Sales Management

Sales Management

Identify the key components of sales management

The sales organization helps salespeople and sales managers perform required tasks in an efficient and effective manner. The structure of the sales organization is a key driver in helping salespeople and sales managers perform required tasks in an efficient and effective manner. There are four different types of sales organization structure, comprising of; geographic sales organization, product sales organization, market sales organization and functional sales organization. All four structures have both advantages and disadvantages. (Ohno 1978)

The geographic sales organization structure is where "sales people are assigned a geographic area and are responsible for all selling activities to all accounts within the assigned area. There is no attempt to specialize by product, market, or function". The advantages of the geographic sales organization are that it is low cost as most geographic areas are covered by one salesperson only. Having only one resource per geographic area also acts as an advantage by erasing customer and geographic duplication. Disadvantages of the geographic sales organization include limited specialization and lack of management control over product or customer emphasis. Limited specialization is a consequence of fewer management levels. Employees are required to be multi-tasked and perform a variety of functions, inhibiting the ability to become specialized in an area, and becoming more efficient and effective in that area over time. (Taylor 1911)

The product sales organization is highly specialized, involving salespeople being responsible for the selling of a certain product or product line, "the objective is for salespeople to become experts in the assigned product categories". This sales organization structure can be split on more than one level of product specialization, for example an insurance company may use one selling team to specialize in the selling of travel insurance and another team to specialize in the selling of home contents insurance. An advantage of this is the salespeople become experts in a particular product increasing sales confidence and customer satisfaction. The disadvantage is the two teams are likely to "cross over" on each other territories, resulting in geographic and customer duplication. Customer dissatisfaction is also likely as the customer needs and wants were not able to be satisfied on the one visit, as the sales representative specialization is limited to one product only. Another disadvantage of the product sales organization is the high cost as more staff and training is required. (Jaques 1994)

Define the roles of the sales manager and staff within the organization

The market sales organization is becoming increasingly popular amongst today's organizations. "The basic objective of market specialization is to ensure that salespeople understand how customers use and purchase their products. Salespeople should then be able to direct their efforts to satisfy customers needs better". An advantage of this type of organization structure is that staff become specialized in a number of tasks and is able to meet all needs of the customer. They have a better understanding of the product. Disadvantages of the market sales organization are high costs and possible geographic ...