7.4.2 Sales Budget

The Marketing Budget Detail screen allows companies to allocate their Sales Budget among three different sales channels. Projections of the upcoming round’s accessibility display in bar a chart at the bottom of the screen.

Outside Sales

Enter the number of sales people and manufacturers reps in your outside sales force for each segment. The outside sales force meets the customer in face-to-face sales calls. Each sales person costs $125,000, which includes salary, commission, travel and support .

Diminishing returns in a segment is reached at 12 sales people. For example, if your company is in all five segments, you would reach diminishing returns at 12 sales people in each segment, for a total of 12*5 = 60 sales people, and a total outside sales budget of 60 x $125,000 = $7,500,000. However, if your company only offered products in Traditional and Low End, you could only benefit from a total of 24 sales people.

Inside Sales

For each segment, enter the number of inside sales people. Each inside sales person costs $50,000.

Diminishing returns in a segment is reached at 30 sales people. For example, if your company is in all five segments, you would reach diminishing returns at 30 sales people in each segment, for a total of 150 sales people, and a total inside sales budget of 150 x $50,000 = $7,500,000. However, if your company only offered products in High, Performance and Size, you could only benefit from a total of 90 sales people.

Distributors

For each segment, enter the number of distributors carrying your product. Distributors offer customers an opportunity to see your product, compare it with other products, and take delivery. Each distributor costs $100,000 per year.

Diminishing returns in a segment is reached at 15 distributors. For example, if your company is in all five segments, you would reach diminishing returns at 15 distributors in each segment, for a total of 75 distributors, and a total budget of 75 x $100,000 = $7,500,000. However, if your company only offered products in High, Traditional and Low, you could only benefit from a total of 45 distributors.

Sales Channel Effectiveness

For each segment, some channels work better than others. For example, the one on one interaction of an outside sales person is very effective when meeting High End customers, however those same customers are not likely to visit a distributor’s sales room. Traditional and Low End customers are most likely to visit a distributor.

Traditional Low End High End Pfmn Size
Outside
Sales
Low Medium High Medium High
Inside
Sales
Medium Low Medium High Medium
Distributors High High Low Low Low

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