Introduction and Functions of Sales

Organization
Organization means the systematic coordination of the functions
essential to achieving organizational objectives. The objective of a
sales organization, therefore, is the performance of various activities
necessary to promote sales. The functions of sales organization can
be classified as follows.
1. Planning functions
a) Sales forecasting
b) Sales budgeting
c) Selling policy
2. Administrative functions
a) Selecting salesmen
b) Training salesmen
c) Control of salesmen
d) Remuneration of salesmen
3. Executive functions
a) Sales promotion
b) Selling routine execution of customers orders.
 Role of Sales Organization
Once the sales plan has been formulated, the next logical
step is to organize a sales force to achieve the
organizational objective. The qualified as sales objectives,
which can be further divided, are shown in figure 1 given
below.
Major Qualified Sales Objectives
Overall objectives Break up or Division
1. Total volume of products 1. Quarter, month and weak
2. Total annual value of 2. Product line and range
products 3. Region and sales area
3. Total annual selling costs 4. Type of customer
4. Total annual profit
contribution

Figure 1
 Role of Sales Organization
Sales organization has the following basic purposes:
1. Define the line of authority
2. Ensure that all necessary activities are assigned and
performed
3. Establish lines of communication
4. Provide for coordination and balance
5. Provide insights into avenues of advancement
6. Economics of executive time.
Sales organization also depends on the type of sales
force which is used, for example, field sales force,
national account management, team selling,
telemarketing, part-time sales forces, direct selling, etc.
 Developing a Sales Organization
Sales organization development refers to the formal, coordinating
process of communication, authority and responsibility for sales
groups and individuals. An effectively designed sales organization
has a framework that enables the organization to serve its customers.
Once the sales people know what their responsibilities are and who
they report to, they can concentrate on doing their expected jobs to
the best of their ability.
Thus, a sales manager must recognize and deal with some basic
problems faced by organizations, when developing his own sales
organization. The five major issues are:
1. Formal and informal organizations
2. Horizontal and vertical organizations
3. The line and staff components of organizations
4. The size of the company.
 Formal and Informal Organizations

Marketing Assistant to
Other functional
Vice President Marketing Vice
or administrative
President
organizations

Director of General Manager of Director of Director of

Marketing Sales Sales Advertising Public
Research Manager Planning Relations

District Sales Manager of

Manager Distribution

Manager of
Sales persons Accounts
Receivable
Key Informal Organization
Figure 2 The informal Communication
System in a Marketing Organization
 Formal and Informal Organizations

District General Sales Marketing Director of

Salesperson
Sales Manager Manager Vice President Marketing
Research

Figure 3 A Lengthy Formal Communications Channel

Horizontal and Vertical Organizations
Top Sales Executive

Regional or Zonal Sales

Manager

District Sales Manager

Sales Supervisor

Salesperson

Figure 4 Vertical Sales Organization

 Horizontal and Vertical Organizations
Top Sales Executive

New England Southern Southwest

Foreign Sales
District Sales District Sales District Sales
Manager
Manager Manager Manager

Middle
Atlantic Midwest Pacific
District Sales District Sales District Sales
Manager Manager Manager

Figure 5 Horizontal Sales Organization

 Centralized and Decentralized Organization

Line and Staff Components

Marketing organizations also feature line and staff

components.
A line function is a primary activity and a staff function is
a supporting activity.
In a marketing organization, the selling function is the line
component whereas advertising, marketing research,
marketing planning, sales training and distributor relations
are usually considered staff roles.
Centralized and Decentralized Organization

Vice President for

Sales

General Sales
Manager

Regional Sales Regional Sales Regional Sales

Manager Manager Manager
A B C

Figure 6 A Line Marketing Organization

 Centralized and Decentralized Organization
Assistant to the
Vice President for
Vice President for
Marketing
Marketing

Marketing Research Advertising

General Sales
Manager

Distributor Sales Sales Sales

Relations Planning Analysis Training

Regional Sales Regional Sales Regional Sales

Manager A Manager B Manager C

Key --- --- --- Staff Organization

______________Line Organization

Figure 7 Line and Staff Marketing Organization

 Company Size and Organization

A simple functional company organization is shown in

Figure 8 . This structure is appropriate for most small and
medium sized companies. These companies have
relatively few products or services and use a limited
number of distribution channels. As each functional area
grows larger, the functional organization will be extended.
A functional marketing organization is shown in Figure 9.
 Company Size and Organization

President

Finance and Sales and

Production Personnel
Accounting Marketing

Figure 8 Functional Company Organization

 Company Size and Organization
Chief Marketing Executive

Advertising Sales Customer Market

Manager Manager Relations Research
Manager Manager
Sales
Supervisors

Salespeople

Figure 9 Functional Company Organization

 Field Sales Organization
Field sales force consists of salespersons who work
primarily with customers in person, although they may
also use the telephone or assistance from computer links
to expedite orders and provide customer service. The
structure of a field sales force is usually based on some
means of specialization, such as geography, market,
product, or activity/function, or a hybrid of these types.
The following are the important field sales:
1. Geographic sales specialization organization
2. Product-based sales specialization organization
3. Customer-based specialization organization
4. Hybrid sales organization
5. Team-based organization
 Geographic Sales Organization
FMCG Sales

WEST DIVISION CENTRAL DIVISION EAST DEVISION

Area Sales Manager Area Sales Manager Area Sales Manager

-Mumbai -Delhi -Kolkata
- Surat - Jaipur - Patna
- Chandigarh

Figure 10 Geographical Sales Organization

Some advantages of geographic organizations are (a) Proper coverage of territory

(b) Defining the responsibility (c) Familiarity with local economic and
competitive conditions, making them better able to serve local customers.
 Figure 11 Product-based Sales Organization

Medical Division of `K Pharma Ltd.

Pharmaceuticals Equipment Supplies

East East East

West West West
Central Central Central
 Figure 12 Customer-based sales Organization

Sales Manager for India

Regional Manager

Branch Sales Manager

Assistant Sales Manager- Assistant Sales Manager

Agricultural Products Health Care Products
Activity/Function-based Organization

Activity Sales Method

* Prospecting Telemarketing/cold calls

* Presentation Face-to-face field sales

* Service Personal visits

 Figure 13 Hybrid Sales Organization

President

Functional Vice President Vice President Vice President

Production Marketing Finance

Sales Manager International

Geographic
For India Marketing Manager

Consumer Goods Industrial Goods

Customer
Managers Manager
 Team-based Sales Organization

Customer

Sales Marketing Technical Support Manufacturing

Figure 14 Supplier Selling Team