MA-U404: Operational Sales Planning Report, Modern Gadgets

This report presents an operational sales plan for Modern Gadgets, a company launching a GPS-enabled watch for children in Bahrain. It outlines the business and marketing strategies, emphasizing the importance of affordable pricing and unique product offerings. The report details sales forecasting techniques, including both quantitative and qualitative methods, and sets SMART sales objectives and targets for the first year. It includes a time plan, sales forecasts, and break-even analysis. The operational sales plan covers aims, objectives, business strategy, tactics, strategic actions, and monitoring through key performance indicators (KPIs). It also addresses sales territory allocation, a business case for resource acquisition, stakeholder communication, and contingency plans for variances in sales performance. The report emphasizes the use of historical data, forecasting techniques, and KPIs to monitor and control the sales process, ensuring effective sales management.

Running Head: Sales Management
Operational Sales Planning: MA-U404

Sales Management 1
Contents
Task 1: An operational sales plan..............................................................................................2
Relation between business & marketing strategies and operational sales planning:.............2
Influence of historical sales data on sales forecasts:..............................................................2
A range of sales forecasting techniques:................................................................................3
Use of sales forecasts to set sales objectives and targets:......................................................3
Time plan for the establishment of objectives and targets for sales plans:............................3
Use of sales forecasts to set objectives and targets for a sales plan:......................................3
Operational sales plan to meet objectives and targets:...........................................................5
Allocation of sales territories:................................................................................................5
Business case to obtain the resources to achieve the operational sales plan’s objectives and
targets:....................................................................................................................................6
Communication of the operational sales plan to all stakeholders and define individual roles
and targets in the sales activity plan:......................................................................................6
Monitor and controlling the operational sales plan using agreed key performance
indicators:...............................................................................................................................6
Variances that may occur in the implementation of the operational sales plan:....................7
Contingency plans to address variances:................................................................................7
Organisation’s procedure for dealing with unforeseen variances:.........................................7
Task 3: A brief report for the sales & marketing director..........................................................7
References:.................................................................................................................................9

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Task 1: An operational sales plan
Relation between business & marketing strategies and operational sales
planning:
The business that is discussed in this report is a watch and modern gadgets making
corporation known as Modern Gadgets. It has planned to launch a new product that is a GPS-
enabled watch for the children. The children will wear it on their wrists. There will be an app
loaded into the smartphones of the parents of guardians of those children. They will be able
to track the location of their children with the help of that app. This has been the basic
business strategy of the company named ‘Modern Gadgets’ that has proposed to launch this
new product in Bahrain. The objective is to offer these products at affordable prices to the
consumers such that they are able to get a unique product that has not been very well know of
in the market. The organization has formulated an operational sales planning for estimating
the revenue generation and cash flows from the new business. In designing the operational
sales planning, the corporate level strategic plans as well as the marketing tactical plans have
been considered. The sales targets and prioritizing of sales territories have been achieved
through this plan (Jobber & Lancaster, 2009).
Influence of historical sales data on sales forecasts:
The historical sales data are extremely important sources of information those are used to
design the process of sales forecasting. The advantage of the historical sales data is that,
suppose 1000 BHD was earned from sales in a particular month in the last year for an
organization, then it can be forecasted that the sales in the same month of the next year
should be near about that value. There can be some variance in the form of growth or
shrinkage in the future expected sales. There might be an array of factors those might cause
differences in the expected projected sales and the actual sales. Some of these factors are as
follows:
 Change in the market growth
 Change in the size of the sales force as compared to the last year
 The investment on advertising and promotions
 Increase or decrease in prices
 Change of location
 Introduction of a new product or service
 Decline in Sales

