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In the previous unit, we have understood about the sales force monitoring and performance evaluation. We have also looked at the advantages of team work and steps in creating better team working skills. In this unit we shall understand about planning the sales and the sales team. The objective of planning the sales and the team is to carry out the sales process in an easy, accurate and profitable manner for the organization. Sales planning should ensure that the resources are used to the maximum capacity such as the sales representatives, CRM systems like office automation tools, IVR, analytics etc. for the benefit of the organization. Sales planning activity should be able to take care of all the present customers needs and also work for generating leads from them in future.

In this unit we shall understand about various elements of sales planning. Sales plan starts with sales objectives which are to be  attained at the end of  sales planning process. Forecasting plays an important role in laying down the objectives for the sales team that are attainable within the given time period. Sales policies, procedure and rules help the sales representatives to handle day to day situations in sales. Sales programme provides the necessary training needs to develop the required skill set to make the sales. We shall also learn about the various types of sales plans depending upon market, selling functions, customers, products and time period.

Sales planning process varies for B2B and B2C markets and hence in this unit we shall understand various activities that the sales plan has to perform to manage the sales in these markets. Handling distribution channels, warehouse, retail stores and price changes are very important to ensure sales in a profitable manner. We shall discuss about various issues that needs to be planned and executed properly and monitored at regular intervals in B2B and B2C markets.


After studying this unit you will be able to :

1)  Explain the objectives of the sales planning process

2)  Understand  the  importance  of  forecasting  in  objective  setting  in  the  sales planning process

3)  Explain  the  role  of  policies,  programme,  rules  and  procedure  in  the  sales planning process.

4)  Identify the role of a sales plan for B2B and B2C markets and explain the need for handling warehouse, retail, distribution channels, and price changes to make sales in a profitable manner.

5)  Explain the importance of sales strategy in winning the market place in all times

6)  Explain the various types of sales plans

Sales planning

Sales  planning process  includes a  set  of  activities  that  needs  to  be  performed  to achieve the goals or objectives of the sales force. It is the duty of the sales manager to create a plan that is well documented and which ensures proper management of logistics, finance, manpower, inventories and purchases. Sales planning document is the single most important document which ensures a proper direction on how to handle the sales functions. Let us now understand the various elements and types of sales planning as described by Mukesh (2006) in the following section.

A- Elements of sales planning

The main elements of sales planning include the following:

a) Selling objectives

This includes the list of objectives that need to be attained after the completion of the sales planning process. The objectives should be realistic and attainable. For example, if the sales representative is selling insurance products to the customer, a target of 20 to 30 insurance product sales per month is mostly an achievable or realistic target. If the sales planning document sets the objective as 100 insurance products, then it might not be achievable most of the times by many sales representatives. Hence the objectives must be achievable and be completed in time.

The objectives may be short term or long term in nature. Short term objection include those that have to be achieved in a quarter or a year and long term may include several years. Some examples of short term objectives include improve the sales figure by 15% as compared to the previous year. Long-term objectives may be to establish the company presence in new countries or continents in the next 2-3 years.

Another important objective is to maintain a contact with all the key customers on a weekly or monthly or quarterly basis. Since we have already discussed that attaining a new customer would be costlier than trying to retain the existing customer, it is very important to contact the customer and take his/her feedback or problems on a regular basis. The time period of contact may vary from company to company and from sale to sale.

Once the objectives are created it‟s time to look at the overall sales policy.

b) Sales Policies

Sales policies provide the guidelines to the sales staff to help them in performing the sales activities. Policies help the sales representatives in achieving their targets. For example, when a sale gets returned by the customer, the refund policy will guide the sales representatives how to deal with the situation effectively, so that the customer will be handled with care rather than getting into an argument. The sales policies also help in clearly identifying the right pricing for the customer depending upon the relationship the customer shares with the company. For example, if the customer is loyal to the company and is doing sales from several years, the policy would inform the sales representative about the maximum discounts that can be given to such customers.

We encounter may such cases where the sales representative look at the previous transaction and gives discount to make customers stay loyal to the company in future. For instance, when you renew the existing software like educational software or anti- virus for another year, then the sales representative would give you a discounted price most of the times.

Hence the policies would help in achieving the targets easily and help the sales representative in handling the day to day sales tasks effectively. After the sales policies let‟s now look at the next element namely sales programme.

c) Sales Programme

Sales programme are essential to ensure the sales representative can handle any sales situation which they are entitle to perform. Sales planning should clearly mention the required skill set in handling the sales and the programme appropriate to incur those skills in the sales representative.

Sales programme may be necessary whenever the a new product/ service is introduced by the company. Sales programme is also necessary when the sales representatives handle sales from new territories which they haven‟t sold any product/ service in the past. Cross-cultural training would be given most of the times, when the sales include the customers other than the native country.

Sales programmes help to develop the necessary skill set in achieving the sales objectives effectively and in given time period. Let us now look at the next element of sales planning namely “sales procedures”.

d) Sales Procedures

Sales procedure is the sequence of various activities that need to be performed for different sales functions. The sales procedures vary from sales to sale and from market to  market.  Sales  procedure  for  a  business  to  consumer  sales  varies  greatly  from business to business sales. The sales procedure may include meeting the customer, explaining the product / service through slides, use closing techniques, take the order and following up. The procedure for B2B sales may indicate to take a complete team from various departments who are the stakeholders in the project to carry out the explanation of the product/ service. The procedure for the B2C sales may indicate that a single representative is enough to handle the task. Even the time intervals for follow-up activities are mentioned which vary for B2B and B2C sales.

