2012 Sales Forcasting Recipe Spice Shan Foods Private Limited Sha - - PDF document

Shan Foods Private Limited

2012

Sales Forcasting – Recipe Spice

Sha n F

• o ds (Priva te ) L

td . wa s fo unde d in 1981 in a sing le ro o m a s Sha n Ma sa la . L a te r, due to its po pula rity, the c o mpa ny wa s na me d Sha n F

• o ds. It

ha s pre se nc e in mo re tha n 50 c o untrie s to da y a nd de a ls in se ve ral b ro a d c a te g o rie s o f o ffe ring s. Sha n F

• o ds ha s c a pita lize d o n the c ha ng ing ma rke t tre nds

a nd c o nsume r ta ste s a nd thro ug h pro duc t tria ls, it ha s ma de sure to c hurn o ut o ffe ring s tha t a re b e st in line with c o nsume r ta ste s.

Sh a n Fo o d s Priv a te Lim ite d

Ko r a n g i In d u s t r i a l A r e a , Ka r a c h i , P a k i s t a n + 9 2 – 2 1 – 3 5 0 5 3 1 9 6 + 9 2 – 2 1 – 3 5 0 5 3 0 8 0

Gro up L e a de r:

Ade e l A. Sidd iq ui (GL ) – 11262

Gro up Me mb e rs:

Ba b a r Ansa ri – 10055 Muha mma d Ka shif – 9415 Ra ja Ra ffa y Niza ma ni – 8856 Ha ssa n Ome r – 9265

Le t t e r o f A c k n o w le d g e m e n t

T

• who m it ma y c o nc e rn.

T his L e tte r is to a c kno wle dg e the e ffo rts a nd sinc e rity, o ffe re d b y the c o urse instruc to r Mr. Sa e e d – UR – Re hma n, to te a c h the sub je c t a nd pro vide a de q ua te g uidline s. T he a c c o mplishme nt o f this re po rt is a re sult o f a c o mb ine e ffo rt ma de b y the re po rte d a nd the re po rting individua ls, d uring the te rm spring 2012. T he o b je c tive to write this re po rt is to le a rn the me tho ds

• f Sa le F
• re c a sting use d b y a n F

MCG pro duc e r, in this c a se Sha n F

• o ds

Priva te L imite d. I he re b y a c kno wle dg e tha t I ma y no t be a b le to unde rsta nd a nd write the c o nte nt o f this re po rt witho ut sinc e re g uida nc e fro m Mr. Kha lid Za ki (GM I nte rna tio na l Sale , Sha n F

• o ds Priva te L

imite d ), Mr. Za hir Mirza (G M Sa le s Ma na g e me nt, Sha n F

• o ds Priva te L

imite d ) a nd the ir a sso c ia te s, a s we ll. Gra c ia s,

Gro up L e a de r:

Ade e l A. Sidd iq ui (GL ) 11262

Gro up Me mb e rs:

Ba b a r Ansa ri 10055 Muha mma d Ka shif 9415 Ra ja Ra ffa y Niza ma ni 8856 Ha ssa n Ome r 9265

Le t t e r o f Tra n s m it t a l

T

• ,
• Mr. Sa e e d – Ur – Re hma n,

I nstitute o f Busine ss Ma na g e me nt, De a r Sir, We a re sub mitting this re po rt alo ng with a pre se nta tio n o n the Sa le s F

• re c a sting me tho d use d b y Sha n F
• o ds Priva te L

imite d , fo r Bo mb a y Birya ni, fro m Re c ipe Mix, o n Mo nda y, da te d 23th April 2012. T he Purpo se o f this re po rt is to pro vide yo u c o nte nt o n the b a sis o f whic h yo u a re a ble to a sse ss o ur unde rsta nding a nd c o mpre he nsio n a b o ut the c o urse title Sale s Ma na g e me nt. T he Co nte nt o f this re po rt is b a se d o n the info rma tio n pro vide d b y Sha n F

• o ds Priva te limite d , fo r the purpo se . Mo re o ve r the da ta

a nd info rma tio n a c q uire d fro m Sha n F

• o ds Priva te L

imite d ha s b e e n c o mpo se d, struc ture d a nd e la b o ra te d so tha t it c a n de live r its inte nde d

• b je c tive s. T

he Re po rt a lso d isc usse s the spe c ific pro c e dure s o f Sa le F

• re c a sting a nd its vita ls, fo r the se le c te d pro duc t.

