Sales Quota & Territory Management
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Transcript of Sales Quota & Territory Management
Prof. Suvendu Kr. Pratihari 11
Sales Quotas and Territory
Management
Prof. Suvendu [email protected]
933 777 3456
Learning Objectives
To Discuss
Prof. Suvendu Kr. Pratihari 2
Sales Quotas
It is an expected routine assignment to sales units
such as:
Territory, Districts, Branches etc.
Sales control is facilitate by setting quotas on
expenses and profitability on volumes.
Quotas guides for what needs to be done.
Prof. Suvendu Kr. Pratihari 3
Prof. Suvendu Kr. Pratihari 4
Provide Performance Targets
Evaluate Performance
Control the Sales Person’s Activities
Uncover Strengths and Weaknesses
Sales Quotas
Sales Objectives
Improving Compensation Plans
Control the Selling Expenses
Types of Sales Quotas
Sales Quotas
Sales Volume Quotas
Profit Quotas
Expense Quotas
Activities Quotas
Prof. Suvendu Kr. Pratihari 5
Sales Volume Quotas of X Company for Y Territory
Sales Person Current Month Year To Date (YTD)
Quota
in Rs.
Actual
Sales
% Rank Quota
in Rs.
Actual
Sales
% Rank
Rakesh
Akhilesh
Amar
Prof. Suvendu Kr. Pratihari 6
Sales Volume
Quotas
Product Line
Product Range
Sales Territory
Sales Districts
Branch Offices
Individual Sales Force
Profit Quotas of X Company for Y Territory
Sales Person Current Month
Sales price/unit Profit
Margin/unit
Volume per
Month
Net Profit
per Month
Rakesh 400 100 100 10000
Akhilesh 200 50 300 15000
Amar 100 25 500 12500
Prof. Suvendu Kr. Pratihari 7
Activity Quotas
Number of Sales Presentation Made
Number of Service Calls Made
Number of Dealers Visited
Nos. of calls made for Recovery
Nos. of new accounts opened
Prof. Suvendu Kr. Pratihari 8
Territory Management
Trade / Dealer Relation
Potential Business
Market Coverage
Reports
Territory Size
Portfolio of Accounts
Customer Satisfaction
Selling Technique
Prof. Suvendu Kr. Pratihari 9
ACTIVITIES OF TERRITORY MANAGEMENT
Factors to be considered when designing
Territory
Selecting a basic geographical control unit
Determining Sales Potential in Control Units
Combining control units in to tentative territories
Adjusting for coverage difficulty and relocating
tentative territories
Prof. Suvendu Kr. Pratihari 10
Approaches for Designing Sales territories
Market Build-up Approach
Here, estimation of the present and potential
products/services demand is made by looking at how the
market is built up, who are its present and potential users,
how much do they consume and at what frequency?
Example:
If the market potential for a new high-end car among four metros viz:
in Mumbai it is 1, 00,000, in Kolkata it is 50, 000, in Chennai it is 60,
000 and in New Delhi it is 80, 000, then it shows that the market
potential is 2,90,000 units of cars in the country.
This leads to an estimation of the total sales calls required per area and
number of sales persons required in that area.
Sales territories are then formed in such a manner that the sales
potential and work load is distributed among the sales persons.
Prof. Suvendu Kr. Pratihari 11
The Workload Approach
This approach has been designed on the basis of the
workload performed by a sales person.
Steps to be considered for this approach:
Customers are to be grouped in to class or size according to the
sales volume.
Optimum call frequency for each class of customers are
estimated.
Present and potential customers are then located geographically
and arranged volume wise and value wise.
The number of present and potential cuistomers in each
volume/ value group is then multiplied by the desired call
frequency to get the total no of planned calls required for each
geographical control units.
Prof. Suvendu Kr. Pratihari 12
K. Praveen is a sales person of a Beverage company limited. His
manager suggested that he should keep a time log of his activities.
His last Saturday’s tome log is as given below. Evaluate utilization
of time by Mr. Praveen
Sl. No. Details Time
1 Reached the distributor’s office 9.30AM
2 Had tea at Distributor’s office 9.30 to 10. 45AM
3 Asked the distributor to make unit ready 10.45AM
4 Unit ready to move the market 11.00Am
5 First call made in the market 11.15AM
6 12 shops covered 11.20 to 1.30PM
7 Lunch Break, Market practically closed 1.30 to 2.20 PM
8 16 shops covered 2.30 to 5.30 PM
9 Shopkeepers having busy time After 5.30 PM
10 Tea Break 5.30 to 6.15 PM
11 Returned to Distributor’s Godown 6.45PM
Prof. Suvendu Kr. Pratihari 13
Mr. Harekrushna is a sales person of M/s. ABC Limited. He covers the market
for a distributor named Pooja Trading Co. Mr. Harekrushna has made a one day
time log as given below. Evaluate utilization of time by Mr. Praveen
Sl. No. Details Time
1 Reached the distributor’s office 9 AM
2 Unit ready by the previous evening as per prior advice from his
manager
9 AM
3 Units moves to the market 9.45 AM
4 First call made in the market 10.05AM
5 20 shops covered for selling 1.30 PM
6 Lunch Break, reviewed the sales &balanced stock 1.30 to 2.15 PM
7 Restarting shop coverage and Covered 16 shops 2.15 to 5.30 PM
8 Shop Keeper busy with customers, however, quick visit to
balance 4 big shops
5.50 PM
9 Returned to Distributor’s godown and office 6.30 PM
10 Had Tea at Distributor’s office, review the whole day
performance, Booked order, Passed instruction for the next day
coverage and unit loading.
6.30 to 6.45 PM
11 Left distributor’s office.Prof. Suvendu Kr. Pratihari 14
Questions
What functions do quotas perform and why are
they so important to a firm?
Identify the factors you would keep in mind for
deciding the sales territories of an industrial product
company like Kirloskar.
Prof. Suvendu Kr. Pratihari 15