Explain the factors affecting the sales territories?

What are the factors affecting the size of a Sales Territory? Discuss.

Ans.

Factors affecting Sales Territory

Following factors affect sales territories:

(1) Policies of Business: Sales territory is highly affected by the policies of business. The size and nature of material, type of production, search of costing, markets control on sales, limits of business growth, and capital investment etc. should be considered during the determination of sales policies and thus sales territories may be formed.

(2) Methods of Distribution: Sales territory is also affected by the methods of distribution. Producer accepts that method for sales due to which customers can receive material directly from the producer. If it is not possible then material should be delivered by the shop or depot of the company or wholesaler or retailer. Thus on the base of methods of distribution sales territory is determined.

(3) Ability of Salesmen : Determination of sales territories is also affected by the ability of salesmen. Experienced and able salesmen have a high range of sales territory and new salesmen have a limited sales territory.

(4) Means of Advertisement and Sales Promotion: Sales territory is also affected by the means of advertisement and sales promotion centers of company or salesmen prepare a definite planning for this and submit it to the head office. To apply these means of advertisement and sales promotion, investment may be either from head office or by the acquired profit by the salesmen. If it is applied by the head office or by the acquired profit by the salesmen. If it is applied by the head office then the size of sales territory is large while if it is by the salesmen than the size of sales territory is small.

(5) Cost of an Area: Sales territory may be increased or decreased by the cost of an area. Every organisation invest a certain percentage of its investment for an area. With the increase in the investment area may also be increased.

(6) Level of Competition: Salesmen should take care of level of competition of marketing in their areas. When competition level is high, salesmen should be more active and alert.

(7) Economic Conditions of Country: It is essential to pay attention about economic conditions of country during the allotment of sales territories. Depending upon the economic conditions of the country, the shape of the sales territory may be increased or decreased.

(8) Demand of the Product: Demand of the product also increases or decreases the sales territories. Thus it is also essential to check the market for the exact position and demand of a particular product during the allotment of sales territory.

If demand of the product is much more in any region or area then sales territory is divided into some sub-sales territories and many small sales territories are made.

(9) Population: Population density should also be kept in the mind while establishing sales territory because population also affects the sales territory. The shape of the sales territory should be small at that region where. there is dense population and paush colonies.

(10) Size of Business: Size of a business also affects the sales territory. When the size of the business is large and production covers a big part of the total demand then a number of salesmen should be required. Thus, the shape and area of sales territory will be smaller.

(11) Government Policies: It is essential to know the government policy, while allotting the sales territory. Sometimes the shape and size of sales territory may be revised, changed or allocated due to government policies like cost control policy, distribution policy, conservation policy and rationing policy etc.