Organization of the Sales Force
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Transcript of Organization of the Sales Force
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ORGANIZATION OF THE SALESFORCE
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ORGANIZATION
Organization is the basic managementfunction of arranging the firms workactivities.
It is performed by all managers regardless oftheir other responsibilities.
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Tasks Of The Sales Organization
To reflect stronger commitment to theircustomers, three basic tasks must beaccomplished by organization:
1. Maintenance of order in achieving salesforce goals and objectives.
2. Assignment of specific tasks andresponsibilities.
3. Integration and coordination with otherelements of the firm.
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STRUCTURE
Structure involves the way in which anorganization divides its activities into distincttasks and then achieves coordination amongthem.
Organization structure also permits theassignment of specific tasks to a positionwhose incumbent is then charged withresponsibility for accomplishing them.
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Developing a Sales Organization
Developing an organization structure is not aneasy task. Sales managers must recognize andthen deal with:
1. Formal and informal organization
2. Horizontal and vertical organization
3. Centralized and decentralized organizational
structures4. The line and staff components of organization
5. The size of the company
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Formal & Informal Organization
Formal organization is the managementcreated relationships between departmentsand between individuals.
Informal organization is basically acommunications pattern formed from thesocial relationships existing within the formal
organization.
Grapevine is another name for informalorganization communications pattern.
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Horizontal & Vertical
Organization
Vertical sales organization: Organizationthat has several levels of management allupward to the next level.
Horizontal sales organization: Organizationin which the number of management levels issmall and the number of managers at anyparticular level is large.
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Centralized & Decentralized
Organizations
Centralized sales organization:Organizations in which responsibility andauthority are concentrated at higher levels ofmanagement.
Decentralized sales organization:Organizations in which responsibility and
authority are delegated to lower levels ofmanagement.
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Line and Staff Components
Line function is a primary organizationactivity. For example, in marketingorganization a selling function is a linecomponent.
Staff function is a supporting organizationalactivity. For example, in marketing
organizataion advertising, marketingresearch, marketing planning etc are staffroles.
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Company Size & Organization
Size of company is a major factor influencingits organizational structure.
For small company, there is likely to be noformal organizational structure.
For a large company, as each functional areabecomes larger, the functional organization isextended. (Functional organizations whoseformat are based on formal activities)
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Basic Types of Sales
Organization
Most company sales forces are organized onthe basis of geography, customers, orproducts or some combinations of thesefactors.
Each of these bases has positive and negativefeatures.
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Geographic Specialization
Sales organization in which selling personnelare given the responsibility for direct sellingactivities in a given geographical area.
Sales representatives are responsible forselling the firms full line of products.
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Customer Specialization
Sales organizations in which selling personnelare organized by particular customers orindustries.
IBM is an example of a company that usesspecialized sales forces for different classes of
customers.
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Product Specialization
Sales organizations in which selling personnelconcentrate their efforts on particularproduct lines, brands or individual items.
Manufacturer representatives areindependent commercial sales agents who
sell for several manufacturers of noncompeting products.
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Combination Organizations
Due to rapidly changing high growth marketmany high-tech companies are attempting todevelop new organization strategies. These
new combination organizations can becategorized as:
1. Market, product and function
2. Decentralized staff and line personnel
3. Complex staff-line relationships
4. Overlaid organizational mechanism
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Relations With Other
Departments There are two types of departments with
which sales must have good workingrelationships.
1. Those connected with other marketingactivities advertising, marketing research,sales promotion etc
2. Those with nonmarketing functions such ashuman resources, manufacturing andfinance.
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Relationships with Other
Marketing Functions
Marketing mix is the combination of varioustechniques used to satisfy customers needs.
These relations between sales andadvertising are of special concern.
Flow of information is another vital part ofthe sales departments relations with othermarketing functions.
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Relations with Non-Marketing
Departments
R&D: To perform basic research andengineering activities needed to develop newproducts and improve existing ones.
Account control concept: in which theauthority and responsibility for handling theaccount rests with field sales management.
This concept was formulated to tackle theproblems faced by high-tech companies.
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Relations with Non-Marketing
Departments
HR: Today role of HR can not be understated.Relations with HR is of crucial importance assales managers are required to seek advicesfrom HR for guidance on sales force hiring.
Accounting and finance: Three major areasof cooperation between sales, accounting
and finance are budgeting, cost control andcredit. Accounting personnel helps salespeople in many ways like for selling cost
analyses.
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Major Trends in Sales
Organizations There are three major organizational trends
that directly influence sales management interms of both people and structure:
1. Telemarketing
2. National account management
3. Indirect sales channel
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Telemarketing
Telemarketing refers to the use oftelecommunications technology in personalselling.
Inbound telemarketing is in which potentialcustomers contact the selling company.
Outbound telemarketing is in which theselling company contacts prospects andcustomers.
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National Account Management
Special sales forces dedicated to obtainingand/or maintaining large accounts.
To meet the unique demands of nationalaccounts, a national account manager isresponsible for coordinating the effort of a
sales and support team to serve their needs.
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Indirect Sales Channel
Independent sales representatives oragencies used by a company in place of itsown field sales force.
It has some disadvantages like about thecontrol over the selling process.
Independent agents follow their own rules
about what to sell, how to sell, etc.