National Electricals Ltd

Manufacturers of electrical appliances: Reorganization of Sales Territories

A) As Described in the given theory of National Electricals Ltd. They

should revised its sales territories with respect to having new sales force
and managing the sales force also they need to do the sales analysis with
respect to sales volume.
Designing a Sales force
When designing a sales force, a company must thoroughly deliberate several issues in order to
establish an efficient sales system. These issues are: - the development of sales force objectives, strategy,
structure, and compensation of the sales force
Sales force objectives are the specific goals that companies expect their sales representatives to
achieve. A typical example of how companies delineate an objective is the establishment of sales quotas
for their sales representatives. Sales quotas inform a sales person of exactly what their objective should
be for a given period of time.
Additionally, besides quotas, there are other ways of delineating sales objectives. For example,
objectives commonly defined by companies in addition to quotas are:- prospecting (searching for leads),
targeting (deciding how to allocate a salesperson’s time), communicating (communicating information
about the company’s product), selling (approaching and promoting), servicing (providing various services
to the customer), information gathering (conducting market research and doing intelligence work), and
allocating (deciding which customers will get scarce products during product shortages). Essentially,
companies must clearly define the specific objectives they want their sales force to achieve and, if these
objectives are met, it will lead to product sales for the company.
With respect to strategy, companies must use sales representatives strategically so that they
approach customers at a time when they are most likely to buy. There are several approaches that can be
used by salespeople depending upon which best fits the situation For example; an individual sales
representative can approach a particular individual buyer or a buyer group. Or, a sales team can approach
the individual buyer or buyer group. Also, sales representatives can employ a technique called seminar
selling, where a company team conducts an educational seminar for the customer company about state-of-
the-art developments

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 Once the company decides on a sales approach, it should maintain a market focus. This means
that salespeople should know how to analyze sales data, measure market potential, gather market
intelligence, and develop marketing strategies and plans. Finding the right resources to accomplish these
goals is something that should be taken into account when designing a sales force.

What Is Sales Analysis?

1. Sales Analysis – a detailed examination of a company's sales data, involving
assimilating, classifying comparing, and drawing conclusions.
2. Accumulation of sales analysis information

3. Uses of sales analysis

Several major broad applications of sales analysis are as follow:-
 Establishment of the sales forecasting system.
 Development of sales performance measures.
 Evaluation of market position.
 Production planning and inventory control.
 Maintaining appropriate product mixes.
 Modifying the sales territory structures.
 Planning sales force activities.
 Evaluation of salespeople's performance.
 Measuring the effect of advertising and other sales promotional
activities.
 Modifying channels of distribution.
 Evaluating channels of distribution.

Analyzing Sales Volume

1. Total Sales Volume – the starting point for a sales volume analysis; the total sales
for a specific period for a company, region, product, or customer.
2. Sales by region: district
a. Retail Sales Index – Relative measure of the dollar volume of retail sales
that normally occur.
3. Sales by salesperson
4. Sales by customer classifications

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 5. Sales by product

Additionally, when designing a sales force strategy, one must take into account sales force
structure. One sales force structure that is commonly used when designing a sales force is the “territorial
structure”. In a territorial structure, each sales representative is assigned an exclusive territory. This type
of structure has three main advantages. First, there is a clear definition of the salesperson’s
responsibilities. Second, being assigned to a particular territory motivates a salesperson to cultivate
personal relationships with the local businesses and individuals in the territory. Third, travel expenses are
limited because the size of the sales representative’s territory is limited
Sales representatives are one of a company’s most expensive assets .So, after strategy and
structure have been determined, a company should determine what the sales force compensation should
be. A company must develop an appealing compensation package if it wants to attract the best
salespeople. Typically, sales representatives are attracted to companies that provide “income regularity,
extra reward for above-average performance, and fair payment for experience and longevity”
The foregoing issues are all topics that must be considered when designing a sales force within a
company.

Managing the Sales Force

Once the sales force foundation has been effectively designed, the next step on the road to
building a successful company is successfully managing the sales force. There are various procedures
and steps that can be utilized to effectively manage a sales force. For example, according to Kotler, there
are four main steps involved in managing a sales force: training of the sales representatives, supervising
the sales representatives, motivating the sales representatives, and evaluating the sales representatives
Training is the first essential step in managing a sales force. New sales representatives who are
sent directly into the field with little or no training beforehand are rarely successful. Customers expect a
sales representative to be knowledgeable about not only the product they are selling, but also about the
customer’s needs. In today’s business environment, typically, new sales representatives need a few weeks
to several months in training. The median training period is 28 weeks in industrial-products companies,
12 weeks in service companies, and 4 weeks in consumer-products companies. Thus, proper training is a
crucial step in managing an effective sales team.
Supervision of sales representatives is also a critical area in managing a sales force. In general,
sales representatives who work on commission can be supervised less closely than those who are salaried.
Yet, every employee needs supervision at one time or another and this is an area where managers must
focus a large part of their energy.

