setting sales objectives

SALES FORCE

MANAGEMENT

Setting Sales Objective30 March 2015

BY: YAZAD UMRIGAR

Hierarchy of Objective Setting

30 March 2015Yazad Umrigar Sales Force Management

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Personal Selling Strategy

Role of Personal Selling in Total Promotional Programme

Qualitative Objectives for Personal Selling

Quantitative Objectives for Personal Selling

The qualitative personal-

selling objectives are long

term and are carried over

from one year to other.

The sales volume

objective is the key

quantitative objective. All

other quantitative

objective derives from or

is related to the sales

volume objectives.

Some Qualitative Sales

Objectives


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To maintain contacts with present customers

To search out and obtain new customers

To keep customers informed on changes in

product line and other aspects of marketing

strategy

To provide technical advice and assistance to

customers

To assist in training customers employees related

to product

To collect and report market information of interest

and use to company management

Some Quantitative Sales

Objectives


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The sales volume objective i.e. the dollar or unit sales volume is the key quantitative objective.

This objective govern other quantitative objectives like

Market share expansion

Profitability of orders

Product diversification

Control personnel selling expenses

To capture wallet share

Market Potential, Sales Potential

&

Sales Forecast


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A market potential is an estimate of the maximum possible sales opportunities present in a particular market segment and open to all players during a stated future period

A sales potential is an estimate of the maximum possible sales opportunities present in a particular market segment open to a specified company during a period.

A sales forecast is an estimate of sales, in dollars or physical units, in a future period under assumed set of internal and external factors

MP

SP

SF

Example – Maruti Alto


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MP – All potential buyers of small petrol cars

SP – All potential buyers

of Alto

SF –Expected

Sales of Alto

Market Share =

SF/MP

Market Definitions


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Market for Maruti Small Cars


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All

passenge

r cars

SUVs,

big cars

Small

CarsElectric

Small

Cars

Petrol

Small

Cars

Finding Market Potential


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Market Identification

• Who buys the product?

• Who can buy the product?

Market Motivation

• Why do people buy?

• Why people don’t buy?

Market Factors

• What affect product demand

• Relevant Market Indexes

For Maruti Alto’s market potential, market factors could be person

reaching certain age in a year, fuel prices and interest rates. Market

indexes could be GDP growth, per capita income etc.

Why Sales Potential is not

Forecast


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Sales potential is how much company can sell if

it has

all the necessary resources and desired to use

them.

Sales forecast is lesser than sales potential

because:

Production capacity limitations

Distribution network constraints

Limited Financial Resources

Whole market is not profitable

Sales Forecasting Methods


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Jury of Executive Opinion

Poll of Sales Opinion

Projection of Past Sales

Time series analysis – Mathematical model

based on cyclical trends, seasonal changes

and fluctuations

Survey of Customer’s buying Plans

Regression Analysis

Econometric Model Building

Industry Forecast and Company

Sales Forecast


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The link between industry market forecast and

company forecast is Market Share

Market Share determination is as tricky as

determining sales forecast

Information on competitors' plans to launch

new models, advertising and selling strategies

is needed

Forecasting a company’s market share varies

in complexity from one industry to other

Deciding Sales Volume

Objective


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A sales forecast do not automatically become

company's sales volume objective but acts as

an starting point

The sales volume objective should be

consistent with management's profit

aspirations and company’s marketing

capabilities.

Provision for eventuality, local factors and

capability plays an important role in

determining sales objective.

Steam Turbine Example


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Projections from 12th and 13th Five Year Plan. Gestation Period.

Historical Achievements in Previous Plans

Share of various technologies, fuel types and efficiency level. Various

segments

Company’s own expansion plans, new product launches, competitor’s

product launches. Potential customers’ capex plans

Sales objective of a given year.


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.....cntd....Steam Turbine

Example

Power capacity installation in Year 2015 50 GW

Coal Based power capacity installation in Year 2015 30 GW

Retirements coal based power generation in year 2015 5 GW

Total coal based installation in year 2015 35 GW

Gestation Period 2 years

Market of coal based power generation in 2013 35 GW

Market of coal based power generation of capacity upto 250

MW10 GW

Price/GW Rs 1000,000

Total Market Potential in 2013 Rs 10,000,000

Expected Market Sahre in 2013 50%

Sales Potential in 2013 Rs 5,000,000

Sales Forecast in 2013 Rs 3,000,000

Sales Objective in 2013 Rs 2,500,000

Marketing

setting sales objectives