Territory Design Territory Design Procedures What are triggering events? The Buildup Method -- Six steps (11-1) 1. Select control units Census tracts -- good for dividing cities Counties - convenient and data readily available 2. Choose starting points Salesperson’s home Large customer - cut transportation cost Big city - convenient for services (11-2)

Territory Design Computer Based Territory Designs Computers save time Need location & number of customers & starting points Program options –minimize moment of inertia –Graph data & draw boundaries -- not optimal –design optimal territories -- expensive Applications -- pharmaceutical reps

Territory Design In-Class Exercises Why do companies redesign territories? 2. In this role play, what were the reasons for redesigning territories? 3. What problems are likely to arise when territories are redesigned? 4. Which salespeople are most likely to be resistant to change?

Territory Design In-Class Exercises What mistakes were made in territory realignment? 6. What options are available? 7. Should the company give in to Hughes and not change his territory? 8. What if seven other people in the district come to you asking for the same deal as Hughes? What do you tell them?

Territory Design Territory Design Procedures 3. Determine Allocation Criteria Territory balance -- effect on morale Customer balance - distribute commission Potential balance - share business growth Size balance - reduce transportation costs 4. Combine Adjacent Control Unit (11-3) 5. Compare Sales Territories Mountains, roads, population center locations? 6. Assign people to Sales Territories

Figure 11-1: Territory Design Process 1 Select geographic control units 2 Decide on allocation criteria 3 Choose starting points 4 Combine control units adjacent to starting points 5 Compare territories on allocation criteria 6 Assign salespeople to new territories Events triggering sales terrirtory adjustments Mergers Division consolidation Division split Sales force turnover Plant relocations Product line changes Revise territory boundadries to balance workload and potential

The numbers in ach county are population figures and are a measure of potential. Three Kentucky Sales Territories TENNESSEE VIRGINIA WEST VIRGINIA INDIANA ILLINOIS OHIO Major super highways Territory borders

The numbers in ach county are population figures and are a measure of potential. Three Kentucky Sales Territories TENNESSEE VIRGINIA WEST VIRGINIA INDIANA ILLINOIS OHIO Major super highways Territory borders

Figure 11-4: Dividing a Large Territory

Table 11-2 Geographic Control Units Used in Territory Design CountriesCities States or provincesZip codes CountiesCensus tracts Metropolitan areasCustomers

Table 11-2 Comparing Three Kentucky Sales Territories Potential as Measured by TerritoryPopulationNumber of Counties 1 1,124, ,129, ,131,13743

Sales Territory Mapping Programs VendorPackageDescription Price GeoQuery Corp.GeoQueryInteractive maps for travel planning $295 and territory analysis. Direct links to contact management program. TTG,Inc.STARmanagerTerritory mapping system that integrates $995 sales and marketing data for interactive territory analysis, realignment, and monitory. SammamishGeoSightGeographic informaitno systems for sales $1,850 Data SystemsProfessionalterritory creation and management. Includes address matching. Metron, Inc.TerrAlignOptimal sales territory alignment and $20,000+ analysis. Exclusive OptAlign technology automatically balances territories and decreases driving time.

Territory Design Territory Design Procedures Talley’s Workload Approach –No starting points –Equates work to be done –May lead to imbalance on size (11-4) –Often raises travel costs –Good when reps are on salary –Key: optimal call frequency for particular classes of customers