Understanding sales volume and sales value helps businesses measure how much they sell and how much revenue they generate, key metrics in setting marketing objectives.
Definition of Sales Volume and Sales Value
Sales Volume
Sales volume refers to the total number of units sold by a business over a given period. It is a quantitative measure used to assess product movement, operational performance, and market traction. Unlike revenue, which focuses on the monetary aspect, sales volume focuses purely on the number of items sold.
It is often tracked daily, weekly, monthly, quarterly, or annually, depending on the business model and industry.
Sales volume helps a company understand customer demand for different products or services.
It is especially important for low-margin, high-turnover businesses, such as supermarkets or fast-food chains.
Example: If a bakery sells 500 loaves of bread in a week, the sales volume for that week is 500 units.
Sales Value
Sales value is the total monetary amount generated by sales within a given period. It is calculated by multiplying sales volume by the price per unit.
Sales Value = Sales Volume × Price per Unit
This metric reflects the company’s revenue, excluding taxes like VAT unless otherwise stated.
Sales value is a financial measure and is critical for budgeting, performance reviews, and investment decisions.
While sales volume reveals how many products were sold, sales value reveals the financial success of those sales.
Example: If those 500 loaves of bread are sold at £2 each, then the sales value for that week is
500 loaves × £2 = £1,000.
These two concepts, while related, offer different perspectives. A business can have high sales volume but low sales value if it sells many units at a low price, or low volume but high value if it sells premium products.
Why Sales Volume and Sales Value Are Common Marketing Objectives
Setting specific targets for sales volume and sales value is a fundamental part of marketing planning, particularly in product-focused businesses.
Significance in Marketing Objectives
These metrics directly connect marketing efforts (like promotions, pricing, and advertising) to tangible outcomes.
They allow companies to quantify success, making it easier to adjust campaigns or strategy if goals are not met.
Many firms set their marketing objectives around either increasing the number of units sold or boosting the total value of sales.
Common Objectives Include:
Growing overall market presence: by increasing volume, especially when entering new markets.
Maximising revenue: by improving value, often through price adjustments or upselling.
Achieving cost efficiencies: by increasing volume to benefit from economies of scale.
Importance for Product-Driven Businesses
In businesses that rely heavily on product sales (e.g. electronics, food and beverages, fashion), sales volume and value are the primary indicators of success.
A company like Apple may focus on high sales value (due to premium pricing), while a supermarket brand like Tesco may aim to maximise sales volume through frequent low-margin sales.
Example Objective: A clothing retailer sets a goal to increase the monthly sales volume of its summer t-shirt range by 20% during July and August.
Factors Influencing Sales Volume and Sales Value
Various internal and external factors affect how many products a business can sell and how much money it can earn from them.
Pricing Strategies
Penetration pricing: Low initial prices to quickly gain market share. This increases sales volume but may limit sales value initially.
Price skimming: High initial prices to maximise revenue from early adopters. This boosts sales value but may reduce initial volume.
Psychological pricing: Setting prices like £9.99 instead of £10 to boost volume.
Dynamic pricing: Changing prices based on demand, competition, or time.
Promotional Activities
Sales promotions: Short-term offers like “buy one, get one free” or percentage discounts typically boost sales volume.
Advertising campaigns: Can increase both awareness and perceived value, influencing both volume and value.
Sponsorships and endorsements: Can increase brand credibility, leading to higher demand and sales.
Market Conditions
Economic climate: In downturns, consumers may prioritise cheaper goods, affecting both sales volume and value.
Consumer trends: Shifts in preferences can drive or hinder sales. For example, a rise in eco-consciousness can benefit companies selling sustainable products.
Regulatory environment: Changes in taxes or product standards can influence pricing and demand.
Product Attributes
Quality: Higher perceived quality can justify a higher price, boosting value even if volume remains constant.
Packaging and branding: Appealing designs or strong brand identities can increase product desirability and thus sales volume.
Seasonality
Certain products sell better at particular times of the year (e.g. chocolate at Christmas, fans in summer), affecting both volume and value.
Competitive Actions
New product launches, aggressive pricing, or innovative marketing by competitors can pull demand away, affecting your own sales metrics.
Measuring and Setting Targets for Sales Volume and Sales Value
Marketing managers must measure past sales performance accurately and use those insights to set realistic and motivating targets.
How Sales Volume is Measured
By counting the number of units sold using sales data from POS systems, order records, or CRM systems.
The data is typically split by:
Time period (daily, weekly, etc.)
Product line or category
Customer segment
Geographical region
How Sales Value is Measured
By multiplying the number of units sold by the price per unit. It may also be tracked net of returns, discounts, and allowances.
Sales Value = Quantity Sold × Price per Unit
This is usually calculated automatically through accounting software or e-commerce platforms.
Setting SMART Targets
Businesses often use SMART criteria when setting sales targets:
Specific: Clear objectives, e.g. increase monthly online sales.
Measurable: Quantified, such as a 15% rise in value.
Achievable: Realistic given market size and resources.
Relevant: Aligned with overall business goals.
Time-bound: Set within a defined timeframe.
Example SMART Objective:
"Increase the sales volume of our vegan protein bars by 10% over the next 3 months through online promotions and influencer partnerships."
Worked Examples: Calculating Sales Volume and Sales Value
Example 1: Calculating Sales Volume
A company sells three products in a single week:
Product A: 100 units
Product B: 150 units
Product C: 200 units
Sales Volume = 100 + 150 + 200 = 450 units
This figure helps the business evaluate whether overall demand is increasing and how it is spread across the product range.
