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Sales Organization

The document discusses the organization of sales functions within a company. It describes the planning, administrative, and executive functions of a sales organization. These include sales forecasting, selecting and training salespeople, sales promotion, and order execution. The document then discusses different ways to structure a sales organization, such as by geography, products, customers, or a hybrid approach. It provides examples of vertical, horizontal, centralized, and decentralized organizational structures. Finally, it discusses considerations for organizing field sales forces and supplier selling teams.

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Rohit Yadav
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307 views

Sales Organization

The document discusses the organization of sales functions within a company. It describes the planning, administrative, and executive functions of a sales organization. These include sales forecasting, selecting and training salespeople, sales promotion, and order execution. The document then discusses different ways to structure a sales organization, such as by geography, products, customers, or a hybrid approach. It provides examples of vertical, horizontal, centralized, and decentralized organizational structures. Finally, it discusses considerations for organizing field sales forces and supplier selling teams.

Uploaded by

Rohit Yadav
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Introduction and Functions of Sales

Organization
Organization means the systematic
coordination of the functions essential to
achieving organizational objectives.
The
objective of a sales organization, therefore, is
the performance of various activities
necessary to promote sales. The functions of
sales organization can be classified as
follows.
1.

Planning functions
a) Sales

forecasting
b)
Sales budgeting
c)Selling policy

1.

Administrative functions
a) Selecting salesmen
b) Training salesmen
c) Control of salesmen
d) Remuneration of salesmen

3.

Executive functions
a) Sales promotion
b) Selling routine execution of customers orders.

Role of Sales Organization


Once the sales plan has been formulated, the

next logical step is to organize a sales force to


achieve the organizational objective.
The
qualified as sales objectives, which can be
further divided, are shown in figure 1 given
below.
Major Qualified Sales Objectives
Overall objectives
1. Total volume of products
2. Total annual value of
products
3. Total annual selling costs
4. Total annual profit
contribution

Figure 1

Break up or Division
1. Quarter, month and weak
2. Product line and range
3. Region and sales area
4. Type of customer

Role of Sales Organization


Sales organization has the following basic
purposes:
1. Define the line of authority
2. Ensure that all necessary activities are assigned
and performed
3. Establish lines of communication
4. Provide for coordination and balance
5. Provide insights into avenues of advancement
6. Economics of executive time.
Sales organization also depends on the type of
sales force which is used, for example, field
sales force, national account management,
team selling, telemarketing, part-time sales
forces, direct selling, etc.

Developing a Sales Organization

1.
2.
3.
4.

Sales organization development refers to the formal,


coordinating process of communication, authority and
responsibility for sales groups and individuals.
An
effectively designed sales organization has a framework
that enables the organization to serve its customers.
Once the sales people know what their responsibilities
are and who they report to, they can concentrate on
doing their expected jobs to the best of their ability.
Thus, a sales manager must recognize and deal with
some basic problems faced by organizations, when
developing his own sales organization. The five major
issues are:
Formal and informal organizations
Horizontal and vertical organizations
The line and staff components of organizations
The size of the company.

Assistant to
Marketing Vice
President

Marketing Vice
President

Director of
Marketing
Research

General
Sales
Manager

Manager of
Sales
Planning

Other functional
or administrative
organizations

Director of
Advertising

Director of
Public
Relations

Manager of
Distribution

District Sales
Manager

Manager of
Accounts
Receivable

Sales persons
Key Informal Organization

Figure 2 The informal Communication


System in a Marketing Organization

Salesperson

District
Sales Manager

General Sales
Manager

Marketing
Vice President

Figure 3 A Lengthy Formal Communications Channel

Director of
Marketing
Research

Top Sales Executive


Regional or Zonal Sales
Manager

District Sales Manager

Sales Supervisor

Salesperson

Figure 4 Vertical Sales Organization

Top Sales Executive

New England
District Sales
Manager

Southern
District Sales
Manager

Middle
Atlantic
District Sales
Manager

Southwest
District Sales
Manager

Midwest
District Sales
Manager

Foreign Sales
Manager

Pacific
District Sales
Manager

Figure 5 Horizontal Sales Organization

Centralized and Decentralized


Organization
Line and Staff Components

Marketing organizations also feature line and

staff components.
A line function is a primary activity and a staff
function is a supporting activity.
In a marketing organization, the selling
function is the line component whereas
advertising, marketing research, marketing
planning, sales training and distributor
relations are usually considered staff roles.

Vice President for


Sales
General Sales
Manager
Regional Sales
Manager
A

Regional Sales
Manager
B

Regional Sales
Manager
C

Figure 6 A Line Marketing Organization

Assistant to the
Vice President for
Marketing

Vice President for


Marketing

Marketing Research

Advertising
General Sales
Manager

Distributor
Relations

Sales
Analysis

Sales
Planning
Regional Sales
Manager A

Regional Sales
Manager B

Sales
Training
Regional Sales
Manager C

Key --- --- --- Staff Organization


______________Line Organization
Figure 7 Line and Staff Marketing Organization

Company Size and Organization


A

simple functional company organization is


shown in Figure 8 . This structure is appropriate
for most small and medium sized companies.
These companies have relatively few products or
services and use a limited number of distribution
channels. As each functional area grows larger,
the functional organization will be extended. A
functional marketing organization is shown in
Figure 9.

President

Finance and
Accounting

Production

Personnel

Figure 8 Functional Company Organization

Sales and
Marketing

Chief Marketing Executive

Advertising
Manager

Sales
Manager

Customer
Relations
Manager

Market
Research
Manager

Sales
Supervisors

Salespeople

Figure 9 Functional Company Organization

Field Sales Organization

1.
2.
3.
4.
5.

Field sales force consists of salespersons who


work primarily with customers in person,
although they may also use the telephone or
assistance from computer links to expedite
orders and provide customer service.
The
structure of a field sales force is usually based
on some means of specialization, such as
geography,
market,
product,
or
activity/function, or a hybrid of these types.
The following are the important field sales:
Geographic sales specialization organization
Product-based sales specialization organization
Customer-based specialization organization
Hybrid sales organization
Team-based organization

FMCG Sales

WEST DIVISION

CENTRAL DIVISION

Area Sales Manager

Area Sales Manager

Area Sales Manager

-Mumbai

-Delhi

-Kolkata

- Surat

- Jaipur

- Patna

EAST DEVISION

- Chandigarh

Figure 10 Geographical Sales Organization


Some advantages of geographic organizations are (a) Proper coverage of
territory (b) Defining the responsibility (c) Familiarity with local economic and
competitive conditions, making them better able to serve local customers.

Medical Division of `K Pharma Ltd.

Pharmaceuticals
East
West
Central

Equipment
East
West
Central

Supplies
East
West
Central

Sales Manager for India


Regional Manager
Branch Sales Manager

Assistant Sales ManagerAgricultural Products

Assistant Sales Manager


Health Care Products

Activity

Sales Method

* Prospecting

Telemarketing/cold calls

* Presentation

Face-to-face field sales

* Service

Personal visits

President

Functional

Geographic

Customer

Vice President
Production
Sales Manager
For India
Consumer Goods
Managers

Vice President
Marketing

Vice President
Finance

International
Marketing Manager
Industrial Goods
Manager

Customer

Sales

Marketing

Technical Support

Figure 14 Supplier Selling Team

Manufacturing

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