A Comprehensive Sales Plan (Intended For Lipton Herbal Tea - Unilever)

Prepared By: Raju Kumar Saha Team Leader (ID-2012121012) Sheik Shami Ullah Chowdhury (ID-2012121015) Najeb Islam (ID-2011421006) HND Business Intake 1, 2012

Prepared For: Mr. Irfan Jahangir Faculty, Marketing, School of Business BAC Dhaka, Bangladesh

Acknowledgement In the Name of Allah; The Most Gracious, The Most Merciful.

All praise to the Almighty, without his blessings and endorsement this report would not have been accomplished.

The successful completion of this report might never be possible in time without the help of some person whose inspiration and suggestion made it happen.

First of all I want to thank my course lecturer Mr. Irfan Jahangir for helping me complete my report.

I also want to thank my team-mates for their continuous and sincere support to expedite information integral for the accomplishment of this report.

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Unilever & Lipton The Unilever Group is one of the worlds leading suppliers of fast-moving consumer goods. Besides having a significant global presence, Their Lipton brand is a leader in the international market.

[Lo 4.1] Sales Plan for Lipton Most Companies have a Business Plan and a Marketing plan, however, a Sales Plan is the greatest tool that an organisation can produce and implement. Without a sales plan, we may not be in a position to create the necessary revenue to keep the business meeting its cash flow objectives. Furthermore, regular review of the sales plan is necessary on a regular basis to ensure that the elements of the plan are working. Executive Summary Unilevers research shows that majority of the people have developed health consciousness. So it is a great idea if tea can prove its usefulness as medicine and offer better health & immunization as it is consumed twice to thrice a day. Furthermore, A few recent studies suggest that the health benefits would drive the performance of Lipton herbal tea across the globe (Winslow 2006). Sales Plan Defined Sales plan should be short, simple and to the point. It's basically our strategic and tactical plan for acquiring new business, growing our existing book of business and making and/or exceeding our sales quota within our sales territory. Normally, a healthy mix would include 75 percent of your sales quota from new business and 25 percent of our quota from add-on business from our existing customers. The Importance of Market Segmentation To sell to our customers, we first must understand why they would want to buy our product. Market segmentation allows for the development of profiles of the many different kinds of customer groups who buy our products.

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We can use this information to create better marketing programs. It also can be used to develop products for your target audience. Market segmentation also assists companies in developing more well-organized distribution networks. By studying the buying behaviours of various target customer groups, we can determine the way that customers prefer to buy our product. If customers prefer to buy online, we will want to focus on our online presence and reduce the resources we put into retail stores. Market segmentation also helps us identify geographic areas where our products are most popular. Sales Channels The more sales channels we use, the more customers we can reach. But each channel adds costs. If we add a new channel only to find it attracts sales away from an existing channel without bringing in extra sales, we'll be increasing our costs for little or no benefit. So, we need to know how and where customers want to buy our products, and the best way of getting customers is to hear about their preferences. Currently, as food company three distribution channels can be used. Producer to End User:

We may open up company-owned stores to start a direct retail system to sell Lipton Tea. We can even sell Lipton tea directly to the end consumers by sending direct dispatch from factory. The volume of the product delivered to a customer must be of an economic delivery size so that shipment isn't a penalty, or of such value that transportation costs don't matter. This is preferable when technical specifications or rigorous performance requirements are applied. Producer to Retailer to End User:

In consumer markets, the intermediary is usually a retailer. We may have to negotiate directly with the buyer for the retail chain. Our product will be placed on the middle and lower levels of self in supermarket. The Lipton Tea will be placed according to the content of tea bags.
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Producer to Wholesaler to End User:

Final product can be distributed to authorized dealer or wholesaler as well. The wholesaler will take title to the goods that are being handled. The wholesaler's sales force will then be responsible for selling to the end user. Probable Obstacles & Methods of Overcoming them whilst Achieving Sales Target The product has a high per-unit value.

We have a broad product line, making it feasible to cover the selling costs over a large volume. Also we have adequate resources so that we can hire our own sales force rather than relying on that of the wholesaler. Potential customers may be geographically concentrated in a specific region.

In this case, we can use short channels of distribution. Especially if we see that independent intermediaries aren't adequately promoting our product. The distributor may want certain information from us, including description & cost.

We may investigate the option of an electronic catalogue based on our products' barcodes or other identifying marking. An electronic catalogue could include "public information" such as size and description; that is accessible to all of our customers. It could also have several private sections, where partner promotion activities and other more confidential information can be stored. Finally, we should always have product samples, price lists and deal information readily available for the buyer.

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[Lo 4.2] Opportunities for Selling Internationally Beyond the obvious benefits of increasing sales and profits, selling to customers internationally has several distinct advantages. One of the most notable is that it will help to expand and diversify our customer base, which can help to counter seasonal demand fluctuations in the home market and lessen dependency on individual customers. Other benefits of export sales include fully utilizing production capacity, realizing economies of scale from larger production volumes, leveraging our innovation and extending the sales potential for existing products. If we are committed to the long-term growth and success of our company, we really cant afford not to consider selling internationally and participating in global commerce. Role of Distributor and Agents Sales agents, wholesalers and other kinds of sales distributors can be a very effective channel for selling to our ultimate customers. An established sales agent or distributor can give us immediate access to our target market without the need to build our own sales presence. A sales agent or wholesaler is particularly useful when we're trying to break into a new overseas market; where we don't have experience and expertise. Agents will usually represent our company in the local market.

