Journal article
Sales contests versus quotas with imbalanced territories
Marketing letters, Vol.24(3), pp.229-244
09/01/2013
DOI: 10.1007/s11002-012-9211-4
Abstract
This paper studies the consequences of sales contests versus quota systems when territories have imbalanced sales potential. How do the optimal sales, efforts of salespeople, and profits vary with territory imbalance in a sales contest and how do these change if compensation is based upon quotas? Our major result is that territory imbalance has a differential effect: it hurts a contest more than a quota. In a sales contest, the salesperson in the stronger territory only need to mimic the effort of the salesperson in the other territory to maximize compensation, but this implies that the salesperson in the weaker territory will shirk relative to a quota system. Handicapping the contest to correct for territory imbalance overcomes its disadvantage vis-A -vis the quota plan, but this is seldom incorporated into sales contests.
Details
- Title: Subtitle
- Sales contests versus quotas with imbalanced territories
- Creators
- Niladri B. Syam - University of HoustonJames D. Hess - University of HoustonYing Yang - University of Houston
- Resource Type
- Journal article
- Publication Details
- Marketing letters, Vol.24(3), pp.229-244
- Publisher
- Springer Nature
- DOI
- 10.1007/s11002-012-9211-4
- ISSN
- 0923-0645
- eISSN
- 1573-059X
- Number of pages
- 16
- Language
- English
- Date published
- 09/01/2013
- Academic Unit
- Marketing
- Record Identifier
- 9984380437202771
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