SALES & DISTRIBUTION MANAGEMENT UNIT -2

I. MEANING OF SALES ORGANIZATION

 A sales organization in Salesforce refers to how a company arranges and manages its sales teams and
activities to achieve its business targets.
 It includes defining the roles and responsibilities of salespeople, dividing work into teams, and
assigning territories or customer segments.
 The structure is designed to align with the company’s goals, focusing on specific products, customer
needs, or regions for better efficiency.
 Salesforce helps in managing sales tasks, tracking customer interactions, and automating processes to
make sales operations more effective.
 It promotes teamwork by enabling salespeople to share customer information, update tasks, and
communicate in real-time.
 The sales organization also monitors team and individual performance, sets goals, and uses data
insights from Salesforce to improve sales strategies.

II. Advantages of a Sales Organization:

1. Clear Responsibilities:
A sales organization defines the roles and responsibilities of each team member. This clarity helps avoid
confusion and ensures that everyone knows their tasks, making it easier to focus on their specific duties.
2. Efficient Workflow:
By creating a structured approach, a sales organization ensures that processes like lead generation,
customer follow-ups, and deal closures are well-coordinated. This improves productivity and reduces
wasted time.
3. Better Customer Focus:
Dividing sales efforts by customer types, geographic regions, or product lines allows sales teams to
concentrate on specific needs. This results in better customer satisfaction and stronger relationships.
4. Improved Communication:
Sales organizations promote teamwork by creating channels for information sharing and collaboration.
For example, sales teams can share updates about client interactions, ensuring everyone is on the same
page.
5. Goal Alignment:
By setting clear objectives, sales organizations ensure that all efforts contribute to achieving the
company’s goals. This alignment helps maintain focus and measure success effectively.
6. Performance Tracking:
A structured sales organization makes it easier to monitor progress. Tools like Salesforce provide
detailed reports on team and individual performance, enabling management to address issues and
reward success.
7. Strategic Growth:
Sales organizations analyze market trends and customer behavior. This data helps in identifying
opportunities for expansion and creating strategies for long-term growth.
 III. Disadvantages of a Sales Organization:
1. High Costs:
Establishing and maintaining a sales organization can be expensive. Costs include training, software tools,
and team salaries, which can be a burden for smaller businesses.
2. Rigid Structure:
While structure is important, too much rigidity can stifle creativity. Employees may feel restricted if they
are unable to explore innovative ways of closing deals or solving customer problems.
3. Conflict Risk:
Disagreements can arise between teams, especially when roles overlap or territories are not clearly
defined. Such conflicts can harm teamwork and reduce efficiency.
4. Dependency on Technology:
Modern sales organizations often rely on tools like Salesforce. While these tools improve efficiency, a
system failure or technical issue can disrupt operations significantly.
5. Training Needs:
A well-functioning sales organization requires continuous training to keep the team updated on new
tools, techniques, and market trends. This can be time-consuming and costly.
6. Communication Gaps:
In large organizations, communication between different teams or departments can be challenging.
Misunderstandings or delays in sharing information can affect customer service and sales outcomes.
7. Pressure on Employees:
Sales teams often work under high-pressure environments with strict targets and deadlines. This can
lead to stress, burnout, and a high turnover rate if not managed properly.
IV. TYPES OF SALES ORGANIZATION
1. Line Sales Organization
1. Authority moves in a straight line from the top boss to the workers.
2. Each salesperson has one direct manager to report to.
3. Works best for small businesses with simple products or a small area to cover.
4. The sales manager handles all tasks like planning, guiding, and monitoring the team.
2. Line and Staff Sales Organization
1. Combines direct managers (line) with specialists (staff) who give advice and support.
2. Line managers focus on sales, while staff handle tasks like research or training.
3. Decisions are made by line managers, but staff provide expert guidance.
4. Mostly used in bigger companies with more complex sales activities.

