CHAPTER 11 Designing Territories. WHAT IS A TERRITORY? ä ä Number of present and potential customers located within a geographic area and assigned to.

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Presentation transcript:

CHAPTER 11 Designing Territories

WHAT IS A TERRITORY? ä ä Number of present and potential customers located within a geographic area and assigned to a sales person

BENEFITS OF TERRITORIES ä ä Ensures proper market coverage ä ä Improves customer relations ä ä Increases morale and productivity ä ä Control and evaluation ä ä Reduces selling costs

WHEN ARE TERRITORIES UNNECESSARY? ä ä When contacts are infrequent ä ä When a great deal of prospecting is involved

DESIGNING TERRITORIES ä ä The ideal situation: have all districts equal in sales potential and work load

DESIGNING TERRITORIES ä ä Select a control unit for boundaries ä ä Analyze workload ä ä Determine territories based on sales potential and call patterns ä ä Assign people to territories ä ä Establish a coverage plan ä ä Ongoing assessment

CONTROL UNITS ä ä States ä ä Counties and Parishes ä ä Cities and Zip Codes ä ä Metropolitan Statistical Areas ä ä Trading Areas

ANALYZING WORKLOADS ä ä Nature of the job ä ä Nature of the product ä ä Stage of market development ä ä Intensity of market coverage ä ä Competition ä ä Market characteristics

DETERMINE BASIC TERRITORIES ä ä Buildup Method ä ä Breakdown Method

BUILDUP METHOD ä ä Determine number, location, and size of clients ä ä Determine desirable call patterns ä ä Determine number of accounts to assign to each sales person ä ä Draw boundaries

BREAKDOWN METHOD ä ä Determine sales potential ä ä Determine volume expected from each person ä ä Determine number of territories needed ä ä Tentatively establish territories (based on volume) ä ä Modify as required

BREAKDOWN METHOD ä ä EXAMPLE TO DETERMINE NUMBER OF TERRITORIES: If total potential is $20 million and average volume per person is $500,000 then 40 sales reps are required in 40 territories

BREAKDOWN METHOD ä ä EXAMPLE TO DETERMINE TERRITORY VOLUME: With 40 reps, we should establish territories with 2.5% of the company’s total sales potential (100%/40 = 2.5)

USING SOFTWARE ä ä Save time ä ä Costly ä ä Some programs can’t adjust for physical barriers

FROM THE INTERNET... ä ä Software Examples: ä prd002.htm> ä Tactician 4 ä Territory Mapper ä Territory Mapper

ASSIGNING PEOPLE TO TERRITORIES ä ä Match characteristics ä ä Overlapping territories ä ä Personnel issues when revising territories

TERRITORIAL COVERAGE ä ä Routing ä ä Scheduling

ONGOING ASSESSMENT ä ä Sales and costs studies

FROM THE TEXT... ä Read everything from Chapter 11 except “Simulating New Territories” on pages 530 to 531.

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