Page 99 - DMGT507_SALES AND PROMOTIONS MANAGEMENT

Unit 5: Organising Sales Effort

5.1 Sales Quotas Notes

A sales quota refers to an expected routine assignment to sales units, such as territory, districts
and branches, etc. Sales quotas are also assigned to individual salespeople over a particular time
period and are used to plan, control and evaluate the selling activities of a company.
Sales quotas serve several purposes. The important objectives are shown in the figure below:

Figure 5.1: Objectives of Setting Sales Quotas

Quotas provide performance targets
Sales Quotas provide standards Sales
Quotas Quotas provide control Objectives
Quotas are motivational

5.1.1 Types of Sales Quotas

A sales organisation can set many types of quotas. The most common quotas are shown in the
following figure:

Figure 5.2: Types of Sales Quotas

Types of Sales Quotas

Sales Volume Profit Expense Activity Quota
Quotas Quotas Quotas Quotas Combinations

Let’s discuss each one of them in brief.
Sales Volume Quotas

Sales volume quotas include sales in rupees or product unit objectives for a specific period of
time.

Example: New East India Bank Ltd. calculates sales in rupees whereas Bajaj Motors
calculates sales as number of cars sold. Sales volume quotas are first set for the entire year. The
yearly total volume quota is then set for shorter time periods, such as three months, six months
and nine months. The sales force is assigned their yearly quotas. Sales targets are set for the year
for sales force so their aim is to sell throughout the year to achieve the total sales objective.
The sales volume quotas can be set in the following areas:

Product line
Product range
Sales Sales division
Volume Sales Territories
Quotas Sales districts
Branch offices
Sales force (individual)

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