Organisational Structure

Question 1

What are the pros of: geographic structure

Answer 1

• Low cost -> reduced travel expense
• No geographic duplication
• No customer duplication
• Fewer management levels
• proximity to customers

Question 2

What are the cons of: geographic structure

Answer 2

• Limited specialisation
• difficult for sales person to handle whole product range
• Lack of management control over product or customer emphasis

Question 3

What are the pros of: product structure

Answer 3

• Salespeople become experts in product and application -> specialised skills
• Management has good control over selling effort

Question 4

What are the cons of: product structure

Answer 4

• High cost
• Customer duplication -> requires degree of organisation
• Geographic duplication
• may create customer annoyance due to duplication

Question 5

What are the pros of: market centered structure

Answer 5

• Salespeople develop better understanding of unique customer needs -> increased customer knowledge
• Management control of selling allocated to different markets

Question 6

What are the cons of: market centered structure

Answer 6

• High cost

- Geographic duplication

Question 7

What are the pros of: account size based structure

Answer 7

• improved sales
• develop close customer relationships
• career opportunities for sales people
• reduces costs of servicing small accounts
• resources allocated to high value accounts

Question 8

What are the cons of: account size based structure

Answer 8

Account size - very high cost of servicing accounts

Question 9

What are the pros of: functional structure

Answer 9

Efficiency in performing selling activities

- focus/sales support on new product lines

Question 10

What are the cons of: functional structure

Answer 10

• Customer duplication
• Geographic duplication
• Need for coordination
• risk of pushing new products/risk of failure
• high costs of multiple teams

Question 11

What are the pros of: hybrid structure

Answer 11

dependent on hybridisation mix

- aim is to maximise advantages and minimise weaknesses of other structures

Question 12

What are the cons of: hybrid structure

Answer 12

dependent on hybridisation mix

Question 13

What are common elements organisations use for sales force structuring?

Answer 13

• use key account specialists for major accounts
• small/medium - use general territory representatives
• maybe integrate product application specialists

Question 14

What are elements to be traded off when establishing sales structures?

Answer 14

• financial
• customer coverage
• organisational flexibility

Question 15

What is the goal of organisational structure

Answer 15

Meet customer needs through service/speciality in a cost effective way.

Question 16

What are considerations to be made for international sales forces?

Answer 16

• geographic size
• sales potential
• customer expectations
• product line width
• current selling practices
• language spoken

Question 17

When are geographic structures for international sales forces used?

Answer 17

• less developed markets
• singular product line
• small sales volumes

Question 18

When are product or customer based structures for international sales forces used?

Answer 18

• large developed markets
• broad product lines
• large sales volume justifies specialisation

Question 19

What is formula for the workload approach for number of sales people?

Answer 19

(number of customers * call frequency)/(average weekly call rate * number working weeks per year)

Question 20

What are the three methods of organising a salesforce?

Answer 20

• geographical
• product
• customer

Question 21

What are the four variations of the customer orientated approach to structure?

Answer 21

• market centered
• account size
• new/existing accounts
• functional

Question 22

What are generic characteristics that are important for organisational structure?

Answer 22

• Flat vs tall
• Centralised vs decentralised
• Span of control
• Strategy levels - corporate, sbu, marketing, sales

Question 23

What are the steps of the territory design procedure?

Answer 23

• selecting planning and controlling unit
• analyse planning and control unit opportunity
• form initial territories
• assess territory workload
• finalise territory design

Question 24

Describe the characteristics of: product structure?

Answer 24

Ideal when there is large product line and technical products.
Sales force focuses on specialising in each key product line.

Question 25

Describe the characteristics of: functional structure?

Answer 25

Salesforce is specialised by function.

eg. divided into new and existing products.
eg. telemarketing sales and face to face sales
eg. developmental sales and maintenance sales

Question 26

Describe the characteristics of: market centred structure?

Answer 26

Specialised sales teams for unique market segments.
eg. computer firm selling to banks, manufacturers and retailers.
Increases customer knowledge and improves services.

Question 27

Describe the characteristics of: account size based structure?

Answer 27

Major account sales force differs from small accounts.
Major account characteristics - different buying habits and sophisticated sales arguments.
Sales people may have increased discretion to secure large orders.
May use tiered structure and team selling approach.

Question 28

Describe the characteristics of: new/existing account structure?

Answer 28

Separate prospecting and servicing teams. Splits responsibility and increases clarity of purpose. Increased specialisation -> capitalise of sales staff skill.

Question 29

What are the pros of new/existing account structure?

Answer 29

Allows for dedication of sales people to service existing customers. -> clarity of purpose

• specialisation of selling skills
• eliminates competition between prospecting and servicing accounts

Question 30

What are the cons of new/existing account structure?

Answer 30

New/existing account structure - relatively high cost, potential discontinuity between sales people