Description
The ppt describes topics like definition, territory design, discipline, sales quotas, targets, budget quota, expense quota, bottom up approach, and top down approach
A group of current and potential customers assigned to a salesperson, branch, dealer, or distributor for a given period.
•Higher employee morale •Better market service •Efficient evaluation and control •Matching marketing programs
? Geographic ? Customer ? Account ? Any
Areas
? District/State/Country etc
Types
? Verticals/OEMs/Dealers etc
Size
? Large/Medium/Small
Combination of the above
Select Basic Control Unit Estimate Market Potential in Each Control Unit Combine Control Units into Tentative Territories Perform Workload Analysis Adjust Tentative Territories to Allow for Sales Potential and Coverage Difficulty Differences Assign Salespersons to Territories
STAGES IN TERRITORY DESIGN
Select Basic Control Unit
The basic control unit is the most elemental geographic area to be used in forming the sales territories. States, trading areas, counties, cities, MSAs, zip codes
Estimate Market Potential in Each Control Unit
Subjective Methods • Users’ expectations • Sales force composite • Jury of executive opinion Objective Methods • Test Market • Time series analysis • Statistical demand analysis
STAGES IN TERRITORY DESIGN
Combine Control Units into Tentative Territories
The goal at this stage is to make each tentative territory as equal as possible with respect to market potential Do not take into account differences in workload or sales potential at this stage.
Perform Workload Analysis
• Determining the engagement schedule for the sales force
STAGES IN TERRITORY DESIGN
Adjust Tentative Territories to Allow for Sales Potential and Coverage Difficulty Differences
Need to adjust the sales potential by the amount of effort (workload) each of the initial territories will require.
Assign Salespersons to Territories
Up to now, we have not considered differences in abilities between salespeople. This step takes individual ability differences into account.
? Tax Implications ? Warehouse Operations ? Customer Spread and
Logistics ? Cost to serve ? Hybrid Channels ? Firm Policies
? Territory
Poaching
? Company Bypassing Dealers ? Dealer Bypassing Dealer
? Territory
Pricing
? Justified Differential Pricing ? Differential Pricing based on
power.
? Time
bound quantitative objectives assigned to a selling unit that specify desired levels of performance
?
To Provide Quantitative Performance Standards To obtain tighter Sales & Expense Control To Motivate desired performance To use in connection with Contests
?
? ?
? Straight Salary ? Salary plus
Commission ? Straight Commission
? Salary + Commission ? Incentives Outside Salary
+
Commission
?
SALES VOLUME QUOTAS
? Rupee Volume ? Unit Volume ? Point Quotas
?
BUDGET QUOTAS ACTIVITY QUOTAS
? Expense Quotas ? Net / Gross Margin Quotas ? Calls Made ? Demos Done ? New Customers etc
?
Potential Problems: 1.Cutting price and no maximum profit 2.Large sales expenses
?Gross margin quotas ?Net profit quotas Gross Margin= Sales Volume – Cost of Goods Net Profit= Sales Volume – Cost of Goods – Direct Selling Expenses
Potential Problems: 1. Sales personnel generally do not set prices and have no control over the cost. They are not responsible for the gross margin. 2. Salespeople may cut the sales expenses and therefore harm the sales when the net profit measure is used.
? A salesperson may receive an expense budget that is a percentage of the territory’s sales volume. ? Other firms may set up rupee limits. ? Others may have limits on items such as lodging, meals, and entertainment but pay all the expenses on cars and office expenses.
Activity quota set objectives for jobrelated duties useful toward reaching the performance target. Examples are prospects, calls and presentations. Activity Quotas typically are not the basis for reward. They are more for control and better customer service.
Conversion Quotas E.g. Call/Presentation and Call/Sales Ratio Quota Combinations The most common practice is sales volume and activity quotas. These quotas influence both selling and non-selling activities.
?
Levels ? Individu al ? RO/ASO ? Group ? Dealers
• Periodicity – Annual – Quarterly – Monthly – Weekly
• Approach •Top Down •Bottom Up
?
Corporate
?
Regional Office
?
Area Sales Office
?
Unit
?
Individual / Dealer
What is the Forecast ? ? Is it in line with our Expectations ? ? What are the problems ? ? Can we overcome these problems ? ? If yes, is there a Gap still ?
?
