CHAPTER EIGHT

Organization

ORGANIZATION IS IMPORTANT!

Organizational structure has a direct bearing on the success of sales strategies

ORGANIZATIONAL STRUCTURE

Is a control mechanism guides the activities of company

members

ORGANIZATIONAL CONCEPTS

Specialization versus generalization Centralization versus decentralization Span of control Line versus staff

CHARACTERISTICS OF A GOOD ORGANIZATION

Marketing orientation Build around activities Related responsibility and authority Reasonable span of control Stable yet flexible Balance and coordinated activities

ORGANIZATIONAL TYPES

Geographic Organization Product Organization Market Organization Functional Organization Major Account Organization

GEOGRAPHIC ORGANIZATION

Assign salespeople a geographical area called a territory

Ensures coverage of entire market Can respond to local conditions Can respond to customer requests Sales managers are generalists

GEOGRAPHIC ORGANIZATION

EASTERN REGIONSALES M AN AGER

DISTRICT SALES M ANAGER S (20)

ZONE M AN AGERS (4)

W ESTERN R EGIONSALES M AN AGER

V.P. SALES

PRODUCT ORGANIZATION

Product managers responsible for sales of one or more products

Best used for a variety complex products or a number of dissimilar unrelated products

Duplication of selling effort

PRODUCT ORGANIZATION

OFFIC E EQU IPM EN T M AN AGER OFFIC E SU PPLIES M AN AGER

N ATION AL SALES M AN AGER

MARKET ORGANIZATION

Organize on the basis of customers, industry type, or by channels of distribution

Consistent with marketing philosophy

Duplication of selling efforts

MARKET ORGANIZATION

C OM M ER CIAL ACC OUN TS M GR GOVER NM EN T AC COU NTS M GR

N ATIONAL SALES M AN AGER

FUNCTIONAL ORGANIZATION

Specialize according to selling activity

Geographic and Customer Duplication

FUNCTIONAL ORGANIZATION

FIELD SALES M AN AGER TELEM AR K ETIN G SALES M AN AGER

N ATION AL SALES M AN AGER

MAJOR ACCOUNT ORGANIZATION

Multiple people in buying process Purchase centrally Desire long term, cooperative

relationship Expect specialized attention

MAJOR ACCOUNT ORGANIZATION

Existing sales force Management Separate sales force Sales teams

MAJOR ACCOUNT ORGANIZATION

Strategic Account Management Association» http://www.nams.org/

HYBRID ORGANIZATION

Use a mix of the aforementioned approaches

Capitalize on advantages of each type

TELEMARKETING

It allows companies to make cost-effective sales calls

Many business customers like it!

TELEMARKETING

Customer service Prospecting and qualification Customer retention Advertising and promotions

SALES AGENTS

Independent businesses given exclusive contracts to sell within a given region

Also known as “manufacturer’s representatives”

SALES AGENTS

Market focus Compatibility Economic consequences Level of control Competitive environment

SALES FORCE SIZE

Affordability approach Workload approach Breakdown approach

AFFORDABILITY APPROACH

Divide total dollars available for sales (wages, commission, travel) by average wages + expenses per sales person

See example page 384

WORKLOAD APPROACH

A buildup method based on numbers of customer, planned call frequencies, length of each call

Number = Total hrs required for selling / number of total hrs of selling available for one salesperson

See example page 384

BREAKDOWN APPROACH

Size of sales force =

Forecasted Sales

Average sales per salesperson

FROM THE TEXT

Read pages 364 to 385.