12 Sales Quotas and Territory Final

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

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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

Date post:	04-Jun-2018
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12 Sales Quotas and Territory Final

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