Gra c ia s,

Gro up L e a de r:

Ade e l A. Sidd iq ui (GL ) 11262

Gro up Me mb e rs:

Ba b a r Ansa ri 10055 Muha mma d Ka shif 9415 Ra ja Ra ffa y Niza ma ni 8856 Ha ssa n Ome r 9265

Lis t o f Ta b le s

T a b le 1: T a rg e t Ma rke t .................................................................................................. 10 T a b le 2: E F E Sale s ............................................................................................................ 11 T a b le 3: IF E Sa le s ............................................................................................................. 11 T a b le 4: F

• re c a sting Mo de l F

Y'13 ............................................................................... 12 T a b le 5: F

• re c a sting first ha lf F

Y'13 ............................................................................. 13

Lis t o f Fig u re s

F ig ure 1: Sa le s Org a niza tio n........................................................................................... 4 F ig ure 2: Sa le s F

• re c a sting Pro c e ss

.............................................................................. 5 F ig ure 3: Ma rke t Sha re .................................................................................................. 10 F ig ure 4: Sa le s F Y'12 - Histo ric a l T re nd ........................................................................ 12

Ta b le o f C o n t e n t s

L e tte r o f Ac kno wle dg e me nt .......................................................................................... ii L e tte r o f T ra nsmitta l ......................................................................................................... iii T a b le o f Co nte nts ............................................................................................................. 1 I ntro duc tio n ....................................................................................................................... 3 Pro duc t Ra ng e ................................................................................................................. 3 Sa le s Org a niza tio n ........................................................................................................... 4 Sa le s F

• re c a sting Pro c e dure

......................................................................................... 4

• 1. F

a c to r Ana lysis ....................................................................................................... 5

• 2. F
• re c a sting Mo de l

................................................................................................ 6

• 3. Da ta Ac q uisitio n

.................................................................................................... 6

• 4. E

stima tio ns ............................................................................................................... 7

• 5. Co mb ining E

stima te s ............................................................................................ 7

• 6. Va ria nc e Ana lysis (E

va lua tio n) ........................................................................... 7 F

• re c a sting Me tho ds

...................................................................................................... 8

• 1. Histo ric a l E

xtra po la tio n ......................................................................................... 8

• 2. Sa le s Pro je c tio ns b y PL

C ...................................................................................... 8

• 3. Se a so nal Va ria tio ns

............................................................................................... 8

Sa le s F

• re c a sting – Re c ipe Sp ic e – T

a b le o f Co nte nts Pa g e | 2

• 4. L

e a ding Indic a to rs ................................................................................................ 8

• 5. Sa le s fo rc e e stima te s (Co mpo site s)

.................................................................. 9

• 6. Ma rke t Surve ys

....................................................................................................... 9

• 7. E

xte rnal and I nte rnal F a c to rs listing ................................................................... 9

• 8. Co mmitte e Co nse nsus

......................................................................................... 9

• 9. E

xe c utive s Op inio n ................................................................................................ 9 Se le c te d Pro duc t ............................................................................................................. 9 F

• re c a sting fo r Se le c te d Pro duc t

................................................................................ 9

• 1. Sub je c tive Ana lysis

.............................................................................................. 10 1. T a rg e t Ma rke t ................................................................................................ 10 2. Ma rke t Sha re ................................................................................................. 10 3. E F E Sa le s ......................................................................................................... 11 4. IF E Sale s ........................................................................................................... 11 5. Se a so nal Va ria tio n (Histo ric a l tre nd) ........................................................ 12

• 2. F
• re c a sting Mo de l

.............................................................................................. 12

• 3. Sa le s F
• re c a st fo r F

ruit Cha a t ........................................................................... 13

• 4. Co nse nsus & E

xe c utive Op inio n ...................................................................... 13

Sa le s F

• re c a sting – Re c ipe Sp ic e – Intro duc tio n

Pa g e | 3

In t ro d u c t io n

Sha n F

• o ds (Priva te ) L

imite d is a F

• o d pro duc ts Ma nufa c turing a nd

Ma rke ting Org a niza tio n. It wa s fo unde d in 1981 in a sing le ro o m a s Sha n Ma sa la . L a te r, due to its po pula rity, the c o mpa ny wa s na me d Sha n F

• o ds. It

ha s pre se nc e in mo re tha n 50 c o untrie s to da y a nd de a ls in se ve ral b ro a d c a te g o rie s o f o ffe ring s. Sha n F

• o ds ha s c a pita lize d o n the c hang ing ma rke t

tre nds a nd c o nsume r ta ste s a nd thro ug h pro duc t tria ls, it ha s ma de sure to c hurn o ut o ffe ring s tha t a re b e st in line with c o nsume r ta ste s. A hug e pa rt o f the ir sa le s c o nsist o f Re c ipe Mix Ca te g o ry. Re c ipe Mix Ca te g o ry c o nsists o f 64 va ria nts, c la ssifie d into 9 ra ng e s. T he sha re o f pro duc ts fro m Cha a t Ma sa la in the Re c ipe Mix Ca te g o ry Sa le s is sig nific a ntly la rg e r tha n a ny o the r rang e , a nd it is d ue to the po pula rity o f Shan Cha a t Ma sa la . T his re po rt is to unde rsta nd the fo re c a sting me tho ds Sha n F

• o ds ha s

a do pte d, fo r the re g ula r bo ttle SKU (100 g m), o f Cha a t Ma sa la . But prima rily, we must lo o k into the pro duc t ra ng e a nd b ra nd po rtfo lio a nd the ir pro c e dure

• f sa le s fo re c a sting , to unde rsta nd the c o mple xity o f the c o mpa ny’ s Sa le s

Org a niza tio n.

