Sales

Organisation
Structure
 Sales
organization
• An organization of individuals either
working together for the marketing of
products and services manufactured
by an enterprise or for products that
are procured by the firm for the
purpose of reselling
• A sales organization defines duties,
roles, rights, and responsibilities of
sales people engaged in selling
activities meant for the effective
execution of the sales function
Factors influencing
structure
• Product and service related factors
• Organization related factors
• Marketing mix related factors
• External factors:
 the speed of market change
 reduction in the number of vendors per buyer
 closer to customer relationships
 changes in regulations and international practices
Centralization vs
Decentralization
• Centralization
 the degree to which decision making is concentrated
at a single point in the organization
 top-level managers make decisions with little input
from subordinates in a centralized organization
• Decentralization
 the degree to which decisions are made by lower
level employees
 distinct trend toward decentralized decision making
 Tall & Flat
Organization
Structures
• Flat structures
 Reduces the levels of management.
 Widens span of control of
management at various levels of
organisation.
 More decentralized with regard to
decision-making
 Span of Control vs.
Management Levels

National
Sales
Manage
r

District District District District District

Sales Sales Sales Sales Sales
Manage Manage Manage Manage Manage
r r r r r
 Tall & Flat
Organization
• TallStructures
structures
- Have many levels of authority
relative to the organization’s size.
- As levels in the hierarchy increase,
communication gets difficult.
- The extra levels result in more time
being taken to implement decisions.
- Narrow span of control
- More centralized decision making
 Span of Control vs.
Management Levels
National
Sales
Manager

Regional Regional
Sales Sales
Manager Manager

District District District District District Distric

Sales Sales Sales Sales Sales t Sales
Manage Manage Manag Manage Manage Manag
r r er r r er
Basic Types of Sales
Organisation
Structure
• The grouping of activities into positions and the
charting of relationships of positions causes the
organization to take on structural form.
• The most common structures are line & line and staff.
• Functional organizational structures are rare.
• Most sales department have hybrid organizational
structures, with variations to adjust for personalities
and to fit specific operating conditions.
 Line Sales
Organization
 Lines of authority and instructions are
vertical, i.e. they flow from the top to the
bottom.

 The unity of command is maintained in a

straight and unbroken line. It implies that
each subordinate receives instructions
from his immediate superior alone and is
responsible to him only.
Line Sales Department
Organisation
Line & Staff Sales
Organisation
 Refers to a pattern in which staff specialists
advise managers to perform their duties.

 Staff managers provide advice to the line manager

who are generally specialists in the field.

 Staff positions are purely advisory in nature. They

have a right to recommend but have no authority
to enforce their preference on other dept.

 The line executives are the “DOERS” or

commanders, where as, the specialists are the
“THINKERS” or advisors.
Line & Staff Sales
Organisation
Functional Sales
Organization
 Functional structure is created by
grouping the activities on the basis of
functions required for the
achievement of organizational
objectives.
 Authority relationships in functional
structure may be in the form of line,
staff & functional.
Functional Sales
Organization
Schemes for Dividing
Line Authority In the
Sales Organisation
Tasks of line administration are
subdivided among these new assistants in
one of the 3 ways:-
– By Products : divisions created
according to the type of product or
service.
– By Geographic area: divisions based on
the area of a country or world served.
– By Market: divisions based on the types
of customers served.
 Customer and Product
Determinants
of Sales Force
Specialization
Customer Needs Different

Simple Complex
Product Range of
Offering Products

Customer Needs Similar

Product Sales
Organization
Geographic Sales
Organization
Market Sales
Organization
 Hybrid Sales
Organization
•
Structure
Many large organizations have
divisional structures where each
manager can select the best structure
for that particular division.
– One division may use a functional
structure, one geographic, and so
on.
• This ability to break a large
organization into many smaller ones
makes it much easier to manage.
 Hybrid Sales
Organization Structure