In this specific article, I will explain the: (i) Definition of Sales Organization Structure, (ii) Objectives of Sales Organization Structure, (iii) Importance of Sales Organization Structure, (iv) Types of Sales Organization Structure…
Definition of Sales Organization Structure-
What is a Sales Organization Structure??
The sales organization is the grouping or division of sales performing activities to the various personnel or members of the organization in order to attain the sales target in accordance with the design sales plan. In an organization, they have a separate department regarding their sales and the department name is sales management department.
Therefore, the sales organization is design to attain the various objectives that the company is seeking such of profit maximization, revenue generation, attainment of sales quotas, establishing brand image or attainment of market share.
Objectives/Purpose/Importance of Sales Organization-
The objectives of a sales organization are also known as the importance of a sales organization. It includes various points such as:-
1. Revenue generation-
This is the first objective of a sales organization and it can be as a forecast objective of the sales organization is revenue generation since revenue is the lifeblood for any company to operate in an appropriate manner. Although, Revenue is also known as the backbone of any company or an organization because it helps to provide the balance of statement.
In every sale organization, this objective plays an efficient factor affecting role for our sales manager or an organization.
2. To build reporter and reportee relationship-
The sales organization ensure that who is the reporter and reportee. There will be no confusion that what authority will be followed and all the operation of the sales team are carried in a synchronous manner. In this objective, the sales organization follow the level of management between the reporter and reportee.
3. To ensure all sales activities are streamlined-
In this objective of a sales organization, the various sales activities consist to identify the potential buyers (prospects) approaching the prospect, giving a sales presentation, handling objections, and finally close the sales process.
If in an organization, the sales activities are not structured or maintained in an efficient manner then the sales of a particular product will not be achieved. So, that is the reason, the sales organization or department always focus on to maintain the sales activities and as well as target the potential buyers or customers.
4. To ensure coordination-
Sales organization ensure all the efforts of sales members are coordinated or harmony to attain the sales goal. In an organization, they have various departments like purchase, sales, manufacturing, finance, and other departments and these all the departments are helps to maintain the perfect coordination between various individuals (whether it is suppliers, dealers, or customers).
Therefore, in the sales organization, the sales department maintain or build a courageous relation with the intermediaries like suppliers or dealers and customers also.
5. To define authority-
Authority is a type of power of sales manager or executive control over the salespeople. It also ensures the proper span of control and unity of command. Through authority, the manager can take all the decisions regarding their particular task, on work, and on their employees because it indicates the power to choose a particular course of action.
In simple words, the authority will give an idea about responsibility relationship and delegation of task and duties the concerned will be responsible for controlling the sales activities and acting as a supervisor for a particular workgroup involved selling activities.
6. To build effective salesforce:-
In this objective or importance of sales organization, an effective sales team should comprise of sales member who is having wonderful selling skills and they are synergy. So that sales target are achieved or attained in an appropriate manner.
In simple words, an effective sales force management comprises of sales personnel or managers who have the responsibilities to attain the objectives for enhancing the sales.
7. To prepare the sales budget-
The sales budget highlights or represents the sales expenses involved such as…
- Transportation cost,
- Promotion or Advertisement cost,
- Tele-calling expenses,
- Remuneration or incentive paid to the salespersons.
8. To allocate sales territories-
The sales territories refer to the grouping to customers in a particular area located to a particular sales plan. This objective also helps to decide the prospects or target buyers of a companies product. So, that is the reason, sales territory is also the main importance of a sales organization.
Structure and Types of Sales Organization Structure-
The different types of sales organization structure can be classified into six basic categories:-
1. Formal sales organization structure
2. Informal sales organization structure
3. Functional sales organization structure
4. Geographic sales organization structure
5. production organization structure
6. Customer-based organization structure
1. Formal Sales Organization Structure-
In this types of sales organization structure the duties and to be of all sales members defined. There is clarity in authority, accountability, and responsibility. All the rules and regulations are in written form the members of the group are required to follow the regulations strictly.
Characteristics of Sales Organization Structure-
It includes various characteristics like:-
(i) It helps in attainment of organizational goals.
(ii) It ensures coordination so that all sales activities are done synchronously.
(iii) It defines logical authority.
(iv) It results in the division of work and specialization.
(v) It consists of rules and regulations policies in written form.
(vi) It ensures the scalar chain and span of control.
2. Informal Sales Organization Structure-
This types of sales organization structure is an interlocking social structure that governs how people work together in practice. It is the combination of behavior, interaction values, and norms through which work is accomplished and the relationship is built among the various individuals who share a common organization combination.
Characteristics of Informal Sales Organization Structure-
It includes various characteristics like:-
(i) These structures perpetuate social and cultural value in a group.
(ii) They provide social status and satisfaction.
(iii) Smooth communication is possible among the members of a group.
(iv) They provide social control by influencing and regulating behavior inside and outside the group.
(v) It indicates social affection or love.
3. Functional Sales Organization Structure-
This types of sales organizational structure is a particular structure in which expert advice are fully utilized. Here all sales executives receive direction on GM sales and are accountable to different executives with respect to their functions.
The top sales executives have coordination responsibility for small and medium firms and the coordination function is difficult and complicated.
4. Geographic Sales Organization Structure-
In these types of sales organization structure, sales representative are looking after the local territories. The organization is a better position to respond to local needs. This organization structure is flat and there is a short line of communication.
Proper routing makes travel plan easier sales representative may not be very much knowledge about the whole product line. They are selective in promotional approach.
5. Production Organization Structure-
Production organization structure issued when the company uses diversified products lines. At the top of position is the sales head (All India) who is supported by regional manager and area manager sales. At lower level/sales plan who are specialized can work.
The diversity of the product line makes it necessary for the categories sales representative.
The respective product lines are handled by a various sales representative.
6. Customer-Based organization Structure-
The customer-based organization structure helps to standardized the product but the requirement of different categories. Customers are so varied that separates salespersons need to assign to them.
Xerox is a perfect example using customer-based organization structure. A phone company can also adopt this structure for general trade. Hospitals/Institutional trade and export trade divisions.
It is a customer-oriented approach to the unique problem of each customer grouping stative into account the problem can be of overlapping geographical categories which mean in some territory there can be the different serving same kind of customers.
So, these are all types of sales organization structure…