Sales Territory Design
Sales Territory Design
Sales Territory Design
DESIGN
The Sales Territory concept
Defined as:
A sales territory is a grouping of customers and prospects
assigned to an individual salesperson.
• Irrespective of geographical designations sales territory is
grouping of customers and prospects that can be called
upon conveniently and economically by an individual
salesperson.
• For instance:
When sales personnel sell mainly to personal
acquaintances as in selling insurance or investment
securities, little logical basis exist for dividing the market
geographically.
The Sales Territory concept
House Accounts :
• An account handled by a group of
executives or home office personnel.
• Generally house accounts are responsible
for significant shares of company’s
business.
Reasons for Establishing / Revising
Sales Territories
1. To provide proper market coverage.
2. To control selling expenses.
3. To assist in evaluating sales force personnel.
4. To contribute to sales force morale.
5. To aid in the coordination of personal selling and
advertising efforts.
6. To establish a sales person’s responsibility.
7. To improve customers relations.
Designing Sales
Territories
Designing sales Territories
Procedure for setting up sales
territories
1. Selecting a basic geographical control unit.
Commonly used units are postal code numbers, areas,
towns or cities. Sales territories are put together as
consolidations of basic geographical control units.
2. Determining the sales potential present in each unit.
Sales potential : Maximum possible sales opportunities
open to a specific company selling a good or service
during a stated future period to particular market segment.
Identify the present and prospective buyers precisely in a
unit and ascertain the unit’s total market potential that the
company has an opportunity to obtain i.e. Sales Potential.
3. Combining control units into tentative territories.
Assumption : No significant differences exist in the
physical and other characteristics of the control
units.
Contiguous control units are combined into tentative
territories having approx. same sales potential.
Planner decides the number of territories.
• Planner then decides the territory shape.