective segmentation requires segments to be measurable, accessible, substantial, and differentially responsive to marketing strategies.
Chapter 8 segmentation, targeting, differentiation, and positioning strateg...Dr. Ankit Kesharwani
This document discusses market segmentation and targeting strategies for e-marketing. It defines market segmentation as aggregating individuals along similar characteristics related to product or service use. Targeting is selecting the most attractive market segments. Effective segmentation uses a variety of bases including demographics, geography, psychographics, and consumer behavior. The document provides many examples of variables to consider within each base when defining segments. It also discusses how to identify consumer benefits sought and technology adoption attitudes to inform segmentation.
The document discusses segmentation and targeting strategies for e-marketing. It outlines how market segmentation involves grouping individuals based on characteristics like geography, demographics, behaviors, and interests. This allows companies to better target customer segments. The document provides examples of common segmentation bases used by e-marketers and describes several usage segments like millennials, ethnic groups, and influentials. It also discusses four targeting strategies and how segmentation can increase customer retention, sales, and repeat orders.
This chapter discusses differentiation and positioning strategies for e-marketing. It defines differentiation as adding value to distinguish a product or service. There are five dimensions for differentiation: product, services, personnel, channels, and image. Positioning involves creating a desired image in the public's mind based on attributes, benefits, user categories, competitors, or as an integrator. Specific Internet differentiation strategies include site environment, making intangibles tangible, building trust, efficient ordering, pricing, and customer relationship management.
E business ,e-commerce, e-marketing (sadiq shariff10@hotmail.com)Sadiq Shariff
E-business refers to using internet technologies to provide superior customer service, streamline business processes, and reduce costs. It can benefit all types of businesses by cutting costs, promoting globally through websites, and improving customer support. E-commerce is the buying and selling of products or services online, including the entire process from marketing to payment. It offers advantages like 24/7 availability and low costs but also security risks. E-marketing is a subset of e-business that uses electronic media like websites to perform marketing activities and achieve marketing objectives.
The document provides an overview of sales forecasting techniques, including qualitative methods like jury of executive opinion and quantitative time series methods like moving averages. It describes how to calculate simple, seasonal, and weighted moving averages. Examples are given to demonstrate how to generate moving average forecasts.
This document discusses sales budgeting, forecasting, and control. It covers developing sales budgets to plan and coordinate sales, types of budgets including sales, selling expense, and administrative budgets. Forecasting methods like macro, micro, qualitative, and quantitative are described. Sales forecasting is used for production scheduling, pricing, promotion, and financial planning. Control involves setting standards, evaluating performance, and correcting deviations to optimize sales, profits, and revenue.
Sales forecasting is important for businesses to plan investments, new products, and production capacity. There are two types of forecasts: macro forecasts examine total market demand, while micro forecasts focus on a product's market share. Forecasts are based on customer intentions and past sales data. An effective sales forecast breaks down past sales trends, seasonal factors, erratic events, and marketing responses. Time series analysis is commonly used to smooth data and identify patterns for projecting future revenues.
Sales forecasting provides estimates of future sales that are used for planning activities across various departments. There are 5 levels of sales forecasting including market potential, sales potential, actual sales forecasts, sales quotas, and sales budgets. Forecasting methods can be qualitative, relying on expert opinions, or quantitative, using statistical analysis of historical sales data. The sales forecast is then used to create a sales budget that projects revenues and allocates funds for selling expenses needed to achieve sales goals. The sales budgeting process involves developing the sales forecast, setting sales objectives and tasks, determining resource needs, and getting final budget approval.
Ssm lecture-01 & 02 (development and role of selling in marketing)Revisiting Strategy
This document discusses the nature and role of selling, as well as different selling approaches and types of salespeople. It begins by explaining that selling involves making sales and is important for linking companies to customers. Some key selling approaches discussed are transactional, consultative, and enterprise selling. Salespeople are also classified as order takers, order creators, or order getters depending on their role in the sales process.
Prospect engagement has never been more complex due to the recent economic and health crisis. To help CROs and sales leaders reassess risk, we’ve developed Sapphire Ventures’ COVID 19 Prospect Assessment Model to provide an easy way to build a complete understanding of your prospects’ health
and outlook across four key factors, so that you can effectively understand how best to engage and adjust your GTM motion.
The budgetary procedures normally begin in the sales department as sales revenues are the main source of income for most companies. The sales budget impacts other departments' activities. There are two main planning styles - top-down where top management sets objectives and bottom-up where units prepare their own objectives. When creating the marketing budget, the sales executive must argue for funds and their budget must be selected over other proposals as management can only implement so many. Finally, the sales budget must be effectively "sold" to top management as it competes with other divisional budgets and management evaluates benefits to the whole organization.
This document provides an overview of sales forecasting. It discusses that sales forecasting is an important aspect of sales management that involves estimating future sales. It describes that no single forecasting method is suitable for every situation and managers must choose methods that match their specific decision needs. Both qualitative methods like expert opinions and quantitative methods like statistical analysis can be used. The document also discusses key considerations like who is responsible for forecasts, choosing appropriate time horizons, and evaluating forecast accuracy.
