Beruflich Dokumente
Kultur Dokumente
MANAGEMENT OF SALES
TERRITORY AND SALES QUOTAS
MODULE 3
Management of Sales Territory & Sales Quota: Sales territory, meaning, size,
designing, sales quota, procedure for sales quota. Types of sales quota, Methods of
setting sales Quota. Recruitment and selection of sales force, Training of sales
force.
Introduction:- Sales Territory: -- is defined as a group of present and potential customers
assigned to an individual sales person, a group of sales person, a branch,
dealers, a distributor or a marketing organization at a given period of time.
A sales territory comprises of a group of customers or a geographical area
assigned to a sales unit. The territory may or may not have geographic
boundaries.
A sales territory represents a group of customer accounts, an industry, a
market or a specific geographical area.
Definitions:\
David , Still &cundiff-grouping of customers & prospects assigned to an
individual salesperson.
Manard & Davis - Basic unit of sales planning and control.
A well planned territorial design for example, helps in matching the selling efforts
with the sales opportunities in that market.
Sales Territories are generally designed on the basis of Geographical areas but
there are sometimes companies decide to build territories on the basis of the urgent
frequency requirements of customersA sales territory helps in better sales
planning and effective operational control.
Advantages: better market coverage, effective utilization of salesforce, efficient
distribution of workload among people, convenient way to evaluate performance,
no enchroachment, understanding customer<-> better serving. Companies help to
get insight (for sales people) for their own territories.
by a company with a small sales force. The county is much smaller unit than the
state and acts a better focal point for dividing territories. Another control unit used
for establishing sales territories is the trading area. The trading area is a
geographic region that consists of a city and the surrounding areas that serve as the
dominant retail or wholesale center for the region
Step 2:---Decide on the criteria for allocation
Once the selection of the basic geographical control unit is complete, the
next task is to analyse the consumer a characteristics, buying patterns, market share
data and the competitive position of a firm in order to identify both the present and
prospective customers on the basis of information such as sex, age, group, likes
and dislikes, requirements and standard of living.
Many Indian firms take into account 3 key factors while deciding on the size
of the territory.
1.The customer base compreses of current customer, potential customerssize and
geographic size interms of square kilometers or square miles to be covered by the
salespeople.
2. Market Potential
3. Topographical data
step 3: Decide on the Starting Point:
After ascertaining the sales potential in control units, the sales manager
should form tentative sales territories as the starting point by selecting geographic
location. A common choice is the location point( often the residence of the
salesperson) This is done to avoid the relocation cost of the salesperson and
provides emotional support by keeping the salesperson closer at home with his
family and relatives.
There are 3 types of territory shapes that affects sales expenses and coverage and
time:
Circle- Salesperson located at centre- Maruthi, Hyundai follows this(urban
Market)
Wedge- radiates from densely populated to smaller rural area(both urban and rural)
Clover Leaf when accounts are distributed randomly
Hopscotch sales person starts at the fartherst point from the office and makes call
on the way back to office
Step 4:-- Combine control units adjacent to sales territories
Once the decision about the starting point is taken, the sales managers then
combine control unit to build up the market. The sales manager keep on running
total on the allocation criteria for each newly designed territory.
Step 5:-- Allocates criteria and workload Analysis
-Compare territories (customer per square mile and support detail outlets per
square mile)
Many times, small and large territories in a particular geographic spread may have
an equal potential on customer size. In such cases there is a need to allocate control
units on the basis of traveling and call norms in order to reach customers.
Adjustment is made keeping in view the sales potential, customer size, market
growth rate and sales expenses involved in the market coverage.
Workload analysis consist of how much of selling effort is require to meet
the sales objectives for a given region.( Refer sales organisation chapter for
workload analysis)
Strategic planning matrix
To determine account call rate, Account planning matrix is used here.There
are two dimensions; 1. Overall opportunity rate 2. Firms ability to produce
--2 dimensionOverall opportunityhigh flow
--firms atrocity to capitalize
High Low
High opportunity/sales organization
have different advantage
Strategy:- commit high level of
research to take advantage
Stable opportunity
Strategy:- Allocate model of research
to retain current advantage
Strong
SALES QUOTAS
Meaning :
Sales quotas are the targets that salespeople try to achieve within a specific
period of time, which contributes towards achieving the organisational goal
regarding sales forecasts.
It is an expected performance objective routinely assigned to the sales units, such
as depts., divisions and individual.
Quotas are established in terms of sales volume, profit or Gross margin, expenses,
activities or some combination of these.
