Chapter 4 – Structuring the Sales Force for Strategic Advantage

I. The 3 Sales Force Structure Objectives

a. Adaptability – if adaptive, a company can react quickly to product and
market changes without a major structural overhaul. It’s adaptive if a
selling process can change resulting from product or market
fluctuations can be accommodated within the existing sales force
structure
b. Efficiency
i. Encouraging Efficiency: The Geographic structure – sales
territories
c. Effectiveness – increased in several ways: knowledge, focus, problem-
solving ability, ability to make recommendations quickly,
persuasiveness, skill
i. Encouraging Effectiveness: Specialized Structures
1. Market Heterogeneity/Complexity – many market
participants (customers and prospects) – have different
needs and requirements – some markets are just very
complicated
2. Product Heterogeneity/Complexity – some co.s have
limited product lines while others have many –
products can be complex too
3. Sales Force Activity Heterogeneity/Complexity – SF
needs to find customers, identify needs, solve customer
problems, sell, service, maintain, partner, and expand
the business. Complex markets = complex activities.
4. Need for Specialization – excessive
heterogeneity/complexity can create a need for
specialization.
II. Five SF Structures that Create Results
a. Generalist SF Structure – each salesperson sells the firm’s entire
product line to all accounts and prospects in a defined geographic
area. Appropriate when the firms sells a manageable product line and
the selling process is relatively homogenous for all
customers/prospects. Smaller sales territories. Efficient but not very
effective in heterogeneous environments.
b. Market-Based SF Structure – typically, this is a response to market
heterogeneity and complexity.
c. Product-Based
d. Activity-Based
e. Mixed
III. Developing an Efficient and Effective SF Structure – 4 Steps
a. Study the Products, Markets, and Activity
b. Develop a Coverage Matrix – a grid that displays any 2 of the 3 sources
of heterogeneity (products, markets, or selling activities)
c. Generate SF Structure Alternatives
d. Evaluate Different SF Structures