1. Sales and Distribution
Management, 2e
Dr Tapan K. Panda, Great Lakes Institute of Management, Chennai
Dr Sunil Sahadev, University of Sheffield, UK
Copyright © 2011 Oxford University Press
Chapter 6: Sales Organization

2. Chapter 6
Sales Organization
Copyright © 2011 Oxford University Press
Chapter 6: Sales Organization

3. Sales organization
• an organization of individuals either working together
for the marketing of products and services manufactured
by an enterprise or for products that are procured by the
firm for the purpose of reselling
• a sales organization defines duties, roles, rights, and
responsibilities of sales people engaged in selling
activities meant for the effective execution of the sales
function
Copyright © 2011 Oxford University Press
Chapter 6: Sales Organization

4. Sales organization (cont….)
• a structural body through which the functions of
sales management are carried out
• sales organization always makes efforts to increase sales,
thereby achieving the principle of profit maximization,
which contributes to the overall growth of enterprise
Copyright © 2011 Oxford University Press
Chapter 6: Sales Organization

5. Factors influencing structure
• product and service related factors
• organization related factors
• marketing mix related factors
• external factors:
- the speed of market change
- reduction in the number of vendors per
buyer
- closer to customer relationships
- changes in regulations and international
practices
Copyright © 2011 Oxford University Press
Chapter 6: Sales Organization

6. Organizational principles
 span of control
 unity of command
 hierarchy of authority
 stability and continuity
 coordination and integration
 homogeneity
 objectivity
 specialization
Copyright © 2011 Oxford University Press
Chapter 6: Sales Organization

7. Organizational design
- formal and coordinated task
- assigning territories
- establishing flows of communication and responsibilities
of sales groups and individuals to customers effectively
Line organization
Mr. Ratnakar Shetty
President / Owner
Mr. Chandrakant
VP (Sales)
Five sales people
Copyright © 2011 Oxford University Press
Chapter 6: Sales Organization

8. Typical structure of a line organization
Consumer
market
National
Distributors
Direct to
Home
Institutional
market
Direct
marketing
Regional
Distributors
Distributors
Corporate
market
Bundling
Gifting
Consumer
Retailers
Consumers
Copyright © 2011 Oxford University Press
Chapter 6: Sales Organization

9. Design by territory
VP Marketing
National Sales
Manager
Divisional Manager
(East)
Divisional Manager
(North)
Regional Sales
Manager
Regional Sales
Manager
Regional Sales
Manager
District Sales
Manager
District Sales
Manager
District Sales
Manager
Sales Staff
(City wise)
Sales Staff
(City wise)
Sales Staff
(City wise)
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Divisional Manager
(West)
Chapter 6: Sales Organization

10. Design by management function
Mr. Dara singh,
VP
(Marketing)
Staff Function
Line Function
Mrs. Chitra
Mohanty
(Advt / Sales
Promotion Mgr)
Mr. Chandra De
Manager
(MR)
Mr. Dibya Behera
(Sales Manager)
20 Sales People
Copyright © 2011 Oxford University Press
Chapter 6: Sales Organization

11. Design by product
President,
Marketing
Product Manager (A)
Manager
(Sales)
Manager
(Training)
Manager
(Promotion)
Manager
(Sales)
Manager
(Training)
Manager
(Promotion)
Product Manager (B)
Copyright © 2011 Oxford University Press
Chapter 6: Sales Organization

12. Design by customer
President
(Marketing)
Vice President
(Marketing)
Sales Manager
Industrial Relations
Sales People
Copyright © 2011 Oxford University Press
Sales Manager
Wholesalers
Sales Manager
Retail Sales
Sales People
Sales People
Chapter 6: Sales Organization

13. President
Functional
Vice President
(Production)
Geographic
Marketing Manager
India
G.M
Consumer care
Customer
Vice President
(Marketing)
Combined
Sales Org. Design
G.M
International Sales
Vice President
(HRD)
Marketing Manager
International
G.M
International Sales
Divisional Manager
Soaps
Divisional Manager
Paper
Divisional Manager
Food
Eastern Sales
Division
Western Sales
Division
Northern Sales
Division
Europe Division
Copyright © 2011 Oxford University Press
America Division
Product
Gulf Division
Chapter 6: Sales Organization

14. Sales Organization
Key account sales
- focus on CRM
- customer profitability and value analysis
- the few accounts give incremental returns
- national accounts
Sales process automation
- EDI – Electronic Data Exchange
Copyright © 2011 Oxford University Press
Chapter 6: Sales Organization

15. Emerging organizational design
• agency and distribution selling
• shared sales force
• telemarketing
• TQM and team-based selling
Customer
Sales
Marketing
Technical
Support
Manufacturing
Supplier selling team
Copyright © 2011 Oxford University Press
Chapter 6: Sales Organization

16. Number of sales people
• determined by:
- territories vary in their demand structure for prospecting
- product mix demands
- levels and types of prospecting
- nature of the customer segments
Affordability method (based on sales budget)
Incremental method
Workload method
Number of sales people =
(Number of
(Number of
(Ideal
(Length of
X Potential frequency of
existing
X
X a call)
customers)
customers)
calls)
Ideal selling time available for a salesperson
Copyright © 2011 Oxford University Press
Chapter 6: Sales Organization