Give the reasons of establishing or revising sales territory.

Ans.

Reasons of Revising Sale Territories

Sales territories are set up and revised according to market conditions. Main objective revising a sale territory is to plan and manage sales. Every company wants to maximize its sales and profits by improving customer relationship service and reducing selling expenses. It is the key objective with the help of this distribution of work load among sales persons become easy. There are some main reasons of revising sales territory are given as under:

(1) Improvement in Market Coverage: Main reason for establishing or revising sales territory is to improve market coverage. The enterprise may lose its business, when there is a lack of proper market coverage. If sales territories are designed properly and assigned to sales personnel carefully, it is possible that there is a wide and better market coverage. To overcome from the problem of market coverage, management must establish sale territories. Some considerations should be kept in mind while establishing or revising sales territories eg. the market is being expanded, it permit the sales force to cover the assigned sale territories, efficiently and economically, maximum area is presented by sales force, territories should represent reasonable workload to facilitate them to contact customers.

Good territorial, design allows sales personnel to spend time with customers. Sale territories combined with appropriate sales force assignments, when it is well-designed. Call regularity is important in selling of products.

(2) To reduce or control Selling Expenses: Special feature of a good territorial design is that it is combined with good sales person who give best results in low selling expenses. Main reason for the establishment of sales territories should assist in reducing selling expenses ratios.

If territorial planning is not combined with proper assignments, the ratio of selling expenses increase. Sales force visit should be reduced by appropriate routing and scheduling with this proportional selling expenses also be reduce. When there is a need of change, sales territories should also be changed.

Motive of sales management is not only reduce selling expenses, but also make proper relationship between expenses and volume of sales. Rises in selling expenses are not be followed by increased sales volumes and higher sales volumes. Sales territories is one step management.

(3) To improve Sales Force Interest: Reason of revising sales territories is also to improve sales force morale and interest. Good territorial design help in maintaining sales force interest. Some factors are keep in mind while designing sales territories. The salesman is in a position to achieve the target, workload given to the sales person should be in according his capacity, salesman should be aware of their responsibility. When sales territories are not used, there are numerous conflicts. The above mentioned factors help in promoting sales force morale and interest. These factors put the individual sales person to work hard and make each sales person as productive as It will raise the self-confidence of each sales person and to maximize their morale.

(4) To coordinate Personal Selling and Advertising Efforts : One more objective of revising sales territories is to establish coordination between advertising and personal selling. Coordination is necessary between advertising and personal selling to perform the selling task more efficiently. In most situations personal selling and advertising alone are not sufficient to complete the selling task. The salesman may call upon dealers to draft the marketing’s plan prior to launching an advertising compaign for a new consumer product.

This may result more satisfied performance.

(5) To improve Sales Planning: There is an improvement in sales planning by establishing sales territories. Main motive of establishing sales territories is to improve sales planning by proper sales budgeting, sales forecasting, market research, sales profitability analysis.

(6) To meet the Competition: With the help of sales territories the enterprise can face the competition more effectively on the basis of above management revise the selling strategies.