7.9 SALES MEASUREMENT

Sales measurement involves not just making a record of what has been produced. Shipment data from the plant initially records product made to 'fill up the distribution line' and then to satisfy retailers' orders. But because of the inventory effects in the system, shipments may not relate to retail sales.

The most efficient method is to buy supermarket audit data which has been recorded electronically, i.e. the quantity of the product that has actually been sold in the supermarket. This is up-to-date actual retail information. Commercial sales research companies will provide sales not only of the new product but of competitive products so there is a control on analysing the sales.

Sales may be analysed as follows:

      Share of total market of the product category. This is usually
      measured in units, tonnes, dollars, pounds, but it is also interesting
      to measure the percentage of the target consumers who buy and
      how much they buy as this is a fundamental measure.

      Share of market in individual supermarkets or other point
      of distribution. This is useful because it identifies the type of
      supermarket and/or the area in which the product sells.

      Ratio of sales of new brand against competitors. This gives an
      indication of how the product stands in the market.

      Per capita sales rates. The new product's sales divided by the number
      of people or households in the geographical area or in the population
      of the target market. This can be used as a basis for predicting
      sales in other areas. Also it can be compared with nutritional surveys
      on food eating to give an idea of the importance of the product in the diet.