Sales CRM Terms

What is Territory Management? (Explained With Examples)

What is Territory Management? (Explained With Examples)

What is Territory Management? (Explained With Examples)

Oct 11, 2023

Oct 11, 2023

Table of content
    Table of content
      What is Territory Management? (Explained With Examples)


      What is Territory Management? (Explained With Examples)

      Territory management is a strategic approach used by businesses to divide and assign specific geographic areas to their sales representatives or teams. The goal is to optimize sales efforts, improve customer service, and increase revenue in a systematic way. By assigning territories to sales personnel, companies can ensure proper coverage, avoid overlap or gaps in sales activities, and maximize market potential

      1°) What is Territory Management?

      Territory management, as the name suggests, involves the division of a market or geographic area into smaller territories that are assigned to individual sales representatives or teams. Each territory typically consists of a specific set of customers, prospects, or leads.

      When it comes to territory management, there is more to it than just dividing a market or area. It is a strategic approach that allows companies to optimize their sales efforts and ensure that resources are allocated efficiently. By dividing a larger market into smaller, targeted territories, companies can focus their sales efforts and tailor their strategies to specific customer segments or geographic areas.

      1.1 - Definition of Territory Management

      Territory management is the process of dividing a larger market into smaller, targeted territories based on factors such as geography, market potential, customer segmentation, or product lines. This division allows companies to allocate resources efficiently and ensure that sales efforts are focused and properly aligned.

      When defining territories, companies take into consideration various factors. Geography plays a crucial role as it helps determine the boundaries of each territory. Market potential is another important factor, as territories are often assigned based on the potential for sales growth in a particular area. Customer segmentation is also taken into account, as territories may be divided based on specific customer groups or demographics. Additionally, some companies may choose to divide territories based on product lines, assigning different territories to sales representatives specializing in different products or services.

      1.2 - Advantages of Territory Management

      Implementing a territory management strategy offers several benefits for businesses:

      1. Improved Customer Coverage: By assigning territories, companies can ensure that all customers are properly attended to and receive consistent service. Sales representatives can focus on building relationships and providing personalized support to their assigned customers, resulting in higher customer satisfaction and loyalty.

      2. Increased Sales Efficiency: Territory management streamlines the sales process by allowing sales representatives to focus on a specific area or customer segment. This allows them to develop deep knowledge and relationships, leading to more effective selling. Sales representatives can become experts in their territories, understanding the unique needs and preferences of their customers, and tailoring their sales strategies accordingly.

      3. Better Market Understanding: Territories enable sales teams to gain a deeper understanding of the specific needs, preferences, and dynamics of their assigned area, leading to improved decision-making and sales strategies. By focusing on a specific territory, sales representatives can gather valuable insights about the local market, competition, and customer behavior, which can be used to refine sales approaches and target potential opportunities.

      4. Enhanced Resource Allocation: By dividing the market, companies can allocate sales resources more effectively and avoid wasting time and effort in areas with low sales potential. Territory management allows companies to identify high-potential areas and allocate their best sales representatives or teams to those territories, maximizing the chances of success. This ensures that resources are utilized efficiently and that sales efforts are concentrated where they are most likely to yield results.

      1.3 - Disadvantages of Territory Management

      While territory management offers numerous benefits, there are also some potential challenges to consider:

      • Potential for Overlap or Gaps: If territories are not well defined or properly managed, there is a risk of overlapping responsibilities or areas not being covered at all, resulting in inefficiencies and missed opportunities. It is crucial for companies to establish clear boundaries and ensure that there is no ambiguity or confusion regarding territory assignments. Regular communication and coordination among sales representatives and teams are essential to avoid overlap or gaps in coverage.

      • Difficulty in Territory Assignment: Identifying the optimal territories for sales representatives requires careful analysis of factors such as market potential, customer density, and skills alignment. This process can be time-consuming and complex. Companies need to invest in thorough market research and data analysis to determine the most effective territory assignments. It may also be necessary to periodically review and adjust territories as market conditions change or business objectives evolve.

