Sales Organization Structure

Merging Two Sales Forces

An Expert’s Viewpoint:
Zeneca and Astra were two independent pharmaceutical
companies that merged, forming AstraZeneca. Integrating
the two sales forces was a major challenge, for example,
Astra was more decentralized and Zeneca was more
centralized. The decision was made to develop a new
sales model that blended the advantages of centralization
and decentralization, and they decided to move to a
market-oriented sales organization structure.

Action
 Merging Two Sales Forces
An Expert’s Viewpoint:

Result

The new sales organization has been successful in

generating significant sales and market share growth.
Tony Zook, vice president of sales at AstraZeneca,
thinks that “by bringing together two winners, you can
create a champion.”
 ASTRAZENECA PLC
• SEVEN IMPORTANT AREAS OF HEALTHCARE SUCH
AS GASTROINTESTINAL, CARDIOVASCULAR,
ONCOLOGY, RESPIRATORY AND INFLAMMATION,
CENTRAL NERVOUS SYSTEM, PAIN CONTROL AND
INFECTION.
• THE GROUP HAS MANUFACTURING SITES IN 20
COUNTRIES.
• Brands include: LOSEC/PRILOSEC, NEXIUM,
SELOKEN/TOPROL-XL, PLENDIL, ZOLADEX,
CASODEX, ARIMIDEX, NOVALDEX, PULMICORT,
OXIS, SYMBICORT, ACCOLATE,
RHINOCORT, SEROQUEL, ZOMIG, DIPRIVAN,
NAROPIN, XYLOCAINE, ATACAND, ZESTRIL,
AND MERREM/MERONEM.
 ASTRAZENECA PLC

Sales in 2002
• $17.8 billion with $2.8 billion in profits or
16% profit on sales
• $303,000 sales per employee
• 58,700 employees
 Sales Organization Concepts

Specialization
The degree to which individuals perform some of the
required tasks to the exclusion of others. Individuals
can become experts on certain tasks, leading to better
performance for the entire organization.

Centralization
The degree two which important decisions and tasks
performed at higher levels in the management
hierarchy. Centralized structures place authority and
responsibility at higher management levels.
Sales Force Specialization Continuum

Generalists Some specialization Specialists

All selling activities of selling activities, Certain selling
and all products to products, and/or activities for certain
all customers customers products for certain
customers
Span of Control vs. Management Levels

Flat Sales Organization

National

Management Levels
Sales
Manager

District District District District District

Sales Sales Sales Sales Sales
Manager Manager Manager Manager Manager

Span of Control
 Span of Control vs. Management Levels
Tall Sales Organization

National Sales
Manager

Management Levels
Regional Sales Regional Sales
Manager Manager

District District District District District District

Sales Sales Sales Sales Sales Sales
Manager Manager Manager Manager Manager Manager

Span of Control
 Line vs. Staff Positions

National Sales Manager

Sales Training Manager

Regional Sales Managers

Sales Training Manager

District Sales Managers

Staff Position

Salespeople Line Position

 Geographic Sales Organization

Simplest National Sales Manager

and most
Sales Training Manager
common

Eastern Region Sales Manager Western Region Sales Manager

Zone Sales Managers (4) Zone Sales Managers (4)

District Sales Managers (20) District Sales Managers (20)

Salespeople (100) Salespeople (100)

Sales territories
 Product Sales Organization

National Sales Manager

Duplication?

Office Equipment Sales Manager Office Supplies Sales Manager

District Sales Managers (10) District Sales Managers (10)

Salespeople (100) Salespeople (100)

P&G product managers

 P & G, $43 billion in sales
• Thirteen of P&G's brands are billion-dollar
sellers (Always/Whisper, Ariel, Bounty,
Charmin, Crest, Downy/Lenor, Folgers,
Iams, Olay, Pampers, Pantene, Pringles,
and Tide).
• P&G bought haircare giant Clairol (Nice 'n
Easy, Herbal Essences, Aussie)
 Market Sales Organization
National Sales Manager

Commercial Accounts Government Accounts

Sales Manager Sales Manager

Sales Training
Manager

Zone Sales Managers (4) District Sales Managers (5)

District Sales Managers (25) Salespeople (50)

Salespeople (150)
 Functional Sales Organization

National Sales Manager

Field Sales Manager Telemarketing Sales Manager

Regional Sales Managers (4) District Sales Managers (2)

District Sales Managers (16) Salespeople (40)

Salespeople (160)
 Sales Organization Structures:
Identifying Major Accounts

Large Large Major

Account Account
Size of Account

Regular Complex
Small Account Account
Simple Complex
Complexity of Account
Sales Organization Structures:
Major Accounts Options

Develop Major Account Salesforce

Assign Major Accounts to

Sales Managers

Assign Major Accounts to Salespeople

along with Other Accounts
 Comparison of
Sales Organization Structures
Organizational
Structure Advantages Disadvantages

• Low Cost
• Limited specialization
• No geographic duplication
• Lack of management
Geographic • No customer duplication
control over product or
• Fewer management levels
customer emphasis

• Salespeople become experts

• High cost
in product attr. & applications
Product • Geographic duplication
• Management control over
• Customer duplication
selling effort
 Comparison of
Sales Organization Structures
Organizational
Structure Advantages Disadvantages

• Salespeople develop
better understanding of
unique customer needs • High cost
Market
• Management control over • Geographic duplication
selling allocated to different
markets

• Efficiency in performing
Functional
selling activities
• Geographic duplication
• Customer duplication
• Need for coordination
 Hybrid Sales Organization Structure
National Sales Manager

Commercial Accounts Government Accounts

Sales Manager Sales Manager

Major Accounts Regular Accounts Office Equipment Office Supplies

Sales Manager Sales Manager Sales Manager Sales Manager

Field Sales Telemarketing

Manager Sales Manager

Western Eastern
Sales Manager Sales Manager