RASHTRASANT TUKDOJI MAHARAJ NAGPUR UNIVERSITY

MBA
SEMESTER: 3

SPECIALIZATION
MARKETING

SUBJECT
SALES & DISTRIBUTION MANAGEMENT

MODULE NO : 1
INTRODUCTION TO SALES MANAGEMENT
- Jayanti R Pande
DGICM College, Nagpur
Copyright © 2023 Jayanti Rajdevendra Pande. All rights reserved.
Q1.Give definition of sales management & explain process of sales management.

SALES MANAGEMENT is the process of planning, organizing, directing, and controlling a sales team's activities to achieve specific
sales goals. It involves overseeing the entire sales process, from setting targets and strategies to recruiting, training, motivating,
compensating, and evaluating the sales force.
PROCESS OF SALES MANAGEMENT SALES MANAGEMENT PROCESS
1 Setting Sales Force Objectives: The first step is to establish clear, measurable sales
objectives that align with the company's overall goals. These objectives should specify
targets for revenue, market share, customer acquisition, and product sales. 1 Setting Sales Force Objectives
2 Forming Sales Force Strategy: Develop a strategy that outlines how the sales team
will achieve these objectives. This strategy includes identifying target markets,
understanding competitors, and defining a unique value proposition to win customers. 2 Forming Sales Force Strategy
3 Recruiting Sales Force: Building the right sales team is essential. This involves
identifying and hiring individuals with the skills and qualities needed to execute the
sales strategy effectively. 3 Recruiting Sales Force
4 Training Sales Force: Continuous training ensures that the sales team is well-prepared
to communicate product features, handle objections, and close deals. It helps them
stay on top of market trends and customer preferences. 4 Training Sales Force
5 Developing Motivation and Compensation Plans: Salespeople need motivation to
perform at their best. Sales managers create compensation plans that include salaries,
commissions, bonuses, and incentives to reward top performers. Motivation can also 5 Developing Motivation and
come from recognition and career advancement opportunities. Compensation Plans
6 Evaluating the Sales Force: Regularly assess the performance of the sales team using
metrics such as sales revenue, conversion rates, customer satisfaction, and
productivity. Feedback and performance reviews help identify areas for improvement 6 Evaluating the Sales Force
and guide adjustments to the sales strategy and objectives. Copyright © 2023 Jayanti Rajdevendra Pande. All rights reserved.
 Q2. Differentiate between Sales management & Marketing management.

Sales management is primarily concerned with the activities of the sales team and achieving short-term sales goals, while
marketing management is focused on creating demand, building brand value, and establishing long-term customer
relationships through various marketing activities.
Sales Management Marketing Management
• Focuses on selling products or services to customers • Focuses on creating awareness, interest, and demand
• Manages the sales team's activities and performance • Manages marketing strategies and campaigns
• Emphasizes indirect customer interactions through advertising,
• Emphasizes direct customer interactions
branding, and promotion
• Concerned with long-term brand building and customer
• Concerned with short-term revenue generation
relationships
• Involves setting sales targets and quotas • Involves setting marketing objectives and budgets
• Measures success through various marketing KPIs such as brand
• Measures success primarily through sales revenue
awareness, reach, and engagement
• Marketing managers oversee broader marketing strategies and
• Sales managers deal with the sales team's day-to-day activities
initiatives
• Focuses on creating demand, which may lead to sales in the long
• Focuses on closing deals and achieving immediate sales
term
• Marketing management encompasses advertising, public
• Sales management primarily involves a sales force
relations, market research, and product development
• Sales management is more tactical and execution-oriented • Marketing management is more strategic and planning-oriented
Copyright © 2023 Jayanti Rajdevendra Pande. All rights reserved.
Q3. Explain the nature & scope of sales management.

