1. P LANNING, F ORECASTING & B UDGETING Distribution Management M Wahidul Islam Spring 2015 LECTURE 2

2. HTTP :// EDU - MBA 671. WEEBLY. COM

3. Elements of Distribution Management Planning, Forecasting & Budgeting Sales Force Management Product Pricing and Promotion Product Visibility Distribution Channels Channel Information Systems Warehousing and Logistics

4. S TRATEGIC PLANNING Marketing StrategyLong TermShort Term Product / Service Strategy Promotion / Marketing Communication Strategy Pricing Strategy Sales / Distribution Strategy Sales Promotion Strategy Selling Strategy (Sales Force / Personal etc.) Direct Marketing Strategy Point of Sales Promotion (communication) Strategy

5. G RAMEENPHONE - S TRATEGIC PLANNING Marketing Strategy Connecting people using emotional hook & limiting distances with targeted service offerings with ease of availability Product / Service Strategy Specific target segment based product / service with premium pricing Pricing Strategy Premium Pricing with Value Added Services Promotion / Marketing Communication Strategy Aggressive media presence with different product / service lines with emotional hook Sales / Distribution Strategy Ensuring availability everywhere with reach up to Rural markets

13. G RAMEENPHONE - S TRATEGIC PLANNING Marketing Strategy Connecting people using emotional hook & limiting distances with targeted service offerings with ease of availability Product / Service Strategy Specific target segment based product / service with premium pricing Pricing Strategy Premium Pricing with Value Added Services Promotion / Marketing Communication Strategy Aggressive media presence with different product / service lines with emotional hook Sales / Distribution Strategy Ensuring availability everywhere with reach up to Rural markets

14. F ORECASTING S ALES

15. S ALES F ORECASTING Is sales forecast only for Sales and Distribution department? Who else has a stake on the sales forecasting? Manufacturing for setting up production facility and planning production Finance for raising investment and cash to support manufacturing and predict incoming cash flow from profits and utilizing them Procurement function to support other departments requirements to meet the sale forecast HR to ensure proper manpower planning to support forecast and execution

16. B ASIC A PPROACHES OF S ALES F ORECAST Company Regional Area Territory Specific Market > Top-Down / Break-Down Approach > Bottom-up / Build-up Approach

17. S ALES F ORECASTING M ETHODS Qualitative Executive Opinion Delphi Method Sales Force Composite Survey for Buyers Intentions Test Marketing Full Blown Controlled Simulated

18. S ALES F ORECASTING M ETHODS Quantitative Moving Averages Exponential Smoothing Decomposition Naive / Ratio method Regression Analysis Econometric Analysis

19. H OW TO IMPROVE FORECASTING ACCURACY ? Use multiple Forecasting Method Helps to ensure high level of accuracy and gain confidence Identify Suitable Methods Depends on the application, cost and time available for forecasting Develop a few factors While using regression / econometric analysis, number of independent variables / factors should be more or few? Obtain a range of forecasts Minimum, intermediate and maximum Basically refers to contingency / scenario planning

20. G UIDELINE FOR SELECTING SUITABLE FORECASTING METHOD

21. S ELECTION T REE FOR F ORECASTING M ETHODS Armstrong, J. S. (2001). Selecting Forecasting Methods. ScholarlyCommons:University of Pennsylvania, 9.

22. B UDGETING

23. S ALES AND D ISTRIBUTION E XPENDITURE B UDGETING How do you determine how much to budget for sale and distribution? (not to be mistaken for marketing communication) Approaches Percentage of Sales Method Executive Judgment Method Objective and Task Method

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