Weekly Discussion

Jump tp Figure 9.2: Organizing the Sales Force, Appendix

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Variations of the Customer Structure

Major account organization structure

Company may assign a salesperson or a team to focus on major customers to foster long-term relationships

Global account manager

Individual who may be in charge of a single customer and all of its global needs

Customer’s needs, schedules, and interests are the top priority of the manager

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Controlling the Sales Force

Reasons

Personal selling can be the largest marketing expense component in the final price of the product

Sales force is likely to be less efficient than it is capable of being unless it is directed, motivated, and audited on a continual basis

Key functions

Forecasting sales

Establishing sales territories and quotas

Analyzing expenses

Motivating and compensating performance

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Sales Forecast

Estimate of how much of the company’s output can be sold during a specified future period under a proposed marketing plan and under an assumed set of economic conditions

Uses

Establishing sales quotas

Planning the personal selling efforts and other types of promotional activities

Budgeting selling expenses

Planning and coordinating production, logistics, inventories, personnel, and so forth

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Forecasting Methods, 1

Jury of executive opinion method: Combines and averages the views of top management representing marketing, production, finance, purchasing, and administration

Sales force composite method: Obtains the combined views of the sales force about the future outlook for sales

Customer expectations method: Involves asking customers or product users about the quantity they expect to purchase

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Forecasting Methods, 2

Time-series analysis: Involves analyzing past sales data and the impact of factors that influence sales

Correlation analysis: Involves measuring the relationship between the dependent variable, sales, and one or more independent variables that can explain increases or decreases in sales volumes

Other quantitative techniques: Numerous statistical and mathematical techniques can be used to predict or estimate future sales

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Establishment of Sales Territories and Quotas

Represents management’s need to match personal selling effort with sales potential

Sales territories can be segmented on the basis of geography and product specialization

Sales quotas

Provide incentives for salespeople and a quantitative standard for performance measurement

Evaluate and control the efforts of the sales force

Represent specific sales goals assigned to each territory or unit over a designated time period

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Factors in Establishing Sales Quotas

Compensation must be adjusted since all territories will not have equal potential

All salespeople will not have equal ability and assignments may have to be made accordingly

Sales task in each territory may differ from time period to time period

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Analyzing Expenses

Sales expense budget should be included in sales forecast

Developed from the bottom up in some companies

Each territorial or district manager submits estimates of expenses and forecasted sales quotas

Estimates are prepared for a period of a year and then broken down into quarters and months

Sales manager reviews the budget requests from the field offices and from staff departments

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Motivating and Compensating Performance, 1

Important task for the sales manager

Major determinants of sales force productivity

Types of compensation

Salary: Specific amount of monetary compensation at an agreed rate for definite time periods

Commission: Monetary compensation is provided for each unit of sales and expressed as a percentage of sales

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Motivating and Compensating Performance, 2

Bases for computing commission

Volume of sales in units of product

Gross sales in dollars

Net sales after returns

Sales volume in excess of a quota

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Types of Sales Force Incentives and Some Possible Performance Outcomes

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APPENDICES

Figure 9.1: The Sales Relationship-Building Process, Appendix

There are six rectangular boxes placed one below the other. To denote a process, downward pointing arrows are placed at the bottom of each of the boxes, except for the last one. The first box is labeled prospecting. The second box is labeled planning the sales call. The third box is labeled presenting. The fourth box is labeled responding to objections. The fifth box is labeled obtaining commitment. The sixth box is labeled building a long-term relationship.

Jump back to Figure 9.1: The Sales Relationship-Building Process

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People Who Support the Sales Force, Appendix

There are three small rectangular boxes partially overlapping three large rectangular boxes. Each pair of small and large boxes is placed one below the other. The content in the large box explains the term provided in the small box. In the first pair of boxes, the small box is labeled missionary salespeople. The content in the large box reads focus solely on promoting existing products and introduction of new products. In the second pair of boxes, the small box is labeled technical sales specialists. The content in the large box reads support the sales staff by providing training or other technical assistance. In the third pair of boxes, the small box is labeled cross-functional sales teams. The content in the large box reads used when the product is extremely high priced and is being sold to the whole organization.

Jump back to People Who Support the Sales Force

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Sales Management Task, Appendix

There are three small rectangular boxes partially overlapping three large rectangular boxes. Each pair of small and large boxes is placed one below the other. The content in the large box explains the term provided in the small box. In the first pair of boxes, the small box is labeled geographic structure. The content in the large box reads individual salespeople are assigned geographic territories. In the second pair of boxes, the small box is labeled product structure. The content in the large box reads salesperson is assigned customers and prospects for a particular product or product line. In the third pair of boxes, the small box is labeled customer structure. The content in the large box reads assigns a salesperson or team to serve a single customer or type of customer that has large or significant needs.

Jump back to Sales Management Task

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Figure 9.2: Organizing the Sales Force, Appendix

Starting from the top, the first section is labeled geographic structure. Within this section, there are five boxes arranged in two rows. The top row contains one box labeled worldwide sales. A line extends from the bottom of this box and connects to four boxes in the row below. Starting from the left, the boxes are labeled Asia, North America, Europe, and Latin America. The second section in the figure is labeled product structure. Within this section, there are five boxes arranged in two rows. The top row contains one box labeled worldwide sales. A line extends from the bottom of this box and connects to four boxes in the row below. Starting from the left, the boxes are labeled office furniture, sales, computers, and fax machine. The third section in the figure is labeled customer structure. Within this section, there are five boxes arranged in two rows. The top row contains one box labeled national sales. A line extends from the bottom of this box and connects to four boxes in the row below. Starting from the left, the boxes are labeled schools, law firms, hospitals, and government.

Jump back to Figure 9.2: Organizing the Sales Force

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