Page 281 - DMGT408DMGT203_Marketing Management

Marketing Management/Essentials of Marketing

Notes 12.2 Planning Functions

12.2.1 Sales Forecasting

Sales forecasting is the art that predicts the likelihood of economic activity on the basis of certain
assumptions. The process of making certain estimates of future events is referred to as sales
forecasting and the figure obtained from the process is known as a ‘sales forecast’. Sales forecasting
would be futile if the future were known. In order to determine the future course of events, aid
is taken from an organised system of sales forecasting.
Different steps in sales forecasting are:
1. Defining the objectives to be achieved

2. Dividing the various groups into homogenous groups
3. Analysing the importance of various factors to be studied for sales forecasting
4. Selecting the method
5. Collecting and analysing the related information

6. Drawing conclusions from the analysis made
7. Implementing the decision taken
8. Reviewing and revising sales forecasting techniques from time to time.

12.2.2 Sales Budgeting

The sales budget is the final point of a sales organisation. All other budgets hinge on the basis of
the sales budget. What then is a sales budget? It is a forecast of sales to be achieved in the
stipulated period. The sales budget can be prepared on the basis of division, brand, products,
dealers, territory and sales force.

Did u know? The following factors need to be kept in mind when preparing a sales budget:
1. Past trends 2. Sales force estimates 3. Trade prospects 4. Present position 5. Potential
consumers 6. Government policies 7. Changing business environment 8. Sales promotion
strategies.

12.2.3 Selling Policy

The object of a selling policy is to place the right type of goods in the hands of consumers at the
right time and at the right place. Further, it should aim at attracting customers and rendering
them satisfactory services. A selling policy includes:
1. Method of distribution (sale)

2. Terms of sale
3. Guarantee and service
In case of products involving maintenance and repairs, the seller renders what is called
after-sale-service. Technical representatives are sent to the user’s place for repairing the
machines/gadgets free of cost or at a nominal charge. Usually, free service is rendered during
the “guarantee period”. The after-sale-service policy is a strong selling point to push up the sales

274 LOVELY PROFESSIONAL UNIVERSITY