sfm chapter 5 slides
TRANSCRIPT
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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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