ORGANIZATION OF THE SALES FORCE

ORGANIZATION
Organization is the basic management

function of arranging the firms work activities.

It is performed by all managers regardless of

their other responsibilities.

Tasks Of The Sales Organization

To reflect stronger commitment to their

customers, three basic tasks must be accomplished by organization: 1. Maintenance of order in achieving sales force goals and objectives. 2. Assignment of specific tasks and responsibilities. 3. Integration and coordination with other elements of the firm.

STRUCTURE
Structure involves the way in which an

organization divides its activities into distinct tasks and then achieves coordination among them.
Organization structure also permits the assignment of specific tasks to a position whose incumbent is then charged with responsibility for accomplishing them.

Developing a Sales Organization

Developing an organization structure is not an

easy task. Sales managers must recognize and then deal with:
1. Formal and informal organization 2. Horizontal and vertical organization 3. Centralized and decentralized organizational structures 4. The line and staff components of organization 5. The size of the company

Formal & Informal Organization

Formal organization is the management

created relationships between departments and between individuals. Informal organization is basically a communications pattern formed from the social relationships existing within the formal organization. Grapevine is another name for informal organization communications pattern.

Horizontal & Vertical Organization

Vertical sales organization: Organization

that has several levels of management all upward to the next level.
Horizontal sales organization: Organization

in which the number of management levels is small and the number of managers at any particular level is large.

Centralized & Decentralized Organizations

Centralized sales organization:

Organizations in which responsibility and authority are concentrated at higher levels of management. Decentralized sales organization: Organizations in which responsibility and authority are delegated to lower levels of management.

Line and Staff Components

Line function is a primary organization

activity. For example, in marketing organization a selling function is a line component. Staff function is a supporting organizational activity. For example, in marketing organizataion advertising, marketing research, marketing planning etc are staff roles.

Company Size & Organization

Size of company is a major factor influencing

its organizational structure. For small company, there is likely to be no formal organizational structure. For a large company, as each functional area becomes larger, the functional organization is extended. (Functional organizations whose format are based on formal activities)

Basic Types of Sales Organization

Most company sales forces are organized on

the basis of geography, customers, or products or some combinations of these factors.

Each of these bases has positive and negative features.

Geographic Specialization
Sales organization in which selling personnel

are given the responsibility for direct selling activities in a given geographical area.
Sales representatives are responsible for

selling the firms full line of products.

Customer Specialization
Sales organizations in which selling personnel

are organized by particular customers or industries.

IBM is an example of a company that uses

specialized sales forces for different classes of customers.

Product Specialization
Sales organizations in which selling personnel

concentrate their efforts on particular product lines, brands or individual items.

Manufacturer representatives are

independent commercial sales agents who sell for several manufacturers of non competing products.

Combination Organizations
Due to rapidly changing high growth market

many high-tech companies are attempting to develop new organization strategies. These new combination organizations can be categorized as: 1. Market, product and function 2. Decentralized staff and line personnel 3. Complex staff-line relationships 4. Overlaid organizational mechanism

Relations With Other Departments

There are two types of departments with

which sales must have good working relationships. 1. Those connected with other marketing activities advertising, marketing research, sales promotion etc 2. Those with nonmarketing functions such as human resources, manufacturing and finance.

Relationships with Other Marketing Functions

Marketing mix is the combination of various

techniques used to satisfy customers needs.

These relations between sales and

advertising are of special concern.

Flow of information is another vital part of

the sales departments relations with other marketing functions.

Relations with Non-Marketing Departments

R&D: To perform basic research and engineering activities needed to develop new products and improve existing ones.
Account control concept: in which the

authority and responsibility for handling the account rests with field sales management. This concept was formulated to tackle the problems faced by high-tech companies.

Relations with Non-Marketing Departments

HR: Today role of HR can not be understated.

Relations with HR is of crucial importance as sales managers are required to seek advices from HR for guidance on sales force hiring. Accounting and finance: Three major areas of cooperation between sales, accounting and finance are budgeting, cost control and credit. Accounting personnel helps sales people in many ways like for selling cost analyses.

Major Trends in Sales Organizations

There are three major organizational trends

that directly influence sales management in terms of both people and structure:
1. Telemarketing 2. National account management 3. Indirect sales channel

Telemarketing
Telemarketing refers to the use of telecommunications technology in personal selling.
Inbound telemarketing is in which potential

customers contact the selling company. Outbound telemarketing is in which the selling company contacts prospects and customers.

National Account Management

Special sales forces dedicated to obtaining

and/or maintaining large accounts.

To meet the unique demands of national

accounts, a national account manager is responsible for coordinating the effort of a sales and support team to serve their needs.

Indirect Sales Channel

Independent sales representatives or

agencies used by a company in place of its own field sales force. It has some disadvantages like about the control over the selling process. Independent agents follow their own rules about what to sell, how to sell, etc.