Lecture, organisation and structure of sales activities and controlling sales output, by, rahat...

Organisation and Structure of Sales Activities and controlling
sales output
McGraw-Hill/Irwin Copyright 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
Lecture
By: Rahat Kazmi
This lecture was prepared for BTEC Business Studies Level 4, but can also be useful for other business studies students, Sales Managers, Sales Team Leaders and Supervisors
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Organize Around Customers
Historical Product-centered Expertise in features and functions
Today Customer-centered Expertise in business issues Sales resources deployed to provide
best service to best customersSource: HR Chally Group (2007), The Chally World Class Excellence Research Report: The Route to the Summit. Dayton, OH: HR Chally Group.

Identify purposes of sales organization Understand different horizontal
organizational structures of a sales force.
Outline major issues in key account and team selling.
Discuss key vertical structure issues in sales organizations.
Identify important issues in starting a new sales force from the ground up.

Purposes of Sales Organization
Divide and arrange activities so the firm can benefit from specialization of labor
Provide for stability and continuity in firms selling efforts
Provide for coordination of activities assigned to sales force and to departments in the firm

Division and Specialization of Labor
Increase productivity - specialists can become proficient at assigned tasks
Divide required selling activities to gain maximum benefits within the sales force

Division and Specialization of Labor Line organization
Vertical Chain of command runs from chief sales
executive down through levels of subordinates
Each subordinate responsible to one personVP Sales
Director of UK. Sales
Regional Mgr. for England
District Mgr. for Wandsworth

Division and Specialization of Labor
Line and staff organization Vertical (most common) Several sales management activities assigned
to separate specialists
VP Sales
Director of Sales Training
Director of DistributorRelations
Director of Sales
Promotion

Stability and Continuity Organize activities without
regard to talents of current employees
People can be trained to fill positions
Same activities will be carried out even if designated individuals receive promotions or leave

Sales Organization Structure
Horizontal divides selling activities among sales force
Vertical assigns authority for specific sales management activities

Which Sales Structure Should You Have?
https://www.youtube.com/watch?v=fmqNAwAjz-g

Horizontal Structure Options
Outside Agents
Company Sales Force
Geographic
Co-Marketing
Product
Natl KeyAccounts
Market/Customer Type Team Selling
SellingFunction
SellingCenters
MatrixOrganizations
OR
Telemarketing

Outsourcing the Sales Force Types of agents
Manufacturers representatives Sell part of the output of their principals Take neither ownership nor physical
possession of goods Cover specific territory and specialize in
limited range of complementary products Selling agents
Do not take title or possession of the goods they sell
Compensated by commissions Broad authority to modify prices and terms
of sale Actively shape manufacturers promotional
and sales programs
HorizontalStructureOptions

Six Cs of findingthe right rep
HorizontalStructureOptions Source: Dan Hanover, Independents Day, Sales & Marketing
Management, April 2000, pp. 6568.
1. Compatible lines2. Compatible territories3. Compatible customers4. Credibility of the rep
5. Capabilities6. Credits

Outsourcing Considerations
Economic Criteria Control Transactions costs Strategic Flexibility

Geographic Organization
Simplest and most common method
Individual salespeople assigned to separate geographic territories
Responsible for performing all activities necessary to sell all products

Does not provide benefits associated with specialization of labor
Geographic Organization
Lowest costs Travel time and
expenses minimized
Sales administration and overhead costs kept low

Geographic sales organization

Duplication of effort
Product Organization
Salespeople master effective selling methods for single or related products
Closer alignment of sales and production
Sales management controls allocation of selling effort across the line
Separate sales force for each product (or category) in the line

Sales force organized by product typeHorizontalStructureOptions

Possible higher selling and administrative costs
Duplication of effort
Customer Type/Market Organization
Better understanding of customer needs
Increased familiarity with certain businesses
Increased control over allocation of selling effort
Natural extension of marketing concept and strategy of market segmentation

Sales force organized by customer typeHorizontalStructure
Options

Customer objections to switch to maintenance salesper

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