What is a sales territory? What are the major reasons for forming sales territories?

A sales territory comprises a group of customers or a geographic area assigned to a salesperson. The territory may or may not have geographic boundaries. Typically, however, a salesperson is assigned to a geographic area containing present and potential customers. Companies develop sales territories for the following reasons. (1) For obtaining thorough coverage of the market. (2) For establishing each salesperson's responsibilities. (3) For evaluating the performance of salespeople. (4) For improving customer relations. (5) For reducing sales expense. (6) For allowing better matching of salesperson to customer's needs.