We can pay them a sales commission, salary, retainer, or a combination of all three. We will retain ownership of the goods, and will be responsible for the costs incurred by our agent. Many well-established agents have their own customer base, and some wholesalers may only buy through a certain agent. Distributors will buy product from us and then sell to their customers, adding a margin or setting their own price.

They may import and hold stock of our product and may also help promote it and provide after sales service for customers. Distributors tend to concentrate on products that are the easiest to sell and/or have the highest margins. Therefore if our distributor handles a large range of products, ours may not get much attention.

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Appointment of Distributors and Agents In appointing an agent or distributor, we are effectively sub-contracting the selling function of the business. The different attributes of an agent and distributor will be key to deciding which type of partner to choose. However, it is important for any company considering a channel partnership to understand the differences, in practical and legal terms, between appointing an agent and a distributor. Word of mouth referrals are often the best way to choose a distributor as trust and a good rapport are essential. It is also vital that they have experience and a good network of representatives. We must carry out thorough due diligence to ensure they are financially sound, with good references and market knowledge. We will also need to persuade the distributor to carry our product. Furthermore, employing a third party results in an additional cost to our products and we may also lose some control and visibility over sales. It also has implications for intellectual property rights protection, increasing the risk of our product being copied or counterfeited. Thus, while selecting Distributors or Agents following checklist should be verified: o o o o o Distributors or Agents size, history and ownership (private or state-owned) Quality and quantity of the sales force Customer feedback and trade/bank references Regional coverage, transportation, and warehousing facilities Types of outlets covered and frequency of calling

Once a working relationship is established, the agent/distributor needs to be managed actively, this may be achieved by: o Visiting as regularly as is practicable at a senior management level; this shows interest in, and commitment to, the agent and the market. This will also provide us with an opportunity to learn about conditions in the market and see how our products are faring. o Working closely with the agents to show them how they can profit from our products. o Helping to prepare marketing and sales plans for the agent. o Linking performance to incentives and agreeing milestone targets.
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Sales Budget and Sales Forecast There are three kind of sales forecasting 1. Short-term forecasts. 2. Medium-term forecasts. 3. Long-term forecasts And a sales budget is a valuable tool that gives a direction to a company with regard to its targeted sales. A sales budget helps a company achieve its sales targets. It helps prevent sales losses and provides a basis for sales evaluation. A sales budget helps to integrate all departments in a company because achieving a sales target is the secret of making profits. It helps each department to assess their performance and correct any mistakes in function. It helps a company distribute goods and services in a cost effective way. It also helps the company to keep its marketing expenditure within affordable limits. Lipton makes a financial plan with regard to the amount of goods and services that it plans to sell in a year and the price at which the goods and services are to be sold. Here is an example of future Sales Budget of Lipton (Forecasted): Lipton Herbal Tea Sales Budget For the Year Ended December 31, 2013 Quarter 1 2 3 4 Year Budgeted sales in each box 20,000 60,000 80,000 40,000 200,000 Selling price per box 40.00 40.00 40.00 40.00 40.00 ------------ ------------ ------------ ------------ -----------Total sales 400,000 1200,000 1600,00 800,000 4,000,000 ====== ====== ====== ====== ====== Percentage of sales collected in the period of the sales Percentage of sales collected in the period after the sales 70% 30% 70% 30%

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Schedule of Expected Cash Collections 1 Accounts receivable, beginning balance 180,000 180,000 2 First quarter sales 280,000 120,000 400,000 3 Second quarter sales 840,000 360,000 1200,000 4 Third quarter sales 1120,000 480,000 1600,000 5 Fourth quarter sales 560,000 560,000 ----------- ----------- ----------- ----------- ----------6 Total cash collections 460,000 860,000 1480,000 1040,000 3540,000 ====== ====== ====== ====== ====== 1 Cash collections from last years fourth-quarter sales. 2 400,000 70%; 400,000 30% 3 1200,000 70%; 1200,000 30% 4 1600,000 70%; 1600,000 30% 5 800,000 70% Uncollected fourth quarter sales appear as accounts receivable on the company's end of 6 year balance sheet.

This example contains the sales budget for Lipton for the year 2013, by quarters. Please notice from the example that the company plans to sell 200,000 boxes of product during the year, with sales peaking in the third quarter. After preparing sales budget, a schedule of expected cash collections is also prepared such as the one that appear above. Cash collections consist of sales made to customers in prior periods plus collections on sales made in the current budget period. In the example, 70% of sales will be collected in the quarter in which the sales are made and the remaining 30% will be collected in the following quarter. For example, 70% (or $280,000) of the first quarter sales are collected during the first quarter and 30% (or $120,000) is collected during the second quarter.

