Copyright © 2001 by Harcourt, Inc. All rights reserved.

CHAPTER 4
THE MARKET-DRIVEN SALES ORGANIZATION

Copyright © 2001 by Harcourt, Inc. All rights reserved.

LEARNING OBJECTIVES
A sales force is a complex selling unit of the firm. Its organizational design and structure are built around its customers and markets. After studying this chapter, you should be able to explain:

 The type of markets in which salespeople work.  The major job activities of salespeople.  The various types of sales jobs.  Why sales jobs are designed for an individual organization’s markets and customers.

 The various types of sales force organizational structures.
 Newer forms of organizations.  How coordination and technology improve customer service.
Copyright © 2001 by Harcourt, Inc. All rights reserved.

Inc. • Set up the sales force organizational structure.FACTORS INFLUENCING ORGANIZATIONAL DESIGN AND STRUCTURE • Examine customers in each market. • Determine the types of sales jobs needed to serve a market. Copyright © 2001 by Harcourt. which includes the various sales jobs and geographic territories. • Design sales jobs around customers. . All rights reserved. • Note the job activities salespeople must do.

All rights reserved. JOBS.1 THE RELATIONSHIPS AMONG MARKETS. AND ACTIVITIES INFLUENCE SALES JOB DESIGN AND ORGANIZTATIONAL STRUCTURE Performance Ct ms uo e s r ad aks nM e r t T ypes of Jobs Rue e id qr Jb ci iis o A te tv D esign th Job e Establish Sales Organizational Structure Quality of Work Life Copyright © 2001 by Harcourt.FIGURE 4. . Inc.

goods. Inc. promotions. Copyright © 2001 by Harcourt. .MARKETING AND MARKETS Marketing is the process of planning and executing the conception. and services to create exchanges that satisfy individual and organizational objectives. All rights reserved. pricing. and distribution of ideas.

. Inc. All rights reserved.SALESPEOPLE WORK IN TWO MARKETS • Consumer • Business Copyright © 2001 by Harcourt.

SALES JOBS ARE VARIED AND CAN BE CLASSIFIED Seven major categories: Category One – inside order taker. Category Four – is not expected or permitted to take an order but is asked only to build goodwill or to educate the actual or potential customer. Copyright © 2001 by Harcourt. All rights reserved. Inc. Category Three – an order taker but also works in the field. Category Two – deliverer. .

Inc. All rights reserved. Copyright © 2001 by Harcourt. Category Seven – requires the creative sale of intangibles. . Category Six – demands the creative (specialty) sale of tangibles.Seven major categories: Continued Category Five – major emphasis is placed on technical knowledge.

Inc. . Copyright © 2001 by Harcourt. The main problem with order takers is that they create only one distinction in the customer’s mind: price. This salesperson must often create discontent with what the prospect already has and has to overcome the most powerful and obstinate resistance. All rights reserved. retain.APPLICATIONS OF THE SALES JOB CLASSIFICATIONS Order takers – wait for the customer to order. and increase business with customers. Order getters – obtain.

Copyright © 2001 by Harcourt. • They listen more than talk. All rights reserved. . • They evaluate and respond to the customer’s changing needs.Order getters build relationships. • They have an objective in mind. • Their sales calls are more productive. • They develop relationships with customers. Inc.

Often.TRUE SALESPEOPLE ARE HARD TO FIND People with the prerequisite traits and attributes for success in creative sales are rare. Inc. Copyright © 2001 by Harcourt. 100 to 150 or even more applicants must be interviewed to find one qualified candidate. All rights reserved. .

4.THE SALESPERSON’S JOB ACTIVITIES AS A TERRITORIAL MANAGER 1. Helps customers resell products to their customers. 2. Inc. Sells to current and new customers. 7. 3. Builds goodwill with customers. Helps customers use products after purchase. All rights reserved. . 5. Provides company with market information. Provides solutions to customers’ problems. 6. Copyright © 2001 by Harcourt. Provides services to customers.

coordinated process of communication. authority. and responsibility for sales groups and individuals. Copyright © 2001 by Harcourt. All rights reserved. .SALES ORGANIZATIONAL DESIGN Organizational design refers to the formal. Inc.

PURPOSES AND IMPORTANCE OF JOB DESIGN • Content • Qualifications required to perform • Returns and rewards for performance Copyright © 2001 by Harcourt. Inc. . All rights reserved.

. Inc. All rights reserved.SALES ORGANIZATIONAL STRUCTURE Organizational structure is the relatively fixed. formally defined relationship among jobs within the firm. Copyright © 2001 by Harcourt.

The president has complete authority. Inc.THE LINE ORGANIZATION In the pure line organization. the chief executive – usually the president – does the decision making for the firm. Copyright © 2001 by Harcourt. All rights reserved. .

