IMPORTANT

◦ Written end-term test - 26th November, 2024, replacement 4th December,

2024

◦ 2024 Oct 21-25 project week, no formal class!

◦ Guest speaker: 19 November 2024 during regular lesson

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 PLANNING OF SALES, FORECAST
ANALYSIS, LONG-TERM, SHORT-TERM
FORECASTING
KATALIN SARKADI, MBA, PROFESSOR OF PRACTICE
Forecasting
◦ Forecasting is a technique that uses historical data as inputs to make informed
estimates that are predictive in determining the direction of future trends.
Businesses utilize forecasting to determine how to allocate their budgets or plan
for anticipated expences for an upcoming period of time. This is typically based on
the projected demand for the goods and services offered. (Investopaedia)
◦ i.e. predicting how much sales is going to be realized within a set period (annually,
quarterly, monthly),
◦ these overarching objectives are fragmented and split among the members of the
sales force organization, in our case responsible for direct selling.
◦ Forecasts are created from empirical and historical data via making predictions
about the expected future trends.
Forecasting – Information Sources
Sales Management & Human Finance, Accounting and Manufacturing and Product
Resources Marketing
Development
◦ Information about ease of selling Credit policies affect reps Manufacturing may rely on orders,
product can lead to decisions
◦ – Loose policies = more sales, more subsequently manufacture product
◦ – Training bad debts (furniture)
– What products are emphasized
– Push for price cuts, product ◦ – Tight policies = fewer sales, fewer – May stockpile products until they’re
enhancements – How many bad debts
sold
representatives to hire ◦ – Reps can provide information – • Reps know what their customers
◦ Representatives info can impact hiring effect on credit policies
are asking for, provide R&D with
plans ◦ Competition pricing, market recommendations for new products
◦ – Ensure enough employees at the right conditions, etc.
time or different demanded features
◦ Reps contribute information before – Reps are often the first to run
◦ – Bad sales may = hiring more reps to and after marketing campaigns
improve sales, across competitors’ new products
◦ or perhaps hiring freeze, possible – Can provide insight into what
downsizing
customers are willing to pay for
 Forecasting Inputs

https://spendmatters.com/2014/07/31/8-key-design-considerations-for-optimizing-your-demand-planning-process-part-1/
The Sales Force Program
Forecasting Methods
Long – Mid – Short Term Forecasting Methods
◦ Long-term forecasting: Being part of the strategic company objectives it projects
the possible future demand over a time period of 2 years, relating to resource
implications.
◦
◦ Mid-term or medium-term forecasting: it entails minor strategic decisions in
relation to the operation of the business and provides a basis for the annual
operational budgeting of the company, covering the period of around one year.
◦ Short-term forecasting: they target rather tactical steps and covers a period of
approximately 1-3 months, but definitely less than a year. Tactical steps can be
taken to meet the targets if some unexpected happens on the market, to do some
corrective actions in the original plans (like reacting to a competition product
launch or promotion, price decrease or increase, out of stock of competitive
brands, seasonal sales fluctuations, etc.)
 Estimates used in Forecasting

Tanner , J. Honeycu/, E. and Erffmeyer, R. (2013) Sales Management: Pearson New InternaFonal EdiFon, 1st edn.)
Estimating Total Market Size
◦ •Potential market sales for a given sector in a given
◦ county can be estimated as

◦ PSij is potential market sales for commercial sector j in county i

◦ -Pi is population for county i
-SSPCj is state sales per capita for commercial sector j -PCIi is per capita income
for county i
-PCIs is per capita income for state s
https://youtu.be/fp-1_9mLlbc
https://youtu.be/fp-1_9mLlbc
Forecasting Methods: Time Series Techniques, Trend
Analysis
◦ Group of statistical methods used to examine sales patterns over time, determining
base figures to calculate price and volume adjustment
◦ Trend analysis(naïve forecast):determining the rate sales have grown in the past
and using that to estimate future sales
◦ Can be useful when changes in a market are few and not very dramatic
◦ Adjustments : An adjustment provides sales managers or sellers the ability to
estimate the final amount that they expect for a forecast's opportunities to
bring in at the close of the forecast period. Sales managers have the ability to
adjust their own or a direct report's forecast.
◦ Moving average: rate of change for past few periods is averaged
◦ Exponential smoothing: type of moving average that puts more emphasis on the
most recent period.
Forecasting Methods: Correlational Analysis

