INCLUDED CHAPTERS Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8.
Chapter
13
pyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. pyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter Chapter 13 13 Sales Territories You have to recognize when the right place and the right time fuse and take advantage of that opportunity. There are plenty of opportunities out there. Ellen Metcalf TM 13-1
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Chapter. 13. TM 13-1. Sales Territories. You have to recognize when the right place and the right time fuse and take advantage of that opportunity. There are plenty of opportunities out there. Ellen Metcalf. Sales Territory. TM 13-2. - PowerPoint PPT Presentation
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Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
ChapterChapter
1313 Sales Territories
You have to recognize when the right place and the right time fuse and take advantage of that opportunity. There are plenty of opportunities out there.
Ellen Metcalf
TM 13-1
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Sales TerritorySales TerritorySales TerritorySales Territory
Comprises a number of present and potential customers, located within a given geographical area and assigned to a salesperson, branch, or intermediary (retailer or wholesaling intermediary).Key word: customers
TM 13-2
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Benefits of Good Territory DesignBenefits of Good Territory DesignBenefits of Good Territory DesignBenefits of Good Territory Design
Enhances customer coverage
Reduces travel time and selling costs
Provides more equitable rewards
Aids evaluation of sales force
Increases sales for the sales
organization
Increases morale
TM 13-3
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Procedure for Designing Sales TerritoriesProcedure for Designing Sales Territories TM 13-4 (Fig. 13-
1)
Select a Control Unit
Determine Location and Potential of
Customers
Determine Basic
Territories
Assign Salespeople to
Territories
Set Up Territorial Coverage
Plans
Evaluate Effectiveness
of Design
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Territorial Control UnitsTerritorial Control UnitsTerritorial Control UnitsTerritorial Control Units
States
Counties
Cities
Zip-code areasMSAs (Metropolitan Statistical Areas)
TM 13-5
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Buildup Method of Territorial Design TM 13-6 (Fig. 13-3)
Management must determine:
Desirable call patterns:Call frequency per account per year
Total calls needed in each control group
Workload capacity:Total calls possible per rep per year = number of daily calls x days selling
Tentatively set territorial boundary lines by combining control units until total calls needed = total calls possible
Modify territories as needed
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Territory Design: Build-Up Method WorksheetTerritory Design: Build-Up Method Worksheet TM 13-7
Control Units
Illinois Iowa Kentucky
Customer Call Calls Calls Calls
class frequency Accounts per year Accounts per year Accounts per year
A 2 per month 10 240 7 168 5 120
B 1 per month 30 360 17 204 10 120
C 1 every 2 months 68 408 55 330 27 162
108 1,008 79 702 34 402
Distribution of one rep’s calls 1,008 + 491 or 402
year (1,500)*
Possible control combinations 100% 70% or 100% Illinois Iowa Kentucky
Alternative territories 100% Illinois + 100% Kentucky 100% Illinois + 70% Iowa
*6 calls/day x 5 = 30 calls/week x 50 = 1,500 calls/year
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Territory Size and Workload Factors
Nature of Job:Lots of presale and post-sale activity Decreases
Nature of product:A frequently purchased product Decreases A limited repeat-sale Increases
Market development stage:New market--fewer accounts IncreasesEstablished market--more accounts Decreases
Market coverageSelective coverage IncreasesExtensive coverage Decreases
Competition:Intensive Decreases – unless
market is oversaturated
Limited Increases
Workload Factor Territory Size Increase/Decrease
TM 13-8
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Breakdown Method of Territorial DesignBreakdown Method of Territorial DesignTM 13-9
(Fig. 13-5)
Management must determine
Company sales potential
Sales potential in each control unit
Sales volume expected from each sales person
Tentatively set territorial boundary lines by combining control units total sales potential = total sales volume expected
Modify territories as needed
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Territory Design: Break-Down Method WorksheetTerritory Design: Break-Down Method Worksheet
Company sales potential = $200,000,000
Targeted volume rep = $ 10,000,000
Number of reps needed Company sales potential $200,000,000 Targeted volume/rep $ 10,000,000
Territory volume as Targeted volume/rep $ 10,000,000 Company sales potential $200,000,000
Each territory should comprise 5% of sales potential or $10,000,000
Combine adjacent control units until each sales potential of $10,000,000
= = = 20
5% == =
TM 13-10
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Sales Territories for Pharmaceutical Sales RepsSales Territories for Pharmaceutical Sales Reps
Divide…
•The 48 states into 5-10 regions
•Each region into several districts
•Each district into 8-12 territories (typically 1 rep per territory)
TM 13-11
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Computers in Territory DesignComputers in Territory DesignComputers in Territory DesignComputers in Territory Design
Geographic Information System (GIS)Combines multiple layers of information to
provide in-depth understanding of a sales territory.
Elements of a complete GIS:SoftwareHardwareDataTrained people
TM 13-12
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Routing the Sales ForceRouting the Sales ForceRouting the Sales ForceRouting the Sales Force
Routing is the managerial activity that establishes a formal pattern for sales reps to follow as they go through their territories.
Reduces travel expenses as it ensures a more efficient territory coverage.
Some reps resent it.Best for routine sales
jobs with regular call frequencies.
x
Area C
Area B
Area A
Area B: Typically the “problem” area.
TM 13-13
