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An Integrated Model-Based Approach for Sales Force Structuring

Author

Listed:
  • Arvind Rangaswamy

    (The Wharton School, University of Pennsylvania)

  • Prabhakant Sinha

    (ZS Associates)

  • Andris Zoltners

    (Northwestern University)

Abstract

This paper analyzes the problem of designing the structure of multiproduct sales forces selling in an environment where purchase decisions are made on a straight rebuy or modified rebuy basis. It addresses two key issues pertaining to structure: How many sales forces should the firm have and which products should be assigned to each sales force? First, the key determinants of sales force structure are identified and described. Next, a mathematical programming model is formulated that can aid firms in designing the structure of their multiproduct sales force. An application is then described in detail including sales response specification, parameter estimation, solution procedure, and model implementation. Insights from several of the numerous implementations of the model in the pharmaceutical industry are also summarized.

Suggested Citation

  • Arvind Rangaswamy & Prabhakant Sinha & Andris Zoltners, 1990. "An Integrated Model-Based Approach for Sales Force Structuring," Marketing Science, INFORMS, vol. 9(4), pages 279-298.
    • Handle: RePEc:inm:ormksc:v:9:y:1990:i:4:p:279-298
    DOI: 10.1287/mksc.9.4.279
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    Citations

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    Cited by:

    1. Darmon, Rene Y., 2002. "Salespeople's management of customer information: Impact on optimal territory and sales force sizes," European Journal of Operational Research, Elsevier, vol. 137(1), pages 162-176, February.
    2. Fabio Caldieraro & Anne T. Coughlan, 2009. "Optimal Sales Force Diversification and Group Incentive Payments," Marketing Science, INFORMS, vol. 28(6), pages 1009-1026, 11-12.
    3. Feng, Cong & Fay, Scott, 2020. "Store Closings and Retailer Profitability: A Contingency Perspective," Journal of Retailing, Elsevier, vol. 96(3), pages 411-433.
    4. Johannes Habel & Sascha Alavi & Nicolas Heinitz, 2023. "A theory of predictive sales analytics adoption," AMS Review, Springer;Academy of Marketing Science, vol. 13(1), pages 34-54, June.
    5. Guenzi, Paolo & Sajtos, Laszlo & Troilo, Gabriele, 2016. "The dual mechanism of sales capabilities in influencing organizational performance," Journal of Business Research, Elsevier, vol. 69(9), pages 3707-3713.
    6. Ho-Taek Yi & Young-Bong Cha & Fortune Edem Amenuvor, 2021. "Effects of Sales-Related Capabilities of Personal Selling Organizations on Individual Sales Capability, Sales Behaviors and Sales Performance in Cosmetics Personal Selling Channels," Sustainability, MDPI, vol. 13(7), pages 1-21, April.
    7. Murali Mantrala & Sönke Albers & Fabio Caldieraro & Ove Jensen & Kissan Joseph & Manfred Krafft & Chakravarthi Narasimhan & Srinath Gopalakrishna & Andris Zoltners & Rajiv Lal & Leonard Lodish, 2010. "Sales force modeling: State of the field and research agenda," Marketing Letters, Springer, vol. 21(3), pages 255-272, September.
    8. Haase, Knut & Müller, Sven, 2014. "Upper and lower bounds for the sales force deployment problem with explicit contiguity constraints," European Journal of Operational Research, Elsevier, vol. 237(2), pages 677-689.
    9. T. S. Raghu & B. Jayaraman & H. R. Rao, 2004. "Toward an Integration of Agent- and Activity-Centric Approaches in Organizational Process Modeling: Incorporating Incentive Mechanisms," Information Systems Research, INFORMS, vol. 15(4), pages 316-335, December.
    10. Panagopoulos, Nikolaos G. & Avlonitis, George J., 2010. "Performance implications of sales strategy: The moderating effects of leadership and environment," International Journal of Research in Marketing, Elsevier, vol. 27(1), pages 46-57.

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