CHAPTER 11CHAPTER 11

Designing Territories

WHAT IS A TERRITORY?WHAT IS A TERRITORY?

Number of present and potential customers located within a geographic area and assigned to a sales person

BENEFITS OF TERRITORIESBENEFITS OF TERRITORIES

Ensures proper market coverage Improves customer relations Increases morale and productivity Control and evaluation Reduces selling costs

WHEN ARE TERRITORIES UNNECESSARY?

WHEN ARE TERRITORIES UNNECESSARY?

When contacts are infrequent When a great deal of prospecting is

involved

DESIGNING TERRITORIESDESIGNING TERRITORIES

The ideal situation: have all districts equal in sales potential and work load

DESIGNING TERRITORIESDESIGNING TERRITORIES

Select a control unit for boundaries Analyze workload Determine territories based on sales

potential and call patterns Assign people to territories Establish a coverage plan Ongoing assessment

CONTROL UNITSCONTROL UNITS

States Counties and Parishes Cities and Zip Codes Metropolitan Statistical Areas Trading Areas

ANALYZING WORKLOADSANALYZING WORKLOADS

Nature of the job Nature of the product Stage of market development Intensity of market coverage Competition Market characteristics

DETERMINE BASIC TERRITORIES

DETERMINE BASIC TERRITORIES

Buildup Method Breakdown Method

BUILDUP METHODBUILDUP METHOD

Determine number, location, and size of clients

Determine desirable call patterns Determine number of accounts to

assign to each sales person Draw boundaries

BREAKDOWN METHODBREAKDOWN METHOD

Determine sales potential Determine volume expected from each

person Determine number of territories

needed Tentatively establish territories (based

on volume) Modify as required

BREAKDOWN METHODBREAKDOWN METHOD

EXAMPLE TO DETERMINE NUMBER OF TERRITORIES: If total potential is $20 million and average volume per person is $500,000 then 40 sales reps are required in 40 territories

BREAKDOWN METHODBREAKDOWN METHOD

EXAMPLE TO DETERMINE TERRITORY VOLUME: With 40 reps, we should establish territories with 2.5% of the company’s total sales potential (100%/40 = 2.5)

USING SOFTWAREUSING SOFTWARE

Save time Costly Some programs can’t adjust for

physical barriers

FROM THE INTERNET...FROM THE INTERNET...

Software Examples:Tactician 4

<http://www.tactician.com/product/http://www.tactician.com/product/prd002.htm>prd002.htm>

Territory Mapper Territory Mapper <http://www.territorymapper.com/><http://www.territorymapper.com/>

ASSIGNING PEOPLE TO TERRITORIES

ASSIGNING PEOPLE TO TERRITORIES

Match characteristics Overlapping territories Personnel issues when revising

territories

TERRITORIAL COVERAGETERRITORIAL COVERAGE

Routing Scheduling

ONGOING ASSESSMENTONGOING ASSESSMENT

Sales and costs studies

FROM THE TEXT...FROM THE TEXT...

Read everything from Chapter 11 Read everything from Chapter 11 except “Simulating New Territories” except “Simulating New Territories” on pages 530 to 531.on pages 530 to 531.