Planning of sales of enterprise products in modern realities
The essence of sales, sales activity, and sales planning of the enterprise products. Investigation of factors influencing sales planning. Calculation of capacity of the product market. Elements of ensuring the efficient functioning of the sales system.
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Planning of sales of enterprise products in modern realities
Mustratova K.O., Master, Kherson National Technical University
Oliinyk N.M., Candidate of Technical Sciences, Associate Professor, Senior Lecturer at Department of Economics and Entrepreneurship Kherson National Technical University
Makarenko S.M., Candidate of Economic Sciences, Senior Lecturer at Department of Management and Administration
Kherson State University
Oliinyk N.M., Makarenko S.M., Mustratova K.O. Planning of sales of enterprise products in modern realities
The article outlines the essence of sales, sales activity, and sales planning of the company's products. The factors influencing sales planning of the enterprise are investigated. The formula for calculating the capacity of the product market in actual measurement is specified. The most common mistakes when drawing up the sales plan for the activities of domestic enterprises in modern realities are distinguished. The work considers the main elements of ensuring the efficient functioning of the sales system in current economic conditions.
Key words: sales activity, sales, sales planning, marketing policy, market capacity.
Олійник Н.М., Макаренко С.М., Мустратова К.О. Планування збуту продукції підприємства у сучасних реаліях
У статті висвітлено сутність збуту, збутової діяльності та планування збуту продукції підприємства. Досліджено фактори, що впливають на планування збуту продукції підприємства. Уточнено формулу розрахунку місткості ринку продукції у натуральному вимірі. Виокремлено найпоширеніші помилки при складанні плану збуту продукції в діяльності вітчизняних підприємств у сучасних реаліях. Розглянуто основні елементи забезпечення ефективного функціонування системи збуту в сучасних умовах господарювання.
Ключові слова: збутова діяльність, збут продукції, планування збуту, збутова політика, місткість ринку.
Олейник Н.Н., Макаренко С.Н., Мустратова Е.А. Планирование сбыта продукции предприятия в современных реалиях
В статье отражена сущность сбыта, сбытовой деятельности и планирования сбыта продукции предприятия. Исследованы факторы, которые влияют на планирование сбыта продукции предприятия. Уточнена формула расчета емкости рынка продукции в натуральном измерении. Выделены наиболее распространенные ошибки при составлении плана сбыта продукции в деятельности отечественных предприятий в современных реалиях. Рассмотрены основные элементы обеспечения эффективного функционирования системы сбыта в современных условиях хозяйствования.
Ключевые слова: сбытовая деятельность, сбыт продукции, планирование сбыта, сбытовая политика, емкость рынка.
Formulation of the problem
The main profile of the planning, organizational and management activities of the enterprise, as well as the primary goals and objectives of the current planning, organization, and management of production determines the production plan. The production program of the company defines the structure of the enterprise, specialization, and pace of development. It represents the central section of its plan [1, p. 360]. However, in market conditions, it is impossible to work efficiently without skilful and precise planning of sales of the company's products. Fierce competition in the modern business world puts companies ahead of choosing which products need to be produced to meet the needs of consumers and maximize profits of the enterprise. For surviving of a domestic enterprise, it is necessary to compete with foreign commodity producers both in their country and abroad, which at this stage of business development in Ukraine is extremely complicated. Therefore, an essential task for Ukrainian enterprises is to improve the old and find new ways to plan product sales.
Analysis of recent researches and publications
Interest in the marketing of products arises both in direct subjects of management and in the economic science in general. Problems of product marketing planning are widely covered in the scientific literature. Foreign scientists such as Gordon J. Bolt [2], Peter Doyle [3], Sally Dibb, Lyndon Simkin, J. Bradley [4] and others have been investigating this problem. Among the domestic scientists, the following scientists are known: O. Brukh [5], S. Nesterenko [6], L. Balabanova, Yu. Mitrokhina [7], O. Kavtysh [8], T. Ilchenko [9], S. Tulchynska [10], and others.
Selection of previously unsettled parts of the general problem
Despite a large number of works devoted to this issue, the question of the qualitative planning of sales of products, control over them becomes more and more relevant in modern conditions and requires a thorough and detailed analysis.
The purpose of the article is to determine the main features of product marketing planning at enterprises in modern realities, to find problems and alternative ways to solve them.
sale planning enterprise product
Presentation of the primary research material
Integration of Ukraine into the world market space requires the introduction of a marketing concept into the practice of enterprises, which radically changes approaches to understanding the purpose of the activity, tasks, and methods of implementation and the means of their achievement. The very philosophy of managing sales activities of the enterprise changes [11, p. 7]. In new realms, sales activity is one of the critical positions at the enterprise since it is the final stage of its operation, and more precisely, sales to end users. It depends on how seriously the enterprise relates to this stage [12, p. 7].
Modern authors define the concept of “sales” in different ways. Thus, O. Brukh [5, p. 143] believes that sales of products is a gradual, systematic movement of manufactured products from manufacturer to consumer through the appropriate set of phased processes: the development of a strategy of marketing policy of the enterprise; definition of basic methods of product promotion; formulation of types and number of channels of distribution channels and channel width; setting the intensity level of the distribution channel; defining a management system for sales channels.
