Sales Territory

A sales territory consists of existing and potential customers assigned to the salesperson. The
territories may or may not have geographical boundaries. However, the basic concept
emphasizes that a territory or market is made up of present and potential customers, rather
than a geographical area.

Reason behind setting up the sales territory.

 Increase market or customer coverage
 Reduce selling expense
 Better sales force performance evaluation
 improved customer relationship
 increased customer relationship
 improved coordination
 benefit salespeople and company

Procedure for design the sales territory

select a control
unit

find location and

evaluate and revise
sales potential of
sales territories
customer

manage territorial determine basic

coverage territory

assign salespeople
o territory

Determining Basic Territory

Build up method -
 Decide call frequency
 Calculate total number of calls in each control unit
 Estimate workload capacity of a salespeople
 Make the tentative territories
 Develop the final territories

Breakdown method
 Estimate the company sales potential for total market
 Forecast sales potential for each control unit
 Estimate sales volume expected from each salespeople
 Make tentative sales territories
  Develop final territories

Assign salespeople to territories

 Relative ability of salespeople
 Salespeople effectiveness in a territory

Manage territorial coverage –

1] Planning of efficient routes for salespeople
2] Scheduling the salespeople’s time
3] Using time management tools

Planning of efficient routes for salespeople – Routing is a travel plan or pattern used
by a salesperson for making customer calls in a territory. The main advantages are 1]
reduction in travel time and cost 2] improvement in territory coverage.
 Procedure for setting up a routine plan
 Application and importance of routine

Scheduling the salespeople time - There are many supports available to help SP
manage their time more efficiently and productivity. These are 1] Use of computers, mobile
communication equipment and other high - tech equipment and 2] Inside salespeople
 Allocation of time
 Customer calls

Time management tools for salespeople

 High tech equipment
 Inside salespeople

Time management tools for sales managers

The same high - tech equipment, such as laptop computers, smartphone, and other are
available to sales manager to help make more efficient use of their time. Computerized
supports systems like CRM and ERP used by the companies for effective time management.

CASE STUDY
Dilemma of protagonist –
The case mostly aims at the problem of coverage and time management face by Pradeep, who
is sales and service engineer in North Karnataka region of Guhring India.
Understanding – Pradeep Joshi is facing tremendous pressure from his zonal manager (south)
to cover Karwar district and Goa state in addition to the four districts in Karnataka state.
Moreover, Pradeep is responsible for achieving sales volume goal, effective pre sales as well
as post sale technical service to the existing and prospective business customer.
Although, Pradeep is working 12 -14 hours a day and 6 day a week, even after that he is
unable to visit all business customers in month. It takes him 2 weeks to cover 30 customers in
Belagavi and another two weeks for the rest. However, manager is asking him that whether
he’s following any route plan and customer visit schedule.

Ques 1 – If you were Krishnamurty, how would you resolve Pradeep’s problem?
Ans. 1 – Initially. Krishnamurty should classify customer based on their profit / sales
potential. Also, by using ABC analysis, where customers are entered in the reverse order of
their sales potential, by first entering the name of the customer whose sales potential is the
highest, using this method Pradeep can prioritize tasks and save time accordingly.
Alternatively, Krishnamurty should follow Build – up method, where the main objectives of
the method is equalize the workload of the salespeople.
1] Deciding call frequencies – The factors that influence call frequency are the customer’s
sales and profit potential, buying behavior of the customer and nature of products or services
offered, it will ultimately define how many times a customer should be visited by Pradeep.
2] Estimating workload capacity of a salesperson – It can be calculated by number of calls he
can make in a working day by the number of working days in a year.
3] Making tentative territories – This can further help in determining workload of normal
salesperson, where Krishnamurty can calculate workload capacity of Pradeep with existing
four districts and then moreover calculate for additional district and a state. Hence, this will
help in ascertaining total number of sales calls that Pradeep can make in a year.