1. The document discusses demand measurement and sales forecasting. It defines sales forecasting as an estimate of future sales under a marketing plan and economic conditions.
2. Sales forecasting serves as the basis for business planning and informs decisions around marketing, production, inventory, and budgets. Accurate forecasting requires analyzing market trends, demand, and a company's sales potential.
3. The document outlines various forecasting methods like executive opinions, statistical analysis, customer expectations, time series analysis, and the Delphi method. It emphasizes using multiple forecasting techniques for a reliable sales estimate.
Introduction to Sales Management – The Sales Organization
– Determining Sales Related Marketing Policies – Sales
Functions and Policies – International Sales Management
– Personal Selling.
Sales Planning – Sales Budgets – Estimating Market
Potential and Forecasting Sales – Sales Quotes – Sales &
Cost Analysis, Sales Force Management: Hiring and Training Sales
Personnel – Time and Territory Management –Compensating Sales Personnel – Motivating the Sales Force
– Leading the Sales Force – Evaluating Sales Force
Performance.
Marketing Logistics - Distribution as Marketing Mix
Element – Distribution Resource Planning – Marketing
Channel Integration – Channel Management – Nature of
Marketing Channels – Evaluating Channel Performance-
Specialized Techniques in selling – Tele Marketing – Web
Marketing
Distribution Cost Analysis: Managing Channel Conflicts –
Channel Information Systems – Wholesaling – Retailing –
Ethical And Social Issues in Sales and Distribution
Management.
This document discusses forecasting and demand measurement. Forecasting involves estimating future demand by anticipating customer behavior under different conditions. It is important for businesses to forecast in order to plan investments, products, and capacity. There are two types of forecasting: macro, which looks at total market demand, and micro, which focuses on unit sales. Choosing a forecasting method depends on required accuracy, available data, time horizon, and product lifecycle stage. Creating a sales forecast involves estimating market demand, a company's share of that demand, and an expected sales level based on marketing plans. Common forecasting techniques analyze past sales trends, customer intentions, and customer behaviors.
Sales forecasting and budgeting are important planning tasks that provide estimates of future revenue. There are multiple levels of sales forecasting including market potential, sales potential, actual sales forecasts, sales quotas, and sales budgets. Forecasting involves analyzing general economic conditions, industry sales, and a company's own sales using both qualitative methods like executive opinions and quantitative methods like statistical analysis. The sales forecast is then used to create a sales budget that allocates funds for revenue and selling expenses according to various budgeting procedures over a set time period, usually a year.
This document provides an overview of industrial pricing strategies and policies. It discusses key factors that influence industrial pricing decisions such as pricing objectives, demand analysis, cost analysis, and competitive analysis. It then examines various pricing strategies across different stages of the product lifecycle and for different types of customers. Specific pricing policies like trade discounts, quantity discounts, and cash discounts are also explained. Commercial terms and conditions prevalent in industrial markets are briefly outlined.
This document provides an overview of sales forecasting and budgeting. It discusses the key concepts including defining a sales forecast as an estimate of a company's future sales. Sales forecasting is important for various planning activities and financial control systems. There are qualitative and quantitative methods for forecasting, with qualitative relying on subjective opinions and quantitative using statistical analysis. The document outlines the sales forecasting process including preparing forecasts for economic conditions, industry sales, and company/product sales. It also discusses sales budgeting which estimates future revenue, expenses, and profits to develop financial plans.
The document discusses marketing plans and ongoing marketing evaluation. It provides details on:
1. The components and purpose of a marketing plan, including executive summary, market analysis, strategy, budget, and conclusion.
2. The marketing planning process and roles of different teams and specialists.
3. Tools for ongoing evaluation like marketing audits, which examine how marketing strategies are implemented and identify factors that impacted business.
4. The importance of understanding causality and executing plans well for ongoing marketing success.
This document discusses sales forecasting. It defines sales forecasting as estimates of future sales for a specific period used for planning activities. Sales forecasts are used by human resources to project staffing needs, financial executives for budgets, and production managers for scheduling. Forecasting allows businesses to work systematically and determine required production capacity. There are qualitative and quantitative forecasting methods, which include jury of executive opinion, salesforce composition, and time series analysis using trends, cycles, and seasons.
This document provides an overview of sales forecasting methods. It begins with introducing the speaker, Magdy Abdelsattar, and his contact information. The document then outlines the objectives of the training, which are to explain what sales forecasting is, why it is important, how the process works, and to introduce different forecasting methods and how to apply them. Both qualitative and quantitative forecasting methods are discussed at a high level, including Delphi technique, expert judgment, scenario writing, and time series analysis.
