3. How would you form your sales team in 2020 in terms of organization of sales force.

Justify your reasons.

Sales force structures are generally represented by the organizational charts and every so
often answer the two key questions, how to divide all the sales activities among various
types of salespeople and how to organize and manage the activities to meet the company’s
goals. In addition, sales force structures describe the implementation of the selling plan by
the sales force. At the core level, salesperson roles and specialization explain the types of
customers each salesperson may represent and the tasks that each of them needs to
perform. The framework of the sales force will also include the reporting relationships that
occur within the sales force and this will help to identify the coordination and control
mechanisms that will guide the actions’ of the salespeople, affect the flow of information
and at the same time synchronizing the activities and information flows within the company.
There are many reasons why the sales force structures are important. From a customer’s
perspective, the structures determine on how many different salespeople the customer
sees, how knowledgeable the salespeople are about their products and customers and
therefore, how responsive the salespeople towards their customers’ needs. Meanwhile,
from company’s perspective, the structures help to influence how effectively the sales force
generates revenues, how it manages its costs efficiently, how adaptable it is to evolve and
whether or not it has the flexibility to change quickly. Moreover, sales force structures affect
everyone. The responsibilities or roles of different salespeople are specified by defining on
how the sales force will execute the sales strategy which includes identifying the type of
customers each of them will target, the products or service portfolios that they will sell and
the activities they will perform.
Besides that, sales force structures outline how the sales activity is coordinated and
controlled by identifying on how different sales roles will interface, the sales manager’s role
and the reporting relationships. Sales force organization charts range from the very simple
structure where each salesperson reports to the manager, to the most complex structure
where each salesperson is linked to several parts of the company focusing on specific
products, customers, selling activities and/or geography.
Companies have several choices of how to specialize the roles within their sales
organizations. For example, when a company sells a narrow or uncomplicated product line
to similar market segments, the salespeople are usually a generalist where each of them
sells the company’s full product to all types of customers. Generalists sales roles promote
efficiency because sales force travel and coordination needs are minimized. Meanwhile, a
company with diverse and complex product line may improve the sales force effectiveness
by designing sales roles that are specialized by product. A company that sells several
different product line to a diverse set of customers every so often have a selling process that
requires the salespeople to perform many unrelated and complex activities. In this situation,
the company often has generalist salespeople as well as a mix of product, market and/or
activity specialists.
As we may already know, there are four basic models of sales force specialization and that
include generalist, market-based, product-based and activity-based. Another model is a
hybrid which combines elements of two or more of the basic models. Since TEC is a US
based company that sells various products, I would prefer that the sales team would be
formed following the product-based specialization model. A product-based specialization is
most applicable when a company has a large, diverse and complex line of products. Each
salesperson specializes by selling only a few of the products in the company’s total product
portfolio and then reports to a management structure that is also focused on the same
limited number of product lines. Each product-based sales force calls on its own customers,
sets its own goals and rewards its own salespeople.

Figure 1 Product-Specialized Sales Force

Besides that, a product-based specialization is effective when it comes to ensure that a

product or product line receives the desired level by selling effort. For example, if there is a
need for twenty people to sell a certain product line into a market effectively, then the only
way for this amount of effort to actually devote to the product line is to establish a sales
force of twenty people. Likewise, if the sales effort allocated is too high, the management
can decrease the number of people to ensure that less time will be spent on the product
line. Sales structures with product specialists are often the easiest to manage and it is also
easier to track the financial data by product and create product-level profit and loss.
By forming the sales team using product-based specialization model, it will help the sales
leaders from their respective regions to easily intensify and control sales effort towards
strategically important products. Besides that, the salespeople also tend to have better
product knowledge thus making them product expertise.
4. Explain the various types of quotas use in sales management.
There are about three types of quotas that are widely used. They are sales volume quotas,
profit-based quotas and activity quotas. Among these three types of quotas, sales volume
quotas are broadly used for both large and small companies.
I. Sales Volume Quotas
This type of quota is a very specific volume targets established for each territory and
possibly for each product line for a specific period of time. This quota may be stated in a
numerous of ways and that include dollar volume, unit volume or even a point system
A dollar volume quota is suitable especially for these circumstances like when there is a
large number of similarly priced items (drugs to wholesalers), when the prices reflect
management’s selling priorities (higher-priced products are implied more important than
the less expensive products) and when prices are rather stable.
As for unit volume quota, sales objectives are stated in the terms of the number of units of
each product to be sold. This type of quota is popular in businesses that sell a limited
number of high-cost products like automobile parts and when the prices change regularly.
By stating quota in units, the effects of inflation can be eliminated from the system.
A point quota system is a certain number of points to be earned for selling each product.
This type of quota usually provides a greater management flexibility because points are
assigned to the sales of each type of product. For example, if management wishes to
emphasize a new product, it could simply increase the number of points awarded to the sale
of the product.
II. Profit-Based Quotas
This category of quota is quite similar to the sales quota but the main focus is on the profits
generated. Profit quotas are usually not based on the bottom-line profits but on gross
margin or contribution margin. Profit-based quotas attempt to focus more on the
salesperson’s attention towards profits not volume.
This quota is likely to be used when the salespeople make decisions that dramatically affect
the company’s profits. Profit contributions are often vary considerably among different
products, unless the salespeople are aware of these profit differences and know that they
will be held accountable for profits, there is no incentive to sell more profitable products.
III. Activity Quotas
Activity quotas set targets on the specific activities that will help the company’s sales and
profit objectives. This type of quota identifies the investment nature of selling, which is
salespeople must frequently performing activities that will have the potential to produce a
significant sales volume in the future.
A company that use activity quotas is often believe that success can be accomplished by
anyone who completes the recommended number of daily or weekly activities. Some typical
activity quotas include number of calls per day, calls on new accounts, point-of-purchase
displays and such. Besides that, this kind of quota is heavily based on the salespeople’s
behaviours.