Sales ch 5

Market potential

Estimate of possible sales for an entire industry in a market during a stated period under ideal conditions

Sales potential

Portion of market potential the firm can expect to reasonably achieve

Sales forecast

Estimate of dollar or unit sales for a specified future period

Sales quotas

Sales goals assigned to a marketing unit to manage sales efforts

Subjective forecasting method

Relies on opinions

User expectations

Relies on buyers' expressed intention

Sales force composite

Relies on sales force opinions

Jury of executive opinion

Relies on key experts' opinions

Delphi technique

Relies on various participants who prepare estimates which are compared anonymously and iteratively to reach consensus

Objective forecasting method

Uses data and analytical techniques

Market test

Places product in select areas

Time series analysis

Relies on historical data to develop predictions

Moving average

Averages sales results over previous time periods to forecast

Exponential smoothing

Type of moving average where most recent years given more weight

Decomposition method

Applied to monthly or quarterly data where seasonal pattern is evident

Statistical demand analysis

Attempts to determine the relationship between sales and factors that influence sales

North American Industry Classification System (NAICS)

Developed by US Bureau of the Census, estimates sales per industry, U.S., Canada, Mexico, Organizes the reporting of business information, estimates sales by industry

Buying Power Index (BPI)

Considers income, population and retail sales

Sales volume quota

Emphasize sales or some aspect of sales

Activity quota

Focus on certain sales activities

Financial quota

Examine financial criteria such as gross margin or contribution to overhead

Breakdown method

(Number of sales personnel needed = Number of sales needed ÷ Estimated productivity of each salesperson)

Workload method

(Total number of salespeople required = Total # hours required to service market ÷ # Hours available to each salesperson)

Incremental method

Adding salespeople until incremental profit produced equals incremental cost

80:20 principle

(80% of results come from 20% of inputs)

Characteristics of a Good Quota

Attainable, Easy to understand, Complete, Timely