Sales & Distribution Management

Sales forecasting
Sales Budget: control measure Sales quotas: control measure Sales territories: control measure
Fourth Lecture

Recruitment , Selection & Training of 5 Sales Executives (sales targets, budgeting, allocation of quotas & territories)

Sales Forecasting

Sales forecasting: Introduction

What is forecasting Forecasting is a tool for predicting future based on past information. Sales forecasting The sales forecast is a prediction of expected sales(expressed in rupee or units) for a specified future period. Sales forecasting of a company An estimate of future sales, for the time period under the proposed marketing plan and assumed set competitive market forces Market potential of a product( service) It is an estimate of possible sales of a product( service) in the market, during a specified future period, under normal conditions

Forecasting Methods & Techniques

Trend analysis/ Time series The forecaster studies the past demand for the product & also company sales data, to project future sales estimates.( takes into account seasonality, cyclical behavior, product life cycle, etc) Jury of executive opinion Opinions of a small group of high level managers. Result is a group estimate. Sales force composite Each salesperson estimates sales in his region. Forecasts are reviewed to ensure realistic. Combined at higher levels to reach an overall sales forecast. Delphi Technique A panel of experts project their best estimates via questionnaire. Secrecy is maintained about respondents/ feed back This method eliminates band wagon effect of majority opinion Other methods: Regression analysis, econometric models are quantitative methods developing relationship between independent and dependent variables

Sales Budget

Finance Minister: Pranab Mukherjee

Indian Railways: Turn Around Strategist

Brihanmumbai Municipal Corporation (BMC)

Sales budget: Significance

1. It is a measure to compare the actual performance against the budgeted amounts for sales personnel , regions, products channel members, customers, etc 2. It is an indicator to control expenses associated with sales activities and keep constant watch on profits 3. It helps measure the performance of individual sales members and decide about the size of sales team

4. It helps marketing team to frame policies and plan for future expansion, growth strategies, etc

Objectives of sales budget (maximise sales, minimise costs and ensure profits)
Sales budget
Budget is a timely Control

mechanism
Specify operating Period(M/QTR/YR)

Estimates of sales

Estimates of expenses

Estimates of profitability

Budgeting: Sales force selling expenses

1) 2) 3) 4) 5) 6) Salaries, commission, bonus, etc of sales force and sales department Expenses for training of sales force Traveling and conveyance expenses of the sales department Administrative expenses of sales department( rents, taxes, office, etc) Commissions to the distributors/dealers Other expenses directly related sales

Sales budget: Form & Contents: revenues, expenses &profits (product / region wise)
Region Product
A B C D WEST NORTH EAST SOUTH TOTAL

Product or/and region wise sales, expenses & profit budgets

Sales Quotas

Sales Quotas: What it is Quotas are quantitative objectives(targets) assigned to

sales personnel

Quotas can be set for individual sales personnel , other selling units such as sales department, wholesalers, distributors, territories, regions, etc

Why Fix Quotas : Benefits

Quotas provide performance targets.

Quotas provide quantitative standards. Quotas provide tighter sales, expense control & profit margins. Quotas identify reasons for performance differences Quotas are motivational and inspirational

Sales Quota : SMART Concept

S: Specific (objectives & goals)

M: Measurable (measured in terms of quantity or value)

A: Attainable (based on market standards , past experience,

skills, etc)

R: Realistic (attainable under all circumstances) T: Time specific( short term or specified time period)

Sales Territories

What are Sales Territories

Sales territories comprise a existing and potential customers, located within a given geographical area and assigned to a salesperson, branch, or intermediary (retailer or wholesaling intermediary).
Territory rout planning is aimed at effective time management & control on selling expenses( minimize time on the road)

Why Establish Sales Territories?

Well designed territories assist in attempts to improve Market coverage Enhances customer coverage Reduces travel time and selling costs Provides more equitable rewards Secure coordination of personal selling and advertising efforts Evaluation of personal selling efforts Management of personal ability index

Thank you