N5 Sales Management 3.3 Changed market conditions


Market conditions refer to characteristics of a market in which a business operates. Examples of changing market conditions can be: • New competitor(s) entering the market • Increase or decrease in the market’s growth rate or any other factor affecting the primary demand for the industry’s output. For example, rising petrol prices can decrease the demand for large cars and increase the demand for smaller cars.


3.4 General business conditions


Politics, economics, laws and regulations and the natural environment are examples of general business conditions that can affect the sales of a business, positively or negatively. Examples are: • The general state of the economy • Higher interest rates lead to people buying less luxuries


• High inflation rates lead to people being less brand loyal; they rather buy cheaper product ranges.


The success of a business can to a large extent depend on these factors. All the above-mentioned factors (3.1 – 3.4) are closely related.


Activity 1


Name and discuss more examples of general business conditions that influence an organisation’s sales (positive or negative). Use examples from current news stories in the media to motivate.


4.


The sales forecast and the marketing plan


The marketing goals and strategies, the core of the marketing plan, must be established before a sales forecast is made. A different sales forecast will, for example, be necessary if the marketing goal is: • Sell a new product, for example Ford introduces Mustang in South Africa in 2015. • Replace a specific product, for example, Hyundai replaced the Atos with the i10.


The sales forecast and sales potential


At first glance, the business's sales potential and sales forecast may appear to be the same. But usually that is not the case. The sales potential is what would be achieved under ideal conditions, and the sales forecast depends heavily on the pre-determined marketing plan/4 Ps. The sales forecast typically is less than the sales potential for several reasons: • Production facilities may be too limited to allow the business to reach its full sales potential. • Current distribution systems may not reach all of its potential market. • Financial resources/capital may be inadequate.


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