Designing and Organizing the Sales Force：中国经济管理大学 MBA课堂笔记《销售管理学》
Designing and Organizing the Sales Force
中国经济管理大学/中國經濟管理大學
Designing and Organizing the Sales Force
Learning Objectives:
After completing this chapter, students should be able to:
Explain how a firm’s goals affect the organization of its sales force.
Understand that a sales force can be organized in multiple ways that match the way customers want to buy.
Explain the advantages and disadvantages of different sales force organizational structures.
Describe the various reporting relationships sales forces typically have.
Understand the advantages and disadvantages of outsourcing a firm’s sales force.
Introducing the Chapter:
Salespeople greatly impact the satisfaction and long-term relationships their organizations have with their customers. To increase the satisfaction levels of their buyers, firms must structure their sales forces so that their customers can purchase what they want, when they want it, and from the channel that is most convenient for them. Although many companies continue to employ geographical, product, market, or functional sales force structures to serve the marketplace, buyers also utilize electronic, multi-channel, or hybrid supply chains. This chapter explains the many options firms must navigate between to successfully serve their customers.
It is important how you introduce the students to this chapter because, otherwise, it may seem abstract. One way to get their attention is to discuss selling a relatively simple product like toothpaste. Toothpaste is (was?) fairly simple to understand—it came in a tube and everyone used it several times a day to clean their teeth and mouth. Initially, consumers purchased toothpaste in grocery or drug stores. Thus, a salesperson for Procter & Gamble® was assigned a geographical territory to call on grocers, drug stores, and dentists. But with the advent of super stores, purchasing for large distributors of toothpaste was switched to their national headquarters. For example, for Wal-Mart® that occurs in Bentonville, AR. The same is true now for large drug store chains like CVS, WalGreen, etc. As a result it is more difficult to organize sales by geographical territory since purchase decisions are made at higher levels.
Once you reach this point ask the students where they buy their auto/truck tires. Again, many consumers use to buy their tires at a local gas or repair shop, but today consumers buy from specialty tire stores, via the web, at super stores like Sams® and Costco®, in addition to gas, repair, auto dealers, etc. Thus, tire manufacturers like Michelin®, Goodyear® and Firestone® must have different sales organizations to service large super stores, small repair shops, and national repair shops. Then, the sales situation becomes even more complicated when you add in large truck tires, off-the-road tires, etc. Based upon the different products and markets in the tire industry, it is easy to see that selling tires has become specialized. Each of these market segments have distinct needs and want to purchase their tires for resale differently. It is the sales organization’s responsibility to meet those needs by correctly organizing their sales force(s). When manufacturers want to open up new territories, it is often most economical to partner with a selling agent until the product is adopted and selling well in the new territory. This means manufacturers may have their own sales force(s) as well as independent sales representatives. Finally, as territories and customer needs change so must the organization of the sales force.
A second way to introduce sales organizations is to draw a map of the US or your state and say that you are about to introduce a new product—let’s say a damper for washing machines that minimizes vibrations. Looking at the fact that you have a single product and a discrete geographical territory, what is the best way to organize the sales effort? It would appear to be geographically. Now, let’s move forward five years and your firm offers dampers for consumer and commercial washers and dryers. How should the sales effort now be organized? Perhaps by a consumer sales force that sells the damper to retailers, repair stores, etc. and a commercial sales force that calls upon businesses with larger machines that require higher quality devices. Finally, tell the class to imagine that it is 10 years later and the firm now offers 3-5 product lines for appliances. The firm must look at the market and their customers to decide whether the sales effort should be based upon both geography and product line? In other words, as the product line and marketplace becomes more complicated, it is more likely that the organization of the sales force will become more complex. Basic products and uses equal geographical territories and as the number of products increases and the usage of the product takes on additional applications, the sales force must become more specialized!
Chapter Outline:
I. How a Firm’s Goals Affect the Design of Its Sales Force
A. Influences of Organizational Structure
1. Customer Type
2. Products Sold
3. Salesperson’s Job
a. Selection, training, evaluation, compensation influenced
b. Familiarity with purchaser
i. Strengths
ii. Weaknesses
iii. Buyer base
c. Daily activities of the salesperson
B. Purpose of Organizational Structure
1. Serving buyers effectively
a. Contacting the buyer at a time they prefer
b. High quality customer service
c. Allowing customers to order goods when and how they want
2. Operating efficiently as measured by cost and customer satisfaction
a. Achieve a competitive advantage
i. Market share
ii. Profits
iii. Buyer feedback
b. Sales continuity
3. Adaptable to future changes
II. Organizing the Members of the Firm’s Sales Force
A. Methods of Choosing Sale’s Force Size
1. Breakdown Method
a. Used when a total sales revenue figure is desired and salesperson’s main goal is to close the sale.
