Territory Design & Management

 Sales Management
 Marketing 3345
Events
Eventstriggering
triggeringsales
sales 11
territory Select
Selectgeographic
geographic
territoryadjustments
adjustments control
controlunits
units

Mergers
Mergers 22
Division
Divisionconsolidation Decide
consolidation Decideon on
Division
Divisionsplit
split allocation criteria
allocation criteria
Sales
Salesforce
forceturnover
turnover
Plant relocations
Plant relocations 33
Product
Productline
linechanges
changes Choose
Choose
starting
startingpoints
points
Revise
Reviseterritory
territory
boundaries
boundariestoto
44 balance
balanceworkload
workload
Combine
Combine control
controlunits
units
adjacent to starting points and
andpotential
potential
adjacent to starting points

55
Compare
Compare territories
territories on
on
allocation criteria
allocation criteria

66
Assign
Assign salespeople
salespeopleto
to
new territories
new territories
Territory Design Process
 Stages in Territory Design

Step 1 Select Basic Control Unit

Step 2 Estimate Market Potential in Each

Control Unit

Step 3 Combine Control Units –Tentative

Territories

Step 4
Perform Workload Analysis

Step 5 Adjust Tentative Territories to Allow for Sales

Potential and Coverage Difficulty Differences

Step 6 Assign Salespersons to Territories

 Territory Design Procedures

 What are triggering events?

 The Buildup Method -- Six steps
1. Select control units
 Census tracts -- good for dividing cities
 Counties - convenient and data readily

available
2. Determine Allocation Criteria
 Territory balance -- effect on morale
 Customer balance - distribute commission

 Potential balance - share business growth

 Size balance - reduce transportation costs

 Geographic Control Units Used in Territory Design

Countries Cities
States or provinces Zip codes
Counties Census tracts
Metropolitan areas Customers
 Territory Design Procedures

3. Choose starting points

 Salesperson’s home
 Large customer - cut transportation cost

 Big city - convenient for services

4. Combine Adjacent Control Units

5. Compare Sales Territories
 Mountains, roads, population center
locations?
6. Assign people to Sales Territories
 Kentucky Counties, Major Cities, and Population Centers

The numbers in each county are

population figures and are
a measure of potential. OHIO

INDIANA

WEST
VIRGINIA

ILLINOIS

VIRGINIA

TENNESSEE

Kentucky Counties, Major Cities, and Population Centers

 Three Kentucky Sales Territories

The numbers in ach

county are
population figures
and are
a measure of
potential.
Major super highways OHIO
Territory borders

INDIANA

WEST
VIRGINIA

ILLINOIS

VIRGINIA

TENNESSEE
Three Kentucky Sales Territories
Comparing Three Kentucky Sales Territories

Potential as Measured by

Territory Population Number of Counties

1 1,124,897 47
2 1,129,290 27
3 1,131,137 43
Figure 11-4: Dividing a Large Territory
 Territory Design Procedures

 Talley’s Workload Approach

 No starting points
 Equates work to be done
 May lead to imbalance on size
 Often raises travel costs
 Good when reps are on salary
 Key: optimal call frequency for particular
classes of customers
 Workload Method
1. Classify all customers into sales volume categories

2. Determine the frequency with which each type of

account should be called upon and the desired length of
each sell

3. Calculate workload involved in covering entire market

4. Determine time available per salesperson

5. Apportion the salesperson’s time by task performed

6. Calculate the number of salespeople

 Experiences of a Consumer Durable Goods
Manufacturer with Territory Design
Deployment Analysis for Two Territories
Trading Present Recommended
Area* Effort (%) Effort (%)

Andy 1 10 4
2 60 20
3 15 7
4 5 2
5 10 3
Total 100 36

* Each territory is made up of several trading areas.

% The percentage of salesperson time spent in the trading area (100% = 1 salesperson).
 Experiences of a Consumer Durable Goods
Manufacturer with Territory Design
Deployment Analysis for Two Territories
Trading Present Recommended
Area* Effort (%) Effort (%)

Sally 1 18 81
2 7 21
3 5 11
4 35 35
5 5 11
6 30 77
Total 100 236
* Each territory is made up of several trading areas.
% The percentage of salesperson time spent in the trading area (100% = 1 salesperson). Thus,
the deployment analysis suggests that Andy’s territory requires only 0.36 salespeople, which
Sally’s territory needs 2.36 salespeople for proper coverage.
CALLPLAN Approach

Salesperson Input
1. What sales level will result from each current
customer and prospect if:
•no calls are made
•one half the present calls are made
•present level of calls is continued
•50 percent more calls are made
•a saturation level of calls are made
2. Probabilities that prospects will be converted into
customers given the different call frequencies
CALLPLAN Approach

CALLPLAN Output

1. Expected sales for all feasible call frequencies

2. Optimal number of calls for each client and prospect

3. Length of call for each client and prospect

 Computer Based Territory Designs

 Computers save time

 Need location & number of customers & starting
points
 Program options
 minimize moment of inertia
 Graph data & draw boundaries -- not optimal
 design optimal territories -- expensive
 Applications -- pharmaceutical reps