Customer organization

In our last post we have discussed on sales force management and product organization. Today we are going to talk on customer organization which is most important part of any small business. To orient the field sales organization to the market a firm may make use of a customer basis. The type of industry corresponding to SIC category and the channel of distribution are two widely used classes of customer. For example, if it is for blinds industry where they are selling different products like vertical blinds, roman shades online, than for them channel of distribution is different. While for Instant term life insurance rates company who are providing life insurance quotes online, channel of distribution is different. What a firm seeks to achieve in limiting a salesman’s efforts to selected group of customers is specialization in servicing their particular needs. Market factors conducive to the use of a customer base include:
(1) geographical concentration to facilitate the equating of customer sets with geographical assignments;

(2) substantial sales and profits to justify the assignment of sales personnel; and

(3) distinctiveness in needs to permit differentiation between customer segments.

Organizing of the basis of customers rather than products offers the practical advantage of less territorial overlap with specialization. There is still the added costs of some territorial overlap plus the possibility the salesman may be called upon to sell a diverse range of products.

Product organization

Two conditions are conducive to the use of a product basis in organizing field sales. One is that the firm markets a diverse range of products or product lines. By limiting the product types he is accountable for, a salesman can become more of a product specialist. This may be especially important from a competitive standpoint when products are technically complex in nature. The second is the determination that product knowledge is the primary marketing input for the salesman.

While a product division appears ideally suited to industrial marketers, several prominent consumer-good marketers use this basis of organization for field sales. General Foods, for example, divides up the field sales organization by brands. Another large marketer of essentially grocery products separates its field sales organization into food and nonfood.

A major disadvantage of the product organization is the duplication of effort. Two or more salesmen from the same company will travel in the same geographical area, possibly calling on the same accounts and purchasing contacts. Another disadvantage is the added expense of hiring product or brand managers to provide staff assistance. Still an-other disadvantage is the possible development of insularity among salesmen causing them to lose sight of the other products marketed by the firm.