Page 92 - DMGT507_SALES AND PROMOTIONS MANAGEMENT

Sales and Promotions Management

Notes The sales manager, after taking into consideration all these factors, will prepare the sales budget
in terms of quantity and money, distinguishing between products, periods and areas of sales.

Example: ABC Banking Corporation Ltd. has three sales divisions at Delhi, Jaipur and
Lucknow. The bank sells two products — Product A and Product B. The budgeted sales of the
st
year ending 31 December 1998 at each place are given below:
Delhi : Product A 2,00,000 units @ 16 each
Product B 1,40,000 units @ 10 each

Jaipur : Product B 2,20,000 units @ 10 each
Lucknow : Product A 3,00,000 units @ 16 each
The actual sales during the same period were as follows:
Delhi : Product A 2,50,000 units @ 16 each

Product B 1,50,000 units @ 10 each
Jaipur : Product B 2,50,000 units @ 10 each
Lucknow : Product A 3,10,000 units @ 16 each
From the reports of the sales personnel, it was considered that the sales budget for the year
ending 31 December 1999 would be higher than the 1998 budget in the following aspects:
st
Delhi : Product A 16,000 units
Product B 10,000 units

Jaipur : Product B 26,000 units
Lucknow : Product A 20,000 units
Intensive sales campaigns in Jaipur and Lucknow are expected to result in additional sales of
50,000 units of Product A in Jaipur and 36,000 units of Product B in Lucknow.
st
You are requested to prepare a sales budget for the period ending 31 December 1999.
Solution:
Sales Budget

Division Product Budget for 1999 Budget for 1998 Actual for 1998
Qty Price Value Qty Price Value Qty Price Value

Delhi A 2,16,000 16 34,56,000 2,00,000 16 32,00,000 2,50,000 16 40,00,000

B 1,50,000 10 15,00,000 14,0,000 10 14,00,000 1,50,000 10 15,00,000
3,66,000 49,56,000 3,40,000 46,00,000 4.00.000 55,00,000
Jaipur A 50,000 16 8,00,000 — — — — — —

B 2,46,000 10 24,60,000 2,20,000 10 22,00,000 2,50,000 10 25,00,000
2,96,000 32,60,000 2,20,000 22,00,000 2,50,000 25,00,000
Lucknow A 3,20,000 16 57,20,000 3,00,000 16 48,00,000 3,10,000 16 49,60,000

B 36,000 10 3,60,000 — — — — —
Contd
3,56,000 54,80,000 3,30,000 48,00,000 3,10,000 49,60,000 ...
Total A 5,86,000 16 93,76,000 5,00,000 — 80,00,000 5,60,000 — 89,60,000

B 4,32,000 10 43,20,000 3,60,000 36,00,000 4,00,000 40,00,000
136,96,000 8,60,000
10,18,000
86 LOVELY PROFESSIONAL UNIVERSITY 116,00,000 9,60,000 129,60,000