Sales & Marketing

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Unit 2: Sales Planning
Organizing the Sales Force
PG – IV
Marketing 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 Theory
Formal
Organization
Structure
Role & Status
Pattern
Individual Informal
Organization
Informal
Organization
Physical
Setting
Organizational
objective
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
Social
Status
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
Customer
Add New Customer
MARKET PENETRATION
Same Product to Same
Customer
Add New Customer
MARKET DEVELOPMENT
Adapt Product for New
Customers
MARKET DEVELOPMENT
Adapt Product for New
Customers
DIVERSIFICATION
New Products & New
Customers
DIVERSIFICATION
New Products & New
Customers
PRODUCT
DEVELOPMENT
New Product to Same
Customer
PRODUCT
DEVELOPMENT
New Product to Same
Customer
O
L
D
N
E
W
OLD NEW
P
R
O
D
U
C
T
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

26. To Sales Hiring Process…