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A range of sales forecasting techniques:
Generally, there are two types of sales forecasting techniques those are employed by an
organization such as the quantitative and qualitative techniques. The quantitative technique is
based on the use of historical data and it includes various mathematical calculations for
forecasting the future demand. Example of this technique might be the Time Series Analysis.
The qualitative analysis is conducted with data gathered from the overlays and estimates of
different people. It is important when there is no past demand of the product and the product
is new. Examples of the qualitative method of forecasting is market research and sales force
planning those have been implemented in case of this new business (Mentzer & Moon, 2005).
Use of sales forecasts to set sales objectives and targets:
The sales forecasts made for Modern Gadgets have made it convenient for the sales
department to develop the sales objectives and targets those are SMART in nature. The major
sales objectives can be enumerated as follows:
 To achieve a profit of around 15-20% in the first year of operations on the GPS
watches
 To increase the sales force by at least 10% in the first year so as to achieve higher
sales every month
 To achieve at least more than 40% increase in sales value from the first month till the
twelfth month in the first year
Time plan for the establishment of objectives and targets for sales plans:
The time plan has been formulated according to the planning cycle of the organization that is
the fiscal year for the organization starting on 1st April and ending on 31st March of the next
year. The sales objectives and targets have been formulated on a monthly basis. The
outcomes of the selling activities and the performance of the sales personnel will be measured
on a monthly basis since the window of forecasting is just one year for the GPS watch for the
organization.
Use of sales forecasts to set objectives and targets for a sales plan:
The sales forecast for the 12 months is projected as follows in BHD:
Prod
uct
Mon
th 1
Mon
th 2
Mon
th 3
Mon
th 4
Mon
th 5
Mon
th 6
Mon
th 7
Mon
th 8
Mon
th 9
Mon
th
10
Mon
th
11
Mon
th
12
GPS 582 595 620 635 660 710 735 755 772 815 835 855

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Watc
h
The sales forecast for the GPS Watch for the next 12 months depicts a sale of 582 BHD in the
first month and gradually, there has been an increase in the sales of the product as evident. In
the twelfth month the sales value will be around 855 BHD. Thus, there will be expected rise
of around 47% in sales value of the watch from the first month till the twelfth month in the
year. This is a good response from the market that shows that the product has the potential to
capture the market successfully if the marketing and sales planning is conducted effectively.
Month
1 Month
2 Month
3 Month
4 Month
5 Month
6 Month
7 Month
8 Month
9 Month
10 Month
11 Month
12
582 595 620 635 660 710 735 755 772 815 835 855
GPS Watch
Break-Even Sales:
Year 1
Sales Price Per Unit 2
Variable Cost 1.4
Contribution 0.6
Fixed Cost 262
BEP Sales 436.6667
The above table shows the Break-Even sales of the GPS watch in the first year of its sale to
the customers. The selling price per unit has been fixed at 2 BHD and the BEP sales will
amount to 436.67 BHD at the end of the first year of operations.

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Operational sales plan to meet objectives and targets:
The operational sales plan consists of the following:
 Aims & Objectives- The aims and objectives of the business are to push the new
GPS watch to the target customers at reasonable prices such that the new product has
positive chance of receiving market acceptability and growth (McDonald & Wilson,
2011).
 Business Strategy- The business strategy will include the techniques of offering the
high quality of products and services to the target customers. The focus will be to
offer the products at affordable prices to the customers and provide effective after-
sales services once the products have been sold to the customers (MURRAY, 2016).
 Business Tactics- The business tactics define the target customers those are mainly
composed of the parents having children. Thus the target age range is between 21-40
years primarily having children.
 Strategic Actions- The products will be available at the retail outlets of the brand.
They will also be offered through online sales facilities those can be availed of from
the official portal of the company and with the help of an app that can be downloaded
for the modern smartphones. The company needs more sales personnel for selling the
products door to door and also for showing demonstrations at various locations within
the city, particularly near the schools and colleges (Logility, 2018).
 Control and Monitoring- The sales processes need to be monitored and evaluated
from time to time such that the performances of the sales force can be evaluated and
kept track of, based on which their compensations, incentives and future strategies
will be determined by the management. There are Key performance Indicators or
KPIs to track and evaluate each sales function undertaken by each and every sales
people (Rouse, 2018).
Allocation of sales territories:
The allocation of the sales territories for the new product has been done on the basis of
historical approaches. The reasons behind the allocation of sales territories to the sales people
are as follows:
 Achieving savings in costs and reducing travelling time for each sales people
 Enabling the sales personnel to reach to the appointed customers on time

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 Motivating the sales personnel by allowing them certain degree of autonomy where
they are the leaders in their respective sales territories
 Ensuring that the administration is kept simple
Business case to obtain the resources to achieve the operational sales
plan’s objectives and targets:
The business case has been developed for obtaining the required resources for the purpose of
achieving the objectives and targets of the operational sales plan. The various domains of
consideration have been the strategic situation, objectives of investment, current
arrangements, needs of the business, the benefits those will be achieved by investing in the
required resources, the risks involved in investing on the internal and external resources those
are required, an array of options those are needed to procure the resources, the timescale of
procuring each of the resources and finally appendices those might contain financial analyses,
risk analysis, cash-flow analysis, etc. (Kinaxis, 2017).
Communication of the operational sales plan to all stakeholders and define
individual roles and targets in the sales activity plan:
The proposed sales plan for the new GPS-enabled watches by the company needs to be
communicated to the key stakeholders related to the sales of the organization. Some of those
stakeholders are as follows:
 Sales Management
 Sales Managers
 Sales Executives
 Financial Department
 Operational Department
 HR Department
 Production Department
 Marketing Department
 Directors
 Others related directly or indirectly with the sales functions
Monitor and controlling the operational sales plan using agreed key
performance indicators:
The company has selected some Key Performance Indicators for assessing the effectiveness
of the operational sales plan in terms of the performances of each of the sales people within
the sales department (Cecere, 2015). The major KPIs are listed as follows:
 Level of sales

