Post on 08-Apr-2015
Management of Sales Territory & Sales Quota
Module 3
Sales territory
Module 3
Sales territory
A sales territory is defined as a group of present and potential customers assigned to an individual salesperson, group of salesperson, a branch, a dealer, a distributor or a marketing organization at a given period of time
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Advantages
Better market coverage Effective use of sales force Convenient way to evaluate the performance of a
sales person. Enhance employee morale Understand and serve customers I a better way Develop loyalty. Develop specific marketing programs for the specific
territory. Develop trade promotion strategy Cost control etc.
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Disadvantages
This type of territory designing may not be possible for some companies. New companies. Small companies. Where customers are geographically
dispersed. Some organizations may need industry
specific groups. etc.
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Size of sales territories
Nature and demand of the product. Mode of physical distribution. Selling process. Transport and communication
facilities. Other factors
Government regulations Density of population
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Size of sales territories contd…
Population spread within the territory Market potential Growth rates Level of competition Co’s sales policy Ability of sales people Overall economic condition etc.
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Allocation of Sales Territories
Assigning a particular sales man to a specific territory. He knows the customers closely and Customer know him
Uniform distribution of work for all sales people
This motivates the sales man to perform.
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Allocation of Sales Territories contd…
Duplication of work is avoided.
Economies of scale can be achieved.
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Designing a sales territory
1.Select the basic geographic Control units
2.Decide on the criteria for allocation
3.Determine basic territories
4.Assign sales force to new territories
5.Revising sales territories
Factors influencing The modification Of
a territory
•Merger •Market consolidation
•Split in division
•Sales force T/O
•Customer relocation
•Product life cycle change
•Product line change
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Designing Sales territory
1. Select basic geographic control units-
While designing territories, the first step is to select a geographical control unit as a territorial base. Commonly used units are states, countries, cities, pin codes etc.
A typical territory may compromise several individual units.
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Designing Sales territory contd…
2. Decide on the criteria for allocation-
Management should determine the location and potential of both present and prospective customers within each selected control unit.
The get above information company can make use of lot of data which is easily available. For eg. Per capita income, employment situation, FMCG sales figures, house rents and lot of data available from various research institutes or reports.
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Designing Sales territory contd
3. Determine basic territories- at this stage territories are established
Methods of determining the territory are-
Build up method
Breakdown method
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Buildup method
Management must
Determine:
Desirable call Pattern
(call frequency)
Total calls needed
In each control group
workload capacity
Tentatively setTerritorial lines by
Combining control units Until total calls needed
= total calls possible
Modify territoriesAs needed
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Breakdown method
Management Must determine
company sales potential
sales potentialIn each control
unit
Sales volumeexpected from
eachsalesperson
Tentative territorialboundary lines bycombining control
units until totalsales potential =
expected sales volume
Territorial modifications
As needed
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Designing Sales territory contd … Routing the sales force
Routing is the managerial activity that establishes a formal pattern for sales reps to follow as they as they go through their territories
Territory shapes
Circle
Wedge
cloverleaf
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4. Assigning salespeople to territories
Till this point we have assumed that all the sales people are equal in aspects. But this is not true.
Sales representative’s age, selling skill, experience, initiative, creativity etc. has to be taken into account while allotting the territory.
Many companies design territories of unequal sizes to take care of this aspect.
Sales quota
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A sales quota is the sales goal set for the product line, company division, or sales representative. It is primarily a managerial device for defining and stimulating sales efforts
- Philip Kotler
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Introduction
Quota is a type of plan It is expected performance objective Quotas are assigned to departments,
divisions, and individuals. They are goals, which are to be
achieved in a specific period of time.
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Importance of Sales Quota
Motivate sales people. Quota helps management by
exception. It gives direction to the sales people’s
efforts and resources for specific ends.
It serves as a control.
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Principles of Quota Setting
SMART Quota should be Specific, Measurable,
Attainable, Realistic, Time specific
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Selling by Objectives (Charles Futrell)
Organization of sales job Territory Management Account Management Call Management Self Management
Defining Annual Objectives These objectives are of three types
Regular/Recurring Objectives Problem solving Objectives Creative objectives
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Types of Sales Quota
Sales Volume Quota Sales Budget Quota Sales Activity Quota Combination Quota
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Methods of Setting Quota
Based on sales potential Based on forecast Based on Past Sales Based on Executive Judgement Based on Sales Person’s Judgement Based on Compensation
Recruitment and selection of Sales Force
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Hiring process
Phases of hiring process
Human resource planning process Recruitment Selection Socialization
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Challenges in Sales Force Selection
The determination of characteristics that differentiate candidates who perform better, measuring these characteristics, evaluation of the motivation level of candidates for the job and for the organization, followed by a decision on who will make the ultimate selection decision.
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1. Human Resource Planning It is a systematic procedure that describes
the way a sales job is to be performed and the skills and abilities needed to perform the job.
Determination of performance measures. The identification of critical success factor. The performance dimensions of the position. The determination of performance measure
dimensions. The operationalization and the establishment of
performance. Standards and the design of the assessment
tools.
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1. Human Resource Planning contd…
Turnover
Job Analysis
Job qualification and Job Description
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2. Sales Force Recruitment
Sources
Internal
External
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3. Selection Inviting application
Personal interview
Reference checks
Physical examination
Psychological tests
Intelligence
Personality
Aptitude test
Determination of terms of service
Appointment
Initial orientation
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4. Socialization
Anticipatory Stage
Encounter Stage
Setting in
Training the Sales Force
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Importance of training
Objectives of sales training
Challenges in sales training
Role of a trainer
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The training process
1. Training need assessment.
2. Design and conduct of training programme.
3. Evaluation of a training programme.
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1. Training need assessment
Organizational level analysis
Task level analysis
Individual level analysis
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Discovery of the training need involves the following five tasks Listing the duties, responsibilities, or tasks of the job
under consideration on the basis of the job description guide.
Listing the standards of work performance related to the job.
Comparing the actual performance against standards.
Determining the part of the job that creates a problematic environment for the sales person and whether or not he is performing the job, as per the standards.
Determining the kind of training needed to overcome specific difficulties and problems.
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2. Design and conduct of training programme.
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4. Evaluation