sales organization structure

27
SALES ORGANIZATION STRUCTURE -Varun Bansal, 058 EF

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Page 1: Sales Organization Structure

SALES ORGANIZATION

STRUCTURE

-Varun Bansal, 058 EF

Page 2: Sales Organization Structure

What is Organization Structure ?What is Organization Structure ?

• Organization structure is a pattern of Organization structure is a pattern of relationships about various components or relationships about various components or parts of the organization it prescribes the parts of the organization it prescribes the relationships among various activities and relationships among various activities and positions.positions.

• A sales organization defines duties, roles, A sales organization defines duties, roles, rights, and responsibilities of sales people rights, and responsibilities of sales people engaged in selling activities meant for the engaged in selling activities meant for the effective execution of the sales functioneffective execution of the sales function

Page 3: Sales Organization Structure

The Sales Organization The Sales Organization

I. Purposes of sales organization. I. Purposes of sales organization. • To permit the development of specialist. To permit the development of specialist. • To assure that all necessary activities are To assure that all necessary activities are

performed. performed. • To achieve coordination or balance. To achieve coordination or balance. • To define authority. To define authority. • To economize on executive timeTo economize on executive time

Page 4: Sales Organization Structure

Setting up a sales organizationSetting up a sales organization

• Defining the Objectives. Defining the Objectives. • Determination of activities and their volumes Determination of activities and their volumes

of performance. of performance. • Grouping activities into positions. Grouping activities into positions. • Assignment of personnel to positions. Assignment of personnel to positions. • Provision for coordination and controlProvision for coordination and control

Page 5: Sales Organization Structure

Sales Organization Concepts

Page 6: Sales Organization Structure

Sales Force Specialization Continuum

Some specializationof selling activities,products, and/or

customers

All selling activitiesand all products toall customers

GeneralistsGeneralistsCertain selling activities for certain products for certain customers

SpecialistsSpecialists

Page 7: Sales Organization Structure

Flat Sales OrganizationFlat Sales Organization

Span of ControlSpan of Control

Managem

ent LevelsM

anagement Levels

National Sales

Manager

National Sales

Manager

District Sales

Manager

District Sales

Manager

District Sales

Manager

District Sales

Manager

District Sales

Manager

District Sales

Manager

District Sales

Manager

District Sales

Manager

District Sales

Manager

District Sales

Manager

Span of Control vs. Management Levels

Page 8: Sales Organization Structure

Span of Control vs. Management Levels

Page 9: Sales Organization Structure

OrganizationalStructure

OrganizationalStructure

EnvironmentalCharacteristicsEnvironmentalCharacteristics

TaskPerformance

TaskPerformance

PerformanceObjective

PerformanceObjective

SpecializationSpecializationHigh Envir. uncertaintyHigh Envir. uncertainty NonroutineNonroutine AdaptivenessAdaptiveness

CentralizationCentralizationLow Envir.

UncertaintyLow Envir.

Uncertainty RepetitiveRepetitive EffectivenessEffectiveness

Selling-Situation Factors and Organizational Structure

Page 10: Sales Organization Structure

Simple Product Offering

Simple Product Offering

Complex Range of Products

Complex Range of Products

Customer Needs DifferentCustomer Needs Different

Customer Needs SimilarCustomer Needs Similar

Market-Driven

Specialization

Product/Market-Driven Specialization

Geography-Driven

Specialization

Product-Driven

Specialization

Customer and Product Determinants

of Sales Force Specialization

Page 11: Sales Organization Structure

Basic types of sales organizational Basic types of sales organizational structurestructure

• lineline• Line-staffLine-staff

• FunctionalFunctional

• GeographicGeographic• ProductProduct• marketmarket

Page 12: Sales Organization Structure

Line sales organization.

Page 13: Sales Organization Structure

Merits – Merits – • Simplicity. Simplicity. • Authority and Responsibility are clear and logical. Authority and Responsibility are clear and logical. • Problems of discipline and control are small. Problems of discipline and control are small. • It is difficult to evade or shift responsibility. It is difficult to evade or shift responsibility. • Simplicity is structure makes it easy for execution to develop close relations with sales Simplicity is structure makes it easy for execution to develop close relations with sales

personnel. personnel. • Sometime in making policy changes, deciding new plans and converting into actions. Sometime in making policy changes, deciding new plans and converting into actions. • Administration expenses comparatively low.Administration expenses comparatively low.

Limitations – Limitations – • It depends more on departmental head. It depends more on departmental head. • No subordinates with specialized skills and knowledge to provide advice and assistance. No subordinates with specialized skills and knowledge to provide advice and assistance. • Less time for policy making more on operational direction. Less time for policy making more on operational direction. • For big organization this structure is inappropriate.For big organization this structure is inappropriate.

Line sales organization. Line sales organization.

