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Sales and Distribution MGT Unit 3 Student

The document discusses sales territories, which are geographical areas assigned to individual salespeople that allow companies to effectively plan sales coverage, assign responsibilities, and evaluate performance; it also outlines the objectives, design, characteristics, planning, management, and evaluation of sales territories and the roles and processes of sales management in coordinating resources to achieve sales goals.

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Pradeep Raj
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120 views

Sales and Distribution MGT Unit 3 Student

The document discusses sales territories, which are geographical areas assigned to individual salespeople that allow companies to effectively plan sales coverage, assign responsibilities, and evaluate performance; it also outlines the objectives, design, characteristics, planning, management, and evaluation of sales territories and the roles and processes of sales management in coordinating resources to achieve sales goals.

Uploaded by

Pradeep Raj
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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SALES AND DISTRIBUTION MANAGEMENT

UNIT 3
SALES TERRITORIES
A sales territory is defined as a group of present and potential customers assigned to an
individual salesperson, a group of salespersons, a branch, a dealer, a distributor, or a marketing
organization at a given period of time.
Territories are defined on the basis of geographical boundaries in many organizations.
Though the geographic market may have a heterogeneous mix of both existing and potential
customers, a decision on the basis of geographic coverage has distinctive advantages.
According to Stiff and Cundiff, “A sales territory is a grouping of customers and prospects
assigned to an individual salesperson.”
According to Mynard and Davis, “Sales territory is the basic unit of sales planning and
sales control.”
OBJECTIVES
1. To facilitate effective sales planning.
2. To cover and manage the entire market.
3. To assign salesmen’s responsibility for a particular territory.
4. For a better evaluation of performance of the salesmen.
5. To reduce the selling costs.
6. To facilitate coordination in marketing functions.
7. To make the marketing research functions.
8. Development of fair competition among all sales persons.
9. To improve the customer relations.
10. To appoint salesmen matching with the territory and customers.
11. Independent work area for each salesman.
12. To compete effectively with competing institutions.
SALES TERRITORIES DESIGN

A company has to establish a geographic control unit. For a multinational company, this
could be a country. Then for a national company, it could be a region or zone consisting of one
or several states. There can be further units in terms of cities or districts. Trading area
representing a natural flow of trade can be chosen as a control unit.
After establishing control unit, we have to determine the sales potential of each control unit. The
units are then combined into tentative sales territories. These can be further refined by making
suitable adjustments.
There are two basic approaches
1. Market Build-up Approach
2. Workload Approach.
SALES TERRITORIES - CHARACTERISTICS
1. Sales territory is a geographical area containing a number of present and potential customers.
2. Different groups of customers are formed by a firm through allotment of territories.
3. It is a group of customers or geographical area assigned to a salesman.
4. It is the area that can be effectively and economically served by a single salesman.
SALES TERRITORY PLANNING AND MANAGEMENT
1. Research the geographical area.
2. Divide the area on the basis of population, accessibility, potential etc.
3. Study the consumer behaviour of the territory.
4. Assess the revenue potential from the respective territories.
5. Analyse the hurdles that may be present in the territories.
6. Define the products suitable for the territory.
7. Probe further to find out specific needs and wants of the people within the territory.
8. Appoint sales people or sales team for each territory.
9. Monitor and track the performance of each territory.
10. Review sales people performance for each territory.
11. Avoid overlapping territory because it causes conflict among the sales people.
NEED FOR SALES TERRITORIES
(i) To cover the market properly.
(ii) To deploy the salespeople effectively.
(iii) To service the customer grouping efficiently.
(iv) To evaluate the sales representatives.
(v) To facilitate higher productivity in selling and marketing effort.
(vi) To control selling expenses.
(vii) To coordinate personal selling and advertising.
FUNCTIONS OF SALES MANAGEMENT

