1. Copyright © 2001 by Harcourt, Inc. All rights reserved.

2. C HAPTER 4 T HE M ARKET- D RIVEN S ALES O RGANIZATION

3. Copyright © 2001 by Harcourt, Inc. All rights reserved.  The type of markets in which salespeople work.  The major job activities of salespeople.  The various types of sales jobs.  Why sales jobs are designed for an individual organization’s markets and customers.  The various types of sales force organizational structures.  Newer forms of organizations.  How coordination and technology improve customer service. L EARNING O BJECTIVES A sales force is a complex selling unit of the firm. Its organizational design and structure are built around its customers and markets. After studying this chapter, you should be able to explain:

4. Copyright © 2001 by Harcourt, Inc. All rights reserved. F ACTORS I NFLUENCING O RGANIZATIONAL D ESIGN AND S TRUCTURE Examine customers in each market. Determine the types of sales jobs needed to serve a market. Note the job activities salespeople must do. Design sales jobs around customers. Set up the sales force organizational structure, which includes the various sales jobs and geographic territories.

5. Copyright © 2001 by Harcourt, Inc. All rights reserved. FIGURE 4.1 THE RELATIONSHIPS AMONG MARKETS, JOBS, AND ACTIVITIES INFLUENCE SALES JOB DESIGN AND ORGANIZTATIONAL STRUCTURE

6. Copyright © 2001 by Harcourt, Inc. All rights reserved. M ARKETING AND M ARKETS Marketing is the process of planning and executing the conception, pricing, promotions, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.

7. Copyright © 2001 by Harcourt, Inc. All rights reserved. Consumer Business S ALESPEOPLE W ORK IN T WO M ARKETS

8. Copyright © 2001 by Harcourt, Inc. All rights reserved. Seven major categories: Category One – inside order taker. Category Two – deliverer. Category Three – an order taker but also works in the field. Category Four – is not expected or permitted to take an order but is asked only to build goodwill or to educate the actual or potential customer. S ALES J OBS A RE V ARIED AND C AN BE C LASSIFIED

9. Copyright © 2001 by Harcourt, Inc. All rights reserved. Category Five – major emphasis is placed on technical knowledge. Category Six – demands the creative (specialty) sale of tangibles. Category Seven – requires the creative sale of intangibles. Seven major categories: Continued

10. Copyright © 2001 by Harcourt, Inc. All rights reserved. A PPLICATIONS OF THE S ALES J OB C LASSIFICATIONS Order takers – wait for the customer to order. The main problem with order takers is that they create only one distinction in the customer’s mind: price. Order getters – obtain, retain, and increase business with customers. This salesperson must often create discontent with what the prospect already has and has to overcome the most powerful and obstinate resistance.

11. Copyright © 2001 by Harcourt, Inc. All rights reserved. They develop relationships with customers. They listen more than talk. Their sales calls are more productive. They have an objective in mind. They evaluate and respond to the customer’s changing needs. Order getters build relationships.

12. Copyright © 2001 by Harcourt, Inc. All rights reserved. People with the prerequisite traits and attributes for success in creative sales are rare. Often, 100 to 150 or even more applicants must be interviewed to find one qualified candidate. T RUE S ALESPEOPLE ARE H ARD TO F IND

13. Copyright © 2001 by Harcourt, Inc. All rights reserved. T HE S ALESPERSON’S J OB A CTIVITIES AS A T ERRITORIAL M ANAGER 1.Provides solutions to customers’ problems. 2.Provides services to customers. 3.Sells to current and new customers. 4.Helps customers resell products to their customers. 5.Helps customers use products after purchase. 6.Builds goodwill with customers. 7.Provides company with market information.

14. Copyright © 2001 by Harcourt, Inc. All rights reserved. S ALES O RGANIZATIONAL D ESIGN Organizational design refers to the formal, coordinated process of communication, authority, and responsibility for sales groups and individuals.