The document discusses sales force evaluation, including setting objectives, measuring performance both quantitatively and qualitatively, and using a sales force evaluation matrix. Quantitative measures include sales revenue, profit, calls made, while qualitative measures assess skills, relationships, product knowledge. Performance is compared to objectives and standards to identify areas for improvement or reward.
planning , sales forecasting and budgetingSunil Chichra
This chapter discusses strategic planning, sales forecasting, and budgeting. It covers key topics like developing sales strategy from marketing strategy, approaches to sales forecasting, common forecasting methods, and the purpose and process of creating a sales budget. Marketing plays an important role in strategic planning by providing customer insights and developing competitive advantages. Sales forecasts can be created using qualitative methods like executive opinions or quantitative methods like regression analysis. The sales budget estimates sales volumes and expenses to help with planning, coordination, and control.
This document discusses concepts related to customer relationship management (CRM). It covers the CRM cycle process of converting existing customers into loyal customers using the IDIC (Identity, Differentiate, Interact, Customize) framework. It also discusses the ladder of loyalty and how prospects become customers, clients, supporters, advocates and partners. Finally, it describes different types of bonds for building customer relationships, including financial, social, customization and structural bonds. The goal is to educate on building long-term customer loyalty and retention through effective CRM strategies and relationship building.
Cb unit-viii (consumer influence & diffusion of innovation)Revisiting Strategy
This document outlines the course units for a Consumer Behavior course taught by Prof. Amit Kumar at IILM Graduate School of Management. The 8 units cover: 1) the consumer marketplace, 2) models of consumer behavior, 3) cultural influences, 4) sociological influences, 5) personal influences, 6) psychological influences, 7) the consumer decision making process, and 8) consumer influence and diffusion of innovation. The document also provides examples of innovations that did and did not diffuse effectively in the Indian market and potential reasons for their success or lack thereof.
This document discusses direct marketing and database marketing. It begins by defining direct marketing and explaining the growth of direct marketing due to factors like market fragmentation, advances in computer technology, and the increased availability of customer data. It then discusses how direct marketing has transformed some markets by allowing companies like Dell, First Direct bank, and Direct Line insurance to eliminate intermediaries. The document also explains what database marketing is and how companies can use customer databases to target specific segments, strengthen customer relationships, and tailor their marketing efforts.
The document discusses managing direct marketing campaigns. It begins by explaining what direct marketing is and discussing database marketing. It then explores setting objectives for campaigns, including financial, communication, and marketing objectives. Key aspects of managing campaigns that are covered include identifying target audiences, making creative decisions, choosing appropriate media, executing the campaign, and evaluating its performance. Metrics for evaluating campaign success such as response rates, new customers acquired, and customer lifetime value are also examined.
This document provides an overview of direct marketing. It begins by defining direct marketing and explaining how it differs from general marketing in focusing on direct, personalized communication and measurable responses. It then discusses key direct marketing tools like database marketing and objectives like customer retention. The document outlines decision variables in direct marketing, including offer, creative, media, timing, and customer service. It also covers general objectives, media channels, and consumer privacy concerns regarding direct marketing.
3.case study e_bay_direct marketing & dircet selling systemRevisiting Strategy
This document discusses direct marketing and direct selling. It begins by defining direct marketing as an interactive marketing system that uses advertising media to generate a measurable response. It then discusses eBay as an example, describing how eBay sent out catalogs through newspapers to promote holiday shopping on their site. The document also provides definitions and discussions of direct selling, multilevel marketing, advantages and disadvantages of direct marketing, examples of companies that use direct marketing, and prospects and problems of direct selling.
The document discusses the strategy hierarchy in organizations. At the highest level is the corporate strategy, which sets the overall goals and plans for the entire company. Individual business units like marketing then develop their own strategies to support the corporate strategy. The marketing strategy addresses questions like which markets and products to target. The direct marketing strategy would then outline objectives, media choices, and processes for direct marketing campaigns to support the overall marketing strategy.
This document contains information about a course on contemporary direct marketing taught by Prof. Amit Kumar. It includes Prof. Kumar's background and qualifications, as well as an overview of the course contents, objectives, and evaluation criteria. The course aims to explore the major changes in direct marketing driven by information technology, and how direct marketing can be effectively applied to services, high-value products, and FMCGs. Key topics that will be discussed are the meaning of direct marketing, database marketing, customer retention, and creating action plans.
This document discusses customer relationship management (CRM) applications in different industries, including telecom, airlines, and hospitality. It provides examples of how CRM is used in each industry, such as loyalty programs in telecom, frequent flyer programs in airlines, and membership programs in hospitality. The document also discusses characteristics of business markets that make them different from consumer markets, key participants in business-to-business buying processes, and the typical eight stages of business buying processes. It emphasizes the importance of CRM in business-to-business relationships for satisfying complex customer decision making.
This document discusses technological tools for customer relationship management (CRM). It covers the main functionality of CRM applications including sales force automation, campaign management, and customer service and support. Specifically, it describes the functionality required for campaign management like workflow, segmentation, personalization, execution, response management, and response modeling. It also discusses the sales cycle and functionality needed for sales force automation, including interfacing with marketing campaigns and business contact/account management. Finally, it outlines the full customer service cycle from logging requests to billing.
