ch-4 sales quota

7/29/2019 CH-4 Sales Quota

1/29

Sales Quota

Dr. Bhumija Chouhan


2/29

A sales quota is the sales goal set for the product line,

company division, or sales representative. It is primarily

a managerial device for defining and stimulating sales

efforts.

Sales quotas are the sum of the total sales of a future

period to be achieved by each salesperson. It is the

sales goal set for a product line, company division, or

sales representative.

Accurate sales quota setting prevents non-productive

behaviour of sales people.


3/29

These are set for specific time period They can be of

various types for eg. sales volume , sales activity, etc.

They serve as the standards They can be set for

different products , salesmen , different territories It is a

motivational tool It requires study of market conditions.


4/29


5/29


6/29


7/29


8/29


9/29


10/29


11/29


12/29


13/29


14/29


15/29


16/29


17/29

Sales Budget

It is a process of allocating a portion of an organization's

resources for its various sales related activities for a

specified period of time.

It depends on the sales forecast expected revenue and

expenses.


18/29

Budget Purposes

Planning

Co-ordination

Control


19/29

Features

It consists of three parts; break even, target andprojected sales.

The budget also includes sales by product, location,

customer density and seasonal sales patterns.

It provides a plan for both cash and credit sales.


20/29

Types of budgets prepared

Sales budget

Selling expenses budget

Administrative expenses budget


21/29

Methods of budgeting

Affordability method

Percentage-of-sales method

Competitive parity method

Objective-and-task method


22/29

Budgetary procedure

Determining planning style-top down or bottom

up actual procedure.

Each management level within the sales

department approves the budgets for which it is

responsible, incorporates them into its ownbudget, and submits this consolidated budget to

the next higher level for approval


23/29

Handling competition for available funds within marketing

division

Selling the sales budget to top management

Using the budget for control purposes


24/29

Effects of Errors

Expenses such as sales force commissions vary directlywith volume.

Expenses such as sales supervisory expenses , aresemi variable, fluctuating with changes in volume but notdirectly.

If estimated unit sales volume is incorrect by much , theusefulness of budgeted selling expense figures areimpaired as standards of performance.


25/29

Flexibility in budgeting

Budget should not be rigid

Full advantage of market opportunities must be taken asthey appear.

If competitors initiate actions not foreseen at the budgetmaking time, funds must be allocated to counter act

them.

A realistic attitude towards the dynamic nature of themarket is a part of effective sales budgeting.


26/29

Process of Sales Budget

Review Situation

Communication

Subordinate Budget


27/29

Approval of Sales budget

Other Departments


28/29

Factors Effecting Sales Budget:

Financial Resources

Salesmens Estimates

Past Sales Figures and TrendsPlant Capacity

Competition

Availability of raw material and other supplies

Seasonal Fluctuations


29/29

General Trade Prospects

Return on capital employed

Orders on hand

Other consideration

ch-4 sales quota

Documents