◦ Correlational analysis: form of trend analysis, forecasts are based on trends

of other variables
◦ Leading indicator: variable that happens before sales of the company’s product
◦ Regression analysis: includes a number of variables; influence of each
variable is estimated and weighted, and effects are summed to provide a
single estimate of sales
◦ Consumer spending correlates: variables that predict how much
consumers will spend overall (Consumer Confidence Index)
◦ Business spending correlates: variables useful to business in correlational
analysis (NAICS - North American Industry Classification System)
 Qualitative Forecasting Methods

https://youtu.be/fp-1_9mLlbc
Forecasting Methods: Other Models

◦ Response models: sophisticated statistical models that examine how customers respond to sales
and marketing strategies
◦ Market share calculation
◦ Market test: response model that’s especially useful when firms are trying to figure out how well a
new product or service is likely to be accepted
◦ Company launches in a limited market to learn how the market will react to the product, demand is extrapolated to full
market
◦ Delphi method: The Delphi method is a forecasting process framework based on the results of multiple
rounds of questionnaires sent to a panel of experts.
◦ Judgement techniques: involve judgements by someone of the actual forecast
◦ Executive opinion: best-guess estimates of a company’s executives
◦ Expert opinion: similar to executive opinion except that expert is usually outside of the company
◦ Customer (and channel) surveys: ask customers (or distributors and retailers) how much they plan to spend
◦ Sales force composite: ask members of sales force what they think they can sell
Limitations of Forecasting, Typical Issues and Avoidance
Overestimating
– Leads to investing in manufacturing and
distribution assets the firm won’t need
Underestimating
– If manufacturing isn’t making enough of the
product to meet demand, door is open for
competitors to launch “copycat” products and steal
market share

How to Do Forecast:

• Use multiple methods

Pick the right method for your business

• Use as much information as you can

Plan for multiple scenarios

Track your progress and adjust the forecast

 Sales Quota

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.

Sales Quota in Goal Setting and Performance
Mgmt see at earlier lesson
Readings, videos

◦ Moodle ‘book’ Sales Management’

◦ https://hbr.org/1971/07/how-to-choose-the-right-forecasting-technique
◦ https://youtu.be/fp-1_9mLlbc
◦ https://www.youtube.com/watch?v=X8E07cDHK5g
 Pricing Strategies
Pricing strategies are important factors for business success – to gain the highest possible profit but
also ensure long-term, sustainable success with competitive market prices in the offered category.
◦ Cost-plus pricing: it is the most common pricing procedure, which applies a fair extra price on
top of the production cost. The only bottleneck of the process is that it neglects decreases in
production costs resulting from production volume increases (production cost/unit).
◦ Customer-Driven Pricing or Strategic pricing: prices are set in line with the customers’
perceived value of the product. The perceived value can increase when there is a shortage or a
given product is out of stock and competitors are increasing the price, and also if there is a
seasonal demand (e.g. firewood).
◦ Share-driven pricing: if prices are dictated by the competition, the end result is always
contradictory. Competitors start to decrease prices in the hope of quickly gaining market share,
but this is never sustainable as it radically eats up potential market profit. Price wars are very
harmful games and only those players can afford it who has very strong financial stability and
reserves. After the end of the price war, it is very difficult to get back to a profitable price level
accepted by customers or consumers.

(Nagle and Müller, 2017)

 Pricing Strategies
◦ Value-based pricing: pricing is adjusted to the perceived value of the product.
◦ Proactive pricing: when the company wants to prepare for a known competitive
market entry, it can decrease the price in order to ensure some pre-purchases or a
loyalty programme.
◦ Price skimming: a company launches or lists a product at the highest possible
price and starts lowering it to a level where it meets the market average (see Apple,
or Sony Playstation, or Tesla electric cars).
◦ Penetration pricing: offering a starting price, a discount during the launch phase,
in order to attract customers or consumers. When the critical mass of targeted
customers is achieved and loyalty is established, the company can start raising the
price to a much more profitable level. Examples can include a telecommunication
provider selling subscriptions with a free month of internet services, or any FMCG
products with a launch price.

