8 Designing & Development of Salesforce Tanner

8/13/2019 8 Designing & Development of Salesforce Tanner

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Sales Management: Shaping Future Sales Leaders

Organization of the

Sales Force


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Organization of The Sales Force

Basic Management Function of ArrangingThe Firms Sales Activities


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Tasks of The Sales Organization

1. Maintenance of order in achieving sales forcegoals/objectives

2. Assignment of specific tasks and responsibilities3. Integration and coordination with other elements

of the firm


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How a Firms Goals Affect the Design of ItsSales Force

Organization of sales force is driven by strategic goals

Organizational sales structures serve a number ofpurposes that include

1. Serving buyers effectively in ways they want to beserved

2. Operating efficiently and effectively as measured by

cost and customer satisfaction


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The Size of the Sales Force

BreakdownMethod

WorkloadMethod


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DevelopingA Sales Organization


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Developing A Sales Organization

1. Formal & informal organization

2. Horizontal & vertical

3. Centralized & decentralized

4. The line and staff components ofthe organization


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Formal and informal organizations - every firm has aformal & an informal organization.

The formal organization is a creation of management

CEONSM

RSM

ASM

Salesperson

Informal organization is developed from the socialrelationships existing with in the formal organization structure.


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Informal organization

Communication pattern formed from the socialrelationship existing with in the formal organization

Salesperson ASM RSM NSM CEO

Manager Marketing distribution Manager NSM Manager Accounts


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Vertical Sales Organization

Several level of management, all reportingupward to the next level

CEO

NS

RSM

ASM

FS

SR


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Horizontal Sales Organization

Number of management level is small and number ofmanager at particular level is large

Chief Sales ExecutiveDistrict Sales Manager District Sales Manager District Sales ManagerDistrict Sales Manager

Karachi Multan Lahore Islamabad


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Centralized

Responsibility and authority are concentrated

at higher level of managementDecentralizedDelegated to lower levels of management

- Structure is ineffective unless the assignment

of decision making to lower levels of salesmanagement is accompanied by a completeauthority to carry out the decision.


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Line and Staff Marketing Organization

A line function is a primary organizational activity andstaff function is a supporting organizational activity.

In a marketing organization selling function is the linecomponent.

Advertising, marketing research, sales training, and

distributor relations are considered as staff roles


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Line Marketing Organization

Vice President for sales

General Sales

Manager

Regional Sales

Manager N

Regional Sales

Manager C

Regional Sales

Manager S


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Line and Staff Marketing Organization

Vice President for Marketing

General Sales Manager

Regional Sales

Manager N

Regional Sales

Manager C

Regional Sales

Manager S

------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------

Sales TrainingSales AnalystSales PlanningDistribution

Manager

Marketing

Research Advertising


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Best way to design a sales structure is to

Determine sales activities that must be performedto reach goals

Create sales structure that affords highest levelsof service to buyers at lowest overall cost

Select, train and manage reps and managersto become experts in their assigned duties

Basic Types of Sales Organization


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Sales Structures

Geographic Specialization

Customer Specialization

Product Specialization


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Geographic Specialization

Sales people are given the responsibility for directselling activities in a given geographical area

Territories are treated as separate profit center forpurpose of analysis and evaluation for salespersonnel

Is the most commonly used method

Simplicity explains its popularity among salesexecutives

Offers the advantages of adaptability and improvedcoverage


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Generalists

Sell every offering to all the customers and prospects in agiven geographic area.

Generalist Benefits: Geographic knowledge

Limited travel costs

No duplication of effort

Sales rep owns market

Disadvantages:

Less effective

Risk of misplaced focus


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Geographic-Based Structure


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Customer and product specialization approaches aremore complex and should only be used if their specificfeatures are critical for firms sales efforts


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Customer Specialization

Sales organization in which selling personnel areorganized by particular customer or industry

The companys customer may require specializedknowledge of their industry

Sales force is to focus on customers need and buildthe best possible relationship

Office equipment manufacturers have sales specialistwho deal only with educational institution


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Customer Specialization By type of Industry


Sales Manager

ElectronicsMkt

Sales Manager

Military Mkt

Sales Manager

Computer Mkt


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Customer SpecializationBy Distribution Channel


Sales Manager

Exports

Domestic

Sales Manager


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Customer Specialization By General type of Customers


Sales Manager

Institutions

Sales Manager

Small Business

Sales Manager

Major Accounts


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Customer Specialization - Disadvantages

Territories typically overlap.

May be two, three or more sales representatives of thecompany covering the same geographical area, but

serving different clients, which results in often higherselling costs.

The salespeople may not share information about theaccount with each other, so they will be doing unnecessarywork

Lack of flexibility as specialists can not be redeployed intimes of industry downturn

To avoid unwanted costs, customer specialization shouldbe used only if is required by the specialized buyer need


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Sales organization in which selling personnel concentrate theirefforts on particular product lines, brands or individual items

The entire field force is divided by product groupings

Product sales specialists are used when products complexitylimits other options

High tech companies must have product specialists whounderstand the specialized needs of the customer and can usetheir detailed product knowledge to identify and develop

specific applications(Pharmaceutical companies have product specialists for specificcustomers)


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Sales Manager

Product C

Sales Manager

Product B

Sales Manager

Product A


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Disadvantages

Territories typically overlap. Two or more sales reps from the same

company will call on the same customer

Expensive duplication of sales efforts


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Product specializationis most effective when vast knowledgeis required to sell the product or service you are taking to market.

Examplescan be found in the High-tech and medical fields.

