Your dog could have eczema. It is a symptom of an underlying problem, usually dietary, rather than a disease itself. The skin becomes scaly and the hair starts falling out. You can correct the problem by a change in diet, or giving hormone injections. Usually you need fat supplements like Vitamin A and E. Exzema can also be caused by fleabite allergy, or a parasitic condition. To treat these you will need to first eliminate the fleas, and then use antimicrobial and anti-inflammatory medicines.
Bald spots can also be caused by mange. There are two type of mange, scabies, which has an odor and starts on the head, and or demodectic "red" mange caused by mites. Lastly, the dog could also have ringworm, a contagious fungal infection that grows on hair follicles, rather like athletes foot. This is contagious, so you should take the dog to your local vet to start treatment immediately.