[ Articles list ] [ Home ]

Vasant Dave's article published in The Economic Times (India) of July 1, 1987.

Analyzing Sales on PC

Industrial sales analysis invariably answers many questions but also raises quite a few. Sales analysis initiates a train of thought that if pursued logically, pinpoints problem areas in marketing. The personal computer assists the manager to analyze sales faster than otherwise possible. It tips him off to initiate timely corrective actions. An interview published in 'International Management' (August, 1983) aptly sums up the role of the personal computer in taking business decisions: "Having the PC always makes you ask the question, 'Why not do this?' because it will only take a couple of seconds. If it is laborious and manual, you don't do it. But if it is simple, you will. It actually forces a greater level of professionalism. I call it my 'Micro disciplinarian'. When I know I can get all this information, it is almost criminal not to."

Some questions the industrial marketing manager asks are:

• How does my sales to government clients this year compare to that in the last year? Can it be correlated with my cash flow position?

• How am I faring with Original Equipment Manufacturers? Does a fall in sales to OEMs indicate lower demand or intensified competition? How can we rectify the situation?

• How each of my products is doing as compared to the comparative period last year? Is a slump in any particular product a result of an overall drop in sales to a specific industrial sector? Why?

To get answers to these questions, an information processing system needs to be created in two storeys: Codification and Computerization.

• For each condition a code is allotted so that all sale notes satisfying that particular condition can be sorted out by selection of the related code. A 3-digit code would suffice for a comparatively good analysis.

• Relevant information from each sale-note along with the allotted 3-digit code is entered in memory. It may be necessary to slightly modify the organization's formats and procedures so as to avoid GIGO (Garbage In, Garbage Out), the most common pitfall in computerization.

Codification

The classification of each client can be done according to the following codes:

• First Digit - 'Category' Code: 1 = Government / Semi-government, 2 = Private Sector.
• Second Digit - 'Main Operation' Code: 1 = Original Equipment Manufacturer, 2 = End-user.
• Third Digit - 'Market Segment' Code: 1 = Machine Tools, 2 = Man-made Fiber, 3 = Pharmaceuticals, 4 = Sugar, 5 = Textiles, 6 = Thermal Power Generation.

Computerization

The manager tends to evaluate any new sub-system upon its compatibility with the current system. In case no system exists, he would insist that the suggested system be flexible enough to link up with sub-systems that might be added in future. The basic concept needs to be respected if the present exercise is to be practical. As such it would need 3 databases:

'Client account code' and 'Product code' in the Sale Note Database would enable copying the related 'Client's name' and 'Product description' from the preceding databases. Such an inter-linkage of the various databases with key parameters not only eliminates the time spent on typing repetitive information but also minimizes errors.

A software package such as 'dBase III plus' can be utilized to create the databases. Let us consider the sale note database. All information in it related to a single note is termed a 'record'. Each 'record' is composed of a number of data bits termed as 'fields'. Client account code, category code, main operation code, market segment code, etc. are different fields. The database package has the capability to scan thousands of 'records' and sorting out only those having the given combination of 'fields'. For example, all sale notes concerning a product 'X' and having a Sales analysis code 215 (i.e. Private sector OEMs in Textile industry) can be listed together and totaled within seconds. With a short program that gives step by step commands to the computer about what to do, one can derive all input information.

If further statistical acrobatics are needed based upon the above summary, they can be performed by 'importing' the summary into a spreadsheet package. A spreadsheet package such as 'Lotus 1-2-3 Version II' or 'WIPRO 4-5-6' allows an executive to create statements. A column, a row or a position can be defined in terms of one or more columns, rows or positions. Having entered the known data, one can create additional rows and columns by defining these in computational or logical relationships to the existing rows and columns. Thus final analyses can be computed. The spreadsheet package also has the capability of drawing line graphs, bar charts, stacked bar charts and pie charts from the statements recorded in its memory. This facility is vital for quickly preparing effective reports for presentation to the higher management.

Although this article has focussed on Sales analysis, an exercise done in a similar way would indicate industry-wise shift in demand as also market share. New projects analysis on the same lines can provide a strong base for demand forecasting. Age-wise outstanding analysis may throw light on those industries which may be accorded lower priority as funds are likely to be blocked for longer periods in commitments made to them.

The advent of the personal computer has added a new dimension to the marketing manager's thinking. At its best, the PC is a powerful tool that enables the marketing manager to make moves more swiftly in the short run and draw up a challenging strategy in the long.

© Vasant Davé

**