Sales quota plans: Mechanisms for adaptive learning

Murali K. Mantrala; Kalyan Raman; Ramarao Desiraju

doi:10.1023/A:1007943127984

Sales quota plans: Mechanisms for adaptive learning

Murali K. Mantrala^*, Kalyan Raman, Ramarao Desiraju

^*Corresponding author for this work

Integrated Marketing Communications

Research output: Contribution to journal › Article › peer-review

27 Scopus citations

Abstract

A vexing problem in managing sales forces occurs when the sales manager does not know the characteristics of a sales territory. In this paper we show how sales quota-bonus plans can be optimally used to learn about unknown territory characteristics over a multiperiod horizon. We demonstrate this process in two scenarios - one in which the sales manager and the rep are symmetrically informed about the territory characteristics, and the other in which the rep is better informed than the manager. Overall our analysis underscores the importance of Bayesian techniques in sales force management.

Original language	English (US)
Pages (from-to)	393-405
Number of pages	13
Journal	Marketing Letters
Volume	8
Issue number	4
DOIs	https://doi.org/10.1023/A:1007943127984
State	Published - 1997

Keywords

Adaptive control
Bayesian learning-by-doing
Sales force management
Sales quota-bonus plans
Sales response uncertainty

ASJC Scopus subject areas

Business and International Management
Economics and Econometrics
Marketing

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10.1023/A:1007943127984

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abstract = "A vexing problem in managing sales forces occurs when the sales manager does not know the characteristics of a sales territory. In this paper we show how sales quota-bonus plans can be optimally used to learn about unknown territory characteristics over a multiperiod horizon. We demonstrate this process in two scenarios - one in which the sales manager and the rep are symmetrically informed about the territory characteristics, and the other in which the rep is better informed than the manager. Overall our analysis underscores the importance of Bayesian techniques in sales force management.",

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N2 - A vexing problem in managing sales forces occurs when the sales manager does not know the characteristics of a sales territory. In this paper we show how sales quota-bonus plans can be optimally used to learn about unknown territory characteristics over a multiperiod horizon. We demonstrate this process in two scenarios - one in which the sales manager and the rep are symmetrically informed about the territory characteristics, and the other in which the rep is better informed than the manager. Overall our analysis underscores the importance of Bayesian techniques in sales force management.

AB - A vexing problem in managing sales forces occurs when the sales manager does not know the characteristics of a sales territory. In this paper we show how sales quota-bonus plans can be optimally used to learn about unknown territory characteristics over a multiperiod horizon. We demonstrate this process in two scenarios - one in which the sales manager and the rep are symmetrically informed about the territory characteristics, and the other in which the rep is better informed than the manager. Overall our analysis underscores the importance of Bayesian techniques in sales force management.

KW - Adaptive control

KW - Bayesian learning-by-doing

KW - Sales force management

KW - Sales quota-bonus plans

KW - Sales response uncertainty

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Sales quota plans: Mechanisms for adaptive learning

Abstract

Keywords

ASJC Scopus subject areas

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