organization of the sales force

8/3/2019 Organization of the Sales Force

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ORGANIZATION OF THE SALESFORCE


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ORGANIZATION

Organization is the basic managementfunction of arranging the firms workactivities.

It is performed by all managers regardless oftheir other responsibilities.


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Tasks Of The Sales Organization

To reflect stronger commitment to theircustomers, three basic tasks must beaccomplished by organization:

1. Maintenance of order in achieving salesforce goals and objectives.

2. Assignment of specific tasks andresponsibilities.

3. Integration and coordination with otherelements of the firm.


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STRUCTURE

Structure involves the way in which anorganization divides its activities into distincttasks and then achieves coordination amongthem.

Organization structure also permits theassignment of specific tasks to a positionwhose incumbent is then charged withresponsibility for accomplishing them.


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Developing a Sales Organization

Developing an organization structure is not aneasy task. Sales managers must recognize andthen deal with:

1. Formal and informal organization

2. Horizontal and vertical organization

3. Centralized and decentralized organizational

structures4. The line and staff components of organization

5. The size of the company


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Formal & Informal Organization

Formal organization is the managementcreated relationships between departmentsand between individuals.

Informal organization is basically acommunications pattern formed from thesocial relationships existing within the formal

organization.

Grapevine is another name for informalorganization communications pattern.


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Horizontal & Vertical

Organization

Vertical sales organization: Organizationthat has several levels of management allupward to the next level.

Horizontal sales organization: Organizationin which the number of management levels issmall and the number of managers at anyparticular level is large.


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Centralized & Decentralized

Organizations

Centralized sales organization:Organizations in which responsibility andauthority are concentrated at higher levels ofmanagement.

Decentralized sales organization:Organizations in which responsibility and

authority are delegated to lower levels ofmanagement.


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Line and Staff Components

Line function is a primary organizationactivity. For example, in marketingorganization a selling function is a linecomponent.

Staff function is a supporting organizationalactivity. For example, in marketing

organizataion advertising, marketingresearch, marketing planning etc are staffroles.


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Company Size & Organization

Size of company is a major factor influencingits organizational structure.

For small company, there is likely to be noformal organizational structure.

For a large company, as each functional areabecomes larger, the functional organization isextended. (Functional organizations whoseformat are based on formal activities)


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Basic Types of Sales

Organization

Most company sales forces are organized onthe basis of geography, customers, orproducts or some combinations of thesefactors.

Each of these bases has positive and negativefeatures.


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Geographic Specialization

Sales organization in which selling personnelare given the responsibility for direct sellingactivities in a given geographical area.

Sales representatives are responsible forselling the firms full line of products.


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Customer Specialization

Sales organizations in which selling personnelare organized by particular customers orindustries.

IBM is an example of a company that usesspecialized sales forces for different classes of

customers.


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Product Specialization

Sales organizations in which selling personnelconcentrate their efforts on particularproduct lines, brands or individual items.

Manufacturer representatives areindependent commercial sales agents who

sell for several manufacturers of noncompeting products.


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Combination Organizations

Due to rapidly changing high growth marketmany high-tech companies are attempting todevelop new organization strategies. These

new combination organizations can becategorized as:

1. Market, product and function

2. Decentralized staff and line personnel

3. Complex staff-line relationships

4. Overlaid organizational mechanism


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Relations With Other

Departments There are two types of departments with

which sales must have good workingrelationships.

1. Those connected with other marketingactivities advertising, marketing research,sales promotion etc

2. Those with nonmarketing functions such ashuman resources, manufacturing andfinance.


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Relationships with Other

Marketing Functions

Marketing mix is the combination of varioustechniques used to satisfy customers needs.

These relations between sales andadvertising are of special concern.

Flow of information is another vital part ofthe sales departments relations with othermarketing functions.


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Relations with Non-Marketing

Departments

R&D: To perform basic research andengineering activities needed to develop newproducts and improve existing ones.

Account control concept: in which theauthority and responsibility for handling theaccount rests with field sales management.

This concept was formulated to tackle theproblems faced by high-tech companies.


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Relations with Non-Marketing

Departments

HR: Today role of HR can not be understated.Relations with HR is of crucial importance assales managers are required to seek advicesfrom HR for guidance on sales force hiring.

Accounting and finance: Three major areasof cooperation between sales, accounting

and finance are budgeting, cost control andcredit. Accounting personnel helps salespeople in many ways like for selling cost

analyses.


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Major Trends in Sales

Organizations There are three major organizational trends

that directly influence sales management interms of both people and structure:

1. Telemarketing

2. National account management

3. Indirect sales channel


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Telemarketing

Telemarketing refers to the use oftelecommunications technology in personalselling.

Inbound telemarketing is in which potentialcustomers contact the selling company.

Outbound telemarketing is in which theselling company contacts prospects andcustomers.


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National Account Management

Special sales forces dedicated to obtainingand/or maintaining large accounts.

To meet the unique demands of nationalaccounts, a national account manager isresponsible for coordinating the effort of a

sales and support team to serve their needs.


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Indirect Sales Channel

Independent sales representatives oragencies used by a company in place of itsown field sales force.

It has some disadvantages like about thecontrol over the selling process.

Independent agents follow their own rules

about what to sell, how to sell, etc.

organization of the sales force

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