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Sales territories

Sales territories






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    Sales territories Sales territories Presentation Transcript

    • Sales Territories
    • Sales Territory
      • A sales territory is a grouping of customers and prospects assigned to an individual salesperson
      • Matching sales efforts with opportunities
      • Breaking total market into smaller units
      • Makes control of sales operations more effective
      • Assigning responsibility for achieving specific objectives
      • Basis:
        • Geographical Basis
        • Customer Accounts Basis
        • House Account Concept
        • Marketing Channel Basis
    • Reasons for Establishment of Sales Territories
      • Providing Proper Market Coverage
      • Controlling Selling Expenses
      • Assisting in Evaluating Sales Personnel
      • Contributing to Sales Force Morale
      • Aiding in Coordination of Personal Selling & Advertising
    • Setting Up of Sales Territories
      • Selecting a Basic Geographical Control Unit:
        • Districts/States/ Cities
      • Determining Sales Potential Present in Each Control Unit
      • Combining Control Units into Tentative Territories
      • Adjusting for differences in Coverage Difficulty & Redistricting Tentative Territories
    • Setting Up of Sales Territories
      • Selecting a Basic Geographical Control Unit:
      • Starting point in establishment of territories
      • Cities/District/States as the basis
      • Trading Areas as the basis
        • A trading area consist of the geographical region surrounding a city that serves as the dominant retail or whole sale center or both
        • Vary from product to product
    • Setting Up of Sales Territories
      • 2. Determining Sales Potential present in each control unit:
      • Identification of the buyers as precisely as possible
      • Present & potential buyers indicate Market Potential
      • Determination of Sales Potential I.e unit’s market potential that the company has an opportunity to obtain
      • Market potential is converted to sales potential by analyzing the historical market share , adjusting for changes in company & competitor selling strategies
    • Setting Up of Sales Territories
      • 3. Combining control units into Tentative Territories:
      • Combine units into Tentative territories
      • First approximation of sales territories by combining contiguous control units into tentative territories
      • Percentage of total sales potential average sales person should realize
      • Estimation of sales productivity per sales personnel unit & divides it into total estimated sales potential
      • Decision upon number of sales personnel units & territories required
    • Setting Up of Sales Territories
      • Adjusting for differences in Coverage Difficulty & Redistricting Tentative Territories:
        • Determine, number,location & size of customers & prospects in each tentative territory
        • Estimate time required for each sales call
        • Determine length of time b/w calls
        • Decide call frequencies
        • Calculate number of calls possible within a given period
        • Adjust the number of calls possible during a given period by desired call frequencies for different classes of customers & prospects
        • Check out the adjusted territories with sales personnel
    • Dividing the Sales Force
      • Divide by geography when:
        • customer needs are similar
        • product line is narrow or easy to understand
        • selling tasks require similar skills
      • Divide by customer type when:
        • customer needs are diverse
        • product line is narrow or easy to understand
        • selling tasks require diverse skills
      • Divide by task or product when:
        • customer needs are similar
        • product line is broad or complex
        • selling tasks require diverse skills
    • Setting Up of Sales Territories
      • Assignment of Sales Personnel to Territories:
        • Sales Potential, Coverage Difficulty & different abilities
        • Different sales potential but equal abilities
      • Routing & Scheduling Sales:
        • Improve sales coverage
        • Number & location of customers, the means and methods of transportation & desired call frequency rates
    • QUOTAS
      • Quantitative objectives assigned to sales organizational units
      • Standards for appraising selling effectiveness
      • Devices for directing & controlling sales operations
      • Quotas based upon information derived from sales forecasts, studies of Market & Sales Potential & Cost estimates
    • Objectives in using Quotas
      • To provide Quantitative Performance Standards:
        • Determining which outlets, units, Territory or sales Person is doing average or above average or below average job
        • Identification of strong & weak points & hence, corrective action
      • To obtain tighter sales & Expense Control:
        • Sales expenses reimbursements up to a certain percentage of sales
        • Increasing Profitability as the focus
    • Objectives in using Quotas
      • To motivate desired performance:
        • Inspirational Purposes
      • To use in connection with sales contests:
        • Performance against quotas
        • Common denominator factor is built into a contest
    • Types of Quotas
      • Sales Volume Quotas :
        • How much for that period
        • Geographical areas, product lines, or Marketing Channels
      • Dollar / Rupees sales volume quotas:
        • Broad product lines set in Value Terms
        • Relate easily to other performance data such as selling expenses
        • No set prices of the products
      • Point Sales Volume Quotas
    • Procedure for setting sales volume quotas
      • Sales volume quotas derived from territorial sales potential
      • Sales volume quotas derived from total market estimates
      • Sales volume quotas based upon past sales experiences alone
      • Based upon executive judgment alone
      • Related only to compensation plan
      • Letting sales personnel set their own sales quotas
      • Expense quotas
      • Gross Margin or Net Profit quotas
      • Allocation of Time & efforts
      • Defining the Important activities sales personnel perform & setting performance frequencies
      • Total Sales calls, Calls on particular class of customers; number of new accounts; product demonstrations; displays; collections
    • Administering the Quota System
      • Accurate, Fair & Attainable Quotas
      • Securing & Maintaining Sales Personnel’s acceptance of Quotas:
        • Participation by sales personnel in quota setting
        • Keeping sales personnel informed
        • Need for continuous managerial control