Chapter 6 Sales Force Planning And Organizing

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By Group C

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The Purpose and Benefits of Planning

improving morale when the entire sales

organization actively participates in the planning process providing direction and focus for organizational efforts improving cooperation and coordination of sales force efforts developing standards by which sales force performance can be measured and deviations can be identified to take corrective actions increasing the sales organizations flexibility in dealing with unexpected 8/22/12 developments

Planning at Different Levels of Management

Type Strategic planning Participants CEO, boards, president, senior VPs Focus company mission, vision, goals, primary strategies, overall budgeting departmental, yearly, and quarterly plans, policies, procedures, budgets branch plans and budgets

Tactical planning general sales manager, director of marketing

Monthly and weekly planning Daily planning

regional sales managers

sales supervisors and sales unit plans and budget reps

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Sales and Operational Planning Process

Develop performance standard controls so they can compare actual performance to predetermined standards. Objectives are specific results desired within a designated time frame, for example, become best service-oriented sales force. Predetermined approaches for handling routine matters or reoccurring situations are called policies.

Tactics are day-today actions that make up the strategic plan, for example, using special sales contests to spur sales of products.

A strategy is an overall program of action for using resources to achieve a goal or objective.

Detailed descriptions of specific steps for carrying out actions are called procedures.

Stages in the Sales Management Planning Process

Analyze the situation. Set goals and objectives.

Determine market potential and forecast sales. Develop strategies.

Allocate resources and develop budgets. Evaluate and control.

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Analyze the Situation

Set Goals and Objectives

1.

Sales goals

Set goals and objectives

2.

Sales objectiv es

implement a sales management training program for new sales managers within two years reduce sales force turnover to below the industry average over the next five years

increase sales by 15% next year reduce customer complaints by 10% next year increase the number of new customer accounts by 20% in the next six months

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Determine Market Potential and Forecast Sales

1. Market potential Determine market potential and forecast sales 2. Sales potential

the maximum possible sales for an entire industry

3. Market capacity

the maximum possible sales for a company

the units the market will absorb if the product or service is free

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Develop Strategies: Four Types Of Growth Strategies

Current product Current market
A. Market penetration Market penetration focuses on increasing sales of current products in current markets by more intensive marketing efforts.

New product
B. Product development Product development creates new or improved products for current markets by adding new sizes, models with new features, alternative quality versions, or creative new alternatives to satisfy the same basic needs. D. Product diversification

New market

C. Market development

Market development seeks to open upDiversification refers to expansion new markets for current products. into new product lines or by purchasing new businesses.

Business Portfolio Approach: Strategic Business Units (SBU)

SBUs are divisions of major firms within multiple

product companies. classed as an SBU.

A division, product line, or single product may be Each SBU has its own management. SBUs are evaluated on their profit and growth

potential as standalone firms.

SBUs have several characteristics:

distinct mission

separate management unique customer segments their own competitors planning independent of other company units 8/22/12

Stakeholders

Performance Standards and Measures

Customer Service Internal measures Components

External measures

1. Industry Reliability averages 1. Custo mer satisfaction Tangibility 2. Past performan ce 2. Societal satisfaction

Responsive 3. Mana ness gerial expectatio ns

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Planning Tools

Unsuccessful planning may result from making erroneous assumptions. Thus, management must make assumptions about the future by using these tools tools: Planning two 2.
1. Dialectic planning Contingency planning

Dialectic planning examines the validity of assumptions in a forecast. Calls for making a new set of assumptions to revaluate previous plans. Plans are rigorously challenged; a second plan is prepared.

A contingency plan is a backup plan to the one adopted, and it will be executed only if events occur beyond the control of the major plan.

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Types of Organizations

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Line Organization for Marketing and Sales

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Types of Sales Department Organizations

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Geographic Sales Organization

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Product Sales Organization

Honda has product lines that include the following: automobiles lawn mowers generators motorcycles 8/22/12

Functional Sales Organization

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Customer/Market Sales Organization

Aircraft manufacturers have different marketing efforts for the following : government military commercial markets

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Combination Sales OrganizationOrganized by Geography, Products, and Customers

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Size of the Sales Force

1. Equalized workload Size of the sales force 2. Incremental productivity

assumes that the total workload in covering the market consists of three factors: a) customer size b) sales volume potential c) travel time

3. Sales potential

based on assumption of what the average sales representative will achieve in annual sales volume, then divide by year sales forecasted

assumes the sales force should be increased until profits added by the last salesperson hired equal the costs of employing that salesperson.

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Guidelines for Developing a High-Quality Sales Organization

Be sure authority equals responsibility. Put salespeople where they fit best. Be willing to delegate. Be more than just an efficiency expert. Hold sales personnel accountable for what they do. Be flexible. Know what needs to be done. Organize the sales force to avoid unequal workloads.

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