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SALES FORCE
UNIT-4
SALES FORCE - DEFINITION
 implementation of sales strategy through
selecting, training, motivating, and
supporting the sales force, setting sales
revenue targets,
SALES FORCE
 The salesperson’s role is a key one in the
organization.
 The high cost of maintaining a sales force means
that management is especially interested in how to
efficiently organize this vital element.
 These are:
(a) Designing sales force strategy and structure.
(b) Recruiting and selecting salespeople.
(c) Training salespeople.
(d) Compensating salespeople.
(e) Supervising salespeople.
(f) Evaluating salespeople.
OBJECTIVES OF SALES FORCE
 Increase sales volume
 Introduce a new product
 Reducing selling costs
 Offset competitive promotions
 Improve working habits
 Develop new prospect lists etc.
SALES FORCE STRUCTURES
 Territorial structure is used where every sales
representative is assigned specific geographical
area. This structure is preferred for building
relationships with locals.
 Product structure is used for complex and un-
related product portfolio. Here the sales people are
directly associated with research and development
of the products.
 Market structure is used if the companies are
operating different industry or market segments.
Every sales force specializes in a definite market
and helps push a product efficiently across the
given market. However, the disadvantage would
arise if customers are located over a wide
geographical area.
 Complex structure is used when companies are in
business of selling complex product to different
customer across a large geographical area. Here
sales force structure is a combination of other
structures discussed.
 Once the structure is designed companies need to
make a decision with respect to the size of the
sales force. The size of the sales force is
dependent on the market size and number of
customers.
COMPENSATING SALES FORCE
 To compensate sales force, a company must have an
appealing compensation plan.
 Compensation is made up of the several elements:
1). A fixed amount, usually a salary, gives the
salesperson a more stable income.
2). A variable amount, which might be commissions
or bonuses, rewards a sales- person for
greater effort.
3). Expense allowances (which repay salespeople
for job-related expenses) let salespeople undertake
needed and desirable selling efforts.
4). Fringe benefits provide job security and
satisfaction.
 Management must decide which of these elements
(and which combination or amount) makes the most
sense for each sales job.
 The compensation plan can both motivate and
direct a salesperson’s work. Basic methods include:
1) Straight salary
2) Straight commission
3) Salary plus bonus
4) Salary plus commission.
THANK YOU
Sales Force Structure and Compensation
Sales Force Structure and Compensation

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Sales Force Structure and Compensation

  • 2. SALES FORCE - DEFINITION  implementation of sales strategy through selecting, training, motivating, and supporting the sales force, setting sales revenue targets,
  • 3. SALES FORCE  The salesperson’s role is a key one in the organization.  The high cost of maintaining a sales force means that management is especially interested in how to efficiently organize this vital element.  These are: (a) Designing sales force strategy and structure. (b) Recruiting and selecting salespeople. (c) Training salespeople. (d) Compensating salespeople. (e) Supervising salespeople. (f) Evaluating salespeople.
  • 4. OBJECTIVES OF SALES FORCE  Increase sales volume  Introduce a new product  Reducing selling costs  Offset competitive promotions  Improve working habits  Develop new prospect lists etc.
  • 5. SALES FORCE STRUCTURES  Territorial structure is used where every sales representative is assigned specific geographical area. This structure is preferred for building relationships with locals.  Product structure is used for complex and un- related product portfolio. Here the sales people are directly associated with research and development of the products.  Market structure is used if the companies are operating different industry or market segments. Every sales force specializes in a definite market and helps push a product efficiently across the given market. However, the disadvantage would arise if customers are located over a wide geographical area.
  • 6.  Complex structure is used when companies are in business of selling complex product to different customer across a large geographical area. Here sales force structure is a combination of other structures discussed.  Once the structure is designed companies need to make a decision with respect to the size of the sales force. The size of the sales force is dependent on the market size and number of customers.
  • 7. COMPENSATING SALES FORCE  To compensate sales force, a company must have an appealing compensation plan.  Compensation is made up of the several elements: 1). A fixed amount, usually a salary, gives the salesperson a more stable income. 2). A variable amount, which might be commissions or bonuses, rewards a sales- person for greater effort. 3). Expense allowances (which repay salespeople for job-related expenses) let salespeople undertake needed and desirable selling efforts. 4). Fringe benefits provide job security and satisfaction.
  • 8.  Management must decide which of these elements (and which combination or amount) makes the most sense for each sales job.  The compensation plan can both motivate and direct a salesperson’s work. Basic methods include: 1) Straight salary 2) Straight commission 3) Salary plus bonus 4) Salary plus commission.