This document discusses key concepts in customer relationship management economics, including market share versus customer share using Maruti Udyog Ltd. as a case study, calculating lifetime value of customers using examples from Citi Bank credit cards and resort customers, and using an ABC costing model and decision matrix to evaluate customer lifetime value versus likelihood of churn.
1. The document discusses customer relationship management (CRM) and the need for specialized CRM courses in Indian universities. Currently, few universities offer dedicated CRM programs despite its growing importance.
2. IILM Graduate School of Management aims to establish India's first dedicated CRM course to produce graduates with CRM knowledge that can benefit organizations.
3. The proposed CRM course would cover topics such as building customer relationships, CRM technologies, and CRM applications in different business sectors.
This document discusses operational issues in implementing customer relationship management (CRM). It covers collecting customer data to build a database, analyzing that data through techniques like market basket analysis and RFM analysis to identify best customers. It also discusses developing CRM programs like customer retention, converting good customers to loyal ones, and dealing with unprofitable customers. Specific retention techniques discussed include frequent shopping programs, special customer service, personalization, and building community. The document notes challenges in implementing these programs effectively.
This document contains information about a course on Customer Relationship Management (CRM) and loyalty programs offered by ACCMAN Institute of Management. It includes 15 sections that provide an overview of the topics to be covered in the course, learning outcomes, objectives, reference books and websites, course structure, sample assignments and a project on analyzing CRM strategies of different industries. The key topics to be covered include the fundamentals and importance of CRM, building customer loyalty, technological tools for CRM, operational issues in implementing CRM, and applying CRM in business-to-business and business-to-consumer markets.
This document contains lecture slides from a course on consumer behavior taught at IILM Graduate School of Management. The slides cover various topics related to consumer decision making process including:
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- Concepts like evoked set, cognitive dissonance, and their impact on consumer decision making.
- Differences in decision making for products with varying levels of consumer involvement.
- Ways marketers can address post-purchase thoughts and behaviors like dissatisfaction or
Cb unit-vi (psychological influences on consumer decision making)Revisiting Strategy
This document outlines a course on consumer behavior taught by Prof. Amit Kumar. It covers 8 units: 1) the consumer in the marketplace, 2) models of consumer behavior, 3) cultural influences, 4) sociological influences, 5) personal influences, 6) psychological influences, 7) the consumer decision-making process, and 8) consumer influence and diffusion of innovation. One class focuses on psychological influences, discussing the key influences of motivation, perception, learning, and memory on consumer responses to marketing. Motivation theories of Freud, Maslow and Herzberg are mentioned.
Cb unit-v (individual influences on consumer decision making)Revisiting Strategy
The document discusses personal influences on consumer decision making. It covers several personal factors including age and life stage, occupation and economic situation, lifestyle and values, and self-concept. For each factor, examples are given of how they shape consumer choices and behaviors. Marketers are advised to consider these personal characteristics to better target and position their products and services for different consumer segments. The document also introduces several lifestyle segmentation frameworks including VALS that categorize consumers based on resources and orientations.
Cb unit-iii (cultural influences on consumer decision making)Revisiting Strategy
This document discusses cultural influences on consumer behavior. It covers several topics:
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2. 07/06/10 2
“A student pursuing management education from IILM-
Graduate School of Management, for example may find
himself or herself placed in a firm as a Sales Manager.
Our goal is to prepare the student for the exciting
challenges related to leading sales organizations in
today’s hyper-competitive global economy”.
IILM-GSM
Importance of this course
Selling & Sales Management
4. 07/06/10
Contents
• Forecasting & Application of Forecasting
• Sales Forecasting
• Forecasting Market Demand/ Potential
• Marketing Decision Support System
• Forecasting Process
• Popular Methods of Forecasting
1. Judgment based- Qualitative
2. Sales extrapolation- Quantitative
3. Customer based
IILM-GSM
Selling & Sales Management Sales Forecasting
5. 07/06/10
Forecasting
• Forecasting is the process of making statements about
events whose actual outcomes (typically) have not yet
been observed. A commonplace example might be
estimation of the expected value for some variable of
interest at some specified future date.
• Prediction is a similar, but more general term.
IILM-GSM
Selling & Sales Management Sales Forecasting
6. 07/06/10
Application of Forecasting
Forecasting has application in many situations:
1. Supply chain management - to make sure that the right product is at the
right place at the right time. Accurate forecasting will help retailers reduce
excess inventory and therefore increase profit margin. Accurate
forecasting will also help them meet consumer demand.
2. Weather forecasting, Flood forecasting
3. Transportation forecasting
4. Economic forecasting
5. Technology forecasting
6. Earthquake prediction
7. Product forecasting
8. Player and team performance in sports
9. Political Forecasting
10. Sales Forecasting
IILM-GSM
Selling & Sales Management Sales Forecasting
7. 07/06/10
Sales Forecasting
Sales forecasting is estimating what a company's
future sales are likely to be based on sales records
as well as market research.
• Information used for sales forecasting must be well
organized and may include information on the
competition and statistics that affect the businesses'
customer base.
