SALES MANAGEMENT

Module-2 Build-up method In this method, the basic territories are set up by building up from the control units. The objective to be achieved is to equalize workload of sales people. The procedure fallowed is given below. 1. Decide call frequencies. It means how many times a customer should be visited by the companys salesperson per year. The factors that influence call frequency are the customers sales/profits potential, cost of visiting the customers, buying behaviour of the customer, and the nature of the product and service offered. 2. Calculate the total number of calls in each control unit. Total number of calls in Each control unit Call frequency per month Number of customers 12 Months

3. Estimate workload capacity of a sales person. Sales persons Normal workload Capacity Average number of calls made by salesperson in a working day Total number of working days

4. Make tentative territories. Company should group adjoining control units until yearly number of sales calls needed in those control units equals the total number of calls a salesperson can make. 5. Develop final territories. In cases where workloads of salespersons are not equalized, adjustments of tentative territories are made by adding or removing certain control units. Breakdown method It follows an intensive distribution strategy, for selling consumer products. It has an objective to equalize the sales potential of territories. 1. Estimate the company sales potential for total market. The first step in the procedure is to estimate the company sales potential (or company sales forecast) for its total market by using the sales forecasting methods.

[Mahesh Gowda S, ASST.PROF, DEPT OF MBA, RNSIT, Bangalore]

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SALES MANAGEMENT
2. Forecast sales potential of each control unit. Sales potential of Each control unit Total sales potential of the company Multiple factor buying index of each control unit

3. Estimate sales volume expected from each sales person. Here the sales manager must estimate how much each sales person should sell, in order to ensure profitable operation. For this, the sales manager studies the past sales as well as the cost and profitability analysis. 4. Make tentative sales territories. Company should group adjoining control units until the sales potential of each territory is equal to or greater than the expected sales volume from each sales person. 5. Develop final territories. Tentative territories need to be adjusted due to the special consideration such as geographical location of customer or unequal sales potential of some territories. Calculation of Multi factor index: -First identify factors that influence sales of a product. -There are many factors like population and income that influence sales. -These factors are given certain weights, corresponding to the degree of sales opportunity. Example: Detergent soaps Factors => population (0.4), personal income (0.3), and retail sales (0.3). Suppose if you calculate the MFI of Bangalore = 0.7% of Indian population, 1% of Indian disposable income, & 0.9 % of Indias retail sales. = 0.4 * 0.7 + 0.3 * 1.0 + 0.3 * 0.9 = 0.85. Based on Indian detergent industry forecast of Rs 55000 million for some year, the market potential of Bangalore would be, 0.85% of Rs 55000 million and that accounts to Rs 467 million.

[Mahesh Gowda S, ASST.PROF, DEPT OF MBA, RNSIT, Bangalore]

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