1. Introduction and Functions of Sales Organization
Organization means the systematic coordination of the functions essential to achieving organizational objectives. The objective of a sales organization, therefore, is the performance of various activities necessary to promote sales. The functions of sales organization can be classified as follows.
1. Planning functions
a) Sales forecasting
b) Sales budgeting
c) Selling policy
Administrative functions
a) Selecting salesmen
b) Training salesmen
c) Control of salesmen
d) Remuneration of salesmen
Executive functions
a) Sales promotion
b) Selling routine – execution of customer’s orders.

2. Role of Sales Organization
Once the sales plan has been formulated, the next logical step is to organize a sales force to achieve the organizational objective. The qualified as sales objectives, which can be further divided, are shown in figure 1 given below.
Major Qualified Sales Objectives
Overall objectives
1. Total volume of products
2. Total annual value of
products
3. Total annual selling costs
4. Total annual profit
contribution
Break up or Division
Quarter, month and weak
Product line and range
Region and sales area
Type of customer
Figure 1

3. Role of Sales Organization
Sales organization has the following basic purposes:
Define the line of authority
Ensure that all necessary activities are assigned and performed
Establish lines of communication
Provide for coordination and balance
Provide insights into avenues of advancement
Economics of executive time.
Sales organization also depends on the type of sales force which is used, for example, field sales force, national account management, team selling, telemarketing, part-time sales forces, direct selling, etc.

4. Developing a Sales Organization
Sales organization development refers to the formal, coordinating process of communication, authority and responsibility for sales groups and individuals. An effectively designed sales organization has a framework that enables the organization to serve its customers. Once the sales people know what their responsibilities are and who they report to, they can concentrate on doing their expected jobs to the best of their ability.
Thus, a sales manager must recognize and deal with some basic problems faced by organizations, when developing his own sales organization. The five major issues are:
Formal and informal organizations
Horizontal and vertical organizations
The line and staff components of organizations
The size of the company.

5. Formal and Informal Organizations
Marketing Vice President
Assistant to Marketing Vice President
Other functional or administrative organizations
Director of Marketing Research
General Sales Manager
Manager of Sales Planning
Director of Advertising
Director of Public Relations
District Sales Manager
Manager of Distribution
Sales persons
Manager of Accounts Receivable
Key Informal Organization
Figure 2 – The informal Communication System in a Marketing Organization

6. Formal and Informal Organizations
Salesperson
District
Sales Manager
General Sales
Manager
Marketing
Vice President
Director of
Research
Figure 3 – A Lengthy Formal Communications Channel

7. Horizontal and Vertical Organizations
Top Sales Executive
Regional or Zonal Sales
Manager
District Sales Manager
Sales Supervisor
Salesperson
Figure 4 – Vertical Sales Organization

8. Horizontal and Vertical Organizations
Top Sales Executive
New England
District Sales
Manager
Southern
District Sales
Manager
Southwest
District Sales
Manager
Foreign Sales
Manager
Middle
Atlantic
District Sales
Manager
Midwest
District Sales
Manager
Pacific
District Sales
Manager
Figure 5 – Horizontal Sales Organization

9. Centralized and Decentralized Organization
Line and Staff Components
Marketing organizations also feature line and staff components.
A line function is a primary activity and a staff function is a supporting activity.
In a marketing organization, the selling function is the line component whereas advertising, marketing research, marketing planning, sales training and distributor relations are usually considered staff roles.

10. Centralized and Decentralized Organization
Vice President for
Sales
General Sales
Manager
Regional Sales
Manager A
Regional Sales
Manager B
Regional Sales
Manager C
Figure 6 – A Line Marketing Organization

11. Centralized and Decentralized Organization
Vice President for
Marketing
Assistant to the
Marketing Research
Advertising
General Sales
Manager
Distributor
Relations
Sales
Planning
Analysis
Training
Regional Sales
Manager A
Manager B
Manager C
Key Staff Organization
______________Line Organization
Figure 7 – Line and Staff Marketing Organization

12. Company Size and Organization
A simple functional company organization is shown in Figure 8 . This structure is appropriate for most small and medium sized companies. These companies have relatively few products or services and use a limited number of distribution channels. As each functional area grows larger, the functional organization will be extended. A functional marketing organization is shown in Figure 9.

13. Company Size and Organization
President
Finance and
Accounting
Production
Personnel
Sales and
Marketing
Figure 8 – Functional Company Organization

14. Company Size and Organization
Chief Marketing Executive
Advertising
Manager
Sales
Manager
Customer
Relations
Manager
Market
Research
Manager
Sales
Supervisors
Salespeople
Figure 9 – Functional Company Organization

15. Field Sales Organization
Field sales force consists of salespersons who work primarily with customers in person, although they may also use the telephone or assistance from computer links to expedite orders and provide customer service. The structure of a field sales force is usually based on some means of specialization, such as geography, market, product, or activity/function, or a hybrid of these types. The following are the important field sales:
Geographic sales specialization organization
Product-based sales specialization organization
Customer-based specialization organization
Hybrid sales organization
Team-based organization

16. Geographic Sales Organization
FMCG Sales
WEST DIVISION
CENTRAL DIVISION
EAST DEVISION
Area Sales Manager
Mumbai
Surat
Area Sales Manager
Delhi
Jaipur
Chandigarh
Area Sales Manager
Kolkata
Patna
Figure 10 – Geographical Sales Organization
Some advantages of geographic organizations are (a) Proper coverage of territory (b) Defining the responsibility (c) Familiarity with local economic and competitive conditions, making them better able to serve local customers.

17. Figure 11 – Product-based Sales Organization
Medical Division of `K’ Pharma Ltd.
Pharmaceuticals
Equipment
Supplies
East
West
Central
East
West
Central
East
West
Central

18. Figure 12 – Customer-based sales Organization
Sales Manager for India
Regional Manager
Branch Sales Manager
Assistant Sales Manager-
Agricultural Products
Assistant Sales Manager
Health Care Products

19. Activity/Function-based Organization
Sales Method
Telemarketing/cold calls
* Prospecting
* Presentation
Face-to-face field sales
* Service
Personal visits

20. Figure 13 – Hybrid Sales Organization
President
Vice President
Production
Marketing
Finance
Sales Manager
For India
International
Marketing Manager
Consumer Goods
Managers
Industrial Goods
Manager
Functional
Geographic
Customer

21. Team-based Sales Organization
Customer
Sales
Marketing
Technical Support
Manufacturing
Figure 14 – Supplier Selling Team