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Sales and Distribution
Management, 2e
Dr Tapan K. Panda, Great Lakes Institute of Management, Chennai
Dr Sunil Sahadev, Un...
Chapter 6
Sales Organization

Copyright © 2011 Oxford University Press

Chapter 6: Sales Organization
Sales organization

• an organization of individuals either working together
for the marketing of products and services ma...
Sales organization (cont….)

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

• sales ...
Factors influencing structure
• product and service related factors
• organization related factors
• marketing mix related...
Organizational principles
 span of control
 unity of command
 hierarchy of authority
 stability and continuity
 coord...
Organizational design
- formal and coordinated task
- assigning territories
- establishing flows of communication and resp...
Typical structure of a line organization

Consumer
market
National
Distributors

Direct to
Home

Institutional
market
Dire...
Design by territory
VP Marketing
National Sales
Manager

Divisional Manager
(East)

Divisional Manager
(North)

Regional S...
Design by management function
Mr. Dara singh,
VP
(Marketing)

Staff Function

Line Function

Mrs. Chitra
Mohanty
(Advt / S...
Design by product

President,
Marketing

Product Manager (A)

Manager
(Sales)

Manager
(Training)

Manager
(Promotion)

Ma...
Design by customer
President
(Marketing)
Vice President
(Marketing)

Sales Manager
Industrial Relations

Sales People

Cop...
President
Functional

Vice President
(Production)

Geographic
Marketing Manager
India
G.M
Consumer care
Customer

Vice Pre...
Sales Organization
Key account sales
- focus on CRM
- customer profitability and value analysis
- the few accounts give in...
Emerging organizational design
• agency and distribution selling
• shared sales force
• telemarketing
• TQM and team-based...
Number of sales people
• determined by:
- territories vary in their demand structure for prospecting
- product mix demands...
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  1. 1. Sales and Distribution Management, 2e Dr Tapan K. Panda, Great Lakes Institute of Management, Chennai Dr Sunil Sahadev, University of Sheffield, UK Copyright © 2011 Oxford University Press Chapter 6: Sales Organization
  2. 2. Chapter 6 Sales Organization Copyright © 2011 Oxford University Press Chapter 6: Sales Organization
  3. 3. Sales organization • 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 Copyright © 2011 Oxford University Press Chapter 6: Sales Organization
  4. 4. Sales organization (cont….) • 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 Copyright © 2011 Oxford University Press Chapter 6: Sales Organization
  5. 5. Factors influencing structure • product and service related factors • organization related factors • marketing mix related factors • 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 Copyright © 2011 Oxford University Press Chapter 6: Sales Organization
  6. 6. Organizational principles  span of control  unity of command  hierarchy of authority  stability and continuity  coordination and integration  homogeneity  objectivity  specialization Copyright © 2011 Oxford University Press Chapter 6: Sales Organization
  7. 7. Organizational design - formal and coordinated task - assigning territories - establishing flows of communication and responsibilities of sales groups and individuals to customers effectively Line organization Mr. Ratnakar Shetty President / Owner Mr. Chandrakant VP (Sales) Five sales people Copyright © 2011 Oxford University Press Chapter 6: Sales Organization
  8. 8. Typical structure of a line organization Consumer market National Distributors Direct to Home Institutional market Direct marketing Regional Distributors Distributors Corporate market Bundling Gifting Consumer Retailers Consumers Copyright © 2011 Oxford University Press Chapter 6: Sales Organization
  9. 9. Design by territory VP Marketing National Sales Manager Divisional Manager (East) Divisional Manager (North) Regional Sales Manager Regional Sales Manager Regional Sales Manager District Sales Manager District Sales Manager District Sales Manager Sales Staff (City wise) Sales Staff (City wise) Sales Staff (City wise) Copyright © 2011 Oxford University Press Divisional Manager (West) Chapter 6: Sales Organization
  10. 10. Design by management function Mr. Dara singh, VP (Marketing) Staff Function Line Function Mrs. Chitra Mohanty (Advt / Sales Promotion Mgr) Mr. Chandra De Manager (MR) Mr. Dibya Behera (Sales Manager) 20 Sales People Copyright © 2011 Oxford University Press Chapter 6: Sales Organization
  11. 11. Design by product President, Marketing Product Manager (A) Manager (Sales) Manager (Training) Manager (Promotion) Manager (Sales) Manager (Training) Manager (Promotion) Product Manager (B) Copyright © 2011 Oxford University Press Chapter 6: Sales Organization
  12. 12. Design by customer President (Marketing) Vice President (Marketing) Sales Manager Industrial Relations Sales People Copyright © 2011 Oxford University Press Sales Manager Wholesalers Sales Manager Retail Sales Sales People Sales People Chapter 6: Sales Organization
  13. 13. President Functional Vice President (Production) Geographic Marketing Manager India G.M Consumer care Customer Vice President (Marketing) Combined Sales Org. Design G.M International Sales Vice President (HRD) Marketing Manager International G.M International Sales Divisional Manager Soaps Divisional Manager Paper Divisional Manager Food Eastern Sales Division Western Sales Division Northern Sales Division Europe Division Copyright © 2011 Oxford University Press America Division Product Gulf Division Chapter 6: Sales Organization
  14. 14. Sales Organization Key account sales - focus on CRM - customer profitability and value analysis - the few accounts give incremental returns - national accounts Sales process automation - EDI – Electronic Data Exchange Copyright © 2011 Oxford University Press Chapter 6: Sales Organization
  15. 15. Emerging organizational design • agency and distribution selling • shared sales force • telemarketing • TQM and team-based selling Customer Sales Marketing Technical Support Manufacturing Supplier selling team Copyright © 2011 Oxford University Press Chapter 6: Sales Organization
  16. 16. Number of sales people • determined by: - territories vary in their demand structure for prospecting - product mix demands - levels and types of prospecting - nature of the customer segments Affordability method (based on sales budget) Incremental method Workload method Number of sales people = (Number of (Number of (Ideal (Length of X Potential frequency of existing X X a call) customers) customers) calls) Ideal selling time available for a salesperson Copyright © 2011 Oxford University Press Chapter 6: Sales Organization
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