sales quota & territory management

Prof. Suvendu Kr. Pratihari 11

Sales Quotas and Territory

Management

Prof. Suvendu [email protected]

933 777 3456

mailto:[email protected]

Learning Objectives

To Discuss


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.



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


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


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


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


Territory Management

Trade / Dealer Relation

Potential Business

Market Coverage

Reports

Territory Size

Portfolio of Accounts

Customer Satisfaction

Selling Technique


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


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.


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.


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


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.



Thank You

Prof. Suvendu Kr. [email protected]

mailto:[email protected]

sales quota & territory management

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