SALES BUDGET, QUOTAS SALES BUDGET, QUOTAS

AND AND

SALES TERRITORIESSALES TERRITORIESPRESENTED BY:

INDRANSH GUPTA

JATIN ARORA

SALES BUDGET

Estimates of expected volume of sales and selling

expense.

Sales volume of sales budget is based on sales

forecast.

Sales Budget is slightly lower than the sales

forecast.

Suggest the importance of sales forecasting and

sales quotas for territory management.

SALES BUDGET

Design the product-wise / brand-wise sales

planning for a company,

Design an effective territory planning for the sales

force,

Plan the total expenses on effective coverage of

your area,

SALES BUDGET: financial plan depicting how resources should be

allocated to achieve the forecasted sales.

THE PURPOSE OF SALES BUDGETING: plan for and control the expenditure of resources

(money, material, people and facilities)

necessary to achieve the desired sales objectives

that have been set on the basis of sales forecasts.

WHY SALES BUDGET

PROFIT PLANNING

based on expected sales less cost of achieving the sales.

includes sales goals, strategy & action plan

cost of expected plan is based in sales quota; production;

territory; customer & selling price.

CO-ORDINATION

B/w all deptts. i.e. marketing, finance, production,

human resource etc.

WHY SALES BUDGET

CONTROL

Tool for evaluation of performance.

In term of standard sales volume & selling expenses

against actual performance.

Yearly Budget is broken => Quarterly => Monthly.

METHODS USED FOR DECIDING SALES EXPENSE BUDGET.

1. % OF SALES METHOD

2. EXECUTIVE JUDGMENT

3. OBJECTIVE AND TASK METHOD

SALES BUDGET PROCESS REVIEW SITUATION: 

reviews past, present & future (budget period).

COMMUNICATION: 

writing to all field office regarding formats, guidelines, assists

and time about all three budgets. SUBORDINATES BUDGETS:

sales managers prepares sales budget for their respective sales

territory and submits it to national sales manager

National sales manager prepares the companies proposed

sales budget by combining the received budget.

SALES BUDGET PROCESS APPROVAL OF THE SALES BUDGET:

consulting marketing head; national sales manager prepares 2/3

alternative proposals of sales budget

Sales budget is presented to top management.

OTHER DEPARTMENT:

Final sales budget given to other department to prepare are their own

budgets.

sales budget is broken down into each sales territory quarterly and

monthly.

A/c’s deptt. prepares cash budget and profit budget based on sales

revenue information given by sales department and expenses budget

given by other departments.

Sales Quota goals set by co. for marketing unit for specific period.

Marketing unit may be regions, territory, branch,

salesperson, a distribution or a dealer.

can be set on sales unit, expenses, profit margin,

activity, customer satisfaction etc.

Annual sales quota for each unit - broken down to

quarterly/monthly.

Objectives of Sales Quota

Making available performance standard:

act as a tool to measure performance of sales

person, act as a goal/target setter.

Performance standard set against which actual

performance is compared to evaluate salespersons

performance.

Objectives of Sales Quota Controlling performance:

By setting quotas for special activities, sales volume & selling expenses.

The SM (sales manager) controls performance. Fore.g:-10 calls per day i.e. 5 calls of business customer’s

indirectly monitors/controls the activities of sales person by setting quotas.

Can keep an eye on wasteful expenditure on customer (travelling, lodging, entertainment & meals)

Control over reporting &can influence sales performance.

Objectives of Sales Quota Motivating people:

Sales quotas are set by motivating sales people by money.

performance is recognized by awards/rewards like trips abroad.

financial compensation/ rewards are called incentives.

incentives linked with quotas which are made achievable for sales person. So

that he puts in extra effort to achieve his quota.

Objectives of Sales Quota Identifying strength &weakness: 

Actual performance compound respective quotas of difference

territories & salespersons.

The SM can identify successful &unsuccessful performance.

Analysis of causes of poor performance may reveal training

program needs improvement, better product quality required to

meet customer needs & positioning strategy.

Types of Sales Quota

Sales Volume:

1) Rs. sales volume:- many product easier to manage

(HUL)

2) Unit Sales volume: - Sets sales volume in units. E.g.

machinery/ milk/ petrol.

3) Point sales volume: - When company wants to make

profit will target.

Types of Sales Quota

Financial Quota:

Gross- margin/profit: Gross margin quota is decided

by ‘cost of goods sold’ from sales volume.

Expense quota: Companies control over in cost of selling

(travelling), control over expenses along with sales volume

quota, SO that selling expenses are kept in line.

E.g. Pantaloon -“Garv se kaho Hum kanjus hai”

Types of Sales Quota

Activity Quota:

Direct sales person to carry out job related activity. 

- Defining important activity

- Finding out time required for carrying out activity

- Deciding priority given to carry out activity.

- Deciding quota/ frequency for important activity.

Types of Sales Quota

Combination quota:

Selling activity &non-selling activities,

uses point as common measure to overcome the

problem of difference measures used by various

quotas discussed earlier.

Methods for setting Quotas1) Territory potential

2) Part sales expenses

3) Total marketing estimates

4) Executives judgment

5) Salespeople’s estimates

6) Compensation plan

SALES TERRITORY

group of customer accounts, an industry, a market or a

specific geographical area, assigned to a specific

salesperson.

factors that influence sales volume of a territory are

territory size, its market potential, number of customer

accounts, firms experience and market share in the

territory, quality of salesperson assigned and the

frequency of sales call made.

GOALS

1) Proper Market Coverage

2) Effective Development of Sales Force

3) Efficient Customer Service

4) Objective Evaluation of Sale Force

5) Improving Selling and Marketing Productivity

STEPS IN TERRITORY PLANNING

1) Salesperson’s Capacity

2) Frequency of Calls per Month

3) Parity in Sales Potential

4) Minimise Travel Time & Expenses

5) Suitably Station the Salesperson

Improving Territory Productivity

clarity of approach to account development, as

well as to small/marginal customer,

profit generators and detractors in the territory

allocation of sales, marketing and other resources

based on territory’s contribution potential

effective utilisation of sales force time.

Vardhman Sales Budget made based on pending orders, capacity and

product lines free.

Sales Territory set according to branches : Delhi, CMY,

Mumbai etc.

Sales Quota is Product-wise.

Eg: 300 tons to be sold.

150 in Domestic Market

150 to be exported

Further divided according to products.

THANK YOU