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Sales Organization:
An organization structure defines relationship among jobs , and amongst the people in a company. It gives a framework showing what tasks or activities are performed by the various employees in the sales organization. Few important terms : 1. Degree of centralization
Centralized structure vs Decentralized structures A centralized structure has authority and responsibility placed at higher levels of management. In decentralized structures the A&R for carrying out tasks are delegated to lower-level managers. Decentralized structure based on decision making at lower levels would enable faster customer service.
Overview
2. Degree of specialization
General approach vs Specialized approach Managers ( leading , training , research) and salespersons ( training , merchandising , selling ) are generalists carrying out all activities. Less effective as the markets , products become more complex. In specialized approach the individuals become experts by focusing on few tasks resulting in better performance of the organization. Specialization could be functional , product , market or geographic.
Sales Organization:
Few important terms : 3. Line and staff positions
Line managers have authority & responsibility to direct and control immediate subordinates. Staff managers have areas of specialization and expertise wherein they have staff responsibility i.e advisory & recommending role. Training manager , M.R manager would have no sales generating responsibility.
4.
Span of control
Refers to number of individuals who report to each manager.
Overview
Organization structures:
Sales organizations can be classified into 4 basic types :
1. 2. 3. 4. Line sales organization Line and staff sales organization Functional sales organization Horizontal organization
Organization structures:
Head Marketing
Mktg Services Manager ASM 1 Sales Manager Mkt Research Manager ASM 3 Promotional Manager
ASM 2
Sales people
Sales people
Sales People
Organization structures:
Head Marketing
Sales Manager
Promotional Manager
ASMs #4
Sales people
Operations Team
- Production / Operations
- Quality assurance - Systems engineering
Planning Team
- Strategic planning - Accounts , finance - HR , Administration - Chief Operations Officer
Sales Team
Organization structures:
Horizontal Sales Organization
Cross functional teams are formed by drawing people from various functions like R&D , Operations , Customer support & Sales. These teams work with customer teams to solve the customers problems. This structure removes management levels ( hierarchy) & also departmental boundaries. The support functions like strategic planning , HR , and finance are looked after by a small team of senior executives. Advantages Customer centric; faster turn around time
Organization structures:
Head Marketing Mktg Services Manager RSM (N) ASMs #5 Sales people Sales Manager Mkt Research Manager RSM (S) ASMs #3 Sales people Promotional Manager
Geographic specialization
Commonly deployed by large organizations with national footprint . Typically , salespeople are assigned a geographic area and are responsible for all selling activities within the assigned areas. Advantages Better market coverage ; Quick response to local conditions and competition ; Disadvantages Limited specialization of marketing tasks.
Organization structures:
Head Marketing Mktg Services Manager RSM
(Prod Group A)
ASMs#5
(Prod Group A Sales People (A)
ASMs#4
(Prod Group B
Sales People(B)
Commonly deployed when product portfolio is large and the product inter-relation is weak ( Type of consumers / Nature of usage / category / Type of outlets ) RSMs & ASMs are line managers and have no staff assistance. Advantages Better product focus ; Disadvantages Increased selling cost ; Geographical & customer duplication.
Organization structures:
Head Marketing Mktg Services Manager Promotion al Manager Sales Manager RSMs #4 ASMs #16 Sales training Manager
Mktg Manager ( Prod Group A) Mktg Manager ( Prod Group B)
Sales people
Focus of the organization is on the basic customer need. Advantages duplicate call problem addressed ; Marketing manager focuses on the brands thru involvement in planning , promotion , coordination , market visits Disadvantages Lack of product specialization of salespeople.
Organization structures:
National Sales Manager
ASMs Comml.
ASMs Govt.
Sales people
Sales people
Market specialization
Basis market specialization or by channel of distribution. Salespeople carry out selling activities for all products but for specific customer groups each of which have different buying practices and preferences. Advantages Customer centric ; Disadvantages Duplication of territory coverage ; higher selling costs
Delhi SM
UP + Raj SM
ASM 1 UDS
ASM 2 UDS
ASM 3 UDS
CE 1
CE 2
CE 3
CE 4
Dist 1
CE 5
Dist 2
CE 6
Dist 3
Workload
Sales pot.
Increme ntal
N=S(1+T) P Where , N = Size of salesforce S = Annual sales forecast for the company P = Estimated productivity of the average salesperson T = Estimated % of annual salesforce turnover on account of resignations , retirements and promotion. A company has 20 salespeople and sales manager has to decide whether he should add more salespeople. Sales manager estimates that incremental sales from further salespeople would respectively be Rs 12 lacs ; Rs 10 lacs ; Rs 8 lacs ; Rs 6 lacs and Rs 5 lacs on annual revenue basis. Cost of goods sold is a constant 60% of turnover. The co. salesperson is paid a salary of Rs 120,000 per year and average spent on food and travel per salesman works out to Rs 80,000 per annum. The salespeople are paid annualized incentive of 6% of
Incremental method
Increme ntal
Planning
Establish responsibility Decide the number of salespeople needed Outline the type of salepeople needed
Recruiting
Selecting
Develop tools and procedure for measuring applicants
Hiring
Socialisation
Socialisation
assimilation
2.
Planning stage
3.
c)
2
Recruitment
stage
2.
Once data is built the company identifies & uses the source(s) which permit most effective hires at least cost.
Selection stage
Applicants are measured against the job specifications that were developed in the planning stage. Selection process consists of number of filters which are progressively applied to screen out applicants not matching the job specifications. All the 7 steps are used by a very few organizations. Most use filters basis information needs & expenditure budget. Selection criteria prioritizes few selection criteria with objective of better fitment. Each applicant is ranked on qualifications and potential in relation to the selection criteria .
Screening Step 1 resumes Application Step 2 Blank Initial Step 3 interview Intensive Step 4 Interview Testing
Selection Process:
Screening Resumes
Advertisements or education institutions yield large number of resumes which are screened basis job specifications. Relevant information ( Resume may lack in certain details) laid out in a particular order Properly conducted interview is a good predictor of the candidates performance . Interview structures may vary from structured to unstructured or semi-structured. Candidate made comfortable thru open ended qs on educational & family background. Focus on listening. Behavior based interviews / performance based interviews Selection tests are designed to measure aptitude , intelligence , creativity , interests , knowledge and personality of salespeople. The purpose of testing is to decide whether applicants have traits , knowledge , attitude for success.
Application Blank
Interview
Rejecting
Testing
Step 5
Reference check
Also known as background checks with previous employers are helpful in validating applicants ability and character. Qs such as would you rehire him? Why did he leave ? helpful.
Typically used by companies for promotions & development but can also be used as a tool of selection process. Conduct simulated exercises such as role playing , business games , case analysis & individual presentations.
Assessment Centers
Hiring stage
1. Socialisation
5 The new salesperson is familiarised with values , culture of the organisation and also the attitudes , behaviour of people who are already working in the organisation.
Assimilat ion
2. Assimilation
Is the 2nd stage of socialisation the new salesperson is socially integrated into the new environment.