PHASE – II

Sales Process

Volkswagen is making its sales organization fit for the future. The brand is to fundamentally realign its sales
model together with its dealers. The new sales model is to be launched in Europe in April 2020. Today in
Berlin, Volkswagen and the European Dealer Council presented their vision for the future world of
Volkswagen’s 5,400 dealers and service partners as well as their 54,000 employees in Europe. The objective
is to provide seamless individual round-the-clock support for customers going far beyond vehicle sales on
the basis of a unique Volkswagen customer ID. Each year, the Volkswagen brand intends to introduce about
5 million customers to the new world of mobility around the globe and to offer them individual services on
the basis of their ID. The car buying experience itself will also change. On-line sales are to be massively
expanded and direct sales are to become possible. Five new sales and service formats such as city showrooms
or pop-up stores are to be added. At the same time, the sales organization is to become more flexible and
efficient.

“This is the right step at the right time,” says Jürgen Stackmann, Board Member for Sales of the Volkswagen
brand. “We have adopted this approach because our business environment is changing at a breathtaking pace
in view of new technologies, changed customer expectations and new market players.”

According to Stackmann, Volkswagen is outstandingly well-positioned, with qualified sales and service
partners, an established logistics network, a strong product portfolio and extremely loyal customers. He said
that the new sales model was the combination of this infrastructure with the new elements which would
define business in the future, such as digital products and services or new on-line sales possibilities for
products and services.

The new sales model is being driven by the progressive digitalization and connectivity of the Volkswagen
fleet, which will reach a new level with the introduction of the new, fully connected electric ID. family in
2020. From then on, Volkswagen customers with their personal ID number are to be at the center of a fully-
networked world of mobility including seamless individual support going beyond vehicle purchasing, with
round-the-clock availability. “This way, we will learn more about our customers’ needs and will be able to
develop optimum tailor-made offerings for each individual customer through intelligent data management.
This is already practiced successfully in other sectors,” the Sales Board Member continued. In this world of
mobility, customers will benefit from a wide variety of tailor- made offerings. For example, vehicles will be
kept up-to-date by over-the- air software updates via the mobile phone network. Vehicles will notify the
dealer that the next service is due via the predictive maintenance app. Customers will also be able to access
a broad portfolio of services from the Volkswagen We digital ecosystem such as We Park, We Deliver or
We Connect. There will also be services going beyond customers’ own vehicles such as We Share – the
planned car sharing offering from Volkswagen.

On-line business will make a key contribution to the development of the new sales model and is currently
being massively expanded. Within the framework of its new digital partnership with its dealers, Volkswagen
will develop a joint Internet platform which will handle the entire purchasing process through to contract
conclusion, including financing, payment and even used car trade-ins. Customers will be able to choose from
the entire brand model range and to complete their car purchase with their selected dealer online. For
Volkswagen, the new platform will offer the possibility of direct sales for the first time; the brand intends to
use this possibility mainly in the fields of software and on-line services. People who prefer to maintain
personal contact with the brand and the dealer will have a choice of different points of contact in the future.
There will be five new formats in addition to the traditional full-feature dealership with sales and service
under one roof. Each dealer will only need to have one full-feature facility in the future. Dealers will be able
to shape their presentation by agreement with the relevant importer to make their business more effective
and customer-oriented, with city showrooms, pop-up stores, service factories, used car centers or scalable
full-feature dealerships (i.e. of variable size).

“We believe in the new business model as it will strengthen dealers’ entrepreneurial responsibility,” said Dr
Matti Pörhö, President of the European Dealer Council (EDC), which represents the interests of Volkswagen
dealer councils in Europe. “In the areas of digitalization and E- mobility, the major tasks for the future,
dealers will play a key role. To shoulder these challenges, dealers need a firm foundation of profitability.”
Pörhö praised the fair and open cooperation with Volkswagen: “We actively participated in shaping the
business model right from the start. At the event in Berlin, Volkswagen and the EDC sealed the new sales
model, with Jürgen Stackmann and Matti Pörhö symbolically signing the new contract that is to govern
relations between the manufacturer and its dealers in Europe from April 2020 onwards. In the early summer,
the German dealers’ association had already agreed to the content of the contract, followed by the European
importers a few weeks later. By the end of November, all European dealers are to sign the new contract.
Distribution channel