• Companies conduct sales forecasting in hopes of
identifying patterns so that revenue and cash flow can
be maximized.
IILM-GSM
Selling & Sales Management Sales Forecasting
8. 07/06/10
Reason for Undertaking Sales Forecasting
Businesses are forced to look well ahead in order to planBusinesses are forced to look well ahead in order to plan
their investments, launch new products, decide when totheir investments, launch new products, decide when to
close or withdraw products and so on. The salesclose or withdraw products and so on. The sales
forecasting process is a critical one for most businesses.forecasting process is a critical one for most businesses.
Key decisions derived from sales forecasting include:
• Employment levels required
• Promotional mix
• Investment in production capacity
IILM-GSM
Selling & Sales Management Sales Forecasting
9. 07/06/10
Sales Forecasting
• Before the forecasting process begins, marketing, sales,
or other managers should determine how far ahead the
forecast should be done.
• Short-term forecasting is a maximum of three months
and is often effective for analyzing budgets and markets.
• Intermediate sales forecasting is between a period of
three months and two years and may be used for
schedules, inventory and production.
• Long term forecasting is for a minimum of two years
and is good for dealing with growth into new markets or
new products.
IILM-GSM
Selling & Sales Management Sales Forecasting
10. 07/06/10
Purposes for 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
IILM-GSM
Selling & Sales Management Sales Forecasting
11. 07/06/10
Purposes for Long-Term Forecasting
• Planning of a new unit or expansion of an existing unit
• Planning of long-term financial requirements
• Planning of man-power requirements
IILM-GSM
Selling & Sales Management Sales Forecasting
12. 07/06/10
Sales Forecasting
• Basically, sales forecasting is analyzing all parts of a
business from total inventory to the strengths and
weaknesses of salespeople.
• Managers must think about changes in customer sales
or other changes that could affect forecasting figures.
• They must be competitive when assessing the
competition and how they can surpass the competition
to better meet the needs of the target market.
IILM-GSM
Selling & Sales Management Sales Forecasting
13. 07/06/10
Stages in Sales Forecasting
1.1. Stage One in the forecast is to estimate Market DemandStage One in the forecast is to estimate Market Demand
2.2. Stage Two in the forecast is to estimate CompanyStage Two in the forecast is to estimate Company
DemandDemand
3.3. Stage Three is then to develop the Sales ForecastStage Three is then to develop the Sales Forecast
( Forecasting Process)( Forecasting Process)
IILM-GSM
Selling & Sales Management Sales Forecasting
14. 07/06/10
Stage One in the forecast is to estimateStage One in the forecast is to estimate
Market DemandMarket Demand
IILM-GSM
Selling & Sales Management Sales Forecasting
The First stage in creating the sales forecast is to estimateThe First stage in creating the sales forecast is to estimate
Market Demand.Market Demand.
Definition:Definition:
Market Demand for a product is the total volumeMarket Demand for a product is the total volume
that would be bought by a defined customerthat would be bought by a defined customer
group, in a defined geographical area, in agroup, in a defined geographical area, in a
defined time period, in a given marketingdefined time period, in a given marketing
environment. This is sometimes referred to asenvironment. This is sometimes referred to as
the Market Demand Curve.the Market Demand Curve.
15. 07/06/10
Consider the UK Overseas Mass MarketConsider the UK Overseas Mass Market
Package Holiday IndustryPackage Holiday Industry
What is Market Demand?What is Market Demand?
Using the definition above, market demand can be definedUsing the definition above, market demand can be defined
as:as:
Defined Customer GroupDefined Customer Group:: Customers Who Buy an Air-Customers Who Buy an Air-
Inclusive Package Holiday.Inclusive Package Holiday.
Defined Geographical AreaDefined Geographical Area:: Customers in the UKCustomers in the UK
Defined Time PeriodDefined Time Period: A calendar year: A calendar year
Defined Marketing EnvironmentDefined Marketing Environment:: Strong consumerStrong consumer
spending in the UK but overseas holidays affected byspending in the UK but overseas holidays affected by
concerns over international terrorism.concerns over international terrorism.
