ORGANIZING THE SALES FORCE CHAPTER - 5 ORGANIZING THE SALES FORCE

THE PURPOSE OF ORGANIZATION To facilitate the achievement of marketing and sales objectives and goals by – Responding to market needs - shorten the time flexibility openness to change Arranging activities efficiently - specialization routinization Establishing channels of communication

National Sales Manager TYPES OF ORGANIZATION LINE ORGANIZATION VP, Marketing National Sales Manager Sales Manager Sales Manager District 1 Manager District 2 Manager District 1 Manager District 2 Manager Branch Manager Branch Manager Branch Manager Branch Manager Salespeople Salespeople Salespeople Salespeople

TYPES OF ORGANIZATION STAFF ORGANIZATION VP, Marketing Director of Marketing Research Sales Manager Director of Sales Training Technical Manager District Manager Salespeople Staff Line

TYPES OF ORGANIZATION FUNCTIONAL ORGANIZATION VP, Marketing Sales Manager Director of Sales Training District Manager Technical Service Manager Sales force

TYPES OF ORGANIZATION WITHIN THE SALES DEPARTMENT GEOGRAPHIC ORGANIZATION Appropriate when: Customers are widely dispersed Customers are located in similar industries near each other Regional differences in customer behavior are great Personal relationships are important Geographic markets are large enough

TYPES OF ORGANIZATION WITHIN THE SALES DEPARTMENT GEOGRAPHIC ORGANIZATION Advantages Decentralization Flexibility Disadvantages Overhead costs of management Problems in coordinating total company sales efforts Lack of functional specialists

TYPES OF ORGANIZATION WITHIN THE SALES DEPARTMENT PRODUCT-ORIENTED ORGANIZATION Appropriate when: Product complexities and differences are great The marketing programs need to be coordinated at the customers’ level Product introductions are frequent There are large differences in locations of products on life cycles Products are sufficiently important to justify special attention

TYPES OF ORGANIZATION WITHIN THE SALES DEPARTMENT PRODUCT-ORIENTED ORGANIZATION Variations of product-oriented organizations: Product divisions Product marketing groups Product specialization within certain functions Product managers

TYPES OF ORGANIZATION WITHIN THE SALES DEPARTMENT PRODUCT-ORIENTED ORGANIZATION Advantages Increases sales force knowledge of company products Provide expertise in helping customer problems Disadvantages Additional expense Possible irritation of customers

TYPES OF ORGANIZATION WITHIN THE SALES DEPARTMENT FUNCTION-ORIENTED ORGANIZATION Appropriate when: Activities require special expertise Products are few in number and similar Functions are sufficiently important to justify special attention

TYPES OF ORGANIZATION WITHIN THE SALES DEPARTMENT MARKET-ORIENTED ORGANIZATION Appropriate when: Customer needs and products purchased vary greatly from one industry to another It is important to avoid confusion and duplication of effort in serving customers Customer groups are large enough to justify special attention There is a substantial need to identify and solve customer problem

TYPES OF ORGANIZATION WITHIN THE SALES DEPARTMENT MARKET-ORIENTED ORGANIZATION Sales department in many companies are usualyy classified by – Organization by industry Organization by channel of distribution Organization by national or key accounts

TYPES OF ORGANIZATION WITHIN THE SALES DEPARTMENT MARKET-ORIENTED ORGANIZATION Advantages Overcome the limitations of product structure in satisfying customer groups Disadvantages Expensive overlapping of territorial sales coverage Added layer of management and increased compensation for salespeople

CONSTRUCTING A SOUND SALES ORGANIZATION A market-oriented approach An approach designed around sales activities Defined areas of authority and responsibility A reasonable span of control Flexibility Coordination and balance

QUALITY OF THE SALES ORGANIZATION Be sure that authority equals responsibility Put salespeople where they fit best Be willing to delegate Be more than just an efficiency expert Hold sales force personnel accountable for what they do Be flexible Know what needs to be done Organize the sales force so that unequal workloads are avoided