      • Resistance to Change: Implementing a territory management system may face resistance from existing sales personnel who might be comfortable with their current approach or uncertain about the new system's benefits. It is crucial for companies to communicate the rationale behind the change and provide training and support to sales representatives during the transition. Clear communication and involvement of the sales team in the decision-making process can help address concerns and ensure a smooth implementation.

      2°) Examples of Territory Management

      Let's explore some practical examples of how territory management can be applied in different contexts:

      2.1 - Example in a Startup Context

      In a startup context, territory management can be used to divide the initial target market into manageable areas based on factors such as location, industry, or customer size. This allows the startup's sales team to focus on specific territories and establish a strong presence, effectively penetrating the market with their products or services.

      For example, let's consider a tech startup that offers a software solution for small businesses. By implementing territory management, the startup can divide its target market into different regions. Each region can then be assigned to a dedicated sales representative who can focus on building relationships with potential customers in that area. This approach ensures that the startup's resources are efficiently utilized, and the sales team can provide personalized attention and support to businesses in each territory.

      Furthermore, territory management in a startup context can also help identify areas with high growth potential. By analyzing sales data and customer feedback from different territories, the startup can gain insights into market demand and adapt its strategies accordingly. This data-driven approach allows the startup to allocate resources effectively and make informed decisions for future expansion.

      2.2 - Example in a Consulting Context

      In consulting firms, territory management can be employed to assign clients or industry sectors to different consultants or teams. By doing so, each consultant can specialize in specific industries or sectors, allowing them to develop deep expertise. This approach enhances client satisfaction and maximizes the consultant's effectiveness in providing tailor-made solutions.

      For instance, let's consider a management consulting firm that offers services to clients across various industries. By implementing territory management, the firm can divide its client base into different sectors, such as finance, healthcare, technology, and retail. Each sector can then be assigned to a dedicated team of consultants who possess the necessary knowledge and experience in that particular industry.

      This specialization enables the consultants to understand the unique challenges and trends within their assigned sectors, allowing them to provide valuable insights and customized solutions to their clients. Moreover, by focusing on specific industries, the consulting firm can build a strong reputation and establish itself as a trusted advisor in those sectors, attracting more clients and fostering long-term relationships.

      2.3 - Example in a Digital Marketing Agency Context

      A digital marketing agency may adopt territory management to divide its target market based on industries or regions. By assigning dedicated account managers to specific territories, the agency can offer customized strategies and campaigns tailored to the unique needs and challenges of each industry or region. This approach ensures effective communication, personalized service, and improved client retention.

      For example, let's consider a digital marketing agency that provides services to clients in different industries, such as e-commerce, hospitality, and healthcare. By implementing territory management, the agency can assign dedicated account managers to each industry. These account managers can then focus on understanding the specific marketing needs and goals of clients within their assigned industry.

      By having a deep understanding of the industry, the account managers can develop tailored marketing strategies that resonate with the target audience and address industry-specific challenges. This approach not only improves the agency's ability to deliver effective marketing campaigns but also strengthens the client-agency relationship. The account managers can become trusted partners who understand the unique dynamics of their clients' industries, leading to increased client satisfaction and loyalty.

      2.4 - Example with Analogies

      To better understand the concept of territory management, analogies can be helpful. Think of a garden divided into different sections, each assigned to a gardener responsible for its care. This division ensures that each area receives the appropriate attention, leading to a flourishing and well-maintained garden. Similarly, territory management in sales allows businesses to allocate resources and efforts efficiently, resulting in optimal market coverage and increased revenue.

      For instance, imagine a large retail company with multiple stores across different regions. By implementing territory management, the company can assign specific territories to its sales teams. Each sales team is then responsible for managing and growing sales within their assigned territory, just like a gardener tending to their designated section of the garden.

