Post on 07-Apr-2015
Sales ManagementSales Management Marketing 3345Marketing 3345
Territory Design & Territory Design & ManagementManagement
Territory Design ProcessTerritory Design Process
1Select geographic
control units
1Select geographic
control units
2Decide on
allocation criteria
2Decide on
allocation criteria
3Choose
starting points
3Choose
starting points
4Combine control units
adjacent to starting points
4Combine control units
adjacent to starting points
5Compare territories on
allocation criteria
5Compare territories on
allocation criteria
6Assign salespeople to
new territories
6Assign salespeople to
new territories
Events triggering salesterritory adjustments
Events triggering salesterritory adjustments
MergersDivision consolidationDivision splitSales force turnoverPlant relocationsProduct line changes
MergersDivision consolidationDivision splitSales force turnoverPlant relocationsProduct line changes
Revise territoryboundaries tobalance workloadand potential
Revise territoryboundaries tobalance workloadand potential
Stages in Territory Design
Step 1 Select Basic Control Unit
Estimate Market Potential in Each Control Unit
Combine Control Units –Tentative Territories
Perform Workload Analysis
Adjust Tentative Territories to Allow for Sales Potential and Coverage Difficulty Differences
Assign Salespersons to Territories
Step 2
Step 3
Step 4
Step 5
Step 6
Territory Design ProceduresTerritory Design Procedures
What are triggering events?What are triggering events? The Buildup Method -- Six steps The Buildup Method -- Six steps
1. Select control units1. Select control units Census tracts -- good for dividing citiesCensus tracts -- good for dividing cities Counties - convenient and data readily Counties - convenient and data readily
availableavailable
2. Determine Allocation Criteria2. Determine Allocation Criteria Territory balance -- effect on moraleTerritory balance -- effect on morale Customer balance - distribute commissionCustomer balance - distribute commission Potential balance - share business growthPotential balance - share business growth Size balance - reduce transportation costsSize balance - reduce transportation costs
Geographic Control Units Used in Territory DesignGeographic Control Units Used in Territory Design
Countries CitiesStates or provinces Zip codesCounties Census tractsMetropolitan areas Customers
Territory Design ProceduresTerritory Design Procedures
3. 3. Choose starting pointsChoose starting points Salesperson’s home Salesperson’s home Large customer - cut transportation Large customer - cut transportation
costcost Big city - convenient for services Big city - convenient for services
4. 4. Combine Adjacent Control UnitsCombine Adjacent Control Units
5. Compare Sales Territories5. Compare Sales Territories Mountains, roads, population center Mountains, roads, population center
locations?locations?
6. 6. Assign people to Sales TerritoriesAssign people to Sales Territories
The numbers in each county arepopulation figures and area measure of potential.
Kentucky Counties, Major Cities, and Population Centers
TENNESSEE
VIRGINIA
WESTVIRGINIA
INDIANA
ILLINOIS
OHIO
Kentucky Counties, Major Cities, and Population Centers
The numbers in ach county arepopulation figures and area measure of potential.
Three Kentucky Sales Territories
TENNESSEE
VIRGINIA
WESTVIRGINIA
INDIANA
ILLINOIS
OHIOMajor super highways
Territory borders
Three Kentucky Sales Territories
Comparing Three Kentucky Sales Comparing Three Kentucky Sales TerritoriesTerritories
Potential as Measured by
Territory Population Number of Counties 1 1,124,897 47 2 1,129,290 27 3 1,131,137 43
Figure 11-4: Dividing a Large Territory
Territory Design ProceduresTerritory Design Procedures
Talley’s Workload ApproachTalley’s Workload Approach No starting pointsNo starting points Equates work to be doneEquates work to be done May lead to imbalance on sizeMay lead to imbalance on size Often raises travel costsOften raises travel costs Good when reps are on salaryGood when reps are on salary Key: optimal call frequency for Key: optimal call frequency for
particular classes of customersparticular classes of customers
Workload Method
Classify all customers into sales volume categories1.
Determine the frequency with which each type of account should be called upon and the desired length of each sell
2.
Calculate workload involved in covering entire market3.
Determine time available per salesperson4.
Apportion the salesperson’s time by task performed5.
Calculate the number of salespeople6.
Experiences of a Consumer Durable Goods Manufacturer with Territory Design
* Each territory is made up of several trading areas.
% The percentage of salesperson time spent in the trading area (100% = 1 salesperson).
Recommended Effort (%)
Present Effort (%)
Trading Area*
Deployment Analysis for Two Territories
Andy 1 10 42 60 20
3 15 7
4 5 2
5 10 3
Total 100 36
Experiences of a Consumer Durable Goods Manufacturer with Territory Design
* Each territory is made up of several trading areas.
% The percentage of salesperson time spent in the trading area (100% = 1 salesperson). Thus, the deployment analysis suggests that Andy’s territory requires only 0.36 salespeople, which Sally’s territory needs 2.36 salespeople for proper coverage.
Recommended Effort (%)
Present Effort (%)
Trading Area*
Deployment Analysis for Two Territories
Sally 1 18 812 7 21
3 5 11
4 35 35
5 5 11
6 30 77
Total 100 236
CALLPLAN Approach
What sales level will result from each current customer and prospect if:
1.
Probabilities that prospects will be converted into customers given the different call frequencies
2.
•no calls are made
•one half the present calls are made
•present level of calls is continued
•50 percent more calls are made
•a saturation level of calls are made
Salesperson Input
CALLPLAN Approach
CALLPLAN Output
Expected sales for all feasible call frequencies1.
Optimal number of calls for each client and prospect2.
Length of call for each client and prospect3.
Computer Based Territory DesignsComputer Based Territory Designs
Computers save timeComputers save time Need location & number of customers & Need location & number of customers &
starting pointsstarting points Program optionsProgram options
minimize moment of inertiaminimize moment of inertia Graph data & draw boundaries -- not Graph data & draw boundaries -- not
optimaloptimal design optimal territories -- expensivedesign optimal territories -- expensive
Applications -- pharmaceutical repsApplications -- pharmaceutical reps