Sales objectives chapter 03


Published on

Published in: Business, Education
1 Comment
No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Sales objectives chapter 03

  1. 1. SALES OBJECTIVESChapter 03
  2. 2. IMPORTANCE OF SALES OBJECTIVES Sales objectives are self-defining in that they represent projected levels of goods or services to be sold. Every thing in the plan is to achieve sales objectives
  3. 3. SMART OBJECTIVES S – Objectives must be specific M – Objectives must be measurable A – Objectives must be challenging & achievable R – Objectives must be realistic T – Objectives must be time specific
  4. 4. FACTORS TO CONSIDER IN SETTING SALES OBJECTIVESQualitative factorsQuantitative factors
  5. 5. QUANTITATIVE FACTORS Sales Trends – trending of market in past and company sales when projecting sales.  Market sales  Company versus market sales  Market share trends Size and purchase rate of your target market Budget, profit and pricing considerations  Sales expenses  Cost of doing business / operational cost  Expected profitability
  6. 6. QUALITATIVE FACTORS Economic considerations  Recession, Inflation or stable conditions Competition  Expand its sales force, add distribution channels, add retail outlets etc. Fad Volume – Sports tournament, Health related  Negative / Positive & how long ? Your PLC The mission and personality of your organization  Conservative , Charging ? What is the expectation?
  7. 7. PROCESS OF SETTING SALES OBJECTIVES1. Set individual sales objectives using three different quantitative methods.2. Reconcile these different quantitative goals into composite sales objectives.3. Adjust the quantitatively based composite sales objectives through the interpolation of the relevant subjective, qualitative factors, such as the economy, competition, and the personality of your organization
  8. 8. THE PROCESS OF SETTING SALES OBJECTIVES Task 1 Task 2 Task 3 Set quantitative Reconcile into one Qualitative adjustment of Objectives composite sales composite objective into objective marketing plan sales objective Market +Macro Share Composite sales Marketing planMicro Top + Bottom objectives Sales ObjectivesExpens Profit +e plus Expense
  9. 9. SETTING QUANTITATIVE SALES OBJECTIVES Outside macro approach Inside micro approach Expenses plus approach Alternative new product / category approach
  10. 10. OUTSIDE MACRO APPROACH Look outside your company env and estimate total market or category sales for each of next 3 yrs Then estimate your company market share for the next 3 yrs. Sales objective = total market sales x market share Should end up with a 3 yrs projection for both unit & dollar sales.
  11. 11. INSIDE MICRO APPROACH Start at the top or with a review of the companies total sales. Using the straight percentage or trend line approach project sales for next 3 yrs Calculate the above for each department / product line and add all together to arrive at a company sales projection for next 3 yrs Reconcile this total with your initial sales estimate for the entire organization to determine an ultimate top projection.
  12. 12. INSIDE MICRO APPROACH CONTD Estimate sales from where they are generated to arrive at the bottom up figure  Sales by each channel  Store unit  Service office center Add them together to reach each years projection To reach the final micro sales figure reconcile the top sales estimates with the bottom sales estimates
  13. 13. EXPENSE PLUS APPROACH Budget based method / ideal for short termEstimate the cost and the required profit for the next yearExp Op.expense% = Gross Margin% - Exp PBIT%Sales Objective = Bud. Exp / Exp Op.expence%
  14. 14. ALTERNATIVE NEW PRODUCT / CATEGORY APPROACHReview the potential target market and work back word to a sales objective number Used when you don’t have historical data When introducing a product for the first time Numbers can be highly speculative and in accurate
  15. 15. RECONCILING SALES OBJECTIVES Analyze the Macro, Micro & Cost plus approach and reconcile the differences Use three of them and get a weighted average At least use two methods
  16. 16. QUALITATIVE ADJUSTMENT OF QUANTITATIVE SALES Review the qualitative factors that has an impact on the sales objectives Increase or decrease based on the qualitative factors that you are consideringE.g.:-A. Recession – negative impact (reduce)
  17. 17. OTHER CONSIDERATIONS Include rationale with sales objectives  Process used, assumptions, factors considered Involve upper management in setting sales objectives Plant to revise the sales objectives
  18. 18. EXPECTATIONS OF CHAPTER Acknowledge the importance of setting sales objectives Appreciate both quantitative and qualitative factors of effecting sales Set sales objectives in achieving the corporate and divisional objectives