IILM-GSM
Selling & Sales Management Sales Forecasting
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Recent data for the UK Overseas Mass MarketRecent data for the UK Overseas Mass Market
Package Holiday market suggests that marketPackage Holiday market suggests that market
demand can be calculated as follows:demand can be calculated as follows:
Number of Customers in the UKNumber of Customers in the UK:: 17.5 million17.5 million
per calendar yearper calendar year
Average Selling Price per HolidayAverage Selling Price per Holiday:: £450£450
Estimate of market demandEstimate of market demand: £7.9 billion: £7.9 billion
(customers x average price)(customers x average price)
IILM-GSM
Selling & Sales Management Sales Forecasting
17. 07/06/10
Stage Two in the forecast is to estimateStage Two in the forecast is to estimate
Company DemandCompany Demand
Company demand is the company’s share of marketCompany demand is the company’s share of market
demand. This can be expressed as a formula:demand. This can be expressed as a formula:
Company Demand = Market Demand V/s Company’sCompany Demand = Market Demand V/s Company’s
Market ShareMarket Share
For example, taking our package holiday market example;For example, taking our package holiday market example;
the company demand for First Choice Holidays in thisthe company demand for First Choice Holidays in this
market can be calculated as follows:market can be calculated as follows:
First Choice Holidays Demand = £7.9 billion x 15%First Choice Holidays Demand = £7.9 billion x 15%
Market Share = £1.2 billionMarket Share = £1.2 billion
IILM-GSM
Selling & Sales Management Sales Forecasting
18. 07/06/10
Stage Two in the forecast is to estimateStage Two in the forecast is to estimate
Company DemandCompany Demand
Company Demand = Market Demand V/s Company’sCompany Demand = Market Demand V/s Company’s
Market ShareMarket Share
A company’s share of market demand depends onA company’s share of market demand depends on
how its products, services, prices, brands and so onhow its products, services, prices, brands and so on
are perceived relative to the competitors. All otherare perceived relative to the competitors. All other
things being equal, the company’s market share willthings being equal, the company’s market share will
depend on the size and effectiveness of itsdepend on the size and effectiveness of its
marketing spending relative to competitors.marketing spending relative to competitors.
IILM-GSM
Selling & Sales Management Sales Forecasting
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Stage Three is then to develop theStage Three is then to develop the
Sales ForecastSales Forecast
The Sales Forecast is the expected level of company salesThe Sales Forecast is the expected level of company sales
based on a chosen marketing plan and an assumedbased on a chosen marketing plan and an assumed
marketing environment.marketing environment.
Note that the Sales Forecast is not necessarily theNote that the Sales Forecast is not necessarily the
same as a “sales target” or a “sales budget”.same as a “sales target” or a “sales budget”.
IILM-GSM
Selling & Sales Management Sales Forecasting
20. 07/06/10
Stage Three is then to develop theStage Three is then to develop the
Sales ForecastSales Forecast
A sales targetA sales target (or goal) is set for the sales force as a way(or goal) is set for the sales force as a way
of defining and encouraging sales effort. Sales targetsof defining and encouraging sales effort. Sales targets
are often set some way higher than estimated sales toare often set some way higher than estimated sales to
“stretch” the efforts of the sales force.“stretch” the efforts of the sales force.
A sales budgetA sales budget is a more conservative estimate of theis a more conservative estimate of the
expected volume of sales. It is primarily used for makingexpected volume of sales. It is primarily used for making
current purchasing, production and cash-flow decisions.current purchasing, production and cash-flow decisions.
Sales budgets need to take into account the risksSales budgets need to take into account the risks
involved in sales forecasting. They are, therefore,involved in sales forecasting. They are, therefore,
generally set lower than the sales forecast.generally set lower than the sales forecast.
IILM-GSM
Selling & Sales Management Sales Forecasting
21. 07/06/10
Forecasting Process
The forecasting process is defined as the series of decisions
and actions taken by a business organization in:
Identifying the forecasting objectives
Determining the independent and dependent variables
Developing a forecasting procedure
Using the available data in the selected method to estimate the
sales in future
IILM-GSM
Selling & Sales Management Sales Forecasting
22. 07/06/10
Develop forecasting
procedure
Forecasting Process
contd.
Select forecasting
analysis method
Comprehend total
forecasting procedure
Collect, collate,
gather and analyze
data
Determine
independent and
dependent variables
Present all the
assumptions about
data
Forecast objectives
Evaluate performance
results against the
forecasts
Make and finalize
the forecast
IILM-GSM
Selling & Sales Management Sales Forecasting
23. 07/06/10
Forecasting Market Demand
It is the estimated rupee or unit sales for a specific future time
period based on the company’s marketing plan and an assumed
marketing environment.
Price/
Unit
Price /
Unit
Price/
Unit
Price/
Unit
Price/
Unit
Price /
Unit
Qty per Unit
(E)
Qty per Unit
(F)
Qty per Unit
(C)
Qty per Unit
(B)
Qty per Unit
(A)
Qty per Unit
(D)
Total
Market
demand
P1
P2
Q1
Q2
D D1
D D2
D D1
D D2
Market demand curve
IILM-GSM
Selling & Sales Management Sales Forecasting
24. 07/06/10
Market Demand Function
P- Price of the product
I- Consumer Income
T- Consumer preference
P0 Price of other goods & services
QD = B + aP P + a1I + a0P0 + aTT
aP,, aI, a0, aT represents the one unit
change in quantity associated
with the variables.
