SALES ORGANIZATION STRUCTURE AND PERSONAL SELLING

1. SALES & DISTRIBUTION MANGEMENT
Re-created by: Dr. Sandeep Solanki, Associate Professor, RNB Global
University, Bikaner
A. Definition of Sales Organization
B. Concept or Principles of Sales Organization
C. Need of Sales Organization
D. Organizational Designs or Structure or Types of Sales Organization
E. Selling Process and Characteristics of a successful salesman
F. Sales Manager’s Functions & Responsibilities
G. Sales Budgeting (already covered during Unit-I)

2. A. DEFINITIONS OF SALES ORGANIZATION
a) The Sales Organization provides the vehicle for making decisions on products, sales channels,
physical distribution, promotion and prices. – Cundiff, Still & Govoni
b) Sales organization is the planning, direction and control of personal selling including recruiting,
selecting, training, equipping, assigning, routing, supervising, paying and motivating, as these
tasks apply the personal sales force. – American Marketing Association
c) A good sales organization is one where in the functions or departments have been carefully
planned, coordinated towards the objectives of putting the product in the hands of customers. The
whole effort being efficiently supervised and managed so that each function is carried out in the
desired manner. – Bollins

3. B. CONCEPT OR PRINCIPLES OR GUIDELINES OF SALES ORGANIZATION
– There must be clear lines of authority running from the top to the bottom of the organization. The
clear and unbroken chain of command should link every person in the organization with someone at
the higher level.
– Responsibility should always be coupled with corresponding authority. This calls for the principal
of homogeneity in which formal authority & responsibility must be co-terminus and co-equal.
– The work of every person in the organization should be confined as far as possible to the
performance of single leading function, i.e, specialization.
– Jobs should not be assigned without due regard for the talents and preferences of current
salespersons. For example, some salespeople may sell only some products or may visit specific
type of customers such as government institutions or trade. By focusing on few tasks, individuals
can become experts on those activities, thus enhancing overall sales performance.
– Span of Control refers to the number of individuals who report to each sales manager. A general
guideline is that the span of control be six or eight.
– The number of levels of authority should be kept at a minimum (flat organization). Flat
organizations are used to achieve decentralization, whereas tall structures are more suitable for
centralized organization.

4. B. CONCEPT OR PRINCIPLES OR GUIDELINES OF SALES ORGANIZATION
– Most companies have centralized or decentralized orientation. A centralized structure has authority
& responsibility placed at higher levels of management. A decentralized helps decision making at
lower levels, resulting in faster customer service.
– The organization should be flexible but objective, so that it can be adjusted to changing conditions.
Each division and sub-division of the organization should be the expression of a definite purpose
and be in harmony with the objective of the organization.
– It is necessary to have effective coordination between sales & other marketing activities and sales
and other departmental functions, if possible with regular meetings with all.
– The responsibility of higher authority for the acts of its subordinates is absolute.
– Whenever possible the line function should be separated form staff objectives. Line positions in
management have formal authority or power to direct and control immediate subordinate and
staff management positions are in advisory & recommending roles in their respective areas of
expertise.
– No one in organization should report to more than one-line authority. Everyone in the
organization should know to whom to report and who reports to him. Each person should report
to one boss only, generally termed as unity of command.

5. C. NEED OR IMPORTANCE OF SALES ORGANIZATION
– Functions of each department are carefully planned and coordinated and the efforts of individuals
are supervised.
– Duties, roles and the rights & responsibilities of salespeople is clearly defined, meant for the
effective execution of the sales function.
– Organizes resources towards the goal of delivering products and services in the hands of the
customer for profit.
– It serves as point of orientation for individuals for cooperative efforts aimed at establishing
relationships both within and outside the organization.
– Undertakes managerial functions such as the selection and recruitment of quality manpower, their
induction and training for better performance, and the effective supervision of subordinates in the
field force.
– Helps in the flow of upward and downward communication in the organization for taking sales-
related decisions.

6. C. NEED OR IMPORTANCE OF SALES ORGANIZATION
– Removes duplication of efforts and enhances the productivity level of salespeople by keeping cost
and expenses under control.
– Generates financial resources, which are circulated within the organization to finance its other
functions.
– Pay proper attention to strategic organizational planning and the formulation of policies.
– Right job for the right person promotes selective specialization and plans and executes strategies
for the achievement of predetermined objectives.
– A sales organization serves as unified contact or relationship point with customers to resolve their
problems and welcome suggestions.
– Contributes to building morale of the employees and act as reservoir of sincere and hardworking
salespeople.

