amandeep kaur

8/7/2019 amandeep kaur

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Sales ControlSales Control

Sales control requires the establishment of standards, the evaluationSales control requires the establishment of standards, the evaluation

of actual performance and the correction of deviation inof actual performance and the correction of deviation in

performance. Sales control implies not only managerial actionperformance. Sales control implies not only managerial action

with regard to actual sales, but it also embraces all other marketingwith regard to actual sales, but it also embraces all other marketing

function required for the even flow of products or services formfunction required for the even flow of products or services form

producers to consumers.producers to consumers.


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Objectives of Sales ControlObjectives of Sales Control

Performance Management:Performance Management: the first step in sales control isthe first step in sales control is

measuring the performance of the sales force.measuring the performance of the sales force.

Problem Identification:Problem Identification: sales control help managers to identifysales control help managers to identifyproblems in sales before they become liabilities to the firm.problems in sales before they become liabilities to the firm.

Identifying Opportunities:Identifying Opportunities: identifying sales opportunitiesidentifying sales opportunities

before the competitors o an thus helping the firm gain abefore the competitors o an thus helping the firm gain acompetitive advantage.competitive advantage.


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Sales Control ProcessSales Control Process

Setting GoalsSetting Goals::

Sales Manager design the courses of action by which the sales forceSales Manager design the courses of action by which the sales force

can achieve the goals set.can achieve the goals set.

Comparing Actual with TargetsComparing Actual with Targets::

the next step in sales control process comparing the actual with thethe next step in sales control process comparing the actual with the

set goals.set goals.

Taking Necessary MeasuresTaking Necessary Measures::

once the causes for the gaps between the actual and the budgetedonce the causes for the gaps between the actual and the budgeted

values are established, there is a need to take corrective action.values are established, there is a need to take corrective action.


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Sales Control MethodsSales Control Methods

1.1. Sales AnalysisSales Analysis

2.2. Marketing Cost AnalysisMarketing Cost Analysis

3.3. Sales AuditSales Audit


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Sales AnalysisSales Analysis

It is the detailed examination of a companys sales data and involvesIt is the detailed examination of a companys sales data and involves

assimilating, classifying, comparing and drawing conclusions.assimilating, classifying, comparing and drawing conclusions.

Managers use sales analysis to evaluate current performance forManagers use sales analysis to evaluate current performance for

future planning, and to direct the sales effort.future planning, and to direct the sales effort.


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Elements of Sales AnalysisElements of Sales Analysis

Purpose of EvaluationPurpose of Evaluation::

a sales manager should decide on the purpose of the evaluation before startinga sales manager should decide on the purpose of the evaluation before starting

the analysis.the analysis.

Comparison StandardsComparison Standards::

a simple sales analysis simply states facts whereas a comparative sales analysisa simple sales analysis simply states facts whereas a comparative sales analysiscompares the sales figures with some standards.compares the sales figures with some standards.

Reporting and Control SystemReporting and Control System::

most companies use sales information systems to store and process data tomost companies use sales information systems to store and process data to

generate reports. A sales information system uses mathematical and statisticalgenerate reports. A sales information system uses mathematical and statistical

procedures to generate reports that depict trends, seasonal patterns, regressionprocedures to generate reports that depict trends, seasonal patterns, regressionanalysis, etc.analysis, etc.

Hierarchical Sales AnalysisHierarchical Sales Analysis::

it involves studying the sales performance at a micro level by investigating andit involves studying the sales performance at a micro level by investigating and

analyzing its components.analyzing its components.


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Steps in Sales AnalysisSteps in Sales Analysis

Determining the Sources ofSales InformationDetermining the Sources ofSales Information: there are many sources of: there are many sources of

sales information that includes data from marketing information system,sales information that includes data from marketing information system,

company records, customers, sales personnel, field visits, and insights of thecompany records, customers, sales personnel, field visits, and insights of the

manger as well as external sources such as newspaper and magazine reports,manger as well as external sources such as newspaper and magazine reports,

trade journals, etc.trade journals, etc. Collections ofSales DataCollections ofSales Data: the sales data is collected from sales invoices,: the sales data is collected from sales invoices,

historical records of sales volume, customer complaints, bills of sale, cashhistorical records of sales volume, customer complaints, bills of sale, cash

registers, etc.registers, etc.

Processing ofSales Data:Processing ofSales Data: most firms use an information system to capture,most firms use an information system to capture,

store and process the sales data.store and process the sales data. Studying the ResultsStudying the Results: The result of sales analysis should be carefully studied: The result of sales analysis should be carefully studied

to identify the facts and acquire a lead for further analysis.to identify the facts and acquire a lead for further analysis.


