PowerPoint Presentation On Planning, Sales Forecasting, and Budgeting

PPT On Planning, Sales Forecasting, and Budgeting

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1. Planning, Sales Forecasting, and Budgeting

2. Learning Objectives
To understand strategic planning, its linkage to strategic marketing and marketing management
To know how sales strategy is developed from marketing strategy
To learn basic terms used in forecasting, forecasting approaches, and methods of sales forecasting
To understand purposes and the process of sales budget

3. Strategic Planning
Planning is deciding now what, how, and when we are going to do
Strategic planning is deciding about the organisation’s long-term objectives and strategies
In a large organisation, planning is done at three or four organisational levels, as shown in the figure (in the next slide)

4. Planning In A Large Organisation
For effective planning, operations, and control, a large multi-product / multi-business firm divides its major products / services into divisions / strategic business units ( SBUs)
Each SBU has a separate business, a set of competitors and customers, and a manager responsible for strategic planning, performance, and control ( Ex. TATA, Reliance)

5. Components of Sales Strategy
Classifying market segments and individual customers within a target segment
Each firm should first decide on target market segments and if possible, to classify customers into high, medium, low sales & profit potentials
Sales strategy is developed accordingly
Relationship strategy
Whether a selling firm should use transactional, value-added, or collaborative relationship depends on both the seller and the customer
Each selling firm to decide which segments and individual customers respond profitably to collaborative relationship

6. Components of Sales Strategy (Continued)
Selling Methods
These are: (1) Stimulus response, (2) formula, (3) need-satisfaction, (4) team selling, (5) consultative
Selection of appropriate selling method depends on relationship strategy
Channel Strategy
There are many sales / marketing channels. For example: company salesforce, distributors, franchisees, agents, the internet, brokers, discount stores
Selection of a suitable channel depends on both the buyer and the seller, products / services, and markets

7. Basic Terms Used in Sales Forecasting
Market demand for a product or service is the estimated total sales volume in a market (or industry) for a specific time period in a defined marketing environment, under a defined marketing program or expenditure. Market demand is a function associated with varying levels of industry marketing expenditure.
Market (or industry) forecast (or market size) is the expected market (or industry) demand at one level of industry marketing expenditure

8. Basic Terms (Continued)
Market potential is the maximum market (or industry) demand, resulting from a very high level of industry marketing expenditure, where further increases in expenditure would have little effect on increase in demand
Company demand is the company’s estimated share of market demand for a product or service at alternative levels of the company marketing efforts (or expenditures) in a specific time period

9. Basic Terms (Continued)
Company sales potential is the maximum estimated company sales of a product or service, based on maximum share (or percentage) of market potential expected by the company
Company sales forecast is the estimated company sales of a product or service, based on a chosen (or proposed) marketing expenditure plan, for a specific time period, in a assumed marketing environment
Sales budget is the estimate of expected sales volume in units or revenues from the company’s products and services, and the selling expenses. It is set slightly lower than the company sales forecast, to avoid excessive risks

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