A sales territory is defined as the space that consists of existing and potential customers assigned to a sales person

Advantages of setting up sales territories

Maintain and increase market coverage Controlling sales expenses Better evaluation of sales force performance Maintain and improve customer relations Increase sales force effectiveness Improve co-ordination with marketing team

Situations where setting up sales territory is not advisable

For small companies which have slim sales force size When personal contacts or relationships are the basis of marketing a product or a service eg: Insurance policy or network marketing (Amway,Oriflame,etc) Not suitable for products which adopt exclusive distribution model

Factors to be considered for sales territory mapping

Topography/geography of the region Development level of transport infrastructure Format of the transport infrastructure Availability of modes of public transport Density of customers

Routing and scheduling

1) Straight Line/ Hopscotch Route Plan
C1 Base C5 C4 C3 C2

2) Circular Route Plan

Base

 Clover Leaf Plan

Base

Build-up method of sales force requirement planning

Objective is to give equal work load to each sales person Classify customers based on their sales potential i.e A,B,C grade Potential and target of each territory may differ

How sales people spend their time

Tasks Intensive Distribution Time Spent (%) Face to face calling 60 Selective Distribution Time Spent (%) 30 Industrial sales Time Spent (%) 40

Waiting/travelling Administrative
Telephone calling Service calls/ trouble shooting Total

20 15
05 100

40 15
10 05 100

20 20
10 10 100

Build up method of sales force req. planning (eg: Selective distribution) Territory X Total Total Call Total Time Customer Call freq. No. of No. of calls Avg.Call time Avg. travel travel reqd Type p/m cust. p/month time (mins) (hrs) time (mins) Time (Hrs) (Hrs) A 4 25 100 45 75 30 50 125 B 2 45 90 25 37.5 30 45 82.50 C 1 65 65 15 16.25 30 32.5 48.75 128.8 127.5 256.3 Working hrs per day per salesman Working hrs per month per salesman Hrs avlb for calls p/m Sales person reqd 8 184 23 working days p/m 129 70% of total working time spent 2.0

Evaluation of relative ability of sales person

Parameters Product Knowledge Market Knowledge Weightage 0.15 0.15 Evaluation 0.9 0.8 Sales Person Score (A x B) 0.135 0.12

Past Sales Performance

Communication skills Selling skills Total

0.35
0.15 0.20 1.00

1
0.8 0.9

0.35
0.12 0.18 0.905

Use of IT in Territory Management

Software available in market like Arc Editor, Arc GIS,etc Can help devise multiple permutations and combinations for optimal territory planning High cost of software Does not factor in intangible factors Does not factor in local infrastructure details of each territory