8 Designing & Development of Sales Force Tanner_07

Sales Management: Shaping Future Sales Leaders

Designing and Organizing Designing and Organizing the Sales Forcethe Sales Force

Learning Objectives

List the major tasks of sales organization

Identify the basic types of sales organization

Understand the importance of relation with other departments

Understand the advantages and disadvantages of outsourcing a firm’s sales force

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.7-3

Organization of The Sales Force

Basic Management Function of Arranging Basic Management Function of Arranging The Firm’s Sales Activities The Firm’s Sales Activities

Tasks of The Sales Organization

1.Maintenance of order in achieving sales force goals/objectives

2.Assignment of specific tasks and responsibilities

3.Integration and coordination with other elements of the firm

Tasks of The Sales Organization

Structure

Division of activities into tasks and the related coordination

Developing A Sales Organization


1.Formal & informal organization

2.Horizontal & vertical

3.Centralized & decentralized

4.The line and staff components of the organization

5.The size of the company


Formal organization

Management created relationship between departments and between individuals

CEO

NSM

RSM

ASM

Salesperson


Informal organization

Communication pattern formed from the social relationship existing with in the formal organization

Salesperson ASM RSM NSM CEO

Manager Marketing distribution Manager NSM Manager AccountsManager Marketing distribution Manager NSM Manager Accounts


Horizontal Sales Organization

Number of management level is small and number of manager at particular level is large

Chief Sales Executive

District Sales Manager District Sales Manager District Sales ManagerDistrict Sales Manager District Sales Manager District Sales Manager District Sales ManagerDistrict Sales Manager Karachi Multan Lahore IslamabadKarachi Multan Lahore Islamabad


Vertical Sales Organization

Several level of management, all reporting upward to the next level

CEO

NS

RSM

ASM

FS

SR


Centralized

Responsibility and authority are concentrated at

higher level of management

Decentralized -Delegated to l

-Structure is iower levels of management

neffective unless the assignment of decision making to lower levels of sales management is accompanied by a complete authority to carry out the decision.

Assigning responsibility to perform a particular task to sales Assigning responsibility to perform a particular task to sales supervisors, without any authoritysupervisors, without any authority


How a Firm’s Goals Affect the Design of Its Sales Force

Organization of sales force is driven by strategic goals

Organizational sales structures serve a number of purposes that include

Serving buyers effectively in ways they want to be served

Operating efficiently and effectively as measured by cost and customer satisfaction


How a Firm’s Goals Affect the Design of Its Sales Force

Best way to design a sales structure is toBest way to design a sales structure is to

Determine sales activities that must be performed to reach goals

Create sales structure that affords highest levels of service to buyers at lowest overall cost

Select, train and manage reps and managers to become experts in their assigned duties

Relations With Other Departments

Key Concern of Sales Manager Key Concern of Sales Manager Relation with other departmentsRelation with other departments

All business activities should be coordinated to satisfy All business activities should be coordinated to satisfy customer needcustomer need

Sales department is the key link, so coordinating the sales effort with Sales department is the key link, so coordinating the sales effort with other departments is absolutely essential other departments is absolutely essential

Two types of departments sales MUST have good Two types of departments sales MUST have good working relationshipworking relationship

One, connected with marketing activities, advertising, marketing One, connected with marketing activities, advertising, marketing research, sales promotion, product managementresearch, sales promotion, product management

Second, those with non marketing functions such as HR, Second, those with non marketing functions such as HR, manufacturing and financemanufacturing and finance

Relations With Other

Relation with marketing functionRelation with marketing function Marketing mixMarketing mix

Advertising plan/schedule Advertising plan/schedule

Sales department will ensure product availability at all relevant retail Sales department will ensure product availability at all relevant retail w/s outlets, before TVC is on. w/s outlets, before TVC is on.

Relations with non marketing departmentsRelations with non marketing departments R&D, sales people are excellent source of new product or product R&D, sales people are excellent source of new product or product

modificationmodification

R&D – High tech companies. Sales people need to trained on new R&D – High tech companies. Sales people need to trained on new technologytechnology


Relation with productionRelation with production Production department’s concerns are minimizing cost through Production department’s concerns are minimizing cost through

standardization, long & continuous production run, long production standardization, long & continuous production run, long production lead time lead time

Sales executive want many types of products, frequent product Sales executive want many types of products, frequent product changes, customer’s special order & short production lead timechanges, customer’s special order & short production lead time

Best way is Best way is JOINT PLANNING

Relations with HRRelations with HR HR – Hiring, managing, training & developmentHR – Hiring, managing, training & development

Sales managers – recruiting, hiring, training, developing & managingSales managers – recruiting, hiring, training, developing & managing

Relation with Finance – Three major areasRelation with Finance – Three major areas Budgeting, cost control, creditBudgeting, cost control, credit


Relation with Finance – Three major areasRelation with Finance – Three major areas Budgeting

- Sales department provides short and long range sales estimates as - Sales department provides short and long range sales estimates as the basis of financial planning & budgetingthe basis of financial planning & budgeting

Cost control

- Accounting specialist can assist sales managers in their efforts to - Accounting specialist can assist sales managers in their efforts to control costs, by providing data for selling cost analysis control costs, by providing data for selling cost analysis

Credit

- Credit plans are major concerns for sales as well as finance. Sales - Credit plans are major concerns for sales as well as finance. Sales executive should have input into establishing credit policies. Sales executive should have input into establishing credit policies. Sales people can also provide current credit status information people can also provide current credit status information

Major Trends in Sales Organizations

Changing Trend Traditional forms of sales organization have changed their approachTraditional forms of sales organization have changed their approach

In search of new and better ways to serve their marketsIn search of new and better ways to serve their markets

For Consumer goods & service companies, the new approaches For Consumer goods & service companies, the new approaches involve product manager form of organizationinvolve product manager form of organization

Industrial manufacturer are looking closely at strategies that will help Industrial manufacturer are looking closely at strategies that will help them adapt to change buying behavior and develop more specialized them adapt to change buying behavior and develop more specialized sales forcesales force

For many companies, the major challenge is change from a For many companies, the major challenge is change from a

““Product” To “Customer Driven Orientation” Product” To “Customer Driven Orientation”

Major Trends in Sales Organizations

Telemarketing Use of telecommunication technology in personal sellingUse of telecommunication technology in personal selling

Direct Marketing Approach that bypasses intermediaries to deliver goods and services Approach that bypasses intermediaries to deliver goods and services

directly from seller to buyerdirectly from seller to buyer

Inbound Telemarketing Potential customer contacts the selling companyPotential customer contacts the selling company

Outbound Telemarketing Selling companies contact the prospect and customersSelling companies contact the prospect and customers

National Account Management

A special sales force is dedicated to obtaining & maintaining major A special sales force is dedicated to obtaining & maintaining major accounts ( 50 to 70% sales)accounts ( 50 to 70% sales)

A customer that involves several people in the buying process before a A customer that involves several people in the buying process before a sales takes placesales takes place

A customer that purchases in significant volume, both in dollar and as A customer that purchases in significant volume, both in dollar and as a %age of supplier’s total salesa %age of supplier’s total sales

A customer that desires a long term cooperative working relationship A customer that desires a long term cooperative working relationship with company or supplierwith company or supplier

A customer that expects specialized attention and servicesA customer that expects specialized attention and services

THANKSTHANKS

Documents

8 Designing & Development of Sales Force Tanner_07