7. D. Organizational Designs or Structure or Types of Sales Organization
Fig. 1: Line Sales Organization Structure
AREA SALES MANAGER (1-4)
BRANCH MANAGER
HEAD - MARKETING
FIELD SALES SUPERVISOR
SALESMAN (8-10)

8. Fig. 2: Line & Staff Sales Organization Structure
D. Organizational Designs or Structure or Types of Sales Organization
HEAD - MARKETING
MARKETING SERVICES
MANGER
SALES MANAGER MARKETING RESEARCH
MANAGER
PROMOTIONAL
MANAGER
AREA SALES
MANAGER - 1
AREA SALES
MANAGER - 2
AREA SALES
MANAGER - 3
AREA SALES
MANAGER - 4
SALESMEN SALESMEN SALESMEN SALESMEN

9. Fig. 3: Product Oriented Sales Organization Structure
D. Organizational Designs or Structure or Types of Sales Organization
HEAD - MARKETING
MARKETING RESEARCH
MANGER
GENERAL MANAGER
(SALES)
SALES TRAINING
MANAGER
PROMOTION
MANAGER
4 REGIONAL SALES MANAGER
PRODUCT GROUP - A
SALESPEOPLE
PRODUCT GROUP - A
16 DISTRICT SALES MANAGER
PRODUCT GROUP - A
4 REGIONAL SALES MANAGER
PRODUCT GROUP - B
SALESPEOPLE
PRODUCT GROUP - B
16 DISTRICT SALES MANAGER
PRODUCT GROUP - B

10. Fig. 4: Customer Oriented Sales Organization Structure
D. Organizational Designs or Structure or Types of Sales Organization
SALES MANAGER –
INDUSTRIAL CONSUMER
SALES MANAGER –
RETAIL SALES
SALES MANAGER –
GOVERNMENT OFFICES
VICE PRESIDENT - SALES
SALESMEN
PRESIDENT - MARKETING
SALES MANAGER -
WHOLESALERS
SALES SUPERVISOR SALES SUPERVISOR SALES SUPERVISOR SALES SUPERVISOR
SALESMEN SALESMEN SALESMEN

11. Fig. 5: Geographic or Territory Oriented Sales Organization Structure
D. Organizational Designs or Structure or Types of Sales Organization
DIVISIONAL MANAGER
– EAST TERRITORY
DIVISIONAL MANAGER
– WEST TERRITORY
DIVISIONAL MANAGER
– SOUTH TERRITORY
DIVISIONAL MANAGER
– NORTH TERRITORY
NATIONAL – SALES MANAGER
VICE PRESIDENT - MARKETING
REGIONAL SALES
MANAGER (STATES)
REGIONAL SALES
MANAGER (STATES)
REGIONAL SALES
MANAGER (STATES)
REGIONAL SALES
MANAGER (STATES)
DISTRICT SALES
MANAGER
DISTRICT SALES
MANAGER
DISTRICT SALES
MANAGER
DISTRICT SALES
MANAGER
SALES PERSONNEL
(CITY OR TOWN)
SALES PERSONNEL
(CITY OR TOWN)
SALES PERSONNEL
(CITY OR TOWN)
SALES PERSONNEL
(CITY OR TOWN)

12. Fig. 6: Hybrid Or Combination Sales Organization Structure
D. Organizational Designs or Structure or Types of Sales Organization
EUROPE DIVISION AMERICA DIVISION GULF DIVISION
EASTERN SALES
DIVISION
WESTERN SALES
DIVISION
NORTHERN SALES
DIVISION
DIVISIONAL
MANAGER (SOAP)
DIVISIONAL
MANAGER (PAPER)
DIVISIONAL
MANAGER (FOOD)
MARKETING
MANAGER (INDIA)
PRESIDENT
VICE PRESIDENT
MARKETING
VICE PRESIDENT
HRM
VICE PRESIDENT
MARKETING
MARKETING MANAGER
(INTERNATIONAL)
G.M. (CUSTOMER
CARE)
G.M.
(INTERNATIONAL SALES)
G.M.
(INTERNATIONAL SALES)
FUNCTIONAL
GEOGRAPHIC
CUSTOMER
PRODUCT

