Sales Planning & Forecasting

7/27/2019 Sales Planning & Forecasting

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SalesPlanning&Forecasting

Session

2

Sanjeev Varshney


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StrategicPlanningProcess

1. Define the business mission

2. Conduct a situation audit:

Market attractiveness analysisCompetitor analysisSelf-analysis

3. Identify strategic opportunities

5. Establish specific objectives and allocate resources

7. Evaluate performance and make adjustments

6. Develop a channel mix to implement strategy

4. Evaluate strategic alternatives


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MarketAnalysis

0

50

100

1 s t Q t r 2 n d Q t r 3 r d Q t r 4 t h Q t r

MARKET

FACTORS

COMPETITIVE

FACTORS

ENVIRONMENTAL

FACTORS

ANALYSIS OF

STRENGTHS &

WEAKNESSES

Barriers to entry

Bargaining power of

vendors

Competitive rivalry

Threat of superior

new formats

Technology

Economic

Regulatory

Social

Size

Growth

Seasonality

Business cycles

Management

capabilities

Financial resources

Locations

OperationsMerchandise

Store Management

Customer loyalty


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Decisionsfor

Channel

Strategy

TargetAudience

ChannelDesign

SustainableCompetitiveAdvantage


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MarketPotential

Vs Sales

Potential

Sales

Potential

Market

Potential

Universe


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EstimatingMarket

&

Sales

Potential

Customeranalysisisthestartingpoint

Whobuys

the

product

Whousestheproduct

Whatistheprofile(demographics,lifestyleetc.)

Whatarethebuyinghabits

IdentifytheMarketFactor

Surveyof

Buyer

Intention

Testmarkets


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ProductPossessionAnalysis/LifeStyle

analysis

Thiswillhelpyouinidentifyingpossible

marketsegments

in

absence

of

psychological

andbehavioraldata

Better

than

demographic

profiling Becomesabasisto dobetterdemand

planningandrunmarketingcampaignsand

launchschemes


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MarketFactor

Index

Example:

BuyingPower

Index

=(5I+2P+3R)/10

I:PercentageofDisposablepersonal

incomein

the

area

P:PercentageofUSpopulationinthearea

R:PercentageofUSretailsalesinthearea


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89

IndicesforAssessingSalesPotential

MarketPotentialIndex(MPI)

NumberofHouseholdsPurchasingaProductor

ServiceinaTradeArea

SpendingPotential

Index

(SPI)

AverageAmountSpentonaProductorService

byaHouseholdinaTradeArea


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BBDOMarket

MPV

Index

&

MII

Provides3indices:

MarketPotentialValue(MPV) Thisisameasureofaggregatepotential.

MarketIntensityIndex(MII) Thisisameasureofthequalityand

affluenceof

the

consumers

and

markets.

MediaExposureIndex(MEI) ThisisameasureofMassMediaavailabilitybyindividualmassmedia.

Datafor515districtsacross21statesand3unionterritories.Thesedistrictsareacombinationofbothurban(towns)andruralareas(villages).

Providesan

aggregateprosperitylevel,

measuresthequalityofthemarket

Itprovidesinsightsintomarkets

Ataggregate

level

Inpercapitaterms


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InformationYoucanGet


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EstimatingMarket

Potential:

Exercise

Inyourgroupsdiscussandcomeoutwith

method/sto

go

about

estimating

market

potentialforfollowingproducts:

ACs(window/split)inKolkata

Menformalandcasualwearinmidendcategory

(Rs.800Rs1500).


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Whatisthelinkbetween:

Workingmen

who

buy

Allen

Solly

shirts

also

buy

Barbiedolls

Menwhobuypremiumwhiskycanbeoffered:

Hotwheel

cars

as

gifts

13

ProductBasket

Analysis


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14

ClusteringExercise

Jim Tim Ram Shyam Seema

Goodday TigerBiscuit Tiger Biscuit Goodday Goodday

Kissan Jam Kissan Jam Kissan jam

Britannia

cheese

Britannia

cheese

Brownbread Whitebig

bread

White bread Brown bread Whitebread

smallpack

Diet Coke Coke DietCoke Coke

Lowfat

Margarine

Amul butter

familypack

Amul Butter Low fat

margarine

Amul butter

TropicanaMixedfruit

juice

Tropicanaorangejuice

Tropicanajuice

Tropicana

juice


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PatternGeneration

MarketPatterns

Category

patterns SeasonalPatterns

Discountpurchasepatterns

IndividualConsumerpatterns(trends,ProductBasketanalysis,Bill

Valueanalysis

etc.)

Whataretheybuying?

Whenaretheybuying?

Whoarethey?

Whereare

they

buying

from?

Whatelsearetheybuying?

SegmentationisdoneusingthispatternsandthenSalesprogramssuggested.


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Modelfor

Demand

Planning

CRMData

analysis(PBA)Lifestyleanalysis

Classifytheminto

categoriesfor

different

treatment forstocking

&supplychain

Lookforcurrentandfuture

patterns

Identifywhatsells

andwhatdoesnot

Identify

consumer

patterns

IdentifyLifestyle

patterns

Carryout

Market

Analysisand

establishSegment

strength

EstablishConsumerDemandfor

eachand

divide

them

between

regionsEstablish

Consumer

Demandforeachsegment


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SalesForecast

AtCorporatelevel

RegionalLevel

Territorylevel


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DevelopingSales

Forecast

TypesofsalesForecast

Productlevel

TimePeriod

Geographicarea

Channelwise

Accountwise

Matrixforecasts


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SalesForecasting

Methods

ExecutiveOpinion

Delphi

Salesforcecompositemethod

Surveyofbuyersintentionmethod

Testmarketingmethod

Movingaverage

Exponentialsmoothening

Decompositionmethod

Regressionanalysis

Econometric

analysis


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FactorsInfluencing

the

sales

Forecast

Marketingplans

Conditionswithin

the

Industry

MarketConditions

GeneralBusiness

Conditions


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Developsales

Budget

PercentageofSalesMethod

Objective&

Task

Method


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TheSales

Budget

TheSellingExpenseBudget

TheAdministrative

Budget


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StrategicPlanning

StrategicPlanningfortheTotalCompany

StrategicMarketing

Planning

SalesForceStrategy


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ExampleCompanyObjective Marketing Goal SalesForceGoal

Increasemarketshare

from8%to20%in

twoyears

Intensifymarketeffortsin

domesticmarketsto

increasesalesvolumeby

300 crore nextyear

a. Enternewgeographic

marketsandselltonew

customers

b. Cover existinggeographic

markets moreaggressively

MarketingStrategy

(Sales ForceGoal)Sales

force

strategySales

Force

Tactics

EnterNewmarkets Buildlongterm,

customer

relations

1. Stressmissionarysellinginsales

trainingandsupervision

2. Stresssalary elementin

compensationplan

Sellaggressivelyin

existingmarkets

Increasesales

force

motivation

1. Conduct moresalescontests

2. Stresscommissionfeatureinpay

plan

3. Increasefield

supervision


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Assignment1

InyourgroupscarryoutSalesForceplanningfor

thefollowing

problems:

1. Akzonobel (Dulux Paints)wantstoincreaseits

marketsharefrom8%to12%in2yearstime

2. Cocacola

India

wants

to

increase

its

overall

revenueby12%

3. Madura

fashion

&

Lifestyle

wants

to

become

a

6500crore companyfromcurrent2600crore

companyby2015.


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Mycontact

[email protected]

Sales Planning & Forecasting

Documents

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