Answer 1

Pharmaceutical salespeople are known for given aggressive sales quotas and
targets. In the light of above statement, it is imperative to know that
pharmaceutical industry basically works on the principle of generating market
share by providing free samples, once sample is a hit, they focus on capturing
more and more market share within a particular area or geography depending
upon the pharmaceutical companies objectives for business expansion and
survival strategies. Differences in forecasting and budgeting procedures,
executive management, selling problems, management philosophy etc, cause
each firm to have unique set of targets.

Below are few sales quotas and target setting methodologies namely sales
volume target/quota, activity target/quota, profit target/quota and expenses
target/quota.

1. Sales volume target/quota : Sales volume target is one of the

important standard for appraising the sales performance of distributive
outlets, sales personnel individually, and other units of sales organisation.
It is one of the oldest and most common type of sales methodology. In this
methodology, Sales representatives are evaluated on the basis of the total
revenue they generate or the number of units they sell during a specific
period. Some companies also incentivize the sales representatives on
selling the number of units. For example, sales executive is assigned a
sales quota of selling 65 pairs of shoes every month. He likely receives a
commission/incentive/bonus only when he achieves his sales quota
assigned.
2. Activity target/quota : Activity quota or methodology usually involves
activities like scheduling meetings, leading demos, phone calls, follow-up
emails etc. This type of methodology usually requires BDRs(business
development representative) or SDRs(sales development representatives)
for completing a set number of activities over a period of time, usually one
month or a quarter. These BDRs/SDRs usually aren’t responsible for
closing actual business and are a part of larger selling teams. An activity
quota ensures they are contributing to the organisation and also provide
requisite help to the representatives they support as a supporting staff.
For example, an executive working for some company is assigned a target
of 30 phone calls per month, 50 follow-up emails and 10 demos each
month. His activity is tracked using CRM.
3. Profit target/quota : This type of quota is based on overall gross margin
or profit a salesperson earns for the company. It can be product/servicing
related profits or margin. For example, an employee working for a sports
store. He sells a product like a shoe or skates at a rate higher that for
others to earn more profit for the company. He also sells few at a rate a bit
lower than the required if bulk product purchase is done by a client,
keeping company’s margin.
4. Expenses target/quota : This methodology involves Expenses to be
kept on check along with sales quotas/targets. Management often
 provides sales personnel with certain financial incentives for controlling
their expenses. Apart from sales quotas achievement, employee
performance is tracked on how better he has managed/utilized the
financial incentives for completing the sales target. For example, an
employee who has managed to spend less amount than the other(Sales
volume of both being the same) will be incentivized/rated better than the
other.

Pharmaceutical companies mainly focuses on capturing/acquiring more and

more market share in a particular vicinity. It works through a groups of medical
representatives who visit each and every medical stores or the stores who sell
pharmaceutical products in the vicinity and try to convince them to purchase
their products. Firstly, they provide some samples for certain medicines at free
or lower cost. Once demand arises for the product, they sell more of that product
in the market and generate references. In my opinion, Sales volume based
sales quotas/target strategies is best suited for pharmaceutical companies.
Medical representatives are assigned targets to generate volumes of products
sale. Variety of products to be sold. Hence, this strategy will suit the best.

Answer 2

A Sales forecasting method can be explained as a procedure for estimating the

sales of product which can be done if a given marketing program is
implemented/put in place. It is the act of matching opportunities with the
marketing efforts. Sales forecasting is the determination of a firm’s share in the
market under a specified future. Thus sales forecasting shows the probable
volume of sales. It is imperative that none of the forecasting method is perfect.
There can be some or the other shortcoming for each method.

Sales forecasting methods can be classified as below:

