A sales territory groups customers and prospects and assigns them to an individual salesperson. Territories are established to thoroughly cover the market, establish salesperson responsibility, evaluate performance, improve customer relations, reduce expenses, and match salespeople to customers, benefiting both. Territories are designed by selecting a basic geographical control unit, determining sales potential in each unit, tentatively establishing territories, evaluating customer contact plans, and assigning territories. Territories are then evaluated and revised as needed based on factors such as customer numbers, locations, sizes, call times, frequencies, and travel times.

1. Sales Territory
• A sales territory is a grouping of customers and
prospects assigned to an individual salesperson

2. Reasons for Establishment of Sales
Territories
• To obtain thorough coverage of the market.
• To establish a salesperson’s responsibility.
• To evaluate performance.
• To improve customer relations.
• To reduce sales expense.
• To allow better matching of salesperson to
customer.
• To benefit salespeople and the company.

3. FACTORS TO CONSIDER WHEN DESIGNING
TERRITORIES
DETERMINE DETERMINE
SELECT BASIC SALES BASIC
CONTROL UNIT POTENTIAL IN TERRITORIES
EACH UNIT
EVALUATE, REVISE CUSTOMER ASSIGN TO
IF NEEDED CONTACT PLAN TERRITORIES

4. 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

5. 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

6. SIX STEPS TO CONSIDER WHEN DETERMINING A
FIRM’S BASIC TERRITORIES
1. Forecast sales and determine 4. Tentatively establish
sales potentials. territories.
2. Determine the sales volume 5. Determine the number of
needed for each territory. accounts for each territory.
3. Determine the number of 6. Finalize the territories, and
territories. draw the boundary lines.

7. ASSIGN TO TERRITORIES
Some salespeople can handle large territories
and the travel associated with them; some
can’t. Some territories require experienced
salespeople; some are best for new people.
Some people want to live in metropolitan
areas; others prefer territories with smaller
cities.

8. CUSTOMER CONTACT PLAN
The customer contact plan involves
scheduling sales calls and routing a
salesperson’s movement around the
territory.

9. Scheduling refers to establishing a fixed
time when the salesperson will be at a
customer’s place of business.
In theory, strict formal route designs enable the
salesperson to:
1. Improve territorial coverage.
2. Minimize wasted time.
3. Establish communication between
management and the sales force in terms
of the location and activities of individual
salespeople.

10. THREE BASIC ROUTING PATTERNS
Straight-Line Pattern
First Call
Base c
c c c c Work Back
Cloverleaf Pattern c Major-City Pattern
c c
c c 2 3
c c c c
c Base c
1
c c c c
c c c c
5 4
c c
c
Each Leaf Out and
Back Same Day 1 - Downtown

11. Using the Telephone for Territorial Coverage
1. Sales generating
• Selling regular orders to smaller accounts.
• Selling specials, such as offering price
discounts on an individual product.
• Developing leads and qualifying prospects.
2. Order processing
• Ordering through the warehouse.
• Gathering credit information.
• Checking if shipments have been made.
3. Customer service
• Handling complaints.
• Answering questions.

12. EVALUATION AND REVISION OF SALES 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

13. Equalized Workload
This method uses the number, location, and size
of customers and prospects to determine the
frequency of sales calls and amount of time a call
takes by using such data as:
• Time required for each sales call.
• Frequency of sales calls per given customer.
• Time intervals between sales calls.
• Travel time around territories.
• Nonselling time.

14. • 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