      This approach allows the sales teams to focus on understanding the unique characteristics and preferences of customers in their territories. They can tailor their sales strategies, promotional activities, and customer engagement efforts to effectively meet the needs of the local market. As a result, the company can achieve better market coverage, build stronger customer relationships, and drive increased revenue.

      In conclusion, territory management is a strategic approach that helps businesses divide and assign geographic areas to sales teams or representatives. It offers advantages such as improved customer coverage, increased sales efficiency, better market understanding, and enhanced resource allocation. However, there may be challenges such as overlap or gaps, difficulty in territory assignment, and resistance to change. Real-world examples in various contexts highlight the versatility and benefits of implementing territory management strategies. By leveraging territory management effectively, businesses can optimize their sales efforts, provide better customer service, and ultimately drive growth and success.

      About the author

      Arnaud Belinga

      Breakcold Youtube Channel

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      Sales CRM Terms

      What is Customer-Centric Selling? (Explained With Examples)

      What is Customer Journey Mapping? (Explained With Examples)
      What is Customer Journey Mapping? (Explained With Examples)
      What is Customer Journey Mapping? (Explained With Examples)

      Sales CRM Terms

      What is Customer Journey Mapping? (Explained With Examples)

      What is the Customer Journey? (Explained With Examples)
      What is the Customer Journey? (Explained With Examples)
      What is the Customer Journey? (Explained With Examples)

      Sales CRM Terms

      What is the Customer Journey? (Explained With Examples)

      What is the Customer Lifetime Value (CLV)? (Explained With Examples)
      What is the Customer Lifetime Value (CLV)? (Explained With Examples)
      What is the Customer Lifetime Value (CLV)? (Explained With Examples)

      Sales CRM Terms

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      What is Customer Profiling? (Explained With Examples)
      What is Customer Profiling? (Explained With Examples)

      Sales CRM Terms

      What is Customer Profiling? (Explained With Examples)

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      What is Customer Retention? (Explained With Examples)
      What is Customer Retention? (Explained With Examples)

      Sales CRM Terms

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      What is Dark Social? (Explained With Examples)
      What is Dark Social? (Explained With Examples)

      Sales CRM Terms

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      What is Data Enrichment? (Explained With Examples)
      What is Data Enrichment? (Explained With Examples)

      Sales CRM Terms

      What is Data Enrichment? (Explained With Examples)

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      What is Data Segmentation? (Explained With Examples)
      What is Data Segmentation? (Explained With Examples)

      Sales CRM Terms

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      What is Database Marketing? (Explained With Examples)
      What is Database Marketing? (Explained With Examples)

      Sales CRM Terms

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      What are Decision Criteria? (Explained With Examples)
      What are Decision Criteria? (Explained With Examples)

      Sales CRM Terms

      What are Decision Criteria? (Explained With Examples)

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      What is a Decision Maker? (Explained With Examples)
      What is a Decision Maker? (Explained With Examples)

      Sales CRM Terms

      What is a Decision Maker? (Explained With Examples)

      What is a Decision-Making Unit (DMU)? (Explained With Examples)
      What is a Decision-Making Unit (DMU)? (Explained With Examples)
      What is a Decision-Making Unit (DMU)? (Explained With Examples)

      Sales CRM Terms

      What is a Decision-Making Unit (DMU)? (Explained With Examples)

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      What is Demand Generation? (Explained With Examples)
      What is Demand Generation? (Explained With Examples)

      Sales CRM Terms

      What is Demand Generation? (Explained With Examples)

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      What is Digital Marketing? (Explained With Examples)
      What is Digital Marketing? (Explained With Examples)

      Sales CRM Terms

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      What is Direct Marketing? (Explained With Examples)
      What is Direct Marketing? (Explained With Examples)

      Sales CRM Terms

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      What is a Discovery Call? (Explained With Examples)
      What is a Discovery Call? (Explained With Examples)

      Sales CRM Terms

      What is a Discovery Call? (Explained With Examples)

      What is a Discovery Meeting? (Explained With Examples)
      What is a Discovery Meeting? (Explained With Examples)
      What is a Discovery Meeting? (Explained With Examples)

