Planning the Sales Effort

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

Strategic Planning
Planning is deciding now what, how, and when we are going to do Strategic planning is deciding about the organisations 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)

Planning In A Large Organisation

Organisational Levels
Corporate

Organisation Structure

Type of Planning
Corporate Strategic Planning
SBU C

Corporate Office

Division / Business Unit / SBU

SBU A

SBU B

Divisional / SBU Strategic Planning Product / Operational Planning

Product

Product x

Product y

Product z

For effective planning, operations, and control, a large multiproduct / 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)

Role of Marketing in Organisational Planning

Type of Planning Corporate strategic planning Role of Marketing Key Tasks Formal Name

Provide customer and competition Corporate information marketing Support customer orientation

Divisional / Provide customer and competition Strategic SBU analysis marketing Strategic Develop competitive advantage, target planning markets, value proposition, positioning Product / Evolve and implement marketing plan Marketing functional or including marketing-mix strategy, and sales management Operational strategy planning

Marketing and Sales Strategies

Figure below shows how sales strategy is developed from marketing strategy Sales
Product / service strategy Target market strategy (Longterm) Marketing Strategy Marketing mix strategy (Shortterm) Price strategy promotion strategy

Advertising strategy Promotion / IMC* strategy

Personal selling / sales strategy

Public relations & Publicity strategy

Distribution strategy Direct marketing strategy

* IMC: Integrated Marketing Communication

Components of Sales Strategy

Classifying market segments and customers within a target segment individual

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

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

Quality Of Field Force

If you want to improve results, improve your sales force Sounds simple ! But organisations seldom achieve this role There are not enough naturally talented sales people. Need for good Sales Managers far outstrips the supply.

There are no jobs with a future only people with a future

Need for Good Sales Managers far outstrip the supply by about four to one ratio. GALLUP

Managing Sales Force

Why is it so critical ?

Trade Marketing performance is reflected in the balance sheets Quality of Sales People shall determine success of new and established brands in the future Maximizing performance of human capital improves business results

Managing Sales Force

Why is it so critical ?

Trade Marketing performance is reflected in the balance sheets Quality of Sales People shall determine success of new and established brands in the future Maximizing performance of human capital improves business results

Managing Sales Force

What does it mean ?

Role Prescribed Behaviour Profile Traits and Abilities Goal Setting Measurables

Role of Marketing & Distribution

a) Core Services Accurate Order Service Efficient Delivery Service Collection of Payment b) Value Added Services Category Management Space Management Channel-specific support Multi-level Contact Business Building Promotions

Role of Field Force

Planning Distribution Merchandising Communication & Trade Relations Administration All of Planning Organizing Directing Controlling

What do you need to have ?

Technical Competencies (Subject Knowledge)
Territory

Managerial Competencies (Soft Skills)

Interpersonal

Channels

Reflecting on Self

Distributor

Leadership Paradigm

Field Force

What Else ?
What drives good performance - Passion ? Employees who are engaged are more productive, increase profitability and stay longer. Issues of Real Work versus Routine Work Thinking Hats..outside the office gate.

Research Findings of Contributions by employees:

70 60 50 40 30 20 10 0 -10 -20 1ST 25 % 2ND 25 % 3RD 25 % 4TH 25 %

TYPICAL ENGAGEMENT LEVELS

Engaged

26%

36%

Not Engaged

55 % 55%

Actively Disengaged

19%

9%

Average

World Class

Challenges for Sales Managers:

In this background resource allocation is the key. Need to break the equity myth i.e. equal resources versus resources for maximum results. Competition is at the heart of Trade Marketing. Therefore what resources is competition deploying and how fast is competition improving people / inputs.

Spend time where it matters most

Performance Category
Stars

Percent of Field Time

50%

Objectives of Visit
Strengthen relationship. Remove obstacles. Identify additional resources needed. Encourage and develop. Teach Evaluate Monitor Monitor

New or developing

25%

Survivors

10%

Poor

15%

Recruit replacements Develop key account awareness.

Controlling for Performance - Motivation

Can we motivate ? - The moment you talk of motivation, you are making the person worthless. Lead by example Define How To Join them in the execution process Senior Managers presence Effort more than money Examples of disorganised but effective employees 24 x 7 Leadership Example of waking-up a late riser everyday at 7 am

Sales Force Motivation

Monetary compensation based on measurables Sales Achievement. Is Sales Achievement the best measurable to reward ? Can we have other measurables ? - Coverage Norms - Ratings on quality of merchandising - Business Investments and the list can go on.

Sales Force Motivation

What drives people is Money Economics encompasses every walk of life. Poverty is no sales mans ambition.

Money is important but no one reward is equally important to everyone. Opportunity to get motivated Organisational role. Design of Incentives: Come Fly with Me Contest Johnsons Baby Soap. Who drives: Leadership.

What is leadership
In the context of Sales Management..

Demonstration is critical.
Taking Responsibility is another If you are in another persons territory.what will you do if you go around the market and find your product short..

Leadership is Responsibility

Leadership is Making it Happen

Leadership is possessing the skills, abilities & attitude's that will enable us to successfully carryout responsibilities incumbent to our office/role.