The growth of the Volkswagen Group has been one of the automotive sector’s best and most
often told success stories over the last five years, including its expansion in Asia, resurgence
in North America and ability to outperform the European market. After topping 8m units last
year, and strong growth so far in 2012, the group’s 2018 target of being the world’s number
one carmaker and reaching 10m vehicles per year is now notable for being realistic as well as
ambitious. While much has understandably been made of the group’s global growth, somewhat
less appreciated has been the sheer complexity and expansion of Volkswagen’s distribution
network. After formally integrating Porsche earlier this year and including Volkswagen
Commercial Vehicles, Scania and MAN, the group is now made up of 12 brands with 99
production locations and 240 different vehicle models globally. Volkswagen Group Logistics,
the central logistics function, oversees the supply of vehicles into 150 markets. This network
requires tremendous logistics coordination. In Europe alone, the group contracts directly with
105 trucking carriers, 15 different shipping lines and eight rail providers. Last year, the
company sent vehicles on 280,000 truckloads and 250,000 wagonloads.

Volkswagen’s network is made more complex by the demands of the Volkswagen production
and order-to-delivery system, which assigns promised delivery dates to dealers or end-
customers based on forecasted lead times. Even with the dispersion of sales points in new
markets and hinterlands, the group still has the objectives of reducing lead times, inventory and
emissions in the outbound supply chain. What’s more, along with the 2018 sales target, the
group has committed to reducing its overall emissions by 25% (from 2010 levels) by 2018,
which includes vehicle logistic operations.

“Our vehicle logistics are based on customer demands and so we are working to reduce lead
times, increase flexibility and secure competitive capacity at the same time as maintaining our
focus on green logistics,” says Andrea Eck, general manager outbound logistics for
Volkswagen Group Logistics. It’s a combination that seems to point in conflicting directions –
more vehicles, longer distances, more locations, faster speeds, but with exact accuracy and
fewer emissions. And yet, as with its sales targets, Volkswagen has developed processes and
plans that are already helping it to realise these goals. For example, lead times and inventory
levels have been reduced thanks to new distribution concepts, including ‘regional hubs’ for
synchronised rail distribution. Emissions have been brought down thanks to an increasing use
of multimodal transport. Eck and her team lead the development of these strategies.
Volkswagen Group Logistics, which includes the group’s fourth-party transport arm,
Volkswagen Logistics, oversees international transport across all modes and the development
and integration of outbound flows for all new plants, sales regions and models. It manages the
movement of more than 5m vehicles per year, plus a growing portion of third-party business,
such as used vehicles, agricultural and construction equipment and emergency service vehicles.

Order Processing

Stage 1: processing order - as it sounds.

Stage 2: with the factory - parts are being ordered and are awaiting supply dates

Stage 3: BW confirmed - all parts are at factory and they've confirmed a date for build.

Stage 4: Build in progress - as it sounds, although very often skipped on the tracker as actual
build is only a couple of days. States is takes 4 weeks from start of build to delivery.

Stage 5a: in transit:left the factory - on it's way to Emden.

Stage 5b: in transit:shipping - at Emden waiting a boat. Normally received 48 hours after 5a.

Stage 5c: in transit:nearly here - on boat to either Grimsby, Tyne or Sheerness depending on
dealer location. At this stage VW can give you the name of the boat, but it sometimes skips
this stage. Now states 10 days to dealer.

Stage 6: Arrived in the UK - as stated, takes up to 10 days apparently, although they try and
do it within 7.

Stage 7: At dealer - just needs PDI and prep and is ready for you.
PHASE - III
Sales Quota setting

Sales quotas are targets set for individual sales reps and teams to measure performance,
incentivize salespeople, and increase company revenue. Sales quotas are typically tied to sales
volume, costs, profit, or specific sales activities like appointments or calls, and effective quotas
are ones in which 80% of your staff—on average—should be able to meet.

