sfm chapter 5 slides

8/13/2019 SFM Chapter 5 Slides

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The Strategic Role of

Information in SalesManagement

Sales & Distribution

Management

Marketing 3345


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Information Drives Management

Decision Making and Planning

Sales forecasts

Territory estimates

Quotas

Sales force size

Sales territory design


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Market Opportunity Analysis

Market potentialestimate of possible sales ofa commodity, a group of commodities, or aservice for an entire industry in a market duringa stated period under ideal conditions

Sales potentialthe portion of the marketpotential that the firm can expect to reasonablyachieve

Sales forecastan estimate of the dollar or unit

sales for a specified future period Sales quotassales goals assigned to a

marketing unit for use in managing sales efforts


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Sales budget

Production budget

Direct labor materials

and overhead budgets

Cost of goods sold budget

Budgeted profit and loss

statement

Sales and

administrative

expense budget

Revenue budget

Sales forecasts

Impact of Sales Forecasts on Budgeting


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Percentage

Percentage of of Firms Percentage of

Firms that That Use Firms No

Methods Use Regularly Occasionally Longer Used

Subjective

Sales force composite 44.8% 17.2% 13.4%

Jury of executive opinion 37.3 22.4 8.2

Intention to buy survey 16.4 10.4 18.7

Extrapolation

Nave 30.6 20.1 9.0

Moving Average 20.9 10.4 15.7

Percent rate of change 19.4 13.4 14.2

Leading indicators 18.7 17.2 11.2

Unit rate of change 15.7 9.7 18.7

Exponential smoothing 11.2 11.9 19.4

Line extension 6.0 13.4 20.9

Quantitative

Multiple regressing 12.7 9.0 20.9

Econometric 11.9 9.0 19.4

Simple regression 6.0 13.4 20.1

Box-Jenkins 3.7 5.2 26.9

Utilization of Sales Forecasting Methods of 134 Firms

S&MM, February 2008


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Choosing a Forecasting Method

Which forecasting method should be used andhow accurate is the forecast likely to be?

In general, the various forecast comparisons

suggest that no method remains superior underall conditions.

Good forecasters apply multiple forecastingmethods to the problem

Scenario planning prepares a series of what-ifquestions and produces possible outcomes


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Developing Territory Estimates

Territory estimates effect:

The design of sales territories

Procedures for identifying potential customers

The establishment of sales quotas

Compensation and its subcomponents

The evaluation of salesperson performance


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Planning Tools

North American Industry Classification System(NAICS) Developed by the US Bureau of the Census,

organizes the reporting of business information

Each industry in the US is assigned a two-digitnumber

Buying Power Index (BPI) Generated and published by Sales Marketing

Management Magazine, considers income,population and retail sales

Most useful with low-priced convenience goods


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Sales Quotas

Goals assigned to salespeople

Apply to specific periods and may be expressed

in dollars or physical units

Tool for sales managers planning and

controlling field selling activities and results

Benchmark for evaluating sales effectiveness

Motivate sales people


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Characteristics of a Good Quota

Attainable

Easy to understand

Complete Timely


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Types of Quotas

Sales based quotas

Sales activities quotas

Financially based quotas


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Determining Sales Force Size

Salespeople are among the mostproductive assets of a company, and theyare also among the most expensive!

How can an optimal sales force beestablished?

Breakdown method:

Number of sales

personnel needed =Sales Volume

Productivity


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Determining Sales Force Size

Workload methoduses the buildup

method to estimate the work required to

serve the entire market

Incremental methodsuggests that sales

representatives should be added as long

as the incremental profit produce by their

addition exceeds the incremental cost


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Territory designThe Build Up Approach


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sfm chapter 5 slides

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