What does it mean to us in Sales

Leadership

Capacity to challenge i.e. confronting sensitive / uncomfortable issues relating to processes, systems or people. Mindset of Buck stops at me No critical evaluation of others. Examine what I need to do more.

Enabling

Trust / Openness

Build Openness Encourage feedback Trust not to be used as an abdication of responsibility. Follow-up / Monitoring is part of the job not be considered mistrust.

Ownership

Stated / Expressed expectations is part of the job. Not a part of the definition of ownership. It is a performance issue. Ownership is over and above written / stated role into areas which are of business interest in any domain your own or any other.

Goal Setting
What needs to be done ?

What is right for the company ? Draw Action plans

Fix responsibilities for communication

Fix responsibilities for action

Goal Setting

Big, Hairy Audacious Goals are in vogue, but sometimes small, meaningful goals are only possible. If at first, and second and third, you dont succeed, try something else. Raise the bar everytime to make it easy break the problem in small bits and it looks easy.

Measurables
What cannot be measured will not be achieved. Operational Effectiveness through disciplined and structured approach. Simplified process to become systemic but without forsaking detail.

Measurables

What are the actionable steps for in-depth operational effectiveness ? Distribution Guidelines Retail Census Design & Substrate Manual PJP & Monthly Planners Fact File Dealer Dash Board Dealer Folders

PJP & Monthly Planners

Permanent Journey Plan is an index based on statistical facts and priorities Direction for Monthly Planners Days of travel night halts Planned versus actual touring Travel route plans in a continuum Outlet route plans for day-wise working

Permanent Journey Plan

Market Delhi Calcutta Ind. Vol. 1000 500 Own Vol. 500 100 MS(%) Days/ Month 50 20 12 5 Other Factors

Patna
Guwahati Total

1000
2000 4500

50
500 1150

5
25

2
6 25

Monthly Planner
M 30 T 31 W T F S S 1

2 Delhi

3 Delhi

4 Delhi
11 Cal. 18 Guw. 25 Del.

5 Delhi
12 Cal. 19 Guw. 26 Del.

6 Delhi
13 Cal. 20 Guw. 27 Del.

7 Delhi
14 Cal. 21 Guw. 28 Off

8 Delhi
15 Cal. 22 Del. 29 Off

9 10 Patna Patna 16 Guw. 23 Del. 17 Guw. 24 Del.

Plan Versus Actual (Days)

Town Plan Actual Variance Reason

Delhi
Calcutta Patna Guw.

12
5 2 6

10
7 2 6

2
2 -

Fact File

Information docket to be carried by all field staff Diary Check. Statistical information to be used to design travel and action plans. Geographic segmentation and volume analysis by routes and villages. Route-wise & channel-wise analysis Know where you are heading. Application is the key

Sales Officer Performance Monitor

Link Monthly Objectives to KRAs List 3-4 critical success areas e.g. Volume Achievement, Dealer Investment, Infrastructure Use Allocate equal points and measuring mechanism with weightage percentage. Each Sales Officer would know at the end of the month how he has performed. Self Monitoring Mechanism helps superiors to evaluate on a monthly / quarterly and yearly basis.

PERFORMANCE KRA

MONITOR MEASURE WTG % WEIGHTED SCORE EXAMPLE Achmt % %Ach(upto max 100%) *Weightage 3 2 1 1 1 1 9 %Ach(upto max 100%) *Weightage 6 3 2 2 3 2 18 6 %Ach(upto max 100%) *Weightage %Ach *Weightage %Ach *Weightage %Ach(upto max 100%) *Weightage 100% 80% 90% 100% 100% 100% 90% 4.8 2.7 2 2 3 1.8 16.3 6 80% 90% 100% 100% 100% 90% 2.4 1.8 1 1 1 0.9 8.1 Score

PEOPLE

Infrastructure - Build Up Nos.

100% Ach vs Plan

DR's STK/SCP MS 3W 2W Van Ttl Infrastructure - Performance Mandays 100% Ach vs Plan except for STK/SCP DR's STK/SCP MS 3W 2W Van Ttl MD Systems Execution & Sustainence 100% of MD Mkts as per Norms 2 VOLUME ACHIEVEMENT Retail Sales Volume Total Sales Volume Visibilty 100% Ach vs SQB 100% Ach vs SQB 100% Sub Total 3 REMITTANCES 100% of MD Sales Ensure MD Investments at 12 days Ensure all MD'S within Credit Limits %Achmt vs MD Sales % MD's having Inv = or >12days % MD's within Credit Limits Sub Total Grand Score Achievment

11 12 11 34 11 11 11 33

120% 100% 70%

13.2 12 7.7 32.9

%Ach *Weightage %Ach *Weightage %Ach *Weightage

105% 90% 100%

11.55 9.9 11 32.45 95.75

Self Monitoring Mechanism

KRA WTG Achievement Score

Infrastructure Build-up Infrastructure Performance

15 19

88 90

13.2 17.1

Volume
Remittances

33
33

90
90

29.7
29.7

Overall

100

89.7

Combine Actions
Success will be a result of all these actions put together. The ability of a Sales Manager lies in capturing key dimensions in his mind and find his way. It makes this enormous task easy.