3. Functional Sales Organization

1. Sales tasks are divided based on specific functions like customer service or product focus.
2. Different managers oversee areas like customer needs or product sales.
3. Salespeople work under multiple managers depending on the task.
4. Good for companies with many products or customers needing special attention.

4. Horizontal Sales Organization

1. Has fewer levels of management, so everyone works more closely together.
2. Focuses on quickly meeting customer needs and adapting to changes.
3. Team members share responsibilities based on skills rather than strict roles.
4. Used by modern companies that want to encourage creativity and teamwork.
 V. PROCESS OF DEVELOPING SALES ORGANIZATION
Step 1: Define the Goals of the Sales Organization
 Understand what the company wants to achieve with its sales team.
 This can include goals like growth, increasing market share, reducing costs, becoming a market leader, and
building good customer relationships.
Step 2: Identify the Activities Needed
 List the tasks and activities that need to be done to reach the goals.
 Determine how much of each activity is needed and the cost involved.
Step 3: Define the Positions and Group Activities
 Identify the roles or positions that will carry out these activities.
 Group similar tasks together and assign them to the same role.
 Decide the level at which each task should be performed (higher or lower positions).
Step 4: Define Relationships and Authority
 Clarify how different positions are connected to each other.
 Determine who has the authority to make decisions in each role.
 Assign the right people to the positions.
Step 5: Review the Organization Structure
 Check if the structure:
a) Helps in managing and controlling the team properly.
b) Allows the company to grow.
c) Is flexible and can adjust to changes easily.
 VI. FACTORS AFFECTING SALES ORGANIZATION
1. Company Goals and Strategy
The overall goals of the company, such as growth, market share, and customer satisfaction, influence how
the sales organization is structured and the approach it takes to reach these goals.
2. Market Conditions
Changes in the market, such as competition, customer preferences, and economic factors, can impact how a
sales organization operates and adjusts its strategies to stay competitive.
3. Sales Volume and Complexity
The size of the sales target and the complexity of the products or services being sold affect how the sales
team is organized. More complex products might require a specialized sales team, while simpler products
might need a larger general sales team.
4. Technology
Advances in technology, such as CRM software, automation tools, and communication platforms, can
improve the efficiency and effectiveness of the sales team, influencing how the organization is structured
and managed.
5. Customer Needs and Segmentation
Understanding customer needs and segmenting them into different groups affects how the sales team is
organized. For example, targeting different types of customers may require specialized teams focusing on
each group.
6. Resources and Budget
The resources available, including budget, staff, and training, can impact the size and structure of the sales
organization. A limited budget might result in a smaller, more focused team, while more resources can
allow for a larger, more diverse team.
7. Management and Leadership Style
The approach taken by top management and sales leaders has a big impact on the sales organization.
Whether the leadership style is more hands-on or allows for more autonomy can shape how the sales team
is structured and how they perform their tasks.

VII. PURPOSE OF SALES ORGANIZATION

1. Achieve Sales Targets
The main goal of a sales organization is to ensure that the company meets its sales targets. This means
selling enough products or services to reach the company’s financial goals and growth plans.
2. Build Strong Customer Relationships
A sales organization helps build and maintain good relationships with customers. Strong relationships
lead to customer trust, satisfaction, and loyalty, encouraging them to keep coming back and recommend
the business to others.
3. Organize Sales Efforts
A sales organization helps manage how the sales team works by organizing tasks, setting clear roles,
 and ensuring the right people focus on the right tasks. This helps the team work more effectively and
efficiently.
4. Increase Revenue and Profit
By focusing on sales targets and improving sales strategies, the sales organization aims to increase the
company’s revenue (the money earned from sales) and profit (the money left after expenses). A well-
organized sales team can make the business more successful.
5. Monitor and Control Sales Performance
The sales organization tracks the performance of individual salespeople and the entire team. This helps
identify which areas are doing well and where improvements are needed. It also ensures that
salespeople are meeting their targets.
6. Adapt to Changes in the Market
A good sales organization can quickly adjust when there are changes in the market, such as new
competitors, changes in customer needs, or industry trends. This allows the company to stay
competitive and continue making sales.
7. Provide Training and Support
The sales organization ensures that the sales team has the training, tools, and knowledge needed to do
their job well. Ongoing training helps salespeople improve their skills and stay updated on the latest
products, services, or sales techniques.

