1. The Strategic Role of
Information in Sales
Management
Sales & Distribution
Management
Marketing 3345

2. Information Drives Management
Decision Making and Planning
 Sales forecasts
 Territory estimates
 Quotas
 Sales force size
 Sales territory design

3. Market Opportunity Analysis
 Market potential –estimate of possible sales of
a commodity, a group of commodities, or a
service for an entire industry in a market during
a stated period under ideal conditions
 Sales potential – the portion of the market
potential that the firm can expect to reasonably
achieve
 Sales forecast – an estimate of the dollar or unit
sales for a specified future period
 Sales quotas – sales goals assigned to a
marketing unit for use in managing sales efforts

5. Sales forecasts
Sales budget
Production budget
Sales and
Revenue budget administrative
Direct labor materials expense budget
and overhead budgets
Cost of goods sold budget
Budgeted profit and loss
statement
Impact of Sales Forecasts on Budgeting

6. Utilization of Sales Forecasting Methods of 134 Firms
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
Naïve 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
S&MM, February 2006

7. Choosing a Forecasting Method
 Which forecasting method should be used and
how accurate is the forecast likely to be?
 In general, the various forecast comparisons
suggest that no method remains superior under
all conditions.
 Good forecasters apply multiple forecasting
methods to the problem
 Scenario planning prepares a series of “what-if”
questions and produces possible outcomes

8. 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

9. 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-digit
number
 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

10. 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

11. Characteristics of a Good Quota
 Attainable
 Easy to understand
 Complete
 Timely

12. Determining Sales Force Size
 Salespeople are among the most
productive assets of a company, and they
are also among the most expensive!
 How can an optimal sales force be
established?
 Breakdown method:
Sales Volume
Number of sales
personnel needed =
Productivity

13. Determining Sales Force Size
 Workload method uses the buildup
method to estimate the work required to
serve the entire market
 Incremental method suggests that sales
representatives should be added as long
as the incremental profit produce by their
addition exceeds the incremental cost

15. Territory design – “The Build Up Approach”