2. Workload Method
a. Based on firm’s strategy and expectations
b. Steps to calculation
a. Compute the total sales call workload
b. Determine the amount of work performed by each salesperson
c. Factor in additional work responsibilities
B. Level of Salesperson’s expertise
1. Generalist- sells all firm products to all customers
2. Specialist- sells complicated products to select customer base
C. Sales Force Structures
1. Geographical Sales Structure
a. Based on Physical Boundaries
i. State
ii. County
iii. Zip code
b. Generalist Buyers
c. Advantages
i. Easy to design
ii. Minimizes duplication of effort
iii. Each customer has an assigned salesperson
iv. More efficient scheduling
v. Flexibility of divisions
2. Product Sales Structure
a. Based on product lines or manufacturing divisions-
i. e.g. General Electric
b. Advantages
i. Salesperson is expert in their area
c. Disadvantages
i. Multiple calls to the same buyer
ii. Salesperson may have little knowledge of other products
iii. Can Confuse buyers
iv. Lack of communication between salespersons of other areas
3. Market Sales Structure
a. Representatives assigned to customers based on their markets
b. Customer centric
c. Advantage
i. New market penetration
d. Disadvantages
i. Higher selling expenses
ii. Multiple calls to the same buyer
iii. Duplication of effort
iv. Buyer confusion
4. Functional Sales Structure
a. Selling process divided into two or more steps and performed by specialists
b. Disadvantages
i. Harder to coordinate multiple sales representatives
5. Combination Sales Structure
a. Sales force organized in a mix of product, market, and geographical factors
b. Large markets
c. Complex product lines
d. Customers require different applications
III. Global Sales Management
A. Cultural Differences
IV. Key Accounts
A. Characteristics
1. Higher levels of service needed by best customers
2. 80/20 Rule- about 20% of buyers provide the majority of business
B. Structures
1. Employing the existing sales force structure
2. Assigning company executives
3. Building a separate sales force/division
V. Telemarketing Structure
A. Telemarketing growth in B2B firms
B. History of Outsourcing
C. Types
1. Incoming (Pull Strategy)- leads generated by advertising
2. Outgoing (Push Strategy)- calls from sales telemarketers
D. Restrictions
1. Federal Trade Commission “No Call” regulation
2. Telephone Consumer Protection Act (TCPA)
3. Automatic Dialing and Announcing Device (ADAD)
VI. Computerized Sales Structure
1. Advantages
1. Product tracking
2. Ordering systems
3. Less expensive for seller
2. Etiquette
1. Ask to send emails so its not regarded as SPAM
2. CAN-SPAM Act of 2003
VII. Reporting Relationships within a Firm’s Sales Force
A. Structures
1. Line Organization
2. Line and Staff Sales Structures
B. Span of Control
1. Narrow for technical sales and industrial products
2. Broad for routine trade sales and telemarketing activities
C. Independent Sales Representatives (Agents)
1. Commission based on sales made within assigned geographical areas
2. Sells several related but not completed product lines
3. Good for entrance into new territories with low or unknown sales volume
4. Advantages of Independent Sales Representatives
D. Relationship between company sales managers and agents
1. Contract for geographical region
2. Managers have little control
3. Agents perform based on self interest
4. Should have clear expectations for agents
E. Company Salesperson or Sales Agent?
1. Break-even analysis
VIII. Chapter Summary
A. Sales Force Structure is major aspect of firm’s strategic plan
B. Sales Force Organization should offer high levels of customer service at reasonable costs
C. Sales Agents can be an excellent choice for servicing a territory
1. Uses
a. Unproven territories
b. Firms that cannot afford to hire and maintain a sales force
2. Controlling sales agents can be a problem
3. Best strategy for sales firms is to help agents reach their goals
Questions and Problems:
Explain why firms organize their sales activities into a specific structure. How important is the sales structure for a business’s strategic plan?
Sales managers are responsible for organizing the sales force so that company and sales goals are accomplished and the sales force operates as efficiently as possible. Organizational sales structures serve a number of important purposes that include:
· Serving buyers effectively in ways they want to be served:
+ Contacting the buyer at preferred times
+ Allowing the customer to order when and in a way that best meets their needs
+ Providing high quality customer service levels
+ Developing an appropriate relationship level with different types of customers, based upon their value to the firm.