NATURE OF SALES MANAGEMENT

1. Wide Scope: Sales management has a broad scope as it encompasses a wide range of activities, from setting sales objectives
and strategies to managing the sales force and evaluating performance. It covers a significant part of a company's operations.
2. Essential for Marketing Activities: Sales management is an integral part of the marketing function. It ensures that marketing
efforts are effectively translated into actual sales. It acts as a bridge between marketing strategies and their execution in the
marketplace.
3. Formulates Hierarchy: Sales management establishes a hierarchical structure within the sales department, defining roles and
responsibilities for sales personnel. This hierarchy helps streamline operations and ensures clear reporting lines.
4. Customer-Centric: It places a strong emphasis on understanding customer needs and preferences. Sales managers and teams
interact directly with customers, gathering valuable insights that can be used to improve products, services, and marketing
strategies.
5. Performance-Driven: Sales management is inherently focused on achieving specific sales targets and objectives. It emphasizes
performance measurement and strives to maximize sales revenue and profitability.

SCOPE OF SALES MANAGEMENT

1. Sales Force: Involves recruiting, training, motivating, and evaluating salespeople to achieve sales goals.
2. Intermediaries: Encompasses managing distributors, wholesalers, and retailers, and building partnerships to reach customers.
3. Logistics: Ensures product availability through inventory control, transportation, and order management.
4. Promotion: Includes coordinating advertising, promotions, and public relations to generate interest in products.
5. Customer Relationship Management (CRM): Focuses on maintaining and enhancing relationships with existing customers,
addressing concerns, and exploring upselling opportunities.

Copyright © 2023 Jayanti Rajdevendra Pande. All rights reserved.

Q4. State different types of sales position in detail

TYPES OF SALES POSITION

1 Delivery Sales Person:

• Role: A delivery salesperson is responsible for physically delivering products or services to customers. They often have direct
face-to-face interactions with customers during the delivery process.
• Key Responsibilities: Ensuring on-time delivery, handling payments (if necessary), providing basic product information, and
resolving any delivery-related issues.
• Typical Industries: Food delivery services, package delivery companies, and local product distributors.

2 Order Taker:
• Role: Order takers are primarily responsible for processing customer orders. They may work in retail stores, call centers, or
online platforms.
• Key Responsibilities: Accepting customer orders, inputting orders into the system, confirming product availability, and providing
order-related information.
• Typical Industries: Retail, e-commerce, fast-food chains, and customer service call centers.

3 Sales Support People:

• Role: Sales support personnel assist the sales team by handling administrative tasks and providing logistical support. They
ensure that sales operations run smoothly.
• Key Responsibilities: Managing paperwork, processing sales contracts, coordinating product shipments, and assisting with
customer inquiries.
• Typical Industries: Various industries, as sales support roles are found in almost all businesses with a sales department.
Copyright © 2023 Jayanti Rajdevendra Pande. All rights reserved.
4 Technical Sales Support or Sales Engineer:
• Role: Sales engineers are experts in technical products and services. They work alongside salespeople to explain complex
technical aspects to customers.
• Key Responsibilities: Assisting in product demonstrations, providing technical expertise, addressing customer questions,
and helping customers understand the value of technical solutions.
• Typical Industries: Technology, engineering, manufacturing, and industrial sectors.

5 Demand Creator:
• Role: Demand creators are responsible for generating interest and demand for a product or service. They often work on
creating marketing campaigns and strategies.
• Key Responsibilities: Identifying target markets, developing marketing plans, creating advertising materials, and organizing
promotional events to attract potential customers.
• Typical Industries: Marketing agencies, advertising firms, and businesses focused on brand awareness.

6 Solution Vendor:
• Role: Solution vendors provide comprehensive solutions to customer problems or needs. They focus on selling complete
packages or systems, rather than individual products.
• Key Responsibilities: Assessing customer needs, proposing tailored solutions, explaining how the solution addresses
specific challenges, and negotiating contracts for the entire solution package.
• Typical Industries: Information technology, consulting firms, and industries that offer integrated solutions.

Copyright © 2023 Jayanti Rajdevendra Pande. All rights reserved.

Q5.State the objectives and challenges in sales management.

OBJECTIVES OF SALES MANAGEMENT

1. Increase Profit: Sales management aims to enhance profitability by not only increasing sales revenue but also effectively managing
costs to ensure a healthy profit margin.
2. Maximize Sales: The primary goal is to maximize sales volumes by efficiently utilizing available resources, such as the sales team,
marketing strategies, and distribution channels.
3. Increase Market Share: Sales management seeks to expand the company's market share, which means a larger portion of the market's
total sales. This often involves strategies to outperform competitors and gain more customers.
4. Return Value to Stakeholders: Sales management strives to provide a return on investment to shareholders and stakeholders by
delivering sustainable sales growth and profitability.
5. Customer Satisfaction: Ensuring that customers are satisfied with the product or service and their needs are met is another objective.
Happy customers are more likely to make repeat purchases and become loyal to the brand.

