ANALYSIS OF SALES

AND MARKETING COST

PRESENT BY:-
AMRENDRA
KUMAR
KUSHAL T.R
 SALES & MARKETING
COST ANALYSIS
Companies need to have proper mechanisms in place so that
that
salespeople adhere to the top line and bottom line objectives
Sales Audit :-Sales Audit is a systematic, critical & unbiased
review and appraisal of the basic objectives and policies of
the selling function and of the organization, policies, methods,
principles and personnel employed to implement those
policies and achieve those objectives.
• Salespeople tend to lose sight of this core objective over
time; that is why this becomes critical
•Key characteristics:
•a) Objectives: Each sales function must have clearly

stated
• objectives. Like we want to achieve sales of 20
million
• units this year without decreasing per unit profit by
more
• than 3%.
•b) Company Policies: Are they in line with objectives

or do they need to be changed. E.g. the

compensation structure
• c) Organization: Does the company have the

resources to
• achieve the objectives? E.g. overstaffed or
understaffed
• d) Methods: Are the strategies appropriate?

• Will discounting, for instance dent the brand image?

•e)Procedures: Implementation of methods
•

• Audits seek to answer 4 questions:

• a) Who is buying what and how?
• b) Who is selling what and how?
• c) How is the competition doing?
• d) How are we doing?  
•
• Sales analysis :seeks to identify strengths
and weaknesses in the sales data like high
turnover-low profit; good and bad
customers, high potential and low potential
customers, respective performance of sales
territories etc.
•  Allocating sales effort:
• ‘Iceberg principle’ says that only a small part
of the total situation is visible; the rest has
to be gauged through sales analysis. There
are customers who account for a smaller
percentage of sales but time, money and
effort to tap them is no less. These
situations must be analysed & corrective
action taken. The desirable outcome is that
allocation be done based on sales potential
and actual sales.
•
Figures in Rs. Million

REGION Quota Sales +/- % age achieved

New Delhi 5 3.78 -1.22 75.6%

Mumbai 7 8.35 +1.35 119.28%

Hyderabad 4 5.49 +1.49 137.25%

Chennai 3.5 3 -0.5 85.71%

Bangalore 2.5 2 -0.5 80%

•

• The data must then be analyzed in New

Delhi, Chennai and Bangalore to ascertain
which salesperson(s) in these areas
missed the quotas. Then we can further
analyze where he missed the quota by
factors like sales account type, or by
product line.

• Marketing cost analysis:
• This is done to judge the profitability of
various aspects of the sales operations. It
can be judged w.r.t. territories, sales
personnel, product types, accounts, etc.
•  Classifying sales expenses:
• They may be classified as separable
( direct) or common (indirect ). Separable
are traceable to individual sales people,
accounts, channels, products, etc. Common
expenses are for the entire company. For
instance, salary is a common expense and
commission is a separable expense; even
transportation. You cannot attribute
administration related sales expenses.
•
  In marketing cost analysis, expenses data is
grouped by
• activity; for instance, all expenses related to
field sales are kept separately.
 Common expenses have to be assigned
logically to different aspects of the sales
operations.
 For instance, if the company has a fixed salary
component, how do you divide it among
products?
 The final formula regards contribution by any
aspect of the
• sales function:
• Sales – cost of goods sold – (separable
expenses + common separable expenses +
common expenses attributable on a logical
basis)
 

• THANK-YOU