I. MEANING OF SALESFORCE COMPENSATION

 Sales force compensation refers to the payment and rewards given to salespeople for their sales efforts.
 It includes both fixed components, such as a base salary, and variable components, like commissions and
bonuses.
 The compensation plan is designed to motivate salespeople by aligning their goals with the company’s
objectives.
 It provides financial incentives for salespeople to meet or exceed sales targets.
 A well-structured compensation plan helps retain skilled sales talent by offering competitive pay and
benefits.
 It encourages higher levels of performance and business growth by rewarding top performers.
II. OBJECTIVES OF SALESFORCE COMPENSATION
1. Motivation: The main goal is to motivate salespeople to sell more. When their pay is linked to how much
they sell, they are more likely to work harder to meet their targets.
2. Attracting Talent: A good compensation plan helps attract skilled and experienced salespeople. If the pay is
good, talented professionals are more likely to want to work for the company.
3. Retention: Offering a fair and rewarding compensation plan helps keep good salespeople in the company.
When employees feel valued, they are less likely to leave the company.
4. Aligning with Company Goals: The compensation plan should match the company's goals, like increasing
sales or improving customer satisfaction. This way, salespeople work toward achieving the company’s
objectives.
5. Rewarding Performance: Salespeople should be rewarded based on their performance. The better they
perform, the more they earn. This encourages them to work harder and achieve better results.
6. Fairness: The compensation should be fair to all salespeople. It should be based on how much work they do
and how much they sell, so everyone feels they are being paid fairly.
7. Managing Costs: The compensation plan helps the company control its costs. Some of the pay is fixed, like a
salary, but a portion is based on performance (commissions or bonuses). This way, the company only
spends more when the salespeople are doing well.

III. Requirements of a Good Compensation Plan

1. Attractive and Competitive
The compensation plan should offer a salary that is competitive with other companies in the industry. It
should be good enough to attract skilled employees and keep them with the company.
2. Clear and Transparent
Employees need to understand how the compensation plan works. The company should clearly explain
how rewards, such as bonuses and commissions, are earned.
3. Motivating and Performance-based
A good compensation plan should encourage employees to perform well. It should reward them based on
their achievements, like sales targets, with incentives such as commissions and bonuses.
4. Fair and Equitable
The plan must treat all employees equally. It should offer the same opportunities for everyone based on
their role and performance, without any unfair treatment.
5. Flexible and Adaptive
The compensation plan should be able to change when needed. If the company’s goals or market conditions
change, the compensation plan should adjust to meet these new needs.
6. Legally Compliant
The compensation plan must follow all laws and regulations, such as minimum wage and benefits laws.
This ensures the company stays legal and avoids any issues.
7. Rewarding Long-Term Success
A good plan should not just focus on short-term sales. It should also reward employees for staying with the
company and helping it grow in the long term. This can include things like profit sharing or stock options.

IV. Elements of a Good Compensation Package for Sales force

1. Base Salary
This is the regular, fixed amount paid to employees. It provides financial security and should be enough to
attract and retain skilled workers.
2. Sales Commission
Commissions are paid based on the sales an employee makes. It motivates employees to perform well and
reach sales targets, as they earn more for higher sales.
3. Bonuses
Bonuses are extra payments given when employees meet or exceed certain goals. These can be given on a
monthly, quarterly, or yearly basis, depending on performance.
4. Incentives and Rewards
Non-monetary rewards like gift cards, trips, or products can motivate employees. These rewards are a fun
way to recognize achievements and boost morale.
5. Health and Insurance Benefits
Health insurance, dental care, and life insurance are important benefits that show the company cares about
employees’ well-being, making the job more attractive.
6. Retirement Plans
Retirement plans like pension funds or 401(k) help employees save for the future. This shows the
company’s commitment to their long-term security.
7. Job Security and Career Growth
A good compensation plan includes opportunities for career development. Offering training and chances
for promotion helps keep employees motivated and loyal to the company.

