sales organization structure
TRANSCRIPT
SALES ORGANIZATION
STRUCTURE
-Varun Bansal, 058 EF
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
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
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
Sales Organization Concepts
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
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
Span of Control vs. Management Levels
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
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
Basic types of sales organizational Basic types of sales organizational structurestructure
• lineline• Line-staffLine-staff
• FunctionalFunctional
• GeographicGeographic• ProductProduct• marketmarket
Line sales organization.
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.
Line and staff sales organization
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.
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)
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
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)
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)
Customer and Product Determinants of Sales Force Specialization
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
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
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
Hybrid Sales Organization StructureHybrid Sales Organization Structure
• Customer knowledgeCustomer knowledge• Market knowledgeMarket knowledge
• Economies of scale issuesEconomies of scale issues
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.
Static????Dynamic????Static????Dynamic????
• EntropyEntropy• EvolutionEvolution• EconomicsEconomics
Thank you