Example 2: Calculating Sales Value
If the unit prices are:
Product A: £10
Product B: £8
Product C: £6
Sales Value = (100 × 10) + (150 × 8) + (200 × 6) = £1,000 + £1,200 + £1,200 = £3,400
The sales value provides insight into how much revenue was generated in that period, allowing for revenue forecasting and performance analysis.
Example 3: Target Planning
A retailer wants to achieve a monthly sales value of £12,000. The main product sells at £60 per unit.
Required Sales Volume = Target Sales Value ÷ Price per Unit
= 12,000 ÷ 60 = 200 units
If they are currently selling only 160 units, they need to:
Increase unit sales by 40
Raise the price (if feasible)
Bundle the product with complementary items
Launch a promotion or campaign to stimulate demand
This example shows how businesses translate marketing objectives into operational actions.
Tracking Progress Towards Sales Objectives
Monitoring sales performance ensures the business remains on track and identifies when changes are needed.
Key Performance Indicators (KPIs)
Units sold per product: For tracking volume.
Total sales revenue: For tracking value.
Average selling price: Can indicate effectiveness of pricing strategies.
Sales per channel: E.g. in-store vs online.
Conversion rates: Proportion of leads that result in purchases.
Customer retention rate: Helps estimate recurring volume.
Tools for Tracking
Sales dashboards: Provide live updates on key sales figures.
Customer Relationship Management (CRM) systems: Help segment customers and identify buying patterns.
ERP and POS systems: Track daily sales and inventory in real time.
Forecasting tools: Use historical data to project future trends and inform decision-making.
Example: Mid-Campaign Adjustments
A company launches a new product with the aim of generating £30,000 in sales value within the first quarter.
After the first month, sales total only £6,000.
Midway through, the team decides to:
Introduce a 15% discount
Expand the campaign to new regions
Launch targeted digital advertising
Following these adjustments, month-two sales increase to £12,000, demonstrating how regular tracking allows for agile decision-making to recover missed targets.
By consistently tracking both sales volume and sales value, businesses are able to refine their strategies, focus on best-performing products, identify problems early, and ultimately achieve their marketing goals more effectively.
FAQ
Unit sales refer specifically to the number of individual items or units of a product sold, while total transaction numbers indicate how many separate customer purchases were made. A single transaction could involve the purchase of multiple units, meaning transaction volume may be lower than unit sales. For example, if ten customers each buy five bottles of water, the business records ten transactions but a sales volume of fifty units. Understanding both figures helps businesses analyse buying behaviour and basket size.
Yes, a business can sell a large number of units but still perform poorly financially if its profit margins are low or costs are too high. High sales volume does not guarantee profitability, especially if the pricing strategy involves heavy discounting or penetration pricing. In such cases, the cost of goods sold, marketing expenses, or fixed costs may outweigh the revenue generated. Therefore, it is essential to assess both volume and value alongside cost structures and profit margins.
A business may focus on sales value to maximise revenue and profitability, particularly when operating in a niche or premium market. Higher prices on lower volumes can generate more revenue with lower operational strain. For example, luxury car manufacturers like Ferrari aim for high sales value per unit sold rather than large volume. This approach is also useful when increasing production capacity is difficult or when the firm wants to maintain an exclusive brand image while generating high income from fewer customers.
A change in product mix—shifting the proportion of products sold—can significantly impact both volume and value. For instance, promoting lower-priced items may increase sales volume but reduce average transaction value, while focusing on premium items can raise sales value with fewer units sold. An optimal mix depends on the company’s objectives. Businesses must monitor which products drive revenue and adjust their marketing and pricing strategies accordingly to balance short-term cash flow with long-term profitability.
Customer segmentation allows businesses to tailor their marketing strategies to different groups, improving the efficiency of campaigns aimed at boosting sales. High-volume sales may come from price-sensitive segments, while high-value transactions often come from loyal or high-income customers. By identifying who contributes most to each objective, firms can allocate resources more effectively—for instance, offering bulk discounts to students to raise volume or premium add-ons to professionals to raise value. Segment-specific strategies help achieve sales targets with greater precision.
Practice Questions
Explain how a business might use sales volume and sales value as part of its marketing objectives. (6 marks)
A business uses sales volume to track the number of units sold, helping it assess customer demand and operational performance. Sales value, the revenue generated, informs pricing and profitability strategies. Together, these metrics guide marketing decisions such as promotional efforts or product focus. For instance, if a firm wants to increase brand awareness, it might set a volume objective. Alternatively, to boost profitability, it might aim to raise value by increasing prices or upselling. By setting SMART objectives based on these metrics, the business aligns its marketing strategy with broader financial and operational goals.
Analyse the impact of a competitor’s price reduction on a business’s sales volume and sales value. (10 marks)
A competitor’s price reduction can negatively impact a business’s sales volume as price-sensitive customers may switch, reducing units sold. Lower volume directly decreases sales value unless offset by higher prices or increased spending per customer. The business may respond by cutting its own prices, which could maintain or boost volume but reduce unit revenue, thus impacting overall value. Alternatively, it might invest in promotions or highlight product quality to justify its price. The actual impact depends on brand loyalty, product differentiation, and market conditions. If not managed well, it could weaken profitability and long-term market positioning.
