SALES TERRITORY IN

MANAGMENT
Lecture 10
October 30th, 2019
Learning Objectives
• Understand the nature & scope of territory management
• Identify the reasons for establishing and revising
territories
• Describe the objective, criteria & basis for territory
formation
• Outline a model of territory management
• List and discuss routing pattern
Defining the term
Sales Territory
Sales Territory
• It is a configuration of current and potential accounts, for
which responsibility has been assigned to a particular sales
representative

• Salespeople responsible for individual accounts (Account

Management)

• Salespeople are also responsible for group of accounts

(Territory Management)

• Although geographic consideration play a role in setting

boundaries, Sales Territories are primarily based on
Customer Grouping
Sales Territory Management
• Can be defined as Planning, Implementation and
Control of salespersons' activities with the goal realizing
the sales and profit potential of their assigned territories

• Geographic boundaries are created mainly for

convenience but exempt selected accounts

• Key Business accounts require special attention, time and

experience.
Scope of Territory Management
• Salespersons bear the ultimate burden of managing parts
of the customer base

• Managing their territories, salespeople manage

themselves and their time, not the activities of other
people
Assigning Territories
Many options available with sales managers

• Geography

• Market Potential

• Servicing Required

• Workload
National
Regional North

South
 Areas
Area Sales Managers Pindi

F. Abad

Multan
Lahore 2

Lahore 1
Bahawalpur
Sales Rep’s Territory
Based on Area (Geography)

• Sindhi Muslim Society, Tunisia Line Nursery

• Tariq Road, Khalid Bin Walid Road
• Sharfabad, Bahadarabad
• Mehmoodabad, Baloch Colony
• PAECHS 6, Chunaisar Halt
• Defense commercial Market
• DHA 2,3, 4,5
• Delhi.Colony, Punjab Colony, Gizri
 Section Plan for Territory
Area A B C D Total
S.Muslim, Tunesia Line Nursary 06 14 20 20 60
Tariq Road, K.Walid Road 12 15 15 20 62
Sharfabad,Bahadar Abad 10 12 20 20 62
Mehmood Abad, Baloch Colony 07 13 25 22 67
PECHS 6, Chunaisar Halt 12 18 12 18 60
D. Commercial Market 15 13 12 10 50
DHA 2,3 13 15 15 15 58
DHA 4,5 14 14 12 10 50
Delhi.Colony,Punjab Colony 10 20 20 15 65

TOTAL 99 134 151 150 534

 Territory Coverage Plan
Days Area A B C D Total Avg Sales
M 1&3 Sadar 10 12 20 18 60 75,000.00
T 1&3 P.Street, B.Road 08 10 22 20 60 50,000.00
W 1&3 S.Muslim, T.Lines 06 14 20 20 60 40,000.00
T 1&3 JacobLines, B.J.Lines 04 12 25 22 63 40,000.00
F 1&3 Tariq Rd., K.Walid Rd 12 15 15 20 62 85,000.00
S 1&3 Sharfabad,B.Abad 10 12 20 20 62 65,000.00
M 2&4 Mehmoodabad, Baloch 07 13 25 22 67 45,000.00
T 2&4 PECHS, ChunaisHalt 12 18 12 18 60 75,000.00
W 2&4 Clifton, B.B 15 13 12 10 50 100,000.00
T 2&4 DHA 2,3 13 15 15 15 58 80,000.00
F 2&4 DHA 4,5 14 14 12 10 50 80,000.00
S 2&4 D.Colony,P.Colony 10 20 20 15 65 55,000.00
TOTAL 121 168 218 210 717 790,000.00
Sales Rep’s Territory
• Active List Territory Coverage.xlsx
MODERN CHALLENGES
FACED BY SALES FORCE
CHALLENGES FOR SALES FORCE
• Selling cost has gone up faster than sales volumes

• Sales productivity has suffered a lot individually, collectively

pressure of competition, purchases, distribution is increasing

• Sales force is selling less, senior executives are looking to the sales
organizations to improve their performance

• Major reason of decline in sales force productivity is that sometimes

they spend too much time on non selling activities

▫ Administrative tasks
▫ Internal Meetings
▫ Travel
CHALLENGES FOR SALES FORCE
• Selling cost has gone up faster than sales volumes

• Sales productivity has suffered a lot individually, collectively

pressure of competition, purchases, distribution is increasing

• Sales force is selling less, senior executives are looking to the sales
organizations to improve their performance

• Major reason of decline in sales force productivity is that sometimes

they spend too much time on non selling activities

▫ Administrative tasks
▫ Internal Meetings
▫ Travel
REASON FOR CREATING
SALES TERRITORIES
 Reasons for Creating Territories
• Sales territories lead to accountability at lowest level
• To ensure/obtain thorough market coverage
• To improve customer relations
• To establish each salesperson’s responsibility
• To evaluate performance of each individual
• To enhance control
• To benefit both, salesperson and the company
Reasons for Creating Territories
• Intensive market coverage - Produce higher sales

• Provide excellent customer service- Greater Satisfaction

• Foster enthusiasm - Lead To Less Turnover

• Facilitate performance evaluation - Rewards/incentive

• Enhance control - Reduce Expenses

• Coordinate promotion - Give More

Benefits of Creating Territories
• The scope of activities broadens of a Sales Manager
• Sales force Stops behaving like postman
• Sales force takes responsibility for making things happen
• Sales territories are smallest units of a firm’s market
• Can be well serviced by individual salespersons
• Break down customer base of a firm
• One of the most important responsibilities of sales
management
Managing Territories
Model – Territory management
Analysis
Accounts load
Acct Potential Quotas
Service Require Reporting procedures
Review revision
Objectives
Control
Sales share
Profit targets
New business targets

Strategies
Call frequencies
Product offering
Pricing Calling prospects
Servicing account
Tactics Reporting
Service Require
Territory coverage Implementation
Routing
Scheduling
Managing Territories
Plans activity
• Establishes objectives
• Estimates the resources needed
• Designs strategies
(efficient utilization of resources to ach objective)

Implements
• Puts the plan into action

Control
• Feed back mechanism
Routing Techniques in
Territory Management
Routing in Territory Management
• Territory routing plans incorporate information
developed in the territory analysis

• Good routing plans minimize the backtracking and criss-

crossing that would otherwise occur.

• Routing is a travel plan used by a salesperson for making

customer calls in a territory

• Reasons for routing:

▫ Reduction in travel time and cost
▫ Improvement in territory coverage
Common Routing Techniques
• Straight line—With a straight-line plan, salespeople start from their
offices and make calls in one direction until they reach the end of the
territory. At that point, they change direction and continue to make
calls on a straight line on the new vector.

• Cloverleaf—Using the cloverleaf pattern, a salesperson works a

different part of the territory and travels in a circular loop back to the
starting point. Each loop could take a day, a week, or longer to
complete. A new loop is covered on each trip until the entire territory
has been covered.

• Circular—Circular patterns begin at the office and move in an

expanding pattern of concentric circles that spiral across the
territory. This method works best when accounts are evenly
dispersed throughout the territory.
Common Routing Techniques
• Hopscotch - In this shape, the salesperson begins from the last point
from office and reach out the customers while coming back to the
office. While going, the salesperson does not stop anywhere and
attends calls in one direction while coming back to the office.
QUESTIONS?