Submitted By: Guided By:

Tuhina Mistry Dr. Imran Nadeem Siddiqui

3rd Semester MBA
What is Quota?

A quota refers to an expected performance objective. Quotas are tactical in nature and thus derived
from the sales force’s strategic objectives.

Why are Quotas important?

Quotas provide performance targets.

Quotas provide standards.

Quotas provide control.

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 What is a Sales Quota ?
A sales quota is a sales goal, sales target, or minimum sales level that a sales entity – team or
individual – aims to achieve.

Types of Sales Quotas:

Direct Quota

Overlay Quota

Sales volume quotas

Revenue quotas
 Importance of Sales Quotas

Sales, of course, is no different, and the sales quota is that big visible number out there for all to see.
Depending on a salesperson’s pay mix, and the amount of on target earnings they have “at risk,”
quota draws the line in the sand and sets the attainment expectation of where a salesperson would
want to find their performance at the end of the period.
 Advantages & Disadvantages of Sales Quota
1.Sales quotas enable the management to estimate the total 1. Extending credit to unworthy customers.
sales for the coming years. This helps to adjust the production
schedule to meet the demand. 2. Unreasonable quota leads to loss of motivation

2. Sales quotas help the sales organization to judge the 3. Identical quota leads to frustration
performance of each individual salesman, making monitoring
easy.

3. It becomes easier to locate weak and underdeveloped

markets.

4. Special efforts can be make in such areas to develop it.

Product lines

Individual established and new products.

Geographic areas based on how the sales organization is designed, which would include:
Sales division.
Sales regions.
Sales districts.
Individual sales territories.
Methods for Setting Sales Quotas

Quotas based on forecasts and potentials.

Quotas based on forecasts only.
Quotas based on past experience.
Quotas based on executive judgments.
Quotas salespeople set.
Quotas related to compensation.
Selling by Objectives sets Future Targets

Treating the territory as a business.

Managing each account.

Managing each call.

Managing oneself.
Conclusion

Quotas are important to a company because they establish the “end state” sought,
and they change according to external and internal forces.

Many different types of quotas exist.

Methods for setting quotas may vary.