1. The Sales Organization
Variations in Selling Organizational Structure
Marketing 3345 5

2. Fundamental
Principles
Sales Force
Specialization
Sales Force
Alternatives
Sales Force
Size
Emerging
Issues

3. Fundamental Organization Principles
Unity of Command Each person should report to only one
boss. A clear and unbroken chain of
command should link every person in
an organization with someone a level
higher.
Stability and Continuity Activities should be assigned without
regard for the talents and preferences
of current employees.
Coordination and Activities of salespeople should be
Integration integrated with customer needs,
coordinated with activities of other
departments, and coordinated with
tasks of all salespeople.
Fundamental Organization Principles 1

4. Geographical Sales Organization
National
Sales Manager
Central
Eastern
Western
Regional
Regional
Regional
Sales Manager
Sales Manager
Sales Manager
Northeast
Mid-Atlantic
Southern
District
District
District
Sales Manager
Sales Manager
Sales Manager
Connecticut
New
Pennsy-
lvania
North
South
Maine
and Rhode
Jersey
Carolina
Carolina
Island
District of
Vermont
New York
Delaware
Georgia
Alabama
Columbia
Massach
usetts
New York
Virginia
Maryland
Mississippi
Florida
Geographical Sales Organization

5. Organization: Geographical Organizations
Advantages
Tends to achieve lowest costs
Travel time and expenses are minimized
Sales Administration and overhead costs are kept low
Disadvantages
It does not provide any benefits associated with specialization of labor 3

6. Product Specialized Sales Force
National
Sales Manager
Eastern
Regional
Sales Manager
Northeast
Mid-Atlantic
Southern
District
District
District
Sales Manager
Sales Manager
Sales Manager
Dictation
Typewriter
Minicomputer
Programmable
Copier
Large
Equipment
Salesperson
Salesperson
Calculator
Salesperson
Computer
Salesperson
Salesperson
Salesperson
Product Specialized Sales Force 1

7. Organization: Product Specialization
Advantages
Allows focusing of sales effort
Expertise developed in limited number of products
Disadvantages
More expensive to operate
May result in duplication of sales calls to clients 3

8. Customer Specialized Sales Force
National
Sales Manager
National
Eastern
Manager
Accounts
Regional of
Manager
Sales Manager
Export Sales
Northeast
Mid-Atlantic
Southern
District
District
District
Sales Manager
Sales Manager
Sales Manager
Salesperson
Salesperson
Salesperson
Salesperson
for Educational
Institutions
for Retail
for Government
for Bank
Customers
Agencies
Customers
Salesperson
Salesperson
for Manufacturers
for Wholesale
Customers
Customer Specialized Sales Force 1

9. Organization: Customer Specialization
Advantages
Consistent with market driven strategy
Salespeople become customer experts
Disadvantages
More expensive 4

10. Functional Specialization
Division Marketing
Manager
Industry Sales
Systems
Administrative
Managers
Manager
Manager
Account Executives
Systems reps
Market
(salespeople)
(technical support)
Administration
(training and installation)
Functional Specialization 1

11. Organization: Functional Specialization
Focus on phases in customer relationship:
Initial sales
Follow-up technical support and service
Promotion efforts specialist 5

12. WHO ARE STRATEGIC ACCOUNTS?
WHEN A CUSTOMER PURCHASES A SIGNIFICANT VOLUME AND EXHIBITS ONE OR A COMBINATION OF THE FOLLOWING:
MULTIPLE PEOPLE ARE INVOLVED IN THE BUYING PROCESS
PURCHASING IS CENTRALIZED
THE CUSTOMER DESRIES A LONG-TERM, COOPERATIVE WORKING RELATIONSHIP
THE CUSTOMER EXPECTS SPECIALIZED ATTENTION AND SERVICE

13. Strategic Account Organization Alternatives
Existing Sales Force - Low risk; little change
Management Sell National Accounts -- keeps management close to customer
Separate Sales Force -- more aggressive; more expensive; alternative to sales management for promotion for sales staff
Sales Teams - use when selling process is complex 8

14. BENEFITS OF STRATEGIC ACCOUNT MARKETING
Increased sale to
national accounts
Increased profits
from national
accounts
Increased market
share
Improved customer
communications
coordination
91%
83%
74%
74%
30%

15. Survey Results: Strategic Account Management
Are training programs for the strategic account manager different?
Provide no training for strategic account managers
Different training for strategic account managers
No difference in training for strategic account managers or other sales staff
37%
26%
37%
37%
37%
26%