P ro d u c t R a n g e

Sha n F

• o ds ha ve a b ra nd po rtfo lio o f two b ra nd na me s, Sha n a nd De lve ,

whic h a re furthe r sub divide d into se ve ral c a te g o rie s a nd ra ng e s o f diffe re nt va ria nts o f pro duc ts. Prima rily, it is impo rta nt to unde rsta nd the b ro a d c a te g o rie s o f o ffe ring s b y Shan F

• o ds. F
• llo wing is a summa rize d list.
• Sha n

Va ria nts

– Re c ipe Mix

64

– Pla in Spic e s

16

– Orie nta l Re c ipe

10

– Sa lt

2

– Pic kle

7

– Pa ste

3

– Sa uc e s

5

– Ric e

5

– Ve rmic e lli

1

• De lve De se rts

– Je lly Crystals

4

– Custa rd Po wde rs

3

– Pudding Mix

3

Sa le s F

• re c a sting – Re c ipe Sp ic e – Sa le s Org a niza tio n

Pa g e | 4 I rre spe c tive o f the ra ng e s a nd va ria nts, Sha n F

• o ds pra c tic e s se pa ra te

fo re c a sting me tho ds fo r the ir diffe re nt SKU’ s a s we ll.

Sa le s O rg a n iz a t io n

Sa le s Org a niza tio n o f Shan F

• o ds is d ivid e d into two De pa rtme nts, whic h a re

I nte rna tio nal a nd L

• c a l Sale s. L
• c a l Sa le s de pa rtme nt is mo re like tra d itio na l

Sa le s De pa rtme nt. Sha n F

• o ds Sa le s Org a niza tio n is le a d b y the CE

O himse lf. Sa le s a s a func tio n is mo nito re d a nd a dvise d b y COO, while the c o ntro lling is in the Sc o pe o f GM Sa le s Ma na g e me nt. Unde r his supe rvisio n the re a re RSM (No rth a nd So uth), ASMs, Ke y Ac c o unts Ma na g e rs, Sa le s E xe c utive s (He a d Offic e o nly), a nd Sa le s Re pre se nta tive s. Re po rting within the sa le s func tio n is pe rfo rme d o n da ily b a sis, while COO a nd CE O re vie w the pe rfo rmanc e o n we e kly b a sis with the mana g e me nt c o mmitte e . Sa le s Auto ma tio ns a re o nly use d b y the sale s te a m wo rking in urb a n re g io ns. T

• me e t Sale s o b je c tive s,

GM Sa le s ha s a re spo nsib ility to c o o rdina te with o the r func tio ns within the c o mpa ny. F

• r this re a so n, the y to g e the r de ve lo p SNOPs and b udg e ts,

re spe c tive ly. F

• llo wing is the hie ra rc ha l struc ture fo r the re po rting syste m.

F igur e 1: Sale s Or ganization

Sa le s Fo re c a s t in g P ro c e d u re

Sha n F

• o ds fo llo ws a sta nda rd pro c e dure to fo re c a st a nd furthe r sync hro nize

it with a c tua l a nd imp ro ve the Sale s F

• re c a sting Me tho ds. Sa le s fo re c a sting is

CEO COO GM Sales RSM North ASMs SRs Key Acct. Mngr. Sales Executives RSM South ASMs SRs

Sa le s F

• re c a sting – Re c ipe Sp ic e – Sa le s F
• re c a sting Pro c e dure

Pa g e | 5 pe rfo rme d a nnua lly, b e fo re the be g inning o f the F isc a l Ye a r. T he se fo re c a sts a re ve rifie d fo r a ny va ria nc e s o n q ua rte rly b a sis, b y whic h the se a re fine tune d. E ve ry Pro duc t a nd the ir SKU’ s ha ve se pa ra te fo re c a sting me tho d. T he pro c e ss o f Sa le s F

• re c a sting is c o nduc te d b y Sa le s F
• re c a sting

Co mmitte e , whic h c o nstitute s o f me mb e rs fro m Stra te g ic , Ope ra tio ns, Ma rke ting , a nd Sa le s func tio ns. T his Co mmitte e is he a de d b y CE O, a nd se c o nde d b y COO. T he input fro m GM Sa le s Ma na g e me nt is a lwa ys g ive n the hig he st we ig ht – ag e , a mo ng st a ll o the r me mbe rs. F

• llo wing a re the Co re

func tio ns a nd re spo nsib ilitie s o f the Sa le s F

• re c a sting Co mmitte e .

