Module - 3

Management of Sales Territory & Sales Quota

Content
1.Sales Territory Meaning Size Designing 2.Sales Quota Meaning Procedure for sales Quota Types of sales Quota Methods of setting sales quota

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3. Recruitment and selection of sales force 4. Training of sales quota

Meaning of sales territory

Sales - is the act of meeting prospective buyers and providing them with a product or service in turn of money or other required compensation. - Sales is an act of completion of a commercial activity. The "deal is closed", means the customer has consented to the proposed product or service by making full or partial payment (as in case of installments) to the seller.

Meaning of territory
A large extent or tract of land; a region; a district. a country a region marked off for administrative or other purposes

Meaning of sales territory

Sales territory is defined as a group of present & potential customers assigned to an individual sales person, a group of sales person, a branch, a dealer, a distributor, or a marketing organization at a given period of time.

Advantages of Sales territory/ Why sales territory is required

Designing of sales territory provides various advantages to a firm like 1. It ensures better market coverage 2. Effective utilization of the sales force 3. Efficient distribution of workload among salespeople 4. Convenient way to evaluate the performance of salespeople 5. Control over the direct and indirect costs of the sales function 6. Optimum utilization of sales time by salespeople 7. Enhances employees morale and helps managers to better control & monitor sales & evaluate programmes.

Disadvantages of Sales territory

Many organization do not plan territories & organize sales on the basis of geographic divisions. It includes newly established enterprises, organizations where sales are achieved more through personal relationship rather than a professional approach. Organizations selling highly sophisticated & technically complex products Firm using telemarketing & internet marketing as tools to reaching customers Firms who sells product like insurance, fixed deposits and other investment products

Size of sales territories

Factors influencing the size of a sales territory. 1. The nature & demand of the product. 2. Mode of physical distribution. 3. The selling process. 4. Transport & communication facilities in the overall market & territory. 5. Government regulations 6. Density of population & population spread within the territory 7. Market potential & growth rates.

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8. The level of competition. 9. firms sales policy. 10. Ability of sales person. 11. Overall economic conditions prevailing in the country

For example
1. If a product is a consumer durable with a longer shelf life - Co. will prefer larger territory. For perishable Co. will prefer smaller. 2. Depends on nature of product like Consumer product Industrial product Durable or, Non durable product

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3. when there is huge demand- Co. go for smaller territories . 4. If Co. is going through intermediaries like wholesalers retailers customers they prefer to have a larger territory. 5. In industrial buying size of territory is kept small because of bulk order booking. 6. Territories in rural markets in India are smaller in comparison to the urban markets as transportation & communication is a problem

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7. Government restrictions & regulations of taxes & the movement of the goods also influence the decisions of a firm in regard to the size of the territory. 8. In a market with a high density of population & market potential , companies decide in favour of smaller territories. 9. If a company has experienced, well trained & competent salespeople - will go for larger territory & viceversa.

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10. If a firm with a limited number of products wants to earn higher profits, the size of the territory will be larger. 11. Overall condition of economy also affects the size of the territory. For example , a small size territory is suitable for a firm during recession when prices have stabilized & customers are not willing to spend spontaneously. During boom condition, however, firms can increase the size of the territory.