Quotas are quantitative objectives assigned to sales organisational until they specify desired performance level for sales volume such as:
Expenses, gross margins, net profits & return on investment, selling & non-selling related activities, or some combination of these items.
Some companies set sales quota for organisational units such as individual, district & sales personnel.
Quotas are devices for directing & controlling sales operations. Their effectiveness depends upon the kind, amount & accuracy of marketing information used setting them & upon management skills in administering the quota system.
Objectives in using quotas
- To provide quantitative performance standard;
- To obtain tighter sales and expense control;
- To motivate desired performance
- To use in connection with sales contest
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