Sales Territory Design: An Integrated Approach

The sales territory alignment problem may be viewed as the problem of grouping small geographic sales coverage units into larger geographic clusters called sales territories in a way that the sales territories are acceptable according to managerially relevant alignment criteria. This paper first reviews sales territory alignment models which have appeared in the marketing literature. A framework for sales territory alignment and several properties of a good sales territory alignment are developed in the course of the review. A general sales territory alignment model which accommodates these properties is developed. A solution procedure for the general model is presented. Finally, an actual implementation of the general model is described. The implementation provides a comparison of the general model with a similar model which has been frequently cited in the marketing literature.