.2 COMPUTE CORPORATION’S LINE ORGANIZATION Lewis Stoner President-Owner Jake Preston Vice President of Sales Two Salespeople Copyright © 2001 by Harcourt.FIGURE 4. All rights reserved. Inc.

SPECIALIZED DESIGN Functional organizational design is the grouping of work according to its characteristics. Copyright © 2001 by Harcourt. All rights reserved. Inc. .

.FIGURE 4. All rights reserved. Inc.3 ALARM SYSTEM CORPORATION’S FUNCTIONAL ORGANIZATIONAL DESIGN Line John Abbott Vice President of Marketing Staff John Friedman Advertising/Promotion Manager Charles Thompson Sales Manager Tlpe e ael ne o S p s Pete Likert Market Research Manager Copyright © 2001 by Harcourt.

Staff authority is narrower and includes the right to advise. . recommend. Copyright © 2001 by Harcourt. All rights reserved.Staff Positions with Line Authority Line authority means that people in management positions have formal authority to direct and control immediate subordinates. Inc. and counsel in the staff specialists’ areas of expertise.

This type of organization is generally used by companies with more than strictly local distribution of their products. .Geographic Specialization Many large corporations are organized by geographic territory. All rights reserved. Inc. Copyright © 2001 by Harcourt.

Inc.FIGURE 4. . All rights reserved.4 TEXTRON CHEMICAL CORPORATION GEOGRAPIC SPECIALIZATION Managerial Level Vice President of Marketing National Sales Manager Operating Level Eastern Divisional Sales Manager 7 Regional Sales ManagersA 35 District Sales Managers B 240 Salespeople C Central Divisional Sales Manager 6 Regional Sales ManagersA 30 District Sales B Managers 240 Salespeople C Western Divisional Sales Manager 5 Regional Sales Managers A 25 District Sales Managers B 200 Salespeople C Copyright © 2001 by Harcourt.

Product Specialization Another common type of organization in large companies is based on the firm’s product. marketing. along with staffs for each. All rights reserved. advertising. The entire company may be organized by product. or some functional units may remain centralized. and so on. Copyright © 2001 by Harcourt. with separate sales. Inc. .

All rights reserved. Copyright © 2001 by Harcourt. .Customer Specialization Companies with several separate and distinct markets accounting for major portions of their sales often organize based on these markets or customers. Inc.

product. geographic. Inc. .Combination of Design Elements Many companies organize on the basis of some combination of functional. Copyright © 2001 by Harcourt. or customer design. All rights reserved.

.S.5 MULTIPLE DESIGN FACTORS President Functional Vice President Production Vice President Marketing Vice President Engineering Geographic U.FIGURE 4. Marketing Manager International Marketing Manager Customer Consumer Goods Managers Industrial Goods Managers International Sales Manager Product Soap Products Divisional Manager Paper Products Divisional Manager Food Products Divisional Manager European Division Latin American Division Asian and African Division Eastern Sales Division Central Sales Division Western Sales Division Copyright © 2001 by Harcourt. All rights reserved. Inc.

3. 1. Inc. and 3. A separate division to deal with major accounts. . Select members of the current sales force. 4. Copyright © 2001 by Harcourt. All rights reserved. Sales managers. A combination of 1. 2.ORGANIZING FOR SELLING TO MAJOR CUSTOMERS Companies use four basic organizational methods. 2.

NEW FORMS OF ORGANIZATIONS STRATEGIC ALLIANCES A strategic alliance is a formal relationship created with the purpose of joint pursuit of mutual goals. Inc. All rights reserved. . Copyright © 2001 by Harcourt.

All rights reserved.6 CROSS-FUNCTIONAL SELLING TEAM Ct m uoe s r Sales Marketing Technical Support Manufacturing Se m ul e pg p T l l a i i e r S n Copyright © 2001 by Harcourt. . Inc.FIGURE 4.

Copyright © 2001 by Harcourt. Inc. All rights reserved. .TEAM-BASED ORGANIZATIONS Many organizations are more responsive to their environment because they use work teams as their basic building blocks.

. All rights reserved. Inc.COORDINATION AND TECHNOLOGY Coordination refers to the quality of collaboration across groups. Copyright © 2001 by Harcourt.

. and integrating managers. task forces and teams.INTERNATIONAL COORDINATION The most important methods for achieving coordination are information systems. Copyright © 2001 by Harcourt. All rights reserved. Inc.

Inc. Companies can structure their organizations in numerous ways. even the structure of the sales organization. . A salesperson’s job activities involve much more than person-to-person selling.THE BOTTOM LINE Markets. and job activities influence the design of the various sales jobs and. All rights reserved. job types. Copyright © 2001 by Harcourt. consequently. Sales activities are very diverse and easier to understand if classified in one of seven categories.

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