Sales organization structure

sales organization structures

1. Structures of sales organization
Structure?

2. Basic Types of Sales
Organisations
Sales organisations are generally classified into
four basic types:
•Line Organisation
•Line and staff organisation
•Functional organisation
•Horizontal organisation
We shall discuss main characteristics, advantages,
and disadvantages of each type of sales
organisation

3. Line Organization
Head
Marketing
Sales
Manager
Area Sales
Manager1
Area Sales
Manager3
Area Sales
Manager2
Area Sales
Manager4
salespeoplesalespeoplesalespeoplesalespeople

4. Characteristics: All managers have line authority to direct and
control subordinates. Used in small firms / departments
Advantages: Simple organization, clear authority, quick decisions,
low cost
Disadvantages: No support to line managers from subordinates
who have specialized knowledge / skills. Less time for planning /
analysis

5. Line and Staff Organization
Head-Marketing
Marketing Research
Manager
Sales Manager
Promotional
Manager
Customer Service
Manager
Area Sales
Manager-1
Area Sales
Manager-1
Area Sales
Manager-1
Salespeople Salespeople Salespeople

6. Characteristics: Specialist staff managers are available for senior
marketing / sales managers. Staff managers’ role is to assist / advise line
managers. Used in medium and large size organizations
Advantages: Better marketing decisions, superior sales performance
Disadvantages: High cost and coordination, slower decision making,
conflict may arise if staff managers’ role is not clear

7. Functional Organization
Head-Marketing
Marketing Research
Manager
Promotional
Manager
Customer Service
Manager
Sales Manager
Area Sales Manager #4
Salespeople

8. Characteristics: Each functional specialist has line responsibility over
salespeople. Used by a large firm with many products / market
segments, minimizing line authority to functional managers
Advantages: Qualified specialists guide sales force, simple to
administer
Disadvantage: confusion due to more managers giving orders to sales
force

9. Horizontal Organization
Research & Design Team:
•Customer Research
•Product / Service Design
Planning Team:
•Strategic Planning
•Accounts, Finance
•HR, Administration
•Chief Operation Officer
Operations Team:
•Production / Operations
•Quality Assurance
•Systems Engineering
Customer Support Team:
•Information
•Service
•Training
Customer Satisfaction
Team:
•Sales & Marketing
•Pricing, Promotion
•Channels, Logistics

10. Characteristics: Removes management levels & departmental
boundaries. Except planning team, all others are members of cross-
functional teams. Used by firms having partnering relationships with
customers.
Advantages: Reduction in supervision, unnecessary tasks, & cost;
Improved efficiency and customer responses.

11. Specialization within Sales Organization
•Needed to increase effectiveness of sales force
•Done by expanding basic sales organization
•Basis of specialization
•Geography
•Type of product
•Market
•Combination of above
•Criteria for selection – (1) nature of product, (2)
sales force abilities, (3) demands of selling job,
(4) customer and market facts

12. Geographic Specialization
Head-Marketing
Marketing Research
Manager
General Sales
Manager Promotion
Manager
Customer Service
Manager
Branch Sales
Manager-1
Branch Sales
Manager-2
Branch Sales
Manager-3
Branch Sales
Manager-4
Salespeople Salespeople Salespeople Salespeople

13. Characteristics: salespeople, assigned geographic areas, are responsible
for all selling activities to all customers within assigned areas. Branch sales
managers adjust marketing plan to local needs
Advantages: Better market coverage and customer service, more control
over sales force, quick response to local conditions & competition
Disadvantages: Limited specialization of marketing tasks. Hence, it is
combined with product / market sales organization

14. Product Specialization
Head-Marketing
Marketing Research
Manager
General
Sales Manager
Sales Training
Manager
Promotion
Manager
Area Sales Managers –
Product Group ‘A’
Area Sales Managers –
Product Group ‘B’
Salespeople –
Product Gr. ‘A’
Salespeople –
Product Gr. ‘B’
Fig. ‘x’ Sales Organisation with product specialised salesforce

15. Advantage: Each product gets specialized attention from the salesforce
Disadvantage: Sometimes, more salespeople contact the same customer,
resulting in customer dissatisfaction and higher cost

16. Market Specialization
General Sales
Manager
Sales Manager-
International-
Markets
Sales Manager-
Commercial
Sales Manager-
Consumer Markets
Sales Manager-
Government
Area Sales Mgrs
International
Sales Executives
Area Sales Manager-
Commercial
Salespeople
Area Sales Manager-
Government
Salespeople
Area Sales Mgrs-
Consumer Markets
Salespeople

17. •Characteristics: Desirable when customers are classified by type, user
industry, or channel. Salespeople carry out all activities for all products only
for specific customer groups
•Advantages: Meets needs of specific customer groups, implements
customer-centerd philosophy of the company
•Disadvantages: Geographic duplication, high cost

18. Combination Sales Organization
Director – Sales
& Marketing
General Manager
Sales - North
General Manager
Sales - East
General Manager
Sales - South
General Manager
Sales - West
Regional Sales
Mgr. – Govt.
Regional Sales
Mgr. - Dealers
Regional Sales
Mgr. - Commercial
Salespeople Salespeople Salespeople

19. •Characteristics: Many firms use some combination of specialisation
organizations, called hybrid or combination sales organisation, with
a view to minimize disadvantages and maximize advantages of
specialization organizations

20. Thanks for listening
patiently
An effort by: Vivek Gautam