1. Jury of Executive Opinion : Marketing professionals, important

members of the distribution channel such as distributors/dealers, and
professional bodies such as industry associations and marketing
consultants are the persons who are considered as executives in a
company or the industry. These people have expertise in knowing a
company’s whereabouts pertaining to sales and their opinion holds much
importance in terms of sales speculation. However, this method is based
on opinions only and no factual evidence is available for the same.
2. Poll of Sales Force Opinion : In this method of sales forecasting, the
opinion of sales men, sales managers, and other employees dealing with
sales are obtained, and forecasting is made on the basis of their opinion.
3. Projection of Past Sales : Sales forecasting, in this method, takes a
variety of forms. It sets the sales forecast for the coming year as figure as
the current year’s actual sales. The forecast may be made by adding a set
percentage to last year’s sales.
 4. Time-Series analysis : In this method, past historical data is analyzed
and arranged in systematic time series. (a) Long-term trends (b) Business
cyclical movements (c) Seasonal variations (d) Irregular and casual
fluctuation. After the analysis, different time series mathematical models
are formed; assumed values are applied with each of the models, to arrive
at sales forecasts.
5. Exponential Smoothing : It is similar to the moving average method. In
moving average, the sales of previous years are given equal importance
but in exponential smoothing, the recent past sales are given more weight
than the earlier pasts.
6. Survey of Customers’ Buying Plans : The method suggests selecting a
sample of buyers and questioning them about their intentions to purchase
a particular product. This information is then extrapolated to the total
population of buyers to estimate probable future sales.
7. Regression Analysis : It involves fitting an equation to explain sales
fluctuations in terms of related and presumably casual variables.
Regression analysis is a statistical process.
8. Econometric Model Building and Simulation : This method of sales
forecasting is used by companies of durable products like refrigerators,
T.V.s, washing machines, fans, etc.
Formula, S=R+N
S = Total Sales; R = Replacement Demand and
N = New Owner Demand

In my opinion, Survey of customer’s Buying Plans method would be the

best suited sales forecast strategy for a startup as all other methods involve past
or historical figures or opinions, but this method focuses mainly on opinion of the
buyers who can/will be a part of the target crowd involved in the sales for the
company. Past records or the opinions are not available for a startup and sales
forecasting based on these factors cannot be done, or if done, it will not be
factual.

Answer 3A

The process of influencing others to buy may be viewed from five different
angles based on different theories as below:

1. AIDAS Theory of selling : AIDAS is an abbreviation which stands for

Attention, Interest, Desire, Action and Satisfaction. Or in other words, it is
a process which flows as Attention getting, Interest Creating, Desire
stimulating, Action inducing, Satisfaction. It is more of seller oriented
theory which leads to sales without knowing the buyer’s desire at times. It
is most common theory of selling.
2. “Right set of Circumstances” Theory of selling : The major emphasis
of the theory is that a particular circumstance prevailing in a given selling
situation will cause the prospect to respond in a predictable way. The set
 of circumstances can be both internal and external to the prospect. This is
essentially a seller-oriented theory and it stresses that the salesman must
control the situation in such a way as to produce a sale at the end as the
main motive. It is also called the “situation-response” theory.
3. “Buying Fomula” Theory of selling : The buyer’s needs or problems
receive major attention, and the salesperson’s role is to help the buyer to
find solutions. This theory is a buyer-oriented theory. The theory is based
on the fact that there is a need or a problem for which a solution must be
found which would lead to purchase decision, as shown below:

4. “Behavioral Equation” Theory : This theory is a sophisticated version

of the “right set of circumstances”. This theory explains buying behaviour
in terms of purchasing decision process, viewed as a phase of the learning
process, four essential elements of learning processes included in the
stimulus response model are drive, cues, response and reinforcement. It is
a theory which emphasizes buyer’s decision process but also takes into
account the salespersons’ influence process.
5. SPIN Selling : It is a theory where the sales person organise sales calls
with the aid of questions from four categories namely situation, problem,
implication and need-payoff. This theory enables a salesperson to acquire
deeper understanding of the needs of their customers and also build a
case for providing effective solutions to specific problems or issues.

In my opinion, SPIN selling can be an effective solution in terms of theory of

selling for the caselet given. SPIN selling will enable the salesperson to check
what are the issues faced by the customers and thereby plot their selling
strategy keeping in view the points where customers have issued with the
existing brands or products. It will be a kind of survey to plot a strategy based n
feedback from the customers themselves and providing the product USPs of
WIPRO along with its brand name owing to the goodwill and product sales for
new product line of laptops.

Answer 3B

Top-down methodology refers to the setting up of budgets within the constraints

as set by the senior leadership of an organisation. It is the executive
management and senior management who set high value budgets for a
particular objective of the company.

In, Bottom-up methodology, departments create their budget estimates and

send it to the senior leadership for approval. It is also called as participative
budgeting as managers of each department provide their own department
estimates and help in creating overall budget in this way. Companies use
bottom-up budgeting for ensuring that there should not be any department
which is left without a budget, or less budget as per their needs and wants for
the operation to be performed by them in the organisation.

Looking at WIPRO laptop division, being a new entrant in the market, bottom-up
methodology is best suited. Bottom-up methodology will ensure that each
department receives adequate budget allocation as per their needs and wants.
This will in turn can save much of the budget as their will be budget allocation as
per the needs of each department rather than the top-down approach where
high-level budget allocation is done at senior leadership level itself.