CHAPTER 4

THE MARKET-DRIVEN SALES

ORGANIZATION

Copyright 2001 by Harcourt, Inc. All rights reserved.

LEARNING OBJECTIVES
A sales force is a complex selling unit of the firm. Its organizational
design and structure are built around its customers and markets.
After studying this chapter, you should be able to explain:

The type of markets in which salespeople work.

The major job activities of salespeople.
The various types of sales jobs.
Why sales jobs are designed for an individual organizations
markets and customers.
The various types of sales force organizational structures.
Newer forms of organizations.
How coordination and technology improve customer service.
Copyright 2001 by Harcourt, Inc. All rights reserved.

FACTORS INFLUENCING
ORGANIZATIONAL DESIGN AND
STRUCTURE
Examine customers in each market.
Determine the types of sales jobs needed to
serve a market.
Note the job activities salespeople must do.
Design sales jobs around customers.
Set up the sales force organizational
structure, which includes the various sales
jobs and geographic territories.
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FIGURE 4.1 THE RELATIONSHIPS AMONG MARKETS, JOBS, AND ACTIVITIES

INFLUENCE SALES JOB DESIGN AND ORGANIZTATIONAL STRUCTURE

P er f o r m a n ce
C u sto m er s
a n d M a r k et s

T y p es
of Jobs

R eq u ir ed
J o b A ct i v i t i es

D esign
th e J o b

Q u a lity o f
W o r k L ife

Copyright 2001 by Harcourt, Inc. All rights reserved.

E sta b lish S a les

O r ga n iz a tio n a l
S t r u ct u r e

MARKETING AND MARKETS

Marketing is the process of planning and
executing the conception, pricing,
promotions, and distribution of ideas,
goods, and services to create exchanges
that satisfy individual and organizational
objectives.

Copyright 2001 by Harcourt, Inc. All rights reserved.

SALESPEOPLE WORK IN TWO MARKETS

Consumer
Business

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SALES JOBS ARE VARIED AND

CAN BE CLASSIFIED
Seven major categories:
Category One inside order taker.
Category Two deliverer.
Category Three an order taker but also works in
the field.
Category Four is not expected or permitted to
take an order but is asked only to build goodwill
or to educate the actual or potential customer.
Copyright 2001 by Harcourt, Inc. All rights reserved.

Seven major categories:

Continued

Category Five major emphasis is placed on

technical knowledge.
Category Six demands the creative
(specialty) sale of tangibles.
Category Seven requires the creative sale
of intangibles.

Copyright 2001 by Harcourt, Inc. All rights reserved.

APPLICATIONS OF THE SALES JOB

CLASSIFICATIONS
Order takers wait for the customer to order.
The main problem with order takers is that they create
only one distinction in the customers mind: price.

Order getters obtain, retain, and increase

business with customers.
This salesperson must often create discontent with what
the prospect already has and has to overcome the most
powerful and obstinate resistance.
Copyright 2001 by Harcourt, Inc. All rights reserved.

Order getters build relationships.

They develop relationships with customers.
They listen more than talk.
Their sales calls are more productive.
They have an objective in mind.
They evaluate and respond to the
customers changing needs.

Copyright 2001 by Harcourt, Inc. All rights reserved.

TRUE SALESPEOPLE ARE HARD TO FIND

People with the prerequisite traits and

attributes for success in creative sales are
rare.
Often, 100 to 150 or even more applicants
must be interviewed to find one qualified
candidate.
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THE SALESPERSONS JOB

ACTIVITIES AS A TERRITORIAL
MANAGER
1. Provides solutions to customers problems.
2. Provides services to customers.
3. Sells to current and new customers.
4. Helps customers resell products to their customers.
5. Helps customers use products after purchase.
6. Builds goodwill with customers.
7. Provides company with market information.
Copyright 2001 by Harcourt, Inc. All rights reserved.

SALES ORGANIZATIONAL DESIGN

Organizational design refers to the formal,
coordinated process of communication, authority,
and responsibility for sales groups and
individuals.

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PURPOSES AND IMPORTANCE OF JOB

DESIGN
Content
Qualifications required to perform
Returns and rewards for performance

Copyright 2001 by Harcourt, Inc. All rights reserved.

SALES ORGANIZATIONAL
STRUCTURE
Organizational structure is the relatively
fixed, formally defined relationship
among jobs within the firm.

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THE LINE ORGANIZATION

In the pure line organization, the chief
executive usually the president does
the decision making for the firm. The
president has complete authority.

Copyright 2001 by Harcourt, Inc. All rights reserved.

FIGURE 4.2 COMPUTE CORPORATIONS LINE ORGANIZATION

L ew i s S t o n e r
P r es i d en t - O w n er
J a k e P r es t o n
V i ce P r es i d en t o f S a l es

T w o S a l es p eo p l e

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SPECIALIZED DESIGN
Functional organizational design is the
grouping of work according to its
characteristics.

Copyright 2001 by Harcourt, Inc. All rights reserved.