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 Level of customer satisfaction achieved
 Margins
 Rates of calling
 Rates of conversion
 New customers gained
 Customers lost
 Level of repeat business achieved
 Important projects secured
All these data are collected and analysed with the help of the installed the IT framework and
many other automated systems.
Variances that may occur in the implementation of the operational sales
plan:
Variances are bound to occur in the actual sales output and the estimated sales output of the
new product. The level of tolerance selected is +-7% on a performance band. The variance
should not be more than 7% or less than 7% as both can have detrimental impacts on the
operational sales functions of the organization.
Contingency plans to address variances:
The contingency plan that has been developed for addressing any variance in sales
performance consists of the identification of the various probable risks those might impact
the business at any point of time. A risk assessment has been performed to identify the
various internal and external risks those might affect the sales processes of the organization.
Adequate reserves have been created from beforehand to deal with any form of financial
contingency that might happen in near future.
Organisation’s procedure for dealing with unforeseen variances:
The KPIs have been designed by the organization for assessing the sales performance of each
of the sales people. First of all, the sales management has determined the consequences of not
being able to achieve the desired performances. This has helped in understanding the severity
type and accordingly the contingency plans have been formulated by the organization.
Task 3: A brief report for the sales & marketing director
Introduction:

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The objective of this report is to make the sales and marketing director aware of the sales
planning and the ways it will be communicated to the various sales personnel in the
organization.
Ways of communicating sales plan to the sales team:
The sales plan will be communicated to the sales team with the help of email and meetings
conducted with all the sales executives of the organization those are in charge of selling the
newly launched GPS-enabled watch to the target customers. The sales managers will conduct
meetings with their respective sales teams and discuss the new sales plan to them and take
their feedbacks and suggestions. Finally, he will take the decision regarding any change that
is required and will communicate that to the higher level sales personnel.
Defining individual sales roles and targets:
The sales roles and targets will be assigned to each of the sales people depending on their
experience, level of performance, success achieved, qualification, emotional stability and
personal qualities such as leadership capabilities. The targets will be given as per the job
positions in the sales department and the experience of the sales personnel within the
organization. As for example, for the new joiners, targets will be lower and for the
experienced employees targets will be higher.
Conclusion:
In conclusion, it can be said that the proposed operational sales planning looks to be an
effective strategy for launching the new GPS-enabled watch by the organization. The
required strategies have been formulated effectively and the proposed plans have been
intimated to the sales people within the organization. Now, the plan needs to be approved by
the key stakeholders such that it can be implemented soon for the achievement of growth,
profitability and sustainability by the organization in this competitive industry.

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References:
Cecere, L. (2015). Why Is Sales and Operations Plannning So Hard? Retrieved from forbes:
https://www.forbes.com/sites/loracecere/2015/01/21/why-is-sales-and-operations-
plannning-so-hard/#3c18d261265d
Jobber, D., & Lancaster, G. (2009). Selling and Sales Management; 8th edition.
Kinaxis. (2017). Sales and Operations Planning. Retrieved from kinaxis:
https://www.kinaxis.com/en/solution/sales-and-operations-planning/
Logility. (2018). Successful Sales and Operations Planning in 5 Steps. Retrieved from
logility: https://www.logility.com/library/white-papers/s-op-papers/media/successful-
sales-and-operations-planning-in-5-step
McDonald, M., & Wilson, H. (2011). Marketing Plans: How to Prepare Them, How to Use
Them, 7th Edition.
Mentzer, J. T., & Moon, M. A. (2005). Sales Forecasting Management: A Demand
Management Approach.
MURRAY, M. (2016). Sales and Operations Planning. Retrieved from thebalance:
https://www.thebalance.com/sales-and-operations-planning-2221398
Rouse, M. (2018). sales and operations planning (S&OP). Retrieved from
searcherp.techtarget: http://searcherp.techtarget.com/definition/sales-and-operations-
planning-SOP