· Operating efficiently as measured by cost and customer satisfaction:
+ Achieving a competitive advantage as measured by the firm’s market share, profits, and buyer feedback.
+ Offering customers stability and sales continuity over time as measured by
customer retention levels.
Using the following information, perform a breakdown and workload computation to predict how many salespersons XYZ Inc. will need to service their customers. Forecasted sales for next year are $110 million and an average salesperson sells $9 million annually. Also, the XYZ sales manager has categorized existing accounts into 41 “A,” 105 “B,” and 225 “C” customers. “A” accounts are visited weekly, “B” accounts monthly, and “C” accounts every other month. Salespersons are required to make 4 calls per day and be in the field 4 days per week. Because of vacation, training, and holidays, each salesperson works 48 weeks a year. In addition to calling upon existing accounts, salespersons are assigned a quota of calling upon 10 percent new accounts and devoting 5 percent of their time to information gathering duties.
Breakdown Method: Divide forecasted sales $110 million by Average Sales per SP:
110/9 = 12.22 salespersons
This provides a rough estimate, but recalling the 80/20 rule about 20 percent of the sales force will generate 80 percent of sales. Thus average sales per salesperson can be misleading.
Workload Method:
Step 1: Determine the total workload to service existing accounts:
A = 41 x 50 weekly visits or 2050 calls on “A” accounts
B = 105 x 12 monthly visits or 1260 calls on “B” accounts
C = 225 x 6 bi-monthly visits or 1350 calls on “C” accounts
2050 + 1260 + 1350 = 4660 calls need to serve existing customers
Step 2: Compute total calls average SP can make annually:
Salesperson works 48 weeks a year, on the road 4 days each week and makes 4 calls a day =
48 x 4 x 4 = 768 calls per year
Step 3: Divide total workload calls by annual calls made by SP:
4660 total calls/768 calls per SP = 6.067 salespersons needed at this workload
Step 4: Factor in additional duties and responsibilities:
The SP is also expected to work 10% of their time on new account generation and 5% gathering information for CRM. This equals 15% additional workload. To compute additional duties, divide 6.067 salespersons by .85 or 6.067/.85 = 7.13 salespersons needed to satisfy workload of 4660 calls to existing accounts and 15% additional work responsibilities. The answer is: 7 salespersons needed in this workload situation.
Why does specialization lie at the heart of organizing the sales force?
A specialized sales force can give the firm the advantage of selling expertise. For example, computer manufacturers organize their sales forces by consumer, B2B, and education markets because each market purchases and utilizes the products differently. Likewise, sales managers also understand that, based upon internal and external conditions, partnering with distributors, sales agents, and resellers can improve the effectiveness and profitability of their own sales organization. A specialized sales structure offers the firm expertise advantages over a generalist sales force. That said the sales manager must safeguard against a number of potential problems caused by over-specialization. First, all sales efforts must be coordinated and integrated to address and satisfy buyers’ needs. This is necessary because as firms increase the specialization of their sales force, the addition of personnel both inside and outside of the company that interact with the buying firm increases the complexity of its operations. Second, the sales function must be integrated and coordinated with other organizational functions
Compose a table with five rows and three columns. List the five potential ways to structure a sales force in the left hand column and then discuss the advantages and disadvantages of each sales structures in the middle and far right column.
Structures Advantages Disadvantages
Geographical Easy to design Less expertise for
No duplication of effort broad product line
Schedule ease
Product Product Expertise Duplication of effort
Higher costs
Market Market expertise Higher costs
Functional Specialist knowledge Coordination Problems
Combination Specialist knowledge Higher costs
Duplication of efforts
What are the three principal ways to manage national or key accounts? What is best option for a smaller firm? For a large multi-divisional firm?
Principal ways to manage key or national accounts include: (1) employing the existing sales force structure, (2) assigning company executives, and/or (3) building a separate sales force/ division. Smaller firms often assign company executives to key accounts while larger multi-division firms are more likely to establish a separate sales force/division.
Many firms have moved their customer service and telemarketing operations off-shore. How have many
The off-shoring movement to lower cost countries was quickly met by buyers who complained about miscommunications, cultural gaffes, lack of professionalism and product knowledge, and ability to solve their problems. In response, firms that off-shore invested time and money training their agents and retaining the best telemarketing salespersons they could afford. Some firms purchased better voice-recognition software to make communication with customers easier and speed up calls. Still other companies went so far as to purchase software designed to help sales managers recognize buyer dissatisfaction levels during telephone calls.
