SALES QUOTAS AND TERRITORY

SALES QUOTAS

Sales quota is a goal in terms quantity given to a sales representative, or a group of sales representatives over a period of time. A Sales Quota refers to an expected routine assignment to sales units, such as Numbers, territory, districts or branches etc. Sales Quotas can be set for individuals Sales quota may be assigned to a region, territory, branch office. Used to Plan, Control and evaluate the selling activities of a company. Sales effort is controlled by using quotas, it helps in appraisal and it helps in controlling expenses. Quota provide a quantitative performance standards.

TYPES OF QUOTAS

Sales Volume Quotas Profit Quotas Expense Quotas Activity Quotas Quota Combinations

SALES VOLUME QUOTAS

Sales Volume Quotas include Sales in Rupees or Product Unit objectives for a Specific period of time, Example: Bajaj calculates sales as number of vehicles sold. It can be set in following areas Product Line Product range Sales Divisions Sales Territories Sales Districts Branch Offices Sales Force (individuals)

Product Line - A group of related products manufactured by a single company. For example, a cosmetic company's makeup product line might include foundation, powder, blush, eyeliner, eyeshadow, mascara and lipstick products that are all closely related. Product range- A set of variations of the same product platform that appeal to different market segments. Or A series of different products made by the same company which form a group (such as different models of cars)

EXAMPLE
A.

Quota

Actual Sales

Difference

Performance Index

B.
C. D.

5696000 5584000 6012000

5792000 96000 4842000 -742000 6046000 34000

101.7% 86.7% 100.6%

PROFIT QUOTAS

Used in Multi product Companies Where different products contribute to varying levels of profits . Concentrate on the high profit products by the sales person.

EXAMPLE

Product SP Margin Volume Net profit A 400 280(70%) 60,000 168 lac B 200 80(40%) 25,000 2 lac C 100 20(20%) 10,000 2lac

EXPENSE QUOTA

Expense Quotas are related to Selling costs . Set Quotas for expenses linked to different levels of sales attained by their sales force Percentage of sales volume in a territory and sales person many spend only this amount as an expenditure.

ACTIVITY QUOTAS

Set objectives for job related duties useful for attaining salesperson performance targets Help in attaining long term objectives as goodwill Example Number of sales presentation made Number of service calls made Number of dealers visited Number of calls made for recovery Number of new accounts opened

QUOTA COMBINATIONS

Commonly used are Sales and activity Quotas Depending upon the marketing situation and nature of the product, some companies set quotas which combine some types given above. Rupee sales volume and activity quotas are combined in a large number of pharma companies.

TERRITORY MANAGEMENT

A Sales Territory Comprises a group of customers or a Geographical area assigned to a sales unit. It may or may not have any geographical boundary. It includes Market potential Number of customer Accounts Firms Experience Market Share Capability of sales person and frequency of calls made

ACTIVITIES IN TERRITORY MANAGEMENT

Trade relations Potential business Coverage Reports Territory Size Selling Technique Customer Satisfaction Selling Abilities

WHY ESTABLISH SALES TERRITORIES

Entire Coverage Reduce Conflicts Assign Sales Persons responsibilities Evaluate Performance Improve Customer relation Reduce Sales Expenses Coordinate personal selling and advertising.

Factors which determine the size of a territory

Prospect density or the number of prospect in the specified area. Possible volume of sales Frequency of visits necessary Intensity of selling effort required during each call. Whether it is easy to sell the product or difficult.

DESIGNING TERITORIES

Select a basic geographical Unit Determining the Sales potential in control units Combining the Control units into tentative territories Adjusting for coverage Difficulty and relocating tentative territories

ASSIGNING TO TERRRITORIES

Straight line Pattern Cover Leaf pattern Major City Pattern

Straight line/ Base Line Method

First Call

BASE

COVER LEAF PATTERN

C BASE C C

C
C

C C

MAJOR CITY PATTERN

2 1 4

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Reasons Companies Develop and Use Sales Territories

To obtain thorough coverage of the market. To establish each salesperson's responsibilities. To evaluate performance.

To improve customer relations.

To reduce sales expense. To allow better matching of salesperson to customers needs. To benefit both salespeople and the company.

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Elements of Time and Territory Management for the Salesperson

Salespersons territorys sales quota
Account analysis

Set account objectives and sales quotas

Territory-time allocation

Territory and customer evaluation

Scheduling and routing

Customer sales planning

14-3

Undifferentiated Selling Approach

Single-selling approach

Target accounts

14-6

Account Segmentation Approach

Multiple Selling Strategies Target Accounts
Extra Large

1
Large Medium

2
Medium

14-4

Account Segmentation Based on Yearly Sales

Customer Size
Yearly Sales (actual or Number of potential) in Rs. Accounts Percent

Extra large Large Medium Small

over 200,000 75,000-200,000 25,000-75,000 1,000-25,000

100 500 1,000 1,400

3.3% 16.6 33.3 46.6

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Basic Segmentation of Accounts

Customers Account Classification Sales To Date Potential Sales Prospect Potential Sales

Extra large Large Medium Small

14-6

Account Segmentation Approach

Multiple Selling Strategies Target Accounts
Extra Large

1
Large Medium

2
Medium

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Multivariable Account Segmentation

Product
C Retailer A B

Types of Accounts

Wholesaler Government
1,000 to 25,000 25,000 75,000 200,000+ to to 75,000 200,000

Customer Sales Volume (ELMS)

14-8

Account Time Allocation by Salesperson

Calls per Calls per Number of Month Year Accounts Number of Calls per Year

Customer Size

Extra large Large

1 1

12 12

2 28

24 336

Medium
Small Total

1
1*

12
4

56
78 164

672
312 1,344

*every 3 months

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Daily Customer Plan

Sales Calls Hours 7:00-8:00 A.M. 8:00-9:00 9:00-10:00 10:00-11:00 11:00-12:00 12:00-1:00 P.M. 1:00-2:00 2:00-3:00 3:00-4:00 4:00-5:00 5:00-6:00 Customers Stop by office: pick up Jones Hardware order Travel Zip Grocery Ling Television Corp. Ling Television Corp. Lunch and delivery to Jones Hardware Instruments Dealer Ace Equipment Prospects

Service Customers

Travel
Trailer Mfg. Plan next daydo paperwork

14-11

Weekly Route Report

Todays Date: December 16 Date December 26 (Monday) December 27 (Tuesday) December 28 (Wednesday) December 29 (Thursday) For week beginning December 26 Location Home Home Holiday Inn/South Home

City Lucknow Lucknow Allahabad Barabanki

December 30 (Friday)

Lucknow

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