Page 179 - DMGT205_SALES_MANAGEMENT

Unit 11: Controlling the Sales Effort

11.11 Sales Territories Notes

A sales territory represents a group of customers or markets or geographical areas. Sales
territories are geographical area that can be covered conveniently and canonically by a sales
person.
Territories can be formed on the basis of geographical locations, industry, product use method
of buying and channel of distribution. By territorisation, organisations can achieve better coverage
of potential markets because it permits better planning, proper coverage of potential markets,
efficient call patterns and better customer service. Some services like Insurance and Mutual
Fund are sold on personal contacts rather than by developing territories. House Accounts useable
are handled by the Co. itself. Big customers of prefer to deal directly with the Co. This many
lower the morale of the salesman as a significant share of the Co's business is done directly by
the Co. and the salesman is deprived of the commission.
Territory management is the planning, implementation and control of sales person's activities
with the goal of realising the sales and profit potential of their assigned territory.

1. Sales territories Match sales effort with sales opportunities.
2. Territorial assignment tells direction to the planning and control of the sales force.
3. By forming territories management learns the strengths and weaknesses of the company
in serving different markets.
4. Realistic planning can be done as territories are more homogeneous then the entire market.
5. By dividing the market into small groups specific objectives can be made and more control
can be exercised.
6. Performance approval of the sales person becomes critical according directions can be
given.

11.12 Developing Territories

Designing of sales organisation is incomplete till territories have been formally defined.
Territories can be formed according to:
1. Geographical location

2. Industry
3. Product use
4. Method of buying

5. Channels of distribution
6. Sales of potential
7. Work load in territories
8. Arbitrarily
9. Rational basis.

By territorisation better coverage can be achieved because it facilitates:
(a) Better planning
(b) Proper coverage of potential markets

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