Case1: Sales Force Participationin Quota Setting and Sales

Forecasting

Variables Investigated

Five major variables were singled out for study

A. Extent of Sales Force Participation in Forecasting.

In this study, sales forecasting is defined as estimating future sales for a geographic area,product
line, or list of accounts. Participation in forecasting is the existence of a company policy or
practice of obtaining a sales estimate from salespeople at the sales manager's request. Extent of
participation is defined as the degree of formalization of these policies or practices and is
categorized into three groups: formal policy, informal policy, or no policy.

B. Participation of Salespeople in Quota Setting.A quota is defined as a revenue, profit, or unit

volume goal assigned to a salesperson.

C. Type of Compensation Plan for Salespeople.

Four types of compensation plans were identified
1.Straight salary—fixed payments for a certain
period of time.
2. Straight commission—payment amount varies
in proportion to some type of performance,
usually the amount of revenue obtained.
3. Commission with guaranteed draw—
commissions that are guaranteed up to some
minimum level.
4. Salary combinations—includes three major
variations: salary plus commission, salary
plus bonus, and salary plus bonus plus
commission.

D. Direction of Error of Sales Force Quota Estimates.

This variable reflects the judgment of thesales manager regarding whether the quota estimates of
his salespeople are too high or too low.

E. Degree of Error of Sales Force Quota Estimates.

This variable reflects the sales manager's judgment regarding to what extent the estimates of his
salespeople are too high or too low.

Data for variables D and E were also obtained from sales managers who do not ask their
salespeople for quota estimates;

.
Hypotheses
Although many relationships among these five variables could be investigated, this study
focused on the following six:

Variables Compared: Hypothesis Number and Statement

A:B The extent of sales force participation in the quota-setting process will be greater in firms
where salespeople participate in the forecasting process.

A:C The extent of sales force participation in the forecasting process will differ
depending on the type of compensation plan in effect.

B:C The extent of sales force participation in the quota-setting process will differ depending on
the type of compensation plan in effect.

C:D Whether the quota estimates of salespeople are judged to be too high or too low by their
managers will depend on the type of compensation plan in effect.

C:E The degree of error in the quota estimates of salespeople, as judged by their sales managers,
will depend on the type of compensation plan in effect.

D:E The degree of error in the quota estimates of salespeople will be greaterwhen their quota
estimates are too low than when their estimates are too high.

Each of these hypotheses was reformulated into its null counterpart so that it could be tested
statistically using chi-square analysis. In addition, a number of secondary variables such as type
and size of firm were investigated.
Case2: The Effect Of Product Sales On Sales Force Productivity

A) The first test hypothesis consisted of a set of interview with salesman in the field. A
stratified clustered sample of 100 men from 20 branches was selected.&3 skilled
interviewers travelled through locations over 10 days period.

Question: During these interview ,salesman were asked to what extent they would be
willing to accept a higher tradeoff in exchange for lower dataprinter quota.

The tradeoff ratio offered were 1.5,2.0,2.5, to1.0 for thre groups in increasing order.