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Learning Objectives

r List the major tasks of sales organization


r Identify the basic types of sales organization
r Understand the importance of relation with other
departments
r Understand the advantages and disadvantages of
outsourcing a firm¶s sales force
Organization of The Sales Force

Basic Management Function of Arranging


The Firm¶s Sales Activities

7-3
þopyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Tasks of The Sales Organization

1. Maintenance of order in achieving sales force


goals/objectives
2. Assignment of specific tasks and responsibilities
3. Integration and coordination with other elements
of the firm
Tasks of The Sales Organization

r Structure
Division of activities into tasks and the related
coordination
 
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Developing A Sales Organization

1. Formal & informal organization


2. Horizontal & vertical
3. þentralized & decentralized
4. The line and staff components of
the organization
5. The size of the company
Developing A Sales Organization

Formal organization
Management created relationship between
departments and between individuals
þEO
NSM
RSM
ASM
Salesperson
Developing A Sales Organization

Informal organization
þommunication pattern formed from the social
relationship existing with in the formal organization

Salesperson ASM RSM NSM þEO

Manager Marketing distribution Manager NSM Manager Accounts


Developing A Sales Organization

Horizontal Sales Organization


Number of management level is small and number
of manager at particular level is large

þhief Sales Executive


District Sales Manager District Sales Manager District Sales Manager District Sales Manager
Karachi Multan Lahore Islamabad
Developing A Sales Organization

Vertical Sales Organization


Several level of management, all reporting
upward to the next level
þEO
NS
RSM
ASM
FS
SR
Developing A Sales Organization

þentralized
Responsibility and authority are concentrated at
higher level of management
Decentralized -Delegated to l
-Structure is iower levels of management
neffective unless the assignment of
decision making to lower levels of sales
management is accompanied by a complete
authority to carry out the decision.
Assigning responsibility to perform a particular task to sales
supervisors, without any authority
How a Firm¶s Goals Affect the Design
of Its Sales Force

r Organization of sales force is driven by strategic goals


r Organizational sales structures serve a number of
purposes that include

r Serving buyers effectively in ways they want to be


served

r Operating efficiently and effectively as measured by


cost and customer satisfaction

7-13
þopyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
How a Firm¶s Goals Affect the Design
of Its Sales Force

r Best way to design a sales structure is to


r Determine sales activities that must be performed to
reach goals

r þreate sales structure that affords highest levels of


service to buyers at lowest overall cost

r Select, train and manage reps and managers to


become experts in their assigned duties

7-14
þopyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Relations With Other Departments

r Key þoncern of Sales Manager


r Relation with other departments
r All business activities should be coordinated to satisfy
customer need
r Sales department is the key link, so coordinating the sales effort with
other departments is absolutely essential

r Two types of departments sales MUST have good


working relationship
r One, connected with marketing activities, advertising, marketing
research, sales promotion, product management
r Second, those with non marketing functions such as HR,
manufacturing and finance
Relations With Other

Relation with marketing function


r Marketing mix
r Advertising plan/schedule
r Sales department will ensure product availability at all relevant retail
w/s outlets, before TVþ is on.
Relations with non marketing departments
r R&D, sales people are excellent source of new product or product
modification
r R&D ± High tech companies. Sales people need to trained on new
technology
Relations With Other

Relation with production


r Production department¶s concerns are minimizing cost through
standardization, long & continuous production run, long production
lead time
r Sales executive want many types of products, frequent product
changes, customer¶s special order & short production lead time
r Best way is †

Relations with HR
r HR ± Hiring, managing, training & development
r Sales managers ± recruiting, hiring, training, developing & managing
Relation with Finance ± Three major areas
r Budgeting, cost control, credit
Relations With Other

Relation with Finance ± Three major areas


r ß 
- Sales department provides short and long range sales estimates as
the basis of financial planning & budgeting
r þ  
- Accounting specialist can assist sales managers in their efforts to
control costs, by providing data for selling cost analysis
r þ
- þredit plans are major concerns for sales as well as finance. Sales
executive should have input into establishing credit policies. Sales
people can also provide current credit status information
Major Trends in Sales Organizations

r þhanging Trend
r Traditional forms of sales organization have changed their approach
r In search of new and better ways to serve their markets
r For þonsumer goods & service companies, the new approaches
involve product manager form of organization
r Industrial manufacturer are looking closely at strategies that will help
them adapt to change buying behavior and develop more specialized
sales force
r For many companies, the major challenge is change from a
³Product´ To ³þustomer Driven Orientation´
Major Trends in Sales Organizations

r   
r Use of telecommunication technology in personal selling
    
r Approach that bypasses intermediaries to deliver goods and services
directly from seller to buyer
   
r Potential customer contacts the selling company
   
r Selling companies contact the prospect and customers
National Account Management

r A special sales force is dedicated to obtaining & maintaining major


accounts ( 50 to 70% sales)
r A customer that involves several people in the buying process before
a sales takes place
r A customer that purchases in significant volume, both in dollar and
as a %age of supplier¶s total sales
r A customer that desires a long term cooperative working relationship
with company or supplier
r A customer that expects specialized attention and services
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