A Sales Territory is a configuration of current and potential accounts for which 
 responsibility has been assigned to a particular sales representative.
  
   Although geographical considerations play a role in setting boundaries ,  sales 
 territories are primarily based on customer groupings. 
   Sales representatives are not only responsible for individual customers 
 (account management), but they are also responsible for a group of  accounts 
 ( territory management). 
    Territory management can be defined as the planning, implementation, and 
    control of salesperson’s activities with the goal of realizing the sales and  profit 
    potentials of the assigned territories.
            It is the responsibility of the salesperson to plan their activities in their 
    territories.
            Territorial planning has been described as a predetermined course of action 
    that involves establishing objectives, estimating the resources                                             needed,  and 
    designing  strategies which utilize these resources for the most                                            efficient 
    accomplishment of the stated objective.
 The Scope of Territory Management
   Sales representatives may be viewed as scaled down sales managers since 
 they bear the ultimate burden of managing parts of the customer base. 
   In managing their sales territories sales representatives manage only 
 themselves and their time, not the activities of other people. 
 Sales Territory Design
 Designing sales territories involves breaking down a firm’s customer base so that 
 accounts can be well served by individual sales persons.  
 This assignment of  accounts ranks as one of the most important responsibilities of sales 
 management.  
 Poor design has severe repercussions, such as inadequate market coverage, unequal 
 workloads, lack of control over the sales force and depressed morale.
 A company’s sales territories represent basic accountability units at the lowest level of 
 aggregation.
 The factors that motivate n govern the formation of sales territories are numerous. 
 However, they can be usually classified into three categories: 
    
     customer – related; 
    
     salesperson – related; 
    
     and managerial.
     Reasons for, and benefits of, Sales Territories
     REASONS                                       BENEFITS
                                       Customer – Related 
     Provide intensive market coverage             Produce higher sales
     Provide excellent customer service            Produce higher satisfaction
                                      Salesperson – Related 
     Foster enthusiasm                             Lead to less turnover
     Facilitate performance evaluation             Offer rewards related to efforts
                                            Managerial
     Enhance control                               Reduce expenses
     Coordinate promotion                          Give more returns
     Table 1.   Reasons for, and benefits of, Sales Territories