F igur e 2: Sale s F

• r

e c asting Pr

• c e ss

1 . Fa c t o r A n a ly sis

F a c to r Ana lysis is the b a sic func tio n, whic h la ys the b a sis fo r a c c ura te fo re c a sting . By this, c o mmitte e fig ure s o ut the via b ility o f the pre vio us fo re c a sting mo de l and its c o nstitue nts, with re spe c t to the pre se nt c irc umsta nc e s. F

• llo wing a re so me o f the c o nstitue nts o f F

a c to r Ana lysis.

• Sub je c tive Ana lysis b y T

e rrito ry

• T

a rg e t Ma rke t

• Ma rke t Po te ntia l
• Sa le s Po te ntia l
• E

F E Sa le s

• PE

ST

• Se a so nal Va ria tio ns Histo ric a l Da ta
• CPM
• Po rte r’ s F

ive F

• rc e s

Factor Analysis

• Subjective

Analysis

• EFE and IFE

Sales

Forcasting Model

• Desiging
• Testing

Data Acquisition

• Primary

Sources

• Secondary

Sources

Estimation

• Qualitative
• Quantitative

Combining Estimates Variance Analysis

Sa le s F

• re c a sting – Re c ipe Sp ic e – Sa le s F
• re c a sting Pro c e dure

Pa g e | 6

• IF

E Sale s

• Re so urc e Ba se d Vie w
• Adve rtising Suppo rt
• Distrib utio n Suppo rt
• Va lue Cha in Ana lysis/ Ca pa c ity E

va lua tio ns

• Pro duc t Impe ra tive s

With this info rma tio n the y furthe r impro ve the e xisting o r so me time s e ve n de ve lo p a ne w F

• re c a sting Mo de l b y using a b le nd o f te c hniq ue s.

2 . Fo re c a stin g M o d e l

E a c h Offe ring ’ s sa le fo re c a st is a sig nific a nt a nd uniq ue c o mpo site o f e stima te using se ve ra l me tho ds fo r fo re c a sting . T he se fo re c a sts a re a ssig ne d pe rc e nt we ig ht – a g e s, a nd the n c o mb ine d to ma ke a c o mpo site sa le s fo re c a st mo de l. T his is a lso de pe nde nt o n the c o mpa ny’ s stra te g y fo r the

• ffe ring . F
• r e xa mple , if the c o mpa ny wa nts to se t a g g re ssive ta rg e ts, the

c o mmitte e will inc re a se the we ig ht – ag e o f Histo ric a l E xtra po la tio n, with re spe c t to the re q uire d g ro wth ra te . Se ve ral Qua lita tive a nd Qua ntita tive me tho ds a re use d to c o lle c t da ta a nd e stima te fo re c a sts. So me a re liste d unde r the he a ding o f E stima te s.

3 . D a ta A c q u isitio n

T

• fo re c a st sa le s, se ve ra l prima ry a nd se c o nda ry da ta so urc e s a re use d to

pro vide e stima te s o f fo re c a ste d sa le s. So me o f the m a re a s fo llo ws.

• Ma rke t Re se a rc h a nd Surve y
• Prima ry (Co nduc te d b y Inte rnal T

e a m)

• Da ta Mo nito rs
• Nie lse n Pa kista n
• Pre vio us Vo lume Sale s a nd Re ve nue Da ta
• I

nte rnal MIS

• Ma c ro E

c o no mic s

• Ma rke ting I

nte llig e nc e

• I

nte rnal F unc tio ns

• Sa le s F
• rc e s
• Distrib uto rs
• Who le sale rs
• Re ta ile rs

Sa le s F

• re c a sting – Re c ipe Sp ic e – Sa le s F
• re c a sting Pro c e dure

Pa g e | 7

4 . Estim a tio n s

T he e stima te s re q uire d fo r fo re c a sting individ ua l o ffe ring a re the n e stima te d b y using fo llo wing me tho ds.

• Qua ntita tive
• Histo ric a l E

xtra po la tio n

• I

ndustry Sa le s

• Co mpa ny Sale s
• Sa le s Pro je c tio ns b y PL

C (fo r Ne w Ca te g o rie s)

• Se a so nal Va ria tio ns
• L

e a ding Indic a to rs

• Qua lita tive
• Sa le s fo rc e e stima te s
• Ma rke t Surve ys
• E

xte rnal and I nte rnal F a c to rs listing

• Co mmitte e Co nse nsus
• E

xe c utive s Op inio n All the e stima te s fro m the a b o ve me tho ds a re tra nsla te d into future sa le s, whic h a re the n c o mb ine d to g ive a c o mpo site Sa le s F

• re c a st.

