Sales Organization

Sales organization

• A structural body through which the functions of sales management are carried out

• Sales organization always makes efforts to increase sales, thereby achieving the principle of profit maximization, which contributes to the overall growth of enterprise

• An organization of individuals either working together for the marketing of products and services manufactured by an enterprise or for products that are procured by the firm for the purpose of reselling

• A sales organization defines duties, roles, rights, and responsibilities of sales people engaged in selling activities meant for the effective execution of the sales function

• To permit the development of specialists

• To assure that all necessary activities are performed

• To achieve coordination or balance

• To define authority

• To economize on execution time

Setting Up a Sales Organization

• Defining Objectives

• Determination of Activities and their Volume of Performance

• Grouping activities into positions

• Assignment of Personnel to positions

• Provisions for coordination and control

Factors influencing structure

1. Product and service related factors2. Organization related factors3. Marketing mix related factors4. External factors:

the speed of market change

reduction in the number of vendors per buyer

closer to customer relationships

changes in regulations and international practices

Basic Types of Sales Organisation Structure

• The grouping of activities into positions and the charting of relationships of positions causes the organization to take on structural form.

• The most common structures are line & line and staff.

• Functional organizational structures are rare.

• Most sales department have hybrid organizational structures, with variations to adjust for personalities and to fit specific operating conditions.

Line Sales Organization

• Lines of authority and instructions are vertical, i.e. they flow from the top to the bottom.

• The unity of command is maintained in a straight and unbroken line. It implies that each subordinate receives instructions from his immediate superior alone and is responsible to him only.

• All persons at the same level of org. are independent of each other.

• This structure specifies responsibility and authority for all the positions limiting the area of action by a particular position holder.

General Manager

Sales manager

Assistant Sales manager Division1

Salespeople

Assistant Sales manager Division2

Salespeople

Assistant Sales manager Division3

Salespeople

Assistant Sales manager Division4

Salespeople

Line & Staff Sales Organization

Refers to a pattern in which staff specialists advise managers to perform their duties.

Staff managers provide advice to the line manager who are generally specialists in the field.

Staff positions are purely advisory in nature. They have a right to recommend but have no authority to enforce their preference on other dept.

The line executives are the “DOERS” or commanders, where as, the specialists are the “THINKERS” or advisors

Advantages

Planned Specialization

Quality Decisions

Prospect for Personal Growth

Training Ground For Personnel

Disadvantages

Lack Of Well Defined Authority

Line & Staff Conflicts

Suitability

Not suitable for small org. as it is quite costly for them.

Functional Sales Organization

Functional structure is created by grouping the activities on the basis of functions required for the achievement of organizational objectives.

Authority relationships in functional structure may be in the form of line, staff & functional.

Characteristics of functional structure:

1. Emphasize on sub goals

2. Specialization by functions

3. Pyramidal growth of the organization

4. Line and Staff division

President

Vice president in Charge of marketing

Advertising Manager

General ManagerDirector of

Sales Training

Sales Personnel

Director

Assistant General

sales Man

Direct Sales manager

Branch Sales manager

Sales Personnel

Sales

Promotion

Manager

Director of

dealer

and Distributor relation

s

Manager of Marketing Research

5. Functional authority relationships among various departments.

6. Limited span of management and tall structure.

Advantages:

Result into high degree of specialization

Brings order & clarity in the org.

Promotes professional achievements, provides satisfaction to the specialist.

Resources can be saved

High degree of control and coordination of functions.

Disadvantages:

Judging the performance of each dept is difficult.

Slow Decision Making process

Lack responsiveness necessary to cope up with new & rapidly changing work requirements.

Offers usually line & staff conflict & interdepartmental conflict and results in inefficiency.

Suitability

Required when small org. grows & business activities become more & more complex.

Works better if org. has one major product or similar product line.

Line administration is subdivided

As marketing operations expand, line authority and responsibility eventually become excessively burdensome for the Top Level executives.

To reduce the burden of the line administrative staff additional assistants are provided.

These new subordinates are given line responsibility narrower than those of the assistant general sales manager.

Tasks of line administration are subdivided among these new assistants in one of the 3 ways:-

– By Products: divisions created according to the type of product or service.

– By Geographic area: divisions based on the area of a country or world served.

– By Market: divisions based on the types of customers served.

National Sales Manager

Fields Sales manager

Regional Sales Manager (4)

District Sales Manager (16)

Salespeople (160)

Telemarketing Sales manager

District Sales Manager (2)

Salespeople (40)

Product Sales Organization

Advantages:

• Salespeople become experts in product attr. & applications

• Management control over selling effort

Disadvantages:

• High cost

• Geographic duplication

• Customer duplication

Geographic Sales Organization

Advantages:

• Low Cost

• No geographic duplication

• No customer duplication

VP Marketing

Product Manager (A)

Manager (Sales)

Manager (Promotion)

Manager (Training)

Product Manager (B)

Manager (Sales)

Manager (Promotion)

Manager (Training)

• Fewer management levels

Disadvantages:

• Limited specialization

• Lack of management

Control over product or

Customer emphasis

VP Marketing

National Sales Manager

Divisional Manager (East)

Regional Sales Manager

District Sales Manager

Sales Staff (City wise)

Divisional Manager (West)

Regional Sales Manager

District Sales Manager

Sales Staff (City wise)

Divisional Manager (North)

Regional Sales Manager

District Sales Manager

Sales Staff (City wise)

Market Sales Organization Advantages:

• Salespeople develop better understanding of unique customer needs

• Management control over selling allocated to different markets

Disadvantages:

• High cost

• Geographic duplication

Hybrid Sales Organization Structure

• Many large organizations have divisional structures where each manager can select the best structure for that particular division.

– One division may use a functional structure, one geographic, and so on.

President,Marketing

Product Manager (A)

Manager(Sales)

Manager(Training)

Manager(Promotion

)

Product Manager (B)

Manager(Sales)

Manager(Training)

Manager(Promotion

)

• This ability to break a large organization into many smaller ones makes it much easier to manage.

Advantages:

• Salespeople develop better understanding of unique customer needs

• Management control over selling allocated to different markets

Disadvantages:

• High cost

• Geographic duplication

National Sales Manager

Commercial Accounts Sales Manager

Major Accounts Sales Manager

Regular Accounts Sales Manager

Field Sales

ManagerWester

n Sales Manager

Eastern Sales Manager

Telemarketing Sales

Manager

Government Accounts Sales Manager

Office Equipment Sales Manager

Office Supplies Sales Manager