4 sales organization structure
TRANSCRIPT
-
7/31/2019 4 Sales Organization Structure
1/40
Types of Sales
Organization
-
7/31/2019 4 Sales Organization Structure
2/40
Module 4:
Sales Organization Structure and Sales Force Deployment
Sales Organization Concepts
SpecializationThe degree to which individuals perform some of the
required tasks to the exclusion of others. Individuals
can become experts on certain tasks, leading to better
performance for the entire organization.
Centralization
The degree two which important decisions and tasks
performed at higher levels in the management
hierarchy. Centralized structures place authority andresponsibility at higher management levels.
-
7/31/2019 4 Sales Organization Structure
3/40
Module 4:
Sales Organization Structure and Sales Force Deployment
Sales Force Specialization Continuum
Some specialization
of selling activities,
products, and/or
customers
All selling activities
and all products to
all customers
GeneralistsGeneralistsCertain selling
activities for
certain products forcertain customers
SpecialistsSpecialists
-
7/31/2019 4 Sales Organization Structure
4/40
Module 4:
Sales Organization Structure and Sales Force Deployment
Flat Sales Organization
Span of Control
Man
agementLeve
ls
National
Sales
Manager
District
Sales
Manager
District
Sales
Manager
District
Sales
Manager
District
Sales
Manager
District
Sales
Manager
Span of Control vs. Management Levels
-
7/31/2019 4 Sales Organization Structure
5/40
Module 4:
Sales Organization Structure and Sales Force Deployment
Tall Sales Organization
National Sales
Manager
Span of Control
M
anag
emen
tLevels
District
SalesManager
District
SalesManager
District
Sales
Manager
District
SalesManager
District
SalesManager
District
SalesManage
r
Regional Sales
Manager
Regional Sales
Manager
Span of Control vs. Management Levels
-
7/31/2019 4 Sales Organization Structure
6/40
Module 4:
Sales Organization Structure and Sales Force Deployment
National Sales Manager
Regional Sales Managers
District Sales Managers
Sales Training Manager
Sales Training Manager
Salespeople
Staff Position
Line Position
Line vs. Staff Positions
-
7/31/2019 4 Sales Organization Structure
7/40
Module 4:
Sales Organization Structure and Sales Force Deployment
Organizational
Structure
Organizational
StructureEnvironmental
Characteristics
Environmental
CharacteristicsTask
Performance
Task
PerformancePerformance
Objective
Performance
Objective
SpecializationHigh Envir.
uncertainty Nonroutine Adaptiveness
CentralizationLow Envir.
UncertaintyRepetitive Effectiveness
Selling-Situation Factors and
Organizational Structure
-
7/31/2019 4 Sales Organization Structure
8/40
Module 4:
Sales Organization Structure and Sales Force Deployment
SimpleProduct
Offering
SimpleProduct
Offering
ComplexRange of
Products
ComplexRange 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
-
7/31/2019 4 Sales Organization Structure
9/40
Module 4:
Sales Organization Structure and Sales Force Deployment
Geographical Structure
-
7/31/2019 4 Sales Organization Structure
10/40
-
7/31/2019 4 Sales Organization Structure
11/40
Module 4:
Sales Organization Structure and Sales Force Deployment
Geographical Structure
This is the least specialized and most generalizedtype of sales-force.
-
7/31/2019 4 Sales Organization Structure
12/40
Module 4:
Sales Organization Structure and Sales Force Deployment
Geographical Structure
A potential weakness of the geographical structure isthat the salesperson is required to sell the full range ofthe companys products. They may be very different
technically and sell into a number of diverse markets. In such a situation it may be unreasonable to expect
the salesperson to have the required depth oftechnical knowledge for each product and be
conversant with the full range of potential applicationswithin each market. This expertise can only bedeveloped if the salesperson is given a morespecialized role.
-
7/31/2019 4 Sales Organization Structure
13/40
Module 4:
Sales Organization Structure and Sales Force Deployment
Geographic Sales Organization
National Sales Manager
Zone Sales Managers (4) Zone Sales Managers (4)
District Sales Managers (20)
Salespeople (100) Salespeople (100)
District Sales Managers (20)
Eastern Region Sales Manager Western Region Sales Manager
Sales Training Manager
-
7/31/2019 4 Sales Organization Structure
14/40
Module 4:
Sales Organization Structure and Sales Force Deployment
Product Specialization Structure
-
7/31/2019 4 Sales Organization Structure
15/40
-
7/31/2019 4 Sales Organization Structure
16/40
Module 4:
Sales Organization Structure and Sales Force Deployment
Product Specialization Structure
If the companys products sell essentiallyto the same customers, problems of routeduplication (and hence higher travelcosts) and customer annoyance can arise.
