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CHAPTER 4
THE MARKET-DRIVEN SALES ORGANIZATION

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LEARNING OBJECTIVES
A sales force is a complex selling unit of the firm. Its organizational design and structure are built around its customers and markets. After studying this chapter, you should be able to explain:

The type of markets in which salespeople work. The major job activities of salespeople. The various types of sales jobs. Why sales jobs are designed for an individual organizations markets and customers.

The various types of sales force organizational structures.

Newer forms of organizations. How coordination and technology improve customer service.
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FACTORS INFLUENCING ORGANIZATIONAL DESIGN AND STRUCTURE

Examine customers in each market. Determine the types of sales jobs needed to serve a market. Note the job activities salespeople must do. Design sales jobs around customers.

Set up the sales force organizational structure, which includes the various sales jobs and geographic territories.
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FIGURE 4.1 THE RELATIONSHIPS AMONG MARKETS, JOBS, AND ACTIVITIES INFLUENCE SALES JOB DESIGN AND ORGANIZTATIONAL STRUCTURE

Performance
Ct ms uo e s r ad aks nM e r t T ypes of Jobs

Rue e id qr Jb ci iis o A te tv

D esign th Job e

Establish Sales Organizational Structure

Quality of Work Life

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MARKETING AND MARKETS

Marketing is the process of planning and executing the conception, pricing, promotions, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.

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SALESPEOPLE WORK IN TWO MARKETS

Consumer Business

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SALES JOBS ARE VARIED AND CAN BE CLASSIFIED

Seven major categories:
Category One inside order taker. Category Two deliverer. Category Three an order taker but also works in the field.

Category Four is not expected or permitted to take an order but is asked only to build goodwill or to educate the actual or potential customer.
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Seven major categories:

Continued

Category Five major emphasis is placed on technical knowledge.

Category Six demands the creative (specialty) sale of tangibles. Category Seven requires the creative sale of intangibles.

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APPLICATIONS OF THE SALES JOB CLASSIFICATIONS

Order takers wait for the customer to order.
The main problem with order takers is that they create only one distinction in the customers mind: price.

Order getters obtain, retain, and increase business with customers.

This salesperson must often create discontent with what the prospect already has and has to overcome the most powerful and obstinate resistance.
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Order getters build relationships.

They develop relationships with customers. They listen more than talk.

Their sales calls are more productive.

They have an objective in mind. They evaluate and respond to the customers changing needs.

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TRUE SALESPEOPLE ARE HARD TO FIND

People with the prerequisite traits and attributes for success in creative sales are rare. Often, 100 to 150 or even more applicants must be interviewed to find one qualified candidate.
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THE SALESPERSONS JOB ACTIVITIES AS A TERRITORIAL MANAGER

1. Provides solutions to customers problems. 2. Provides services to customers. 3. Sells to current and new customers. 4. Helps customers resell products to their customers.

5. Helps customers use products after purchase.

6. Builds goodwill with customers. 7. Provides company with market information.
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SALES ORGANIZATIONAL DESIGN

Organizational design refers to the formal, coordinated process of communication, authority, and responsibility for sales groups and individuals.

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PURPOSES AND IMPORTANCE OF JOB DESIGN

Content Qualifications required to perform Returns and rewards for performance

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SALES ORGANIZATIONAL STRUCTURE

Organizational structure is the relatively fixed, formally defined relationship among jobs within the firm.

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THE LINE ORGANIZATION

In the pure line organization, the chief executive usually the president does the decision making for the firm. The president has complete authority.

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FIGURE 4.2 COMPUTE CORPORATIONS LINE ORGANIZATION

Lewis Stoner President-Owner Jake Preston Vice President of Sales

Two Salespeople

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SPECIALIZED DESIGN
Functional organizational design is the grouping of work according to its characteristics.

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FIGURE 4.3 ALARM SYSTEM CORPORATIONS FUNCTIONAL ORGANIZATIONAL DESIGN

Line

John Abbott Vice President of Marketing

Staff John Friedman Advertising/Promotion Manager Charles Thompson Sales Manager

Tlpe e ael ne o S p s

Pete Likert Market Research Manager

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Staff Positions with Line Authority

Line authority means that people in management positions have formal authority to direct and control immediate subordinates. Staff authority is narrower and includes the right to advise, recommend, and counsel in the staff specialists areas of expertise.

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Geographic Specialization
Many large corporations are organized by geographic territory. This type of organization is generally used by companies with more than strictly local distribution of their products.

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FIGURE 4.4 TEXTRON CHEMICAL CORPORATION GEOGRAPIC SPECIALIZATION

Managerial Level

Vice President of Marketing National Sales Manager

Operating Level Eastern Divisional Sales Manager 7 Regional Sales ManagersA 35 District Sales Managers B 240 Salespeople C

Central Divisional Sales Manager 6 Regional Sales ManagersA 30 District Sales B Managers 240 Salespeople C

Western Divisional Sales Manager 5 Regional Sales Managers A 25 District Sales Managers B 200 Salespeople C

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Product Specialization
Another common type of organization in large companies is based on the firms product. The entire company may be organized by product, with separate sales, advertising, marketing, and so on, along with staffs for each, or some functional units may remain centralized.

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Customer Specialization
Companies with several separate and distinct markets accounting for major portions of their sales often organize based on these markets or customers.

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Combination of Design Elements

Many companies organize on the basis of some combination of functional, geographic, product, or customer design.

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FIGURE 4.5 MULTIPLE DESIGN FACTORS

President Functional

Vice President Production

Vice President Marketing

Vice President Engineering

Geographic

U.S. Marketing Manager

International Marketing Manager

Customer

Consumer Goods Managers

Industrial Goods Managers

International Sales Manager

Product

Soap Products Divisional Manager

Paper Products Divisional Manager

Food Products Divisional Manager

European Division

Latin American Division

Asian and African Division

Eastern Sales Division

Central Sales Division

Western Sales Division

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ORGANIZING FOR SELLING TO MAJOR CUSTOMERS

Companies use four basic organizational methods.
1. A separate division to deal with major accounts. 2. Select members of the current sales force.

3. Sales managers.
4. A combination of 1, 2, and 3.
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NEW FORMS OF ORGANIZATIONS

STRATEGIC ALLIANCES
A strategic alliance is a formal relationship created with the purpose of joint pursuit of mutual goals.

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FIGURE 4.6 CROSS-FUNCTIONAL SELLING TEAM

Ct m uoe s r

Sales

Marketing

Technical Support

Manufacturing

Se m ul e pg p T l l a i i e r S n

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TEAM-BASED ORGANIZATIONS
Many organizations are more responsive to their environment because they use work teams as their basic building blocks.

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COORDINATION AND TECHNOLOGY

Coordination refers to the quality of collaboration across groups.

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INTERNATIONAL COORDINATION
The most important methods for achieving coordination are information systems, task forces and teams, and integrating managers.

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THE BOTTOM LINE

Markets, job types, and job activities influence the design of the various sales jobs and, consequently, even the structure of the sales organization. Sales activities are very diverse and easier to understand if classified in one of seven categories. A salespersons job activities involve much more than person-to-person selling.

Companies can structure their organizations in numerous ways.

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