After setting the national target value in the National Forecast phase, the next step involves cascading down the national target to the representative(Rep) level. To get to the Rep level, we first calculate the targets at the brick level. Bricks are the smallest geographical level for which we have sales data; the country is divided into multiple bricks. In the second step, the targets are aggregated from the bricks to the Reps level based on the bricks allocated to each Rep. Nevertheless, it is important to note that the representatives’ territory may vary from one cycle to another. Hence, analysing targets at the brick level first is advisable.
As explained above we need to break down the National Forecasts (targets) to targets at brick level. Let’s assume for example that bricks represent counties in the country. We cannot divide the national target equally between all the bricks (counties), because they are not the same, the demographics and economics are different between counties and therefore the sales and sales potential are different.
The best way to do the breakdown is to look at how the past sales are distributed across the different bricks. For this, we use the GeoShare% indicator which represents the percentage of national sales contributed by a specific brick: i.e. Paris generates 20% of the product sales in France. So we can use the historical GeoShare% of Paris (any brick) to allocate the right amount from the National Target.
The historical GeoShare% of a brick is influenced by
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Using the only GeoShare% of the product to break down the national targets puts more burden on the good performance because they will be allocated a bigger share of the growth. Also, the method cannot be applied when launching a product, as there is no historical data.
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Product GeoShare% allocation only will distribute the same %Growth from the National Level to all the Reps
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The alternative is to use the GeoShare% of the Relevant Market instead of product, meaning we look at how much the RM sales in Paris represent from the total RM sales in France, let’s say it is 15%. This means that the competitor products included in the Relevant Market, on average, generate 15% of their French sales from Paris, whereas our product generates only 20% from Paris. This again means that our Rep in Paris is doing a much greater job compared to the competitor Reps in Paris, and of course, compared to other of our Reps.
If we allocate 20% of the national target to Paris, when generally Paris represents only 15% of France, means we are overburdening the Paris Rep. Using the RM GeoShare% means we would allocate 15% of the National Target to Paris.
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Using RM GeoShare to allocate targets, means that we take into account the only socio-demographic aspects of the bricks into account and not the Rep performance.
This approach would penalise low performers and will allocate to them targets that may be unachievable during one cycle.
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RM GeoShare% allocation only would bring all bricks and reps to the same market share if achieved, basically eliminating the performance variance
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Generally, a combination between Product and RM GeoShares% should be used, by calculating a weighted average between the 2. The weight put on the Product depends on the lifecycle of the product.
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To establish brick targets, access the Geographical Breakdown tab. Within this tab, you’ll find a Filter section on the left side of the screen, comprising two fields: SKU and Team. You can filter the table by selecting the desired SKU and team. Once you’ve selected the SKU and Team for filtering the table, click ‘Apply’ to implement the changes.
The table can be filtered in every state of the plan.
Filter section
After applying a filter for a specific SKU, the relevant market shown in the centre of the screen will correspond with the relevant market linked to the filtered SKU as set in Configuration. In this section, you can decide the weight of the Product / RM GeoShare% used in the geographical breakdown by adjusting the slider to the preferred value or entering the desired value in the respective field. Click ‘Update’ to apply the modifications.