5 . C o m b in in g Estim a te s

F

• r e ve ry individua l pro duc t the re is a c e rta in pe rc e nt we ig ht – a g e , a ssig ne d

to the fo re c a ste d sa le s b y e a c h me tho d, whic h a re the n c o mb ine d to ma ke 100% fo re c a ste d sa le s, whic h a re a g re e d b y the me mb e rs o f the c o mmitte e a nd a ppro ve d b y the He a d o f the Co mmitte e . T he se we ig ht – a g e s a re fine tune d with re spe c t to a c tua l sale s b y Va ria nc e Ana lysis Me tho d, fo r ne xt ye a r sa le s fo re c a sting , a s a n o ng o ing pro c e ss.

6 . V a ria n c e A n a ly sis ( Ev a lu a tio n )

Va ria nc e Ana lysis use d a lo ng with F a c to r Ana lysis e na b le s Shan F

• o ds to

e xa mine the va ria tio n b e twe e n the a c tua l sa le s a nd fo re c a ste d sale s a nd this me tho d is a pplic a b le to e xa mine sale s fo re c a st fro m e ve ry me tho d use d fo r the purpo se . T he c o mpa riso n wo uld b e ma de a g a inst sa le s fo re c a sts a nd a c tua l sa le s to ide ntify the re a so ns fo r a c tua l diffe re nc e s, whic h a re the n e a sily ide ntifie d a nd e xa mine d within the a re a s o f c o nc e rn a nd the ir c o mpo ne nt pa rts. Mo re spe c ific a lly, va ria nc e a nalysis c o uld b e a pplie d to sa le s pric e a nd sa le s vo lume a nd the value s o f va ria nc e c a n po int to e ithe r

• f the two re a so ns. T

his Ana lysis is use d to fine tune the Co mb ina tio n o f Me tho ds, a nd ultima te ly re sults in mo re a c c ura te fo re c a st in future .

Sa le s F

• re c a sting – Re c ipe Sp ic e – F
• re c a sting Me tho ds

Pa g e | 8

Fo re c a s t in g M e t h o d s

Sha n F

• o ds Sale s Org a niza tio n use s a se pa ra te mo de l fo r e ve ry o ffe ring .

F

• llo wing a re the re a so ns b e hind this a c tivity.
• Buying b e ha vio r fo r se ve ra l o ffe ring is uniq ue a nd re la te d to se a so ns,
• c c a sio ns, e tc . F
• r e xa mple , the sale s o f Sha n F
• o ds, Chic ke n T

ikka a nd Biha ri Ka b a b Ma sa la , sig nific a ntly sho ws a c yc lic inc re a se a fte r E id – Ul – Azha , while Cha t Ma sa la sa le s inc re a se s during Ra ma da n till E id – Ul – F itr.

• Buying b e ha vio r fo r diffe re nt SKUs o f a sing le pro duc t, a lso c ha ng e s with

te rrito ry, o c c a sio n, e tc . F

• r e xa mple , Bo mb a y Birya ni Re g ula r pa c k is no t

de ma nde d in se ve ral a re a s a t a ll, while its 15 g m Sa c he ts a re purc ha se d

• n re la tive ly hig he r fre q ue nc y.

T he y use the a b o ve me ntio ne d fo re c a sting me tho ds fo r se ve ral sig nific a nt re a so ns. F

• llo wing a re so me e xpla na tio ns, b a se d o n e xa mple s, whic h justifie s

the ine vita b ility o f e a c h o f the se me tho ds.

1 . Histo ric a l Ex t ra p o la tio n

T he Histo ric a l E xtra po la tio n is use d to e stima te the fo re c a st o f I ndustry Sale s a nd Co mpa ny Sale s, b o th c o nsume r a nd institutio na l. By this the y ke e p the re q uire d sa le s g ro wth into c o nside ra tio n, whic h g ive s a n a g g re ssive sa le s fo re c a st fig ure s.

2 . Sa le s Pro je c tio n s b y PLC

Sa le s Pro je c tio ns b y PL C, he lps the m in ke e ping tra c k o f the pro duc t life c yc le sta g e the pro duc t is in. T his pro vide s a me dio c re Sa le s F

• re c a st, if the pro duc t

is a t a sta g e o f ma turity.

3 . Se a so n a l V a ria tio n s

Se a so nal Va ria tio ns sho ws the c yc lic rise in the de ma nd o f any pa rtic ula r

• ffe ring with re spe c t to ye a r, o c c a sio n, e tc .