Inappropriate use of this method can leadto a customer being called upon bydifferent salespeople representing thesame company on the same day.
-
7/31/2019 4 Sales Organization Structure
17/40
Module 4:
Sales Organization Structure and Sales Force Deployment
Product Sales Organization
National Sales Manager
Office Equipment Sales Manager Office Supplies Sales Manager
District Sales Managers (10)
Salespeople (100) Salespeople (100)
District Sales Managers (10)
-
7/31/2019 4 Sales Organization Structure
18/40
Module 4:
Sales Organization Structure and Sales Force Deployment
Strength & Weakness
-
7/31/2019 4 Sales Organization Structure
19/40
Module 4:
Sales Organization Structure and Sales Force Deployment
Customer-based structures
(Industry-Based Structure)
-
7/31/2019 4 Sales Organization Structure
20/40
Module 4:
Sales Organization Structure and Sales Force Deployment
Market Sales Organization
National Sales Manager
Zone Sales Managers (4)
District Sales Managers (25)
Salespeople (150)
District Sales Managers (5)
Commercial Accounts
Sales Manager
Government Accounts
Sales Manager
Sales Training
Manager
Salespeople (50)
-
7/31/2019 4 Sales Organization Structure
21/40
Module 4:
Sales Organization Structure and Sales Force Deployment
Customer-based structures
The problem of the same customer being served byproduct divisions of the same supplier, the complexityof buyer behavior, which requires not only input from
the sales function but from other functional groups(such as engineering, finance, logistics and marketing),centralization of purchasing, and the immense value ofsome customers have led many suppliers to rethink
how they organize their sales-force.Companies are increasingly organizing around
customers and shifting resources from product orregional divisions to customer-focused business units.
-
7/31/2019 4 Sales Organization Structure
22/40
Module 4:
Sales Organization Structure and Sales Force Deployment
Customer-based structures
(Market-centered structure)
Another method of specialization is by the type of market served.Often in industrial selling the market is defined by industry type.
Thus, although the range of products sold is essentially thesame, it might be sensible for a computer firm to allocate its
salespeople on the basis of the industry served, e.g. banking,manufacturing companies and retailers, given that differentindustry groups have widely varying needs, problems andpotential applications.
Specialization by market served allows salespeople to gaingreater insights into these factors for their particular industry, aswell as to monitor changes and trends within the industry thatmight affect demand for their products. The cost of increasedcustomer knowledge is increased travel expenses compared with
geographically determined territories.
-
7/31/2019 4 Sales Organization Structure
23/40
Module 4:
Sales Organization Structure and Sales Force Deployment
Customer-based structures
(Account-size Structure)
-
7/31/2019 4 Sales Organization Structure
24/40
-
7/31/2019 4 Sales Organization Structure
25/40
Module 4:Sales Organization Structure and Sales Force Deployment
Customer-based structures
(Account-size Structure)
The range of selling skills required is thereforewider than for the rest of the sales-force, whodeal with the smaller accounts.
Some organizations adopt a three-tier system,with senior salespeople negotiating with keyaccounts, ordinary salespeople selling tomedium-sized accounts, and a telemarketingteam dealing with small accounts.
-
7/31/2019 4 Sales Organization Structure
26/40
Module 4:Sales Organization Structure and Sales Force Deployment
LargeLarge
SmallSmall
Complexity of AccountComplexity of Account
SizeofAcc
ount
SizeofAcc
ount
Large
Account
SimpleSimple ComplexComplex
Major
Account
Regular
Account
Complex
Account
Identifying Major Accounts
-
7/31/2019 4 Sales Organization Structure
27/40
Module 4:Sales Organization Structure and Sales Force Deployment
Develop Major Account Salesforce
Assign Major Accounts to
Sales Managers
Assign Major Accounts to Salespeople
along with Other Accounts
Major Accounts Options
-
7/31/2019 4 Sales Organization Structure
28/40
C t b d t t
-
7/31/2019 4 Sales Organization Structure
29/40
Module 4:Sales Organization Structure and Sales Force Deployment
Customer-based structures
-
7/31/2019 4 Sales Organization Structure
30/40
Module 4:Sales Organization Structure and Sales Force Deployment
Functional Sales Organization
The work is organized according to thefunctions e.g.
