Module 2 –Directing Sales force Time and Territory management –Objectives and criteria for Territory formation ,Sales territories Design,Time Management, Routing and Scheduling

Sales Territory Sales Territory consists of existing and potential customers assigned to a salesperson. May not be have geographic boundaries

Reasons for setting ST Increase market/customer –coverage Control selling expenses Better evaluation of salesforce Improve CR Increase salesforce effectiveness Improve co-ordination Benefit salespeople & company

Reasons for not Setting ST Small company with few sales person –local market Personal contacts/relationship-life insurance, network marketing Salespeople are demotivated due to restrictions of sales territories Management of company not aware of benefits of ST

Procedure for Designing Sales Territories Find location & Potential of customers Select a control unit Decide basic terrirories Control Units-Geographic location-states,metros,cities,districts, towns industrial estates Use Build –up Method Use Breakdown Method

Select a Control Unit States Metros Cities/Towns/ Districts Find Location and Potential of Customers How will u find- telephone directories & market research studies-ABC Analysis-A customers-sales and profit potential add upto 70% of total, B -20%,C-10%

Decide Basic Territories Build –up method Decide call frequencies Calculate the total number of calls in each control unit Estimate Workload capacity of a salesperson Make tentative territories Develop final territories

Breakdown method Estimate the company sales potential for total market Forecast sales potential of each control unit Estimate the sales volume expected from each salesperson Make tentative sales territories Develop final territories

Assigning Salespeople to Territories Relative Ability of Salespeople Salesperson’s Effectiveness in a Territory Use of IT Territory Management Ability of salesperson- Product Knowledge, Market knowledge,Past sales performance,Communication skills, selling skills

Territorial Coverage Routing –efficient routes for salespeople Scheduling the salespeople’s time Time Management tools

Procedure for Routing plan Straight line route pattern-salesperson starts from office /home as base makes sales calls in one direction Hoscotch- salesperson starts fartherest point from home or office base and makes sales calls on customers on the way back to home/office Circular –starts from base and moves in a circle.sales calls ends at the office/home Clover leaf- first route covers a part of the territory, next trip covers adjoining circle

Importance and Application -Routing The nature of product The type of job of sales people-FMCG Sales job with creative selling needs a flexible route plan

Scheduling Planning a sales person’s specific time of visits to customers. Best Salesmen are the ones who manage their time effectively

Allocation of Time Salespeople’s task Time spent(%) Administrative task 15 Service calls 13 Face-to –face sales 32 Waiting/traveling 21 Telephone selling 19 Total 100

Customer calls Companies state norms of visits to existing customers and prospects Study shows salespeople spend too much time selling to small /less profitable customers Companies specify norms

Time Management Tools High –tech equipment- laptop, teleconferencing, videotaping cellular phones pagers ,cassette recorders Inside sales people Sales assistants to provide clerical support Technical support people for technical information Telemarketers to find new prospects

Exercise Assume you are appointed as head of marketing – S Aluminum Company, which is a new company manufacturing and marketing aluminium products such as door,window and partition aluminim frames,heat sinks, control panels.Customers include household and business organisation . Factory is located in Hosur-tamil Nadu -38 kms from Bangalore. You have discussed with your CEO to initially focus sales and distribution efforts in southern region – 4 states .Design a sales territory to cover the 4 states . Describe how you would go about the task. What are the major criteria considered in assigning salespersons to different territories? One of the salesperson in the territory of AP is having a problem as to how to cover the entire state with varying market potential of different metros, cities and districts . How to prepare his route plan ans schedule of visits –major tasks like presales service,face –to face selling ,sending weekly reports including market information ,collection of payments from dealers as mwell as business customers and telephone selling . What guidelines would you give to help your salesperson Divide the class into 6 groups

Case Study Krishna Kumar,the marketing manager of MM Marketing Company was thinking how to go about designing sales territories assigning salespeople to the territories and setting sales qoutas, particularly as the product was new. The new product, called Swishflow fan was a unique kind of a table fan with attractive air- conditioner like looks.Considering the initial production capacity of 1,00000 numbers in the first year, Krishna Kumar decided to market the product in and around Mumbai, where the marketing and sales office was located . The target consumers were household as well as commercial organisations ,who could use this product as table-fan and wall –mouted fan. Krishna Kumar thought that the territory design should include geographical areas with market potential for achieving the sales budget 100000 numbers in the first year and a growth of 25% per year for subsequent four years.He calculated a salesforce size of 7 numbers and decided to launch the product in major metros and cities in Maharastra and Gujarat. KK wasof the view that sales Quotas should consider sales volume, sales expense and sales calla per day in order to have a proper control on sales people . He wondered how to design sales territories what criteria should he consider while assigning salespersons to territories and how to design quotas considering the factors mentioning above Question: If you were Krishna Kumar ,what will you do and why?