(Nagle and Müller, 2017)

 Purchasing Power
◦ The Purchasing power can be calculated by research companies on the basis of
their regular panel.
◦ It can be collected from the Bureau of Labor statistics as a reliable source of
information. Purchasing power is decided by the Consumer Price Index (CPI) that
monitors the changes of the prices of goods or services over a period of time.
◦ Any change in the purchasing power can have an effect on sales, pricing and
consequently on forecast and expected revenue

◦ PPP: Purchase Power Parity (Purchase power parity (PPP) is an economic theory that allows for the
comparison of the purchasing power of various world currencies to one another. It is the theoretical
exchange rate at which you can buy the same amount of goods and services with another currency. See also
Big Mac Index – interesting when the company is operating in more then one country or region/continent,e
tc.)

https://www.thebalance.com/purchasing-power-parity-3305953
EMPLOYER BRAND - CORPORATE
BRAND –
AND THEIR EFFECTS ON SALES
KATALIN SARKADI, MBA, Professor of Practice
 Employer and Corporate Branding

EMPLOYER BRANDING: OBJECTIVES, CHANNELS AND PERFORMANCE INDICATORS, Katharina Buttenberg,

https://www.researchgate.net/publication/265379751_EMPLOYER_BRANDING_OBJECTIVES_CHANNELS_AND_PERFORMANCE_
 Employer Branding, Corporate Branding

◦ Employer branding is the process of managing and influencing your

reputation as an employer among job seekers, employees and key
stakeholders. It encompasses everything you do to position your
organization as an employer of choice.”
◦ Your employer brand is your organization’s reputation as an employer. In
simpler terms, it’s what job seekers and employees really think of you. It’s
what they tell their friends and family when you aren’t around. Though it may
not be tangible, your employer brand is an asset that requires constant
cultivation.

https://builtin.com/employer-branding
Employer Branding
◦ It can help the company to
◦ Attract Top Talent. ...
◦ Decrease Time and Cost per Hire. ...
◦ Boost Employee Morale. ...
◦ Raise Retention. ...
◦ Build Credibility with Customers. ...
◦ LinkedIn’s analytical summary found that organisations with great employer brands can see a 28% reduction
in turnover and a 50% cut in hiring costs. For most companies, this equates to annual savings entering the
millions. This headline-grabbing research was supported by the Randstad study, which found that a
staggering 86% of people would not consider applying to or continue to work for a company that has a
bad reputation with former employees or the general public. (https://www.workstars.com/recognition-and-
engagement-blog/2020/02/27/10-awesome-employer-brands-and-what-makes-them-great/)
 Benefits – Employer Branding

◦ Lower Cost/ Hire

◦ Better Talent Pool
◦ Time to Hire
◦ Lower Employee Turnover

https://www.sixdegreesrecruitment.co.uk/what-are-the-benefits-of-employer-branding/
 Culture, EVP and Employer Brand

https://www.aihr.com/blog/employer-branding-examples/
 Benefits – Employer Branding
◦ Corporate reputation is the most valuable intangible asset of an organisation
as it has the potential to increase or decrease an organisation’s worth.
◦ A strong corporate reputation provides a sustainable competitive advantage
to an organisation, which leads to a greater likelihood of achieving its
objectives amongst various stakeholders, including customers, opinion
leaders in the business community, suppliers and current and prospective
employees (Putnam & Mumby, 2013; Keh & Xie, 2009).
◦ Corporate reputation is built on how both external and internal
stakeholders perceive the organisation.
https://The Influence of Employer branding and Employees’ personal branding on Corporate Branding and Corporate Reputation , Adele Potgieter and Marianne Doubell, Nelson Mandely University, at researchgatenet:
https://www.researchgate.net/publication/342859514_The_influence_of_employer_branding_and_employees%27_personal_branding_on_corporate_branding_and_corporate_reputation
 Benefits – Employer Branding
◦ During the process of building the corporate reputation of an organisation,
stakeholders form emotional connections with employees through formal
and informal interactions.
◦ These emotional connections need to be aligned with the corporate identity of
the organisation to enhance the support of both internal and external
stakeholders (Alessandri, 2014). Sageder, Mitter and Feldbauer-Durstmüller (2018) maintain that
corporate reputation is a function of both corporate identity and corporate
image.