CHALLENGES IN SALES MANAGEMENT

1. Competitive Differentiation: Standing out in a crowded market and differentiating products or services from competitors can be a
significant challenge. Sales teams need to communicate unique value propositions effectively.
2. Closing Sales Failure: Not all sales efforts result in successful closures. Overcoming objections, handling rejections, and converting leads
into customers can be difficult and require ongoing training and skill development.
3. Training and Development: Keeping the sales team well-trained and updated on product knowledge, sales techniques, and industry
trends can be challenging, especially as markets evolve rapidly.
4. High Pressure: Sales can be a high-pressure profession with quotas, targets, and the need to meet revenue goals. This pressure can
lead to burnout and turnover if not managed effectively.
5. Market Volatility: Sales management must adapt to market fluctuations, economic changes, and unforeseen disruptions. This requires
flexibility and the ability to pivot strategies when necessary.
Copyright © 2023 Jayanti Rajdevendra Pande. All rights reserved.
Q6. What is sales research? Explain the process of sales research.

SALES RESEARCH refers to the systematic process of collecting, analysing, evaluating, and interpreting data and information related to sales
activities, customers, markets, and competitors. It plays a crucial role in making informed decisions, developing effective sales strategies,
and improving overall sales performance.
SALES RESEARCH PROCESS
1. Investigating: This phase focuses on gathering data from diverse sources, such as customer profiles, sales records, and market trends.
This comprehensive data collection provides a holistic view of the current sales landscape, customer behaviour, and market dynamics.
2. Analysing: Once data is collected, analytical tools and techniques are employed to examine the information in-depth. Sales managers
look for patterns, trends, and correlations within the data. They also analyse competitors' strategies to identify opportunities and areas for
improvement.
3. Evaluating: During this step, sales managers critically assess their team's sales performance and customer feedback. This evaluation
measures the effectiveness of current sales strategies in achieving predefined goals and objectives. It is a critical checkpoint for ensuring
that sales targets are met and that customer expectations are addressed.
4. Interpreting: After analysing and evaluating the data, sales managers interpret the findings. They draw meaningful conclusions from the
information and derive strategic insights. These insights are essential for understanding customer preferences, market trends, and the
competitive landscape.
5. Action Planning: With the insights gained from the research, sales managers formulate actionable strategies. These strategies are
designed to address specific challenges, enhance sales techniques, refine product offerings, or explore new market segments. Action plans
provide a clear roadmap for achieving sales objectives and improving overall performance.
6. Monitoring and Feedback: The execution of action plans is accompanied by continuous monitoring of their impact. Sales managers track
key performance indicators and gather feedback from both the sales team and customers. Monitoring allows for the timely identification
of deviations from the intended course and provides opportunities for course correction.
7. Adaptation: Sales research is an iterative process. Based on ongoing data collection, feedback, and monitoring, sales managers are
prepared to adapt their strategies as needed. This adaptability is crucial in the dynamic world of sales, as it enables teams to respond
effectively to changing market conditions, customer preferences, and emerging opportunities. Copyright © 2023 Jayanti Rajdevendra Pande. All rights reserved.
Q7 State applications & sources of Sales Research.

APPLICATION OF SALES RESEARCH

1. Study of Competition: Sales research is crucial for understanding competitors in the market. It involves analyzing their strategies,
pricing models, product offerings, and market positioning. This helps in identifying strengths and weaknesses compared to
competitors, which is vital for developing effective competitive strategies.

2. Test Marketing: Before launching a product or service on a larger scale, companies often conduct test marketing. Sales research
is used to gather data on how potential customers respond to the product or service in a controlled environment. This helps in
refining marketing strategies and product offerings.

