Group 3 DISTMAN

PLANNING is deciding now what we are going to do later,

including how and when we are going to do it. Successful
companies practice market-oriented strategic planning.
The aim of strategic planning is to achieve targeted profits
and growth in the face of continual changing markets and
environment.

STRATEGIC PLANNING includes making decision about the

company's long-term objectives and strategies. In most
large, multi product and multibusiness organizations,
planning is done at three or four organizational levels:
Components of Sales Strategy
(1) corporate strategic plan (2) divisional and/or business
units strategic plans, and (3) product functional plans. 1. Classifying market segments and individual customers
within a target segment
CORPORATE STRATEGIC PLANNING - It is developed at the
company's headquarters to guide the whole organization. • Each firm should first decide on target market segments
The planning process includes four steps or planning and if possible, to classify customers into high, medium,
activities: low sales & profit potentials
2. Relationship strategy - Whether a selling firm should
(1) developing corporate mission and objectives, (2) use transactional, value-added, or collaborative
defining strategic business units (SBUs), (3) allocation of relationship depends on both the seller and the customer
resources to SBUs, and (4) developing corporate strategies 3. Selling Methods — used by a salesperson or sales team
to fill the strategic planning gap. to create revenue and help sell more effectively
4. Channel Strategy - There are many sales / marketing
BUSINESS UNIT (OR SBU) STRATEGIC PLANNING - It is channels
done by the head of the business unit by developing long- • Selection of a suitable channel depends on both the
term mission, objectives and goals and strategies in the buyer and the seller, products / services, and markets.
changing environment. The strategic planning process at
SBU includes the following eight steps: BASIC TERMS USED IN SALES FORECASTING

1. Defining the business unit's mission. 1. Market demand — is the estimated total sales volume
in a market (or industry) for a specific time period in a
2. Scanning the external environment. defined marketing environment.

3. Analysis of the internal environment. 2. Market (or industry) forecast (or market size) — is the
expected market (or industry) demand at one level of
4. Developing long-term objectives and goals. industry marketing expenditure.
5. Formulating strategies for achieving the objectives and 3. Market potential — is the maximum market (or
goals. industry) demand, resulting from a very high level of
industry marketing expenditure.
6. Preparing programme or action-plans form the
strategies. 4. Company demand — is the company’s estimated share
of market demand for a product or service at alternative
7. Implementing the strategies and action-plans,
levels of the company marketing efforts (or expenditures)
8. Monitoring results and taking corrective actions. in a specific time period.

PRODUCT/OPERATIONAL PLANNING - It is done for each 5. Company sales potential — is the maximum estimated
product within a business unit. Operational managers company sales of a product or service, based on maximum
normally develop plans for short periods time (upto 1 share (or percentage) of market potential expected by the
year). The functional plans like marketing, production, company
human resource, and finance are developed by functional
6. Company sales forecast — is the estimated company
managers to carry out the routine tasked on day-to-day
sales of a product or service, based on a chosen (or
basis.
proposed) marketing expenditure plan, for a specific time
period, in a assumed marketing environment.
7. Sales budget — is the estimate of expected sales erratic events. These components are recombined to
volume in units or revenues from the company’s products produce sales forecast.
and services, and the selling expenses. 9. Naive / Ratio Method
- time series method of forecasting, which is based on the
FORECASTING APPROACHES assumption that what happened in the past will continue
to happen in the immediate future.
1. Bottom-up or build-up — a way of making corporate
10. Regression Analysis Method
decisions that starts from the bottom of the hierarchy,
- It is a statistical forecasting method
rather than at the top.
- Process consists of identifying causal relationship
2. Top-down or Break-down — means that you start with between company sales and independent variable, which
the final deliverable (project goal) and break it down into influences sales.
smaller, more manageable tasks.
11. Econometric Analysis Method
SALES FORECASTING METHODS - many regression equations are built to forecast industry
sales, general economic conditions, or future events.
1. Executive opinion method
- oldest, simplest and the most widely used method. WHAT IS A SALES BUDGET?
- this includes getting the views of top executives of the
- It includes estimates of sales volume and selling
company regarding future sales.
expenses.
2. Delphi method
Sales volume budget is derived from the company sales
- developed by Rand Corporation during late 1940's
forecast – generally slightly lower than the company sales
- similar to the executive opinion method, but the
forecast, to avoid excessive risks
difference is that the members of expert panel do not
meet or discuss in a committee. The procedure include Selling expenses budget consists of personal selling
selection of panel of experts from within and outside the expenses budget and sales administration expenses
organization. budget
3. Salesforce composite method Sales budget gives a detailed break-down of estimates of
- involves salespeople to estimate their future sales. sales revenue and selling expenditure.
- often used by industrial or business marketing
companies. PURPOSES OF THE SALES BUDGET
4. Survey of Buyers’ Intentions Method
- sometimes called as market research (or market survey). PLANNING - the budgeting process in a company consists
- includes asking existing and potential customers about of profit planning based on expected sales, minus the cost
their likely purchases of the company's product and of achieving the sales.
services for the forecast period. CO-ORDINATION - at the corporate level, the budget
process is used for co-ordinating the activities of various
5. Test Marketing Method areas.
- useful for forecasting sales for a new product, which has CONTROL - any budget, or goal, becomes a tool for
no historical (or previous) sales figures. evaluation of performance.
- used for estimating sales for an established product in
new territory. - the sales budge stated in terms of sales volume and
6. Moving Average Method selling expensed, become a standard of performance,
- relatively simple method that develops a company against which the actual performance is measured.
forecast by calculating the average company sales for
SALES BUDGET PROCES
previous years.
7. Exponential Smoothing Method Many firms follow a process for preparation of annual
- closely relatively to the moving averages method for sales and company budgets. It generally includes:
sales forecasting.
- by using this method, the forecaster can allow sales in • Review past, current, and future situations
certain periods to influence the sale forecast more than • Communicate information to all managers of budget
sales in other periods. preparation – guidelines, formats, timetable
• Use build-up approach, starting with first-line sales
8. Decomposition Method managers
- includes breaking down the company’s previous periods’ • Get approval of sales budget from top management
sales data into components like trend, cycle, seasonal, and
• Prepare budgets of other departments e. SELLING SKILLS - the characteristics and competencies
GROUP 4 sales representatives depend onto support customers.

