You Are The Marketing Head Of A Multi Product Marketing Company For Consumer Goods In South India. Explain The Method And Elements Of A Sales Projection For The Following Budget Year?


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Sales forecasts
Projection of sales is an important part of the plan. Part of the sales projection work is planning for a better performance in the future and correcting past performance with which you are not satisfied. You do this by finding out what profit contribution each sales representative makes. One goal of measuring a sales representative's performance is improvement assistance. This is done in the marketing personnel section of the marketing plan.
Talk to your sales managers and get their agreement about goals to attain for the next year. You can agree on total profit contribution in currency, in numbers and a number of other variable parameters. You should include these expectations for each major product line, for each major market (industry, geography, demography, etc.) or even for each major account.
Reach an agreement on the expenses as well. This is handled in the marketing budget section. Think of total sales budget in currency for travel, cars, customer entertainment (lunches, dinners), telephone and other expenses.
In the Budgeting and Control section you can include measurement of the projected sales figures, costs and other parameters included. Have regular meetings with your sales staff, your sales management, marketing management and other personnel responsible for your sales.
Additional costs such as price cuts, non-reimbursed overtime, claims or credits due to errors, and their expenses reduce the sales force's profit contribution. Consider all these variables when projecting your sales for the next three or five years. Be as specific as possible.
We've found that doing two forecasts is best, a very optimistic one and a worst case scenario. Then try to average between the two. We've been successfully using this for years.
Use the Estimate Sales tables to help you calculate the total sales and the cost of goods sold for each product each year. Enter the units to be sold and the sales price per unit. Enter the cost of goods sold per unit. The actual sales and cost of goods total are automatically calculated.
Estimate Sales

The cost of goods per product unit are calculated in a separate table to the right (see below), and are automatically added to the Estimate Sales table in the column 'Cost of goods per units'.

The above information is automatically inserted into the Sales Projection worksheet. Enter the sales per month by taking the total yearly amount from the Estimate Sales and divide it using a weighing percentage for each month. All other data is automatically calculated from the information entered.

Sales projections worksheet

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