Quotas

Quotas are quantitative objectives assigned to sales organizational unit’s individual sales personnel, for instance. As standards for appraising selling effectiveness, quotas specify desired performance levels for sales volume; such budgeted items as expenses, gross margin, net profit, and return on investment; selling- and no selling-related activities; or some combination of these items. Sales management sets quotas for organizational units, such as individual sales districts and sales personnel. In some companies, sales management sets quota for middlemen, such as agents, wholesalers, and retailers. Quotas set for sales regions, or other marketing units on higher organizational levels, are customarily broken down and reassigned to lower-level units like sales districts, or IT individual sales personnel. All quotas have a time dimension-they qualm:” what management expects within a given period.

Quota can be defined as

• Sales quota represents a specific sales goal that an individual is responsible for satisfying over a period of time, usually a year. Specifically, quotas measure and define the appropriate accomplishment level desired from an individual by management

Quotas are devices for directing and controlling sales operations. Their effectiveness depends upon the kind, amount, and accuracy of marketing information used in setting them, and upon management’s skill in administering the quota system. In effective systems, management bases quotas on information derived from sales forecasts, studies of market and sales potentials, and cost estimates. Accurate data are important to the effectiveness of a quota system, but in and of themselves, they are not sufficient; judgment and administrative ski: 8!’ required of those with quota-setting responsibilities. Soundly administered quotas based on thorough market knowledge are effective devices for directing controlling sales operations.