Module 4 • Sales territories 1.5 Better analysis and planning of sales activities
The analysis and planning of sales activities is facilitated by the design of sales territories. The reason is the effectiveness of alternative combinations of the promotional mix (advertising, publicity, sales promotion and personal selling) can be measured and compared.
1.6 Sales are improved
Sales are increased when salespeople are assigned to specific sales territories and they are required to concentrate on their territory only.
1.7 Reduce conflicts and disputes
If each salesperson has his territory to look after, disputes and conflicts between salespeople are reduced to a minimum. Specific territories prevent that two or more salespeople of the same business visit the same customer.
1.8 Improves/strengthens customer relations
Regular calls by the same salesperson on a specific group of customers/prospects builds trust and confidence and leads to better understanding of customers’ needs, so a mutually beneficial relationship is built. A territorial structure can improve the quality of service salespeople give to their customers. Regularity in sales calls is especially important for repeat-order types of products, such as Coca-Cola, Simba Chips or cigarettes. Properly designed sales territories allow salespeople to spend more time with present and potential customers and less time on the road.
1.9 Reducing selling costs
Assigning a specific salesperson to a specific territory, for example, Northern Cape, ensures that no overlapping in territories takes place, which saves costs. Each customer is visited by one salesperson only. Salespeople also spend less time and money travelling than if they sell anywhere in the total market. These savings, together with higher sales volumes, from increased productive selling time, reduce the ratio of selling expenses to sales.
1.10 Better co-ordination between selling and other marketing activities
Marketing activities, such as helping customers in launching advertising campaigns, distributing point-of-purchase displays or doing any other promotional work, are better co-ordinated with sales. Every dealer is the responsibility of some salesperson. Management can use the sales results more effectively to set realistic quotas/targets for each territory and to prepare sales and expense budgets.
2. The design/setting up of sales territories
The most important consideration in territorial design is to have all territories equal in both sales potential and the salesperson’s workload. Businesses use software packages on the computer to help them design sales territories.
Whether a business is setting up sales territories for the first time or revising existing ones, the same general steps (procedure) applies: • Select a geographical control unit. • Analyse salespeople’s workload.
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