I. MEANING OF MOTIVATING SALESFORCE

 Motivating the sales force means inspiring and encouraging sales employees to work with enthusiasm,
achieve their targets, and contribute effectively to the company’s success.
 It involves creating an environment where employees feel valued and appreciated for their efforts,
fostering a sense of purpose and commitment to their roles.
 Motivation ensures that sales employees align their personal goals, such as earning higher commissions or
gaining recognition, with the company’s objectives like increasing revenue and market share.
 By keeping the sales force motivated, companies can maintain consistent performance levels, even during
challenging market conditions or when morale is low.
 A motivated workforce experiences lower stress levels, improved job satisfaction, and fewer instances of
burnout, which can negatively impact productivity.
 When employees feel motivated, they are more likely to remain loyal to the organization, reducing
turnover rates and the cost of hiring and training new staff.

II. Why Motivating Sales force is Difficult

1. Varied Expectations
Salespeople often have different goals and expectations. While some may value monetary rewards, others
might prioritize recognition or career growth, making it challenging to create a one-size-fits-all motivation
plan.
2. High Stress Levels
Sales roles are often associated with high stress due to constant pressure to meet targets, handle rejection,
and maintain client relationships. This stress can make motivation harder to sustain.
3. Fluctuating Market Conditions
Economic changes, market competition, or product demand can impact sales performance. These
fluctuations can demotivate salespeople, as their efforts may not always yield expected results.
4. Monotony in Work
Sales roles often involve repetitive tasks like client follow-ups and presentations, which can lead to
boredom and reduced enthusiasm over time.
5. Unrealistic Targets
When companies set overly ambitious sales targets, employees may feel demoralized, leading to a lack of
motivation to even try reaching them.
6. Lack of Immediate Rewards
Salespeople may not always receive immediate recognition or rewards for their efforts, which can lead to
frustration and loss of drive.
7. Individual Performance Pressure
Salespeople are often evaluated on individual performance rather than teamwork, which can create a sense
of isolation and reduce overall morale.

III. Motivational Techniques for Salespersons

Financial Motivators
These involve money-based incentives that encourage employees to perform better:
1. Remuneration (Salary):
This is the basic pay given to employees. Companies motivate their salespeople by offering regular salary
increments based on performance or experience.
2. Bonuses:
Bonuses are extra payments given in addition to the basic salary. For example, top-performing salespeople
might receive an additional bonus to encourage more sales.
3. Commission:
Commission is a percentage of sales or profits given to salespeople. For instance, a salesperson might earn
10% commission for each car they sell, motivating them to sell more.
4. Promotion:
Promotion provides employees with higher authority and responsibilities, along with increased pay. It
motivates employees by rewarding their hard work and commitment.
5. Fringe Benefits:
These are additional benefits like free parking, company-provided accommodation, holiday allowances, or
mobile phones. Such perks motivate employees by making them feel valued.
 Non-Financial Motivators
These do not involve money but still encourage employees to perform better:
1. Job Security:
Employees feel more motivated when they know their jobs are stable. Without job security, even financial
benefits may fail to motivate them.
2. Challenging Work:
Employees who enjoy dynamic roles feel motivated when given challenging tasks. Companies can make
jobs more interesting through changes in job roles or responsibilities.
3. Recognition:
Acknowledging an employee’s hard work with words of appreciation or small rewards boosts their morale
and encourages them to work harder.
4. Opportunities for Growth:
Employees should feel that they have room for career growth. Companies should provide training or
chances for advancement to keep employees engaged and motivated.
5. Empowerment:
Involving employees in important decisions gives them a sense of belonging and importance in the
organization. Avoiding one-sided decisions fosters a team spirit and motivates them to contribute more.