Page 14: Sales Organization Structure

Line and staff sales organization

Page 15: Sales Organization Structure

Merits – Merits – • Specialized services available. Specialized services available. • Executive can concentrate more on coordination and control.Executive can concentrate more on coordination and control.

Limitation Limitation • Staff work has to be coordinated which is costly.Staff work has to be coordinated which is costly.• Close control over staff line relations is essential. Close control over staff line relations is essential. • Critical decisions tend to be delayed.Critical decisions tend to be delayed.

Page 16: Sales Organization Structure

Functional SalesFunctional SalesOrganizationOrganization

• .. National Sales ManagerNational Sales Manager

Field Sales ManagerField Sales Manager Telemarketing Sales ManagerTelemarketing Sales Manager

Regional Sales Managers (4)Regional Sales Managers (4)

Salespeople (160)Salespeople (160)

Salespeople (40)Salespeople (40)

District Sales Managers (2)District Sales Managers (2)

District Sales Managers (16)District Sales Managers (16)

Page 17: Sales Organization Structure

Geographic Sales OrganizationNational Sales ManagerNational Sales Manager

Zone Sales Managers (4)Zone Sales Managers (4) Zone Sales Managers (4)Zone Sales Managers (4)

District Sales Managers (20)District Sales Managers (20)

Salespeople (100)Salespeople (100) Salespeople (100)Salespeople (100)

District Sales Managers (20)District Sales Managers (20)

Eastern Region Sales ManagerEastern Region Sales Manager Western Region Sales ManagerWestern Region Sales Manager

Sales Training ManagerSales Training Manager

Page 18: Sales Organization Structure

Product Sales Organization

National Sales ManagerNational Sales Manager

Office Equipment Sales ManagerOffice Equipment Sales Manager Office Supplies Sales ManagerOffice Supplies Sales Manager

District Sales Managers (10)District Sales Managers (10)

Salespeople (100)Salespeople (100) Salespeople (100)Salespeople (100)

District Sales Managers (10)District Sales Managers (10)

Page 19: Sales Organization Structure

Market Sales OrganizationNational Sales ManagerNational Sales Manager

Zone Sales Managers (4)Zone Sales Managers (4)

District Sales Managers (25)District Sales Managers (25)

Salespeople (150)Salespeople (150)

District Sales Managers (5)District Sales Managers (5)

Commercial AccountsSales Manager

Commercial AccountsSales Manager

Government AccountsSales Manager

Government AccountsSales Manager

Sales Training Manager

Sales Training Manager

Salespeople (50)Salespeople (50)

Page 20: Sales Organization Structure

Customer and Product Determinants of Sales Force Specialization

Page 21: Sales Organization Structure

OrganizationalStructure Advantages Disadvantages

Geographic

• Low Cost• No geographic duplication• No customer duplication• Fewer management levels

• Limited specialization• Lack of management control over product or customer emphasis

Product

• Salespeople become experts in product attr. & applications• Management control over selling effort

• High cost• Geographic duplication• Customer duplication

Comparison of Sales Organization Structures

Page 22: Sales Organization Structure

OrganizationalStructure Advantages Disadvantages

Market

• Salespeople develop better understanding of unique customer needs• Management control over selling allocated to different markets

• High cost• Geographic duplication

Functional• Efficiency in performing selling activities

• Geographic duplication• Customer duplication• Need for coordination

Page 23: Sales Organization Structure

Hybrid Sales Organization StructureNational Sales ManagerNational Sales Manager

Major Accounts Sales Manager

Major Accounts Sales Manager

Regular Accounts Sales Manager

Regular Accounts Sales Manager

Office Equipment Sales Manager

Office Equipment Sales Manager

Office Supplies Sales ManagerOffice Supplies Sales Manager

Field SalesManager

Field SalesManager

TelemarketingSales ManagerTelemarketingSales Manager

Commercial Accounts Sales Manager

Commercial Accounts Sales Manager

Government Accounts Sales Manager

Government Accounts Sales Manager

WesternSales Manager

WesternSales Manager

EasternSales Manager

EasternSales Manager

Page 24: Sales Organization Structure

Hybrid Sales Organization StructureHybrid Sales Organization Structure

• Customer knowledgeCustomer knowledge• Market knowledgeMarket knowledge

• Economies of scale issuesEconomies of scale issues

Page 25: Sales Organization Structure

Global aspectsGlobal aspects

• Market scope , and market entering Market scope , and market entering strategy(joint venture, strategic alliance, etc)strategy(joint venture, strategic alliance, etc)

• Coordination and communicationCoordination and communication• Simple, flatter structuresSimple, flatter structures• ““suck-ups” who just provide hollow praise to their bosses.suck-ups” who just provide hollow praise to their bosses.

Page 26: Sales Organization Structure

Static????Dynamic????Static????Dynamic????

• EntropyEntropy• EvolutionEvolution• EconomicsEconomics

Page 27: Sales Organization Structure

Thank you