Sales Organizations

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  • 1. SALES ORGANIZATIONS
    purpose of sales organizations
    • to permit the development of specialist
    • 2. to assure that all necessary activities are performed
    • 3. to achive coordination or balance
    • 4. to define authority
    • 5. to economize on executive time
  • SETTING UP A SALES ORGANIZATION
    Defining the objective
    • Set both quantitative as well as qualitative objectives
    • 6. Qualitative objectives are indispensable for long-range planning, thus, kept in mind in short range planning also
    • 7. Quantitative objectives are required as operating guideposts
    Delineating the necessary activities
    • Determining the necessary activities & their volume of performance is based on qualitative & quantitative objectives
    • 8. Also helps in determining which activities to be performed in what volume
  • CONTD…
    grouping activities into ‘jobs’ or ‘positions’
    • activities identified are allocated to different positions
    • 9. activities are grouped so that closely related tasks are assigned to same positions
    • 10. each position must also contain some variations
    assigning personnel to positions
    • whether to recruit special individuals to fill the positions or to modify the positions to fit the capabilities of available persons
    providing for coordination and control
    • sales executives require means to control their subordinates & to coordinate their efforts
    • 11. they should not be overburdened nor should have too many subordinates
  • CONTD…
    • coordination & control is obtained through both formal & informal means
    • 12. formal instruments of organizational control:
    written job description
    • reporting relationships
    • 13. job objectives, duties & responsibilities
    • 14. performance measurements
    an organization chart
    • reduces confusion about individuals role
    • 15. delineates formal relationship
    organizational manuals
    • extension of organization chart
    • 16. contains chart for both the company & the department
  • BASIC TYPES OF SALES ORGANIZATION STRUCTURE
    factors affecting the organizational structure
    types of organization structure
    • the customers
    • 17. the marketing channelsthe company size
    • 18. the product or product line
    • 19. the practices of competitors
    • 20. personalities & abilities of personnel
    line sales organizations
    • oldest & simplest structure
    • 21. widely used in smaller firms or firms with small numbers of selling personnels, limited geographical area or narrow product line
    • 22. chain of command run from top to down
    • 23. all executives exercise line authority & each sales person is responsible to next in the hierarchy
  • LINE SALES DEPARTMENT ORGANIZATION
    GM
    SM
    ASSISTANT
    SM DIV-1
    ASSISTANT
    SM DIV-2
    ASSISTANT
    SM DIV-3
    ASSISTANT
    SM OFFICE
    SALES
    PEOPLE
    SALES
    PEOPLE
    SALES
    PEOPLE
    OFFICE
    STAFF
  • 24. CONTD…
    • no cross communication between persons at same level
    • 25. greatest use in companies where all sales persons report directly to the chief sales executives
    advantages:
    • problems of discipline & control are small
    • 26. authority & responsibility are clear
    • 27. saves time in making policy changes
    • 28. development of close relationship between superior & subordinate
    • 29. administrative expenses are low
    disadvantages
    • too much dependence on department head
    • 30. insufficient time for policy making & planning
    • 31. inappropriate for rapidly growing firms
    • 32. offers little opportunity to subordinates to acquire management skills
  • CONTD…
    line & staff sales organizations
    • found in large & medium-sized firms employing number of sales persons, selling diversified product lines over wide geographic areas
    • 33. provide top sales executives with group of specialists to assist
    • 34. staff helps in conserving the time & frees executives for other works
    • 35. staff specialists increases overall effectiveness of department
    • 36. staff do not have authority to issue orders or directives
  • LINE & STAFF SALES DEPTT. ORGANIZATION
    President
    Vp marketing
    Manager market research
    Gm sales
    Advertising
    Manager
    Sales personel
    Director
    Director
    Training
    Assistant
    Gm sales
    Assistant
    To
    Gm sales
    Sales
    Promotion
    Manager
    District sales manager
    Branch sales manager
    Sales personnel
  • 37. CONTD…
    Advantages
    • Specialization
    • 38. planning activities are divided and apportioned to staff members
    • 39. executives concentrate on coordination & control
    Disadvantages
    • increase in administrative expenses
    • 40. difficult to prevent some persons from evading unwanted responsibilities
  • CONTD…
    functional sales organization
    • each individual in an organization should have few distinctive duties as possible
    • 41. principle of specialization is utilized to its fullest extent
    • 42. sales people receive instructions from several executive but at different aspects of their work
    Advantages
    • improved performance
    disadvantages
    • not feasible for small & medium sized firms
    • 43. suitable for large firms with stable operations & with opportunity for considerable division of labour
  • CONTD…
    committee sales organization
    • never a sole basis for organizing a sales deptt.
    • 44. method of organizing the executive groups for planning & policy formulation
    • 45. the agenda must be planned & controlled to avoid wasting time
    advantages
    promote coordination
    collective decision making
    provide focal point for discussion & for suggestions