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Planning & Organizing Sales Force

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CORPORATE STRATEGY

BUSINESS STRATEGY

(FUNCTIONAL)MARKETING STRATEGY

SALES STRATEGY

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4 Parts of Sales Strategy

1. Classification of Accounts

2. Relationship Strategy

3. Selling Methods

4. Channel Strategy

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1. Classification of Accounts

i. Class ‘A’: High potential of Sales & Profit

ii. Class ‘B’: Medium potential

iii. Class ‘C’: Low potential – (including prospective & current customers who have good relationship with competitors)

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2. Relationship Strategy

•Transactional relationship

•Value-added relationship

•Collaborative relationship

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3. Selling Methodsa) Stimulus response method

b) Formula method

c) Need-satisfaction method

d) Team selling method

e) Consultative selling method

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4. Channel Strategy

•Company Sales Force• Industrial Distributors /

Dealers•Manufacturer’s

Representatives•Tele-marketing• Internet•Brokers / Commission Agents

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The Foundation of the ‘Planning

Efforts’ of most companies is a

SALES FORECAST

NOT ONLY ‘SALES PLANNING’, virtually “ALL PLANNING EFFORTS” financial planning, operational planning….

LET US UNDERSTAND A FEW TERMS……

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SALES FORECAST

SALES POTENTIAL

MARKET POTENTIAL

SALES BUDGET

SALES QUOTA / TARGET

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Market Potential

Estimate of the

maximum possible sales opportunities

present in a particular market segment,

&, open to all sellers of a Good or Service,

during a stated future period

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Sales Potential

• Estimate of the maximum possible sales opportunities present in a particular market segment , open to a specified company, selling a Good or Service, during a stated future period

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Sales Forecast

• Estimate of sales, in rupees or physical units, during a future period, under a particular marketing program, and an assumed set of economic and other factors outside the unit

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Fundamental Techniquesfor determining Market

Potential

1. Market-factor derivation

2. Survey of Buyer Intentions

3. Test Marketing

All 3 are based on analysis of Customers.Hence, CUSTOMER ANALYSIS is required FIRST

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CUSTOMER ANALYSISFIRST STEP

• Market Identification

• Who buys the product?

• Who uses it?

• Who are the prospective buyers or users?

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CUSTOMER ANALYSISSECOND STEP

• Market motivation: To detect reasons ‘why’ customers buy the product, and why potential customers might buy it.

• Why do people buy?

• Why don’t people buy?

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1. Market-factor Derivation

•Use of Market Factors (a market feature or characteristic related to the product’s demand):–Select the Market factors ;–Eliminate those market segments not having prospective buyers

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2. Surveys of Buyer Intentions

Ascertaining from potential Customers whether or not they would purchase the (proposed) Product or Service, at the Prices asked

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3. TEST MARKETING

Introducing, and Marketing a new Product in a (restricted) market that is similar to the (targeted) larger market(s)

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TERRITORIAL POTENTIAL

To break down the overall Sales Potential among various territorial divisions,

Usually, a market factor or market index is used

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MARKET INDEX

• A Numerical Expression indicating the Degree to which one or more Market Factors, associated with a given product’s demand, is present in a given market segment

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SALES FORECASTING

• Qualitative Methods

• Quantitative Methods

• Operational Methods

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SALES FORECASTING -Qualitative Methods

• Jury of Executive Opinion method

• Delphi Technique

• Survey of Customers’ expectations

• Poll of Sales force Opinion method

• Historical Analogy

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Jury of Executive Opinion method

2 Steps:

•High-ranking executives estimate sales;

•An average estimate is then calculated.

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DELPHI TECHNIQUE

• It is a particular type of Jury of Ex.Opinion• Those giving opinions are ‘selected’ for

their expertise• Sequence of Questionnaires administered –

each designed based on response to earlier one

• Thus, final questionnaire would have pooled all available ‘information’

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Survey of Customers’ expectations

• More popular amongst industrial marketers in view of relatively less no. of customers;

• It gathers Opinions and not decisions;

• Survey results need to be tempered with management’s knowledge & plans, if any;

• This method can be made sophisticated and more reliable if survey sample is chosen carefully, and if it is a true survey

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Poll of Sales Force Opinion• Individual sales personnel forecast

Sales for their territories; individual forecasts are combined & modified, as management thinks necessary to form Company Sales Forecast.

PLACES RESPONSIBILITY ON those who have to ‘make it happen’SALES PEOPLE are not the best to forecast – they r Optimistic or PessimisticNormally REVIEWED & MODERATED by SALES EXECS & SALES MGRS

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SALES FORECASTING -Quantitative Methods

•Time-series analysis

•Regression analysis

•Econometric model building and simulation method

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Projection of Past Sales method•Simple Extrapolation

•Moving Averages method

•Exponential smoothingEXPONENTIAL SMOOTHING: Sales (t+1) = (L) X Actual Sales(t) + (1-L)XForecasted Sales(t)To give more weightage to a certain specific period

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Regression Analysis

• It is a statistical process which determines & measures the association between company sales & other variables.

• It involves fitting an equation to explain sales fluctuations in terms of related and presumably causal variables, substituting for these variables values considered likely during the period to be forecasted.

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Econometric Model Building & Simulation

• Uses an Equation or system of Equations to represent a set of relationships among Sales and different Demand determining Independent Variables

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Sales Forecasting methods

• Well-managed companies use several methods, and if different methods produce roughly similar figures, then more confidence is placed on the forecasts.

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SALES VOLUME OBJECTIVESales Forecast contains an estimate of Sales:

– Tied to a proposed Marketing Plan or Program– Assuming a set of economic & other factors

• It does not become company’s sales volume objective, but only an orientation point for management’s thinking about objective

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Evaluation of Forecasts

• Forecasts contain elements of Uncertainty, as all are based on assumptions;

• So, first step – re-examine each assumption;

• Evaluate forecasting methods;

• Keep reviewing forecasts during the period;

• At the end of period, do a detailed comparative analysis of ‘actuals’ vs ‘forecasts’, & record reasons for future.