QD = B + aP P
Linear form of the demand equation
B represents the combined influence
of all the other determinants of the
demand
IILM-GSM
Selling & Sales Management Sales Forecasting
QD = F (P, I, P0, T)
25. 07/06/10
• Marketing Decision Support System
an MDSS is an ongoing future-oriented information structure
designed to collect, collate, categorize, edit, store, and retrieve
information on demand to aid decision making in an
organization’s sales and marketing programme
Marketing Decision Support System
IILM-GSM
Selling & Sales Management Sales Forecasting
27. 07/06/10
Selecting Types of Forecasting Depends On
• The degree of accuracy required
• The availability of data and information
• The time horizon that the sales forecast is intended to
cover
• The position of the product in its life cycle
IILM-GSM
Selling & Sales Management Sales Forecasting
28. 07/06/10
Methods of Forecasting
1. Judgment based (Qualitative Methods)
• Jury of expert opinion (most common)
• Delphi method (2nd
most common)
• Sales force composite (3rd
most common)
1. Sales extrapolation (Quantitative Methods)
• Naïve Method (Simplest trend projection)
• Free Hand or Graphic Method
• Method of Semi-Average
1. Customer based
• Market Testing
• Market Surveys
Selling & Sales Management Sales Forecasting
IILM-GSM
29. 07/06/10
Judgment-based Forecasting: Qualitative
Jury of expert opinion (most common)
• In the Jury of executive opinion method of Sales
Forecasting, appropriate managers within the organization
assemble to discuss their opinions on what will happen to
sales in the future.
• Since these discussion sessions usually resolve around
hunches or experienced guesses, the resulting forecast is a
blend of informed opinions.
Selling & Sales Management Sales Forecasting
IILM-GSM
30. 07/06/10
Judgment-based Forecasting: Qualitative
Delphi Method (most common)
• A similar, forecasting method, which has been developed
recently is called the DELPHI Method. Delphi Method also
gathers, evaluates, and summarizes expert opinions as the
basis for a forecast, but the procedure is more formal than
that for the jury of executive opinion method.
• The Delphi Method has the following steps:
Selling & Sales Management Sales Forecasting
IILM-GSM
31. 07/06/10
Judgment-based Forecasting: Qualitative
Delphi Method (most common)- It has the following steps:
STEP 1 – In this method, A group of experts and A Delphi Coordinator will be
selected. (from the group of experts)
STEP 2 – Various Experts are asked to answer, independently and in writing,
a series of questions about the future of sales. A summary of all the
answers is then prepared. No expert knows, how other answered.
STEP 3 – Copies of summary are given to the Delphi Coordinator. (Individual
experts with the request to Coordinator that they modify their original
answers if they think it necessary.)
STEP 4 – The coordinator processes, compiles, and refers them back to the panel
members for revision, if any.
STEP 5 – This is a to-and-fro process continues for several rounds. (usually three).
The forecast is generated from all of the opinions and justifications.
Selling & Sales Management Sales Forecasting
IILM-GSM
The Delphi forecasts will be primarily median forecasts.
32. 07/06/10
Judgment-based Forecasting: Qualitative
Sales Force Composite (3rd
most common)
• The Sales Force Method is a sales forecasting technique that
predicts future sales by analyzing the opinions of sales people as a
group.
• Salespeople continually interact with customers, and from this
interaction they usually develop a knack for predicting future sales.
• As with the jury of executive opinion method, the resulting forecast
normally is a blend of the informed views of the group.
• The sales force estimation method is considered very valuable
management tool and is commonly used in business and industry
throughout the world.
• This method can be further improved by providing sales people with
sufficient time to forecast and offering incentives for accurate
forecasts.
• Companies can make their sales people better forecasters, by
training them to better interpret their interactions with the customers.
Selling & Sales Management Sales Forecasting
IILM-GSM
33. 07/06/10
Sales Extrapolation: Quantitative
Trend Projections: Assumes future will follow on past
– Appropriate for mature, static industry
• Naïve Method (Simplest trend projection is Naïve method)
• Free Hand or Graphic Method
• Method of Semi-Average
• Method of Moving average (common quantitative method)
• Exponential smoothing
– Alternative method to smooth data
• Regression analysis (next most common in U.S.)
– Forecast sales = a intercept + b slope (time)
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Observed sales Forecasted sales
Trend
line
Time
Sales
Trend Forecast of Sales
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Naïve Method
The following formula shows how to adjust the naïve method to
account for a change in rate of sales levels. The formula is stated
this way:
Next Year’s Sales = This Year’s Sales X This Year’s Sales
Last Year’s Sales
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Assume, for example, that sales for period 6 is to be forecasted.
Also assume that this year’s sales, period 5, equaled Rs. 5,50,000
and that last year’s sales, period 4, were worth Rs. 4,00,000. Thus
the nest year’s sales forecast equals Rs. 7,56,250.
Method is applicable if trends are stable or are changing in a
relatively consistent manner.
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Method of Semi-Averages
In this method available data are divided into two parts, usually with
equal number of years on both the parts
Year Sales
1993 102
1994 105
1995 114
1996 110
1997 108
1998 116
1999 112
The average of the first three years will be:
102+105+114 321
----------- = -------- = 107
3 3
Similarly, for the last three years,
108 + 116 + 112 336
---------------------- = --------- = 112
3 3
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The 3-yearly moving average can be computed with the
following formula:
a+b+c b+c+d c+d+e d+e+f
--------- , ----------- , ---------- , --------- , ………….
