Sales Management Chapter 4

Organizational structure
arrangement of activities involving a group of people
Organizational structure’s purposes
1. activities should be divided and arranged by specialization of labor
2. provide stability and continuity in the firm’s selling efforts
3. provide coordination and integration of various activities assigned to different people in the sales force
Issues of sales organization
Span of control, centralization, number of management levels, and line and staff managers
Line managers
evaluated on salves revenue and profit; responsible for execution
Staff managers
support line positions managers
4 ways a salesforce can be organized
1) geographic organization
2) product organization
3) customer organization
4) organizing by selling function
geographic organization
individual reps to separate geographic territories
product organization
separate sales forces for each product in their product assortment
customer market orientation
organizing sales by customer type
organizing by selling function
have one sales force specializing in prospecting for accounts and one salesforce for maintaining existing accounts.
Key accounts
large accounts (80/20 rule)
4 ways to organize key accounts
1) rely on regular sales force members
2) assign key accounts to sales executives
3) form a separate key account division
4) form a separate sales force for key accounts
Allocating selling efforts across accounts
“how much time should each one of our accounts receive?”
single factor model
classify all accounts based on one variable, such as sales volume
portfolio model
looks at account opportunity and competitive position to determine attractiveness of each account in the company’s account portfolio
account opportunity
customer’s need and ability to pay for and purchase the firm’s products or services
competitive position
the strength of the relationship between the firm and the customer
decision models
rely on past, historical data to develop a regression question representing the relationship between sales calls and sales volume by account
The Breakdown Method
helps determine salesforce size by assuming all sales people have the potential to produce the ame amount of sales in one year.

Forecasted Sales/Productivity per Sales Person

The Workload Method
based on equal workload for all sales people

determine the amount of work it will take to cover the entire market, then divide by # of sales people

Incremental Method
Sales reps should be added as long as the additional profit produced is more than revenue
Basic Control Units
building blocks for constructing territories: states, trading areas, counties, cities, zip code areas
geographic pattern that sales people follow to cover their territory
straight-line method
travel routes start and end in the same location
clover leaf pattern
each account is visited every 4 weeks
hop-scotch pattern
work back from a zig zag manner
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