2cb92sdm module 2

7/29/2019 2cb92SDM Module 2

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Amity School of Business


BBA V Semester

Sales and Distribution Management

Module-2

Sales Organization


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Concepts of Sales Organization

A sales organization is a structuralbody through which the functions of

Sales management are carried out. This assists the sales manager to

carry out needed tasks efficiently andeffectively to achieve results


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Nature of Sales Organization

An organization is simply an arrangementof activities involving a group of people.The goal is to arrange these activities sothat the people involved can act better

together than they can individually. Trend is towards a flatter organization in

which coordination across activities ismore important than top down control.

Salespeople are more often a part of thecross functional team design to servespecific customers.


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Purpose of Sales Organization

To permit the development of specialists

To ensure that all necessary activities areperformed

To achieve coordination

To define authority

To economize on executive time


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Amity School of BusinessFunctions of Sales Organization

Planning Function

Sales Forecasting

Sales Budgeting

Selling Policy Administrative Function

Selecting Salesmen

Training Salesmen

Control of Salesmen Executive Function

Sales Promotion

Selling Routine : Execution ofcustomers orders


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Amity School of BusinessPrinciples of Sales Organization

Degree of centralization

Degree of specialization

Line and Staff positions

Marketing orientation

Effective coordination Span of control


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Setting up a Sales Organization

Defining the objectives

Delineating the necessary activities

Grouping the activities into Jobs andPositions

Assigning Personnel to positions

Providing for coordination and control


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Basic Types of Sales Organizations

Sales organizations are generally

classified into four basic types:

Line Organization Line and Staff Organization

Functional Organization

Horizontal Organization


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Line Organization

Head

Marketing

Sales

Manager

Area Sales

Manager1

Area Sales

Manager3Area Sales

Manager2

Area Sales

Manager4

salespeople salespeople salespeople salespeople


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Amity School of BusinessLine and Staff Organization

Head-Marketing

Marketing Research

Manager

Sales ManagerPromotional

Manager

Customer Service

Manager

Area Sales

Manager-1

Area Sales

Manager-1

Area Sales

Manager-1

Salespeople Salespeople Salespeople


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Functional Organization

Head-Marketing

Marketing Research

Manager

Promotional

Manager

Customer Service

ManagerSales Manager

Area Sales Manager #4

Salespeople


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Amity School of BusinessHorizontal Organization

Research & Design

Team:

CustomerResearch

Product / Service

Design

Planning Team:Strategic Planning

Accounts, Finance

HR, Administration

Chief Operation

Officer

Operations Team:

Production /Operations

Quality Assurance

Systems

Engineering

Customer Support

Team:

Information

Service

Training

Customer

Satisfaction Team:

Sales & Marketing

Pricing,

PromotionChannels,

Logistics


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Amity School of BusinessSpecialization within Sales Organization

Needed to increase effectiveness of sales force

Done by expanding basic sales organization

Basis of specialization

Geography

Type of product Market

Combination of above

Criteria for selection(1) nature of product,

(2) sales force abilities,

(3) demands of selling job,

(4) customer and market facts


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Amity School of BusinessGeographic Specialization

Head-Marketing

Marketing Research

ManagerGeneral Sales

Manager PromotionManager

Customer Service

Manager

Branch Sales

Manager-1

Branch Sales

Manager-2

Branch Sales

Manager-3

Branch Sales

Manager-4

Salespeople Salespeople Salespeople Salespeople


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Used when the company has manyproducts and / or brands

Two types of product specialization

(x). Sales organization with productspecialized sales force

(y). Sales organization with product managersas staff specialists

Product Specialization


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Head-Marketing

Marketing Research

ManagerGeneral

Sales ManagerSales Training

Manager

Promotion

Manager

Area Sales Managers

Product Group A

Area Sales Managers

Product Group B

Salespeople

Product Gr. A

Salespeople

Product Gr. B

Fig. X Sales Organization with Product Specialized Sales force


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Fig. y Sales Organization with Product Managers as Staff

Specialists

Head-Marketing

Marketing Research

ManagerPromotion

ManagerProduct Manager

Product Gr. B

Product Manager

Product Gr. A

General

Sales Manager

Area Sales

Managers

Salespeople


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Amity School of BusinessMarket Specialization

