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

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  • 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.

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  • 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.

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  • 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

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  • 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

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  • 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

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  • 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

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  • 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

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  • Sales Organization Structure

    Horizontal divides selling activities among sales force

    Vertical assigns authority for specific sales management activities

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  • Which Sales Structure Should You Have?

    https://www.youtube.com/watch?v=fmqNAwAjz-g

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  • Horizontal Structure Options

    Outside Agents

    Company Sales Force

    Geographic

    Co-Marketing

    Product

    Natl KeyAccounts

    Market/Customer Type Team Selling

    SellingFunction

    SellingCenters

    MatrixOrganizations

    OR

    Telemarketing

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  • 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

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  • 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

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  • Outsourcing Considerations

    Economic Criteria Control Transactions costs Strategic Flexibility

    HorizontalStructureOptions

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  • Geographic Organization

    Simplest and most common method

    Individual salespeople assigned to separate geographic territories

    Responsible for performing all activities necessary to sell all products

    HorizontalStructureOptions

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  • Does not provide benefits associated with specialization of labor

    Geographic Organization

    HorizontalStructureOptions

    Lowest costs Travel time and

    expenses minimized

    Sales administration and overhead costs kept low

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  • Geographic sales organization

    HorizontalStructureOptions

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  • Duplication of effort

    Product Organization

    HorizontalStructureOptions

    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

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  • Sales force organized by product typeHorizontalStructureOptions

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  • Possible higher selling and administrative costs

    Duplication of effort

    Customer Type/Market Organization

    HorizontalStructureOptions

    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

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  • Sales force organized by customer typeHorizontalStructure

    Options

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  • Customer objections to switch to maintenance salesper