Sales Organization

Arunlal.A.H Bhaskar.K

Topics
Sales organization, objectives, setting up of a sales organization and types of sales organization structure.

Sales organization
Introduction Sales Organization
Sales Organization is a department of the organization for the purpose of directing, coordinating and controlling the sales. A sales organization is responsible for distributing goods and services. Therefore it is also liable for the sold products and responsible for a customers rights of recourse.

sales organization structure

A sales organization structure evolved in such a way that sales people and sales manager carry out their activity effectively and efficiently. It gives a blue print that what activity is performed by which person.

Functions of Sales Organisation

The functions of sales organisation can be classified as follows 1. Planning functions a. Sales forecasting b. Sales budgeting c. Selling policy Administrative functions a. Selecting salesmen

2.

3.

b. Training salesmen c. Control of salesmen d. Remuneration of salesmen Executive functions a. Sales promotion b. Selling routineexecution of customers orders.

Sales organization
The basic concept include are following:

Centralisation Specialization Co-ordination Control

Objectives of sales organization

Defines lines or authority Ensures that all necessary activities are assigned and Performed Establishes lines or communication Provides for coordination and balance Provides Insight into avenues or advancement Economises on executive time

Setting up a Sales Organization

There are five major steps in setting up a sales organization 1. Defining the objective Set both quantitative as well as qualitative objectives Qualitative objectives are indispensable for long-range planning, thus, kept in mind in short range planning also Quantitative objectives are required as operating guideposts 2. Delineating the necessary activities Determining the necessary activities & their volume of performance is based on qualitative & quantitative objectives Also helps in determining which activities to be performed in what volume

Setting up a Sales Organization CONTD

3.

Grouping activities into jobs or positions

activities identified are allocated to different positions activities are grouped so that closely related tasks are assigned to same positions each position must also contain some variations

4.

Assigning personal to positions

whether to recruit special individuals to fill the positions or to modify the positions to fit the capabilities of available persons

5.

Providing for coordination and control

sales executives require means to subordinates & to coordinate their efforts

control

their

they should not be overburdened nor should have too many subordinates

Setting up a Sales Organization CONTD Factors determining the structure of Sales Organization
1. 2. 3. Price of Product Nature of Product Nature of Market

4.
5. 6. 7. 8. 9.

Size of the enterprise

Ability of the Executives Sales Policies of the Enterprise Distribution System Finance Number of Products

Setting up a Sales Organization CONTD

(1) Begin with a historical profile of the companys culture, overall organisation and top-management philosophy of the firm.
(ii) Analyse the requirements of the company in terms of its: size, position in the market, product mix, customers, competition, and sales-people and their ambitions.

Setting up a Sales Organization CONTD

(iii) Appraise the potential of the company, in terms of its impact on the financial, technical, scientific and human resources, existing currently. (iv) Analyse the prevailing workingatmosphere and state of communications,.

Setting up a Sales Organization CONTD

(v) List the various administrative-details, connected with the company. (vi) Prepare a note, relating to the various administrative-details including aspects like hierarchy, span of control, etc. on the salesdepartment, and overall organisation of the department.

Setting up a Sales Organization CONTD

(vii) Describe the procedures and Processes to be followed for executing various tasks.

Developing a Sales Organisation

Sales organisation development refers to the formal, coordinating process of communication, authority and responsibility for sales groups and individuals. A sales manager must recognise and deal with some basic problems

faced by organisations, when developing his own sales organisation.

The five major issues are: 1. 2. 3. 4. 5. Formal and informal organisations Horizontal and vertical organisations Centralised and decentralised organisations The line and staff components of organisations The size of the company.

Sales Organisation structures

The following are the important field sales Organisations: 1. 2. 3. 4. 5. 6. Geographic sales specialisation organisation Product-based sales specialisation organisation Customer-based specialisation organisation Activity/function-based specialisation Hybrid sales organisation Team-based organisation.

Sales Organization Concepts

Specialization
The degree to which individuals perform some of the required tasks to the exclusion of others. Individuals can become experts on certain tasks, leading to better performance for the entire organization.

Centralization
The degree two which important decisions and tasks performed at higher levels in the management hierarchy. Centralized structures place authority and responsibility at higher management levels.

Span of Control vs. Management Levels

Flat Sales Organization
National Sales Manager

Management Levels

District Sales Manager

District Sales Manager

District Sales Manager

District Sales Manager

District Sales Manager

Span of Control

Span of Control vs. Management Levels

Tall Sales Organization
National Sales Manager

Management Levels

Regional Sales Manager

Regional Sales Manager

District Sales Manager

District Sales Manager

District Sales Manager

District Sales Manager

District Sales Manager

District Sales Manage r

Span of Control

Line vs. Staff Positions

National Sales Manager Sales Training Manager Regional Sales Managers Sales Training Manager District Sales Managers

Staff Position
Salespeople Line Position

Selling-Situation Factors and Organizational Structure

Organizational Structure Environmental Characteristics
High Envir. uncertainty

Task Performance Performance Objective

Specialization

Nonroutine

Adaptiveness

Centralization

Low Envir. Uncertainty

Repetitive

Effectiveness

Customer and Product Determinants of Sales Force Specialization

Customer Needs Different
MarketDriven Specialization GeographyDriven Specialization Product/MarketDriven Specialization ProductDriven Specialization

Simple Product Offering

Complex Range of Products

Customer Needs Similar

Geographic Sales Organization

National Sales Manager
Sales Training Manager

Eastern Region Sales Manager

Western Region Sales Manager

Zone Sales Managers (4)

Zone Sales Managers (4)

District Sales Managers (20)

District Sales Managers (20)

Salespeople (100)

Salespeople (100)

Product Sales Organization

National Sales Manager

Office Equipment Sales Manager

Office Supplies Sales Manager

District Sales Managers (10)

District Sales Managers (10)

Salespeople (100)

Salespeople (100)

Market Sales Organization

National Sales Manager
Commercial Accounts Sales Manager Sales Training Manager Zone Sales Managers (4) District Sales Managers (25) Salespeople (150) District Sales Managers (5) Salespeople (50) Government Accounts Sales Manager

Functional Sales Organization

National Sales Manager

Field Sales Manager Regional Sales Managers (4) District Sales Managers (16) Salespeople (160)

Telemarketing Sales Manager District Sales Managers (2) Salespeople (40)

Comparison of Sales Organisation Structures

Organisational Structure Advantages Low Cost No geographic duplication No customer duplication Fewer management levels Disadvantages Limited specialization Lack of management control over product or customer emphasis

Geographic

Product

Salespeople become experts High cost in product attr. & applications Geographic duplication Management control over Customer duplication selling effort

Comparison of Sales Organization Structures

Organizational Structure Advantages Salespeople develop better understanding of unique customer needs Management control over selling allocated to different markets Disadvantages

Market

High cost Geographic duplication

Functional

Efficiency in performing selling activities

Geographic duplication Customer duplication Need for coordination

Hybrid Sales Organization Structure

National Sales Manager

Commercial Accounts Sales Manager

Government Accounts Sales Manager

Major Accounts Sales Manager

Regular Accounts Sales Manager

Office Equipment Sales Manager

Office Supplies Sales Manager

Field Sales Manager

Telemarketing Sales Manager

Western Sales Manager

Eastern Sales Manager

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