Chapter 8

SALES MANAGEMENT PLANNING

Nature & Importance of Sales Planning

Planning: Deciding what to do in the future Sales Planning: Anticipating environmental developments and preparing to meet or capitalize on them
Its crucial when it comes to the introduction of new products A well conceived sales plan provides the direction and framework for sales activities It helps salespersons understand where the sales organization is headed, hot it is expected to get there and what specific actions are to be undertaken, by whom, and when

Sales Planning in the Corporate Context

Corporate Mission: Beginning of the planning process: a statement giving a companys reason for being
A company will only functions well of all its components operate in concert with each other Corporate marketing, and, ultimately, sales objectives are all derieved from this statement of the firms aims, strengths, and uniqueness

Statement of corporate mission Business plan (Strategic plan) Strategic marketing plan

Reason for being

Long-range plan for overall resource allocation to market Long-range plan for specific products and markets Long-range plan for sales activities Short-run plan for implementing sales strategy

Strategic sales plan

Tactical sales plan

Planning Hierarchy

Market research and other information sources are used to identify markets to be served and to predict likely future environmental conditions Projections of trends form the assumptions governing the overall corporate planning system Strategic business and marketing plans are based upon this analysis. This analysis also leads to the preparation of the sales forecast that represents the cornerstone of the corporate planning process Sales plans are part of the strategic marketing plan, which includes related support activities In conjunction with the marketing plan, the company plans its production

Strategic Plan: Outline of how resources will be allocated to market opportunities

Corporate Vs Sales Planning

Similarities & Differences
Corporate Planning Concerns
Business in which to engage-broad expansion, diversification, acquisition guidelines

Sales Planning Concerns

Development of new sales opportunities constrained by Corporate scope and sales sources Following basic policies handed down by corporate scope and sales resources Broad description of the conduct that sales management will support to at least maintain the viability of the business- e.. Product line emphasis, sales strategies and so forth

Scope

Policies

Constituent policy (employee, stockholder etc.) Broad marketing policies Broad product policies

Corporate Vs Sales Planning

Similarities & Differences
Corporate Planning Concerns
Financial Objectives
Broad corporate aspirations Business-level aspirations

Cont.

Sales Planning Concerns

Plan to achieve sales & profit objectives set by corporate Management

Resource Selection of business areas to receive resource allocation Allocation

Recommended sales resource expenditures based on: 1. Competitive position and industry attractiveness for existing products 2. Added lines that have synergy with present ops
Melding, separation, and sharing of existing sales resources within the business

Melding, separation, and sharing of Organization existing and newly acquired plant and personnel resources across business

Information for Sales Planning

Modern sales management planning has to be information based Data, in and themselves, do not constitute information; to be useful they have to be processed, analyzed, interpreted and made actionable Information for better decision making is supplied to sales manager by their firms marketing information system (MIS) or marketing decision support system (MDSS)

Information: Processed data Secondary Data: data originally collected for a purpose other than the one at hand Primary Data: Data collected specifically for the purpose at hand

Marketing Information System & Decision Support System

Marketing information system consists of people, equipment and procedures to gather, sort, analyze, evaluate and distribute needed, timely and accurate information to marketing decision makers. A well-managed MIS should monitor the market on a continuous basis to spot impending changes early Decision support systems (DSSs) have been developed to assist with the formulation of marketing strategy using quantitative models and analytical techniques

Sales Intelligence

Salespeople posses vital information about the market that can be used to develop sales forecasts and quotas, to access new products and to formulate marketing strategy The need for information from the field poses two important sales management planning issues. First, salespeople must be encouraged to provide needed market information. Second management planning issue concerns developing procedures for using information obtained from salespeople Other sources of information include.

Using Marketing Information System

Information system that provides actionable information to sales and marketing managers It highlights possible future conditions, pinpoints potential courses of action, and describes what will probably happen if these actions are undertaken MIS does not make planning decisions-sales and marketing managers do (information is a tool not a substitute for decision making) Past & current facts offer a reasonable glimpse into the future, but true growth opportunities do not posses this comforting quality of continuity
Speculative guessing Sales managerial intuition The information continuum Perfect information

Intuition: Judgment plus creative interpretation of facts

Importance of Marketing Decision Support System

Information system that links sales and marketing managers with relevant data bases
Database Computer Linkage General Format for an MDSS Communication Network Sales or marketing managers

Decision maker

Personal Computer or terminal

Computer

Database of Marketing information

Model of an MDSS

Sales Management Planning Process

Sales management planning is an essential and demanding process that calls upon the full the of a sales managers capabilities Takes place in a logical series of stages that are cyclical in nature

Analysis

Goal Setting

Control

Strategies

Implementation

Tactics

The analytical phase examines what happened in the past, looks at the present situation and predicts what is likely to transpire in the future if current trends continue Goal Setting phase spells out direction that the sales effort should take during the planning period
Sales strategies translate these objectives into an action framework The action details within this framework are filled in during tactical phase

The plan is then executed in the implementation phase

The control stage serves to compare actual outcomes with planned results, in order to examine the need for plan revision

Another way to look at the sales planning process is through a series of specific steps. The steps can be carried out by securing detailed answers to the following specific, although broadly stated, questions:
1. 2. 3.

