Sales Territories

SALES TERRITORIES
Dr. RAVI JAIN

Faculty of Management
Jiwaji University, GWALIOR
Sales Territory
• A sales territory is a grouping of customers and

prospects assigned to an individual salesperson
Reasons for Establishment of Sales
Territories
• To obtain thorough coverage of the
market.
• To establish a salesperson’s responsibility.
• To evaluate performance.
• To improve customer relations.
• To reduce sales expense.
• To allow better matching of
salesperson to customer.
• To benefit salespeople and the company.
FACTORS TO CONSIDER WHEN DESIGNING
TERRITORIES
DETERMINE DETERMINE
SELECT BASIC SALES BASIC
CONTROL UNIT POTENTIAL IN TERRITORIES
EACH UNIT
EVALUATE, REVISE CUSTOMER ASSIGN TO

IF NEEDED CONTACT PLAN TERRITORIES
Selecting a Basic Geographical Control Unit:
• Starting point in establishment of territories
• Cities/District/States as the basis
• Trading Areas as the basis
• A trading area consist of the geographical
region surrounding a city that serves as the
dominant retail or whole sale center or both
• Vary from product to product
Determining Sales Potential present in each control
unit:
• Identification of the buyers as precisely as possible
• Present & potential buyers indicate Market Potential
• Determination of Sales Potential I.e unit’s market
potential that the company has an opportunity to
obtain
• Market potential is converted to sales potential by
analyzing the historical market share , adjusting for
changes in company & competitor selling strategies
SIX STEPS TO CONSIDER WHEN DETERMINING A
FIRM’S BASIC TERRITORIES
1.Forecast sales and determine 4.Tentatively establish

sales potentials. territories.
2.Determine the sales volume 5.Determine the number of
needed for each territory. accounts for each territory.
3.Determine the number of 6.Finalize the territories, and

territories. draw the boundary lines.
ASSIGN TO TERRITORIES
Some salespeople can handle large territories

and the travel associated with them; some
can’t. Some territories require experienced
salespeople; some are best for new people.
Some people want to live in metropolitan
areas; others prefer territories with smaller
cities.
CUSTOMER CONTACT PLAN
The customer contact plan involves

scheduling sales calls and routing a
salesperson’s movement around the
territory.
Scheduling refers to establishing a fixed
time when the salesperson will be at a
customer’s place of business.
In theory, strict formal route designs enable the

salesperson to:
1. Improve territorial coverage.
2. Minimize wasted time.
3. Establish communication between
management and the sales force in terms
of the location and activities of individual
salespeople.
THREE BASIC ROUTING PATTERNS
S traig h t-Line Patter n

F irst C all
B ase c
c c c c Wo rk B ack
Cloverleaf Pattern c Major-City Pattern 3

c c
c c 2
c c c c
c Base c 1
c c c c
c c c c
5 4
c c
c
Each Leaf Out and
Back Same Day 1 - Downtown
Using the Telephone for Territorial Coverage
1. Sales generating
• Selling regular orders to smaller accounts.
• Selling specials, such as offering price
discounts on an individual product.
• Developing leads and qualifying prospects.
1. Order processing
• Ordering through the warehouse.
• Gathering credit information.
• Checking if shipments have been made.
2. Customer service
• Handling complaints.
• Answering questions.
EVALUATION AND REVISION OF SALES TERRITORIES
Determine, number, location & size of customers &
prospects in each tentative territory
Estimate time required for each sales call
Determine length of time b/w calls
Decide call frequencies
Calculate number of calls possible within a given
period
Adjust the number of calls possible during a given
period by desired call frequencies for different
classes of customers & prospects
Check out the adjusted territories with sales
personnel
Equalized Workload
This method uses the number, location, and size
of customers and prospects to determine the
frequency of sales calls and amount of time a call
takes by using such data as:
• Time required for each sales call.
• Frequency of sales calls per given customer.
• Time intervals between sales calls.
• Travel time around territories.
• Nonselling time.
• Adjusting for differences in Coverage Difficulty &
Redistricting Tentative Territories:
– Determine, number,location & size of customers & prospects
in each tentative territory
– Estimate time required for each sales call
– Determine length of time b/w calls
– Decide call frequencies
– Calculate number of calls possible within a given period
– Adjust the number of calls possible during a given period by
desired call frequencies for different classes of customers &
prospects
– Check out the adjusted territories with sales personnel
THANKS

Sales Territories

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SALES TERRITORIES

Dr. RAVI JAIN

• A sales territory is a grouping of customers and

EVALUATE, REVISE CUSTOMER ASSIGN TO

1.Forecast sales and determine 4.Tentatively establish

3.Determine the number of 6.Finalize the territories, and

Some salespeople can handle large territories

The customer contact plan involves

In theory, strict formal route designs enable the

S traig h t-Line Patter n

Cloverleaf Pattern c Major-City Pattern 3

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