BASIS OF STRUCTURE OF SALES ORGANISATION
There are five different basis of preparing a sales organisation structure. An enterprise can prepare its sales organisation structure on any of these basis. These basis are as follows:
1. On the Basis of Function. Under this form of sales organisation structure, various departments are established on the basis of works to be performed, such as-Sales Department, Advertisement Department, Sales Promotion Department, Credit Department, Selling Personnel Department, Marketing Research Department etc. This form of sales organisation structure gets all the advantages of specialisation.
2. On the Basis of Region. If an enterprise has very wide sales territory i.e., national or international, it may choose to prepare its sales
organisation structure on regional or geographical basis. Under this from, the whole sales territory of the enterprise is divided into subregions, such as-on the basis of districts, on the basis of states, on the basis of direction etc. One regional manager is appointed for every subregion. Activities of all the regional managers are supervised and controlled by a Sales Manager. Every regional manager is held responsible for all the activities of his region. Under this form, the departments of advertisement, sales promotion and marketing research etc., are established as central departments.
3. On the Basis of Products. When an enterprise produces more than one product, it can prepare its sales organisation structure on the basis of product. Under this form of sales organisation, different sales departments are established for the sales of different departments. One sales manager is appointed for every product and he is held responsible for all the activities of his department. Under this form, the departments of advertisement, sales promotion, and marketing research etc., are established central departments.
4. On the Basis of Customers. Sales organisation structure can be prepared on the basis of nature of customers of the enterprise also. Under this from different departments are established for different customers, such as-Wholesale Department, Retail Sales Department, Consumers Sales Department, Exports Departments etc. Under this form also, the departments of advertisement, sales promotion and marketing research etc. are established as central departments.
5. Combined Basis. An enterprise may prepare its structure of organisation on any two or more basis as discussed above.
FACTORS DETERMINING THE
STRUCTURE OF SALES ORGANISATION
The main factors determining the structure of sales organisation are given below:
1. Nature of the Product. The structure of sales organisation mainly depend upon the nature of the products, for example, consumer goods of every day use like ghee, oil, cloth, soap, blade, cosmetics require comparatively more complex and a large sales organisation while luxury articles T.V., air conditioners and cars requires a small sales organisation. Similarly the perishable commodities like fish, milk, vegetables etc. require a large sales force and close supervision in comparison to the durable commodities.
2. Price of the Product. The price of the products is another important determinant of the sales organisation. For example, costly articles like machines, air conditioners and motor car have a smaller
sales organisation in comparison to the cheaper and daily commodities like tooth paste, blade, ghee and oil.
3. Nature of the Market. The nature of the market plays a decis role in determining the structure of sales organisation. For the prod, of local markets like milk, vegetables and milk products, the sal organisation is simple and a small one. On the contrary, for the product of international markets like cotton textiles, jute products, steel product and petrol etc. the sales organisation is complex and a large one.
4. Size of the Enterprise. The size of the enterprise also decides the size and structure of the organisation. For example, large sized enterprises like-IISCO, TISCO, RIL, DCM etc. have large and complex sales organisation. On the contrary small scale enterprises have simple and small sales organisations.
5. Executive Competence. Executive competence also determines the structure of sales organisation. The enterprises with a large number of able, honest and competent executives like Tata Group, Birla Group, Dalmia Group, Mahindra and Mahindra have large complex sales organisation. On the contrary, the enterprises with a few and incompetent enterprises have small sales organisation.
6. Sales Policies. Enterprise with aggressive sales policies have large, complex and extensive sales organisation. On the other hand, enterprises with slow and cool sale policies have comparatively a small and simple sales organisation.
7. Distribution System. Distribution with larger number of channels requires a large, complex and extensive sales organisation. For example, Bata Shoe Co. DCM, RIL etc. require large sized sales organisation. On the other hand, if the enterprises distribute their products only through one or two channels, they require comparatively a small and simple sales organisation.
8. Financial Requirements of the Enterprise. Enterprises, investing huge capital, produce on large scale. Therefore, they require large and complex sales organisation to promote sales. On the other hand, the enterprise with a small amount of capital requires small sales organisation.
9. Number of Products. The enterprise manufacturing a large number of products of variant nature like B/L, Bata Shoe Company, Asian Paints etc. require a large a complex organisation. On the contrary, the enterprise manufacturing only one or two products require simple and small sales organisation.
10. Extent of Competition. If the market is competitive and a large number of manufactures are manufacturing close substitutes, the enterprise needs large and complex sales or www.on. In case of monopoly, the enterprise needs a small sales organisation.