Sales organisation consists of human beings or persons working together for the effective marketing of products manufactured by the firm or the products purchased for resale. Sales organisation co-ordinates the efforts of members of a group to bring about a desirable result. It provides an efficient, economic and flexible administrative set up to ensure timely movement of products from the warehouse to the ultimate consumer. Thus it provides satisfactory job to buyers and sellers.
A sales organisation has a number of departments. It has a planned and well co-ordinated structure. It performs the functions of planning, organizing and controlling marketing and distribution of products. Sales organisation is a foundation for effective sales planning and sales policies. Systematic execution of plans and policies and programmes of a sales organisation control all the sales activities. As such it ensures maximum efficiency and profitability without losing consumer service and satisfaction.
According to Boiling, “A good sales organisation is one wherein the functions or departments have each been carefully planned and co-ordinated towards the objective of putting the product in the hands of the consumers—the whole effort being efficiently supervised and managed, so that each function is carried out in the desired manner.”
Need for a Sales Organisation:
“A sales organisation is like a power station sending out energy, which is devoted to the advertising and selling of particular lines; and there is a tremendous waste of energy between the power station and the points where it reaches the consumers. Therefore, there arises the necessity of organizing the sales department.”
So long as the firm is a small one, there is no need for sales organisation, as the proprietor himself can sell all the output or in certain cases, he is assisted by one or two salesmen, under his direct control. But when the firm or the business itself expands, because of extension of markets, production in large-scale, competitive market etc., the need for a sales organisation is felt.
The need arises because of the following factors:
- Production in anticipation of demand, which must be sold.
- To create demand for the products through efficient salesmen.
- Execution of orders without delay.
- Satisfactory action against complaints from customers.
- Collection of credit sales.
- Keeping enough stock by looking at the future demand.
- Maximum contribution to profit.
- To enforce proper supervision of sales-force.
- To divide and fix authority among the subordinates.
- To locate responsibility.
Importance of Sales Organisation:
A sales organisation is the mechanism through which a sales manager’s philosophy is translated into action. The sales organisation provides the vehicle for making decisions on planning, organisation, selection and training of salesmen, their motivation, directing and controlling them. It also provides vehicle through which these decisions are implemented.
“A business organisation is like a home. It has characteristic atmosphere. In some homes the head of the household and all its members are vitally concerned about religion, politics or some other interest—the occupations of the individual members being only of minor interest. In other homes where the personality of the head of the household dominates the activities and spirit of the members the opposite occurs. Like any group a business organisation has its own culture, traditions, and to some extent its own language and climate.” —Hepner
“A sale organisation is like a power-station sending out energy which is devoted to the advertising and selling of particular lines and there is a tremendous waste of energy between the power station and the points where it reaches the consumers. Therefore, there arises the necessity of organizing the sales department.” —Boiling
“Sales are the life blood of business,” Sales organisation is part and parcel of a business firm. All the departments are carefully plaited in a good sales organisation.
The importance of the sales organisation, in brief, is:
- Blood circulation of a human body keeps a man alive and in sound health. Similarly the sales strengthen the organisation. The more is the sales, the more is the profit.
- Increasing sales means progress of the firm. If the sales fall down, it is fatal, because sales are the life blood of the business, as the blood is to a human body.
- Consumers are the kings. Manufacturers produce goods for consumers. They must be satisfied in the market which is full of competitors with products for similar use. So suitable products are necessary, and for this an organisation is necessary.
- To move the products from the factory to the consumers, the sales organisation is necessary— demand creation.
- To handle the orders promptly i.e., from the stages of enquiry to order at full satisfaction to consumers.
- Collection of dues is also important. Several drops make an ocean; at the same time milking cows should not be neglected.
- To keep good public relations by redressing the complaints if any, and to create a good image of the firm.
Functions of a Sales Organisation:
Modem sales organisation is not only profit-oriented but also customer-oriented.
The following are the important functions of a sales organisation:
- Analysis of markets thoroughly, including product and market research.
- Adoption of a selfishly sound but defensible sales policy.
- Accurate market or sales forecasting and planning the sales campaign, based on relevant data.
- Deciding about prices and terms of sales and pricing policies.
- Packaging for the consumer wants a container which will satisfy his desire for attractive appearance, keeping qualities, utility, and correct price and many other factors.
- Branding the product.
- Deciding the channels of distribution.
- Selection, training and control of salesmen and fixing their remuneration.
- Allocation of Territory and quota-setting.
- Sales programmers and sales promotion activities.
- Arranging for advertising and publicity.
- Order preparation and office recording.
- Preparation of customer’s record cards.
- Scrutiny and recording of reports.
- Study of statistical records and returns.
- Maintenance of salesmen’s records.
Structure of the Sales Organisation:
The following factors are to be taken into consideration while designing the structure of a sales organisation:
- Nature of the market
- Sales policies of the enterprise
- Nature of the product
- Number of products
- Availability of financial resources
- Level of distribution system
- Size of the company
- Price of the product
- Ability of the professionals
- Position of competitors’ Products.
Sales management is concerned with mainly with the management of selling function. The sales function in a business is a basic function. The sales management represents one of the most important functional areas of business management, and all the principles of general management such as planning, organizing, directing, motivating, and controlling are applied to sales management too for securing better business performance, viz., reasonable profits through sales. Modem business is consumer centred.
The American Marketing Association has defined sales management as “the planning, direction, and control of the personal selling activities of a business unit, including recruiting, selecting, training, equipping, assigning, rating, supervising, paying and motivating as these tasks apply to the personal sales force.”
Functions of Sales Management:
The general functions of sales management or marketing management are as follows:
- Sales planning and policies
- Pricing policies and price fixing
- Advertising and promotions
- Control of sales force
- Marketing research
- Planning and control of sales
- Management of distribution channels
- Branding, packing and labelling
- After sale service
- Integration and co-ordination of all functions.
The Field of Sales Management:
The field of sales management includes the following tasks:
- Setting sales force objectives
- Human resource planning
- Recruitment and selection of salesmen
- Training of sales personnel
- Controlling the sales force
- Organizing and supporting the work of salesman
- Designing sales force objectives
- Supervising and evaluating the sales force.