Chapter fourSales Management Planning

•SELLING AND SALES MANGEMENT

The Nature and Importance of Sales Planning

Planning means deciding what to do in the future. It involves setting

Objectives n determining ways to achieve them.

Sales planning involves anticipating environmental developments n preparing to meet these developments or capitalize on them. Environmental forces can act as threat or opportunity for a company’s sales n marketing activities.

Sales planning is important to every member of sales organization . It provides the direction n framework for sales activities. It helps sales personnel understand where the organization is headed, how is it expected to go there, n what specific actions are to be taken, by whom n when.

Sales planning in the corporate context

Sales planning is governed by company wide considerations and has to be coordinated within the corporate context in order to align sales schedules, quantities, and projected cash flows with the organization’s overall mission. Also, marketing research, especially that which results in the projection of future trends and sales forecasts, greatly affect the organization and represents the cornerstone of the overall planning process.

Importance of Marketing information systems

Modern sales management planning is based on information, and information is supplied to mangers by marketing information systems.

One such system is marketing decision support system (MDSS). MDSS is an important information system that links sales and marketing managers with relevant databases.

Goal setting

Strategies

TacticsImplementation

Control

Analysis

The sales management planning process.

Sales planning process is a demanding process having a series of steps. The steps in the process can be also understood by securing answers to the following questions:

1. Where do we stand now?

2. What will be the future of our organization?

3. Where should we be heading?

4. How can we get there?

5. Who is going to do what and when?

6. How much will the plan cost, and what do these costs cover?

7. What are the results?

8. What changes need to be made?

Questions asked during planning process with response factors

Step Questions Response factors

1 Where do we stand now? Situation analysis or sales force audit: present position with respect to markets, products, costs, competition and other environmental factors.

2 What will the future be like Trend analysis: future condition of our sales organization with respect to markets, products, costs, competition n other environmental forces. Also include: (a) forecasts n assumptions, (b) opportunities n threats, and (c) potential surprises

3 Where should we be heading Sales objectives n strategies required to respond to opportunities n threats

4 How can we get there Sales action program (tactics) required to realize the objectives n strategies

5 Who is going to do what, and when Assignment of responsibilities and deadlines

6 How much will the plan cost? What di these costs cover?

Preparation of a sales budget and financial plan.

7 What are the results? Collection n analysis of data required to monitor the sales strategies n actions chosen.

8 What changes need to be made? Revision in sales strategies n actions if the results do not match with plan or if changes in conditions have occurred.

The Analysis Phase The first stage of the planning effort. Sales managers need to get the facts about past and

current market trends and the company’s sales performance. The situation analysis has to be conducted. A useful format managers use is SWOT

analysis. To assess internal strengths n weaknesses, sales managers examine the company’s sales

records, market share, distribution channels, product performance segment wise. Sales managers also look at profiles and buying patterns of their various customer

groups. They divide these groups according to purchase volume, and then they determine the level of effort each warrants, as well as the frequency with which each will be called upon.

Moreover, external analysis is done of all Environmental factors..

Setting Sales ObjectivesObjectives are desired ends, conditions, or occurrences that provide motivation and orientation for purposeful action. Provide the specific direction for the organization’s activities n answers the question: Where do we want to go?

Key sales objectives are based on any of the following:

a. Sales volume b. Market share c. Profitability

d. Calls per day e. Customer satisfaction f. New accounts acquired

g. Account servicing h. information gathering i. Self development

Formulating Sales Strategies

Sales strategies are blueprints for action that marshal and reconcile the sales function’s resources with environmental constraints. Strategies answer the question: “How do we get there?”

Different options are available n different organizations can choose different sales strategies. Each strategy has its own set of implications for sales department in an organization n has its own requirements e.g.

A cost leadership strategy demands that sales managers be most concerned with cost cutting strategies, while a differentiation strategy requires a performance orientation, and a focus strategy requires sales person specialization.

Also a company’ s decision to build, hold , harvest n divest is also a typical basis for strategy selection.

Any strategy selection will have major implications for the activities n goals of the sales force.

Tactical Decisions

The term sales tactics refers to the day by day activities that are required to implement sales strategies and achieve sales objectives.

Tactics are usually devised by sales managers and involve the formulation of sales hiring practices, sales training programs, sales incentives and compensation, sales support activities, performance appraisal measures and the coordination of sales activities with other marketing mix components.

Implementation and control phases

The implementation phase of the sales management planning cycle determines the plan’s success. Implementation involves communication of the sales plan through meetings or conferences, additional training if necessary, assurance of support to slaespeople, and sales managers’ supervision of their subordinates.

The control phase keeps sales efforts on course; it involves the comparison of planned and actual results and the actions to be taken when divergence between those results occur.

Important questions

1. Define Marketing Information Systems. How are these information systems used in sales organizations

2. Define situation analysis and Trend analysis

3. Draw the planning process and define Analysis step.