Sales Force OrganizationReporters:Fenella Marie BarrionKrisma C. FidelinoBSBA 3
Task Of Sales Organization The nearly universal adoption of the marketing concept has meant that most companieshave reorganized their sales and marketing activities to reflect the stronger commitment to theircusThe nearly universal adoption of the marketing concept has meant thatmost companies have reorganized their sales and marketing activities toreflect the stronger commitment to their customers. This trend hasenhanced the importance of sales force organization.Three basic tasks must be accomplished by the organizing effort:1. Maintenance of order in achieving sales force goals and objectives2. Assignment of specific tasks and responsibilities3. Integration and coordination with other elements of the firm1. Maintenance of order in achieving sales force goals and objectives2. Assignment of specific tasks and responsibilities3. Integration and coordination with other elements of the firm
An effective sales force organization provides the structure forachieving sales objectives. Structure is “ the sum total of the ways inwhich an organization divides its labor into distinct tasks and thenachieves coordination among them”. Organizational structure also permits the assignment of specifictasks to a position whose incumbent is then charged with responsibilityfor accomplishing that task. Integration and coordination is a third aspect of sales forceorganization. the organizational structure allows the coordination of thevarious functional areas of the firm.
Developing A Sales Organization Developing a sales organizational structure is not an easytask. The keys to organizational design are consistency andcoherence.These comments suggest that sales managers must recognize, andthen deal with, some basic organizational issues when developing asales organization. The five major issues are:1. Formal and informal organizations2. Horizontal and vertical organizations3. Centralized and decentralized organizational structures4. The line and staff components of the organization5. The size of the company
Formal and Informal Organizations Every firm has a formal organization and an informalorganization. The formal organization is a creation of management,where as the informal organization is often developed from socialrelationships existing in the organization. Sometimes called the grapevine, the informal organizationis basically a communications pattern that emerges to facilitate theoperation of the formal organization. Most formal organizations would be totally ineffective if itwere not supporting informal organization.
The Informal communication system in a marketing organization
A lengthy formal communications channel District General Marketing Director ofSalesperson sales sales Vicpreside marketing manager nte research manager
Horizontal and Vertical organization Sales forces can have either horizontal or verticalorganizational formats. The arrangement varies among companies,even within the same industry. The factor that determines whether a vertical or horizontalorganizational structure should be employed is the effective span ofcontrol. The span of control refers to the number of employees whoreport to the next higher level in the organization. Horizontal structures tend to exist where larger spans ofcontrol are acceptable, while vertical organizations characterizecases in which closer managerial supervision is required.
Centralized and Decentralized Organizations A related concern the degree of centralization in thesales organization. This issue has to do with the organizationallocation of the responsibility and authority for specific salesmanagement tasks. - In a decentralized organization, responsibility and authorityare delegated to lower levels of sales management. - In a centralized sales organization, the responsibility andauthority for decisions are concentrated at higher levels ofmanagement.
Line and Staff Components Marketing organizations also feature line and staffcomponents. A line function is a primarily activity, and a stafffunction is a supporting activity. In a marketingorganization, the selling function is the linecomponents, where as advertising, marketingresearch, marketing planning, sales training, and distributorrelations are usually considered staff roles. although the use of the terms line and staff has beencriticized in many quarters, the basic premise behind themremains applicable to marketing organizations.
Company Size and Organization - The attention given sales as a distinct function is primarilydependent upon the owner/manager’s abilities and interests. - In some cases the owner/manager will have strong salesbackground and, in fact, he or she may be the company’s topsalesperson. - In the other cases, the owner/manager does not have a salesbackground and hires one or more salespeople.
Functional Company Organization PresidentFinance and Production Personnel Sales and accounting marketing
Basic Types of Sales Organization The very existence of a field selling organization, aswell as the circumstances surrounding its operation, depend ona variety of factors. These factors determine the nature andcomplexity of the sales organization.There are 4 types of sales organization1. Geographic Specialization2. Customer Specialization3. Product Specialization4. Combination Organizations.
Geographic Specialization Field sales personnel are given the responsibility fordirect selling activities in a given geographical area, orterritory. the sales representative is responsible for sellingthe firm’s full line of products.
Customer Specialization Sales forces may be specialized by customers forvarious reasons. The firm’s customers may require thatthe vendor’s salespeople possess specializedknowledge about their industry. IBM is an example of a firm that uses specializedsales forces for different classes of customers.
Product Specialization - Product specialization allows salespeople and sales managersto concentrate their efforts on particular product lines, brands, orindividual items. - the primary disadvantage of product specialization is that, inmany cases, two or more salespeople from the same companycall on the same customers. - although customers have the advantage of the specializedproduct knowledge provided by each salesperson, they mayresent the extra time that must be spent dealing with additionalrepresentatives.
Combination Organizations Geographic, customer, and product specialization arethe basic approaches to organization. Most sales forcesare a combination of two or more of these basic types. An industrial products company may have separatesales forces for its two product lines: shears and fasteners.Each of these sales forces may then be organized bygeographical location , such as by district or regional office.
Current Organizational Trends The tradition forms of sales organization areundergoing careful security, as a companies search fornew and better ways to serve their markets. For consumer goods and service companies, the neworganizational approaches involve efforts to modify theproduct manager from of organization. Industrial manufacturers are looking closely atorganizational strategies to adapt to the changes inindustrial buying and develop more specialized salesforces.
Strategic Business Unit - A variation of the product form of organization is the strategic business unit(SBU), in which similar businesses are grouped together in a single organizational unit.Adapting the Industrial Sales Force - Important changes in industrial buying brought about by corporate mergers and acquisitions, different kinds of corporate financing, the increased size and complexity of businesses, and environmental factors have changed industrial selling.Industrial Sales Force Specialization - Zimmer and Hugs tad suggest three alternative approaches for structuring an industrial sales organization. Two of these, psychographic and sociocultural specialization, are variations of customer organization, the third , functional specialization, involves the assignment of a specific sales role to each salesperson.
The Field Sales Manager Field selling organizations are quite varied. Some mayhave elaborate district offices with a full complement ofsupport personnel. Others may consist of a small one-room office staffed onlyby an answering service. As a result, the field sales manager’sjob can range over a wide spectrum. At one extreme, the manager may be a desk-boundexecutive; at the other, the manager may be a territorial salesrepresentative who happens to have been assigned someadministrative duties.
Concepts of Effective Sales Organization The sales organization should be built around activities,rather than around the people involved in the activities. Thissimple concept allows the organization to be more permanentand stable. One widely cited article argues that there are two basicsales activities: sales development and sales maintenance.Others see a basic division between planning and operatingactivities. Regardless of the tasks identified, the key factor isthat the organization be activity-oriented , not people-oriented.
Group Similar Functions Together - A colorally to the concept of organization by activities is that similarfunctions should be grouped together. Marketing research andproduction should not administratively report to the operations vicepresident simply because the chief marketing executives is uninterested in marketing research.People and Structure Are Both Critical - Both people and structure influence organization effectiveness.Statements such as “ABC Enterprises is a good organization,” reflectthis situation. What is really meant is that ABC Enterprises isrepresented by good people. The structural aspects of the organizationmay in fact be very weak. - The reverse is also true: many difficulties that are attributed toorganizational problems can be, in fact, people-related problems.