sales territory
This type of
Kenneth Le Meunier-FitzHugh
A sales territory can be either a geographical area
or a set of customers assigned to a salesperson
or group. The salesperson is expected to call
on existing and prospective customers within
their territory on behalf of the organization. A
territory should be organized strategically to
maximize effectiveness. The simplest form of
sales territory is one where all customers are
visited or telephoned by one person responsible
for all products/services. Where the product
range is wide and/or where customer types
with differing needs can be readily identified,
territories will tend to occupy more than one
salesperson.
Geographical territories require that the sales
force visits all customers within the designated
area, which could be as small as a town or city or
as large as a continent or country. The benefits
of this type of sales territory are that there
are lower costs because of reduced traveling
time and overheads (e.g., accommodation, fuel,
and administration) and there is less confusion
about who is managing the sales relationship.
The salesperson can also arrange their call
pattern to meet the needs of different types
of customer within their territory. An alterna-
tive way of organizing the sales territory is by
Wiley Encyclopedia of Management, edited by Professor Sir Cary L Cooper.
Copyright © 2014 John Wiley & Sons, Ltd.
product group or customer type.
specialist grouping of the customers allows the
salesperson to specialize in meeting the needs
of that type of customer. Arranging territories
by product group is particularly beneficial if
the specification of the product/service needs
to be adjusted for each customer, or there is
highly a technical product/service offer. Some
organizations will group customers by size, with
major accounts being serviced by key account
managers. There is a need to balance the costs
of implementing different sales territory struc-
tures with the benefits/problems as perceived
by individual customers and the organization.
See also sales force; sales force control; sales
management
Bibliography
Cravens, D., Le Meunier-FitzHugh, K. and Piercy, N.F.
(2011) The Oxford Handbook of Strategic Sales and
Sales Management, Oxford University Press, Oxford.
Johnston, M.W.and Marshall G.W. (2010) Sales Force
Management (10th edn), McGraw-Hill, Irwin,
New York.
Piercy, N.F. and Lane, N. (2009) Strategic Customer
Management: Strategizing the Sales Organization,
Oxford University Press, Oxford.