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Unit 2: Sales PlanningOrganizing the Sales Force

PG – IVMarketing Specialization

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Building Relationship

• Sales methods are changing to serve customers better

• Selling today often calls for a group effort • Sales teams include people from all

departments • Salespeople today must – Build trust with buyers – Work with other departments

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Sales Organization - Need

• Organization is essential to accomplishing the organization’s goals

• Companies must – organize objectives – organize tasks – organize individual assignments – appoint a leader

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Theories of Organization

Classical Theory• Jobs are divided into highly

specialized tasks.• Management coordinates

these tasks• Emphasizes on:

– Formal objectives– Hierarchy of authority

• Oriented towards efficiency not people.

Neo Classical Theory• Emphasis on humanizing

the organization• May under emphasize the

formal objectives, authority and control.

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Modern Organization TheoryFormal

Organization Structure

Role & Status Pattern

Individual Informal Organization

Physical Setting

Organizational objective

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Individual System

PsychographicsSocial Factors

Demographics

The Individual

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The Informal Organisation

Behaviour Standard

Company Culture

Informal Organization

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Formal Organisation Structure

• Communication Channels

• Line of Authority– Delegation of Authority– Delegation of Responsibility

• Policies & Procedures

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The Physical Settings

Atmosphere Process &Devices

Physical Settings

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Role & Status Pattern

SocialStatus Groups

Role &Status

Pattern

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Sales Force Organisation

Guidelines to Good Organization• Division of Work

– Job Analysis– Job Description– Authorities– Responsibilities

• Span of Management– Chain of Command– Unity of Command– Unity of Direction

• Change– Planned and communicated– Flexibility and adaptability

Growth Dimensions• Passive infants to active adults• Dependence to independence• Few behaviour to many

behaviour• Shallow concerns to long term

concerns• Unconnected challenges to

long term integrated challenges

• Growing ambition• Impulsive to controlled

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Types of Sales Organization• The Line Organization

– Single Level– Multi Level

• The Line and Staff Organization– The Traditional Line & Staff Organization– The Functional Organization

• Organization by Specialization– Organization by Sales Activity– Geographical Area

• Product Organization– Product Manager Organization

• Customer Structure

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The Line Organization• It is simple in structure• It has clear line of authority• Inexpensive• Has high degree of accountability of the sales force• It is Good for small firms• Territories or Regions may be introduced.• The sales team persons have limited growth potential• System does not involved specialists and thus more suited for

simple products or services

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Line and Staff Organization

• Staff positions are introduced to support the sales head.

• It is more efficient as the sales head has specialists to assist him to take decisions

• Sales head maintains the same benefits of enjoying the line of command

• System is more expensive as compared to the line organization

• They may arise some conflict between the line and staff managers.

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The Functional Organization

• It is a modification of the traditional line & staff organization

• The specialists have the authority on the sales force who can optimize the operations in their respective areas

• The sales person is responsible for more than one boss and the unity of command is broken

• May lead to a lot of potential conflict• It is not employed in large organizations

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Sales Strategies

MARKET PENETRATION

Same Product to Same CustomerAdd New Customer

MARKET DEVELOPMENT

Adapt Product for New Customers

DIVERSIFICATION

New Products & New Customers

PRODUCT DEVELOPMENT

New Product to Same Customer

OLD

NEW

OLD NEW

PRODUCT

C U S T O M E R

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Organizing by Sales Activity• Used with Market Penetration Strategy• Market is divided into 2 groups – Account Development &

Account Maintenance• Allows part of the sales team to bring new customers while

others maintain relationships• Beneficial in case of

– Fast acquisition of customers is required– High rate of customer turnover

• Customers may not be comfortable with the idea• Account acquisition team may have different motives.

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Geographical Areas• The market is divided into different territories or regions and all

sales person sell all products• Suited for organizations having large territories and

homogeneous product line• Sales person is closer to the market and can thus cultivate local

markets and solve local problems quickly• Customer has to deal with the same person, possibility of

developing relationships better• Proper supervision of sales force is possible involving lesser costs• Sales person remains generalist and the administration costs

tend to go up.

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Product Organization

• Each sales person handles a product or product line

• Each product gets the salesperson’s attention• Suited for market development or

diversification strategies• However involves additional management and

overlapping territories leading to customer confusion

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Product Manager Organization

• Modification over the product organization where the sales force in the market remains the same.

• Each product line or product range is managed by a product manager which is a staff function

• Central control lies with the product managers• Sales team does not report to the product managers

for which they may lack control over team• Possibility of conflicts

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Strategic Implications for Product or Product Manager Organizations

• Complex products• Dissimilar products• Different channels uses• Buyers vary by product• In-depth product knowledge required• Single salesperson cannot keep up technically

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Customer Structure – Account Management

• Customer structure is beneficial in case where– Sales team needs special knowledge to serve customers– Customers buys several products or from various product

lines– Same buying factor apply across product lines– Same buyers or influencers across product lines– Some buyers represent a large percentage of income for

the organization or need special attention

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Independent Representative• Advantages

– No up front costs or other provision for various benefits as the sales may be on straight commission basis

– No need for provision of other benefits

– The representatives share a good equity with the customers and thus may be good for new product introductions

– Representatives are specialists in their fields and know the products

• Disadvantage– Less control over the

independent representative– May provide less service to

the customer– May not provide accurate

market information– May carry competitor’s

product alongside– May not provide reports or

attend meetings

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Salesperson’s Expectations• Known quality product with some exclusive features• Product that represents good value and meets customer needs• Complete training• Training on obtaining a lead flow• Customer financing• Quality delivery and distribution• Company reputation for fair dealing and control over all

employees to prevent unfair or undesirable practices• Fair Compensation• Marketable product – Conceptually, Legally & Ethically

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New Trends

• Just in time• Customer relationship management (CRM)• Computer based materials planning• Improved buying proficiencies• Sale force automation• Increase complexities• Face to face selling time is shrinking

To Sales Hiring Process…