1. Sales and Distribution Management, 2e Dr Tapan K. Panda, Great Lakes Institute of Management, Chennai Dr Sunil Sahadev, University of Sheffield, UKCopyright 2011 Oxford University PressChapter 6: Sales Organization

2. Chapter 6 Sales OrganizationCopyright 2011 Oxford University PressChapter 6: Sales Organization 3. Sales organization an organization of individuals either working together for the marketing of products and services manufactured by an enterprise or for products that are procured by the firm for the purpose of reselling a sales organization defines duties, roles, rights, and responsibilities of sales people engaged in selling activities meant for the effective execution of the sales functionCopyright 2011 Oxford University PressChapter 6: Sales Organization 4. Sales organization (cont.) a structural body through which the functions of sales management are carried out sales organization always makes efforts to increase sales, thereby achieving the principle of profit maximization, which contributes to the overall growth of enterpriseCopyright 2011 Oxford University PressChapter 6: Sales Organization 5. Factors influencing structure product and service related factors organization related factors marketing mix related factors external factors: - the speed of market change - reduction in the number of vendors per buyer - closer to customer relationships - changes in regulations and international practices Copyright 2011 Oxford University PressChapter 6: Sales Organization 6. Organizational principles span of control unity of command hierarchy of authority stability and continuity coordination and integration homogeneity objectivity specializationCopyright 2011 Oxford University PressChapter 6: Sales Organization 7. Organizational design - formal and coordinated task - assigning territories - establishing flows of communication and responsibilities of sales groups and individuals to customers effectivelyLine organizationMr. Ratnakar Shetty President / Owner Mr. Chandrakant VP (Sales) Five sales peopleCopyright 2011 Oxford University PressChapter 6: Sales Organization 8. Typical structure of a line organizationConsumer market National DistributorsDirect to HomeInstitutional market Direct marketingRegional DistributorsDistributorsCorporate marketBundlingGiftingConsumerRetailersConsumers Copyright 2011 Oxford University PressChapter 6: Sales Organization 9. Design by territory VP Marketing National Sales ManagerDivisional Manager (East)Divisional Manager (North)Regional Sales ManagerRegional Sales ManagerRegional Sales ManagerDistrict Sales ManagerDistrict Sales ManagerDistrict Sales ManagerSales Staff (City wise)Sales Staff (City wise)Sales Staff (City wise)Copyright 2011 Oxford University PressDivisional Manager (West)Chapter 6: Sales Organization 10. Design by management function Mr. Dara singh, VP (Marketing)Staff FunctionLine FunctionMrs. Chitra Mohanty (Advt / Sales Promotion Mgr)Mr. Chandra De Manager (MR)Mr. Dibya Behera (Sales Manager)20 Sales PeopleCopyright 2011 Oxford University PressChapter 6: Sales Organization 11. Design by productPresident, MarketingProduct Manager (A)Manager (Sales)Manager (Training)Manager (Promotion)Manager (Sales)Manager (Training)Manager (Promotion)Product Manager (B)Copyright 2011 Oxford University PressChapter 6: Sales Organization 12. Design by customer President (Marketing) Vice President (Marketing)Sales Manager Industrial RelationsSales PeopleCopyright 2011 Oxford University PressSales Manager WholesalersSales Manager Retail SalesSales PeopleSales PeopleChapter 6: Sales Organization 13. President FunctionalVice President (Production)Geographic Marketing Manager India G.M Consumer care CustomerVice President (Marketing) Combined Sales Org. DesignG.M International SalesVice President (HRD) Marketing Manager International G.M International SalesDivisional Manager SoapsDivisional Manager PaperDivisional Manager FoodEastern Sales DivisionWestern Sales DivisionNorthern Sales DivisionEurope Division Copyright 2011 Oxford University PressAmerica DivisionProductGulf Division Chapter 6: Sales Organization 14. Sales Organization Key account sales - focus on CRM - customer profitability and value analysis - the few accounts give incremental returns - national accounts Sales process automation - EDI Electronic Data ExchangeCopyright 2011 Oxford University PressChapter 6: Sales Organization 15. Emerging organizational design agency and distribution selling shared sales force telemarketing TQM and team-based sellingCustomerSalesMarketingTechnical SupportManufacturingSupplier selling team Copyright 2011 Oxford University PressChapter 6: Sales Organization 16. Number of sales people determined by: - territories vary in their demand structure for prospecting - product mix demands - levels and types of prospecting - nature of the customer segments Affordability method (based on sales budget) Incremental method Workload method Number of sales people =(Number of (Number of (Ideal (Length of X Potential frequency of existing X X a call) customers) customers) calls)Ideal selling time available for a salesperson Copyright 2011 Oxford University PressChapter 6: Sales Organization