1.Sales2.Telemarketing
3.Promotion
4.After Sales Service
-
7/31/2019 4 Sales Organization Structure
31/40
Module 4:Sales Organization Structure and Sales Force Deployment
Functional Sales Organization
National Sales Manager
Field Sales Manager Telemarketing Sales Manager
Regional Sales Managers (4)
Salespeople (160)
Salespeople (40)
District Sales Managers (2)
District Sales Managers (16)
-
7/31/2019 4 Sales Organization Structure
32/40
Module 4:Sales Organization Structure and Sales Force Deployment
Mixed organization
In practice a combination of various sales organizationalstructures may be used.
Like many selling decisions, the choice of salesorganization is not a black and white affair, which is why
many sales forces are a blend of general territoryrepresentatives and specialists.
Many companies use all forms of selling simultaneously:for very big accounts they use key account specialists; for
the balance of small and medium accounts they usegeneral territory representatives, perhaps supplemented byproduct application specialists who help generalists acrossseveral territories.
-
7/31/2019 4 Sales Organization Structure
33/40
F u n c t i o n a l
G e o g r a p h i c
C u s t o m e r
P r o d u c t
P r e s i d e n t
V i c e P r e s i d e n tM a r k e t i n g
V i c e P r e s i d e n tP r o d u c t i o n
U . S .M a r k e t i n gM a n a g e r
I n t e r n a t i o n a lM a r k e t i n gM a n a g e r
C o n s u m e rG o o d sM a n a g e r s
I n d u s t r i a lG o o d sM a n a g e r s
I n t e r n a t i o n a lS a l e sM a n a g e r
E u r o p e a nD i v i s i o n
L a t i nA m e r i c a nD i v i s i o n
A s i a n aA f r i c a nD i v i s i o n
S o a p P r o d u c t sD i v i s i o n a lM a n a g e r
P a p e r P r o d u c t sD i v i s i o n a lM a n a g e r
F o o d P r o d u c t sD i v i s i o n a lM a n a g e r
E a s t e r nS a l e sD i v i s i o n
C e n t r a lS a l e sD i v i s i o n
W e s t e r nS a l e sD i v i s i o n
V i c e P r e s i d e n tE n g i n e e r i n g
Hybrid Sales Organization
-
7/31/2019 4 Sales Organization Structure
34/40
Module 4:Sales Organization Structure and Sales Force Deployment
Hybrid Sales Organization
Structure
National Sales Manager
Major Accounts
Sales Manager
Regular Accounts
Sales Manager
Office Equipment
Sales Manager
Office Supplies
Sales Manager
Field Sales
Manager
Telemarketing
Sales Manager
Commercial Accounts
Sales Manager
Government Accounts
Sales Manager
Western
Sales Manager
Eastern
Sales Manager
-
7/31/2019 4 Sales Organization Structure
35/40
Module 4:Sales Organization Structure and Sales Force Deployment
Comparison ofSales Organization Structures
Comparison ofSales Organization Structures
Organizational
Structure Advantages Disadvantages
Geographic
Low Cost No geographic duplication No customer duplication Fewer management levels
Limited specialization
Lack of managementcontrol over product or
customer emphasis
Product
Salespeople become experts
in product attr. & applications Management control over
selling effort
High cost Geographic duplication Customer duplication
-
7/31/2019 4 Sales Organization Structure
36/40
-
7/31/2019 4 Sales Organization Structure
37/40
-
7/31/2019 4 Sales Organization Structure
38/40
Module 4:Sales Organization Structure and Sales Force Deployment
NEW FORMS OF ORGANIZATIONS
A strategic alliance is a formal relationship created with
the purpose of joint pursuit of mutual goals.
STRATEGICALLIANCES
-
7/31/2019 4 Sales Organization Structure
39/40
Module 4:Sales Organization Structure and Sales Force Deployment
C u s t o m e r
S a l e s M a r k e t i n g M a n u f a c tT e c h n i c a l
S u p p o r t
S u p p l i e r S e l l i n g T e a m
-
7/31/2019 4 Sales Organization Structure
40/40
M d l 4
TEAM-BASEDORGANIZATIONS
Many organizations are more responsive to their
environment because they use work teams as their
basic building blocks.