Sales Management: Shaping Future Sales Leaders
Designing and Organizing Designing and Organizing the Sales Forcethe Sales Force
Learning Objectives
List the major tasks of sales organization
Identify the basic types of sales organization
Understand the importance of relation with other departments
Understand the advantages and disadvantages of outsourcing a firm’s sales force
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.7-3
Organization of The Sales Force
Basic Management Function of Arranging Basic Management Function of Arranging The Firm’s Sales Activities The Firm’s Sales Activities
Tasks of The Sales Organization
1.Maintenance of order in achieving sales force goals/objectives
2.Assignment of specific tasks and responsibilities
3.Integration and coordination with other elements of the firm
Tasks of The Sales Organization
Structure
Division of activities into tasks and the related coordination
Developing A Sales Organization
Developing A Sales Organization
1.Formal & informal organization
2.Horizontal & vertical
3.Centralized & decentralized
4.The line and staff components of the organization
5.The size of the company
Developing A Sales Organization
Formal organization
Management created relationship between departments and between individuals
CEO
NSM
RSM
ASM
Salesperson
Developing A Sales Organization
Informal organization
Communication pattern formed from the social relationship existing with in the formal organization
Salesperson ASM RSM NSM CEO
Manager Marketing distribution Manager NSM Manager AccountsManager Marketing distribution Manager NSM Manager Accounts
Developing A Sales Organization
Horizontal Sales Organization
Number of management level is small and number of manager at particular level is large
Chief Sales Executive
District Sales Manager District Sales Manager District Sales ManagerDistrict Sales Manager District Sales Manager District Sales Manager District Sales ManagerDistrict Sales Manager Karachi Multan Lahore IslamabadKarachi Multan Lahore Islamabad
Developing A Sales Organization
Vertical Sales Organization
Several level of management, all reporting upward to the next level
CEO
NS
RSM
ASM
FS
SR
Developing A Sales Organization
Centralized
Responsibility and authority are concentrated at
higher level of management
Decentralized -Delegated to l
-Structure is iower levels of management
neffective unless the assignment of decision making to lower levels of sales management is accompanied by a complete authority to carry out the decision.
Assigning responsibility to perform a particular task to sales Assigning responsibility to perform a particular task to sales supervisors, without any authoritysupervisors, without any authority
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.7-13
How a Firm’s Goals Affect the Design of Its Sales Force
Organization of sales force is driven by strategic goals
Organizational sales structures serve a number of purposes that include
Serving buyers effectively in ways they want to be served
Operating efficiently and effectively as measured by cost and customer satisfaction
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.7-14
How a Firm’s Goals Affect the Design of Its Sales Force
Best way to design a sales structure is toBest way to design a sales structure is to
Determine sales activities that must be performed to reach goals
Create sales structure that affords highest levels of service to buyers at lowest overall cost
Select, train and manage reps and managers to become experts in their assigned duties
Relations With Other Departments
Key Concern of Sales Manager Key Concern of Sales Manager Relation with other departmentsRelation with other departments
All business activities should be coordinated to satisfy All business activities should be coordinated to satisfy customer needcustomer need
Sales department is the key link, so coordinating the sales effort with Sales department is the key link, so coordinating the sales effort with other departments is absolutely essential other departments is absolutely essential
Two types of departments sales MUST have good Two types of departments sales MUST have good working relationshipworking relationship
One, connected with marketing activities, advertising, marketing One, connected with marketing activities, advertising, marketing research, sales promotion, product managementresearch, sales promotion, product management
Second, those with non marketing functions such as HR, Second, those with non marketing functions such as HR, manufacturing and financemanufacturing and finance
Relations With Other
Relation with marketing functionRelation with marketing function Marketing mixMarketing mix
Advertising plan/schedule Advertising plan/schedule
Sales department will ensure product availability at all relevant retail Sales department will ensure product availability at all relevant retail w/s outlets, before TVC is on. w/s outlets, before TVC is on.
Relations with non marketing departmentsRelations with non marketing departments R&D, sales people are excellent source of new product or product R&D, sales people are excellent source of new product or product
modificationmodification
R&D – High tech companies. Sales people need to trained on new R&D – High tech companies. Sales people need to trained on new technologytechnology
Relations With Other
Relation with productionRelation with production Production department’s concerns are minimizing cost through Production department’s concerns are minimizing cost through
standardization, long & continuous production run, long production standardization, long & continuous production run, long production lead time lead time
Sales executive want many types of products, frequent product Sales executive want many types of products, frequent product changes, customer’s special order & short production lead timechanges, customer’s special order & short production lead time
Best way is Best way is JOINT PLANNING
Relations with HRRelations with HR HR – Hiring, managing, training & developmentHR – Hiring, managing, training & development
Sales managers – recruiting, hiring, training, developing & managingSales managers – recruiting, hiring, training, developing & managing
Relation with Finance – Three major areasRelation with Finance – Three major areas Budgeting, cost control, creditBudgeting, cost control, credit
Relations With Other
Relation with Finance – Three major areasRelation with Finance – Three major areas Budgeting
- Sales department provides short and long range sales estimates as - Sales department provides short and long range sales estimates as the basis of financial planning & budgetingthe basis of financial planning & budgeting
Cost control
- Accounting specialist can assist sales managers in their efforts to - Accounting specialist can assist sales managers in their efforts to control costs, by providing data for selling cost analysis control costs, by providing data for selling cost analysis
Credit
- Credit plans are major concerns for sales as well as finance. Sales - Credit plans are major concerns for sales as well as finance. Sales executive should have input into establishing credit policies. Sales executive should have input into establishing credit policies. Sales people can also provide current credit status information people can also provide current credit status information
Major Trends in Sales Organizations
Changing Trend Traditional forms of sales organization have changed their approachTraditional forms of sales organization have changed their approach
In search of new and better ways to serve their marketsIn search of new and better ways to serve their markets
For Consumer goods & service companies, the new approaches For Consumer goods & service companies, the new approaches involve product manager form of organizationinvolve product manager form of organization
Industrial manufacturer are looking closely at strategies that will help Industrial manufacturer are looking closely at strategies that will help them adapt to change buying behavior and develop more specialized them adapt to change buying behavior and develop more specialized sales forcesales force
For many companies, the major challenge is change from a For many companies, the major challenge is change from a
““Product” To “Customer Driven Orientation” Product” To “Customer Driven Orientation”
Major Trends in Sales Organizations
Telemarketing Use of telecommunication technology in personal sellingUse of telecommunication technology in personal selling
Direct Marketing Approach that bypasses intermediaries to deliver goods and services Approach that bypasses intermediaries to deliver goods and services
directly from seller to buyerdirectly from seller to buyer
Inbound Telemarketing Potential customer contacts the selling companyPotential customer contacts the selling company
Outbound Telemarketing Selling companies contact the prospect and customersSelling companies contact the prospect and customers
National Account Management
A special sales force is dedicated to obtaining & maintaining major A special sales force is dedicated to obtaining & maintaining major accounts ( 50 to 70% sales)accounts ( 50 to 70% sales)
A customer that involves several people in the buying process before a A customer that involves several people in the buying process before a sales takes placesales takes place
A customer that purchases in significant volume, both in dollar and as A customer that purchases in significant volume, both in dollar and as a %age of supplier’s total salesa %age of supplier’s total sales
A customer that desires a long term cooperative working relationship A customer that desires a long term cooperative working relationship with company or supplierwith company or supplier
A customer that expects specialized attention and servicesA customer that expects specialized attention and services
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