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The 2004 ISMS Practice Prize Winner—Sales Territory Design: Thirty Years of Modeling and Implementation

Author

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  • Andris A. Zoltners

    (Kellogg School of Management, Northwestern University, Evanston, Illinois 60201)

  • Prabhakant Sinha

    (ZS Associates, 1800 Sherman Avenue, Evanston, Illinois 60201)

Abstract

Sales territory alignment is the assignment of accounts and their associated selling activities to salespeople and teams. Models, systems, processes, and wisdom have evolved over 1,500 project implementations for 500 companies with 500,000 sales territories. Optimization models have evolved over time to explicitly consider travel time along road networks and customer disruption. Personal computers with continually increasing speeds and storage capabilities, the Internet, and mapping databases have enabled the development of systems that communicate alignments visually to sales managers. Because of their combinatorial complexity, multiple conflicting objectives, and personnel aspects that touch everyone in the salesforce, the alignment models were unable to completely solve the sales territory alignment issues faced by companies. Consequently, processes that add local managerial knowledge were used to communicate and enhance model-derived solutions, while achieving very high implementation rates. The territory alignment team gains knowledge with every sales territory alignment. Alignment insights get codified. Alignment experts improve every model-derived solution. This wisdom becomes part of subsequent alignments and triggers further innovation. Over time, the role of processes and wisdom becomes larger than the role of the models and systems.

Suggested Citation

  • Andris A. Zoltners & Prabhakant Sinha, 2005. "The 2004 ISMS Practice Prize Winner—Sales Territory Design: Thirty Years of Modeling and Implementation," Marketing Science, INFORMS, vol. 24(3), pages 313-331, September.
    • Handle: RePEc:inm:ormksc:v:24:y:2005:i:3:p:313-331
    DOI: 10.1287/mksc.1050.0133
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    References listed on IDEAS

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    Cited by:

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    2. Syam, Siddhartha S. & Bhatnagar, Amit, 2015. "A decision support model for determining the level of product variety with marketing and supply chain considerations," Journal of Retailing and Consumer Services, Elsevier, vol. 25(C), pages 12-21.
    3. Holtrop, Niels & Wieringa, Jakob & Gijsenberg, Maarten & Stern, P., 2016. "Competitive reactions to personal selling," Research Report 16004-MARK, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    4. Sebastián Moreno & Jordi Pereira & Wilfredo Yushimito, 2020. "A hybrid K-means and integer programming method for commercial territory design: a case study in meat distribution," Annals of Operations Research, Springer, vol. 286(1), pages 87-117, March.
    5. Echchakoui Said, 2019. "Salespeople’s reward preference methodological analysis," Journal of Marketing Analytics, Palgrave Macmillan, vol. 7(1), pages 24-39, March.
    6. Steven M. Shugan, 2006. "Editorial: Errors in the Variables, Unobserved Heterogeneity, and Other Ways of Hiding Statistical Error," Marketing Science, INFORMS, vol. 25(3), pages 203-216, 05-06.
    7. Lilien, Gary L., 2010. "Is academic marketing losing its way? Embrace intermediaries," Australasian marketing journal, Elsevier, vol. 18(3), pages 174-176.
    8. Yao, Ming-Jong & Lin, Jen-Yen & Lin, Yu-Liang & Fang, Shu-Cherng, 2020. "An integrated algorithm for solving multi-customer joint replenishment problem with districting consideration," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 138(C).
    9. V. Kumar & Rajkumar Venkatesan & Tim Bohling & Denise Beckmann, 2008. "—The Power of CLV: Managing Customer Lifetime Value at IBM," Marketing Science, INFORMS, vol. 27(4), pages 585-599, 07-08.
    10. Gary L. Lilien & John H. Roberts & Venkatesh Shankar, 2013. "Effective Marketing Science Applications: Insights from the ISMS-MSI Practice Prize Finalist Papers and Projects," Marketing Science, INFORMS, vol. 32(2), pages 229-245, March.
    11. J. Fabián López-Pérez & Roger Z. Ríos-Mercado, 2013. "Embotelladoras ARCA Uses Operations Research to Improve Territory Design Plans," Interfaces, INFORMS, vol. 43(3), pages 209-220, May-June.
    12. Ríos-Mercado, Roger Z. & Bard, Jonathan F., 2019. "An exact algorithm for designing optimal districts in the collection of waste electric and electronic equipment through an improved reformulation," European Journal of Operational Research, Elsevier, vol. 276(1), pages 259-271.
    13. Sandoval, M. Gabriela & Álvarez-Miranda, Eduardo & Pereira, Jordi & Ríos-Mercado, Roger Z. & Díaz, Juan A., 2022. "A novel districting design approach for on-time last-mile delivery: An application on an express postal company," Omega, Elsevier, vol. 113(C).
    14. Germann, Frank & Lilien, Gary L. & Rangaswamy, Arvind, 2013. "Performance implications of deploying marketing analytics," International Journal of Research in Marketing, Elsevier, vol. 30(2), pages 114-128.
    15. Bender, Matthias & Meyer, Anne & Kalcsics, Jörg & Nickel, Stefan, 2016. "The multi-period service territory design problem – An introduction, a model and a heuristic approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 96(C), pages 135-157.

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