1. SALES Budget & sales QUOTA

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BASIC TERMS
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3. POTENTIAL
This refers to the highest possible level of achievement, whether at the company level or at the industry .
In practice, full potential is almost never reached, so actual sales are typically somewhat less than potential.

4. Market potential
it is the maximum market ( industry) demand, resulting from a very high level of industry marketing expenditure, where further increases in expenditure would have little effect on increase in demand

5. Company sales potential is the maximum estimated company sales of a product or service, based on maximum share (or percentage) of market potential expected by the company

6. sales forecast
A sales forecast is a projection of the expected customer demand for products or services at a specific company, for a specific time horizon, and with certain underlying assumptions.

7. Forecasting Approaches
Top-down or Break-down approach
Bottom-up or Build-up approach
companies usually use both approaches to increase their confidence in the forecast

8. Steps followed in Top-down / Break-down Approach
Estimate industry sales or market potential
Calculate company sales potential {market potential x company share}
Decide company sales forecast (lower than company sales potential because sales potential is maximum estimated sales, without any constraints)

9. Steps followed in Bottom-up / Build-up
Salespersons estimate sales expected from their customers
Area / Branch managers combine sales forecasts received from salespersons
Regional / Zonal managers combine sales forecasts received from area / branch managers
Sales / marketing head combines sales forecasts received from regional / zonal managers into company sales forecast, which is presented to CEO for discussion and approval

10. Sales budget
Sales budget is the estimate of expected sales volume in units or revenues from the company’s products and services, and the selling expenses.

11. Purposes of the Sales Budget
Planning
Coordination
Control

12. Requirement of a successful budget
Support, interest and involvement of top management
Flexible budgeting

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SALES QUOTA IS……
Sales quotas are sales goals or targets (quantitative objectives) set by a company for its sales units for a time period
sales units are regions, branches, territories, salespeople, and intermediaries
Generally, company sales budget is broken down to sales quota.
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14. IMPOTANCE OF QUOTAS ACHIEVE ORGANIZATIONAL TARGET
PROVIDE PERFORMANCE TARGET
PROVIDE STANDARD
PROVIDE CONTROL
PROVIDE DIRECTION
TOOL FOR MOTIVATION

15. CHARACTERISTIC OF GOOD SALES QUOTA
Fair
Challenging
Flexible
Easy understandable

16. Types of Quotas Organizations set many types of sales quotas:
sales volume
units
activity
combination