https://The Influence of Employer branding and Employees’ personal branding on Corporate Branding and Corporate Reputation , Adele Potgieter and Marianne Doubell, Nelson Mandely University, at researchgatenet:
https://www.researchgate.net/publication/342859514_The_influence_of_employer_branding_and_employees%27_personal_branding_on_corporate_branding_and_corporate_reputation
 Correlation between Corporate and Employee Branding

◦ There is a significant positive relationship between employees’

personal branding and corporate reputation.: External stakeholders’
interaction with employees of an organisation has a direct influence on how they perceive the
corporate identity and image (corporate reputation) which could directly and indirectly
influence the financial security of the organisation.
◦ There is a significant positive correlation between employees’ personal
brand and corporate branding : employees play an integral role in the establishment
of a corporate identity and image, ultimately influencing the corporate branding of an
organisation

https://The Influence of Employer branding and Employees’ personal branding on Corporate Branding and Corporate Reputation , Adele Potgieter and Marianne Doubell, Nelson Mandely University, at researchgatenet:
https://www.researchgate.net/publication/342859514_The_influence_of_employer_branding_and_employees%27_personal_branding_on_corporate_branding_and_corporate_reputation
 Correlation between Corporate and Employee
Branding
◦ There is a significant positive correlation between employer branding
and corporate reputation. Organisations that ignore the personal brand of a
potential or current employee run the risk of misalignment between the values, morals and
personality of the organisation and those of the individual. This misalignment could
potentially lead to a high staff turnover, poor client service, weak corporate identity and
image and could ultimately impact negatively on the corporate brand and reputation.
◦ There is a significant positive correlation between employer branding
and corporate reputation. Organisations should recognise personal branding as a
valid branding construct and encompass it in strategic decision-making processes.
◦ The combined influence of all the variables on corporate reputation is,
however, stronger than any of the variables independently
https://The Influence of Employer branding and Employees’ personal branding on Corporate Branding and Corporate Reputation , Adele Potgieter and Marianne Doubell, Nelson Mandely University, at researchgatenet:
https://www.researchgate.net/publication/342859514_The_influence_of_employer_branding_and_employees%27_personal_branding_on_corporate_branding_and_corporate_reputation
 Employer branding’s effects on Sales

Exploring the relationship between corporate, internal and employer branding.

Journal of Product & Brand Management, 19(6), 401-409
Some examples and videos for you to get inspired
◦ https://www.theheadhunters.ca/blog/9-awesome-employer-branding-and-recruitment-videos/
◦ https://www.youtube.com/watch?v=iSSMZgo1640
◦ GE: https://www.youtube.com/watch?v=rIO5ZokkGEE
◦ GE podcast: https://linkhumans.com/employment-consumer-brand-ge/
◦ https://www.youtube.com/watch?v=GcZHGonRF28 video
◦ Verizon: https://www.glassdoor.com/employers/blog/employer-branding-right-wrong/
◦ https://www.verizon.com/about/careers/work-culture

◦ Some examples to take a look at : https://www.aihr.com/blog/employer-branding-examples/

◦ https://www.mollie.com/en/about
Tony’s Chocolate
Zappos https://www.zappos.com/about/

◦ About Us
At Zappos.com, our purpose is simple: to live and deliver WOW.
◦ Twenty years ago, we began as a small online retailer that only sold shoes. Today,
we still sell shoes — as well as clothing, handbags, accessories, and more. That
"more" is providing the very best customer service, customer experience, and
company culture. We aim to inspire the world by showing it's possible to
simultaneously deliver happiness to customers, employees, vendors, shareholders,
and the community in a long-term, sustainable way.
◦ We hope that in the future people won't even realize we started selling shoes
online. Instead, they'll know Zappos as a service company that just happens to sell
________.
https://www.semanticscholar.org/paper/PLACE-AND-
ROLE-OF-EMPLOYER-BRAND-IN-THE-
STRUCTURE-
Mokina/b024447e011cf722f95c1d202690dabc436fa43c/f
igure/6