Regardless of the sales quota you choose, a customer relationship management (CRM)
software like Salesforce Essentials can equip your team with the tools they need to hit their
goals. It also provides advanced reporting to measure performance.

1. Choose a Quota That Aligns With Your Business

There are four main types of sales quotas, each with different numbers used to measure sales
performance, including volume, cost, profit, and activity quotas. Each type has a different
purpose and is right for a specific type of business goal: volume tracks sales units or revenue,
cost measures expenses like time, profit uses profitability, and activity is the count of specific
actions. The type of quota you select will be used to set your baseline, calculate your quota
value, and is how performance will be measured. This is why it’s important to choose the one
that most closely aligns with your company initiatives. For example, if sales volume isn’t
important, then don’t choose a volume quota. Conversely, if you want your sales team to
maximize company profitability, choose a profit quota.

Types of Sales Quotas & Who They’re Right For

Volume-based Sales Quota: (Most Common) Small businesses that want to focus on top-line
revenue growth.

Profit-based Sales Quota: Businesses serving multiple market segments with a range of
products or services.

Activity-based Sales Quota: Businesses with multiple consumer touch points, or long sales
cycles.
Cost-based Sales Quota: (Least Common) Businesses that want to explicitly focus on
controlling expenses

2. Consider Your Target Review Period

The review period is the length of time over which sales performance will be measured.
A short review period, such as weekly or monthly, provides the sales manager with an
opportunity to quickly address and correct performance shortcomings. However, a
quarterly or annual review period is preferred by salespeople since it provides a longer
time window to make up missed numbers before they affect incentives or compensation.

The most common review period is a quarterly review, where you meet with your sales
staff every three months and discuss their predetermined sales quota and their
performance against that quota. However, your specific business function will largely
determine your review period. For example, if you’re a retailer with high sales volumes,
a monthly review might be good, while a semi- or annual review period might be better
for B2B sales with long sales cycles.

3. Establish Your Team’s Performance Baseline

A performance baseline is an average of past performance measured by reviewing past

history, accounting for seasonality, and adjusting for market influences. This step is
important because the baseline acts as a benchmark for setting your final sales quota,
which is usually a specific percentage of the baseline you establish. As an example, if
the baseline for a given sales territory is $50,000 a month, you might set a quota that
represents a 10% growth, or $55,000. If you are just starting out, launching new
products or services, or do not wish to use prior performance as an indicator of success,
you may choose to use your sales forecast in lieu of a historical performance baseline.
Still, it’s always better to use real past data whenever possible as a benchmark.
4. Calculate Your Sales Quota per Review Period

To calculate your sales quota, take your baseline metric and adjust it for desired or expected
growth. For example, if you are using a volume-based sales quota, you can calculate the ideal
sales quota by dividing your forecasted sales target by the number of salespeople. If you have
a profit-based quota, you can look at profitability over the last 12 to 24 months and then
multiply it by a fixed growth rate to arrive at your quarterly profit quota.

Typically, sales quotas that are within 5% of the baseline metrics you established are
considered achievable quotas. Further, sales quotas should realistically be achievable by 80%
of your team in order to incentivize maximum performance. Of course, your team can improve
by more than 5% with additional investment, streamlining processes, or general business
growth, but this figure is a good starting point to assess whether your quota is realistic.

5. Verify That Your Sales Quota Is Achievable

After you set your sales quota based on desired or expected growth, you need to verify that it’s
realistic and achievable by comparing it to your baseline. An effective sales quota is typically
one that is achievable by 80% of your team and within 5% of your baseline metric. The
performance baseline you establish will help you evaluate whether or not a calculated ideal
quota is realistic. It allows you to compare the two values and determine if the difference
between the two is achievable based on your business. Again, this is more of a qualitative
assessment and by no means are the 80% and 5% figures hard and fast rules. Instead, they are
good rules of thumb to check your thinking. However, it’s not uncommon for companies to
grow at rates far above 5%, and if you are one of those companies, your sales quotas should
reflect that growth.