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Motivating sales representatives is another area that is vital to managing a successful sales force.
Evaluating sales representatives is another step in successful managing of a sales force. Evaluating
salespeople frequently involves the use of sales reports, which tell the manager exactly how competent
the sales representative is in selling the product. Other ways of evaluating salespeople are personal
observation, customer letters and complaints, customer surveys, and conversations w ith other sales
representatives. Evaluations can also assess the salesperson’s knowledge of the company, competitors,
territory and responsibilities.
Ultimately, managing a sales force comes down to effectual training of the sales representatives,
supervising the sales representatives, motivating the sales representatives, and evaluating the sales
representatives.

B) Yes, I feel that the company should have changed its sales territories;
the detailed procedure that should have been followed is as follows:-

1. Analyze Sales Performance" by District/Region/Territory

2. Identify "Opportunity" (High Potential /Low Performance)Territories
3. Establish National Quarterly Sales Objectives
4. Establish District/Regional/Territory Monthly and/or Quarterly sales goals
5. Develop Sales Strategies and Tactics for each Customer Segment
6. Develop a Quarterly Territory Action Plan

1. Analyze Sales Performance by District/Region/Territory

• Utilize charts, graphs or bullets to analyze sales performance

• Analyze sales at the level that makes sense for the Sales Manager:
• Analyze sales performance vs. BUSINESS PLAN
• Analyze sales performance vs. the Competition

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Figures are assumption by me.

2. Identify "Opportunity" (High Potential/Low Performance) Territories and Develop

Improvement Plans

Objective: Identify those territories that are underperforming and have large potential to grow market
share and sales

Writing Tips: - they may also utilize this format to identify the Middle Performers (Grow the Business)
and High Performing Territories (Customer Retention)

3. Establish Quarterly BUSINESS PLAN objectives:

For each promoted product, select 1-2 Key Performance Indicators to measure on a quarterly basis.

Example: Establish Monthly/Quarterly New Customer Objectives

Customers Jan Feb Mar Q1 Apr May June Q2 July Aug Sept Q3 Oct Nov Dec Q4 Total
Baseline
New
Switched
Total

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Example: Establish Retained and New Customer Objectives

4. Establish Territory, District, and/or Regional level quarterly sales goals

- This chart can be customized to meet your individual requirements.

Territory # Q1 Q2 Q3 Q4 2000
Product #1

Product #2

Product #3

5. Develop Sales Strategies and Tactics for each Customer Segment

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Customers Jan Feb Mar Q1 Apr May June Q2 July Aug Sept Q3 Oct Nov Dec Q4 Total
Baseline
Retained
New
Lost
Total

Territory # Jan Feb Mar Q1 Apr May June Q2 July Aug Sept Q3 Oct Nov Dec Q4 Total

6. Each Sales Representative Develops a Quarterly Territory Action Plan

Writing Tip: - This Template may be customized by each Sales Manager

Territory Business Plan Template

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5 Steps to Creating A Winning Territory Business Plan
Step I Analyze Territory
Step II Analyze & Set Objectives for Top Accounts
Step III Identify 2 Key Accounts that require individual Key Account Plans (Use Template)
Step IV Set Territory Objectives, Strategies & Action Plans
Step V Take Action & Measure Territory Results

Conclusion:-

Effective sales territory management begins with touching base with every single one of your existing
customers. Ask questions to gauge their satisfaction with their relationship with company. If they identify
any problems, work aggressively to solve these problems as first priority.

If a customer expresses happiness and satisfaction, ask questions to determine that company has been
doing right. Use this information to create a template for managing all of accounts. Also be sure to ask for
referrals, both in general and to specific target accounts. Exhaust these referrals before you begin the
other (less productive) activities in prospecting plan.

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Prioritize the activities as described here, will maximize sales growth in sales territory! In business, sales
personnel serve as the link between a company and its customers. Designing a sales force involves
decisions regarding objectives, strategy, structure, and compensation. Once these have been
accomplished, a manager must manage its sales representatives by training of the sales representatives,
supervising the sales representatives, motivating the sales representatives, and evaluating the sales
representatives.

It has been said that in business there are two parts to every sale -– the part performed by the
organization and the part performed by the salesperson. Both the salesperson and the business
organization must contribute proficiently in creating, managing, and maintaining a successful sales force.

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Bibliography:-

• Kotler, Philip. Marketing Management, the Millennium Edition. Upper

o Saddle River, NJ: Prentice Hall, 2000.

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