S. Nesterenko formulated the following definition of the term: “sales are an integral part of the marketing activity of the enterprise, which consists of a holistic process of bringing the products to the end user by using marketing measures to study the needs, forming and stimulating demand for the products of the enterprise to meet the needs of consumers and obtain profit” [6, p. 79].
According to L. Balabanova and Yu. Mitrokhina [7, p. 19], sales represent a system of elements and actions to ensure adequate sales and meet the needs of consumers.
Consequently, the sale should be understood as a system of complementary procedures for the promotion of finished products to the market and the organization of payments for it.
The first stage in the management of sales of enterprise products is planning. L. Balabanova and Yu. Mitrokhina points out that the planning of sales of the company's products is a process of programming the future company in the field of sales, taking into account changes in the external environment, oriented to meet the needs of the target market (segment) [7, p. 60].
O. Kavtysh argues that the function of marketing planning is to determine the main goals-results of marketing policies for its structural elements, the tool for their achievement, taking into account the existing limitations (financial, resource, personnel, etc.), threats and opportunities, and on this basis - determination of the probability of their achievement, as well as the dynamics of key indicators of their implementation, impact on other signs of activity [8, p. 101].
T. Ilchenko [9, p. 57] believes that the sales plan is essential to achieve the goals of the overall strategy of the enterprise because it is close to the interests of the end consumer. This plan should be shaped according to a specific policy that would reflect the direction of sales plans for many years ahead and obeyed the goals of the strategy, both general and marketing.
Factors influencing sales planning of the enterprise are divided into three groups: elements of the goods, the positioning of the enterprise and the market (Table 1).
At the same time, it is necessary to take into account some factors influencing changes in the product market, namely: consumer demand, competitors' activities, etc. Also, the state of the industry, prospects for its development in the domestic and world markets, macroeconomic indicators, price level, financial capabilities of the enterprise, and the potential volume of sales of products, that is, the capacity of the market, are determined.
The study of demand for goods and the analysis of market opportunities of the manufacturer of this product are closely linked with the study of market segmentation. Because of the market segmentation policy carried out by the business entity, the most critical marketing principle - customer orientation - is embodied in life [13, p. 80].
Today there are a large number of models for forecasting demand for products, but none of them can reliably determine the volume of an order under the influence of changes taking place in the political, economic, social components of the development of the state in general and a particular region [14, p. 436]. Thus, force majeure circumstances that may arise in the external business environment will not only reduce the volume of sales but will radically change the built demand function. Overproduction of products can not only increase the costs for the company for its storage and storage but also lead to an increase in payables to suppliers of raw materials, current obligations to pay wages, to pay mandatory taxes and fees to budgets of all levels, utilities, etc., which significantly worsens the level of financial stability and competitiveness of the enterprise.
Table 1
Factors influencing sales planning of enterprise products
|
Group of factors |
Elements |
|
|
Factors of the product |
- the difference of prices of this product from the number of competitors for similar products; - interchangeability of goods with other goods; - dependence on the equipment, which is necessary for the production of this product; - indirect benefit to the buyer. |
|
|
Positioning factors of the enterprise |
- the general state of the company in the market (image is formed, the prestige of the enterprise from the position of the enterprise itself and in the opinion of consumers and partners); - financial resources directed to sales activity; - the general structure of the product range; - the flexibility of the production and marketing program of the enterprise (the ability to quickly reorient to the production of a new product). |
|
|
Market factors |
- type of market (stable, developing one, etc.); - total market capacity; - distribution of the exchange between competitors (market shares of significant competitors); - the competitive environment of the enterprise, level of competition in the market, assessment of the competitiveness of the company's products; - the elasticity of demand for the price (the influence of the price policy of the company on the amount of demand for goods); - some intermediaries in the process of movement of goods from manufacturer to consumer. |
The construction of a reliable function of demand for products and the determination of the potential capacity of the market for products are also complicated by the lack of information on the real size of household incomes [15, p. 41]. For eliminating these disadvantages, the capacity of the market of products in the natural sense is expedient to calculate according to the formula: where Cm - capacity of the market of products; N - number of consumers of products, persons; C - consumption per consumer in the base period in real terms; Gr(p) - rate of growth of prices, %; Ep - elasticity of demand for the price; Gr(i) - growth rate of consumer income, %; Et - elasticity of demand for the consumer income; A - availability of goods from consumers in kind; Vph - volume of products physically worn in natural measure; Vm - volume of products morally worn in natural measure; AC - alternative consumption (consumption of own products, etc.) in real terms. World experience has shown that in the context of the economic crisis, to at least save profits, enterprises seek to reduce costs and optimize the number of employees. But even those who achieved high cost-cutting results cannot rely on maintaining their position in the market if they do not have marketing intuition and a clear sales plan. In today's realities when drawing up a sales plan for the activities of domestic enterprises, the following most common mistakes can be distinguished:
