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8/2/2019 Sales Management Planning Farkade
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Ambar
Dinesh
Satish
Milind
Farhaan
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Sales ManagementDef:-
Sales management is a business discipline which is
focused on the practical application ofsales techniquesand the management ofa firm's sales operations.
Objectives:-
Sales VolumeContribution to Profits
Continuous Growth
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Sales Management Cycle
Organization
Analysis
Planning
Direction
Control
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Sales Management Process
y Building the right sales strategy
y Hiring the right team
y Creating the right compensation plans, territories andquotas
y Setting the right projections
y Motivating your team
y Tracking revenue against goals
y Resolving conflicts
y Training and coaching sales repsy Managing processes
y Getting the sale!
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Sales Forecasting
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Types offorecasting
1. Macro Forecasting:It i s concerned with forecasting markets in total.This is about determining the existing level ofMarketDemand and considering what will happen to market
demand in the future.
2. Micro ForecastingMicroforecasting is concerned with detailed unit sales
forecasts. This is about determining a products marketshare in a particular industry and considering what willhappen to that market share in thefuture.
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The selection of which type of forecasting touse depends on several factors as under:
(1) The degree of accuracy required
(2)T
he availability of data and information
(3) The time horizon that the sales forecast is intended tocover
(4) The position of the products in its life cycle
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Creating theSales Forecast for a Product
Step 1) Estimating Market Demand
Step2) Estimating CompanyDemand
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Estimating Market Demand
Market Demand for a product is the total volume that wouldbe bought by a defined customer group, in a definedgeographical area, in a defined time period, in a givenmarketing environment.Using the definition above, market demand can be defined as:
Defined Customer Group: Customers WhoBuy an Air-Inclusive Package Holiday.
Defined Geographical Area: Customers in the UK
Defined Time Period: A calendar year
Defined Marketing Environment: Strong consumerspending in the UK but overseas holidays affected byconcerns over international terrorism.
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Recent data for the UK Overseas Mass Market Package
Holiday market suggests that market demand can be
calculated as follows:
Number of Customers in the UK: 17.5 million percalendar year
Average Selling Price per Holiday: 450
Estimate of market demand: 7.9 billion
(customers x average price)
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Stage two in the forecast is to estimate
Company Demand
Company demand is the companys shareofmarket demand.
This can beexpressed as a formula:
Company Demand = Market Demand X CompanysMarket Share
For example, taking our package holiday market example; the
co
mpany demand
for First Ch
oic
eH
olidays in this mark
etcan be calculated as follows:
First Choice Holidays Demand = 7.9 billion x 15% MarketShare = 1.2 billion
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Modern Managers have several different methodsavailable for Sales Forecasting.
Popular methods are:
Jury of Executive Opinion Method
Delphi Method
The Sales force Estimation Method
Time Series Analysis Method
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JuryofExecutive Opinion Method:
In theJuryofexecutiveopinion method ofSalesForecasting, appropriate managers within theorganization assemble to discuss their opinions onwhat will happen to sales in thefuture.
Since these discussion sessions usually resolvearound hunches or experienced guesses, theresulting forecast is a blend of informed opinions.
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SALES FORCE ESTIMATION METHOD
TheSales Force Method is a sales forecasting technique that predicts future
sales by analyzing theopinions ofsales people as a group.
Salespeople continually interact with customers, and from this interactionthey usually develop a knack for predicting future sales.
As with the juryofexecutiveopinion method, the resulting forecast normallyis a blend ofthe informed views ofthe group.
The sales forceestimation method is considered very valuable managementtool and is commonly used in business and industry throughout the world.
This method can befurther improved by providing sales people withsufficient time toforecast and offering incentives for accurateforecasts.
Companies can make their sales people better forecasters, by training them tobetter interpret their interactions with the customers.
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Delphi Method
Delphi Method also gathers, evaluates,and summarizes expert opinions as thebasis for a forecast, but the procedure is
moreformal than that for the juryofexecutiveopinion method.
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TheDelphi Method has thefollowing steps
STEP 1 Various Experts are asked to answer, independently and inwriting, a series ofquestions about thefutureofsales or whatever otherarea is being forecasted.STEP 2 A summaryofall the answers is then prepared. Noexpertknows, how anyother expert answered the questions.
STEP 3 Copies ofsummary are given to the individual experts with therequest that they modify their original answers ifthey think itnecessary.STEP 4 Another summary is madeofthese modifications, and copiesagain are distributed to theexperts. This time, however, expert opinions
that deviate significantlyfrom the norm must be justified in writing.STEP 5 A third summary is madeoftheopinions and justifications,and copies areonce again distributed to theexperts. Justification in
writing for all answers is now required.STEP 6 Theforecast is generated from all oftheopinions and
justifications that arisefrom step 5.
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TimeSeries AnalysisTime series analysis involves breaking past sales down intofourcomponents:
(1) The trend:Are sales growing, flat-lining or in decline?
(2) Seasonal or cyclical factors: Sales are affected by swings ingeneral economic activity(e.g. increases in the disposable incomeof
consumers may lead to increase in sales for products in a particularindustry) Seasonal and cyclical factors occur in a regular pattern.
(3) Erratic events: these include strikes, fashion fads, war scares andother disturbances to the market which need to be isolated from pastsales data in order to be able to identify the more normal pattern of
sales.
(4) Responses: the results ofparticular measures that have beentaken to increase sales (e.g. a major new advertising campaign)