Chapter 7
Designing and Organizing the
Sales Force
SALES MANAGEMENT:
SHARPING FUTURE SALES LEADERS
Tanner, Honeycutt, and Erffmeyer,
2e Wesser 2014.
Copyright © 2014 Wesser Publiser
Objectives
The factors that affect on the
structure of sales force.
Methods to compute sales
forces size
Explain the advantages and
disadvantages of different
sales force organizations
structures.
Factors determines how sales organizations
are structured
Customers
Marketing
Competitors
channel
How sales
organizations
are structured
company
Product
Product
Product company
company size
size
size
7-3
Calculate the Sales Force Size
Breakdown method
Workload method
Incremental method
The Size of the Sales Force
Breakdown method
• Divide forecasted sales revenue by average sales dollars per
salesperson
7-5
The Size of the Sales Force
Workload Method
.
7-6
The Size of the Sales Force
Incremental method
1.Its compares the marginal profits and marginal costs associated
with each incremental salesperson
2.is difficult to develop, and it cannot be used for new sales forces
where historical data and accurate judgments are not possible.
# of Salespeople Marginal Contribution Marginal Cost
100 $85,000 $75,000
101 $80,000 $75,000
102 $75,000 $75,000
103 $70,000 $75,000
Sales Organization Structures
Geographical
Sales Structure
Product
n be
e ca Sales Structure
f o rc ased s
ales ed b w ay
S
a n iz r ent Market
org r diffe Sales Structure
e
oth
Functional
Sales Structure
Combinational
Sales Structure 7-8
Geographic-Based Structure
Depends on physical boundaries to organize sales force
with customer accounts.
Each salesman serves all customers in specific areas.
7-9
Geographical Sales Structure
PROs CONs
Relatively easy to design Work best when product line
is simple.
Minimizes duplication of
activities between salespeople.
Sales calls more efficiently
scheduled, save traveling cost.
Territory can be divided or
combined to respond to market
conditions
7-10
Product-Based Structure
Sales activities organized around related product lines or
manufacturing divisions
7-11
Product-Based Structure
PROs CONs
Specialization in each product Little knowledge of others
line. some customers confused
Sales service is better Lack of communication b/w
Be useful in case of different divisions within the sales firm
complex products in the firm Costs higher than geographic-
based structure
7-12
Market -Based Structure
Reps assigned to customers based on segments or
how product is sold
7-13
Market -Based Structure
PROs CONs
Allows sales efforts to specific Similar to product structure
industries/ channels/ customers
Allow satisfying customer
demands in specialization.
Be an effective strategy when
entering new markets.
7-14
Functional Sales Structure
Sales Manager
Sales division Technicians Customer care
Selling process divided into two or more steps
performed by varied specialists
Functional Sales Structures
PROs CONs
Specialist in each step of Coordinating multiple
selling process. specialists
Salespeople can learn more Ensuring smooth transition
about customers’ specific from account establishment to
business needs, and offer management
customized solution.
7-16
Combination Sales Structures
P re sid e n t
F u n c tio n al V ice P re sid en t V ice P re sid en t V ice P re sid en t
P ro d u ctio n M ar ke tin g E n gin e erin g
G eo g rap h ic U .S. I n te r n atio n al
M ar ke tin g M ar ke tin g
M an ag er M an ag er
C u sto m er C o n su m er I n d u s trial I n te r n atio n al
G oods G oods Sales
M an ag er s M an ag er s M an ag er
P ro d u ct So ap P ro d u cts P ap er P ro d u cts F o o d P ro d u cts L atin A sian an d
E u ro p ean
D iv is io n al D iv is io n al D iv is io n al A m erican A fr ic an
D iv is io n
M an ag er M an ag er M an ag er D iv is io n D iv is io n
E aste r n C en tr al W est er n
Sales Sales Sales
D iv is io n D iv is io n D iv is io n
Combination Sales Structures
PROs CONs
Sales force organized based Complicated in management.
on mix of product, market, and
geographical factors Can result in duplicate sales
efforts
Work best when market is
large, product mix complex,
and customers require different
applications
7-18
Comparison of sales Structures
Structure Advantages Disadvantages
• Low Cost • Limited specialization
• No geographic duplication • Lack of management
Geographic • No customer duplication control over product or
• Fewer management levels customer emphasis
• Salespeople become experts • High cost
in product attr. & applications • Geographic duplication
Product
• Management control over • Customer duplication
selling effort
• Understand of customer needs
Market • Management control over • High cost
selling allocated to different • Geographic duplication
markets
• Geographic duplication
• Efficiency in performing • Customer duplication
Functional
selling activities • Need for coordination
Key Accounts/ VIP account
7-20
Sales Organizational Additions
7-21
Strategic Account Management
Sales force structure is simplified
Use Existing Force All accounts are managed under a
single organizational structure
Assigning sales and marketing
executives to manage key accounts
Assign Execs makes sense for smaller firms that
cannot afford separate sales effort
Create separate sales structures to
serve most important customers
Create Separate Integrates marketing and sales for
key accounts under one
organizational structure
7-22
Telemarketing and E-commerce.
Telemarketing
Computerized
Generated
Incoming: firm
via employs
Internet and
advertising
telephoneand promo messages
to end-users to “pull” or create buyer demand to call an 800
number
Internet sales process varies greatly
and consult with in-house rep
Telemarketing is legal, but unwanted and intrusive
Outgoing: pushing a firm’s product line by calling current or
telemarketing calls are likely to negatively impact an
potential customers to try to uncover needs and close the
existing or potential business relationship
sale
7-23
Telemarketing and E-commerce.
7-24
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