Drawing Account Method
– modification of straight commission plan, sales commission. Credited to each
There are 3 basic types of Salesforce Compensation plans:
y compensation plan
- salespeople are paid a specified amount per time period. Salesperson
receives a straight salary.
Straight Commission Plan -
a salesperson's compensation is determined solely by the amount of their sales
for a given time period. Salesperson's entire paycheck is based on how much in sales he made during a given
Compensation plan -
When choosing a compensation plan for salespeople, the main factor is
balancing the need to provide income security versus incentives
. Salary provides income security, while
Commission provides sales incentives. In a Combination
compensation plan, salary is combined with a
commission to provide for some level of both needs.
Demand for industrial products is derived from the demand for consumer
products. Derived demand is based on the
demand for consumer products.
For example, if an organization sells tires to car manufacturers, its demand is derived
because the number of tires it sells depends on how much of a demand
there are for the cars. The higher the demand
for the cars, the higher the demand for its tires.
When evaluating salespeople's performance, a lot of information can be obtained from reports, which describe each
salesperson's schedule of calls and sales results
are a big part of what sales management looks at when evaluating performance
. The dimensions used
to measure a salesperson's performance are based on the sales objectives. Qualitative measures can also be a factor;
i.e. through customer feedback.
- activities which are intended to provide short-term boosts in product sales.
Examples are coupons,
, sweepstakes, free trial offers.
They can be directed at intermediaries also, and include sales contests, trade
shows, quantity discounts, etc.
. All paid marketing communications other than
advertising, public relations, and
personal selling falls under Sales Promotion.
provides a measure of the sensitivity of demand to changes in price. Formally defined as
change in quantity demanded relative to a given percentage change in price. Basically, it is supposed
to tell us, for a given change in a product's price, how this will affect the demand for the product.
The Price Elasticity of Demand is calculated by dividing the percentage change in demand by the percentage
change in price
The percentage change in demand, or the percentage change in the number of units demanded, divided by the
percentage change in the price of the product tells us the Price Elasticity
For example, if demand for a car goes down 8 percent when a seller raises the price by 2 percent, the price elasticity