      Sales CRM Terms

      What is a Discovery Meeting? (Explained With Examples)

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      What are Discovery Questions? (Explained With Examples)
      What are Discovery Questions? (Explained With Examples)

      Sales CRM Terms

      What are Discovery Questions? (Explained With Examples)

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      What is Door-to-Door Sales? (Explained With Examples)
      What is Door-to-Door Sales? (Explained With Examples)

      Sales CRM Terms

      What is Door-to-Door Sales? (Explained With Examples)

      What is a Drip Campaign? (Explained With Examples)
      What is a Drip Campaign? (Explained With Examples)
      What is a Drip Campaign? (Explained With Examples)

      Sales CRM Terms

      What is a Drip Campaign? (Explained With Examples)

      What is Dunning? (Explained With Examples)
      What is Dunning? (Explained With Examples)
      What is Dunning? (Explained With Examples)

      Sales CRM Terms

      What is Dunning? (Explained With Examples)

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      What is an Early Adopter? (Explained With Examples)
      What is an Early Adopter? (Explained With Examples)

      Sales CRM Terms

      What is an Early Adopter? (Explained With Examples)

      What is Elevator Pitch? (Explained With Examples)
      What is Elevator Pitch? (Explained With Examples)
      What is Elevator Pitch? (Explained With Examples)

      Sales CRM Terms

      What is Elevator Pitch? (Explained With Examples)

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      What is Email Hygiene? (Explained With Examples)
      What is Email Hygiene? (Explained With Examples)

      Sales CRM Terms

      What is Email Hygiene? (Explained With Examples)

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      What is Email Marketing? (Explained With Examples)
      What is Email Marketing? (Explained With Examples)

      Sales CRM Terms

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      What is Emotional Intelligence Selling? (Explained With Examples)
      What is Emotional Intelligence Selling? (Explained With Examples)

      Sales CRM Terms

      What is Emotional Intelligence Selling? (Explained With Examples)

      What is Engagement Marketing? (Explained With Examples)
      What is Engagement Marketing? (Explained With Examples)
      What is Engagement Marketing? (Explained With Examples)

      Sales CRM Terms

      What is Engagement Marketing? (Explained With Examples)

      What is Engagement Rate? (Explained With Examples)
      What is Engagement Rate? (Explained With Examples)
      What is Engagement Rate? (Explained With Examples)

      Sales CRM Terms

      What is Engagement Rate? (Explained With Examples)

      What is Engagement Strategy? (Explained With Examples)
      What is Engagement Strategy? (Explained With Examples)
      What is Engagement Strategy? (Explained With Examples)

      Sales CRM Terms

      What is Engagement Strategy? (Explained With Examples)

      What is Feature-Benefit Selling? (Explained With Examples)
      What is Feature-Benefit Selling? (Explained With Examples)
      What is Feature-Benefit Selling? (Explained With Examples)

      Sales CRM Terms

      What is Feature-Benefit Selling? (Explained With Examples)

      What is Field Sales? (Explained With Examples)
      What is Field Sales? (Explained With Examples)
      What is Field Sales? (Explained With Examples)

      Sales CRM Terms

      What is Field Sales? (Explained With Examples)

      What is a Follow-Up? (Explained With Examples)
      What is a Follow-Up? (Explained With Examples)
      What is a Follow-Up? (Explained With Examples)

      Sales CRM Terms

      What is a Follow-Up? (Explained With Examples)

      What is Forecast Accuracy? (Explained With Examples)
      What is Forecast Accuracy? (Explained With Examples)
      What is Forecast Accuracy? (Explained With Examples)

      Sales CRM Terms

      What is Forecast Accuracy? (Explained With Examples)

      What is a Funnel? (Explained With Examples)
      What is a Funnel? (Explained With Examples)
      What is a Funnel? (Explained With Examples)

      Sales CRM Terms

      What is a Funnel? (Explained With Examples)

