2. Goals of sales analysis:
To determine the attractiveness of a market and to
understand its evolving opportunities and threats as they
relate to the strengths and weaknesses of the firm.
3. MARKET ANALYSIS:
A market analysis studies the attractiveness and the dynamics
of a special market within a special industry. It is part of the
industry analysis and thus in turn of the global environmental
analysis. Through all of these analyses the strengths,
weaknesses, opportunities and threats (SWOT) of a company
can be identified. Finally, with the help of a SWOT analysis,
adequate business strategies of a company will be
defined. The market analysis is also known as a documented
investigation of a market that is used to inform a firm's
planning activities, particularly around decisions
of inventory,purchase, workforce expansion/contraction,
facility expansion, purchases of capital equipment,
promotional activities, and many other aspects of a company.
4. Dimensions of Market Analysis:
Market size (current and future)
Market growth rate
Market profitability
Industry cost structure
Distribution channel
Market trends
Key success factors
5. Distribution Channel
The following aspects of the distribution system are useful in a
market analysis:
Existing distribution channel:
can be described by how direct they are to the customer.
Trends and emerging channels:
new channels can offer the opportunity to develop a competitive advantage.
Channel power structure:
for example, in the case of a product having little brand equity, retailers have
negotiating power over manufacturers and can capture more margin.
6. SALES ANALYSIS:
Sales analysis examines sales reports to see what goods
and services have and have not sold well. The analysis is
used to determine how to stock inventory, how to
measure the effectiveness of a sales force, how to set
manufacturing capacity and to see how the company is
performing against its goals.
7. Usually a sales analysis will compare one time period to
a comparable period in the past. For example, clothing
retailers might want to examine how their back-to-school
sales did compared with last year. They might
take a look at this year's sales from Aug. 1 through
Labor Day and then compare those numbers to the same
period a year ago. Other companies look at month-over-month
sales, or sales this month compared with the
same month last year, or some other time period,
depending on the nature of the business. Break-even
analysis shows a company what minimum level of sales
is needed to make sure it does not lose money. It also
shows how sensitive the break-even point is to changes
in both fixed and variable expenses
8. WHY IT IS IMPORTANT?
Analysing your sales over several years enables you to
establish sales patterns. This will assist you in setting
your sales budgets in the future. It is especially
important to include the analysis when you are
developing your marketing plan each year. Your sales
analysis will also help you identify where your strengths
lie within your product or service range.
activities can then be allocated accordingly to support
the products or services that represent the greatest
opportunity for future profitable growth.
9. For example: if one product or service represents the
majority of your sales you may need to allocate enough
marketing and sales support to continually protect it from
your competition.
10. TIPS:
When analysing your sales performance consider the
following:
Pricing changes e.g.. price increases or discounting.
Competitors – competitors entering or exiting the
market.
New product or service launch growing sales.
New product or service cannibalizing existing product
or service sales.
Customers moving between products or services.
11. Changes in customer demand e.g.. increasing or decreasing.
The segments and distribution channels you operate in