3 3 3 3
Method of Moving Averages
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Exponential Smoothing Method
• It is similar to the moving- average forecasting method.
• The forecaster is allowed to vary the weights assigned to
past data points.
• It allows consideration of all past data, but less weight is
placed on data as it ages, e.g. previous year’s data has greater
weight than five-year old data.
• Exponential smoothing is basically a weighted moving
average of all past data
• The method is used to forecast only one period in the future.
• Exponential smoothing techniques vary in terms of how
they address trend, seasonality, cyclical and irregular influences.
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Exponential Smoothing Method contd.
Next Year’s Sales = a (This Year’s Sales) + (1 – a) (This Year’s
Forecast)
While using this method, a probability-weighting factor, or
smoothing constant, is selected arbitrarily. This factor is usually
between 0.1 to 0.5. This value determines how sensitive the
forecasting values will be to recent changes in sales.
The forecasting equation is:
If sales change consistently, the smoothing constant would be small
to retain the effect of earlier data. Rapid changes call for a large a.
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Correlation Analysis
• a correlation is basically the degree of linear association
between two variables where one variable is treated as
independent variable and sales as the dependent variable
• sales managers look for variables that correlate with or
relate to sales
• correlation analysis involves the determination of whether
a relation exists, and if it does, then measuring it, testing
whether it is significant, and establishing the cause and
effect relation
• the degree of relationships between the variables is called
co-efficient of correlation
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Regression Analysis
• Regression analysis is another form of correlation technique
• reveals average relationship between two variables and
this makes possible estimation or prediction
• a statistical method used to incorporate independent factors
that are thought to influence sales into forecasting procedures
Regression equation of X on Y is expressed as: X = a + b (Y)
Population
Sales
Population
Sales
(Liner Relationship) (Curvilinear Relationship)
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Customer-based Forecasting Methods
• Does not assume future will follow on past
– Appropriate for dynamic markets / new products
• Market Testing
• Market Surveys
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Market Testing
• Test marketing is one of the popular methods for
measuring acceptance of new products.
One market is called a ‘test market’ where the product is
marketed without any promotional campaign. A similar
market is selected as ‘control market’ where the product
is sold with promotional campaign.
The difference in sales between both the market is a measure
of the effectiveness of the sales promotion campaign.
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• Result from a test market are extrapolated to make
prediction about future sales.
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Market Survey
• Market survey of buyer’s expectations.
• The survey of buying intensions involve the selection of a
sample of potential buyers and getting information from
them on their likely purchase of the product in future.
• Generally in B2B market, forecasting depends on the
demand pattern of their B2B buyers.
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Sales Forecast Versus Plan
THE SALES FORECAST IS A PROJECTION INTO THE
FUTURE OF EXPECTED SALES, GIVEN A STATED
SET OF ENVIRONMENTAL CONDITIONS.
THE SALES PLAN IS A SET OF SPECIFIED
MANAGERIAL ACTIONS TO BE UNDERTAKEN TO
MEET OR EXCEED THE SALES FORECAST
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Conclusions
• Forecasting is necessary, but difficult
• All methods have plusses and minuses
– All are based on prior experience
– Will generally miss the turning points
• Best to come up with different scenarios
– Have expected, best and worst forecasts for each
• Be prepared!
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Editor's Notes
To arm or prepare in advance of a conflict
The part of the arm between the wrist and the elbow.
Forecasting can be used in Supply Chain Management to make sure that
Buget is expected volume of sales
Informal way
Simpleset to use..
A Delphi Coordinator will be selected from the group of experts
TIME SERIES ANALYSIS METHOD:
The time series analysis method predicts the future sales by analyzing the historical relationship between sales and time.
Although the actual number of years included in a time series analysis will vary from company to company, as a general rule, managers should include as many years as possible to ensure that important sales trends do not get undetected.
Draw a free line with hand freely ..that gives the trend
In case of even no of years it works well.in case of odd no of years , the middle year is omitted.
Now the two points, 107 and 112 , shall be plotted to their corresponding middle years, i.e 1994 and 1998
By joining these two points, we get the trend line, which can be extended to get future values.
Assume that this year sales were Rs 50000 and this year’s forecast was Rs 40000.
Assume a was given a value of 0.2. the forecast for the next year…..42000.
Like is therer any relation extst between independent and dependent variable
Like sales is related to the population or not..if it is yes
Take example forecasting of no of toys for the age of 3-5 years child…indepent varible will be the child birth rate in that location and then project them when they will become 3 to 5 years old
No of AC cooler in greater noida…will depend on no of hosing project statred in a particular year and then project their requirement in numbers after 2-3 yaers when the construction will complete
No of fans required in a location which is already developed then it will be case of replacement ..kind of maintance selling situation not a developmental selling situation
No of SSM books..will depend on the number of students doing BBA or MBA and taking the classes on SSM at different schools and institutes
Market survey of buyer expectations..selection of a sample of potential buyers and getting information from them on their likely purchase of the product in future.distributing the samples..generally in B2B market…forecasting depends on the demand pattern of their B2B buyers.