SALES TERRITORIES - Existing and potential customer 2. Salesperson effective in territory

assigned to a salesperson.
• Compare social, cultural, and physical characteristics
- Defined as an area where a specific group of present and • Match sales person to the territory.
potential customers are catered to by a salesperson, a
group of salespeople, a branch, a dealer,a distributor,or MANAGEMENT OF TERRITORIAL COVERAGE
marketing agency at a given period of time.
• Planning routes
BENEFITS OF SALES TERRITORIES • Scheduling
• Increasemarket • Time Management
• Control selling expenses and time
ROUTING - Travel plan used by a salesperson for making
• Better evaluation of salesforce performance
customer calls in a territory.
• Improve customer relations
• Increase work performance SCHEDULING
PROCEDURE FOR DESIGNING SALES TERRITORIES • Salesperson records actual time spent on various
activities for 2weeks
• Select age of graphical territorial base
• Sales manager and salesperson discuss and decide how
• Find Good location and prospective customers
to increase timespent on major activities
• Decide basic territories by using Build-up method
• Companies specify call norms for current
DECIDE BASIC TERRITORIES
TIME MANAGEMENT TOOLS - To help sales people to
1. Build-up method
manage their time efficiently and productively, the tools
• Call frequency availableal are:
• Estimate workload capacity of salesperson
• High-tech equipment
• Make tentative territories
• Develop finalterritories • Inside salespeople
• Objective is to equalize the Workload of salespeople
2. Break-down method • Outside salespeople

• Salespotential SALES QOUTA - Are sales goalsol or targets set by a

• Estimate sales volume expected company for its marketing/salesunits for a period of time.
• Make tentative territories
• Develop final territories objective in territory design is OBJECTIVES OF SALES QUOTAS
to have equal opportunity and equal sales workload for all
sales territories. • To use quotas as performance standards or performance
goals
ASSIGNING SALES PEOPLE TO TERRITORIES
• To control performance
1. Relativity ability of sales people • To motivate people by linking quotas to compensation
plans.
a. PRODUCT EVALUATION - the process of evaluating the
suitability and safety of the product for use by consumers. Sales quotas are determined based on the company’s size,
its revenue, and the number of products that the
b. MARKET KNOWLEDGE - awareness and understanding company sells. So, different companies need to implement
of the wider business, economic and market environment. different sales quotas for their sales reps.

c. PAST PERFORMANCE - know how effectively they Types of Sales Quota

performs within a specific period of time.

d. COMMUNICATION - how they convey information in

the workplace.
1. VOLUME SALES QUOTA - takes the
number of units sold or total revenue into consideration.
A majority of small businesses adopt volume sales quotas
as the initial goal for every company is to sell more
products.

2. PROFIT QUOTA - is established for sales representatives,

requiring them to generate a certain amount of profit for
the company by selling products or services for a specific
price. When your business has many target markets and
price points, Profit Quota is perfect.

3. EXPENSES QUOTA - Are aimed at controlling costs of

sales units. Often expenses are related to sales volume or
the compensation plan.

4. ACTIVITY QUOTA - Focuses on the activities in which

sales representatives are supposed to engage. Activity
quotas focus on a salesperson’s efforts rather than the
sales volume outcomes of these activities.

5. COMBINATION QUOTA -Some salespeople may have

more than one quota. A combination quota might include
an activity quota and a profit quota. A combination
strategy gives reps a roadmap to success and provides
smaller milestones to make their quota more easily
attainable.

METHODS FOR SETTING SALES QUOTA

Sales quotas are set by companies by using several

methods. The quotas set based on:

• Total Market Estimate Method

• Territory Potential Method

• Past Sales Experience Method

• Executive Judgement Method

• Sales People Estimate Method

• Compensation Plan Method