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SALES BUDGET

Sales Budget
• A budget of company sales during a
period in the future (detailly)
• Part of company sales planning
• Consist of (usually) :
– type of product (quality)
– quantity
– unit price
– sales time
– place
Company Sales Planning
• Marketing goals : maximal return, market penetration,
market development, market share, launch new
product, etc
• Sales organization (number of team, branches, etc)
• Channel distribution (wholesaler, agent, etc)
• Promotion medias (above the line (printing or not)
and below the line)
• Product research and developmnet (innovation)
• A sales budget shows expected sales in
units at their expected selling prices

• A sales budget is the cornerstone of


budget preparation because a firm can
complete the plan for other activities only
after it identifies the expected sales level
Sales Budget
Influenced By Some Factors :
• Internal Factors : Previous sales, marketing
and sales policies, production capacity,
capital, etc  controllable
• External factors : competitiveness,
demography, religion/norms or belief,
economic condition, etc  un-controllable
A company prepares the sales budget for
a period usually based on the forecasted
sales level

How to forecast the sales level


Non-statistical Method
(relatively SUBJECTIVE)
 Opini / judment method
 Executive opinion, salesman opinion, consultant
opinion, etc
 Delphi technique
 Opinion of panel expert
Statistical Method
(more OBJECTIVE)
 One variable (sales only)
 Free hand method
 Semi-average method
 Moment method
 Least square method
 Parabolic method
Statistical Method
(more OBJECTIVE)
 One variable (sales only)
 Free hand method
 Semi-average method
 Moment method
 Least square method
 Parabolic method
Statistical Method 2
(more OBJECTIVE)
 Two variable or more (sales with adverstising
and else)
 There are : variable independent(s) and
dependent variable
 Linier regression (simple)
 Multiple regression
Statistical Method 3
(more OBJECTIVE)
 Specific Analysis
 Industrial analysis or market share analysis
(TOWS matrix)
 Product-line analysis
 End user analysis
Sales Budget Form

Kerry Industrial Products Company


Sales Budget
For the First Quarter Ended June 30, 2007
Sale
Forecast April May June Quarter
Sales in units 20,000 25,000 35,000 80,000
Selling price
per unit x $30 x $30 x $30 x $30
Total sales $600,000 $750,000 $1,050,000 $2,400,000