13. E. SELLING PROCESS AND CHARACTERISTICS OF A SUCCESSFUL SALESMAN
1. Selling Process Stages/Steps
2. Characteristics of a Successful Salesman
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1. Selling Process Stages/Steps:
1) Meaning of a Selling Process: The selling process is defined as a process by which a salesperson identifies and
locates the prospects, separates the prospects from the suspects, approaches them and makes a sales
presentation, handles their objections, and closes a sale. Subsequently he also follows up the existing customers
to identify further sales leads, and measures the success and customer satisfaction level of the current products
and service offerings. The selling process can help a salesperson to identify he customer needs, arouse their
interest in the product the brand, and motivate them to make a purchase decision. According to a famous sales
guru, the sales process is 90% preparation on customer handling strategy and 10% on sales presentation. It is assumed to
be a chain process that a salesperson should follow step by step to make a synergistic effort. Each of these steps
can be called as a sales proposition. It is an orderly process in which a salesperson can respond to the decision-
making process of the customers and close a sale at the end of the process.

14. E. SELLING PROCESS AND CHARACTERISTICS OF A SUCCESSFUL SALESMAN
Stages/Steps of the Selling Process involves the following:
– Pre-Sale Preparation (adequate knowledge about the company, the product, and the competitors)
– Prospecting (identify the buyer who have a need, ability to pay and adequate authority to buy; identify
the leads, prospects and qualified customers who need further persuasion. According to David Ogilvy,
non-addition of new customers is a process of bleeding towards death. It also involves search for
sources of potential accounts – hot, warm and cool; methods of prospecting include – cold canvassing,
lead clubs, prospect pool, direct mail, observation, customer referrals, telemarketing, networking,
demonstration etc.)
– Pre-Approach (to become knowledgeable about the customer behavior and his requirements; the best
way to understand the customer’s needs is to think the way the prospect will think)
– Approach (be careful about the first impression, selling the company’s image, product literature,
listening skills, simplifying the technical jargons etc. while contacting a customer)

15. E. SELLING PROCESS AND CHARACTERISTICS OF A SUCCESSFUL SALESMAN
– Sales Presentation (through brochures, information literature, visual aids, attracting customer
attention, creating interest, arousing desire, and presentation can be either oral or written;
demonstration)
– Handling Customer Objections (handling customer excuses like – I don’t have the money to buy, I
don’t need this product, this new idea will not do much good for us, you don’t enjoy good
reputation in this area, we would like to buy two but not at this point and so on)
– Closing the Sale (reminds the customer about promotional offers, makes customer cautious about
product availability, may ask directly to place an order, associating with social status etc.)
– Follow-Up Action (after sale-service is important)

16. E. SELLING PROCESS AND CHARACTERISTICS OF A SUCCESSFUL SALESMAN
2. Characteristics of a Successful Salesman:
1) They are effective communicators.
2) Possess complete knowledge about the strength and weakness of his own brand as well as of
competing brands.
3) Able to devise a flexible promotional plan & offers.
4) Expertise himself in networking techniques.
5) Knowledge about other salesmen working the same field.
6) Adapt the presentation to buyer’s style.
7) Get feedback to uncover buyer needs by asking relevant questions.
8) Build a relationship based on mutual trust with customers.
9) Use the selling philosophy of keep it smiling.
10) Listen carefully to the prospect’s words, feelings and thoughts and talk in balancing mode.
11) Enthusiasm towards sales job.
12) Use proof statements from objective sources to add credibility.
13) Empathize towards the sales job and customer’s business.
14) Morally & ethically sound.

17. F. FUNCTIONS & RESPONSIBILITIES OF A SALES MANAGER
1. Achievement of volume and market share
2. Coverage of markets and outlets
3. Width and depth of distribution
4. Managing institutional business and key accounts
5. Competition tracking and action to protect market shares
6. Market feedback and reporting
7. Finished goods inventory management at C&F’s and distributors
8. Managing distribution channels – recruitment, development, evaluation and exit, if necessary
9. Handling customer and consumer complaints
10. Implementation marketing plans – product launches, consumer and trade promotions, merchandising
11. Participation in promotional events
12. Local advertising – wall sites, hoarding, shop boards
13. Cost Effective operations
14. Interface with other functions
15. Recruitment, T&D and Evaluation of sales force