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Sales territory
Consists of

Sales Territories
Dr.Pusanisa Thechatakerng thesunny@rocketmail.com A number of present and potential customers, located within a given geographical area and assigned to a salesperson, branch, or intermediary

Enhances customer coverage control sales reps activities

Reduces travel time and selling costs

Design Territories
1. Select a control unit for territorial boundaries - 2. Determine location and potential of customers - 3 Determine basic territories (Build up or 3. Break down) 4. Assign salespeople to territories 5. Set up territorial coverage plans for sales force 6. Evaluate the effectiveness of the design 4 on a continuing basis

Benefits of good territory Increases morale good territory design results in productive sales person who are being evaluated & rewarded in a fair 3 manner

Provides more equitable/fair rewards to sales reps, Aids evaluation of sales force

1. Determine basic control unit for Territorial Boundaries


Region N, S Zip-code area

2. Determine location & potential of customer


Location - from each selected control unit Prospective customers identified with the aid company sales reps & outside source
Trade T d directories di t i Subscription lists from trade journals Classified telephone directories

province

Sales territory Control unit

City

Metropolitan statistical area


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3. Determine basic Territories


Buildup method
Combine small geographical areas based on the number of calls a salesperson is expected to make Suited for manufacturers of consumer products or companies that want intensive distribution

Buildup method of territorial design


Management must determine Workload capacity
Total calls p possible per rep per year = number of daily calls x days selling

Design call patterns


Call frequency per account per year

Total calls needed in each control group

Breakdown method
Approximately equal segments based on sales potential More popular among manufacturers of industrial products that want selective 7 distribution

Tentatively/probation set territorial Boundary lines by combining


Control units until total calls Needed = total calls possible

Modify territory as needed


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Example of call frequency for different customer classes


Metropolitan Area X Metropolitan Area Y No.of Calls Per Year 120 180 360 660
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Breakdown method of territory design


For firms that want exclusive/mono distribution or that sell some type of industrial products

Management must determine: Sales volume expected from each salesperson

Company sales potential Sales potential in each control unit Territorial Modification as needed
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Customer Call Class Frequency A B C 2 per month 1 per month 1 every 2 ms

No. of No.of oo Calls per No.of Year Accounts Accounts 10 25 15 50 240 300 90 630 5 15 60 80

Tentatively/probation set territorial boundary lines by combining control units until total sales potential = expected sales volume

4. Assigning Salespeople to Territories


Reps differ in selling effectiveness and
Experience, age, physical condition, creativity, selling skills

5. Revising Sales Territories


Indications of need for adjustment
Territorial potential Increased during the time Selling task changes demanding more value-added value added services Territories are too small

Sales rep may succeed in one territory & fail in another Sales performance also may be influenced by differences in local customs religion, and ethnic background
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Routing the sales force (I)


1. Straight line pattern (A) 1. Straight line pattern (B)

Base Area A X Area B Area C


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Routing the sales force (II)


2.

Routing the sales force (III)


3.

(2) (1) (5)

(3)

(4)

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Case
Sales people normally are prohibited from going outside their territorial boundaries in search of business. Sometimes, however, a customer located in one district will voluntarily seek out a sales rep or branch office located in another district. Perhaps this customer can realize a price advantage by buying outside his or home area area.
What should be the position of the seller in these situations? Should it rejects such business? Why? Should it insists the order be placed in the territory where the customer is located? Why? If the order is placed in the foreign territory, should the salesperson in the customers home territory be given any commission or other credit? Why?
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