Sales Objective Analysis and Sales Territory Analysis
Department of Marketing Management4
Sales Objective Analysis and Sales Territory Analysis Hemas Holdings (PLC), Sri Lanka
SALES OBJECTIVE ANALYSIS AND SALES TERRITORY ANALYSIS OF HEMAS HOLDINGS (PLC)
Third Year First SemesterDepartment of Marketing ManagementFaculty of Management StudiesSUSL
We take this opportunity to express our profound gratitude and deep regardsto our guide Miss Kapuge for her exemplary guidance,Monitoring and constant encouragementthroughout the course of this report..
This report investigates the sales objectives and sales territory establishment of a selected organization. Though that we have selected the FMCG sector of Hemas Holdings PLC and gathered the support of Planning Department and Sales Manager Mr. Ramesh Baghavan to accomplish the task. In here, we discuss about how Hemas Holdings has analyzed market potential and their sales forecasting methods under the topic of sales objectives. Estimating of sales territories and deciding sales force size according to the territories will be discussed under the heading of Territory establishment.
Table of ContentsChapter 1 5Introduction51.1 Mission Statement5Chapter 26Deciding Market Potential62.1 AC Nielsen62.1.1 Market size by category volume62.1.2 Market size by share72.2 Lanka Market Research Bureau72.2.1 Socio Economic growth72.2.2 Gross Domestic Production72.2.3 Regional Habits8Chapter 39Sales forecasting9 3.1 The projection of Past Sales Method93.2 Time series analysis103.3 Survey of customer buying plan10Chapter 412Establishing Sales Territories124.1 Estimating sales territories124.1.1 Geographical basis124.1.2 Customer basis134.1.3 Combination basis14Chapter 515Deciding Sales territory size and Sales force size155.1 Deciding sales territory size155.2 Deciding sales force size155.2.1 Store Keeping Units (SKU) 16Reference17Chapter 1 INTRODUCTION
Hemas Holdings is a highly demanded company all over the world as it is a multi-production company. When talking about the history of this company it has been commenced operations in 1948. And now there are five major sectors with more than 20 subsidiaries that this company supplies its service. They are FMCG,Healthcare, Transportation, Leisure and Strategic Investments. Hemas Holdings firstly created by Sheikh HasannallyEsufally (MBE) as a pharmacy and trading company. After some decades it has been transformed to a largely spread firm with several recognizable brands including Baby Cheramy, Clogard. Kumarika, Diva, Godridge..etc.
1.1 Mission Statement
We are committed to delivering to our shareholders the best ever returns a listed company has given over the first seven years of listing. For our employees, we are committed to creating exciting new opportunities and a rising share of wealth. For our business partners, we will be a winner to grow with. To our customers, from all quarters, we will deliver excellence every time. We are a responsible corporate citizen close to the lives of the community. To the state, we are a future winner with the nation at heart.
Chapter 2DECIDING MARKET POTENTIALMarket potential is the entire size of the market for a product at a specific time. It represents the upper limits of the market for a product. Usually market potential is an estimate of the maximum possible sales opportunities present in a particular market segment and open to all sellers of a good service during a stated future period.When decide the market potential, Hemas Company look at AC Nielson data on the market. They report on the market size by category volume & shares. In addition to that Hemas company look at trends in market such as consumer behavior. This data are taken from Lanka Market Research Bureau (LMRB).2.1 AC Nielsen
When considering the FMCG category, they report on the market size by category volume and shares.
2.1.1 Market size by category volumeCategoriesSub categoriesHemas product
1. Personal care sectori. Baby and adult hair care ii. Skin care
iv. Oral carei. Baby heramy
ii. Goya, Paris
iii. Capri, Pro
2. Home care_Diva
3. Paper products_Nimex
4. Skin care_Cheramy touch
5. Personal wash_Velvet
In Sri Lanka there are about 250 000 outlets around the country. But Hemas consider only 80 000 outlets when calculating sales potential. They decide their sales potential under five categories. Thus when they determine market potential they measure the entire FMCG market sales value according to these five categories. Those categories are mentioned below. Table 2.1
2.1.2. Market size by shareIn addition to category volume AC Nielson determine the market potential by measuring market shares of FMCG market. They measure the market share by concerning the buying habits of the consumers and the market growth of the FMCG products.Ex: Hemas flagship brand Baby Cheramy continued to maintain its stance as the market leader in the baby care category Diva detergent continued to be market leader in terms of volume generated.
