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    Sales Organization

    Arunlal.A.H

    Bhaskar.K

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    Topics

    Sales organization,

    objectives,

    setting up of a sales organization

    and types of sales organization

    structure.

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    IntroductionSales Organization

    Sales Organization is a department of the organization for

    the purpose of directing, coordinating and controlling thesales.

    A sales organization is responsible for distributing goods andservices. Therefore it is also liable for the sold products andresponsible for a customers rights of recourse.

    sales organization structureA sales organization structure evolved in such a way that sales

    people and sales manager carry out their activity effectivelyand efficiently. It gives a blue print that what activity isperformed by which person.

    Sales organization

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    Functions of Sales Organisation

    The functions of sales organisation can be classified as follows

    1. Planning functions

    a. Sales forecasting

    b. Sales budgeting

    c. Selling policy

    2. Administrative functions

    a. Selecting salesmen

    b. Training salesmen

    c. Control of salesmen

    d. Remuneration of salesmen

    3. Executive functionsa. Sales promotion

    b. Selling routineexecution of customers orders.

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    The basic concept include are

    following:

    Centralisation Specialization

    Co-ordination

    Control

    Sales organization

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    Objectives of sales organization

    Defines lines or authority

    Ensures that all necessary activities are

    assigned and Performed

    Establishes lines or communication

    Provides for coordination and balance

    Provides Insight into avenues or advancement

    Economises on executive time

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    Setting up a Sales Organization

    There are five major steps in setting up a sales organization

    1. Defining the objective

    Set both quantitative as well as qualitative objectives

    Qualitative objectives are indispensable for long-rangeplanning, thus, kept in mind in short range planning also

    Quantitative objectives are required as operating guideposts

    2. Delineating the necessary activities

    Determining the necessary activities & their volume ofperformance is based on qualitative & quantitative objectives

    Also helps in determining which activities to be performed inwhat volume

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    Setting up a Sales Organization CONTD

    3. Grouping activities into jobs or positions

    activities identified are allocated to different positions

    activities are grouped so that closely related tasks areassigned to same positions

    each position must also contain some variations

    4. Assigning personal to positions

    whether to recruit special individuals to fill the positions orto modify the positions to fit the capabilities of availablepersons

    5. Providing for coordination and control sales executives require means to control their

    subordinates & to coordinate their efforts

    they should not be overburdened nor should have toomany subordinates

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    Factors determining the structure of Sales

    Organization

    1. Price of Product

    2. Nature of Product3. Nature of Market

    4. Size of the enterprise

    5. Ability of the Executives

    6. Sales Policies of the Enterprise

    7. Distribution System

    8. Finance

    9. Number of Products

    Setting up a Sales Organization CONTD

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    (1)Begin with a historical profile of the

    companys culture, overall organisation

    and top-management philosophy of thefirm.

    (ii) Analyse the requirements of the company

    in terms of its:

    size, position in the market, product mix,

    customers, competition, and sales-people

    and their ambitions.

    Setting up a Sales Organization CONTD

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    (iii) Appraise the potential of the company, in

    terms of its impact on the financial, technical,

    scientific and human resources, existingcurrently.

    (iv) Analyse the prevailing working-

    atmosphere and state of communications,.

    Setting up a Sales Organization CONTD

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    (v) List the various administrative-details,

    connected with the company.

    (vi) Prepare a note, relating to the various

    administrative-details including aspects like

    hierarchy, span of control, etc. on the sales-department, and overall organisation of the

    department.

    Setting up a Sales Organization CONTD

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    (vii) Describe the procedures and

    Processes to be followed for executing

    various tasks.

    Setting up a Sales Organization CONTD

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    Developing a Sales Organisation

    Sales organisation development refers to the formal, coordinating

    process of communication, authority and responsibility for sales groups

    and individuals.

    A sales manager must recognise and deal with some basic problems

    faced by organisations, when developing his own sales organisation.The five major issues are:

    1. Formal and informal organisations

    2. Horizontal and vertical organisations

    3. Centralised and decentralised organisations

    4. The line and staff components of organisations

    5. The size of the company.

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    Sales Organisation structures

    The following are the important field sales Organisations:

    1. Geographic sales specialisation organisation

    2. Product-based sales specialisation organisation

    3. Customer-based specialisation organisation

    4. Activity/function-based specialisation

    5. Hybrid sales organisation

    6. Team-based organisation.

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    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 and responsibilityat higher management levels.

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    Flat Sales Organization

    Span of Control

    Man

    agementLevels

    National

    Sales

    Manager

    District

    Sales

    Manager

    District

    Sales

    Manager

    District

    Sales

    Manager

    District

    Sales

    Manager

    District

    Sales

    Manager

    Span of Control vs.

    Management Levels

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    Tall Sales Organization

    National Sales

    Manager

    Span of Control

    ManagementLevels

    District

    SalesManager

    District

    SalesManager

    District

    SalesManager

    District

    SalesManager

    District

    SalesManager

    District

    SalesManage

    r

    Regional Sales

    Manager

    Regional Sales

    Manager

    Span of Control vs.

    Management Levels

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    National Sales Manager

    Regional Sales Managers

    District Sales Managers

    Sales Training Manager

    Sales Training Manager

    Salespeople

    Staff Position

    Line Position

    Line vs. Staff Positions

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    Organizational

    Structure

    Environmental

    Characteristics

    Task

    Performance

    Performance

    Objective

    SpecializationHigh Envir.

    uncertainty Nonroutine Adaptiveness

    CentralizationLow Envir.

    UncertaintyRepetitive Effectiveness

    Selling-Situation Factors and

    Organizational Structure

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    SimpleProduct

    Offering

    ComplexRange of

    Products

    Customer Needs Different

    Customer Needs Similar

    Market-

    Driven

    Specialization

    Product/Market-

    Driven

    Specialization

    Geography-

    Driven

    Specialization

    Product-

    Driven

    Specialization

    Customer and Product

    Determinants of Sales Force

    Specialization

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    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

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    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)

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    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 AccountsSales ManagerSales Training

    Manager

    Salespeople (50)

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    Functional Sales Organization

    National Sales Manager

    Field Sales Manager Telemarketing Sales ManagerRegional Sales Managers (4)

    Salespeople (160)Salespeople (40)

    District Sales Managers (2)District Sales Managers (16)

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    Comparison ofSales Organisation Structures

    Organisational

    Structure 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 expertsin product attr. & applications

    Management control over

    selling effort

    High cost

    Geographic duplication

    Customer duplication

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    Comparison ofSales Organization Structures

    Market

    Salespeople develop

    better understanding ofunique 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

    Organizational

    Structure Advantages Disadvantages

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    Hybrid Sales Organization Structure

    National Sales Manager

    Major Accounts

    Sales Manager Regular AccountsSales Manager Office EquipmentSales Manager Office SuppliesSales Manager

    Field Sales

    ManagerTelemarketing

    Sales Manager

    Commercial Accounts

    Sales Manager Government AccountsSales Manager

    Western

    Sales Manager EasternSales Manager

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    Thank you