winer1973 - The Effect of Product Sales Quotas on Sales Force Productivity Author(s Leon Winer Source Journal of Marketing Research Vol 10 No 2(May 1973

winer1973 - The Effect of Product Sales Quotas on Sales...

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The Effect of Product Sales Quotas on Sales Force Productivity Author(s): Leon Winer Source: Journal of Marketing Research , Vol. 10, No. 2 (May, 1973), pp. 180-183 Published by: American Marketing Association Stable URL: Accessed: 02-05-2016 05:25 UTC Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact [email protected] American Marketing Association is collaborating with JSTOR to digitize, preserve and extend access to Journal of Marketing Research This content downloaded from 129.81.226.78 on Mon, 02 May 2016 05:25:05 UTC All use subject to
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LEON WINER* This article describes an actual controlled experiment to test the validity of the Davis-Farley sales compensation model. Results indicate that the implicit assump- tion of the model that salesmen seek to maximize income needs additional study. The Effect Of Product Sales Quotas on Sales Force Productivity Sales quotas are sales volume objectives assigned to specific sales units, such as regions, districts, or sales- men's territories, usually expressed in terms of dollar sales volume. Sometimes, in order to achieve manufac- turing efficiency or long-term goals, sales managers set quotas for specific products at challenging levels (i.e., levels that are higher than the level of sales expected to be achieved in the absence of such quotas). The under- lying idea is that by setting challenging quotas and at- taching significant rewards to their achievement it is pos- sible to direct salesmen's efforts along desired paths. However, it does seem that employment of product quotas should result in some loss of sales force efficiency. If salesmen respond to the reward system and are di- rected away from sales activities they would normally pursue, then the sales force is presumably using its time inefficiently. An apparently superior quota setting pro- cedure would take into account both manufacturing ef- ficiency, long-term goals, and optimal use of sales effort. In two articles, Farley [2] and Davis and Farley [1] have shown mathematically that management should set commission rates calculated at an equal percentage rate of gross profit on all products. Furthermore, to insure maximum profits, salesmen should be asked to specify "desired quota" on all products. If necessary, quotas and commission rates would then be negotiated until both management and salesmen are in agreement. This model is based on two assumptions which have several implications.
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  • Fall '16
  • alej
  • Marketing, Sales, Scientific control, salesmen, Journal of Marketing Research

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