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Objectives
• Sales vs marketing strategies
• The planning process
Lecture 2:
• Objectives, strategies and tactics
Sales Planning
• Sales forecasting in the marketing planning
system
• Qualitative and quantitative forecasting
techniques
• Sales budget in the smooth running of an
organisation

The sales planning process Establishing marketing plans

MOST: Mission, Objective, Strategy, Tactics

Hierarchy of the marketing plan

Strategic possibilities using

A SWOT matrix for Boots
SWOT analysis

• Use existing strong, well-established brands to raise production levels through

automation to market to other European countries (S1, S2, W1, W2, O2, T2).
• Raise the basic price (S4, W3, O1, T1, T2).

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Strategic possibilities using Porter’s Strategic possibilities using Miles

Typology and Snow’s Typology
• Cost leadership • Prospector
– Servicing large current customers, pursuing large prospects, – Primary focus is on sales volume growth. Territory
minimizing costs, selling on the basis of price, and usually
assuming significant order-taking responsibilities. management emphasizes customer penetration and
prospecting
• Differentiation
– Selling nonprice benefits, generating orders, providing high- • Defender
quality customer service and responsiveness, a possibly – Maintain the current customer base. Very little
significant amount of prospecting if a high-growth industry,
selecting customers based on low price-sensitivity. Usually
prospecting for new customers is involved. Customer
requires a high-quality sales force. service is emphasized along with greater account
• Focused penetration
– Becoming experts in the operations and opportunities associated • Analyser
with the target market. Focusing customer attention on nonprice – Must balance multiple roles
benefits and allocating selling time to the target market.
William L. Cron and Michael Levy, “Sales Management Performance Evaluation: A Residual William L. Cron and Michael Levy, “Sales Management Performance Evaluation: A Residual
Income Perspective,” Journal of Personal Selling & Sales Management 7 (August 1987), pp. 57–66. Income Perspective,” Journal of Personal Selling & Sales Management 7 (August 1987), pp. 57–66.

The place of selling in the

Objective Criteria
marketing plan
• Ensure objectives focus on results
• Establish measures against objectives
• Where possible have a single theme for each
objective
• Ensure resources are realistic
• Ensure marketing objectives are integral to
corporate objectives

An overview of the marketing planning process

Contribution of the sales function Inside-out planning model

1. Analysis of current market situation (marketing
audit);
2. Determining sales potential/sales forecasting;
3. Generating and selecting strategies;
4. Budgeting, implementation and control.

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Outside-in planning model Promotional mix decision

• Type of market
• Stage in the buying process
• Push versus pull strategies
• Stage in the product life-cycle

Advertising versus
Stages in the buying process
Personal Selling

The relationship between

Forecasting
objectives, strategies and tactics
• Short-term forecasts
– for tactical matters such as production planning
• Medium-term forecasts
– Most importance in the area of business budgeting
• Long-term forecasts
– for long-term resource implications such as the
construction of a new factory and the training of a
workforce

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A conceptually based model of Market potential, sales potential,

judgemental forecasting and sales forecasting process

Source: Hogarth, R. (1975) Cognitive processes and the assessment of subjective probability distributions, Journal of the American Statistical Association, 70(350):271–89.

Qualitative forecasting techniques User expectations

• Consumer/user survey method Advantages Disadvantages
• Panels of executive opinion
• Salesforce composite
• Delphi method
• Bayesian decision theory
• Product testing and test marketing

Sales force composite Jury of executive opinion

Advantages Disadvantages Advantages Disadvantages

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Delphi technique Quantitative forecasting techniques

Advantages Disadvantages • Time series analysis • Causal techniques
– Moving averages – Leading indicators
– Exponential – Simulation
smoothing – Diffusion models
– Time series analysis
– Z charts

Time-series analysis Moving averages

Advantages Disadvantages

Office Goods Supplies Ltd: Annual sales of briefcases, moving average

Moving averages Exponential smoothing

Office Goods Supplies Ltd: annual sales of briefcases, moving average Office Goods Supplies Ltd: annual sales of briefcases, exponential smoothing
(weighting shown in brackets)

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Time series analysis Time series analysis

Office Goods Supplies Ltd: sum of quarterly deviations from trend

Office Goods Supplies Ltd: quarterly sales of briefcases

Time series analysis Time series analysis

Office Goods Supplies Ltd: forecasted trend figures and deviations from trend that
have been applied Office Goods Supplies Ltd: quarterly sales of briefcases and one-year forecast

Z (or zee) charts Z (or zee) charts

Office Goods Supplies Ltd: monthly sales of briefcases 2013–14 Office Goods Supplies Ltd: monthly sales of briefcases, Z chart for 2014

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Statistical Demand Analysis Budgeting method

Advantages Disadvantages • A percentage of last year’s sales
• Parity with competitors
• The affordable method
• The objective and task method
• The return on investment method
• The incremental method

The budgetary process