T he y also c o nside r pa tte rn o f the da te s in e ve ry mo nth, sho wing inc re a sing c yc le s o f ta ke o ffs fro m she lve s. T his he lps the m to pla n fo r a c q uiring the se lf spa c e s, a c c o rd ing ly.

4 . Le a d in g In d ic a to rs

So me So c io – De mo g ra phic fa c to r, sho ws sig nific a nt re la tio nships with the sa le o f c e rta in pro duc ts, suc h a s, if the re is a n inc re a se in we dding c e re mo nie s, the re is a sig nific a nt inc re a se in the I nstitutio na l sa le o f Birya ni Ra ng e , Ko rma Ra ng e , e tc .

Sa le s F

• re c a sting – Re c ipe Sp ic e – Se le c te d Pro duc t

Pa g e | 9

5 . Sa le s f o rc e e stim a te s ( C o m p o site s)

Sa le s fo rc e e stima te s a re the e xpe c ta tio ns o f the sale s re pre se nta tive s, a b o ut future sa le . T his prima rily, he lps in kno wing the re a l pic ture a t the g ra ss ro o t le ve l, a nd the n it is he lps in kno wing the distrib utio n o f sale s to the te rrito ry le ve l.

6 . M a rke t Su rv e y s

By Ma rke t Surve ys, the y re c o g nize the numb e rs o f the e xisting a nd po te ntia l b uye rs a nd spe c ific b uying b e ha vio rs the y po sse ss. T he se c a n b e tra nsla te d into the e xpe c te d Sale s.

7 . Ex te rn a l a n d In te rn a l Fa c to rs listin g

E xte rnal a nd I nte rnal F a c to r listing ind ic a te se ve ral a spe c ts, whic h c a n a ffe c t Sa le s F

• re c a st, sig nific a ntly the sale s to the institutio ns. F
• r E

xa mple , if PIA is no t to c o nduc t Ha j F lig hts, the institutio na l sa le s o f Shan Salt and Pe ppe r, pa c ka g e d spe c ia lly fo r PIA will sig nific a ntly de c re a se .

8 . C o m m it te e C o n se n su s

Afte r a pplying the a b o ve me ntio ne d me tho ds, pe rc e nt we ig ht – a g e s, the c o mmitte e me mbe rs disc uss, re vie w, d e c ide a nd a g re e with the Sale s F

• re c a sts.

9 . Ex e c u tiv e s O p in io n

T he Sale s F

• re c a sts a re the n pre se nte d in fro nt o f the Bo a rd o f Dire c to rs,

a lo ng with CE O a nd COO, fo r re visio ns a nd a ppro va ls.

Se le c t e d P ro d u c t

T

• unde rsta nd the fo re c a sting me tho d, a do pte d b y Sha n F
• o ds Priva te

limite d, we se le c te d a Sha n F

• o ds F

ruit C ha t Ma sa la (100 g m Bo ttle ) fro m the Cha t Ma sa la Ra ng e , within Re c ipe Mix Ra ng e . Re c ipe Mix Ra ng e c o nsists o f 64 diffe re nt va ria nt with 4 to 8 diffe re nt SK U’ s fo r e a c h. All the se pro duc ts a nd SKU’ s ha ve diffe re nt fo re c a sting me tho ds a nd its a sso c ia tio ns.

Fo re c a s t in g f o r Se le c t e d P ro d u c t

F

• llo wing is the Sale s fo re c a st fo r Sha n F
• o ds F

ruit Cha t Ma sa la (100 g m Bo ttle ), whic h is no t a c tua l. T he purpo se o f this fo re c a st is to g ive a n e xa mple tha t ho w the a b o ve e la b o ra te d pro c e ss c a n b e pe rfo rme d.

Sa le s F

• re c a sting – Re c ipe Sp ic e – F
• re c a sting fo r Se le c te d Pro duc t

Pa g e | 10

1 . Su b je c tiv e A n a ly sis

• 1. T

a rg e t Ma rke t

T he T a rg e t ma rke t is de fine d in the fo llo wing ta ble .

