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Types Of Quotas
1.
2.
communicates – “
how much for what period”
3.
set for geographical
areas, product lines or marketing channels or combination
4.
the smaller the
unit, the more effective the quota for controlling sales operationbudget
5.
6.
7.
8.
9.
Companies perpetuate past
errors
10.
11.
12.
13.
Management provide sales
personnel with financial incentives to control their own expenses
14.
To reduce administrative
burden and misunderstandings, expense quotas are generally expressed as % of sales
15.
Problems –
16.
Variations in coverage
difficulty & other environmental factors, make it impractical to set identical expense % for all the territories
17.
Different sales person
sells different product mixes, so some incur higher expenses than others
18.
Advantages –
19.
Makes sales personnel
more cost conscious
20.
21.
Problems –
22.
Sales persons do
not set the price and have no role on the manufacturing cost. Thus, not responsible for gross margin
23.
Certain selling expenses
are beyond the salesperson’s influence
24.
25.
Appropriate when sales
personnel perform important non-selling activities
26.
Control & recognition
of sales person performing non selling activities
27.
Reward sales person
on quantity of work; irrespective of quality
28.
29.
Design imperfection may
cause sales personnel to place too much emphasis on one component activityFull line quota Designed to secure some desired balance of sales among various products
30.
31.
Keeping sales personnel
informed
32.
33.
Since quota requires
statistical technique, fear is that sales personnel will not accept quota prepared by hard to explain techniques
34.
Place too much
emphasis upon making sales – legitimate criticism of sales volume quota
35.
If product is
in short supply, quotas are not appropriate
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