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Sales budget, quotas and sales territories
 

Sales budget, quotas and sales territories

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    Sales budget, quotas and sales territories Sales budget, quotas and sales territories Presentation Transcript

    • SALES BUDGET, QUOTASSALES BUDGET, QUOTAS ANDAND SALES TERRITORIESSALES TERRITORIES PRESENTED 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 Quotas 1) 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