CHAPTER 11

Designing Territories
 WHAT IS A TERRITORY?

 Number of present and potential

customers located within a
geographic area and assigned to a
sales person
 BENEFITS OF
TERRITORIES
 Ensures proper market coverage
 Improves customer relations
 Increases morale and productivity
 Control and evaluation
 Reduces selling costs
 WHEN ARE TERRITORIES
UNNECESSARY?
 When contacts are infrequent
 When a great deal of prospecting is
involved
 DESIGNING TERRITORIES

 The ideal situation: have all districts

equal in sales potential and work
load
 DESIGNING TERRITORIES

 Select a control unit for boundaries

 Analyze workload
 Determine territories based on sales
potential and call patterns
 Assign people to territories
 Establish a coverage plan
 Ongoing assessment
 CONTROL UNITS

 States
 Counties and Parishes
 Cities and Zip Codes
 Metropolitan Statistical Areas
 Trading Areas
 ANALYZING WORKLOADS

 Nature of the job

 Nature of the product
 Stage of market development
 Intensity of market coverage
 Competition
 Market characteristics
 DETERMINE BASIC
TERRITORIES
 Buildup Method
 Breakdown Method
 BUILDUP METHOD

 Determine number, location, and size

of clients
 Determine desirable call patterns
 Determine number of accounts to
assign to each sales person
 Draw boundaries
 BREAKDOWN METHOD

 Determine sales potential

 Determine volume expected from
each person
 Determine number of territories
needed
 Tentatively establish territories
(based on volume)
 Modify as required
 BREAKDOWN METHOD

 EXAMPLE TO DETERMINE NUMBER

OF TERRITORIES:
If total potential is $20 million and
average volume per person is
$500,000 then 40 sales reps are
required in 40 territories
 BREAKDOWN METHOD

 EXAMPLE TO DETERMINE
TERRITORY VOLUME:
With 40 reps, we should establish
territories with 2.5% of the
company’s total sales potential
(100%/40 = 2.5)
 USING SOFTWARE

 Save time
 Costly
 Some programs can’t adjust for
physical barriers
 FROM THE INTERNET...

 Software Examples:
 Tactician 4
<http://www.tactician.com/product/
prd002.htm>
 Territory Mapper
<http://www.territorymapper.com/>
 ASSIGNING PEOPLE TO
TERRITORIES
 Match characteristics
 Overlapping territories
 Personnel issues when revising
territories
 TERRITORIAL COVERAGE

 Routing
 Scheduling
 ONGOING ASSESSMENT

 Sales and costs studies

 FROM THE TEXT...

 Read everything from Chapter 11

except “Simulating New Territories”
on pages 530 to 531.