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The goal is to arrange these activities so that people involved can act together better than they can individually. Sales organizations are restructured to make them more responsive to changing needs and demands of their customers. Characteristics of a good sales force organization: 1 . Organizational structure should reflect a marketing orientation. When designing a sales organization, management should focus first on the market and the sales force. The organization structure is built according to the selling and marketing tasks necessary to capitalize on the market demand and to rev the firm’s customers. . Organizations should be built around activities not around people. 3. Responsibility and authority should be related properly. When you give someone a job to do, also give the person the tools to do it. 4. Span of executive control should be reasonable. This means the number of subordinates who report directly to one executive. As a guideline, the span should be small – usually not more than six to eight people. 5. Organizations should be stable but flexible. Stability in an organization means having trained executive replacements available when needed.
Flexibility refers to worth run situations as fluctuations in the number of workers needed. An organization might subcontract some work during peak seasons or hire temporary sales force. 6. Activities should be balanced and coordinated. Balance means not letting one unit become unduly more important than another. Coordination is to coordinate between sales and other marketing units. Example, sales and advertising and between sales and non-marketing departments as the production and finance departments. Basic types of organizations: Most organizations can be classified into one of two most common categories refer to figure 1 below).
Line Line and staff Nature Simplest form of organization. Authority flows from chief executive and down to the first level of subordinates then to the second level of subordinates. Consists of line organization and staff assistants who are specialists in various areas. Staff assistants are responsible for planning specialized activities and have an advisory relation with the sales managers and the sales force. Example, the advertising manager has line authority for people in the advertising department but has staff authority with the sales force.
When used In very small firms or within small departments in a larger company -Large sales force -Varied product lines -Large customer number Merits -Highly centralized authority -Quick decision making -Lack of managerial specialization -Slower decision making -Provides benefits of specialization Specialization within a sales department: The most common way to divide sales responsibilities is to split the sales force on some basis of sales specialization. 1- Geographical specialization. The sales force is grouped based on geographical territories.
Each sales errors is assigned a separate geographical area called territory, in which to sell. 2- Product specialization. The type of product sold is another frequently used basis for dividing the responsibilities and activities within a sales department, used when a company is selling: – A variety of complex and technical products – Many thousands of products The advantage of this form of organ action is the specialized attention given to each product line by the sales force. 2- Market specialization. Sales department is divided on the basis of the type of customer classed by its industry or by channels of distribution. Combination of organizational basis. Many firms use some combination drawn from the structures discussed. Example, a sales force may combine geographical specialization with product specialization. Additional strategic organizational alternatives: 1- National account management: many companies developed separate structures within their organizations for dealing with major accounts – in terms of: – Complexity of buying and selling process of major accounts I. E. People involved in the process are located in different geographical locations. – Account for large share of selling’s volume and profits.
Three commonly used organizational approaches are: a- a separate sale force to sell to key accounts b- use of executives for major account selling c- a separate division to deal with its key account selling 2- Buying centers and team selling: buying center includes all individuals involved in the purchasing decision process; the buying center includes: users Of the product influencer, who set the product specifications deciders who make actual purchase decisions gatekeepers who control the flow of purchase information buyers who process the purchase orders
A growing number of firms are using selling teams to call on the various individuals in the buying center. A selling team is a group of people representing the sales department and other functional areas in the firm as R & D, finance and production departments. Companies as IBM which sell customized computer hardware and software use teams of sales people and technical experts who work closely with the customers buying team.
Team selling is expensive and only used when there is potential for high sales volume and profit. 3- Dependent sales organizations: most producers use dilemma to get their product to the final customer. Examples include brokers, wholesalers, retailers, and manufacturers’ representatives. Manufacturer representative is an agent who has its own sales force and can represent several manufacturers (but not direct competitors).
This type is used when: a manufacturer does not have a sales force when it is not cost effective for the company to use its own sales force 4- Telemarketing and electronic marketing: this describes direct selling using telephone and innovative communication systems as e-mail and internet. This type of selling is increasing due to: mom buyers prefer it over personal sales calls in certain selling situations Marketers find that it increases sales efficiency in case of placing routine standardized orders.
Organizing for international sales: Companies may decide to sell its products overseas for many reasons: 1- in response to customer request 2- the home market is saturated 3- company has excess capacity Organizational forms in international selling: 1- Use of home country middlemen – these are export middlemen located in the home country – they offer distribution services for companies who want to sell abroad with minimum commitment.