Sales force organization structure


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Sales force organization structure

  1. 1. A Study on SALES FORCE ORGANIZATION STRUCTURES Mini Project Report in MARKETING MANAGEMENT Submitted to JNTU, Kakinada In Partial Fulfillment for the Award of the Degree of MASTER OF BUSINESS ADMINISTRATION Submitted By Koppula. Chandrasekhar (Reg. No. 13491E0037). DEPARTMENT OF MASTER OF BUSINESS ADMINISTRATION QIS COLLEGE OF ENGINEERING & TECHNOLOGY An ISO 9001: 2008 Certified Institution and Accredited by NBA (Affiliated to JNTU, Kakinada and Approved by AICTE) Vengamukkapalem, Pondur Road ONGOLE –523 272 . Augest-2014
  2. 2. INDEX S. No Contents Page No’s 01 Abstract 01 02 Key wards 01 03 Introduction 01 04 Definition 01 05 Need for the study 02 06 Scope of the study 02 07 Methodology 02 08 Objectives 02 09 Review of literature 02 10 Territorial Organizational structure 02 11 Product Organization Structure 03 12 Customer Organization Structure 03 13 Complexity Organization Structure 03 14 Sales force organization Structure (Image) 04 15 Conclusion 05 References
  3. 3. SALES FORCE ORGANIZATION STRUCTURES Abstract:- This article provides a complete analysis of organizing the sales force for customer and company success. It develops a framework to guide the design and management of the sales organization that is consistent with company strategy and drives results. The sales force's requirements for generalists and/or specialists are guided by the firm's product offerings, markets and selling activities. A sales force structure is defined by two main decisions: the specialization decision and the reporting relationship decision. Sales force structure decisions impact customer and company results by directly influencing salespeople and their activities. Sales force structures need to change as business needs evolve. Directing careful attention to implementation helps ensure that sales force structure alterations are well received by customers, salespeople, and managers. Keywords: sales force, customer, specialization decision, reporting relationship decision, salespeople Resource: Aaron D. Arndt, Jason Harkins, (2013) "A framework for configuring sales support structure", Journal of Business & Industrial Marketing, Vol. 28 Iss: 5, pp.432 – 443 10.1108/08858621311330272 (Permanent URL) Introduction: A company's sales force consists of its staff of salespeople. The role of the sales force depends to a large extent on whether a company is selling directly to consumers or to other businesses. In consumer sales, the sales force is typically concerned simply with taking and closing orders. These salespeople are not responsible for creating demand for the product, since demand for the product has already been created by advertising and promotion. They may provide the consumer with some product information, but individuals involved in consumer sales are often not concerned with maintaining long-term customer relationships. Sales managers and supervisors can measure the efficiency of their sales force using several criteria. These include the average number of sales calls per salesperson per day, the average sales-call time per contact, the average revenue and cost per sales call, the entertainment cost per sales call, and the percentage of orders per 100 sales calls. The sales force can also be evaluated in terms of how many new customers were acquired and how many customers were lost during a specific period. The expense of a sales-force can be measured by monitoring the sales-force to-sales ratio, or sales force cost as a percentage of total sales. Definition: Sales drive a business, so you can't afford to take your sales department lightly. Considering how to structure a sales force has to work both for your business model and help salespeople achieve success. To do this, you'll have to consider your product, your clientele and how salespeople think and function. Once you have a system
  4. 4. and the right talent, it may take some fine tuning before it really works optimally. But it all starts with the structure. Need for the Study: Sales transactions typically require a diverse range of sales activities, including customer contact, scheduling appointments, internal meetings, processing orders, and preparing financing applications. This research develops a framework for understanding how to structure sales support for specific sales activities. Scope of the Study: This research proposes four relevant dimensions of sales activities that should be considered when allocating sales activities to members of the selling center. The framework will help managers, academicians, and business students understand how sales support structure impacts sales performance. Objectives:  To know specialization decision.  To Study customer.  To evaluate sales force structure. Methodology: o This data collected from electronic sources collected from the electronic sources i.e., from the Google and the related websites and also empirical study research papers. o o Review of literature: Sales drive a business, so you can't afford to take your sales department lightly. Considering how to structure a sales force has to work both for your business model and help salespeople achieve success. To do this, you'll have to consider your product, your clientele and how salespeople think and function. Once you have a system and the right talent, it may take some fine tuning before it really works optimally. But it all starts with the structure. Territorial organization structure (Geography-Based Sales): A geographically focused sales team is very common and effective in certain industries. The concept is that if your salespeople specialize in a certain area, they can scour it thoroughly and understand its workings. The sales approach to a suburban community can be very different from an inner-city area or a rural town. Geographically-based sales allow salespeople to know their markets and develop appropriate approaches to an area. It also can prevent salespeople from bumping into each other if their maps and territories
  5. 5. are well defined. Industries that use this approach include direct cosmetic sales, telecommunications, print advertising and staffing. Product organization structure (Product-Based Sales): Sometimes, specialized knowledge is the way to go. Having salespeople become experts in a specific product or product line can make them stronger sellers. This is especially true with products that are highly technical or which are sold to professionals. Medical device and equipment sales, for example, require a salesperson to have an in-depth understanding of his product. Physicians who might purchase these products can have complicated and technical questions that require the salesperson to have a thorough understanding of how the product works and the setting in which it is used. Customer organization structure (Client-Based Approach): Arranging your sales efforts around your clients is another valid approach to sales force design. In some industries, different types of clients have very different needs. For example, in health insurance the needs, concerns and sales process for a Fortune 500 company are very different than for a local small business. Sales people do best when they become experts in a particular type of client and can develop sales techniques which fit a particular type of target. Another advantage to a client-based approach is that clients often feel like they have more of a relationship with their sales representative and get the sense of greater customer service since the sales effort is designed around them. Complexity organization structure (Mixes): Not everything is cut and dry in sales. Sometimes organizations develop a hybrid of these approaches. For example, one sales team might cover large businesses in a particular geographical region and other small businesses in that same region. There can be many positive results from this form of specialization. However, managers need to develop clear definitions of both the geography and the company size. It can be easy for there to be gray areas in the terms "large business" and "small business." Defining how many employees constitute a large business can save everyone a lot of headache and internal squabbling. Similarly, vague phrases like "Southern California" or "North Texas" can become problematic if left undefined. Cooperation: Whether your sales team is a small group or multiple teams of people, you'll need to think out how to foster cooperation. Your company doesn't benefit from two different sales teams approaching the same client about two different products. Likewise, having the same client with multiple offices and locations approached by two or more salespeople at different sites only creates confusion for everyone. Think through these scenarios and how you want them handled because no matter which approach you take to your sales force structure, these overlapping situations occur. More importantly, overlap is an
  6. 6. opportunity to bring your best sales talent together to land an important client. Consider a way to give everyone financial incentives to work together collaboratively to avoid creating divides and wounds in your sales force. Conclusion: A business organization needs to structure its sales force to meet the needs of its customers. Configuring the optimal structure of a company's sales force involves considerations, not only of the organization of the business, but also of the sales staff's knowledge and the nature of the sale itself. A sales force may contain a mixture of generalist and specialist sales people. Generalist sales staff conducts all sales activities for all products to all customers. Sales specialists may focus on specific geographic areas, products, customers or functions within the sales process. Resource:   6