Chapter
14
Analysis of
Sales Volume
It is only through evaluation
that value exists: and without
evaluation the nut of existence
would be hollow.
Friedrich Nietzsche
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Interrelationship of planning,
implementation, and evaluation
Planning
Set goals
Determine strategies & tactics
Evaluation
Implementation
Compare goals and results
Organize
Explain variances
Staff
Operate
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
The Evaluation Process (Fig 14-2)
To Find Out:
What
happened
Why
it happened
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
What
to do about it
80-20 Principle
80
percent of the orders,
customer, territories, or products
contributes only 20 percent of
the sales volume or profit.
Epitomizes misplacement of
marketing efforts
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Total Sales Figures May Hide
Significant Problems (Fig. 14-3)
Sales Volume
Total
Territory A
Time (years)
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Bases for Analyzing Sales Volume
Total
Sales Volume
Sales
by Territories
Sales
by Products
Sales
by Customer Classifications
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
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
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
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
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
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
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
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
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,
marekting, accounting, purchasing,
manufacturing).
 Salespeople
are sometimes resistant to SFA
initiatives.
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.