FIGURE 4.3 ALARM SYSTEM CORPORATIONS FUNCTIONAL ORGANIZATIONAL

DESIGN

L in e

Joh n A b b ott
V i ce P r es i d en t o f M a r k e t i n g

S ta f
J o h n F r i ed m a n
A d v er t i s i n g / P r o m o t i o n
M a n a g er

C h a r l es T h o m p s o n
S a l es M a n a g er

T en S a l es p eo p l e

Copyright 2001 by Harcourt, Inc. All rights reserved.

P et e L i k e r t
M a r k et R es e a r ch
M a n a g er

Staff Positions with Line Authority

Line authority means that people in management
positions have formal authority to direct and
control immediate subordinates.
Staff authority is narrower and includes the right
to advise, recommend, and counsel in the staff
specialists areas of expertise.

Copyright 2001 by Harcourt, Inc. All rights reserved.

Geographic Specialization
Many large corporations are organized by
geographic territory. This type of organization is
generally used by companies with more than
strictly local distribution of their products.

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FIGURE 4.4 TEXTRON CHEMICAL CORPORATION GEOGRAPIC SPECIALIZATION

M a n a g e r ia l
L evel

V ic e P r e s i d e n t
o f M a r k e tin g
N a tio n a l S a le s
M an ager

O p e r a t in g
L evel
E a s t e r n D iv i s io n a l
S a le s M a n a g e r

C e n t r a l D iv i s i o n a l
S a le s M a n a g e r

7 R e g io n a l S a l e s
M an ag ersA

6 R e g io n a l S a le s
M an ag ersA

W e s t e r n D iv i s i o n a l
S a le s M a n a g e r
5 R e g io n a l S a le s
M an ag ers A

3 5 D is t r i c t S a le s
M an ag ers B

3 0 D is t r i c t S a le s
B
M an ag e rs

2 5 D is t r i c t S a le s
M an ag ers B

2 4 0 S a le s p e o p le C

2 4 0 S a le s p e o p le C

2 0 0 S a le s p e o p le

Copyright 2001 by Harcourt, Inc. All rights reserved.

Product Specialization
Another common type of organization in large
companies is based on the firms product. The
entire company may be organized by product,
with separate sales, advertising, marketing, and so
on, along with staffs for each, or some functional
units may remain centralized.

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Customer Specialization
Companies with several separate and distinct
markets accounting for major portions of their
sales often organize based on these markets or
customers.

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Combination of Design Elements

Many companies organize on the basis of some
combination of functional, geographic, product,
or customer design.

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FIGURE 4.5 MULTIPLE DESIGN FACTORS

P r e s id e n t
F u n c t io n a l

V ic e P r e s id e n t
P ro d u c tio n

G e o g ra p h ic

U .S .
M a r k e t in g
M an ag er

C u sto m e r

P ro d u c t

V ic e P r e s id e n t
M a r k e t in g

C o n su m er
G oods
M an ag ers

S o ap P ro d u c ts
D i v is i o n a l
M an ager

E aste rn
S a le s
D i v is i o n

I n te r n a tio n a l
M a r k e t in g
M an ager

I n d u s t r ia l
G oods
M an ag ers

P a p e r P ro d u c ts
D iv is io n a l
M an ag er

C e n tral
S a le s
D iv is io n

V ic e P r e s id e n t
E n g in e e r in g

F o o d P ro d u c ts
D iv is io n a l
M an ager

I n t e r n a t io n a l
S a le s
M an ag er

E u ro p ean
D iv is io n

W estern
S a le s
D iv is io n

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L a tin
A m e ric a n
D iv is io n

A s ia n a n d
A f r ic a n
D iv is io n

ORGANIZING FOR SELLING TO MAJOR

CUSTOMERS
Companies use four basic organizational
methods.
1. A separate division to deal with major
accounts.
2. Select members of the current sales
force.
3. Sales managers.
4. A combination of 1, 2, and 3.
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NEW FORMS OF ORGANIZATIONS

STRATEGIC ALLIANCES
A strategic alliance is a formal relationship created with
the purpose of joint pursuit of mutual goals.

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FIGURE 4.6 CROSS-FUNCTIONAL SELLING TEAM

C u sto m e r

S a le s

M a r k e t in g

T e c h n ic a l
Su p p o rt

S u p p li e r S e ll i n g T e a m

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M a n u f a c t u r in g

TEAM-BASED ORGANIZATIONS
Many organizations are more responsive to their
environment because they use work teams as their
basic building blocks.

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COORDINATION AND TECHNOLOGY

Coordination refers to the quality of collaboration
across groups.

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INTERNATIONAL COORDINATION
The most important methods for achieving
coordination are information systems, task forces
and teams, and integrating managers.

Copyright 2001 by Harcourt, Inc. All rights reserved.

THE BOTTOM LINE

Markets, job types, and job activities influence the design
of the various sales jobs and, consequently, even the
structure of the sales organization.
Sales activities are very diverse and easier to understand
if classified in one of seven categories.
A salespersons job activities involve much more than
person-to-person selling.
Companies can structure their organizations in numerous
ways.

Copyright 2001 by Harcourt, Inc. All rights reserved.