Page 180 - DMGT205_SALES_MANAGEMENT

Sales Management

Notes (c) Efficient call patterns
(d) Better customer service
(e) Choosing appropriate salesmen for specific accounts.
In certain businesses which are carried out by social and personal contacts such as LIC, mutual
funds, stocks, etc., it is preferable not to develop sales territories.
Factors that affect the sales volume of a territory are its:
1. Size

2. Market potential
3. Number of customers' accounts
4. Firm's experience
5. Market share in the territory.

Factors that affect the size of the territory are:
1. Number of customers and prospects in an area
2. Call frequency on existing customers
3. Number of calls that the sales person makes in a day.

A company's sales territory represents basic accountability units at the lowest level of aggregation.
Several territories are combined into a district, several districts are combined into a region,
several regions into zones and several zones into a national market.
Sales people are not only responsible for individual accounts but for a group of accounts (Territory
Management). This is the first step in moving from selling to managing. It requires planning
and control of sales effort. Territories are long lasting structural arrangements. These are formed
by dividing the company's total market into smaller parts or also by taking smaller units of the
market and assembling them to larger territories.
The steps followed in developing territories are being described below.

Determination of Basic Control Unit for Territorial Boundaries

The starting point in territorial planning is the selection of a basic geographical control unit.
The most commonly used control units are villages, tehsils, towns etc. and then cities, standard
metropolitan statistical area, trading area and states. The two reasons for selecting a small
control unit are:
1. If the control unit is too large, areas with low sales potential are hidden by areas having
high sale potential and vice versa these units remain relatively stable making it difficult
to redraw territorial boundaries.
2. To increase one territory and reduce the other is easier with smaller sized control units.
Other than a village, tehsil, town, etc., there are three more basic units for territorial boundaries.

Metropolitan Statistical Areas (MSA)

An MSA is a geographic area with adjacent communities that have a high degree of economic
and social integration with that nucleus.

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