- the replacement of the program by the forecast of sales of products. It is necessary to distinguish between these concepts. The plan may include an estimate but it must meet specific requirements. The program should contain a description of the results that the company aims to achieve. Forecast, in its turn, only outlines a situation that will consist of one or another probability. The plan is different from reality; it contains planned results and a set of conditions, under which these results can be achieved. The method includes changes that are expected to be carried out at the enterprise: a collection of managers, costs for their training and advanced training, etc. It also specifies what actions to take and what time frame. For example, increase the volume of sales of the enterprise through the improvement of the skills of workers;
- instead of a sales plan, a production plan is being prepared. When forming a product sales plan, emphasis should be placed more on the marketing component. For example, stimulating the sales of products by advertising, quality of service, etc.;
- the formation of a sales plan for products based on inertia that is, with the assumption that the pace and proportions achieved at the time of the development of the program, will continue in the future. But at the same time, it does not pay attention to the fact that in the planned period in the market can be an entirely different situation. The best solution is to find a new way and solve new emerging strategic tasks. For example, taking into account the impact on the company's sales of new technologies or the differentiation or updating of the product;
- buyers are treated as a homogeneous group. To date, customers have a lot of flavours, and this has a significant influence on making a purchase decision. It is necessary to compile a list of client groups and structure these data, while taking into account the necessity of the goods, the volume of procurements of products, etc. Also, one should identify a group of assets that buyers are willing to buy this product. For example, preparing a special offer for regular customers;
- the lack of a retail plan. When dealing with wholesalers, businesses usually look at additional information about them and use it to increase sales, while forgetting retail buyers. To attract the attention of retail customers to the company's products, one can use a system of discount cards, gifts, discounts. These methods are useful incentives for product sales. It is also worth taking into account the demand for commodity positions, considering the traffic volume at the point of purchase, attendance at the place of trade, to monitor what goods are sold better, and so on. For example, to increase sales, you should place ads on the entry, improve the quality of service, etc.;
- the plan does not contain results and terms. When planning sales of products to the company should outline the result of actions and words, as well as specify the persons involved in the implementation of the plan. For example, the necessary result - sales of new products, the term - six months, actions - work with wholesale and retail buyers, executors - managers, marketers.
To avoid errors and to create a bright sales plan, the following groups of methods are usually used:
- mathematical (based on the theories of accurate statistics, that is, plans must be corrected with adjustments to the market conditions, to the numerical methods include the method of sliding average, etc.);
- research (based on an expert assessment of the heads of sales departments);
- operational (proceeding from concrete actions and calculations of results. The advantages of this method are the understanding of trends in product sales).
It should be noted that none of the methods can guarantee 100% success, so you need to use several means at a time. It will reduce the risks and achieve increased sales. When drawing up a product sales plan, you need to take gradual steps, take into account the details relating to the company and the market as a whole. It is advisable to calculate indicators for each brand and points of sale. Thus, with the example of sales of PAT “Pivdenna Vynokurnia” (“Southern Distillery”) (Oleshky, Kherson oblast), using forecast extrapolation methods, it was found that in 2018 demand for products of the company will increase by more than 23.4 %. At the same time, using additional criteria for assessing the risk of implementation of the said production and marketing plan (the Laplace, Wald and Hurwitz criteria), it was found that during the production and sales of last year's volume of wine products in the amount of 10 thousand bottles, the average expected profit will reach a maximum and will amount from 88 thousand
UAH up to 104 thousand UAH At the same time, the plan for the production and sale of the aforementioned products, using only methods of forecast extrapolation, was not properly constructed, could lead to losses in the amount of over 440 thousand UAH. In the general scope of PAT “Southern Distillery” activity, the number of losses could reach over 44 million UAH. In a pessimistic scenario, it again proves the feasibility and justification of using several methods in planning production and marketing.
Also, after drawing up the sales plan for the company's products, it is necessary to ensure its full implementation and to introduce permanent control over each component of the detailed planning document. In case of non-fulfilment of the plan, it is necessary to identify the reasons and make the appropriate adjustments.
In general, it is necessary to continuously monitor the effectiveness of implementing the sales plan of the enterprise, to take measures aimed at improving sales activities, especially today, when the situation in the market is not stable, there is a high threat of bankruptcy and steep competition from domestic and foreign producers.
Conclusions from the conducted research and prospects of further exploration in this direction
In the context of the study held, one can conclude that the first stage in the management of sales of enterprise products is planning. The factors influencing the sales planning of the enterprise products, which are divided into three groups: elements of the product, the positioning of the enterprise and the market are revealed. At the same time, it is necessary to take into account some factors influencing changes in the product market, namely: consumer demand, competitors' activities, etc. Also, the state of the industry, prospects for its development in the domestic and world markets, macroeconomic indicators, price level, financial capabilities of the enterprise, and potential sales volume are determined.
In the course of the study, the most common mistakes are identified today when developing a product sales plan and ways to resolve them are found. When planning sales of products, Ukrainian enterprises' economists need to avoid the above errors, especially paying attention to the changing market situation.
References
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