A sales quota is a quantitative goal assigned to a sales unit relating to a particular period of time. A sales territory represents a group of customers or markets or geographical areas

1. Sales Quotas
and
Sales Territories
Dr. Amitabh Mishra

2. Sales Quota
 A sales quota is a quantitative goal assigned to a sales unit relating to a
particular period of time.
 A sales unit may be:
 A territory,
 A branch office,
 A region,
 A distributor or
 A person.
 Sales quotas plan, direct, control and evaluate the activities of a
company and their effectiveness depends upon the kind, quantity and
accuracy of marketing information used in setting them and upon
management's skill in administering the quota system.
Dr. Amitabh Mishra

3.  Sales quotas are:
 Source of motivation,
 Basis for incentive, compensation and increasing standards of
performance of sales persons and
 Uncover the strength and weaknesses in the selling structure of the
firm.
 Sales persons are quota achievers
 The sales quotas are set by sales manager for individual
salesman or a sales district.
 The executives who set sales quotas must have experience
and should be familiar with territories.
Dr. Amitabh Mishra

4. Types of Sales Quotas
Dr. Amitabh Mishra

5. Types of Sales Quotas
 There are basically four types of sales quotas and
different types or a combination of them can be
used.
 Sales Volume quotas
 Financial quotas
 Activities quotas
 Combination of these Quotas.
Dr. Amitabh Mishra

6. Sales Volume Quotas
 These are most commonly used and are based on sales
volume. Sales volume can be measured by:
 Volume of sales made by an individual.
 Volume of sales made in a geographical area.
 Volume of sales made in a product line.
 Volume of sales made in a distribution outlet.
 Sales volume quotas are also set to balance the sales of slow
moving products and fast moving products. They may be
set in terms of unit sales or rupee sales volume or both and
on overall as well as product wise basis.
Dr. Amitabh Mishra

7. Sales Territories
Dr. Amitabh Mishra

8. Sales Territories
 A sales territory represents a group of customers or
markets or geographical areas.
 Sales territories are geographical area that can be covered
conveniently and canonically by a sales person.
 Territories can be formed on the basis of
 Geographical locations,
 Industry,
 Product use method of buying and
 Channel of distribution
Dr. Amitabh Mishra

9. Significance of Territorisation
 By territorisation, organisations can achieve:
 Better coverage,
 Efficient call patterns and
 Better customer service
 Choosing appropriate salesmen for specific accounts
 Some services like Insurance and Mutual Fund are sold on personal
contacts rather than by developing territories. House Accounts useable
are handled by the Co. itself.
 Big customers of prefer to deal directly with the Co. This many lower
the morale of the salesman as a significant share of the Co's business is
done directly by the Co. and the salesman is deprived of the
commission.
Dr. Amitabh Mishra

10.  Sales territories match sales effort with sales opportunities
 Territorial assignment tells direction to the planning and control of the sales
force
 By forming territories management learns the strengths and weaknesses of
the company in serving different markets.
 Realistic planning can be done as territories are more homogeneous then the
entire market
 By dividing the market into small groups specific objectives can be made and
more control can be exercised
 Performance approval of the sales person becomes critical according
directions can be given
Dr. Amitabh Mishra

11. Basis for Territory Design
Designing of sales organisation is incomplete till territories have been
formally defined.
Dr. Amitabh Mishra

12. Basis for Territory Design
 Territories can be formed according to:
 Geographical location
 Industry
 Product use
 Method of buying
 Channels of distribution
 Sales of potential
 Work load in territories
 Arbitrarily
Dr. Amitabh Mishra

13. Factors affecting Size of the Territory
 Factors that affect the size of the territory are:
 Number of customers and prospects in an area
 Call frequency on existing customers
 Number of calls that the sales person makes in a
day.
Dr. Amitabh Mishra