Emerging Sales Organization Structure/Design
Emerging sales organization structures/designs are developed on the basis of field/territory for making selling more effective. The reason behind it is that the sales manager can personally supervise and control field selling operations.
In case the selling firm is new or young and there are limited salespeople in a limited area /territory, it is easy to supervise and control field operations by limited sales managers. But when the organization grows these activities become complex.
In the field sales organizations, the following persons are taken into account for the effectiveness of sales operations.
- All employees of the sales department who work in different areas/territories away from the home office.
- Traveling sales supervisors, branch and district managers, and clerical employees branch and district offices.
- Service repair and sales promotion personnel.
Therefore, Therefore, selling firms have started to achieve two purposes by forming field sales organizations. The first is to facilitate the selling tasks and to let salespeople get chances to achieve their goals.
The formation of the field sales organizations depends on many considerable factors. They are:
- Firm’s philosophy (Centralized or decentralized)
- Sales-related marketing policies.
- Personal selling practices.
- Direct frequency of sales calls.
- The geographical spread of sales accounts.
Considering these factors, selling firms develop schemes for establishing sales organizations by dividing line authority and assigning respective responsibilities to all people working in such organizations.
Types of Emerging Sales Organizational Design
Following are the major types of emerging sales organization designs. These all sales organizational designs are guided by line authority where the supervisor role of control flows downward. All individual salespeople are responsible on behalf of their immediate supervisor. Reporting of each salesperson moves upward in each design.
Geographical Sales Organization Design
In this sales organization, the design is based on geography where each sales manager is given a task to perform in a particular area, territory, or geography and salespeople are also responsible to their respective area sales manager.
It is simple to administer because salespeople are assigned to carry over their duties under separate area sales managers.
This sales organization proves relatively less costly because the selling firm does not have to appoint a separate product/line to sell. The size of salespeople regional sales managers is small so the administrative cost is low.
This organization carries difficulty in selling a wide product range because sales personnel are in small numbers and have only general knowledge about the products. They are not specialized as product lines.
In this form of the sales organization, reporting is delayed, not a process but because limited salespeople have to prepare reports about many products.
Product-Oriented Sales Organization
In this emerging sales organization, the organization’s sales strategy is based on the types of the product, and marketing efforts are also assumed on the basis of the product’s types, features, and other qualities.
- It widens knowledge of products (even complex and technology sophisticated) and their application. This developed a specialized sales force.
- The developed knowledge makes salespeople able to make an effective presentation. By satisfying the queries of customers through the demonstration of products, salespeople bring customers in the state of closing sales.
- It develops selling skills – presentation, demonstration, handling objections, etc. in addition to enriching knowledge that further helps to effectively execute the selling process.
- It estimates competition between the selling of new land existing products/product lines.
This sales organization creates increased travel costs and others as there are separate specialized salespeople to different sales territories.
This provides ample opportunity to sales executives for making the right evaluation of sales performance. If a product/product line reflects the inadequacy the suspect of the effects introduced of the product/product line.
Customer-Based Sales Organization
In this sales organization, the activities are done based on types of customers mainly individual customers and organizational customers.
- It removes the problem of the same customer being served by product divisions.
- It brings companies to customer-centric sales organizations by shifting resources from the product or regional divisions.
- It provides salespeople with good customer knowledge.
- It is suitable for monitoring changes and trends within markets/industries.
- This organization increases the number of salespeople as is organized on the basis of customers types.
- Due to the above fact, administrative and customer service costs both increase.
- It is costly in comparison to the above forms (geographical and product-oriented) emerging sales organizations.
Account-Based Sales Organization
In this, the sales organization is based on the account sizes and types such as key accounts, medium-sized accounts, new accounts, and small accounts.
- It constitutes a link between salesforce resources and customer value.
- It targets close working relations, improved communication, and better service, higher sales, salespeople career opportunities, specialization of selling skills, etc.
- It pays sufficient attention to new accounts.
- It makes salespeople specialize in selling skills.
- It tries to eliminate competition between prospecting and servicing existing customer accounts.
It increases the very high costs of servicing key customers accounts. It is also high cost generating a type of sales organization