Sales & Distribution

Management
IIFT MBA (IB) 2020
Elective

Session 2 The Sales Organization

Dr. Jones Mathew, PhD

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 Recap of our 1st session
• Evolution of Personal selling – Persuasion  Negotiation Consulting--> Business Management 
Partnership Strategies  Tech-assisted Sales
• Salesperson’s role – Warrior? Consultant? Both?
• Salesperson vs professional salesperson
• Personal selling strategies (10 qualities of a B2B seller)
• Nature & role of Sales Management: Revenue generation Brand building
• Sales Manager’s expected expertise areas: financial, people, planning & execution, marketing
• Types of Personal Selling – industrial/retail/services
• Differences between selling & marketing
• Sales Management Process: V/M/G/O  Formulation of strategic sales management programme
Implementation Evaluation
• Emerging trends in sales management experiential sales/global & ethical issues/new selling
methods
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Sales Organization

Session 2
 Learning Objectives

• Understand the nature of a sales organization

• Discuss the factors affecting the changes and its design
• Recognize the principles of a sales organization
• Understand the different types of sales organization designs
• Analyze the factors leading to the emergence of a modern organizational
design
• Explain the concept of total quality management
• Calculate the sales force required for a sales organization

4
Sales Organization

5
Marketing & Sales Organization

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Product Based Sales Organization

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Geography Based Sales Organization

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Customer Segment Based Sales Organization

• Passenger vehicle • Commercial vehicle

manufacturers have different
sales strategies for:
• Online customer sales
• Offline retail customer sales
• Special sales through CSD
manufacturers have different
sales strategies for:
• Government
• Military & defence
• Commercial fleet companies

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Determinants of a Sales Organization

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Matrix Organization Structure

Matrix management is
an organizational
structure in which some
individuals report to
more than one
supervisor or leader,
relationships described
as solid line or dotted
line reporting.

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https://blog.hubspot.com/sales/pros-and-cons-s
ales-organizational-designs-chart

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 Sales Organization

• An organization of individuals either working together for the marketing of

products and services manufactured by an enterprise or for products that are
procured by the firm for the purpose of reselling.
• A sales organization defines duties, roles, rights, and responsibilities of sales
people engaged in selling activities meant for the effective execution of the
sales function.
• A structural body through which the functions of sales management are
carried out.
• A sales organization always makes efforts to increase sales at the lowest
possible costs, thereby achieving the principle of profit maximization, which
contributes to the overall growth of enterprise.
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 Factors Influencing Structure

• Product and service related factors

• Organization related factors
• Marketing mix related factors
• External factors:
 the speed of market change
 reduction in the number of vendors per buyer
 closer to customer relationships
 changes in regulations and international practices

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Structural Change in a Sales Organization

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 Organizational Principles

• Span of control (number of subordinates/tasks for effective management)

• Unity of command (one subordinate-one boss)
• Hierarchy of authority (Chain of command)
• Stability and continuity (not subject to changes often)
• Coordination and integration (cohesion among silos – different
functions/subgroups)
• Homogeneity (intra group similarity- small office equipment vs large)
• Objectivity (fact based categorization – geography/product/mkt segment)
• Specialization (subject matter based expertise – radiography equipment)

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 Organizational Design - Objectives

• Formal and coordinated task accomplishment

• Assigning territories equitably
• Establishing flows of communication and responsibilities of sales groups and individuals
While line authority relies on command, line and staff authority is based on command and advise. ... On the other
hand, in line and staff organization, the staff executives are specialists who support and advise the line managers in
the accomplishment of organization's objectives.

Line Sales Organization Line & Staff Sales Organization

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 Sales Organization

• Key account sales

 focus on CRM
 customer profitability and value analysis
 the few accounts give incremental returns
 national accounts

• Sales process automation

 EDI – Electronic Data Exchange
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 The K.A.M. Manager
• Key Account Management (KAM) defines the relationship between the business and the
consumers. The KAM is tasked with defining the individual approach of the sales personnel to
specific consumers in order to create strong and lasting relationships.
• The main objective of the Key Account Manager is to manage a group of important
consumers (Key Accounts) in order to achieve designated sales targets through the
implementation of appropriate and unique strategies for these key accounts.
• The Key Account Manager maintains and expands relationships with important clients and
will work closely with various business departments in order to maintain and further develop
the relationships with the key accounts. The Key Account Manager is responsible for the
achievement of sales quota and is assigned key objectives/metrics relevant to key accounts.
• The Key Accounts Manager represents the entire range of company solutions to the assigned
consumers. He leads the consumer’s account planning cycle and ensures that the client’s
needs and expectations are met by the business.

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 Newer Organizational Designs

• Agency (a commission agent who sells the principals entire offering) and
distribution selling (sell products at a reduced rate to a distributor who in
turn keeps the difference between the original price and the price its
customers pay)
• Shared sales force – Tata and Fiat
• Telemarketing/Video Sales/Whatsapp Sales/Facebook Sales/Instagram
Sales/Contactless Sales –Hero Motocorp
• TQM and team-based selling (B2B sales)

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 Number of Sales People

• Determined by:
territories vary in their demand structure for prospecting
product mix demands
levels and types of prospecting
nature of the customer segments
•Affordability method (based on sales budget)
•Incremental method
•Workload method

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 Thank You!

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