GfK GeoMarketing
Tailored for success: Territory planning in the textile industry
While some criteria for optimizing territory structure can vary from branch to branch, certain fundamental principles hold across the board. RegioGraph provides comprehensive support in this regard, as Anne Schroeder shows in her university dissertation
The motivating reason behind she examined textile company’s need for territory optimization was the retirement of several sales representatives. Anne Schroeder, a business student at the University of Cooperative Education in Stuttgart, chose to focus on this restructuring in her dissertation, for which she found GfK GeoMarketing’s territory planning software, RegioGraph, invaluable.
“As part of my thesis, it was necessary to shed more light on the concept of sales territory planning,” says Anne Schroeder. “With reference to the existing sales territory structure, my goal was to devise a restructuring plan that took into the account the various needs and characteristics of the company. Working together with the textile company provided me with a practical starting point and a specific aim to explore. RegioGraph’s practice-oriented design was instrumental to the successful completion of the project.“ The initial focus of the thesis was an analysis of the existing sales territory structure.
“Theoretically, an optimized analysis of a company’s sales, territory and market data plays a decisive role in its chances of success. My research confirmed that this holds true for the textile company, demonstrating as well that much of the aforementioned data varies significantly according to location. Territory planning software such as RegioGraphis indispensable in preparing a regionspecific marketing analysis, particularly in the case of a company with a sales department.“
The task was clear: optimize the sales territories by adapting them to the parameters of the regions in question, such as the number of actual customers and potential customers, past sales figures, concentration of customers, sales and marketing potential and the location of sales teams and customers.
Implementing the project withRegioGraph , Part One – The Analysis:
With the help of GfK GeoMarketing’s 5-digit postal code map, the company’s customer data could be visualized and analyzed. This madeit possible to identify where the sales representatives lived and operated, in addition to the routes they traveled to and from customer locations.
The distribution of current and potential customers within the German sales regions also became clear, as did the distribution of customers according to size-based categories. This visualization facilitated the identification of especially strong sales territories, as well as several aspects of company operations that could be improved, including, most critically, overlaps in the driving routes of the sales representatives.
Implementing the project withRegioGraph , Part Two – New Planning:
The defined goal for the subsequent restructuring was as follows: A clear structure should be created allowing the best customer service possible for the lowest possible cost.
The 5-digit postal code areas of Germany were used as a starting point for optimizing the service areas. The demarcation of postal code areas was departed from only in those instances in which not doing seemed disadvantageous to the business. It was important to guarantee that existing customer relations would not suffer from any effects of the restructuring. The aim was to ensure that the new structure resulted in medium- to long-term continuity with regard to customer contact partners.
Care was also taken to create sales territories whose size and structure permitted the full utilization of the company’s existing sales staff. Regional cultural and linguistic variations were also taken into account. Additionally, the drafting of sales territory boundaries considered the locations of the sales staff’s homes in order to avoid long drives and overnight stays. Finally, attention was given to the relative skills and abilities of the sales staff.
“Only by using the territory planning software RegioGraphwas it possible for me to perform this kind of analysis and territory planning,” Schroeder explained. “The geographic relationships connecting addresses, cities and sales territories were illuminated through the visualization of the data. As a result, strengths and weaknesses could be identified more easily, enabling the creation of a more streamlined business structure.”
“The software also allowed me to present my project results to my thesis supervisor at my university in Stuttgart in a very convincing fashion. RegioGraph was thus a key factor in the success of the territory optimization and my academic endeavors.”
The textile industry has been in continual flux for more than 30 years. The textile industry is a “nomad” in the processing and production sector. Due to the high intensity of labor resources in the sewing sector, processing and production sites are frequently chosen according to the level of wages offered in the respective regions. Many companies have outsourced much of their labor from Western Europe to Eastern Europe, as well as to Asia in a persistent effort to lower wage costs and raise profit margins. Developing new markets in these regions is regarded as equal in importance to the establishing of sales staff closer to home. In many cases, the executive and administrative headquarters for these companies remain in industrialized countries such as Germany.
For further information on the thesis, please contact:
Anne Schroeder, schroederanne(at)gmx.de