Advantages of allocation of sales territories

1. By appointing a salesman or a group of salesmen for a particular territory, the company is able
to serve his customers more satisfactorily.

2. Comparison among salesmen is possible and can be easily made. This is so because there is
equitable distribution of territories among equally competent salesmen.

3. By allocating sales territories, the entire sales field of a particular organisation can be covered
quickly.

4. Assignment of a particular territory to a particular salesman makes the sales force to work
hard, as the man working in a particular territory has fixed selling targets before him.

5. By assigning pre-determined sales territories, the sales manager instills the element of
competition among the sales force. Competition among salesmen definitely results in more sales.

6. The inefficient salesmen are easily found out by the sales organisation.

7. The organisation is able to know sales potentialities of each area. Therefore comparison
among sales areas is possible.

8. The allocation of sales territories restricts the area of operation of the salesman to given
geographical area. This helps to develop friendly relationship between the salesman and the
customers. This helps the salesmen to increase their sales volume.

9. Market survey can be easily and quickly done when a company has its sales territories
properly divided among its salesmen.

10. Allocation of sales territories ensures adequate market coverage and avoids duplication of
sales efforts.
 Methods used for Designing Territories

1. Build-up Method:
Current & prospective customers are identified and their sales requirements analysed
individually. Subsequently the salespersons are assigned territories on the basis of the
sales volumes & number of calls they are supposed to make to these accounts.
1. Determine Optimal Call Frequencies.
2. Determine the total number of calls needed in each control unit.
3. Determine workload capacity.
4. Draw tentative territorial boundary lines.
5. Modify the tentative territories as needed.

2. Breakdown Method: In this method, the market potential for the product is
identified & then the market share that the company is targeting assessed.
1. Determine sales potential.
2. Determine sales potential in each control unit.
3. Determine the sales volume expected from each sales person.
4. Draw tentative territorial boundaries.
5. Modify tentative territories as needed.

3. Incremental Method: In this Method, additional territories are created as long as

the revenues generated from them exceed the cost of serving them.
 Territory Shape
The sales manager has to decide the shape of the territory. The territory shapes affects the
selling expenses and also helps for sales coverage. There are four types of shapes, which are
used widely.

 The wedge

 The circle

 Hopscotch

 The cloverleaf

The Wedge:
This shape is suitable for the territories, which contain both the urban and non-urban areas. The
radius starts from the most populated urban center. Wedges can be divided into many sizes and
the travel time can be maintained by balancing between the calls of urban and non-urban areas.

The Circle:
When the clients are distributed evenly throughout an area, the sales manager chooses the circle
shape. The salesperson starts from the office, moves in a circle of stops until he reaches the
office again. This helps the salesperson to come near to the customer as compared to the wedge.
The Hopscotch:
In this shape, the salesperson begins from the last point from office and reach out the customers
while coming back to the office. While going, the salesperson does not stop anywhere and
attends calls in one direction while coming back to the office.

The Cloverleaf:
When the accounts or client are located randomly in a geographical area, the cloverleaf shape is
used. This type of shape is more often found in industrial markets than in consumer markets.