3. Consumer Behaviour Study: Understanding consumer behaviour is essential for tailoring sales and marketing strategies. Sales
research can provide insights into what motivates customers to make purchasing decisions, their preferences, and how they
respond to different sales approaches.

4. Market Share Analysis: Sales research helps in assessing the company's market share relative to competitors. By studying market
share trends and dynamics, companies can make informed decisions about how to increase their market presence and share.

5. Study of Distribution Channels and Costs: Sales research aids in optimizing distribution channels and managing associated costs.
By analysing the efficiency and effectiveness of distribution methods, companies can ensure products reach customers
efficiently while minimizing expenses.

Copyright © 2023 Jayanti Rajdevendra Pande. All rights reserved.

SOURCES OF SALES RESEARCH

1. Internal Research Resources:

1. Sales Records: Internal sales data, including transaction records, customer information, and historical sales
performance, is a valuable source of information.
2. Customer Feedback: Collecting feedback from existing customers through surveys, feedback forms, and customer
service interactions provides insights into customer preferences and satisfaction.
3. Sales Team Reports: Sales representatives often provide valuable information about customer interactions, market
trends, and competitor activities through regular reports.
4. Financial Data: Financial reports and performance metrics offer insights into sales revenue, costs, and profitability.

2. External Research Resources:

1. Market Research Firms: These specialized firms conduct market research studies, consumer surveys, and competitive
analysis on behalf of businesses.
2. Government Data: Government agencies often publish data related to industry trends, market size, and economic
indicators that can be useful for sales research.
3. Industry Associations: Trade associations and industry groups may provide market reports, benchmarking data, and
industry-specific research.
4. Competitor Information: Publicly available information on competitors, such as annual reports, press releases, and
online content, can be a valuable external source.
5. Consumer Surveys: External consumer surveys, whether conducted by third-party research firms or available through
online platforms, offer insights into consumer behavior and preferences.

Copyright © 2023 Jayanti Rajdevendra Pande. All rights reserved.

Q8. Describe sales forecasting & the objectives of sales forecasting.

Sales Forecasting is the process of estimating future sales levels and trends for a specific product or service, within a defined time
frame. It's a critical aspect of business planning that helps organizations make informed decisions about production, inventory,
staffing, and overall strategy.

OBJECTIVES OF SALES FORECASTING

Short-Term Objectives:
• Inventory Management: In the short term, one of the primary objectives of sales forecasting is to ensure that inventory levels
are aligned with anticipated demand. This prevents overstocking or understocking of products, which can be costly for
businesses.
• Staffing and Resource Allocation: Accurate short-term forecasts assist in allocating resources, including human resources. It
helps in determining the right number of employees required for sales and customer support during peak periods.
• Cash Flow Management: Short-term sales forecasting helps organizations manage their cash flow effectively by predicting
when revenue will be generated and when expenses will be incurred.

Long-Term Objectives:
• Strategic Planning: Long-term sales forecasts are essential for strategic planning. They guide decisions related to market
expansion, product development, and overall business growth over several years.
• Resource Investment: Businesses use long-term forecasts to decide where to invest resources for future growth. This might
include opening new branches, entering new markets, or developing new products.
• Financial Planning: Long-term sales forecasts provide a foundation for financial planning and securing funding. They help in
assessing the capital needed for sustained growth and profitability.
Copyright © 2023 Jayanti Rajdevendra Pande. All rights reserved.
Q9. What are the different methods of sales forecasting.

METHODS OF SALES FORECASTING

QUALITATIVE METHODS
1. Executive Opinion: In this method, top executives and experienced managers use their knowledge and intuition to estimate
future sales. While it's subjective, it can be valuable for strategic decisions.
2. Delphi Method: The Delphi method gathers input from a panel of experts through a series of structured questionnaires or
interviews. It encourages consensus-building and reduces bias.
3. Sales Force Composite Method: Sales representatives provide their individual sales forecasts, which are then aggregated to
create a comprehensive sales projection. This method leverages the expertise of the sales team.
4. Survey of Buyers' Expectations: Surveys are conducted among current or potential customers to gauge their expectations and
buying intentions. This method relies on customer insights to make forecasts.
5. Historical Analogy Method: Sales are predicted by comparing the current situation to a past scenario with similar
characteristics. It assumes that history will repeat itself in similar conditions.

