1. Design and Size of Sales Territories.
Design and Size of Sales Territories

2. Learning Objectives The definition of a sales territory.
Who is responsible for territorial development.
The factors to consider when designing sales territories.

3. WHAT IS A SALES TERRITORY?
A sales territory is defined as group
of present and potential customers
assigned to an individual sales
person, a branch , a stockiest ,
a distributor at a given point of time.

4. WHO IS RESPONSIBLE FOR TERRITORIAL DEVELOPMENT?
Development of sales territories is usually the responsibility of the sales manager overseeing the larger sales units within the organization.

5. WHY ESTABLISH SALES TERRITORIES?
To obtain thorough coverage of the market.

6. WHY ESTABLISH SALES TERRITORIES?
To establish a salesperson’s responsibility.

7. WHY ESTABLISH SALES TERRITORIES?
To evaluate performance.

8. WHY ESTABLISH SALES TERRITORIES?
To improve customer relations.

9. WHY ESTABLISH SALES TERRITORIES?
To reduce sales expense.

10. WHY ESTABLISH SALES TERRITORIES?
To allow better matching of salesperson to customer.

11. WHY ESTABLISH SALES TERRITORIES?
To benefit salespeople and the company

12. FACTORS TO CONSIDER WHEN DESIGNING TERRITORIES.
Select Basic
Control Unit
Analyze
Workload
Determine
Basic Territories
Customer
Contact Plan
Evaluate,
Revise if Needed
Assign to
Territories

13. SELECT BASIC CONTROL UNITS
States
Counties
Cities and zip-code areas
Metropolitan areas
Trading areas
Major accounts

14. Control Units Pharmacy company 27 offices in the country
Western Maharashtra is one of it
Pune
Zip codes – Tahsils

15. ANALYZE SALESPEOPLE’S WORKLOADS
Workload is the quantity of work expected from sales personnel. Three of the main influences on workload involve the
a ) nature of the job,
b ) intensity of market coverage, and
c) type of products sold.

16. Nature of Job Order taker – Larger territory
Missionary – Lesser territory

17. Intensity of Market Coverage
Distribution methods:
Intensive distribution
Selective distribution
Exclusive distribution

18. Types of products sold Convenience goods– Call many more accounts.
Shopping foods -
Specialty goods - Dell – Computer networks to top organizations.

19. DETERMINE BASIC TERRITORIES - SIX STEPS
Forecast sales and determine sales potentials.
Determine the sales volume needed
for each territory.
III Determine the number of territories
Breakdown Approach
Equalized workload
IV. Tentatively establish territories.
V. Determine the number of accounts
VI. Finalize the territories, and draw the
boundary lines.

20. DETERMINE THE NUMBER OF TERRITORIES
The breakdown approach uses factors such as sales, population, or number of customers.
Sales Force Size = Forecasted Sales
Average Sales per
Salesperson

21. Equalized Workload
This method uses the number, location, and size of customers and prospects to determine the frequency of sales calls and amount of time a call takes by using such data as:
Time required for each sales call.
Frequency of sales calls per given customer.
Time intervals between sales calls.
Travel time around territories.
Non selling time.

22. Equalized Workload Account Segmentation based on sales
Customer Size
Yearly Sales
( in units )
Number of Accounts % A
>6000
100
18 % B
2400 to 6000
200
36 % C
1200 to 2400 D
< 1200 50
10 %

23. Equalized Workload Determination of total number of calls
Customer size
Call frequency
per month /per Quarter
Total calls in a year
Number of accounts
Number of calls per year A 2 24
100
2400 B 1 12
200 C 1* 4
800 D
* 1 per quarter
Nil 50

24. Equalized Workload Total number of calls = 5600 ……………….
Individual Customer calls*
= 37 Sales Territories
Assumption : Working months 10 . Each month travels 15 days . Covers 15 points .

25. Step 4 –Tentatively establish territories
Market
Regions
Districts
Sales territories
Example : if 18 sales people . Might use state as control unit .

26. . Step 5 Determine the number of accounts for each territory Step 6
Finalize the territories and draw boundary lines

27. ASSIGN TO TERRITORIES
Some salespeople can handle large territories and the travel associated with them; some can’t.
Some territories require experienced salespeople; some are best for new people.
Some people want to live in metropolitan areas; others prefer territories with smaller cities.

28. CUSTOMER CONTACT PLAN
The customer contact plan involves scheduling sales calls and routing a salesperson’s movement around the territory.

29. Weekly Route Report Date City Location / Dealer Jan 23 2012 Ahmednagar
R K Distributors
Jan
Kopargaon
Mahesh Enterprises
Jan
Shrirampur
Raj Traders
Jan
Holiday
Jan
Satara
Zummerwala & Sons
Jan
Pune ( H Q )
Travel / Home

30. THREE BASIC ROUTING PATTERNS

31. Scheduling Improve territorial coverage. Minimize wasted time.
Establish communication between management and the sales force in terms of the location and activities of individual salespeople.