Page 187 - DMGT205_SALES_MANAGEMENT

Unit 11: Controlling the Sales Effort

Questions Notes
1. Find out the total sales and the profit made by each salesman.
2. What do you think is the main criteria for difference in profits?

11.15 Summary

 Sales managers must be aware of the types of expenses that are incurred both before and
after the sale as well as the sales revenues generated.
 A sales budget is a financial plan depicting how resources should best be allocated to
achieve the forecasted sales.
 Existence of a comprehensive sales information system in the firm is a prerequisite for an
effective sales control system.
 The sales manager scans the total sales on territory basis.
 The purpose of sales management audit is to evaluate the soundness of the sales
management of firm.
 A sales quota is a quantitative goal assigned to a sales unit relating to a particular period
of time.

 The sales quotas are set by sales manager for individual salesman or a sales district.
 Sales volume quotas are also set to balance the sales of slow moving products and fast
moving products.

 Companies sometimes base sales volume quotas solely upon the projected amounts of
compensation that management believes sales personnel should receive.
 Management must make certain that sales personnel understand quotas and the setting
procedure.
 Effective sales management keeps sales personnel informed of their progress relative to
quotas.

 Sales and cost analysis can be done on territory basis rather than the whole market.

11.16 Keywords

Competitors Parity Method: This method is used by large size companies facing tough
competition. It presumes knowledge of competitors' activities and resource allocation.

Customer Related Reasons: Revision of a territory may take place due to shift in customers
business which may be geographic or technical in nature or which may be related to the firm's
product policies.
Management Misjudgement: These could be the underestimating of a sales potential of a territory.
Underestimating the territory is more common than overestimating the territory.
Objective and Task Method: This method calls upon marketers to develop their budgets by
identifying the objectives of sales function and then ascertaining the selling and related tasks to
achieve objectives. Later the cost of each task/activity is calculated to arrive at the total budget.
Adjustment to task or budgets can be made.
Past Sales: Sales quotas are set based solely on past sales experience. If the sales quotas are to be
set for this year then we find out the sales of last year and taking the expected percentage

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