QUANTITATIVE METHODS:
1. Trend Projection: This method uses historical sales data to identify and project trends. It extrapolates past sales patterns into
the future, assuming that the trend will continue.
2. Exponential Smoothing: Exponential smoothing assigns different weights to different time periods, giving more importance to
recent data. It helps in reducing the impact of outliers and random fluctuations.
3. Naïve or Ratio Method: This simple method involves using a single ratio (like sales this month compared to the same month last
year) to forecast future sales. It's easy to apply but may not account for seasonality or other factors.
4. Econometric Method: It combines economic indicators (such as GDP, inflation, or consumer confidence) with historical sales
data to create a more comprehensive sales forecast. It's especially useful when economic factors significantly influence sales.
Copyright © 2023 Jayanti Rajdevendra Pande. All rights reserved.
Q10. What is sales planning and State the components of sales planning.

SALES PLANNING
It refers to the systematic process of setting objectives, strategies, and actions to achieve sales targets and goals effectively. It is
a critical element of the overall business planning process and focuses specifically on the sales function. Sales planning aligns
the efforts of the sales team with the broader organizational objectives and ensures that resources are allocated optimally to
maximize sales performance.

COMPONENTS OF SALES PLANNING

1. Sales Objectives: These are precise, measurable goals set for the sales team, such as revenue targets or market share
objectives, providing clear direction.
2. Sales Policy: Sales policies set rules governing sales operations, encompassing pricing strategies and territory assignments,
fostering consistency and compliance with company standards.
3. Sales Program: Comprising detailed strategies and tactics, the sales program is designed to achieve the defined sales
objectives, including marketing plans and lead generation tactics.
4. Sales Procedures: Sales procedures provide step-by-step guidelines for executing sales tasks like order processing and
reporting.
5. Sales Rules: These regulations ensure ethical sales practices, building customer trust.
6. Sales Forecast: Estimates of future sales based on historical data and trends guide planning and resource allocation.
7. Sales Budget: It allocates financial resources for sales activities, specifying expenses.
8. Sales Strategy: The strategy outlines the approach for achieving sales goals, covering market segmentation, pricing, and
positioning.
9. Sales Quotas: Specific sales targets assigned to individuals or teams serve as performance benchmarks and motivators.
Copyright © 2023 Jayanti Rajdevendra Pande. All rights reserved.
Q11. Explain the process of sales planning & sales control.

Sales Planning is a strategic process that involves setting objectives, strategies, and actions to achieve sales targets effectively. It's
a vital part of overall business planning, focusing specifically on the sales function. Sales planning aligns sales efforts with broader
organizational goals and ensures optimal resource allocation.
SALES PLANNING PROCESS:
1. Sales Forecasting: This initial step involves translating the broader business plan into a forecast of product group sales. It relies
on analysing data, market trends, and competition to project future sales.
2. Strategy Development: Once the sales forecast is established, the next step is defining the sales strategy. This includes pricing,
target markets, distribution channels, and promotions in line with the overall business goals.
3. Resource Allocation: Sales planning ensures that available sales force resources align with revenue and sales targets. It includes
defining territories, setting quotas, and assigning roles.
4. Performance Monitoring: Key performance indicators (KPIs) are established to track sales performance. Regular monitoring
allows for timely adjustments to sales strategies to meet targets.

Sales Control is a vital process that works alongside sales planning to monitor and adjust sales activities for effective goal
achievement. It ensures sales efforts align with organizational goals and enables proactive responses to market changes.
SALES CONTROL PROCESS:
1. Goal Setting: Sales control begins with clear, measurable sales objectives aligned with overall business goals.
2. Performance Measurement: Actual sales performance is measured against goals and KPIs to track progress.
3. Diagnosis: If performance deviates from the plan, a diagnosis identifies root causes such as market changes or internal issues.
4. Corrective Actions: Based on the diagnosis, corrective actions are implemented, which can include strategy adjustments,
pricing changes, or additional training.

Copyright © 2023 Jayanti Rajdevendra Pande. All rights reserved.

Q12. List the various types of sales plans. Also describe the significance of sales planning.

