Compare the three sales force structures outlines in the Kot

Compare the three sales force structures outlines in the Kotler textbook. Which is the most effective. Why?

Solution

Importance of Sales

The original and oldest form of direct marketing is the field sales call. Many business marketing organizations use field salespersons to contact purchasing staff of companies and present their products and offers to them. Similarly many consumer companies like insurance companies and stockbrokers employ field sales persons. Even in company owned outlets, there are salespeople to help consumers locate the right product and buy it.

US firms spend over a trillion dollars annually on sales forces and sales force materials-more than they spend on any other communication or promotion method. Nearly 12 percent of the total workforce work full-time in sales occupations.

Average cost of a sales call ranges from $200 to $300. Closing a sale typically requires four calls, hence the total cost can range from $800 to $1,200. Hence, companies are trying to increase the productivity of sales force through better selection, training, supervision, motivation and incentives.

In the territorial sales force structure, each salesperson is assigned to an exclusive geographic area and sells the company\'s full line of products or services to all customers in that territory. This organization clearly defines each person\'s job, fixes accountability, and increases the person\'s desire to build local business relationships that improve selling effectiveness. The product sales force structure allows the sales force to sell along product lines; the seller becomes very knowledgeable about products. This method can cause duplication of efforts and several salespersons calling on the same accounts. The customer sales force structure organizes along customer or industry lines; this can help a company to become more customer focused and build closer relationships with important customers.

The territorial sales force structure is the most effective because in this each salesperson is assigned to an exclusive geographic area and sells the company\'s full line of products or services to all customers in that territory. This organization clearly defines each person\'s job, fixes accountability, and increases the person\'s desire to build local business relationships that improve selling effectiveness.