Sales Management Final Exam

Sales qutota
sales goal assigned to a marketing unit for use in managing sales efforts
T/F: Sales quotas are typically set LESS than territory potential.
TRUE.
Purpose of Quotas
facilitate the planning and control of the selling effort
— provide INCENTIVE for sales reps
— allow for evaluation of salespeople’s performance
— allow the firm to control a sales person’s efforts
Performance Index (PI)
actual sales DIVIDED BY sales quota (x 100)
Quota Setting Process
1. select the *types of quotas* to use
2. determine *relative importance* of each type of quota that is to be used
3. determine the *actual level* of each type of quota that is going to be used
3 Basic Types of Quotas
1. volume
2. activity
3. financial
Volume Quota
— most popular
— easily understood
— can be linked with sales potential
— consistent with what sales people’s perceptions of their job is
3 Types of Volume Quotas
1. physical unit quotas
2. dollar volume quotas
3. point quotas
Volume Quota: Physical Unit Quota
— convenient when the total number of products sold are *small*
— advantageous when prices are *widely fluctuating*
Volume Quota: Dollar Volume Quota
— used when a salesperson has to sell a large number of *different products*
— provide common metric that can be used
— can counter a salesperson’s propensity to reduce the price
— can be *demoralizing* when prices fluctuate a lot
Volume Quota: Point Quota
— used when different products sold receive a different number of points
— ex. different brands, new vs. older products, profitability
Activity Quotas
— assess the *effort exerted* by salespeople in order to achieve their results
— PROBLEMS: must complete activity sheets each week (takes away from their obligations) and the possibility of misrepresentation