The sales organization helps salespeople and sales managers perform required tasks in an efficient and effective manner
The structure of the sales organization is a key driver in helping salespeople and sales managers perform required tasks in an efficient and effective manner. There are four different types of sales organization structure, comprising of; geographic sales organization, product sales organization, market sales organization and functional sales organization. All four structures have both advantages and disadvantages.
The geographic sales organization structure is where "sales people are assigned a geographic area and are responsible for all selling activities to all accounts within the assigned area. There is no attempt to specialize by product, market, or function" (Ingram et al. 2004, pp. 81) The advantages of the geographic sales organization are that it is low cost as most geographic areas are covered by one salesperson only. Having only one resource per geographic area also acts as an advantage by erasing customer and geographic duplication.
Disadvantages of the geographic sales organization include limited specialization and lack of management control over product or customer emphasis. Limited specialization is a consequence of fewer management levels. Employees are required to be multi-tasked and perform a variety of functions, inhibiting the ability to become specialized in an area, and becoming more efficient and effective in that area over time.
The product sales organization is highly specialized, involving salespeople being responsible for the selling of a certain product or product line, "the objective is for salespeople to become experts in the assigned product categories" (Ingram et al. 2004, pp. 82). This sales organization structure can be split on more than one level of product specialization, for example an insurance company may use one selling team to specialize in the selling of travel insurance and another team to specialize in the...