Question

“Establishing sales territories facilitates proper market coverage and controlling the sales force.” Explain.

Hint:

Explain what a territory is. Then show how it helps reach all customers and helps the manager check each salesperson.

Answer 1

Step 1: Meaning of a sales territory:
A sales territory is a group of present and possible customers in a fixed area. The firm gives this area to one salesperson or one team.

Step 2: How territories help market coverage:
The firm divides the whole market into areas, so every area has a named salesperson. No customer is left out, and no two salespersons call on the same buyer.
The salesperson plans routes and visits, which uses time well and covers the area fully.

Step 3: How territories help control of the sales force:
Each salesperson has a clear target and a clear area. The manager compares actual sales with the target for each territory.
This shows who is doing well and who needs help, and it makes rewards and training fair.

Step 4: Added benefits:
Selling cost falls, customer service improves and the firm knows its market better.

Final Answer:
Territories divide the market among salespersons, so the market is covered fully and each salesperson's work is easy to guide and judge.