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MANAGEMENT OF SALES TERRITORYSales TerritorySales territory is a grouping of customers and prospects assigned to an individual salespersonSales territory is the basic unit of sales planning and controlSales territory is a geographical area containing the present and potential customers who can be efficiently and economically served by a single salesperson, branch, dealer or distributorAdvantagesEnsures better market coverage, effective utilization of the sales force, and efficient distribution of workloadEnhances employees moraleTerritorial design helps in building accountabilityCustomer service improves over a period of time Size of Sales TerritoriesFactors influencing size of territories:1. Nature of product: consumer durable products prefer larger territoriesPerishables have smaller territories2. Demand: High demand smaller territories

3. Distribution: Going through intermediaries larger territories4. competition: High competition smaller territory5. Competence of Sales person:More competent sales person larger size of territory

Designing a Sales TerritorySelect the basic geographic control unitsCriteria for allocationDecide on the starting pointCombine control units adjacent to starting pointCompare territories and work load analysisAssign sales force to new territoriesSelect Geographic unit:Select appropriate geographic control unit that can be combined to form sales territoriesBasic unit can be a country, state, district, division or block with clear boundariesSelection of geographical control units will be effective only when it is based on trading areaTrading area is a geographic area where there are retailer and wholesales who furnish sale2. Criteria for allocation:Identify present and prospective customerAnalyze the consumer characteristics, buying patterns, market share data and competitive position of the firmThree factors:Current customersProspective customersGeographic size in terms of area3. Decide on Starting Point:Sales manager should form a tentative sales territories as the starting point by selecting geographic locationsStarting can be trading area.District headquarter or cityTerritory shapes:Three popular territory shapes:a. Wedge-shaped: Radiates from a densely populated urban area to small rural areasserve both urban and rural marketApplicable FMCG.b. Circle:Sales person is based in the central part of the area and travels uniformly to different areasAutomobiles and consumer durable

c. Clover leaf:Used when accounts are distributed randomly throughout the territory.More common in industrial markets4. Combine control units adjacent to the starting point:5. Work load analysis:Steps:Group the customers according to the volume of sales A,B,CEstimate call frequencies for respective customersLocate present and potential customers d. Number of customers in each group are multiplied by the required call frequency to get the total number of planned callse. Territories are then formed to give adequate work load 5. Assign sales force to New territories:Suitable salespeople are appointed for each territory

Routing and SchedulingManagement of Sales quotaSALES QUOTASales quota are targets that salespeople try to achieve within a specific period of time.Quotas are routinely assigned to the departments, divisions and individuals.A sales quota is the sales goal set for a product line, company division or sales representative.It is sales assignments or goals and expectations of the top management expressed in volume or in rupees sales for a specific future period.It is a companys total expected market share that is assigned to the sales people.IMPORTANCE OF SALES QUOTAFor motivating salespeopleGet a feedback on their performance through the achievement of quotaHelps in giving directions to the salespeoples efforts and resources for specific ends and targetsQuotas serve as guidelines and direct the behavior of the salespeopleServes as self-supervisory mechanism

PRINCIPLES OF QUOTA SETTINGWhile setting quota and the allotment should be uniform between salespeopleShould take into account:Conditions prevailing in the territoryLevel of competitionExperience and ability of the salespeopleShould be a level of definiteness in the quota set for a salespersonSMART:A quota should be Specific, Measurable, Attainable, Realistic and Time specificSpecific: clear and conciseMeasurable: measured in terms of volume of sales generated in quantity and in rupee termsAttainable: realistic goals based on market factsTime specific

PROCEDURE FOR SETTING QUOTAThree steps to be followed:Step 1: Schedule planning:for goal setting meetings.To explain systems, benefits and incentives for each sales personCalled as orientation briefingStep 2: conferencing with Each salespersonDiscussion revolves around four areas:Territory, the account, call management and self-management.

Step 3: summarized written quota statementTo prepare a written summary of goals agreed upon

TYPES OF SALES QUOTA1. sales volume quota:Standard for appraising the performance of individual salespeople, intermediaries and branch.Communicates expectations in terms of what amount of sales for/in what period.Break down approach: annual quota is set for the year and then broken downThree kindsA) monetary sales volume quota:B) Unit sales volume quotaC) Points sales volume quota

2) sales Budget quota:Set in order to control expensesExpense quota ensures that the salespeople limit their expenses in alignment with the sales volumeSalesperson receives an expense budget as a percentage of the territory sales volume and manages the expenses in rupee terms.Sales personnel operate more efficiently to reduce expenses and increase the sales resulting in increased margins and profits.3. sales activity quota: Salesperson is expected to do some non-selling activity and the quota can be set as a mix of these activitiesActivity quota can be set on total sales calls, calls on prospects, number of new accounts, product demonstrations.Activities quota set objectivities for job related duties, which help the salespeople in achieving their sales performance4. combination quota:Common combination is the sales volume and activity quota.

METHODS OF SETTING SALES QUOTA1. quota based on sales forecast and potentials:Set quota on the basis of sales forecasts and the sales potential of the market and the territory2. Quotas based on past sales or experience:Companies collect the sales data of the previous years, average them out for each geographic territory and then add an arbitrary percentage for next years quota.Does not take into consideration the sales potential.

3. Quotas based on Executive judgement:Used when there is little or no information available about the market.Try to analyze facts and figures for the different markets and then decide the quota for the territory, salesperson and intermediaries.4. Quotas based on salespeople judgement:Salespeople set the quota for themselves.Provides an opportunity for the salespeople to test their ability 5. Quotas based on compensation:Salespeople gets extra compensation on achieving of sales quotaSalespeople are evaluated on the basis of their attaining quota for higher assignmentsPROBLEMS IN SETTING SALES QUOTADifferences in the ability, experience and position of the salespeople are not considered suitably Salespeople is not able to understand the reason and logic behind the quota assigned to himSuffer from bias and prejudice of the sales managers