Ads Sales

1 1.1
2 1.4
3 1.8
4 2.1
5 2.3
6 2.45
7 2.65
•We have Power curve models for the response to sales effort for four drugs:
■ Drug 1 sales = 50(calls).5 therefore a= 50, x= calls, b=0.5
■ Drug 2 sales = 10(calls).75
■ Drug 3 sales = 15(calls).6
■ Drug 4 sales = 20(calls).3
 Drug 1 Drug 2 Drug 3 Drug 4
unit proft $ 10.00 $ 15.00 $ 20.00 $ 25.00

cost per call

$ 200.00

Drug 1 Drug 2 Drug 3 Drug 4

a 50 10 15 20 total calls Max Calls
b 0.5 0.75 0.6 0.3 20 20
sales calls (x) 2 4 6 8
units sold (y) 70.71067811865 28.28427 43.95234 37.32132

Profit from all drugs 2943.45065691

Total call cost $ 4,000.00
net profit $ (1,056.55)
Estimating the Sales Response Function at Syntex Labs

Estimates from management

Sales calls (1000s) Sales level

When no sales efforts are made 0 47
sales effort assigned to a drug is cut in half 175 68
sales-force effort (assumed to equal a base of 100) 350 100
sales-force effort were increased by 50 percent 525 126
sales force “saturated” the market 3500 152

Model parameters

When no sales force Constrained

sales efforts “saturated” to be less
are made the market than 5
a b c
20 100 3

Sales
Sales calls estimate
(1000s) Sales level (model)
0 47 20.000
175 68 99.261
350 100 99.907
525 126 99.972
3500 152 100.000
Sum of
squared
errors
Constrained to
be less than
1000,000
d
50000

Squared
error
729.000
977.222
0.009
677.438
2704.010

5087.678
 Calculate the Total Number of Salespeople Needed

total workload to cover the entire market

the total selling time available per salesperson

Workplanning for sales person TOTAL SALES

% in hours PEOPLE REQUIRED:
Selling activities:

Non-selling activities:
(such as collecting information on customers and
competitors, reparing and sending sales reports,
review meetings etc.)

Travelling:

Total

Total weeks in year

Leaves
CL
Medical
EL
No. OF WORK WEEKS
Work hours in a Week
No. of hours per day
No. of days working per week
No. of hours per week

Total working hours in year

 <- Minimize or Maximize? Calculate the Total Workload Necessary to Cover the Entire Market
Estimated minutes
No of per call Total calls
<- How to maximize it? Customer classification customers (convert to hour) per year
Class A
TOTAL SALES Class B
PEOPLE REQUIRED: #DIV/0! Class C
er the Entire Market
estimated hours
per customer Total hours
every year required

TOTAL
Source: Salesand Distribution Management - Krishna K Havaldar