43da0module 2 amizone

7/30/2019 43da0Module 2 AMIZONE

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Amity School of Business

BBA V Semester

Sales and Distribution Management

Module-2Sales Organization


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Concepts of Sales Organization

A sales organization is a structuralbody through which the functions

of Sales management are carriedout.

This assists the sales manager tocarry out needed tasks efficientlyand effectively to achieve results


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Nature of Sales Organization

An organization is simply anarrangement of activities involving agroup of people. The goal is toarrange these activities so that the

people involved can act bettertogether than they can individually.

Trend is towards a flatter organizationin which coordination across activitiesis more important than top down

control. Salespeople are more often a part of

the cross functional team design toserve specific 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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Functions 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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Principles 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 Jobsand Positions

Assigning Personnel to positions

Providing for coordination and

control


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Basic Types of Sales Organizations

Sales organizations are generallyclassified into four basic types:

Line Organization Line and Staff Organization

Functional Organization

Horizontal Organization


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Line Organization

HeadMarketing

Sales

Manager

Area SalesManager1

Area SalesManager3

Area SalesManager2

Area SalesManager4

salespeople salespeople salespeople salespeople


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Line and Staff Organization

Head-Marketing

Marketing Research

Manager

Sales ManagerPromotional

Manager

Customer ServiceManager

Area SalesManager-1

Area SalesManager-1

Area SalesManager-1

Salespeople Salespeople Salespeople


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Functional Organization

Head-Marketing

Marketing ResearchManager

PromotionalManager

Customer ServiceManagerSales Manager

Area Sales Manager #4

Salespeople


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Horizontal Organization

Research & DesignTeam:

CustomerResearch

Product / ServiceDesign

Planning Team:Strategic PlanningAccounts, FinanceHR, Administration

Chief OperationOfficer

Operations Team:

Production /OperationsQuality AssuranceSystemsEngineering

Customer SupportTeam:InformationServiceTraining

CustomerSatisfaction Team:Sales & MarketingPricing,

PromotionChannels,Logistics


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Specialization 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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Geographic Specialization

Head-Marketing


General 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 companyhas many products and /or brands

Two types of productspecialization (x). Sales organization with

product specialized salesforce

(y). Sales organization withproduct managers as staffspecialists

Product Specialization


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Head-Marketing


GeneralSales Manager

Sales TrainingManager

PromotionManager

Area Sales ManagersProduct Group A

Area Sales ManagersProduct Group B

SalespeopleProduct Gr. A

SalespeopleProduct 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


PromotionManager

Product ManagerProduct Gr. B

Product ManagerProduct Gr. A

GeneralSales Manager

Area SalesManagers

Salespeople


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Market Specialization

General SalesManager

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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Combination Sales Organization

Director Sales& Marketing

General Manager

Sales - North

General Manager

Sales - East

General Manager

Sales - South

General Manager

Sales - West

Regional SalesMgr. Govt.

Regional SalesMgr. - Dealers

Regional SalesMgr. - Commercial

Salespeople Salespeople Salespeople


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Emerging Organizational Design

Agency and Distribution Selling

Independent private businesses

Contractual agreement with the selling organization

Payment is based on commission

Salespeople have less specialized knowledge about theproduct and company

Companys sales force policy is flexible

Shared Sales Force

Divides the sales force among the number of divisions orproduct lines of an organization to reduce

Operating cost

Increased efficiency

Achieve synergy

Achieve economies of scope

Puts additional pressure on the salesperson tocoordinate and monitor customers, competitors,product features, other departments people


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Coordination of Personal Sellingwith other Marketing Activities

Sales and Advertising

Work towards same objective of profit

maximization

Activities of sales force are planned and directedalong lines that increase advertising effectiveness

Advertising is geared up as and when required soas to assist the salespeople

Sales and Marketing Information

Marketing information system assist the salesdepartment by gathering data needed for

analyzing sales problems, assisting in determiningsales potential, measuring the effectiveness of thesales effort

Sales department provides the information systemwith many of the raw statistics and other

information needed for sales and market analysisand forecasting.


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Coordination of Personal Sellingwith 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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Sales Forecasting

What is Sales Forecasting?

It is an estimate of sales during a specifiedfuture period which is tied to a proposed

marketing plan and which assumes a particularset of uncontrollable and competitive forces

-Cundiff and Still


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Importance of Sales Forecasting

Helps manufacturing department forsetting up production capacity andplanning production

Finance department for raising cash forinvestment and operations as well as forprofit planning

Purchase function for planning theirpurchases

HR function to help them plan for

manpower planning


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Factors Influencing the Sales Forecast

Marketing Plans Changes in price structure, channels of

distribution, promotional plans, productsmay influence the future sales.

Conditions within the industry Competitor policies and new entrants

into the market needs to be taken intoconsideration.

Market Conditions Awareness about the changes in the

primary demand for the industrys output.

General Business Conditions General state of the economy

Types of Sales Forecast


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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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Terms Used in Forecasting

Market Potential

Maximum possible sales opportunitiespresent in a particular marketsegment and open to all sellers duringa stated future period.

Market Forecast

Expected industry sales for a givenproduct or service at one specificlevel of industry marketingexpenditure, in a given market, for aspecific period of time.

Company Sales Potential Best possible estimated sales of a

given product or service for acompany in a given geographic

area for a specific period of time.


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Company Sales Forecast Estimated company sales of a given product or

service, 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 isexpressed in both revenues and units ofproduction.

Sales budget is used for making purchasing,production, manpower and cash flowdecisions.

Sales QuotaIndividual sales target figure assigned

to each sales unit such a sales person, dealer,distributor, region, or territory, as a requiredminimum for a specified period (month,quarter, year).

Sales quotas may be expressed either incurrency figures (monetary terms) or in number

of goods or services sold (volume terms).


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Sales 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

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