TYPES OF SALES PLANS

1. Strategic Sales Plan: This plan outlines the long-term sales objectives and strategies to achieve overall business goals.
2. Tactical Sales Plan: It focuses on short- to medium-term goals and strategies for specific product lines, markets, or regions.
3. Customer-Based Sales Plan: Sales plans can be tailored to different customer segments, such as new customers, existing
customers, or high-value clients.
4. Product-Based Sales Plan: These plans are structured around specific product lines, detailing how they will be marketed, sold,
and supported.
5. Functional Sales Plan: This plan aligns with different sales functions, such as inside sales, field sales, or channel sales.
6. Territorial Sales Plan: Sales efforts are organized based on geographic areas or regions, optimizing resource allocation for
each.

SIGNIFICANCE OF SALES PLANNING

1. Providing Direction: Sales planning sets a clear path for the sales team, ensuring everyone understands their roles and
responsibilities.
2. Realistic Objectives: It helps in setting achievable sales goals, avoiding overambitious targets that can demotivate the sales
team.
3. Improved Coordination: Sales planning fosters better coordination among sales teams, marketing, and other departments,
leading to a more synchronized approach.
4. Resource Allocation: It assists in optimizing the allocation of resources, including budget, personnel, and time, to maximize
sales results.
5. Risk Mitigation: Effective sales planning identifies potential challenges and allows for contingency plans to mitigate risks and
adapt to market changes. Copyright © 2023 Jayanti Rajdevendra Pande. All rights reserved.
Q13. What are the different methods of sales control?

DIFFERENT METHODS OF SALES CONTROL

Formal Control Sales Funnel

Budget Control

Informal Control Policy Formulation and Review

A. Formal Control: Formal control mechanisms involve established rules, policies, and procedures that sales teams must follow.
This includes documented sales processes, guidelines, and performance metrics.
B. Informal Control: Informal control relies on trust, relationships, and culture within the sales team. It emphasizes collaboration,
open communication, and peer accountability.
C. Budget Control: Sales budget control involves monitoring and managing financial resources allocated to sales activities. It
ensures that expenditures are in line with the budget and provides financial accountability.
D. Sales Funnel: The sales funnel is a visual representation of the sales process, tracking leads and prospects through various
stages. Monitoring the funnel helps identify bottlenecks and areas for improvement in the sales process.
E. Policy Formulation and Review: Establishing sales policies and regularly reviewing them is a method of control. It ensures that
sales practices align with company standards and compliance requirements.
Copyright © 2023 Jayanti Rajdevendra Pande. All rights reserved.
Q14. What is demand measurement ? Also discuss major concepts of demand measurement.

Demand Measurement
• It the process of assessing and quantifying the demand for a product or service in a specific market or by a particular
company. It involves gathering data and analyzing factors that influence the level of demand, helping organizations make
informed decisions about production, marketing, and resource allocation.
• Demand measurement is essential for businesses to make decisions regarding production levels, inventory management,
pricing strategies, and marketing efforts. Accurate demand measurement allows organizations to allocate resources
efficiently and meet customer needs effectively.

MAJOR CONCEPTS OF DEMAND MEASUREMENT

1 Market Demand:
A] Market Potential: Market potential represents the maximum sales that could be achieved in a given market under ideal
conditions. It considers factors such as the size of the target market, purchasing power, and consumer preferences.
B] Market Forecast: Market forecast is a projection of future demand based on historical data, market trends, and various
forecasting techniques. It provides an estimate of expected sales in a specific market over a defined time frame.
2 Company Demand:
A] Company Sales Potential: Company sales potential is the maximum sales volume a specific company can achieve in a
particular market. It considers the company's resources, production capacity, and market reach.
B] Company Sales Forecast: Company sales forecast is a prediction of a company's future sales based on its historical
performance, market conditions, and strategic initiatives. It helps in setting achievable sales targets.
Copyright © 2023 Jayanti Rajdevendra Pande. All rights reserved.
Q15. Explain how to estimate & analyse market potential?

Market Potential is the maximum achievable sales level for a product or service in a specific market, considering various factors like market
size, consumer preferences, and economic conditions. It helps businesses assess growth opportunities and make informed decisions.