IV. Methods of Motivating Sales Force

1. Maslow's Hierarchy of Needs
Maslow’s theory explains that employees have different types of needs that motivate them, arranged in a
step-by-step order. A sales force can be motivated by fulfilling these needs:
 Basic (Physiological) Needs:
Salespeople need a stable salary to cover essentials like food, housing, and other living expenses. Offering a
fair base pay ensures they can focus on their work.
 Safety Needs:
Job security, health insurance, and a safe work environment help salespeople feel secure. For example,
providing long-term contracts or retirement benefits assures them of stability.
 Social Needs:
Salespeople often work alone, so creating team-building activities or fostering friendships within the team
can help them feel connected and valued.
 Esteem Needs:
Recognition, awards, and promotions help salespeople feel respected. For instance, acknowledging top
performers with “Best Salesperson of the Month” awards boosts confidence.
 Self-Actualization Needs:
Providing opportunities to learn new skills, take on challenges, or achieve personal goals makes employees
feel fulfilled. For example, offering advanced sales training programs can help them grow.
2. Herzberg's Two-Factor Theory
This theory divides motivators into two categories: hygiene factors and motivators.
 Hygiene Factors (Prevent Dissatisfaction):
These are basic needs that prevent dissatisfaction but do not actively motivate salespeople. Examples
include:
 A fair salary.
 Good working conditions.
 Job security.
 Motivators (Drive Motivation):
These factors encourage employees to perform better. Examples include:
 Recognition for achievements (e.g., public praise or certificates).
 Career growth opportunities like promotions.
 Challenging and meaningful tasks to keep them engaged.
For example, while a clean office and good pay ensure employees are satisfied, adding rewards like
bonuses or growth opportunities truly motivates them.
3. Vroom's Expectancy Theory
Vroom’s theory emphasizes that employees are motivated when they believe their efforts will result in
rewards. It is based on three key elements:
 Expectancy:
Salespeople will work hard if they believe their efforts will lead to success. For example, they’ll put in extra
effort if they are confident that achieving a high sales target will result in a reward.
 Instrumentality:
Employees need to trust that their performance will be rewarded. For instance, if a company promises
bonuses for achieving targets, it must deliver on that promise to build trust.
 Valence:
The reward must be valuable to the employee. For example, some salespeople may value cash bonuses,
while others may prefer recognition or career advancement opportunities.
This approach focuses on aligning the company's goals with rewards that matter to each employee.
4. Churchill’s Motivation Approach
Churchill’s method focuses on understanding what motivates each salesperson individually and providing
tailored solutions.
 Personalized Motivation:
Every salesperson is different. Some may be driven by financial rewards, while others may value
recognition or career growth. For example, a high performer may be motivated by leadership
opportunities.
 Clear Goals:
Setting achievable and realistic sales targets motivates employees. For instance, breaking a yearly goal into
smaller monthly targets makes it easier to achieve.
 Regular Feedback:
Providing constructive feedback helps employees improve their performance. For example, weekly
meetings to discuss challenges and celebrate wins keep morale high.
 Trust and Support:
Building a supportive work environment where employees feel appreciated motivates them to give their
best. For example, managers who listen to their concerns and offer guidance build a strong bond of trust.

