CHAPTER EIGHT Organization

ORGANIZATION IS IMPORTANT! l Organizational structure has a direct bearing on the success of sales strategies

ORGANIZATIONAL STRUCTURE l Is a control mechanism l guides the activities of company members

ORGANIZATIONAL CONCEPTS l Specialization versus generalization l Centralization versus decentralization l Span of control l Line versus staff

CHARACTERISTICS OF A GOOD ORGANIZATION l Marketing orientation l Build around activities l Related responsibility and authority l Reasonable span of control l Stable yet flexible l Balance and coordinated activities

ORGANIZATIONAL TYPES l Geographic Organization l Product Organization l Market Organization l Functional Organization l Major Account Organization

GEOGRAPHIC ORGANIZATION l Assign salespeople a geographical area called a territory l Ensures coverage of entire market l Can respond to local conditions l Can respond to customer requests l Sales managers are generalists

GEOGRAPHIC ORGANIZATION

PRODUCT ORGANIZATION l Product managers responsible for sales of one or more products l Best used for a variety complex products or a number of dissimilar unrelated products l Duplication of selling effort

PRODUCT ORGANIZATION

MARKET ORGANIZATION l Organize on the basis of customers, industry type, or by channels of distribution l Consistent with marketing philosophy l Duplication of selling efforts

MARKET ORGANIZATION

FUNCTIONAL ORGANIZATION l Specialize according to selling activity l Geographic and Customer Duplication

FUNCTIONAL ORGANIZATION

MAJOR ACCOUNT ORGANIZATION l Multiple people in buying process l Purchase centrally l Desire long term, cooperative relationship l Expect specialized attention

MAJOR ACCOUNT ORGANIZATION l Existing sales force l Management l Separate sales force l Sales teams

MAJOR ACCOUNT ORGANIZATION l Strategic Account Management Association »

HYBRID ORGANIZATION l Use a mix of the aforementioned approaches l Capitalize on advantages of each type

TELEMARKETING l It allows companies to make cost- effective sales calls l Many business customers like it!

TELEMARKETING l Customer service l Prospecting and qualification l Customer retention l Advertising and promotions

SALES AGENTS l Independent businesses given exclusive contracts to sell within a given region l Also known as “manufacturer’s representatives”

SALES AGENTS l Market focus l Compatibility l Economic consequences l Level of control l Competitive environment

SALES FORCE SIZE l Affordability approach l Workload approach l Breakdown approach

AFFORDABILITY APPROACH l Divide total dollars available for sales (wages, commission, travel) by average wages + expenses per sales person l See example page 384

WORKLOAD APPROACH l A buildup method based on numbers of customer, planned call frequencies, length of each call l Number = Total hrs required for selling / number of total hrs of selling available for one salesperson l See example page 384

BREAKDOWN APPROACH Size of sales force = Forecasted Sales Average sales per salesperson

FROM THE TEXT l Read pages 364 to 385.