Let us now look at the next element “sales rules”.

e) Sales Rules

Sales rules indicate the set of actions that need to be performed and not performed depending upon the situation. For example, in credit card payments, if the customer is asking for the refund of the late payment fee, then the rule says clearly not to refund if the amount is received after the due date. Hence, the sales staff is not permitted to refund the amount no matter how loyal the customer is with the company. In some cases, refund could be done. For example,  when there is some genuine reason for the late payment, such as the due date is on a non-working day for the bank due to festival, curfews or any other natural disasters etc. In such cases the sales staff would refund the amount if the rule mentions to refund the amount.

Even in personal sales, the sales representative would be given rules that the maximum discount to be given on the product and the maximum amount of credit that the sales staff can give to the customer to pay the dues. Hence, it‟s the duty of the sales staff to contact the customer within the stipulated timeframe and collect the dues.

Let us now look at the next element “Sales Forecast”.

f) Sales Forecast

Sales forecast lays the foundation of sales planning and objective setting. Based on the sales forecast the sales manager would know the sales that could be attainable for the coming period (next quarter or year). Various time series analysis tools such as trend estimation, moving average, weighted moving average, exponential smoothing etc may be used to forecast. Forecast can be also done based on the predictions done by the industry experts. Methods can be many but the aim of forecasting is to identify clearly the demand and plan the sales activities to generate more leads to the business.

Sales forecast also help in identifying the strategies to gain the market share. If the forecast turns out to be negative i.e. the industry sales are going to dip, then the company may execute their operations effectively to retain the existing customers and attract  the  new  customers.    Hence,  forecast  is  a  very  important  element  in  sales planning and we shall discuss more about this in the coming units.

Now, let us look at the next element “Sales Budget”.

g) Sales Budget

Sales budget identifies the necessary expenditure that is occurred in making the sales. The sales budget estimates the revenue based on sales that would be generated and identifies the profit for the organization after subtracting the operation costs of the sales staff. The sales budget would clearly set the standards for the sales team in terms of the expenditure that is permitted to incur upon the sale. For example, when the sales staff goes for selling the product, the maximum expenses that can be incurred would be mentioned and the sales representative has to maintain his travel expenditure and other costs within that limit.

Maintaining the operations within the budget becomes a complex task in B2B sales where the sales team had to travel to the customer site many times before the sale happens. Hence the sales manager has to see that the operation costs are under control and provide some mechanisms like video conferencing to reduce the travelling costs. Once the operational costs are under control, attaining the profitable level in sales would be a little easier to achieve.

Let‟s us now discuss the next element “sales strategy”.

h) Sales Strategy

Sales strategy involves how the company is going to act in the market place with the products/ services. The market is dynamic and competitive in nature which makes the companies alert all the times with their pricing and position strategies. Positioning the product is very important since in the past many excellent products have failed due to improper positioning. The product/ service which need to be sold have to be properly priced when compared to the competitors. The strategies have to be in place to justify the price if it‟s higher than the other similar products in the market.

The sales staffs have to be given proper training before employing any strategy in the market place. If the product/ service price is not changed even when the rivals have dropped their prices, then the sales staff have to make sure that they can explain to the customer clearly about the reason for high price stating any competitive advantages of the product/ service over the rivals.

Acting smart and ensuring that the sale is generated is the part of the sales strategy. The company, who can handle the sales strategies in the market place, is likely to be the winner.

Hence the sales planning process contains the above discussed elements and helps in attaining the sales objectives in the required time period. Let us now discuss the various types of sales plans that can be created to ensure the sales staff works effectively for the organization at all times.

B- Types of sales planning

Let us look at various types of sales plans in an organization:

a) Sales plan on the basis of market area

Whenever the sales are done in the entire country, then the entire region would be divided into several areas depending upon certain characteristics. A simple segregation would be dividing the entire country sales into different states and assigning a head for each state. For example, the in the telecommunication business, the telecom plans varies from state to state and within the state it remains the same. There are some services which are applicable for the entire country too. Even the promotional offers vary from state to state depending upon the nature of the business in these states.

Some products in FMCG sector are very strong in south and have a little presence in North and hence the companies may introduce special promotional campaigns which are available only to the northern states to improve leads. Hence the sales plan would vary from region to region.

b) Sales plan on the basis of selling functions

Sales team performs several functions such as promotions, follow up activities, pre- sales and sales activities etc. Hence the company lays out various sales plans for each activity if necessary.

c) Sales plan based on type of customers

Most of the companies believe that 80 percent of the business comes from 20 percent of the key customers. Although each and every customer is important to the company, the survival of the company depends on those 20 percent in difficult times. Hence following the same sales plan for all the customers wouldn‟t be practical since the key customer have to be handled more effectively. Hence the companies may have different sales plan for the key customers. Also the company may have different sales plan for customer depending upon the markets like B2B or B2C.

d) Sales plan based on the type of products

Every product/ service may not have the same selling activities. Hence having different sales plan is essential to handle the sales effectively. For example, if the company produces technical products, services, FMCG goods etc. it needs to have separate sales plan for the FMCG goods and the technical products and services.

e) Sales plan based on the time period

There are different sales plan for long term and short term objectives of the company. For example, increasing the sales in the already existing territory and getting sales in new territories can‟t have the same sales plan. Acquiring the new territory would be a long term objective where as increasing the sales in existing territory would be a short term objective which would be a 1 year time period. For the both, strategies would be different and the operation costs would be different. Hence having a separate sales plan would be good for both the short term and the long term objectives.

SAQ 1:

1)  Explain the importance of setting the objectives in the sales planning process

2)  Illustrate  the  importance  of  sales  policies,  program  and  rules  in  the  sales planning process

3)  Identify the problems with wrong forecasting in the sales planning process

4)  Explain the various types of sales planning.

Chi Tran

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