Where do we stand now? What will be the future be like for our sales organization? Where should we be heading?

4.
5. 6.

How can we get there?

Who is going to do what, and when? How much will the plan cost, and what do these costs cover? What are the results? What changes t be made?

7. 8.

Detailed description of various Phases

The Analysis Phase

Consists of facts about past and current market trends and the companys sales performance Examines current scenario and companys existing positions Situation analysis;
How have specific products, territories and accounts developed in terms of sales profitability/ How has the market in general evolved? How competitors are doing? Market share? What can be learned form past? New technologies and their impact? New capabilities to be developed? What about Macro environment? SWOT analysis

Internal strengths and weaknesses can be assessed through examining of sales records, market share, product applications & benefits and target market on product-by-product basis Past and present Price structures of competitive items are also examined Effectiveness of channels, impact of past advertising campaigns Profiles and buying patterns of various customer groups Relevant breakdowns such as by-industry, or geography of lifestyle are reviewed Awareness research highlights the level of product knowledge and brand identification among potential users

A well-managed MIS should monitor the market on a continuous basis to spot impending changes early

Macro-environmental factors take effect primarily in the form of threats or constraints placed upon a sales managers decision-making freedom Threats usually come from current or prospective competitors Opportunities, on the other hand, are more specifically related to markets

Setting Sales Objectives

Objectives: Desired ends, conditions or occurrences that provide motivation and orientation for purposeful action

Provide specific direction Channel resources towards their most productive uses Serves as guidelines for managers and salespeople Also provide standards against which actual sales performance will be evaluated SMART objectives Qualitative & quantitative objectives

Setting sales objectives is a step by step process:

Corporate mission Corporate objectives Marketing objectives Marketing strategies Marketing mix Marketing execution Marketing control
direct

Sales objectives Sales strategies Sales tactics

Sales implementation
coordinate

coordinate

Regional and district sales objectives

coordinate

coordinate

Regional and district Sales strategies

cooperate

cooperate

Regional and district Sales tactics

Personal sales objectives, quotas & plans

report

Sales control

report

Sales Strategies
Sales strategies Blueprints for action that reconcile sales managements resources with environmental constraints

Strategies answer the question How do we get there?

Michael porter has suggested three generic approaches that can serve as a good starting point for strategic thinking:
1. Overall cost leadership: a firm tries to achieve the lowest production and distribution costs so that it can price its products lower than those of competitors and capture a large share of market Differentiation: a firm tries to achieve superior performance in an important customer benefit area that is valued by the market. Quality leader, technology leader etc. Focus: Firm concentrates in one or more specific market segments rather than going after the entire market

2.

3.

Second way to look at Sales development strategies is to consider Orville Walker and Robert Ruekerts conceptual framework in which two major dimensions are used to form conceptual framework:
The business units desired rate of new product-market development and Its intended method of competing

The business strategy of a Prospector is based on the business units desire to rapid new product or market development A Differentiated defender is concerned with maintaining the loyalty of customer by adapting to their needs and providing good service A Low-cost defender attempts to appeals to its customers primarily on price basis

A third way to look at the development of sales strategies is to consider the linkages between sales strategies and the four basic market share strategies:
Build: to increase market share Hold: maintaining sales volume Harvest: reducing selling costs by only calling on most profitable accounts Divest: Cutting selling costs to the minimum and clearing out inventory

Tactical Decisions
Sales Tactics: activities required to implement sales strategies and achieve sales objectives

1.

2.
3.

A. B. C. D.
4.

Introduction Mission Company outlook

Strengths Weaknesses Opportunities Threats

A. B. C. D. E. F.
5.

Market status

A. B. C.

Objectives and Strategies

Industry Market(s) Key factors Purchase criteria Price analysis Competition

Elements of a Sales and Marketing Plan

By market segment Target product/service mix Promotional program

Publicity Direct mail Advertising Trade shows/receptions Presentations

A. B. C. D. E.

Elements of a Sales and Marketing Plan cont.

6.

Sales plan
A. B. C. D. Forecast by market segment Target accounts Distribution Current account status

7.

Organization
A. Administrative B. Sales/account service C. Marketing support services

8.

Financials