CH-4 Sales Quota
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Transcript of CH-4 Sales Quota
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Sales Quota
Dr. Bhumija Chouhan
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A sales quota is the sales goal set for the product line,
company division, or sales representative. It is primarily
a managerial device for defining and stimulating sales
efforts.
Sales quotas are the sum of the total sales of a future
period to be achieved by each salesperson. It is the
sales goal set for a product line, company division, or
sales representative.
Accurate sales quota setting prevents non-productive
behaviour of sales people.
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These are set for specific time period They can be of
various types for eg. sales volume , sales activity, etc.
They serve as the standards They can be set for
different products , salesmen , different territories It is a
motivational tool It requires study of market conditions.
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Sales Budget
It is a process of allocating a portion of an organization's
resources for its various sales related activities for a
specified period of time.
It depends on the sales forecast expected revenue and
expenses.
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Budget Purposes
Planning
Co-ordination
Control
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Features
It consists of three parts; break even, target andprojected sales.
The budget also includes sales by product, location,
customer density and seasonal sales patterns.
It provides a plan for both cash and credit sales.
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Types of budgets prepared
Sales budget
Selling expenses budget
Administrative expenses budget
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Methods of budgeting
Affordability method
Percentage-of-sales method
Competitive parity method
Objective-and-task method
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Budgetary procedure
Determining planning style-top down or bottom
up actual procedure.
Each management level within the sales
department approves the budgets for which it is
responsible, incorporates them into its ownbudget, and submits this consolidated budget to
the next higher level for approval
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Handling competition for available funds within marketing
division
Selling the sales budget to top management
Using the budget for control purposes
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Effects of Errors
Expenses such as sales force commissions vary directlywith volume.
Expenses such as sales supervisory expenses , aresemi variable, fluctuating with changes in volume but notdirectly.
If estimated unit sales volume is incorrect by much , theusefulness of budgeted selling expense figures areimpaired as standards of performance.
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Flexibility in budgeting
Budget should not be rigid
Full advantage of market opportunities must be taken asthey appear.
If competitors initiate actions not foreseen at the budgetmaking time, funds must be allocated to counter act
them.
A realistic attitude towards the dynamic nature of themarket is a part of effective sales budgeting.
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Process of Sales Budget
Review Situation
Communication
Subordinate Budget
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Approval of Sales budget
Other Departments
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Factors Effecting Sales Budget:
Financial Resources
Salesmens Estimates
Past Sales Figures and TrendsPlant Capacity
Competition
Availability of raw material and other supplies
Seasonal Fluctuations
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General Trade Prospects
Return on capital employed
Orders on hand
Other consideration