6. Communicate Performance Expectations

A sales quota does not benefit anyone if a salesperson doesn’t know he or she has one. After a
manager sets the quota, he or she should share what the amount is, but also how the quota was
determined and when and how it will be measured. He or she should then explain any bonuses
or incentives the sales team might expect to earn for meeting or exceeding their quota. The best
method to communicate a sales quota and its value is with a face-to-face meeting.
Sales Territory

1. Define your market, analyze, and segment existing customers.

You should split up your customers into segments based on various characteristics such as:
industry, location, purchase history, and whatever else is relevant to the organization.

Ask yourself, “Who are the top customers, prospects, and leads?” Categorize your customers
into three groups.

1. The first group should be your best customers, or the ones who require little effort.
2. This is followed by the second group of customers: the ones who require a bit more
work, but only those you are confident have potential revenue gain that justifies the
extra work required by sales reps.
3. The third group should be customers who require a lot of work.

With these groups formed, you can decide how to best use your resources.

To discover what key trends are in your geography or market, look over the sales data that’s
already been collected. Analyze the data to find which territories show signs of growth and
then assign them to the sales reps who would be most successful based on their strengths
2. Conduct a SWOT analysis.

Next, you should identify your sales team’s internal strengths and weaknesses and external
opportunities and threats with what is known as a SWOT analysis.

A SWOT analysis is a process that identifies internal and external factors that can affect the
organization’s performance. When you have a better understanding of your strengths,
weaknesses, opportunities and threats, you can develop a stronger sales territory plan.
3. Set goals and create targets.

In order to make a successful sales territory plan, you must create clear parameters and realistic
goals for the team as well as individual sales reps’ territories.

To do this, consolidate the trends you’ve discovered above to come up with S.M.A.R.T
(Specific, Measurable, Achievable, Relevant, and Time-based) goals and realistic targets.
4. Develop strategies to accomplish your goals.

With clear customer segments and goals in place, it’s time to create strategies to succeed.

Using the information collected so far, you can now work out an even distribution of specific
regions or markets among individual reps.

The SWOT analysis mentioned above gives you a better idea of how to best assign your team
members’ skills and talents to a territory.

The customer segments will help you figure out how often different accounts should be
contacted and how to contact them.

5. Review and track your results.

The final step for a sales territory plan is to take the time to review and track the results to
optimize territory division. This is important for measuring progress to see how the plan is
impacting sales.

You should use your plan as a guide to produce intended results and fine-tune it on a regular
basis when needed.

Sales Budget

Sales budget refers to the estimation of the sales revenue and the sales overheads for a particular
period. A more accurate sales forecast means better utilization of resources, higher profitability
and less wastage. Sales forecasting, which is nothing but an estimation of demand for goods or
services in the market is essential for preparing a sales budget.

Let us now go through the various stages of preparing a sales budget:

1. Decide a Period of Sales Budget: A sales budget can be planned accurately if a specific
period is determined. It can be made monthly, quarterly or yearly.
2. Collect Previous Sales Data: The next step is gathering the sales data or record for the
previous period. It acts as a base to plan a sales budget for future sales.
3.
4. Gather Industry’s Sales Information: The company needs to be updated with the total
sales of the particular industry for a specific period. It should be aware of its market share
and the expected growth of the industry within that period.
5. Compare Sales of Consecutive Period: After collecting the sales records, a
comparative analysis is required of the previous sales periods to predict the future sales
possibilities.
6. Study Current Market Trends: Next step is keeping an eye on the market fluctuations,
preference and trend which helps in determining a more accurate sales budget.
7. Communicate with Customers: The customer reviews and buying habits should be
analyzed to know their buying trends and intentions for preparing a sales budget.
8. Prepare Sales Forecast: Based on the above data and analysis regarding past sales,
market trends and customer’s response, sales for a particular period is forecast.