Despite efforts to resolve buyer complaints through technology, many firms decided to move call centers back to their home countries because in the buyer’s eyes, lower cost off-shore centers equates to lower quality service. In fact, one study found that many
Buyers were angry because the level of service was lower and it was more difficult to get problems taken care of quickly. Sales managers can insure that key customers and “A” accounts are taken care of in the way the buyers want to be taken care of—have a computer system in place in which the buyer can check and expedite their order or have US customer service centers for the best customers.
What should sales managers coach their salespersons to do prior to sending blanket email messages to customers and potential customers?
It is advisable to seek permission of the recipient and only send essential email to existing and potential customers. One important question to ask is: “will the email further my current or potential relationship with this account.” Most “blanket” emails are sent to huge numbers of emails hoping for a response rate of 1-5% purchase. What salespersons may not see is that you are potentially alienating 95-99% of email recipients!
What is SPAM? What four conditions does the CAN-SPAM Act of 2003 impose on the sender of emails? Integrate these four conditions as you compose a sales email strategy for communicating with buyers.
The word “SPAM” generally refers to unsolicited bulk email. The CAN-SPAM Act was enacted in 2003 and sets four conditions for sending email to current clients and potential buyers:
· The subject lines of email should not be misleading
· The “From” line should contain a functioning email address
· The body of the message should list a valid physical postal address
· There should be conspicuous instructions to opt out of future mailings
If these requirements are not followed, firms face penalties of up to $2 million or more imposed by the U.S. Government.
What influences do line and staff organizations and span of control have on the final structural decision with regard to decisions being made and routine vs. non-routine sales calls?
A centralized sales force organization allows decisions to be made and communicated quickly to the field. Routine or generalized sales organizations (territory based) also allow faster decisions. However, for non-routine or customized product sales calls, communications and decision making takes longer but specialized sales managers help speed up the decision-making process. Span of control is lower for non-routine sales situations since the need to communicate customized needs and the ability to decide what can be delivered at what costs is more difficult.
Compare and contrast the advantages/disadvantages of utilizing an independent sales agent and a company sales force.
Independent sales people offer firms a number of advantages, including:
An “in-place” or existing sales force
Established buyer relationships
Little (or no) fixed costs
Experienced sales personnel
Lower costs per sales call
Long-term stability in the territory
However, given all these benefits, firms that hire independent sales reps often complain they do not receive equal time for their products. Agents are also blamed for shifting their sales call focus to another product line when a buyer’s need is not easily identified. Independent sales reps are also criticized for: not opening new accounts, not following up on leads, representing too many manufacturers, and communicating poorly with the firms they represent. That said there’s a tendency for manufacturers to take credit for positive sales outcomes accomplished by their agents and assign blame for negative outcomes when they lack control over the outcomes. For example, if a sales agent is doing a super job the manufacturer will assume that an internal sales force will work better at a lower cost and the agency will be dumped. This suggests that a sales agency will likely be criticized when its performance is either too high or too low.
Draw a break-even analysis diagram and assume that Q* is 500 units. If the forecasted sales for the territory was 450 units a month, which sales structure—an independent agent or a company sales force—would be most economical? What other factors, other than costs, might influence your decision?
Company Salesperson or Sales Agent?
Looking at the graph above, if the break-even point Q* = 500 and the forecasted sales volume is 450 units, it is more economical to use a sales agent. That is, since forecasted sales are less than the break-even point, the total costs of an agent would be less. Sales managers must also consider if the agent can meet buyer service needs, the speed of growth in the territory, and the match in goals between the manufacturer and sales agent partner.
Answers for Chapter Caselets:
Caselet 7-1
Jefferson Pilot Reorganizes Its Sales Force
Bradley Peters, National Sales Manager for Jefferson Pilot (JP) Insurance Corporation, has asked the firm’s accounting department to provide him with information about the total cost of hiring new salespeople, including the cost of advertising to attract applicants as well as hire, train, and license them. Peters is considering partnering with independent sales agents located in all of the company’s current sales areas but understands this decision will not be popular with current salespersons. The main thrust of the short case is to determine the benefits and how to proceed with this organizational change.