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Marketing Cost AnalysisMarketing Cost Analysis

It is the analysis of costs that affects sales volume with the purposeIt is the analysis of costs that affects sales volume with the purpose

of determining the profitability of different segment operations. it isof determining the profitability of different segment operations. it is

a managerial tool designed more for use in the planning and controla managerial tool designed more for use in the planning and control

of a firms future operations.of a firms future operations. Profitability is determined by sales

volume and its associated costs and expenses.


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Types of Marketing cost AnalysisTypes of Marketing cost Analysis

1.1. As they appear in the ledger accounts and on the income andAs they appear in the ledger accounts and on the income and

expense statement. (Analysis of Ledger Expenses)expense statement. (Analysis of Ledger Expenses)

2.2. After they are grouped into functional categories. (Analysis ofAfter they are grouped into functional categories. (Analysis ofActivityExpenses)ActivityExpenses)

3.3. After they have been allocated to territories, products, orAfter they have been allocated to territories, products, or

other marketing units. (Analysis of Activity Costs by Marketother marketing units. (Analysis of Activity Costs by MarketSegments)Segments)


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Techniques of Marketing Cost AnalysisTechniques of Marketing Cost Analysis

1)1) Classifying Selling ExpensesClassifying Selling Expenses: it requires the classification of: it requires the classification of

selling expenses as either separable direct) or commonselling expenses as either separable direct) or common

(indirect). A separable expenses is one traceable to individual(indirect). A separable expenses is one traceable to individual

sales personnel, sales territories, customers, marketingsales personnel, sales territories, customers, marketing

channels products, or the like. A common expense is one thatchannels products, or the like. A common expense is one that

is not traceable to specific sales personnel, sales territories,is not traceable to specific sales personnel, sales territories,

customers, marketing channels, products or the like.customers, marketing channels, products or the like.

2)2) Converting Accounting Expense Data to ActivityConverting Accounting Expense Data to Activity

Expense GroupsExpense Groups:In this, accounting expense data are:In this, accounting expense data areconverted into activity expense groups, e.g., all the expensesconverted into activity expense groups, e.g., all the expenses

related to field sales operations are grouped together (includingrelated to field sales operations are grouped together (including

sales salaries, sales commissions, sales travel expense, andsales salaries, sales commissions, sales travel expense, and

branch sales office rent) to determine total expense for thisbranch sales office rent) to determine total expense for this

activity.activity.


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Techniques of Marketing Cost AnalysisTechniques of Marketing Cost Analysis

3)3) Bases for Allocating Common ExpensesBases for Allocating Common Expenses: allocation bases: allocation bases

are factors that measure variability in the activities for whichare factors that measure variability in the activities for which

specific expenses are incurred.specific expenses are incurred.

4)4) Contribution MarginContribution Margin:contribution margin= net sales:contribution margin= net sales--cost ofcost of

goods soldgoods sold--(separable expenses + common expenses(separable expenses + common expenses

allocatable on logical bases).allocatable on logical bases).


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Sales AuditSales Audit

It is a systematic, critical, and unbiased review andIt is a systematic, critical, and unbiased review and

appraisal of the basic objectives and policies of the sellingappraisal of the basic objectives and policies of the selling

function and of the organization, methods, procedures,function and of the organization, methods, procedures,

and personnel employed to implement those policies andand personnel employed to implement those policies and

achieve those objectives.achieve those objectives.


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five main aspects of selling operations:five main aspects of selling operations:

1)1) ObjectivesObjectives: each selling input should have clearly stated: each selling input should have clearly statedobjectives, related to desired outputs. For example, a firmobjectives, related to desired outputs. For example, a firmmight have the objective of raising its market share from 15 tomight have the objective of raising its market share from 15 to

20 percent without reducing per unit profit.20 percent without reducing per unit profit.

2)2) Policies:Policies: Every organization follows certain policies. at theEvery organization follows certain policies. at thetime of auditing, the practical use of these policies can betime of auditing, the practical use of these policies can bechecked.checked.

3)3)

OrganizationOrganization:

Auditing may be directed to check:

Auditing may be directed to checkconcentration of authority or decentralization, number ofconcentration of authority or decentralization, number ofemployees in relation to the number of branch offices andemployees in relation to the number of branch offices andother organizational functions.other organizational functions.


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4)4) Procedures:Procedures: the procedures should allocatethe procedures should allocate

responsibility for implementation to particularresponsibility for implementation to particular

individuals and explain how the goals are to beindividuals and explain how the goals are to be

achieved.achieved.5)5) PersonnelPersonnel: Authority, responsibility and objectives of: Authority, responsibility and objectives of

every employee are defined by the organization. onevery employee are defined by the organization. on

the basis of the actual performance, their evaluationthe basis of the actual performance, their evaluation

can be made possible.can be made possible.


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