16. Survey Results: Strategic Account Management
Do your strategic account managers carry an assigned sales quota?
Yes No
No Response
68%
29%
68%
29% 3% 3%

17. Survey Results: Strategic Account Management
Do strategic account managers have formal authority over the rest of the sales organization?
No formal authority over others in the sales organization
Sales team reports directly to the strategic account manager
May assemble temporary “virtual” sales teams that report directly to the strategic account manager
No Response
47% 7%
47%
24%
24%
22%
22% 7%

18. Survey Results: Strategic Account Management
How do you measure the success of a strategic account program?
Sales volume
Customer satisfaction
Profitability
Volume of recurring revenue stream
Incremental orders from existing accounts
Number of customer with strategic account agreements
Number of transactions/orders
Number of products shipped
80%
53%
45%
29%
22%
11% 6% 6%

19. Table 8-2: Ranking of Customers’ Wants
Contact with outside salesperson
Frequency and speed of delivery
Price
Range of Available Products
Capable inside salesperson

20. SCOPE OF TELEMARKETING’S ROLE
Customer Service
Prospecting and Lead Qualification
Sales Support
Advertising and Promotion

21. Doing the Math on Account Management
Field Rep Telemarketing
Sales calls per day
Sales calls per quarter
Sales calls per year
Salespeople required
Cost per sales call $ $15
Cost per year $1,998, $117,000

22. MAJOR BENEFITS OF TELEMARKETING
Percent of
Respondents
CUSTOMER BENEFIT %
Speed of communication to customer 21.5
Timeliness of contact
Ease/Convenience to customer 10.8
Customer relations
Frequency of contact
COST EFFECTIVE
DIRECT CONTROL
MARKETING RESEARCH
PROVIDE TECHNICAL SUPPORT

23. Organization: Telemarketing
Advantages
Low cost per sales call
Profitably serve small to medium customers
Speed/time saving of telephone ordering
Challenges
Acceptance by field salespeople
Hiring, motivating & retaining good telemarketers 10

24. PROJECTED GROWTH IN SALESPEOPLE AND TELEMARKETERS
Average Number per Company
Five Years Ago
Today
Five Years from Now
21.99
+27.9%
28.11
+29.9%
36.49
Field Salespeople
Average Number per Company
Five years Ago
Today
Five years from Now
41.64
+27.5%
53.07
+12.5%
59.66
Source: Geri Gantman, “Exclusive Survey,” Business Marketing, (September, 2007), p companies in survey.

25. EVOLUTION OF SELLING METHODS OLD
Stage in Selling Process
Prospect/ Present/ Service/
Qualify Close Reorder
Face-to-
Face
Selling
(FTF)
FTF TM
Large
Medium
Small
Account
Size

26. EVOLUTION OF SELLING METHODS NEW
Stage in Selling Process
Prospect/ Present/ Service/
Qualify Close Reorder
National
Account
Manage-
ment
(NAM)
NAM
Telemar-
keting
(TM) TM
FTF
&
Large
Medium
Small
Account
Size

27. Total Costs of Independent Agents vs. Own Sales Force
Total selling costs
Own sales force
Break-
even
sales
Sales volume
Total Costs of Independent Agents vs. Own Sales Force

28. HIRING INDEPENDENT AGENTS DEVELOPING THE “IDEAL” AGENT PROFILE
1. Define the ideal market focus.
2. Identify compatible principles.
3. Specify the necessary technical
background.
LOCATING AGENTS: Rep. Directories
Customer References
Compatible Manufactures
References from Current Agents
Trade Shows

29. HIRING INDEPENDENT AGENTS DEVELOPING THE “IDEAL” AGENT PROFILE
Six Cs of Finding the Right Mnfr Rep
Compatible Lines
Compatible Territories
Compatible Customers
Credibility of the Rep
Capabilities
Credit Worthiness

30. Agent Decision and the Product Life Cycle
Manufacturer Re-employs Rep firm to lower fixed sales costs
Disengagement Decision
Re-engagement Decision
Introduction

31. Evaluating Organizational Structure
Re - Organization
Evaluating Organizational Structure
Financial performance -- must consider
BOTH costs and revenues
Adaptability
External - Internal
New competitors Company goals
Changing technology Management philosophy
Modification to channel Production capabilities
systems Technical resources
Industry life cycle
Integration -- subunits of sales org must work in harmony 18