15. Copyright © 2001 by Harcourt, Inc. All rights reserved. P URPOSES AND I MPORTANCE OF J OB D ESIGN Content Qualifications required to perform Returns and rewards for performance

16. Copyright © 2001 by Harcourt, Inc. All rights reserved. S ALES O RGANIZATIONAL S TRUCTURE Organizational structure is the relatively fixed, formally defined relationship among jobs within the firm.

17. Copyright © 2001 by Harcourt, Inc. All rights reserved. T HE L INE O RGANIZATION In the pure line organization, the chief executive – usually the president – does the decision making for the firm. The president has complete authority.

18. Copyright © 2001 by Harcourt, Inc. All rights reserved. FIGURE 4.2 COMPUTE CORPORATION’S LINE ORGANIZATION

19. Copyright © 2001 by Harcourt, Inc. All rights reserved. S PECIALIZED D ESIGN Functional organizational design is the grouping of work according to its characteristics.

20. Copyright © 2001 by Harcourt, Inc. All rights reserved. FIGURE 4.3 ALARM SYSTEM CORPORATION’S FUNCTIONAL ORGANIZATIONAL DESIGN

21. Copyright © 2001 by Harcourt, Inc. All rights reserved. Line authority means that people in management positions have formal authority to direct and control immediate subordinates. Staff authority is narrower and includes the right to advise, recommend, and counsel in the staff specialists’ areas of expertise. Staff Positions with Line Authority

22. Copyright © 2001 by Harcourt, Inc. All rights reserved. Geographic Specialization Many large corporations are organized by geographic territory. This type of organization is generally used by companies with more than strictly local distribution of their products.

23. Copyright © 2001 by Harcourt, Inc. All rights reserved. FIGURE 4.4 TEXTRON CHEMICAL CORPORATION GEOGRAPIC SPECIALIZATION

24. Copyright © 2001 by Harcourt, Inc. All rights reserved. Product Specialization Another common type of organization in large companies is based on the firm’s product. The entire company may be organized by product, with separate sales, advertising, marketing, and so on, along with staffs for each, or some functional units may remain centralized.

25. Copyright © 2001 by Harcourt, Inc. All rights reserved. Customer Specialization Companies with several separate and distinct markets accounting for major portions of their sales often organize based on these markets or customers.

26. Copyright © 2001 by Harcourt, Inc. All rights reserved. Combination of Design Elements Many companies organize on the basis of some combination of functional, geographic, product, or customer design.

27. Copyright © 2001 by Harcourt, Inc. All rights reserved. FIGURE 4.5 MULTIPLE DESIGN FACTORS

28. Copyright © 2001 by Harcourt, Inc. All rights reserved. O RGANIZING FOR S ELLING TO M AJOR C USTOMERS Companies use four basic organizational methods. 1.A separate division to deal with major accounts. 2.Select members of the current sales force. 3.Sales managers. 4.A combination of 1, 2, and 3.

29. Copyright © 2001 by Harcourt, Inc. All rights reserved. N EW F ORMS OF O RGANIZATIONS A strategic alliance is a formal relationship created with the purpose of joint pursuit of mutual goals. S TRATEGIC A LLIANCES

30. Copyright © 2001 by Harcourt, Inc. All rights reserved. FIGURE 4.6 CROSS-FUNCTIONAL SELLING TEAM

31. Copyright © 2001 by Harcourt, Inc. All rights reserved. T EAM- B ASED O RGANIZATIONS Many organizations are more responsive to their environment because they use work teams as their basic building blocks.

32. Copyright © 2001 by Harcourt, Inc. All rights reserved. C OORDINATION AND T ECHNOLOGY Coordination refers to the quality of collaboration across groups.

33. Copyright © 2001 by Harcourt, Inc. All rights reserved. I NTERNATIONAL C OORDINATION The most important methods for achieving coordination are information systems, task forces and teams, and integrating managers.

34. Copyright © 2001 by Harcourt, Inc. All rights reserved. T HE B OTTOM L INE Markets, job types, and job activities influence the design of the various sales jobs and, consequently, even the structure of the sales organization. Sales activities are very diverse and easier to understand if classified in one of seven categories. A salesperson’s job activities involve much more than person-to-person selling. Companies can structure their organizations in numerous ways.