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Understanding Sales Force Structures

Apr 5, 2025

Lecture Notes on Sales Force Structure

Introduction

  • Topic: Sales Force Structure
  • Purpose: Organizing sales teams and aligning them to products, services, or clients
  • Evolution:
    • 1960s: Product Orientation
    • Now: Market/Customer Orientation
    • Focus: Meeting customer needs for satisfaction and repeat business

Types of Sales Structures

  1. Geographical Structure

    • Definition: Sales teams grouped by region
    • Benefits:
      • Better understanding of local customers and market
      • Knowledge of local laws and regulations
      • Cost and time efficiency
      • Supports local economy
    • Structure:
      • Sales Director → Regional Sales Manager → Area Sales Manager → Sales Manager
    • Examples:
      • Airline industry (e.g., AirAsia)
      • Telstra
      • Griffith University campuses
  2. Product Specialization Structure

    • Definition: Sales teams focused on specific products
    • Benefits:
      • Specialized knowledge about products
      • Ability to provide detailed product information to customers
    • Structure:
      • Sales Director → Product Sales Manager → Salespeople for each department
    • Examples:
      • Hospitals (e.g., clinics for skin, GP, eyes)
      • Retail (e.g., Myer, Telstra)
  3. Industry-Based Structure

    • Definition: Sales teams grouped by industry
    • Benefits:
      • Strong customer knowledge within the industry
      • Observing industry changes effectively
      • Well-known within industry
    • Examples:
      • Virgin Group (Airlines, radios, phones)
  4. Account Size Structure

    • Definition: Sales teams organized by customer spending/size
    • Customer Tiers:
      • Key Account: High spenders
      • Middle-Size Account
      • Small Account: Low spenders
    • Benefits:
      • Better relationship and trust with key customers
      • Knowledge of customer preferences and buying habits
      • Resource allocation efficiency
    • Structure:
      • Key Account Manager → Salespeople for middle-size accounts → Telemarketers for small accounts
    • Consideration: Focus on key accounts to minimize spending on small accounts

Conclusion

  • Sales structure can be an important section in major assignments
  • Questions and further clarifications are encouraged

End of Lecture