MARKET POTENTIAL ESTIMATION FOR EXISTING PRODUCTS:

• Sales Index Method: Calculate the sales index by comparing the company's sales in the target market to its total sales. This method
considers market share and sales trends, helping estimate market potential.
• Market Factor Method: Identify key market factors (e.g., population, income levels, industry growth) that influence demand. Estimate the
market size by applying these factors to the target market.
• Regression Analysis Method: Utilize statistical regression analysis to identify relationships between sales and various market variables. This
method allows for a more data-driven estimate of market potential.
MARKET POTENTIAL ESTIMATION FOR NEW PRODUCTS:
• Judgmental Estimates: Seek input from experts within the organization who have industry knowledge and experience. They can provide
informed judgments on potential market size based on product characteristics and market conditions.
• Consumer Surveys: Conduct surveys among potential consumers to gather insights into their preferences, needs, and willingness to adopt
the new product. Analyze survey data to estimate market potential.
• Substitute Method: Analyze similar existing products or services in the market and estimate market potential by considering how the new
product may capture a portion of this market.
MARKET POTENTIAL ANALYSIS:
1. Identify Potential Product Buyers: Define the characteristics and demographics of potential product buyers. Consider factors like age,
gender, location, income, and lifestyle that may influence purchasing decisions.
2. Determine the Number of Individual Buyers in the Potential Buyers Group: Based on the identified characteristics, estimate the total number
of potential individual buyers in the target market.
3. Measuring Potential Buying or Usage Rate: Analyze historical data or conduct surveys to estimate how often potential buyers may purchase
or use the product. Multiply this rate by the total number of potential buyers to determine market potential.
Copyright © 2023 Jayanti Rajdevendra Pande. All rights reserved.
Q16. Explain Sales potential & determinants of sales potential.

Sales Potential refers to the maximum level of sales a company or product can achieve under ideal circumstances within a
specific market or industry. It is an estimate of the upper limit of sales performance and serves as a benchmark for setting
sales targets and making strategic decisions.

DETERMINANTS OF SALES POTENTIAL

 Accessible Distribution Channel: The ease and availability of distribution channels to reach customers can significantly
impact sales potential. Efficient and accessible distribution methods can help expand market reach.

 Competition Intensity: The level of competition within a market or industry is a crucial determinant. A highly competitive
environment may limit sales potential, while a less crowded market can offer more opportunities.

 Risk-Taking Ability: An organization's willingness and capacity to take calculated risks can affect its ability to explore and
realize sales potential in new markets or with innovative products.

 Organizational Resources: The availability of resources, including financial, human, and technological resources, plays a vital
role in determining how effectively a company can exploit its sales potential.

 Market Conditions: The overall economic, social, and political conditions within a specific market or region can influence
sales potential. Factors such as stability, government policies, and cultural preferences can impact consumer behavior and
purchasing power, ultimately affecting the potential for sales success.
Copyright © 2023 Jayanti Rajdevendra Pande. All rights reserved.
 IMPORTANT DEFINITIONS IN THIS MODULE

1 SALES MANAGEMENT
• The process of planning, organizing, and directing sales activities to achieve specific business goals.
• E.F.L.Breech – Sales Management is overall management of sales & it refers to only a specialised application of the process of
management as a whole.

2 SALES RESEARCH
• Gathering and analyzing information to understand customer preferences, market trends, and competitors for informed sales
strategies.

3 SALES FORECASTING
• Predicting future sales based on data analysis and market insights to guide business decisions.

4 SALES PLANNING
• The systematic process of setting sales objectives, strategies, and actions to achieve sales targets effectively.
• American Marketing Association – Sales Planning are the work of setting up objectives for selling activities, determing & scheduling
the steps necessary to achieve these objectives.

5 SALES CONTROL
• Monitoring and adjusting sales activities to ensure they align with sales goals and adapt to changing market conditions.
• Philip Kotler – Control is the process of taking steps to bring actual results & desired results closer together.

6 DEMAND MEASUREMENT
• Assessing and quantifying the potential demand for a product or service within a specific market or industry.
Copyright © 2023 Jayanti Rajdevendra Pande. All rights reserved.
Copyright © 2023 Jayanti Rajdevendra Pande.

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