General Sales

Manager

Sales Manager-International-

Markets

Sales Manager-

Commercial

Sales Manager-Consumer Markets

Sales Manager-Government

Area Sales Mgrs

International

Sales Executives

Area Sales Manager-

Commercial

Salespeople

Area Sales Manager-

Government

Salespeople

Area Sales Mgrs-

Consumer Markets

Salespeople


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Amity School of BusinessCombination Sales Organization

Director Sales

& Marketing

General Manager

Sales - North

General Manager

Sales - East

General Manager

Sales - South

General Manager

Sales - West

Regional Sales

Mgr. Govt.

Regional Sales

Mgr. - Dealers

Regional Sales

Mgr. - Commercial

Salespeople Salespeople Salespeople

C di ti f P l S lli


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Coordination of Personal Selling

with other Marketing Activities

Sales and Advertising

Work towards same objective of profit maximization

Activities of sales force are planned and directed along

lines that increase advertising effectiveness

Advertising is geared up as and when required so as

to assist the salespeople

Sales and Marketing Information

Marketing information system assist the sales

department by gathering data needed for analyzing

sales problems, assisting in determining sales

potential, measuring the effectiveness of the saleseffort

Sales department provides the information system

with many of the raw statistics and other information

needed for sales and market analysis and forecasting.


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Amity School of BusinessCoordination of Personal Selling

with other Departments

Sales and Production

Sales and R&D

Sales and HR

Sales and Finance Sales and Accounting

Sales and Purchasing

Sales and Public Relations

Sales and Legal


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Amity School of BusinessSales Forecasting

What is Sales Forecasting?

It is an estimate of sales during a specified future

period which is tied to a proposed marketing plan

and which assumes a particular set of uncontrollableand competitive forces

-Cundiff and Still


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Amity School of BusinessImportance of Sales Forecasting

Helps manufacturing department for settingup production capacity and planning

production

Finance department for raising cash forinvestment and operations as well as for profit

planning

Purchase function for planning theirpurchases

HR function to help them plan for manpower

planning


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Amity School of BusinessFactors Influencing the Sales Forecast

Marketing Plans Changes in price structure, channels of

distribution, promotional plans, products mayinfluence the future sales.

Conditions within the industry Competitor policies and new entrants into the

market needs to be taken into consideration.

Market Conditions Awareness about the changes in the primary

demand for the industrys output.

General Business Conditions General state of the economy

T f S l F t


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Types of Sales Forecast

Product Level All Sales

Industry Sales

Company Sales

Product Line Sales

Product Variant Sales

Product Item Sales

Time Period Long Term Medium Term

Short Term

Geographic Area

World Nation

Region

Territory

Customer


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Amity School of BusinessTerms Used in Forecasting

Market Potential

Maximum possible sales opportunitiespresent in a particular market segmentand open to all sellers during a statedfuture period.

Market Forecast

Expected industry sales for a givenproduct or service at one specific level ofindustry marketing expenditure, in agiven market, for a specific period oftime.

Company Sales Potential Best possible estimated sales of a given

product or service for a company in agiven geographic

area for a specific period of time.


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Amity School of Business Company Sales Forecast

Estimated company sales of a given product orservice, under a proposed marketing plan, in agiven market, for a specific period of time.

Sales Budget It is a detailed schedule showing the expected sales

for the budget period; typically, it is expressed inboth revenues and units of production.

Sales budget is used for making purchasing,

production, manpower and cash flow decisions. Sales Quota

Individual sales target figure assigned toeach sales unit such a sales person, dealer,distributor, region, or territory, as a required

minimum for a specified period (month, quarter,year).

Sales quotas may be expressed either incurrency figures (monetary terms) or in numberof goods or services sold (volume terms).


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Amity School of BusinessSales Forecasting Methods

Qualitative Methods Quantitative Methods

Executive opinion Moving averages

Delphi method Exponential smoothing

Sales force composite Decomposition

Survey of buyersintentions

Naive / Ratio method

Test marketing Regression analysis

Econometric analysis

2cb92sdm module 2

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