SALES MANAGEMENT PROCESS


Sales management is the coordination of people and resources to effectively produce the
desired goal. These long-term goals can be wide ranging; however, they are generally increased
sales volume, contribution to profits, and continuous growth.
To achieve these objectives, sales managers have vast responsibilities including, but not
limited to: demand/sales forecasting, establishing quotas/objectives, budgeting, organization,
recruitment, training, compensation, and sales performance evaluation. In the end of the day,
however, the most important role of sales management is not to manage sales, but to manage
the people who make the sales.
TASKS OF SALES MANAGEMENT
1. Sales planning
This area of sales management involves setting the objectives toward which the sales
team will work. Some of the individual tasks involved are setting overall sales targets, quotas,
demand/sales forecasting and strategy.
2. Recruitment of sales staff
An integral portion of sales management. Sales managers are tasked with managing the
personnel they have under them. This extends from the recruitment and hiring of staff, through
training and one on one coaching. When it comes to the recruitment of staff, sales managers must
analyse the open position, create a job description, and qualify the applicants.
3. Sales reporting
Sales management is also tasked with developing and analysing KPI’s for their sales team.
By understanding these indicators, managers are better able to track and make adjustments to
improve productivity. Reports passed up the ladder allow senior management to evaluate the
overall health of sales, as well as the performance of the sales manager individually.
Sales management is an important part of an organization's business cycle. Whether you
are selling a service or a product, sales managers are responsible for leading the sales force,
setting the objectives for the team, planning and controlling the entire sales process, and
ultimately ensuring the execution of the team vision.
STAGES OF SALES MANAGEMENT

EVALUATING PERFORMANCE AND SALES METRICS


1. Sales Cycle Length
After indicators tied to revenue, the length of the sales cycle is one of the most important
metrics you can track. Looking closely at the length of your average sales cycle on a monthly
basis helps determine if, and where, there are any bottlenecks throughout the pipeline. In
addition to examining the entire length of time it takes to convert a lead into a sale, you also need
to pay attention to the length of each individual stage of the sales cycle in order to determine
which areas you can make more efficient.

2. Percentage Achieving Quota


Every sales director must ask themselves the question, “Am I doing everything I can to
set my team up for success?” Evaluating the percentage of your sales reps who meet 100 per cent
of their quotas can be an important step to answer this query.

If you find that a consistent percentage of your salespeople regularly fall short of meeting
their quotas, there’s likely an issue that needs to be addressed with your hiring, strategic plan,
or training. Once you identify the symptom, you can analyse all of your data to help find a
solution.

3. Lead Response Time


B2B customers have a wealth of buying options available to them, which makes your lead
response time more important than ever. If a buyer feels they’re waiting too long for a response
from a salesperson, it’s easy for them to research other products in-depth and move on to the
next stage in the process with the first person to contact them.

4. Opportunity Win Rate


Not all sales reps, even the talented ones, are created equally. Some team members may
excel when it comes to engaging new prospects and building trusting relationships, yet they may
not be quite as adept at guiding the client to put pen to paper. Opportunity win rate is one metric
where looking at a specific data point isn’t likely to provide much insight. A single potential deal
can dissolve for any number of reasons, many of them completely out of the salesperson’s
control.

5. Average New Deal Size

Your average deal size can have important ramifications for your company’s lead
generation efforts and pricing strategy. It’s possible there is a disconnect in the lead generation
process that prevents you from identifying your ideal buyers. Or it’s possible that your package
pricing discourages customers from making larger purchases at one time.
This indicator is also helpful in conjunction with the cost of acquiring a new customer to
determine if certain deals should be pursued or left on the table.

6. Revenue from SMBs Versus Large Enterprises


Strategically, it may be important to examine separately how your sales effort is
connecting with small businesses, mid-market players, and larger enterprises. If one segment is
thriving while another is lacking, it may be necessary to reshape some of your sales processes to
better court a group of customers who are more receptive to your sales pitch.

CONTROLLING SALES FORCE

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