TERRITORY DESIGN – ACTIVITY

You are appointed as an Area Sales Manager for SUNSHINE Corporation. As an Area
Sales Manager, you have the responsibility of taking care of sales of one of the large
geographical area in India (see the map). Given below are the details of the markets for
which your company needs to design sales territories. Also given the category of
products your company would be selling and the types of markets to be addressed,
Company’s sales potential etc,
You have to decide how many sales territories you wish to create, given the market
type, the category of products and company’s objectives (you can make assumption on
company’s objectives). You also need to decide how many Sales Officers you wish to
recruit under you. A sales officer is responsible for target achievement and has to plan
the work schedule accordingly for the assigned territory. Each Sales officer would be
guiding Dealers/ Channel members in recruiting salesmen, who will be supporting sales
at dealer and get salary paid by dealer. Each sales officer has 24 working days in a
month.

Type of market * METRO – CITY / TIER I CITY / TIER II TOWN / Semi urban /

Sector or SALES
SALES SALES SALES
Industry POTENTIAL(PER MONTH)
POTENTIAL (PER MONTH) POTENTIAL(PER MONTH) POTENTIAL(PER MONTH)
FMCG – Biscuits, 20000 outlets / 3000 outlets / 1000 outlets / 250 outlets /
Packed Snacks A:B:C = 1:4:5 A:B:C = 2:5:8 A:B:C = 1:4:20 A:B:C = 1:2:22
Avg unit price: Rs.10/- to 30 Lakhs 7 Lakhs 3 Lakhs 1 lakh
Rs.35/-
CONSUMER
DURABLES – TV,
500 outlets incl 60 outlets incl 30 outlets retail 3 outlets /
REFRIGERTOR,
retail chains / retail chains / chains /
Washing Machine 5 cr 1 cr 40 lakhs 2 lakhs
Avg unit price: Rs.
15,000/- to Rs. 25,000/-
MOBILE SERVICE
PROVIDER – prepaid
8000 outlets / 2000 outlets / 500 outlets / 100 outlets /
32 cr 8 cr 2 cr 30 lakhs
service only (A:B = 1:3)
Uniform For All Markets

AUTOMOBILE (CAR)
20 Dealers / 5 Dealers / 2 Dealers / NIL
Avg Unit price: 30 cr 5 cr 2 cr
Rs. 6.5 lacs – 12 lacs
* Industrial Markets are explained separately.
* Details about Industrial estate markets are given below.

….INDUSTRIAL ESTATES – 30 manufacturing units in each Industrial estate

(Big: Medium : Small =1:3:6) . All the manufacturing units require Forklifts in the plant
operations.

SUNSHINE Corp is also interested in selling forklifts to manufacturing units. The

product needs servicing once a year for safe use & the service is provided by your
company as well. As of now, these manufacturing units are using forklifts sold by local
players and are not satisfied, so willing to go for better quality forklift if available.
Normally, Big Manf unit requires 25 forklifts, Medium -10; & Small – 3 forklifts initially.

A map indicating geographical boundaries, connecting routes across markets (indicated

by star, rhombus, square, triangle & circle) is supplied along with this reading material.

Using Build-Up method, Design territories with the help of Map given if SUNSHINE Corp
is into…….

a) FMCG Business

b) Consumer Durables (TV, Washing Machine, Refrigerator)

c) Prepaid cards

d) Automobiles (CAR)

e) Fork Lifts for Manufacturing units

Few assumptions:

 We can match 23/24 working days depending on the situation.

 If sales person is traveling long, he can cover even 20-22 outlets a day for 2 days
maximum in a week.
2 hours
travel
The workload for a territory can be calculated as follows:

Workload (#) = [Current accounts (#) * Average time to service an active account (#)] + [Prospects
(#) * Time spent trying to convert a prospect into an active account (#)]

The sales potential in a territory can be determined as follows:

Sales potential ($) = Number of possible accounts (#) x Buying power ($)

"Buying power is a dollar figure based on such factors as average income levels, number of
businesses in a territory, average sales of those businesses, and population demographics. Buying
power indices are generally specific to individual industries," but on a whole, definitions of buying
power tend to be more an art than a science.[1]