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8/13/2019 12 Sales Quotas and Territory Final
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SALES QUOTAS
AND TERRITORY
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SALES QUOTAS
Sales quota is a goal in terms quantity given to a sales
representative, or a group of sales representatives overa 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 activitiesof 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.
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TYPES OF QUOTAS
Sales Volume Quotas
Profit Quotas
Expense Quotas
Activity Quotas
Quota Combinations
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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)
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Product Line - A group of related products
manufactured by a single company. For
example, a cosmetic company's makeup productline 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)
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EXAMPLE
A. Quota Actual Sales Difference Performance Index
B. 5696000 5792000 96000 101.7%
C. 5584000 4842000 -742000 86.7%
D. 6012000 6046000 34000 100.6%
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PROFIT QUOTAS
Used in Multi product Companies Where
different products contribute to varying levels
of profits .
Concentrate on the high profit products by thesales person.
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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
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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.
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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
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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 givenabove. Rupee sales volume and activity quotas
are combined in a large number of pharma
companies.
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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
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ACTIVITIES IN TERRITORY
MANAGEMENT
Trade relations
Potential business
Coverage
Reports
Territory Size
Selling Technique
Customer Satisfaction
Selling Abilities
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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.
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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.
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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
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ASSIGNING TO TERRRITORIES
Straight line Pattern
Cover Leaf pattern
Major City Pattern
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Straight line/ Base Line Method
BASE First Call
C
CC
C
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COVER LEAF PATTERN
BASE
C
C C
CC
C
C
C
C
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MAJOR CITY PATTERN
1
2 3
54
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Reasons Companies Developand 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
customer’s needs.
To benefit both salespeople and the company.
14-1
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Elements of Time and TerritoryManagement for the Salesperson
14-2
Salesperson’sterritory’ssales quota
Account analysisSet accountobjectives andsales quotas
Territory-timeallocation
Customer salesplanning
Scheduling androuting
Territory andcustomerevaluation
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Account Segmentation Approach 14-6
Extra Large
Large
Medium
Medium
1
2
Target AccountsMultiple Selling Strategies
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Account SegmentationBased on Yearly Sales
Yearly SalesCustomer (actual or Number ofSize potential) in Rs. Accounts Percent
Extra large over 200,000 100 3.3%
Large 75,000-200,000 500 16.6
Medium 25,000-75,000 1,000 33.3
Small 1,000-25,000 1,400 46.6
14-4
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Basic Segmentation of Accounts 14-5
CustomersProspect
Account Sales Potential Potential
Classification To Date Sales Sales
Extra large
Large
Medium
Small
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Account Segmentation Approach 14-6
Extra Large
Large
Medium
Medium
1
2
Target AccountsMultiple Selling Strategies
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Multivariable AccountSegmentation
14-7
Product
Types of
Accounts
Retailer
Wholesaler
Government
AB
C
1,000to
25,000
25,000to
75,000
75,000to
200,000
200,000+
Customer Sales Volume (ELMS)
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Account Time Allocation bySalesperson
14-8
Customer Calls per Calls per Number of Number of
Size Month Year Accounts Calls per Year
Extra large 1 12 2 24
Large 1 12 28 336
Medium 1 12 56 672
Small 1* 4 78 312
Total 164 1,344*every 3 months
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Daily Customer Plan 14-9
Sales Calls
ServiceHours Customers Prospects Customers
7:00-8:00 A.M. Stop by office: pick up
Jones Hardware order
8:00-9:00 Travel
9:00-10:00 Zip Grocery
10:00-11:00 Ling Television Corp.
11:00-12:00 Ling Television Corp.
12:00-1:00 P.M. Lunch and delivery to
Jones Hardware
1:00-2:00 Instruments Dealer
2:00-3:00 Ace Equipment
3:00-4:00 Travel
4:00-5:00 Trailer Mfg.
5:00-6:00 Plan next day—do paperwork
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Weekly Route Report 14-11
Today’s Date: For week beginning
December 16 December 26
Date City Location
December 26 (Monday) Lucknow Home
December 27 (Tuesday) Lucknow Home
December 28 (Wednesday) Allahabad Holiday Inn/South
December 29 (Thursday) Barabanki HomeDecember 30 (Friday) Lucknow Home
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