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CHAPTER EIGHT

CHAPTER EIGHT. Organization. ORGANIZATION IS IMPORTANT!. Organizational structure has a direct bearing on the success of sales strategies. ORGANIZATIONAL STRUCTURE. Is a control mechanism guides the activities of company members. ORGANIZATIONAL CONCEPTS.

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CHAPTER EIGHT

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  1. CHAPTER EIGHT Organization

  2. ORGANIZATION IS IMPORTANT! • Organizational structure has a direct bearing on the success of sales strategies

  3. ORGANIZATIONAL STRUCTURE • Is a control mechanism • guides the activities of company members

  4. ORGANIZATIONAL CONCEPTS • Specialization versus generalization • Centralization versus decentralization • Span of control • Line versus staff

  5. CHARACTERISTICS OF A GOOD ORGANIZATION • Marketing orientation • Build around activities • Related responsibility and authority • Reasonable span of control • Stable yet flexible • Balance and coordinated activities

  6. ORGANIZATIONAL TYPES • Geographic Organization • Product Organization • Market Organization • Functional Organization • Major Account Organization

  7. GEOGRAPHIC ORGANIZATION • Assign salespeople a geographical area called a territory • Ensures coverage of entire market • Can respond to local conditions • Can respond to customer requests • Sales managers are generalists

  8. GEOGRAPHIC ORGANIZATION

  9. PRODUCT ORGANIZATION • Product managers responsible for sales of one or more products • Best used for a variety complex products or a number of dissimilar unrelated products • Duplication of selling effort

  10. PRODUCT ORGANIZATION

  11. MARKET ORGANIZATION • Organize on the basis of customers, industry type, or by channels of distribution • Consistent with marketing philosophy • Duplication of selling efforts

  12. MARKET ORGANIZATION

  13. FUNCTIONAL ORGANIZATION • Specialize according to selling activity • Geographic and Customer Duplication

  14. FUNCTIONAL ORGANIZATION

  15. MAJOR ACCOUNT ORGANIZATION • Multiple people in buying process • Purchase centrally • Desire long term, cooperative relationship • Expect specialized attention

  16. MAJOR ACCOUNT ORGANIZATION • Existing sales force • Management • Separate sales force • Sales teams

  17. MAJOR ACCOUNT ORGANIZATION • Strategic Account Management Association • http://www.nams.org/

  18. HYBRID ORGANIZATION • Use a mix of the aforementioned approaches • Capitalize on advantages of each type

  19. TELEMARKETING • It allows companies to make cost-effective sales calls • Many business customers like it!

  20. TELEMARKETING • Customer service • Prospecting and qualification • Customer retention • Advertising and promotions

  21. SALES AGENTS • Independent businesses given exclusive contracts to sell within a given region • Also known as “manufacturer’s representatives”

  22. SALES AGENTS • Market focus • Compatibility • Economic consequences • Level of control • Competitive environment

  23. SALES FORCE SIZE • Affordability approach • Workload approach • Breakdown approach

  24. AFFORDABILITY APPROACH • Divide total dollars available for sales (wages, commission, travel) by average wages + expenses per sales person • See example page 384

  25. WORKLOAD APPROACH • A buildup method based on numbers of customer, planned call frequencies, length of each call • Number = Total hrs required for selling / number of total hrs of selling available for one salesperson • See example page 384

  26. BREAKDOWN APPROACH Size of sales force = Forecasted Sales Average sales per salesperson

  27. FROM THE TEXT • Read pages 364 to 385.

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