      What is Gamification in Sales? (Explained With Examples)
      What is Gamification in Sales? (Explained With Examples)
      What is Gamification in Sales? (Explained With Examples)

      Sales CRM Terms

      What is Gamification in Sales? (Explained With Examples)

      What is Gatekeeper Strategy? (Explained With Examples)
      What is Gatekeeper Strategy? (Explained With Examples)
      What is Gatekeeper Strategy? (Explained With Examples)

      Sales CRM Terms

      What is Gatekeeper Strategy? (Explained With Examples)

      What is Gatekeeper? (Explained With Examples)
      What is Gatekeeper? (Explained With Examples)
      What is Gatekeeper? (Explained With Examples)

      Sales CRM Terms

      What is Gatekeeper? (Explained With Examples)

      What is a Go-to Market Strategy? (Explained With Examples)
      What is a Go-to Market Strategy? (Explained With Examples)
      What is a Go-to Market Strategy? (Explained With Examples)

      Sales CRM Terms

      What is a Go-to Market Strategy? (Explained With Examples)

      What is Growth Hacking? (Explained With Examples)
      What is Growth Hacking? (Explained With Examples)
      What is Growth Hacking? (Explained With Examples)

      Sales CRM Terms

      What is Growth Hacking? (Explained With Examples)

      What is Growth Marketing? (Explained With Examples)
      What is Growth Marketing? (Explained With Examples)
      What is Growth Marketing? (Explained With Examples)

      Sales CRM Terms

      What is Growth Marketing? (Explained With Examples)

      What is Guerrilla Marketing? (Explained With Examples)
      What is Guerrilla Marketing? (Explained With Examples)
      What is Guerrilla Marketing? (Explained With Examples)

      Sales CRM Terms

      What is Guerrilla Marketing? (Explained With Examples)

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      What is High-Ticket Sales? (Explained With Examples)
      What is High-Ticket Sales? (Explained With Examples)

      Sales CRM Terms

      What is High-Ticket Sales? (Explained With Examples)

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      What is Holistic Selling? (Explained With Examples)
      What is Holistic Selling? (Explained With Examples)

      Sales CRM Terms

      What is Holistic Selling? (Explained With Examples)

      What is Ideal Customer Profile (ICP)? (Explained With Examples)
      What is Ideal Customer Profile (ICP)? (Explained With Examples)
      What is Ideal Customer Profile (ICP)? (Explained With Examples)

      Sales CRM Terms

      What is Ideal Customer Profile (ICP)? (Explained With Examples)

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      What is Inbound Lead Generation? (Explained With Examples)
      What is Inbound Lead Generation? (Explained With Examples)

      Sales CRM Terms

      What is Inbound Lead Generation? (Explained With Examples)

      What is an Inbound Lead? (Explained With Examples)
      What is an Inbound Lead? (Explained With Examples)
      What is an Inbound Lead? (Explained With Examples)

      Sales CRM Terms

      What is an Inbound Lead? (Explained With Examples)

      What is Inbound Marketing? (Explained With Examples)
      What is Inbound Marketing? (Explained With Examples)
      What is Inbound Marketing? (Explained With Examples)

      Sales CRM Terms

      What is Inbound Marketing? (Explained With Examples)

      What is Inbound Sales? (Explained With Examples)
      What is Inbound Sales? (Explained With Examples)
      What is Inbound Sales? (Explained With Examples)

      Sales CRM Terms

      What is Inbound Sales? (Explained With Examples)

      What is Influencer Marketing? (Explained With Examples)
      What is Influencer Marketing? (Explained With Examples)
      What is Influencer Marketing? (Explained With Examples)

      Sales CRM Terms

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      What is Inside Sales Representative? (Explained With Examples)
      What is Inside Sales Representative? (Explained With Examples)
      What is Inside Sales Representative? (Explained With Examples)

      Sales CRM Terms

      What is Inside Sales Representative? (Explained With Examples)

