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CHAPTER 11

CHAPTER 11. Designing Territories. WHAT IS A TERRITORY?. Number of present and potential customers located within a geographic area and assigned to a sales person. BENEFITS OF TERRITORIES. Ensures proper market coverage Improves customer relations Increases morale and productivity

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CHAPTER 11

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  1. CHAPTER 11 Designing Territories

  2. WHAT IS A TERRITORY? • Number of present and potential customers located within a geographic area and assigned to a sales person

  3. BENEFITS OF TERRITORIES • Ensures proper market coverage • Improves customer relations • Increases morale and productivity • Control and evaluation • Reduces selling costs

  4. WHEN ARE TERRITORIES UNNECESSARY? • When contacts are infrequent • When a great deal of prospecting is involved

  5. DESIGNING TERRITORIES • The ideal situation: have all districts equal in sales potential and work load

  6. DESIGNING TERRITORIES • Select a control unit for boundaries • Analyze workload • Determine territories based on sales potential and call patterns • Assign people to territories • Establish a coverage plan • Ongoing assessment

  7. CONTROL UNITS • States • Counties and Parishes • Cities and Zip Codes • Metropolitan Statistical Areas • Trading Areas

  8. ANALYZING WORKLOADS • Nature of the job • Nature of the product • Stage of market development • Intensity of market coverage • Competition • Market characteristics

  9. DETERMINE BASIC TERRITORIES • Buildup Method • Breakdown Method

  10. BUILDUP METHOD • Determine number, location, and size of clients • Determine desirable call patterns • Determine number of accounts to assign to each sales person • Draw boundaries

  11. BREAKDOWN METHOD • Determine sales potential • Determine volume expected from each person • Determine number of territories needed • Tentatively establish territories (based on volume) • Modify as required

  12. BREAKDOWN METHOD • EXAMPLE TO DETERMINE NUMBER OF TERRITORIES: If total potential is $20 million and average volume per person is $500,000 then 40 sales reps are required in 40 territories

  13. BREAKDOWN METHOD • EXAMPLE TO DETERMINE TERRITORY VOLUME: With 40 reps, we should establish territories with 2.5% of the company’s total sales potential (100%/40 = 2.5)

  14. USING SOFTWARE • Save time • Costly • Some programs can’t adjust for physical barriers

  15. FROM THE INTERNET... • Software Examples: • Tactician 4 <http://www.tactician.com/product/prd002.htm> • Territory Mapper <http://www.territorymapper.com/>

  16. ASSIGNING PEOPLE TO TERRITORIES • Match characteristics • Overlapping territories • Personnel issues when revising territories

  17. TERRITORIAL COVERAGE • Routing • Scheduling

  18. ONGOING ASSESSMENT • Sales and costs studies

  19. FROM THE TEXT... • Read everything from Chapter 11 except “Simulating New Territories” on pages 530 to 531.

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