Page 170 - DMGT205_SALES_MANAGEMENT

Sales Management

Notes

Tasks On the basis of the table given below compute the three salesperson's orders to sale
calls ratios and average size of order for the year. Why might the three salesperson's
performance differ?

Name of Name of Number of Number of Actual sales
territory Salesperson calls orders ( )
A Raja Singh 1400 350 6,00,000
B A K Singh 1600 800 7,00,000
C S P Singh 1800 700 12,00,000

11.5.3 Methods of Sales Control

Most commonly used methods are

1. Sales analysis
2. Marketing cost analysis
3. Sales management audit

11.6 Sales Analysis

It is a detailed examination of sales volume by territory, sales person, customer, product line,
etc. It works on the principle that the trends of the total sales volume conceal rather than reveal
the market reality. Researchers reveal that in most organisations a large percentage of customer
order territories bring in a small percentage of total sales. This is known as 80-20 principle. 80%
of the orders contribute over 20% of sales and 20% of selling units amount for 80% of sales.
Likewise there is the example of iceberg principle which shows that total sales volume may
reveal 10% of real market situation which is above the surface and 90% may remain unknown.
Therefore, it is recommended that for unearthing reality and gaining meaningful insight, sales
must be analysed by territory, by sales person, by customer.

The sales manager scans the total sales on territory basis. Any unusual conditions in any territory
such as intense competition, strike by labour union or transportation, etc., which make an
adverse effect on company's products' are considered for further sales analysis. In the above
example actual sales be compared with desired sales and the reasons for variations be looked
into.
Table 11.1: Sales Analysis by Salesperson

Salesperson Quota Actual Performance
Mukesh 90 88 98%
Saurabh 115 117 102%

Kamal 115 110 95.6%
Salim 110 120 109%
Tony 110 105 95.4%
Contd...

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