Importance:---divise in strategic planning
Types of quotas:-1.Sales volume quota(sv):-Based on svmost of this quota uses dollar sales, some unit sales,
sales of new products or sales of neglected products.
--They are established on the basis of geographic area, PDT line and
customer type.
a> Dollar sales volume:---easily understood by salesperson
--can guage their performance directly against a dollar figure
-- Easier to manage when the salesperson is responsible for many products
b> Unit sales volume:---Useful when the salesperson is responsible for selling only few products
-- set in terms of no. of unitsUse of dollar quota could perhaps even backfire
and level overall performance
c> Point Sales volume: -- Combine dollar or sales unit sales both into unit
points. For e.g. $100 might equal one point, $200 equal to 2 pts
Companys use this approach because they have problems trying to
implement either a dollar or unit volume quota. It helps in maintaining
balance.
2.Financial Quotas:-1> Gross margin or net profit quotas
Coys use these quotas to emphasis to the salesperson that the cry would
prefer a large profit to selling a large volume.
By spending so much time as less profitable products, the sales reps are
limit the coys opportunity to earn higher profits from the high margin
products.
2> Expense quota:- designed to make sales people aware of the costs involved
in this
selling efforts.eg Salespeople may be allowed to spend 5% of
their sales fore expenses.
3> Activity Quotas:-In an effort to ensure that salespeople are conducting their daily activity by
conscientiously many loys require that their salesperson must activity quotas.
--Used to control many different activities. Common type of activity quotas
include
--no of prosunts called on
--no of demos made
--no of displays set/service calls made, new accounts established
--no of deals training given
4> Combination quotas: -- Used when they want to control performance of
both selling and non-selling authorities.
Methods of setting Sales Quota:-1> Quotas based on sales Forecasts and potentials:---Organization forecast the total sales for entire territories which is then
divided into territories and then brought to the individual sales level.
2> Quotas based on past experience:-collect sales data for previous year, average them out for each geographic
territory and then add an arbitrary % for next year quota.
3> Quotas based on Executive judgment:-4>Quotas established by sales people:---some companie allow the sales representatives to establish their own
quotas because sales people are closest to the market and therefore thought to
be the ones who know the most about its potential.
--The drawback is that sales people may either set exclusively high
quota or ridiculosely set large quotas
Administration of Sales Quota:
Setting realistic quota:
Salesperson should be motivated . It shoud be determined by the attainability
of that quota and recognition and incentives
creating understandable quota:
1. including the sales person in quota setting
2. keeping the salesforce updated
3. maintaining control
RECRUITMENT
SALES FORCE
AND
SELECTION
OF
THE
Recruitment,
It is the planned process whereby the scientific principles of
management is utilized for finding out and filling up the
positions in the right territory with the right people.
form
2. Internal
screening
(Interview:-
3. In
depth
interview
4. Reference
5. Physical
clubs
Major
concern
(45%
(43%
exam
for
candidate)
causes
path)
causes
(6%
path)
relative)
Employment offer
Induction / socialization introduced with product, department and
helping them to acquire skill and adjust to role behavior.
Task Analysis
Individual Level
Analysis
Objectives- present the sale trainees with real life business situation &
provide considerable background information from which they are
either expected to analyze & compile the outcome of a series of events
as to provide solution to specific problem.
(7) Fish Bowl:
- To train 2 teams
- 1st team discuss a topic for 30 minutes
- 2nd team is seated around the first team & they are asked observes
comment, criticize (15 minutes)
- The 1st team has no right to reply or even to comment as any criticism at
this stage
- The roles of two teams are then reversed both the teams came together
in full group sessions share/exchange as the process which were
observed
(8) Workshops:
- Method of designing training around identified work problem in order
to find the solutions in the training programme
Objectives:
Obtain contribution from all individuals who are affected & to
optimize the resources available to solve the problem.
(9) Sensitivity Training:
(T. group, study group, group dynamics & group relationship) a type
of laboratory training
Objectives:
- Increase the awareness of our own behavior and to understand how it is
received & interpreted by other.
- Develops sensitivity to the behavior exhibited by other and enables the
trainee to diagnose the causes of that behavior.
This technique relies on its effectiveness in creating a climate in which
participants are willing to be frank, open, & honest with each other.
Focus is on personal behavior & the discussion focuses on ones private
thoughts.
(10) Transaction Analysis:
Evaluation Phase:
Effectiveness is measured either in monetary or non-monetary terms.
Also, by the collection of ratings by both the trainee & the trainee in
every programme.
Companies also conduct a test before & after the training programme.
Designing a sales Training Program:
(1) Deciding as the Training objectives
(2) Deciding on the content
(3) Deciding on the method