sales territories
DESCRIPTION
Sales TerritoriesTRANSCRIPT
Sales TerritoriesSales Territories
Sales TerritorySales Territory A sales territory is a grouping of customers and
prospects assigned to an individual salesperson Matching sales efforts with opportunities Breaking total market into smaller units Makes control of sales operations more effective Assigning responsibility for achieving specific
objectives Basis:
– Geographical Basis – Customer Accounts Basis – House Account Concept – Marketing Channel Basis
Reasons for Establishment of Sales Reasons for Establishment of Sales TerritoriesTerritories
Providing Proper Market Coverage Controlling Selling Expenses Assisting in Evaluating Sales Personnel Contributing to Sales Force Morale Aiding in Coordination of Personal Selling &
Advertising
Setting Up of Sales TerritoriesSetting Up of Sales Territories
Selecting a Basic Geographical Control Unit:– Districts/States/ Cities
Determining Sales Potential Present in Each Control Unit
Combining Control Units into Tentative Territories
Adjusting for differences in Coverage Difficulty & Redistricting Tentative Territories
Setting Up of Sales TerritoriesSetting Up of Sales Territories
1. 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
Setting Up of Sales TerritoriesSetting Up of Sales Territories2. 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
Setting Up of Sales TerritoriesSetting Up of Sales Territories3. Combining control units into Tentative Territories: Combine units into Tentative territories First approximation of sales territories by combining
contiguous control units into tentative territories Percentage of total sales potential average sales person
should realize Estimation of sales productivity per sales personnel unit &
divides it into total estimated sales potential Decision upon number of sales personnel units &
territories required
Setting Up of Sales TerritoriesSetting Up of Sales Territories 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
Dividing the Sales ForceDividing the Sales Force Divide by geography when:
– customer needs are similar– product line is narrow or easy to understand– selling tasks require similar skills
Divide by customer type when:– customer needs are diverse– product line is narrow or easy to understand– selling tasks require diverse skills
Divide by task or product when:– customer needs are similar– product line is broad or complex– selling tasks require diverse skills
Setting Up of Sales TerritoriesSetting Up of Sales Territories
Assignment of Sales Personnel to Territories:– Sales Potential, Coverage Difficulty & different
abilities – Different sales potential but equal abilities
Routing & Scheduling Sales:– Improve sales coverage – Number & location of customers, the means and
methods of transportation & desired call frequency rates
SALES QUOTASSALES QUOTAS
QUOTASQUOTAS
Quantitative objectives assigned to sales organizational units
Standards for appraising selling effectivenessDevices for directing & controlling sales
operations Quotas based upon information derived from
sales forecasts, studies of Market & Sales Potential & Cost estimates
Objectives in using QuotasObjectives in using Quotas
To provide Quantitative Performance Standards:– Determining which outlets, units, Territory or sales
Person is doing average or above average or below average job
– Identification of strong & weak points & hence, corrective action
To obtain tighter sales & Expense Control:– Sales expenses reimbursements up to a certain
percentage of sales – Increasing Profitability as the focus
Objectives in using QuotasObjectives in using Quotas
To motivate desired performance:– Inspirational Purposes
To use in connection with sales contests:– Performance against quotas – Common denominator factor is built into a contest
Types of QuotasTypes of Quotas
Sales Volume Quotas :– How much for that period – Geographical areas, product lines, or Marketing
Channels Dollar / Rupees sales volume quotas:
– Broad product lines set in Value Terms – Relate easily to other performance data such as
selling expenses– No set prices of the products
Point Sales Volume Quotas
Procedure for setting sales volume quotasProcedure for setting sales volume quotas
Sales volume quotas derived from territorial sales potential
Sales volume quotas derived from total market estimates
Sales volume quotas based upon past sales experiences alone
Based upon executive judgment alone Related only to compensation plan Letting sales personnel set their own sales quotas
BUDGET QUOTASBUDGET QUOTAS
Expense quotas Gross Margin or Net Profit quotas
ACTIVITY QUOTAS ACTIVITY QUOTAS
Allocation of Time & efforts Defining the Important activities sales
personnel perform & setting performance frequencies
Total Sales calls, Calls on particular class of customers; number of new accounts; product demonstrations; displays; collections
COMBINATION QUOTAS
Administering the Quota SystemAdministering the Quota System
Accurate, Fair & Attainable Quotas Securing & Maintaining Sales Personnel’s
acceptance of Quotas:– Participation by sales personnel in quota setting – Keeping sales personnel informed – Need for continuous managerial control