presentation on sales quotas which describe how to fix sales quotas and its advantages and disadvantages

1. Presented By:
Kirti Gupta

2. Sales quota is the estimated or predetermined
volume or valueof sales expected to be achieved by
the sales force over a given period of time.
“Sales quotas are sales assignments or goals, they are
management expectations in dollars or units for a specific
future period.”
-Professor Kirkpatric

3. There are certain basic reasons for setting sales
quotas to sales people. Some of them given by
Professor RR. Still, Professor E.W. Cundiff and
Professor N.A.D. Govani. These are:
(a) To provide quantitative performance standards
(b) To motivate desired performance
(c) To get more effective cost control
(d) To use in sales contests

4. 2. Study the
past sales
3. Consults
facts and
opinions
4. Investigate
sales policies
5. Guage the
nature and
extent of
competition
1. Estimate
purchasing
power

5. Guess–work method
Composite method
Performance method

6. 1. Guess-work method:
Under this method, sales executive or the managers combine
their rich and varied experiences and sound judgements to
find out the sales quotas for salesman. Since this method
relics on the guess work- thinking and judgement of the
executives.
2. Composite Method:
Normally, a conference of sales executives and sales-force is
called where the sales people are to present their individual
sales forecasts, express their opinions about the likely sales
quotas. It is a grass- root type of method of fixing sales quotas
because, it involves the participation of those who are
expected to work on these targets that are to be set.

7. 3. Performance Method:
Under this method, the sales of the past are taken as the base
for fixation of quota for the coming period with due increase
or decrease as warranted by the prevailing market
conditions.

8. Sales Volume Budget Activity Combination
1. Territorial
based sales
potentials
2. Total market
esstimates
3. Past sales
experience
etc.
1. Expense
2. Gross
margin or
profit
Nature of
activity
Combination of
two or more
bases

9. A. SALES VOLUME QUOTAS:
Sales Volume Quotas as fixed per individual or other units in sales
organisational level and distributive outlets. These are fixed for the
geographical areas, product-lines or market channels or one or more
of these combination with any unit of sales organisation. These sales
volume quotas may be:
1. Total Market Estimates
2. Territorial based sales potentials
3. Past Sales Experience
4. Executive Judgement
5. Compensation Plan
6. Sales Personnel
B. BUDGET QUOTAS:
Budget quotas are set for various units in the sales organisation
to control selling expenses and gross margin or net margin or
profit. The idea underlying budget quotas is to make the sales
personnel inform that their job is not merely to attain sales
volume above. Budget is of two types:

10. 1. Expense Quotas
2. Gross Margin or Net Profit Quotas
C. ACTIVITY QUOTAS
Some companies set quotas for the activities of their sales people, in
order to control and allocate the time of such sales-force. A company
using such quotas defines the different activities which are
commonly or generally performed by the sales people and also sets
the target performance frequencies. Activity quotas are appropriate
when the sales people also perform important non- selling activities.

11. Adjustment
of sales and
output
Quotas
acts
motivator
Useful in
sales
contests
Appraisal of
performance
Sizing up
the market

12. Danger of
increased
Bad debts
Warrants
huge
finance
Apple of
discord
Possibility of
ineffectiveness
Problem of
quota
monitoring