Specialization by selling activityis found in many industries. Itis illustrated by the delineation between the Hunter and Farmerroles. Hunters typically focus on new logo acquisition, whilefarmers cultivate current customer relationships to drive revenuegrowth and minimize churn.

Specialization by industry verticalis recommended when a

sales professional with deep industry knowledge represents acompetitive advantage over a generalist rep with similar offerings.


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Benefits of Specialization:

Typically more Effective

Knowledge of a Product, Activity Strategic Focus

Role Clarity

Customer Focus

Disadvantages:

More costly

Increase travel time

Customer confusion


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Indirect Sales Channels

Independent sales representatives or agencies used by acompany in place of its own field sales force

- Dealers, Agents, Brokers

Independent reps are an effective, low cost way to open

up new markets

- Established contacts in local market area

- In depth territory knowledge

- Long term customer relationship- Community goodwill, company cant acquire on its own


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Indirect Sales Channels

Independent sales representatives or agencies used by acompany in place of its own field sales force

- Dealers, Agents, Brokers

Mostly, IBM sold its total product range (computers totypewriters) through their own field force

Minicomputers and microcomputers with smaller profitwere sold through indirect sales channels

Most suitable for small companies with limited resources


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Relations With Other Departments

Key Concern of Sales Manager

Relation with other departments

As per marketing concept, all business activities

should be coordinated to satisfy customer need

Sales department is the key link, so coordinatingthe sales effort with other departments is absolutelyessential


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Relations With Other Departments

Two types of departments sales MUST have goodworking relationship

One, connected with marketing activities, advertising, marketingresearch, sales promotion, product management

Second, those with non marketing functions such as HR,manufacturing and finance

Top management is responsible for coordinating the activity of all thedepartments with in a company

Athorough understanding of other departments functions, and

how these relates to the sales efforts, is required Coordination may be achieved through policies, written

communications, meetings and similar formal management activities

Successful coordination between departments often involve informalcommunications as well


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Relations With Other

Relation with other marketing function

Marketing mix

Combination of the various techniques used to satisfy customersneeds and to stimulate sales

Coordination between various elements of the marketing mix isessential

Most companies try to achieve this by requiring the heads of allmarketing , including sales to report to a top marketing executive

Special organizational structure such as product management are

also used to coordinate sales with other marketing functions


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Relation with other marketing function

Advertising

Relation between sales and advertising are of special concern

Both form of promotion have the same purposeto inform the publicand persuade people to buy

Sales manager must aware of the advertising departments plansand activity, so that sales activity can be complemented

AdvertisingA good source of sales lead

Salespeople can provide feedback on advertising


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Relation with Non marketing Departments

Research and Development

Most companies have R&D department

May be a separate staff department or responsibility may beassigned to production or marketing

Primary responsibility or function is to perform basic research andengineering activity needed to develop new products and improveexisting

Sales department can assist R&D efforts in two primary ways

1. Salespeople are excellent sources of new product and productmodification

2.Salespeople have valuable insight into whether or not a newproduct will meet customer need


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Relation with Non marketing Departments

Research and Development

Relationship is crucial in high-tech firms

Field sales managers find themselves dealing with many tasks

Issues, as how headquarter staff should interact with field salesmanagement, final customers and whether sales people should betrained on each product technology?

To solve these problems, high-tech companies have developedaccount control concept authority and responsibility for handlingeach account rests with field sales management

Product specialist accompany salespeople when specific productknowledge is needed


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Relation with production

Function is to prepare the product for sale

Production departments concerns are minimizing cost

through standardization, long & continuous production run,long production lead time

Sales executive want many types of products, frequentproduct changes, customers special order & shortproduction lead time

Best way is JOINT PLANNING


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Relations with HR

Responsible for the people, or human resources

The unique aspects of managing people who sell often leadto conflict s between sales and human resource manager

HR do not understand the problems involved in managingpeople who are located away from the home office.

Sales managers/departments themselves handle the morecomplex tasks of selecting , training, developing & evaluatingtheir own personnel.

However, sales manager often need to consult HR for guidancefor rapidly changing issues, health and safety. A sales managerwould be unwise not to take advice from expert


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Relation with FinanceThree major areas

Budgeting

- Sales department provides short and long range sales estimates asthe basis of financial planning & budgeting

Cost control

- Accounting specialist can assist sales managers in their efforts tocontrol costs, by providing data for selling cost analysis

Credit

- Credit plans are major concerns for sales as well as finance. Salesexecutive should have input into establishing credit policies. Salespeople can also provide current credit status information


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Major Trends in Sales Organizations

Changing Trend

Traditional forms of sales organization have changed their approach

In search of new and better ways to serve their markets

For Consumer goods & service companies, the new approaches

involve product manager form of organization

Industrial manufacturer are looking closely at strategies that will helpthem adapt to change buying behavior and develop more specializedsales force

For many companies, the major challenge is change from a

Product To Customer Driven Orientation


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Major Trends in Sales Organizations

Telemarketing - Use of telecommunication technology in personalselling

Direct Marketing

An emerging form of promotion and distribution that combineselement of advertising and personal selling

Approach that bypasses intermediaries to deliver goods and servicesdirectly from seller to buyer

Greatest strength of direct marketing is its ability to deliver individualselling message to specific prospects or customers with affordablecost.

Development/maintenance of customer data base is the key


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National Account Management

A special sales force is dedicated to obtaining & maintaining majoraccounts ( 50 to 70% sales)

A customer that involves several people in the buying process before

a sales takes place

A customer that purchases in significant volume, both in dollar andas a %age of suppliers total sales

A customer that desires a long term cooperative working relationshipwith company or supplier

A customer that expects specialized attention and services


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THANKS

8 Designing & Development of Salesforce Tanner

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