T able 1: T ar ge t Mar ke t

De mo g ra p hic s

Ag e

• 11 ~ 20

21~ 35 36 ~ 50

• F

a mily Size 1 - 2 3 - 4 5 - 6

• SE

C Cla ss A1 A2 B1 B2 C Ge nd e r Male F e male

• Oc c upa tio n

Stud e nts Pro fe ssio nals Cle ric al Re tire d Ho use wive s Re g io n No rth So uth

• Psyc ho g ra p hic s

Pe rso nality Amb itio us F a mily Orie nte d Quality Co nsc io us He alth Co nsc io us T a ste Co nsc io us Oc c a sio ns Sp e c ial Oc c a sio ns Gue st Visits Sma ll Ga the ring s Me a ls Pic nic s/ T rave ls Sna c ks

• 2. Ma rke t Sha re

F igur e 3: Mar ke t Shar e

10,800,000 10,800,000 2,400,000 Shan National Others

Sa le s F

• re c a sting – Re c ipe Sp ic e – F
• re c a sting fo r Se le c te d Pro duc t

Pa g e | 11 T his Pro duc t is a t its Ma turity Sta g e the re fo re the Ma rke t Po te ntia l is a ssume d to b e sa tura te d, a nd inste a d Ma rke t Sha re must b e c o nside re d.

• 3. E

F E Sa le s

E F E Sa le s is a fa c to r listing o f the e xte rnal fo rc e s whic h ma y a ffe c t e xpe c ta tio ns o f sa le s.

T able 2: E F E Sale s

Ke y E xte r nal F ac tor s % Change % We ight

Opportunitie s

Annua l Po pula tio n Gro wth 6% 6% 5% Dispo sa b le I nc o me I nc re a se 5% 5% 5% T re nd s, He a lthy a nd Quality Pro d uc t 15% 15% Buying Bra nd e d Spic e s 15% 20%

T hre ats

Ne w Co mpe tito rs E nte ring 5% 1% F a st fo o d a nd re sta ura nt T re nd 25% 17% Out o ff Ho me I fta r T re nd 35% 35% Sub stitute Po te ntia l Gro wth 5% 2%

T

• tal

100%

• 4. I

F E Sa le s

IF E Sa le s is a fa c to r listing o f the inte rna l fo rc e s whic h ma y a ffe c t e xpe c ta tio ns

• f sa le s.

T able 3: IF E Sale s

Ke y Inte r nal F ac tor s % Change % We ight

Stre ng ths

Pro d uc tio n Ca pa c ity I nc re a se 15% 5% Value Cha in I mpro ve me nts 10% 5% U rb a n Distrib utio n 1.5% 15% Ave ra g e c usto me r Purc ha se 15% 20%

We akne sse s

Ad ve rtising E ffo rts 5% 1% Rural Distrib utio n 25% 19% L e ss a ttra c tive Sale s pro mo tio ns 35% 35%

T

• tal

100%

Sa le s F

• re c a sting – Re c ipe Sp ic e – F
• re c a sting fo r Se le c te d Pro duc t

Pa g e | 12

• 5. Se a so na l Va ria tio n (Histo ric a l tre nd )

F ruit Cha t Ma sa la sho ws a n 85% o f the annua l sa le s in the mo nths o f Sha b a n a nd Ra ma da n, whic h b e g in to inc re a se fro m the mid o f Sha b a n a nd de c re a se to the le ve l o f no rmal sa le s b y the e nd o f Ra ma da n. Hig he st Sa le s is

• b se rve d during the first we e k o f Ra ma da n. T

he inc re a se in sa le c a n b e

• b se rve d in the Gra ph o f F

Y ‘ 12b e lo w,

F igur e 4: Sale s F Y'12 - Histor ic al T r e nd

2 . Fo re c a stin g M o d e l

T his F

• re c a sting mo de l is de sig ne d o n the b a sis o f Va ria nc e Ana lysis with

ke e ping Sub je c tive Ana lysis, E F E a nd IF E Sale s in c o nside ra tio n. T he Co mpa ny’ s Stra te g y is a g g re ssive to wa rds se lling F ruit Cha rt Ma sa la the re fo re the we ig ht – a g e s a ssig ne d to Histo ric a l E xtra po la tio ns ha ve b e e n inc re a se s a c c o rd ing ly.

T able 4: F

• r

e c asting Mode l F Y'13

Me thods

Pre vious F

• re c ast

Ac tual Sale s % Varianc e Pre vious We ight Modifie d We ight

I nd ustry Sale s 24,500,000 24,000,000

• 2.1

30 35 Co mpa ny Sale s 11,000,000 10,800,000

• 1.9

30 53 Pro je c tio n b y PL C 9,000,000 10,800,000 16.7 20 2 Sale s F

• rc e

E stima te s 9,5000,000 10,800,000 12.0 20 10

Composite s

10,307,500 10,800,000 100 100 10 20 30 40 50 60

Sales FY'12

Sales FY'12

Sa le s F

• re c a sting – Re c ipe Sp ic e – F
• re c a sting fo r Se le c te d Pro duc t

Pa g e | 13

3 . Sa le s Fo re c a st f o r Fru it C h a a t

F

• llo wing is the sa le F
• re c a st fo r two q ua rte r, a ssuming tha t the se c o nd

Qua rte r ho lds the mo nths o f Sha b a n a nd Ra ma da n.

