NAME – Abhi Patel

PRN – 20020242002

1. Write the different types of sales quota & explain how they are different. What types of quota do
you recommend for the following types of sales job & also give reason.
A. Selling FMCG product
B. Selling heavy machinery
Ans)
There are four types of Sales Quota
1. Sales Volume Quota
2. Sales Budget Quota
3. Sales Activity Quota
4. Combination Quota

1. - Sales Volume Quota

It is good for Indian perspective. Because of too much intermediary, salespeople & branch.
It can be in difference quota unit like Pharma company use total sales volume in rupees but automobile
company use in number of vehicles.
The essential volume-based sales quota requires one’s reps to close a specific number of arrangements
each month in a closed won state (For instance: 5 closed won arrangements in January).

2. Sales Budget Quota

These kind of quota set for controlling expense, gross margins & net profit.
Overall intention is salespeople have not only responsibility of getting desired sales volume but also
making good profit
3. Sales Activity Quota
It refers to the minimum level of sales-oriented actions that a salesperson must conduct within a given
time period. Sales Activity quota is the principal means of measuring effort by salespersons; if the
salesperson exceeds the goal, then they are rewarded by management. Activity quotas are often used in
situations in which salespeople have to contact potential clients. The quota is designed to ensure that the
salesperson is making a minimum level of effort to attract new clients, and employers may reward
employees who surpass the activity quota as an incentive to put in more effort.
4. Combination Quota
The most common combination is the sales volume and activity quota.
Combination quota is use to control sales force performance on the basis of selling and non- selling
activities.
A. Selling FMCG product – combination quota
 Due to the variety of products that could be produced in the FMCG company, which adds to
various levels of profits for different products, its prudent to use combination quota for the sales
person to decide on the optimal profit margin, on which products to promote/produce.
B. Selling heavy machinery – sales volume;
Heavy Machinery is a long-time investment for any company which may require high time And
frequent buying is low. Sales of heavy machinery could be counted on the number of units sold in
a specific time span.

2. Write short notes: (3*2=6 Marks)

a. Mean absolute percentage error
b. Sales territory design
a. Mean absolute percentage error (MAPE):
E): It also known as mean absolute percentage deviation (MAPD), is a measure of prediction accuracy of
a forecasting method in statistics, for example in trend estimation, also used as a loss function for
regression problems in machine learning. It usually expresses the accuracy as a ratio defined by the
formula:

The mean absolute percentage error (MAPE) is the most common measure used to forecast error, and
works best if there are no extremes to the data (and no zeros).
b. Sales territory design:
A sales territory is defined as a group of present and potential customers assigned to an individual
salesperson, a group of salespersons, a branch, a dealer, a distributor, or a marketing organization at a
given period of time.

1. Research the geographical area

2. Divide the area on the basis of population, accessibility, potential etc.
3. Study the consumer behaviour of the territory
4. Assess the revenue potential from the respective territories
5. Analyze the hurdles that may be present in the territories
6. Define the products suitable for the territory
7. Probe further to find out specific needs and wants of the people within the territory
8. Prepare a plan for each territory with quotas and tasks to be accomplished
9. Appoint sales people or sales team for each territory
10. Monitor and track the performance of each territory
11. Review sales people performance for each territory,
12. Avoid overlapping territory because it causes conflict among the sales people
Q 4. Mr. Deshpande the marketing manager of orient food and beverage company Ltd. The
company experienced sailing nicely despite competition from multinational brands. However, he
was much aware of the turns and twist of the baby food market. The declining sales made him to
see the root cause of the problem. He knew declining birthrate is one of the major reasons and
birthrate is also different across different demographics. In rural area families also prefer to feed
cow’s milk but yess advertisements have increased awareness towards supplement food. The
families have now started realizing the combination of nutrients in baby food supplement.
Migration of people is also one big reason for sales decline. The ghost of competition also looms
large in Deshpande’s mind. He knows that baby food market will be more competitive in years.
Analyze the sales situation & interpret its meaning for sales managers of both the territories. Refer
the two financial statement of two different territories based on the sales of baby food as follows:

District X (Territory 1)
INR INR
(000)i (000)i
%
n n
change
2007- 2008-
Heads 08 09
Estimated sales 200 207 3.5
Estimated cost of goods
sold 120 132 10
Actual sales 168 157 -6.54762
0.78740
Actual cost of good sold 127 128 2
Gross profit 41 29 -29.2683
net profit 37 26 -29.7297
Estimated sales (in '000 Rs) 24000 27324 13.85
Actual sales (in '000 Rs) 21336 20096 -5.81177

District Y (Territory 1)
INR %
(000)in change
Heads 2007-08 INR (000)in 2008-09
Estimated sales 180 195 8.333333
Estimated cost of goods sold 137 138 0.729927
Actual sales 156 156 0
Actual cost of good sold 132 137 3.787879
Gross profit 24 19 -20.8333
net profit 18 16 -11.1111
Estimated sales (in '000 Rs) 24660 26910 9.124088
Actual sales (in '000 Rs) 20592 21372 3.787879
 Estimated sales in Y has been higher than in which could be due to the various reasons like better
positioning & advertisement in Y than X since the sales could have increased due to increased
awareness among the people.
 The sales of goods in Y have yielded in lesser decline in a profit due to the macroeconomic
factors affecting the sales performance among the districts.
 Actual number of sales admin decreased in district X greater than that of Y which could be due to
the increase in the people shifting in a district x or declining birth rate.
 Cost of good sold has been increased highly in Y, could be due to the demand in the area since
the sales figure has been better rise than the previous year.
 Net profit has taken a greater affect in district X than in Y, accounting macro factors (declining in
birth rate & shifting) whereas, the net profit in district Y has declined due to the increased in the
cost of good sold.
 Its evident that sales figure in district X are going to people willing to shift into different
demography and that can be seen it the estimated sales growth.