Significance and

Types Of
Sales Organisation
ISHAAN SINGLA
43
 What is Sales Organization?
• Sales organization is a part of the total business
organization of a firm. This unit of the firm is concerned
with the distribution of goods. These products may either
be produced by the organization itself or may be purchased
from manufacturers for resale.
• The sales organization is concerned with planning,
controlling of activities such of  recruitment of employee,
training the employees, equipping, assigning, rating,
supervising, paying and motivating the sales force.
 SIGNIFICANCE
• 1. Promotes Specialisation : The sales organization divides and subdivides
various sales functions. Suitable persons are appointed to handle their
respective activities. Thus, the ‘right person’ performs the ‘right job‘.
• 2. Facilitates Co-ordination : A sound sales organization coordinates the
efforts of different departments and sub-departments, offices and employees
for the attainment of sales goals and common objectives.
• 3. Facilities Delegation of Authority : A sales organization defines the rights
and responsibilities of every individual. This helps in the delegation of power
to discharge their job and responsibilities.
• 4. Facilities Timely Contacts with Customers : By assigning proper duties and
by structuring the roles of employees, it is quite possible to make regular
contact with customers. This also helps in obtaining valuable information
relating to customers’ problems and suggestions.
• 5. Increases Efficiency : In the sales organization, jobs are properly
distributed, duties are defined and direction and control are properly
provided. This helps to avoid duplication of work and to increase work
efficiency.
• 6. Proper Attention Towards All Activities : By setting up a separate sales
department, more attention can be paid to sales and non-sales activities and to
individual and group sales functions.
• 7. Contributes to Success of Business : A good sales organization achieves goals
at the minimum costs. It helps achieve the desired success in selling as well as
the other areas of business. The salesman can work at the optimum level. This
contributes to the overall progress of the Enterprise.
• 8. Promotes Innovations : A good sales organization can contribute to the
development of new ideas and innovation. It encourages salespeople to bring
new changes in products by gathering information from salesmen. It promotes
sales research, consumer survey, and market analysis. This helps to innovate
products.
• 9. Increases Morale : A good sales organization helps in building the morale of
sales employees. Every person engaged in the selling field has a clear knowledge
about his position, rights, and responsibilities. This framework of roles motivates
him to perform in an excellent way. His morale is always raised.
• 10. Handles the Task of Personnel Management : To perform the sales
operations, sales forced are recruited, trained, placed, transferred, promoted,
motivated, maintained and controlled. Thus, each aspect of Manpower
development and management is handled.
 TYPES OF SALES ORGANISATION
(GENERAL)
• Line sales organization
This is the oldest type used in smaller firms and in firms where there is a small
selling force. This limitation restricts them to narrow product line in limited
geographical area. All executives have line authority and each subordinate is
responsible only to one higher-up. They have fixed responsibilities and sales
personnel reports directly to the chief sales executive Lines of authority and
responsibility are clear and logical, and it is difficult for individuals to shift or
evade responsibilities Not appropriate when there is a large sales staff .
• Line and Staff sales organization
Found in large and medium sized firms selling diversified product lines over a
wide geographical area Provides the top sales executive with a group of
specialists and experts in dealer and distributors relations, sales analysis , sales
organization, sales personnel, sales planning, sales promotion, sales training,
service, traffic and warehousing Staff sales executives do not have authority to
issue orders or directives.
Staff recommendations are submitted to the top sales executives and after
approval, transmit necessary instructions to the line organization Gives
time to the staff executives time to study problems before
recommendations.
• Functional sales organization
Based upon the concept that each individual in an organization, executive
and employee, should have as few distinct duties as possible. Salespeople
receive instructions from several executives but on different aspects of their
work. All specialists have line authority and they have a function authority.
There is a great improved performance .Not feasible for small and medium
sized firms
• Committee sales organization
The executive group plans policy formulation while implementation of plans
and policies is done by individual executives. Many firms have a sales training
committee. Before policies are made and action is taken, important problems
are deliberated by committee members and are measured against varied
viewpoints.
STRUCTURES OF SALES ORGANISATION
1.Functional Structure
• Function structure refers to the sales organization structure that focuses on
specialization within the marketing team. This means that everyone has
their own purpose to fulfill within the team based on their specialties,
interests, and other factors. Having a sales team that runs by a functional
structure is more efficient, but it does come with a plethora of problems. It
may sound great to have each person specialize in their tasks, but sales is a
very interwoven department. This means that people need to coordinate a
lot in a sales team that runs by a functional structure.
• Having specialization can also be difficult when you're handling clients and
accounts from different geographic regions. Some people may not be able to
handle multi-lingual accounts or they may not know how to interact with
people of different cultures. In addition, there may be some problems with
duplicate information. As tasks and to-dos run around the office, it's likely
that multiple people are going to end up with the same account at the same
time. This is because processes tend to run simultaneously in the sales team.
2. Geographic Structure
• Geographic sales structures sound like what they are. Sales teams that run
by this structure organize by location. So, let's say that you have some
clients in Ahemdabad, others in Delhi. With a geographic organizational
structure, you're likely to break your sales team between these cities. This is
also known as a territorial sales force structure. Geographic sales structures
are extremely popular in the sales world. They come with too many benefits
to ignore.
• First, sales teams that are organized based on the geographical location of
their clients cost much less. It doesn't take a lot to leave certain sales reps in
certain areas. If you weren't organizing based on region, you may have to
move your sales reps all over the place, which can incur cost over time.
Second, a successful sales team in one geographic area leads to continued
growth in that area as well as the surrounding areas. By taking care of one
region at a time, you're more likely to be successful for that region.
• That being said, it may be difficult to decide on your layout. You need to
know where to place territory lines for your sales reps to follow. Plus, the
sales reps that are located in these different areas won't be able to
specialize. This can make more difficult sales tasks harder to do on their
own.
3. Market-Based Structure
• A market-based structure, also known as a customer sales force structure,
refers to a sales team that is organized by customers or industry. More likely,
they're grouped by industry. By placing your sales reps in a specific industry,
you're giving them a chance to specialize in that industry and the needs of
the companies within that industry. Plus, by becoming experts, your sales
reps will have a better chance to grow stronger relationships with your
current and potential clients.
• For companies that aren't focused on one industry or a few industries, it's
likely that a market-based structure would be advantageous. This is
especially given that higher-ups on the management team can bounce
around from industry to industry that the sales reps are specialized in. By
organizing your team strategically in this way, you'll be able to make more
sales and build stronger bonds with your clients.
• Unfortunately, market-based structures come with higher costs and
difficulties in sorting the location of different companies. Obviously,
companies don't base their location on what industry they're in. This means
that some tech companies are in Delhi, others are in Mumbai. You'll have to
move your sales reps around a lot to make up for the splotchy geography of
different industries. This can raise your costs and leave your sales reps
whipping from one area to the next.
4. Product Sales Force Structure
• The product sales force structure focuses on the products that clients make.
This can be based on individual products or product types. This
organizational structure is the most specialized of all of these options. With
this kind of sales organizational structure, you may find that your sales reps
are more attuned to how to sell to certain companies based on the products
they have. In fact, you'll have sales reps that can handle one product type at
once company and the same product type at another company.
• This kind of specialization is great if your company focuses on one industry,
but it can become a little much when you're bringing multiple industries
with multiple products in at once. Sales reps can get interwoven with too
many factors. This may cause communication issues and the need for more
coordination with each, individual sales rep.