T able 5: F

• r

e c asting fir st half F Y'13

Me thods

We ight – age Qtr 1 Qtr 2 F

• re c ast
• W. F

C F

• re c ast
• W. F

C Industr y Sale s

35% 4,320,000 1,512,000 24,480,000 8,568,000

Company Sale s

53% 1,944,000 1,030,320 11,016,000 5,838,480

Proje c tion by PL C

2% 1,555,200 31,104 8,812,800 176,256

Sale s F

• rc e

E stimate s

10% 3,800,000 380,000 21,533,333 2,153,333

Composite

100% 2,121,824 12,023,669

No w the Sa le s fo re c a st fo r Qua rte r 1 is 2,121,824. Whe re a s due to the e xpe c te d sa le s in the mo nth o f Sha b a n and Ra ma da n, Qua rte r 2 sho ws sa le s is 12,023,669 units

4 . C o n se n su s & Ex e c u tiv e O p in io n

Be fo re fina lizing the Sale s F

• re c a st Re po rt, the me mb e rs o f the c o mmitte e

disc uss it in me e ting a nd dra w a c o nse nsus. Afte r fina lizing the Sale s F

• re c a sting Re po rt, it is pre se nte d to the Bo a rd o f

Dire c to r, fo r re vie w

10/4/2012 1

Shan Foods Private Limited Raja Raffay Nizamani

• Shan Foods (Private) Limited is a Food products Manufacturing and

Marketing Organization. It was founded in 1981 in a single room as Shan

• Masala. Later, due to its popularity, the company was named Shan Foods.

It has presence in more than 50 countries today and deals in several broad categories of offerings. Shan Foods has capitalized on the changing market trends and consumer tastes and through product trials, it has made sure to churn out offerings that are best in line with consumer tastes. h f h l f

• A huge part of their sales consist of Recipe Mix Category. Recipe Mix

Category consists of 64 variants, classified into 9 ranges. The share of products from Chaat Masala in the Recipe Mix Category Sales is significantly larger than any other range, and it is due to the popularity of Shan Chaat Masala.

• This presentation is to understand the forecasting methods Shan Foods

has adopted, for the regular bottle SKU (100 gm), of Chaat Masala. But primarily, we must look into the product range and brand portfolio and their procedure of sales forecasting, to understand the complexity of the company’s Sales Organization.

Shan Foods Private Limited

10/4/2012 2

CEO COO GM Sales RSM North ASMs SRs Key Acct. Mngr. Sales Executives RSM South ASMs SRs

Adeel A. Siddiqui

• Subjective Analysis

• Qualitative

• EFE and IFE Sales
• Designing
• Testing
• Primary Sources
• Secondary Sources
• Quantitative

10/4/2012 3

• Subjective Analysis

• Qualitative

• EFE and IFE Sales
• Designing
• Testing
• Primary Sources
• Secondary Sources
• Quantitative

• Subjective Analysis

• Qualitative

• EFE and IFE Sales
• Desiging
• Testing
• Primary Sources
• Secondary Sources
• Quantitative

• Subjective Analysis

• Qualitative

• EFE and IFE Sales
• Designing
• Testing
• Primary Sources
• Secondary Sources
• Quantitative

10/4/2012 4

Babar Ansari Hassan Omar

10/4/2012 5

10/4/2012 6

Shan Chaat Masala (10 gm Bottle) Muhammad Kashif De mo g ra p hic s

• 11 ~ 20

• F

• SE

• Oc c upa tio n

• Psyc ho g ra p hic s

Others, 10% Shan, 45% National, 45%

• tal

• tal

Sales FY'12

10/4/2012 7

Me thods

Pr e vious F

• r

e c ast Ac tual Sale s % Var ianc e Pr e vious We ight Modifie d We ight Industry Sa le s 24,500,000 24,000,000

• 2.1

30 35 Co mpa ny Sa le s 11,000,000 10,800,000

• 1.9

30 53 Pro je c tio n b y PL C 9,000,000 10,800,000 16.7 20 2 Sa le s F

• rc e

E stima te s 9,5000,000 10,800,000 12.0 20 10 Composite s 10,307,500 10,800,000 100 100

Me thods

We ight – age Qtr 1 Qtr 2 F

• r

e c ast

• W. F

C F

• r

e c ast

• W. F

C Industr y Sale s 35% 4,320,000 1,512,000 24,480,000 8,568,000 Company Sale s 53% 1,944,000 1,030,320 11,016,000 5,838,480 Pr

• je c tion by PL

C 2% 1,555,200 31,104 8,812,800 176,256 Sale s F

• r

c e E stimate s 10% 3,800,000 380,000 21,533,333 2,153,333 Composite 100% 2,121,824 12,023,669