? New Products ? ? Market Capacity ? Sales
/ Growth
Executive
? Experience ? Track Record ? Aptitude ? Ability to take Stretch
doc_106292621.ppt
The ppt describes topics like definition, territory design, discipline, sales quotas, targets, budget quota, expense quota, bottom up approach, and top down approach
A group of current and potential customers assigned to a salesperson, branch, dealer, or distributor for a given period.
•Higher employee morale •Better market service •Efficient evaluation and control •Matching marketing programs
? Geographic ? Customer ? Account ? Any
Areas
? District/State/Country etc
Types
? Verticals/OEMs/Dealers etc
Size
? Large/Medium/Small
Combination of the above
Select Basic Control Unit Estimate Market Potential in Each Control Unit Combine Control Units into Tentative Territories Perform Workload Analysis Adjust Tentative Territories to Allow for Sales Potential and Coverage Difficulty Differences Assign Salespersons to Territories
STAGES IN TERRITORY DESIGN
Select Basic Control Unit
The basic control unit is the most elemental geographic area to be used in forming the sales territories. States, trading areas, counties, cities, MSAs, zip codes
Estimate Market Potential in Each Control Unit
Subjective Methods • Users’ expectations • Sales force composite • Jury of executive opinion Objective Methods • Test Market • Time series analysis • Statistical demand analysis
STAGES IN TERRITORY DESIGN
Combine Control Units into Tentative Territories
The goal at this stage is to make each tentative territory as equal as possible with respect to market potential Do not take into account differences in workload or sales potential at this stage.
Perform Workload Analysis
• Determining the engagement schedule for the sales force
STAGES IN TERRITORY DESIGN
Adjust Tentative Territories to Allow for Sales Potential and Coverage Difficulty Differences
Need to adjust the sales potential by the amount of effort (workload) each of the initial territories will require.
Assign Salespersons to Territories
Up to now, we have not considered differences in abilities between salespeople. This step takes individual ability differences into account.
? Tax Implications ? Warehouse Operations ? Customer Spread and
Logistics ? Cost to serve ? Hybrid Channels ? Firm Policies
? Territory
Poaching
? Company Bypassing Dealers ? Dealer Bypassing Dealer
? Territory
Pricing
? Justified Differential Pricing ? Differential Pricing based on
power.
? Time
bound quantitative objectives assigned to a selling unit that specify desired levels of performance
?
To Provide Quantitative Performance Standards To obtain tighter Sales & Expense Control To Motivate desired performance To use in connection with Contests
?
? ?
? Straight Salary ? Salary plus
Commission ? Straight Commission
? Salary + Commission ? Incentives Outside Salary
+
Commission
?
SALES VOLUME QUOTAS
? Rupee Volume ? Unit Volume ? Point Quotas
?
BUDGET QUOTAS ACTIVITY QUOTAS
? Expense Quotas ? Net / Gross Margin Quotas ? Calls Made ? Demos Done ? New Customers etc
?
Potential Problems: 1.Cutting price and no maximum profit 2.Large sales expenses
?Gross margin quotas ?Net profit quotas Gross Margin= Sales Volume – Cost of Goods Net Profit= Sales Volume – Cost of Goods – Direct Selling Expenses
Potential Problems: 1. Sales personnel generally do not set prices and have no control over the cost. They are not responsible for the gross margin. 2. Salespeople may cut the sales expenses and therefore harm the sales when the net profit measure is used.
? A salesperson may receive an expense budget that is a percentage of the territory’s sales volume. ? Other firms may set up rupee limits. ? Others may have limits on items such as lodging, meals, and entertainment but pay all the expenses on cars and office expenses.
Activity quota set objectives for jobrelated duties useful toward reaching the performance target. Examples are prospects, calls and presentations. Activity Quotas typically are not the basis for reward. They are more for control and better customer service.
Conversion Quotas E.g. Call/Presentation and Call/Sales Ratio Quota Combinations The most common practice is sales volume and activity quotas. These quotas influence both selling and non-selling activities.
?
Levels ? Individu al ? RO/ASO ? Group ? Dealers
• Periodicity – Annual – Quarterly – Monthly – Weekly
• Approach •Top Down •Bottom Up
?
Corporate
?
Regional Office
?
Area Sales Office
?
Unit
?
Individual / Dealer
What is the Forecast ? ? Is it in line with our Expectations ? ? What are the problems ? ? Can we overcome these problems ? ? If yes, is there a Gap still ?
?
? New Products ? ? Market Capacity ? Sales
/ Growth
Executive
? Experience ? Track Record ? Aptitude ? Ability to take Stretch
doc_106292621.ppt