Case Questions:
1. What are the benefits of partnering with independent reps, as opposed to a company sales force? Can a case be made for finding a way to retain JP’s current salespeople instead of hiring sales agents to replace them?
JP would save money by switching to independent agents because of the hiring and management costs associated with company sales personnel. This is because the independent agents already surpassed the point where they will leave the profession, they have an established group of customers, are well known, have a sales history, etc. JP is in effect switching from unknown salespersons to an established sales force. Thus costs will be lower, there will be less need to manage, and turnover will certainly be lower. That said, independent agents may not be as easy to control and direct as company sales personnel. There is not a critical reason to maintain a company sales force, but there may be successful, long-term agents who should be retained.
2. Why would the turnover rate be significantly lower for JP if it hired sales agents?
As stated above, independent agents have been in business for a longer-time and only receive a commission when a sale is made. Thus marginal revenue would always be higher than marginal cost. However, IF there was a turnover of independent reps, the total loss could be higher!
3. What type of resistance from its current sales reps might JP encounter if it hired sales agents?
Current reps would view their future as tentative as soon as JP started hiring agents. They might view the change as unfair competition. JP might have trouble managing two categories of salespersons serving the consumer market. Managing the sales force would certainly be more complicated!
4. How might JP integrate an independent rep strategy with its existing company sales force?
There are several ways, but all would be complex. JP might have independent reps handle certain geographical territories and company reps handle other geographical territories. JP might also help successful sales reps to “leave the company” and start their own independent sales rep firm in a given territory. It might also be possible to have company sales personnel handle larger, B2B firms.
Caselet 7-2
IMC Considers Off-Shoring Its Call Center
Should International Manufacturing Corporation (IMC) open a call center overseas? Although IMC can save lots of money and competitors are moving in this direction, Sharon Jones is not convinced such a move is wise. This short provides a forum for discussing this “make or buy” situation. Consider introducing the case by asking students if they have called a customer service number and found themselves talking to a representative in another country.
Case Questions:
1. Even though IMC’s cost per call would decrease, what other costs should Jones consider when making her decision?
IMC must also consider the cost of lost customers and lost sales. Rather than just short-term variable costs, Jones must look at total costs of off-shoring customer service.
2. Do you think some of the countries Jones was thinking about off-shoring to would result in potentially less caller dissatisfaction than others?
Studies have shown that there is less dissatisfaction when the off-shore site is more similar to the home country. For example, callers are more satisfied and accepting of call centers in
3. What metrics might Jones consider when selecting a potential off-shore site?
Caller satisfaction, Percentage of callers that hang up, Number of callers that ask for a representative that speaks better English, and dissatisfied callers that register complaints.
4. What other factors should Jones weigh as she ponders this major shift in customer service responsibilities?
How the change will affect overall customer satisfaction, brand reputation, and brand equity. In other words, will a short-term profit hurt long-term customer satisfaction and repeat purchases?
Role Play:
In the role play with Green River Software, Janet Jackson must determine whether sales agents managed by Ronald Childress are achieving the goals set by Green River. This exercise is designed to provide the students with an opportunity to review the reasons the sales effort is handled by a company sales force or a sales agent. There are many advantages to using a sales agent. When the firm is new fielding a company sales force is expensive. That is why Green River went with Childress—he had been helping with software development and they needed someone they knew and could trust to head up external relations (sales). Jackson and Childress must discuss how the sales agents are handling the customers to move from a more transactional based sales strategy to one of customer relationship management. Green River Software needs the sales force to nurture deeper relationships, expand sales, and keep the buyers highly satisfied if the sales effort is to remain with Childress. Otherwise, Jackson needs to recommend to Green River that switching to a company sales force is the best option for achieving their strategic objectives.
One way to introduce the role play is to discuss the switchover situation from a sales representative to a company sales force. In addition to economic costs, remind the class that a relationship marketing strategy may mean losses in the short run. Likewise, a company sales force is easier to control than manufacturer’s representatives.
Self-Assessments:
In this chapter, three self assessments are provided. In your copy of Sales Management, you will find an Access Code Card. By using this code at www.pearsonhighered.com/tanner, you will gain access to the SAL program. Students will find an Access Code Card in their copy of the book as well.
In the first SAL, the students can assess whether they prefer a formal or informal sales structure. This SAL provides students with guidance on their entering larger or smaller firms and their preference for working in specific organizational structures.
IIIA1 – What Type of Organizational Structure Do I Prefer?