I. MEANING OF RECRUITEMENT OF SALESFORCE

 Recruitment of a sales force means finding people who can work in sales positions for a company.
 It involves looking for individuals who have the right skills, experience, or potential to succeed in sales jobs.
 Companies make people aware of the job openings by advertising through newspapers, online job portals, or
asking for referrals.
 The aim is to attract interested candidates who are willing to apply for the sales roles.
 This process helps the company create a group of qualified applicants for the sales team.
 The main goal is to ensure the company has enough talented people to achieve its sales targets effectively.
II. Process of Recruitment of Sales force
1. Identifying Requirements:
The company first decides how many salespeople are needed and what skills, experience, and
qualifications they should have for the sales role.
2. Preparing Job Descriptions:
A detailed job description is created, explaining the duties, responsibilities, and the qualities required for
the sales job.
3. Choosing Recruitment Methods:
The company chooses how to find candidates. This could include advertising on job portals, using social
media, asking employees for referrals, or visiting campuses to find potential candidates.
4. Creating Awareness:
The company makes people aware of the job openings by posting advertisements on websites, job boards,
or social media. They may also attend job fairs or networking events to reach out to potential candidates.
5. Inviting Applications:
Interested candidates are asked to apply by submitting their resumes and other required documents. This
step ensures that people who are interested in the job can officially apply.
6. Screening Applications:
The company reviews the applications and resumes to make sure the candidates meet the basic
qualifications. They filter out the unqualified ones and shortlist those who have the right skills and
experience.
7. Building a Candidate Pool:
A list of qualified candidates is created, who will then be considered for the next steps in the selection
process, such as interviews or testing.

III. MEANING OF SELECTION OF SALESFORCE

 Selection of a sales force is the process of choosing the right candidates from the group of people who have
applied for the job.
 It involves reviewing candidates' skills, experience, and qualifications to see if they match the requirements
for the sales job.
 The aim is to select individuals who will help the company achieve its sales goals and who fit well with the
company’s work culture.
 This process includes interviewing candidates, testing their skills, and checking their background and
previous job history.
 After evaluating all the candidates, the company chooses the best ones who are most likely to succeed in
the role.
 The selected candidates are then offered the job and become part of the sales team, contributing to the
company’s success in selling products or services.

IV. PROCESS OF SELECTION OF SALESFORCE

1. Receiving Applications:
Once the recruitment process is complete, the company receives applications from candidates who are
interested in the sales job. These applications include resumes, cover letters, and other relevant
documents.
2. Screening Applications:
The company reviews all applications to check if the candidates meet the basic qualifications and job
requirements. Unqualified candidates are eliminated at this stage.
3. Conducting Interviews:
Shortlisted candidates are invited for interviews. During the interview, the company assesses their
communication skills, personality, and knowledge about sales and the industry. The goal is to understand if
the candidates can handle the job and fit into the company culture.
4. Administering Tests:
Some companies may require candidates to take tests to assess their sales skills, problem-solving abilities,
or personality traits. These tests help the company better understand the candidates' strengths and
weaknesses.
5. Background Checks:
To ensure the candidates' qualifications and previous work experience are accurate, the company may
conduct background checks. This could involve verifying educational qualifications, previous employment,
and criminal records.
6. Final Decision:
After reviewing the results of the interviews, tests, and background checks, the company makes a decision
on which candidate(s) will be hired. The best-fit candidate(s) are selected based on their skills, experience,
and overall suitability for the role.
7. Job Offer:
Once the selection is made, the company extends a job offer to the chosen candidate(s). This offer includes
details about salary, benefits, and job responsibilities.
8. Onboarding:
After the candidate accepts the offer, they go through the onboarding process. This includes training,
learning about the company’s products, and getting familiar with the company’s sales strategies to prepare
them for their role.

V. Difference Between Recruitment and Selection of Salesforce

Aspect Recruitment Selection
Definition Process of finding and attracting Process of choosing the most suitable
candidates for sales jobs. candidates for the job.
Objective To create a pool of potential To pick the best candidate from the
candidates. pool of applicants.
Nature Positive – invites many applicants. Negative – eliminates unsuitable
candidates.
Steps Includes advertising, inviting Includes tests, interviews, and
applications, and building a pool. background checks.
Outcome A list of potential candidates. Final selection of the best
candidate(s).
Focus Attracting as many qualified applicants Assessing and choosing the best-fit
as possible. applicant(s).