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[Lo 4.3] Opportunities for Using Exhibitions or Trade Fairs Trade shows are a fantastic way to communicate and share our newest products with our customers. Once having chosen the best locations and amenities for mounting trade shows, certified event planners assist competent business applicants in obtaining sufficient trade show transportation for their business products, displays in addition to employees. Together with the assistance of these trade show professionals, even businesses just starting out using trade shows can easily create eye catching, appealing and in the end, highly productive and profitable exhibits. On every occasion products and maintaining display props and supplies have to be shipped, there is usually a possibility that something will be lost or damaged in shipping. Though all legal trucking companies offering trade show transportation have breakage and liability insurance to guard all items they transport, the most important goal, as far as the trade show management as well as exhibitors are concerned, is to move business products and displays as harmlessly, efficiently, in addition to inexpensively as possible. Trade Fair Participation Types of trade fairs: The type of exhibition - national or international, consumer or trade show - will be a first criterion to decide. If the company is not interested in international customers we should select exhibitions in which national exhibitors take part and where domestic visitors are expected. Relevance of the trade fair for the market: Exhibitions take place on a regular base: once, twice or more often during a year, every two, three years or even in longer periods. Depending on the marketing strategy and event schedule the right exhibitions should be selected. Client target group: A trade fair is an excellent opportunity to get in direct contact with the relevant target groups. Therefore, we should know whom we want to address at the fair. The design of the trade fair participation should be created according to the target groups. These can be defined based on the following aspects: Regional origin, branch and size of the client company, the area of client operations, frequency of client purchasing, and purchasing power. Competition: Following the rules of a market oriented system it is advantageous to be present where our competitors are, too. However, sometimes it is desirable to avoid direct contacts with competitors (e.g. looking for a test market, in case of obvious competitive disadvantages)
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 Costs: We must know if we can afford to participate in the trade fair first. The budget should be calculated based on the expected costs and must be defined before the trade fair participation is contracted. If the budget is sufficient the participation can be realized; if not, budget or type of participation must be adapted. Quality of the trade fair organizer: The management quality of the trade fair organizer can also influence the decision to participate. The quality of the equipment of the site, such as space, design, type of halls, open air grounds and the quality of the facilities have to be acceptable. The experience of the organizer supports the quality of the exposition. Transport connections and infrastructure may also influence the participation decision. Exhibition Strategies and Styles:

Finally when a decision to participate has been made, the exhibition strategy, the exhibition style and exhibition targets have to be determined. Opportunities of Trade Fairs Involvement at trade shows will create many benefits for our company in the marketing world. Here are ten reasons why our company should invest in a popular trade show booth: Cost Effective

Trade shows will offer budget friendly solutions to market our brand and sell our product. Target Market

Trade shows will pull in a highly targeted market that is vastly interested in our product. New Audience

This highly targeted market is often interested in one main aspect: new products. They travel to trade shows to learn about new brands, new products, and new solutions to their lifestyles. This can be a great opportunity to launch a recently developed, major product. Face Time

Trade shows offer more personal time with our client. Instead of communicating through today's technology and phone lines, we can engage in real time conversation and add more of our company's personality and care to our image.

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Relationship Builder

The personal interaction offered at trade shows allows us to establish a direct, more effective relationship with our client. Sales Lead

New relationships and deeper connections open channels for new sales leads. We may find a new market that hasn't been tapped into yet or may discover a need for a potential new product. Year Round Promotions

A onetime meeting at a show could result in year round marketing for us and our client. Giveaway Opportunity

A major selling strategy is to giveaway either our product or products that have our brand on them. This is a major tactic in the trade show industry and provides customers with not only a new belonging but can enhance your company's awareness in the consumer mind. Direct Selling

Probably the biggest reason we should market at trade shows is to directly sell our product to the market. It omits the complications of over the internet or over the phone selling and allows us to interact with both our product and client to achieve a successful sale.

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Bibliography: 1. The Importance of Market Segmentation. Arnold Anderson. Retrieved on 12.12.12 from http://www.ehow.com/info_7743039_importance-market-segmentation.html 2. Selling Internationally; Quick Guide to Exporting. JamieD. Retrieved on 12.12.12 from http://www.sba.gov/community/blogs/community-blogs/business-lawadvisor/selling-internationally-quick-guide-exporting 3. Agents & Distributors. Retrieved on 12.12.12 from http://www.cbbc.org/guide/setting_up/agents_distributors 4. How to Start Selling Internationally. Retrieved on 12.12.12 from http://www.inc.com/articles/2009/11/how-to-sell-internationally.html 5. Distributing Your Product. Retrieved on 12.12.12 from http://www.omafra.gov.on.ca/english/food/industry/food_proc_guide_html/chapte r_10.htm 6. The Elements of a Successful Sales Plan. Tony Parinello. Retrieved on 12.12.12 from http://www.entrepreneur.com/article/69864 7. Advantages of a Trade Show. Kendall Reed. Retrieved on 12.12.12 from http://www.map-dynamics.com/blog/209/

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