      What is Inside Sales? (Explained With Examples)
      What is Inside Sales? (Explained With Examples)
      What is Inside Sales? (Explained With Examples)

      Sales CRM Terms

      What is Inside Sales? (Explained With Examples)

      What is Insight Selling? (Explained With Examples)
      What is Insight Selling? (Explained With Examples)
      What is Insight Selling? (Explained With Examples)

      Sales CRM Terms

      What is Insight Selling? (Explained With Examples)

      What is a Key Account? (Explained With Examples)
      What is a Key Account? (Explained With Examples)
      What is a Key Account? (Explained With Examples)

      Sales CRM Terms

      What is a Key Account? (Explained With Examples)

      What is a Key Performance Indicator (KPI)? (Explained With Examples)
      What is a Key Performance Indicator (KPI)? (Explained With Examples)
      What is a Key Performance Indicator (KPI)? (Explained With Examples)

      Sales CRM Terms

      What is a Key Performance Indicator (KPI)? (Explained With Examples)

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      What is a Landing Page? (Explained With Examples)
      What is a Landing Page? (Explained With Examples)

      Sales CRM Terms

      What is a Landing Page? (Explained With Examples)

      What is Lead Database? (Explained With Examples)
      What is Lead Database? (Explained With Examples)
      What is Lead Database? (Explained With Examples)

      Sales CRM Terms

      What is Lead Database? (Explained With Examples)

      What is a Lead Enrichment? (Explained With Examples)
      What is a Lead Enrichment? (Explained With Examples)
      What is a Lead Enrichment? (Explained With Examples)

      Sales CRM Terms

      What is a Lead Enrichment? (Explained With Examples)

      What is Lead Generation? (Explained With Examples)
      What is Lead Generation? (Explained With Examples)
      What is Lead Generation? (Explained With Examples)

      Sales CRM Terms

      What is Lead Generation? (Explained With Examples)

      What is Lead Nurturing? (Explained With Examples)
      What is Lead Nurturing? (Explained With Examples)
      What is Lead Nurturing? (Explained With Examples)

      Sales CRM Terms

      What is Lead Nurturing? (Explained With Examples)

      What is Lead Qualification? (Explained With Examples)
      What is Lead Qualification? (Explained With Examples)
      What is Lead Qualification? (Explained With Examples)

      Sales CRM Terms

      What is Lead Qualification? (Explained With Examples)

      What is Lead Scoring? (Explained With Examples)
      What is Lead Scoring? (Explained With Examples)
      What is Lead Scoring? (Explained With Examples)

      Sales CRM Terms

      What is Lead Scoring? (Explained With Examples)

      What are LinkedIn InMails? (Explained With Examples)
      What are LinkedIn InMails? (Explained With Examples)
      What are LinkedIn InMails? (Explained With Examples)

      Sales CRM Terms

      What are LinkedIn InMails? (Explained With Examples)

      What is LinkedIn Sales Navigator? (Explained With Examples)
      What is LinkedIn Sales Navigator? (Explained With Examples)
      What is LinkedIn Sales Navigator? (Explained With Examples)

      Sales CRM Terms

      What is LinkedIn Sales Navigator? (Explained With Examples)

      What is Lost Opportunity? (Explained With Examples)
      What is Lost Opportunity? (Explained With Examples)
      What is Lost Opportunity? (Explained With Examples)

      Sales CRM Terms

      What is Lost Opportunity? (Explained With Examples)

      What is Market Positioning? (Explained With Examples)
      What is Market Positioning? (Explained With Examples)
      What is Market Positioning? (Explained With Examples)

      Sales CRM Terms

      What is Market Positioning? (Explained With Examples)

      What is Market Research? (Explained With Examples)
      What is Market Research? (Explained With Examples)
      What is Market Research? (Explained With Examples)

      Sales CRM Terms

      What is Market Research? (Explained With Examples)

      What is Market Segmentation? (Explained With Examples)
      What is Market Segmentation? (Explained With Examples)