2.2 Lanka Market Research Bureau (LMRB)
LMRB provide the data about market trends such as consumer behavior. They focus on the goods, which are used by a household. Here market potential is determined by concerning market trends (consumer behaviour) They use some rates to decide consumer behavior. Those rates are discussed below.
2.2.1. Socio Economic Growth (SEG)They categorize SEG to two sub categories as SEG- 1 and SEG -2.SEG 1 denotes the group of the person who are in the high level of the society and SEG 2 denotes the group of the person who are in the low level of the society.
Ex:If we consider about toothpaste products of Hemas Company, SEG-1 category person use the Colgate toothpaste and SEG-2 category person use the Denta toothpaste.
2.2.2 Gross Domestic Production (GDP)
In the past, when consider about consumer behavior people mostly focused about their food items. But recently, as a new trend, people more aware about their cosmetics items than foods items.
Ex:When selecting their cosmetic items consumer tend to select best option among cosmetic items such as perfume, cream, shampoo etc. To illustrate that Hemas offer their cream under many categories such as baby cream, fairness cream, sun cream, body lotion. (Baby cheramy, Cheramy touch, Paris)
2.2.3. Regional habits
As the people consumption habits are different from one region to another region, they offer different products to different regions.
Ex: Hemas invested in Bangaladesh to manufacture the Kumarika oil. Thus, Kumarika oil is produced by considering their consumption habits.
Chapter 3SALES FORECASTINGBusinesses are forced to look well ahead in order to plan their investments, launch new products, and decide when to close or withdraw products and so on. For their success, organizations use various strategies. A good sales forecasting methodology also helps business run more efficiently. So Hemas Holdings company realize that Sales Forecasting is the process of estimating what their businesss sales are going to be in the future .Sales forecasting is an integral part of business management. Without a solid idea of what your future sales are going to be, you cant manage your inventory or your cash flow or plan for growth. The purpose of sales forecasting is to provide information that organization can use to make intelligent business decisions. Therefore Hemas Holdings Company used various sales forecasting methods for planning their sales for achieving their target profit. Because well managed companies do not rely upon a single sales forecasting method but use several. Company used following sales forecasting method for their sales planning. 3.1 The projection of past sales methodthe projection of sales past sales method of sales forecasting takes a variety of forms. The simplest is to set the sales forecast for the coming year at the same figure as the current years actual sales, or the forecast may be made by a set percentage to last years sales. In the following, you can see chart of the historical data of the Hemas Holding Company.Annual results2012201320142015 (e)2016 (e)
SalesMillionLKRReleasedForecastSpread21 41020 8942,5%26 09825 6671,7%32 83331 0535,7%33 47734 863
Operating income (EBITDA)MillionLKRReleasedForecastSpread3 1833 0833,3%3 793
Operating profit (EBIT)MillionLKRReleasedForecastSpread2 2763 3792 93915%3 5914 573
Pre-Tax Profit (EBT)MillionLKRReleasedForecastSpread2 4062 03118%3 0472 76610%2 3542 665
Net incomeMillionLKRReleasedForecastSpread1 6581 5526,8%2 4091 84531%1 8612 107
Annual PublicationHemas Holding PLCTable 3.1
This company used those data and they realized their business situation. After they compare the their present and past data according to the that Hemas Holding company forecast their future sales as well as in order to plan their investments, launch new products, decide when to close or withdraw products and so on.3.2 Time Series AnalysisHemas Holding PLC used Time Series Analysis for their sales forecasting. The time series analysis method, predicts the future sales by analyzing the historical relationship between sales and time. Properly forecasting sales helps you plan and prepare for the months and years ahead, allowing you to control costs and focus on successful growth strategies. A good sales forecasting methodology also helps your business run more efficiently so Hemas Holding Company used this for their short term operating sales fore