In the second SAL, students can consider some areas that determine whether they are committed to an organization. For a salesperson or sales manager it is essential to be committed to the organization or motivation to achieve firm goals will be low.
IIIB2 – How Committed Am I to My Organization?
In the third SAL, it is important to understand whether as manager you prefer to use legitimate, referent, expert, reward, or punishment power when managing a group of salespersons for an organization. Studies recommend that managers use referent and expert for longer lasting effectiveness and employ reward and punishment only in extreme situations. This 20-question SAL provides students with a numerical rating of five power areas to gain an understanding of their use of power in sales management situations.
IIC2 – What’s My Preferred Type of Power?
Using Videos:
To access these videos, go to www.pearsonhighered.com/tanner. Listed below are potential ways to introduce each video and questions that can be asked to spur discussion after you show the videos.
Video 1: The Role of Strategic Account Management – Bernard Quancard
Quancard is CEO of Strategic Account Management Association and he relates strategic account selling to a salesperson selling solutions that add to the productivity of the buyer. To do this well the selling firm must become customer-centric, which means that the entire corporation is aligned to meet customer priorities. Rather than selling widgets, the salesperson must identify customer needs and offer solutions. Quancard recommends that firms try to convince the buyer not to openly bid their needs but to judge the selling organization on the contributions of the solutions offered. Strategic account management is a global approach to productivity and innovation has not limits. A few questions you could ask the class to look for and consider:
1. How does Quancard view sales practices in strategic selling?
2. What does it mean to be customer-centric?
3. How realistic is it to ask buyers to not bid out their requirements?
4. What does Quancard mean by “innovation has not limits”?
Video 2: Boost Customer Loyalty – Howard Stevens
Stevens is CEO of HR Chally and he initially states that firms must boost customer loyalty due to profitability. That is, Stevens declares that for every 5% turnover of customers, the sales firm loses 25% in profits! If sales firms are to improve customer loyalty they must identify the factors that are causing buyers to leave and attack the most important first. If a manager wants to know how well their sales force is doing, look at initial purchases and continuing customers. Stevens states that based upon HR Chally research, sales personnel want to close the deal while buyers want to know how long the relationship will last. To succeed, the salesperson and firm must take the customer’s perspective. Rather than making the product or service, the buyer is outsourcing. The salesperson must manage the account just like an internal manager and the sales firm must stay in touch with buyer needs, attitudes, and solve their problems. A few questions you might ask the class to look for and consider:
1. Profitability is important for most firms, what do the figures Stevens financial outcomes of losing customers mean?
2. Why should a sales manager attack the largest problem first?
3. Why do you believe the salesperson and buyer have such divergent perspectives about entering into an agreement?
4. Why does “taking the customer’s perspective” fly in the face of maximizing one’s profits that we learn in economics?
Full Case Recommendations:
There is not a specific full case for this chapter. Both short cases can be used to supplement the material provided in this chapter.
Other In-Class Exercises:
These in-class exercises allow students to work in groups or by themselves to reinforce the criteria for organizing the sales effort by geography, product, market, functional, a combination approach, or use sales agents.
What type of sales force organization would you recommend for the following sales environments?
WRT sells five distinct product lines that are different in their applications and technologies.
Product or Product/Market
White & White, Inc. sells basic office supplies.
Geographical
G&T offers customized software for physicians, dentists, and veterinarians.
Market
GE provides consumer appliances, aircraft parts, and medical equipment.
Product or Combination depending upon the marketplace
Clean Clothes provides uniforms to garage mechanics, factory workers, and other potentially dirty work locations.
Functional
A second in-class exercise is listed below that can be used independently or combined with the five scenarios above. In scenario 1, below, the correct answer is sales agents or manufacturer’s representatives.
Territory Management
How should the sales force be organized under the following conditions?
The company wishes to expand into a new territory that has few existing customers and will take 3-5 years to establish a significant customer base.
Manufacturer’s Rep or sales agent
A firm that just merged with another technical company. The combined product offering includes 150 products that fall loosely into four product categories.
Product or combination sales organization
A global firm that sells computers. Sales are highest in the Triad (US, EU, and Pacific Rim). How should sales be organized in the three primary areas? In all other areas?
Combination of product/market/geographical. Sales agents in other areas.
A high tech firm that sells to the military, automotive, aerospace, and telecommunications markets?
Market
A global firm, like Unilever or P&G, with 5-8 product lines that are sold in more than 100 nations.
Combination sales force organization. For example, baby products for large retailers in Europe.
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