3. What type of sales quota did Rajiv use? Did he set the appropriate quota level? Why or why not? Lasting Impressions is a small Orlando, Florida, company that provides trade-show marketing solutions to customers of all sizes. The company offers to design a plan for trade-show exhibiting from start to finish, including developing a pre- and postevent marketing plan and branding strategy, creating the exhibit booth and corresponding collateral support materials, packaging and shipping all trade-show materials, and providing boothmanship training services.

Founded by CEO Rajiv Dembla in 1996, the company focuses its own sales efforts on customers within the state of Florida and has a team of four account executives—Mary Beth, Suzanne, Franco, and Syl—who act as the salespeople for the organization. Rajiv_relies on the same territory design that he has for the past several years, in which he divides the state geographically into four equal-size regions, and the account Beenie are responsible for the cities within their respective region.

Rajiv is not an especially quantitative manager by nature, but he did acknowledge the need to do a sales forecast for the upcoming 2013-14 fiscal year. He used the sales force composite method by asking his account executives how much each expected to sell during the coming year and then totaling those estimates. This type of method has worked for the company in the past, but Rajiv is concerned that Syl acts in the spirit of the marketing adage “underpromise and overdeliver” by intentionally underestimating his sales expectations so that his quota will be lower. To be safe, Rajiv also determined the sales forecast by taking a moving average of the previous four years of sales (see Table FY 2013-14 Forecasted Sales and Quotas).

Based on an average of these two sales forecasts, Rajiv set out to develop the yearly sales quota for each of his account executives. As he usually did, he kept the quota as simple as possible by basing it on gross dollars brought into the firm from sales, and he made it equal for each account executive. To ensure that his sales team is aggressive, he set the quotas slightly higher than the forecasted sales. As further motivation, Rajiv put 25 percent of each account executive’s compensation in the form of a bonus for meeting or beating sales volume quotas.