Analysis of
Sales Volume
Learning Objectives
 Strategic relationship between Planning and
Evaluation
 Sales Force Performance Evaluation
 Bases for Analyzing Sales Volume
 Sales Force Automation
Interrelationship of Planning,
Implementation, and Evaluation
Planning
Set goals
Determine strategies & tactics
Evaluation
Implementation
Compare goals and results
Organize
Explain variances
Staff
Operate
Planning, implementation and evaluation are conducted in an interrelated and
continuous manner.
Planning, Implementation and
Evaluation
 (1)Effective planning, (2)implementation and (3)
evaluation.
 Evaluation follows and precedes planning.
 Effective evaluation will tell:
Whether its plan has worked
To what degree it has been successful
What the reasons are for the plan’s success or failure
The Evaluation Process (Fig 14-2)
To Find Out:
What
happened
Why
it happened
What
to do about it
A marketing audit – a comprehensive, periodic review and evaluation of the
marketing function in an organization – its marketing goals, strategies, and
performance. (e.g., appraisal of the organization, personnel and tactics
employed to implement the strategies and reach the goals).
Sales Force Performance
Evaluation
MPA may be taken to correct the misdirected marketing
effort found in many companies.
Evaluation of sales performance covers:
 The analysis of sales volume (SVA) – (is a careful study of a
company’s records of income statement in the net sales
section).
 Marketing cost analysis (MCA)(a study of marketing
expenses determine the profitability of various marketing
segments in an organization) and marketing profitability
analysis (MPA) – SVA+MCA=MPA
 Various analytical measures used to evaluate an individual
salesperson’s performance
Nature of Misdirected
Marketing Effort

A company does not enjoy the same rate of net profit
on every sale. In most firms a large proportion of the
orders accounts for a small share of the profits.
 The 80-20 Principle (the relationship between selling
units and profits).
 80 percent of the orders, customer, territories, or
products contributes only 20 percent of the sales
volume or profit.
 Demonstrates misplacement of marketing efforts.
Because lack of sufficient detailed information, many
executives are unaware of misdirected marketing effort
in their firms.
Total Sales Figures May Hide
Significant Problems (Fig. 14-3)
Sales Volume
Total
Territory A
Time (years)
Many have
shown satisfied
overall sales,
however, when
totals were
subdivided by
territory or
products, serious
weaknesses may
be discovered.
Bases for Analyzing Sales Volume
 Total Sales Volume – the combined sales of all products in all
territories for all customers.
 Sales by Territories – can identify further (e.g., which
territories are strong)
 Sales by Products – few products may bring most of the
volume.
 Sales by Customer Classifications – can analyze its volume by
customer groups in several ways (e.g., industry basis, channels
of distributions)
Information Used In Analysis of Total Sales Volume,
Colorado Ski Company (Fig. 14-4)
Year
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
Company Volume Industry Volume Company’s Share
(in millions)
(in millions)
of Market
$27.0
$360
7.5%
25.2
390
6.4
23.4
360
6.5
20.4
312
7.0
21.0
300
8.2
19.2
234
8.3
19.8
240
8.9
19.2
216
8.9
18.0
180
10.0
15.0
150
10.0
Analysis of Territorial Sales Volume in Five-Territory Western
Division, Colorado Ski Company (Fig. 14-5)
Market
Dollar
Index Sales Goals Actual Sales Performance Variation
Territory (percent) ($000)
($000)
Percentage ($000)
A
27%
$3,645
$2,700
74%
$-945
B
22
2,970
3,690
124
+720
C
15
2,025
2,484
123
+459
D
20
2,700
2,556
95
-144
E
16
2,160
2,070
96
-90
Total
100%
$13,500
$13,500
Analysis of Product Sales Performance in Two Territories,
Colorado Ski Company (Fig. 14-6)
Territory A ($000)
Product
Goal Actual Variation
Skis
$1,629 $1,710
$+81
Accessories 270
234
-36
Pants
900
360
-540
Parkas
846
396
-450
Total
$3,645 $2,700 $-945
Territory B ($000)
Goal
Actual Variation
$1,263 $1,620
$+357
222
360
+138
765
1,080
+315
720
630
-90
$2,970 $3,690
$+720
Customer
Probability
Cube
(Fig. 14-7)
Q4
Q3
Q2
0.9
Q1
Customers
C1
0.2
0.5
0.1
0.9
0.2
0.5
0.1
P1
P2
P3
P4
0.1
C2
...
Cn
Products

Shows salespeople what to sell, when and to whom…
Sales Force Automation
 Typically a single part of an overall CRM (Customer
Relationship Management) system
 Analyzes information from a variety of the firm’s different
business functions (e.g. sales, marketing, accounting,
purchasing, manufacturing).
 Salespeople are sometimes resistant to SFA initiatives.
Thank you