Sales Force Management Exam 1

Equal Employment Opportunity Legislation

- Guidelines prohibit withholding jobs or promotions because of either customer preferences for salespeople of a particular race or sex or presumed differences in turnover rates. - Prohibit separate promotional paths or seniority lists - Additional legislation has outlawed discrimination on the basis of age and physical disabilities

Presenting the sales message

--> Core of the selling process --> Salesperson transmits information about a product or service and attempts to persuade the prospect to become a customer

Concept of Lifetime Value of a Customer

--> Investment in CRM yields more successful long-term relationships with customers and that these relationships pay off handsomely in terms of cost savings, revenue growth, profits, referrals, and other important business success factors --> It is possible to actually calculate an estimate of the projected financial returns from a customer, providing a very useful strategic tool for deciding which customers deserve what levels of investment of various resources

Servicing the Account

--> Salesperson's job is not finished when the sale is made --> Many types of service and assistance must be provided to customers after a sale to ensure their satisfaction and repeat business.

Disadvantages of personal selling as the primary marketing communication tool

1. A sales rep can communicate with only a small number of potential customers 2. Personal selling is much more costly per person reached than other promotional tools

6 drivers of change identified in reinventing sales organizations

1. Building long-term relationships with customers 2. Creating sales organizational structures that are more nimble and adaptable to the needs of different customer groups 3. Gaining greater job ownership and commitment from salespeople 4. Shifting sales management style from commanding to coaching 5. Leveraging available technology for sales success 6. Better integrating salesperson performance evaluation

Steps to determine sales force size by the workload method

1. Classify customers into categories 2. Determine frequency and length of calls for accounts in each category 3. Calculate workload to cover entire market 4. Determine time available per salesperson 5. Apportion salesperson's time by task performed 6. Calculate the number of salespeople needed

CRM System Pushbacks

1. Disruptions of established routines 2. The perception of the software as a micromanagement tool 3. Differences in the expectations for the system from sales staff and management 4. Perceived lack of management support for the system

Advantages of Personal selling as the primary marketing communication tool

1. Personal sales messages are often more persuasive than advertising or publicity in mass media 2. Sales representatives can communicate a larger amount of complex information than can be transmitted with other promotional tools 3. The salesperson can use visual aids 4. The salesperson can spend more time getting to know the client's problems and needs and educating the client about the advantages of appropriate products or services. 5. Long term contact in personal selling is particularly important when the product or service can be customized to fit the needs of an individual customer or when the terms of sales are open to negotiation

Steps in territory design

1. Select basic control unit 2. Estimate market potential in each control unit 3. Combine control units into tentative territories 4. Perform workload analysis 5. Adjust tentative territories to allow for sales potential and coverage difficulty differences 6. Assign salespeople to territories

Selling Process

1. prospecting for customers 2. opening the relationship 3. qualifying the prospect 4. presenting the sales message 5. closing the sale 6. servicing the account

B

A company's organizational structure for sales should A. Have a wide span of control B. Allow the firm to benefit from specialization of labor C. Incline line, but not staff, personnel D. Organize it around people, not activities E. Be either vertical or horizontal, but not both

Fire some customers

A sales rep is studying the projected financial returns from a customer including money, resources, time and info involved in managing each account. LTV in a customer, know what that may lead to

E.

A strategic partnership between buyer and seller is identified by a: A. Short-time horizon B. Low concern for the other party C. Collaborative relationship between the participants D. Bargaining relationship between the participants E. Cooperative relationship between the participants

B

According to Michael Porter, a firm practicing a niche strategy: A. Has relative market share and emphasizes efficient-scale facilities B. Dominates a particular target market although its overall market share may be low C. Chooses high-growth markets while holding onto substantial mature markets D. Attempts to pioneer in product/market development E. Insulates itself from competitive rivalry by creating brand loyalty and the resulting lower sensitivity to price

C

Archway Furniture is projecting their expected financial returns from different groups of customers. Archway is estimating the A. Data warehousing ROI B. Supply chain cost and revenues C. Lifetime value of customers D. Marketing mix profitability E. Generic strategy returns

D

As a sales forecasting technique, market tests: A. Are more reliable for industrial products than for consumer products B. Are inexpensive to administer C. Always provide realistic pictures of potential sales D. Are often used with a new product or with an improved version of an established one E. Can be conducted quickly if the manufacturer needs to get the product to market quickly to beat its competitors

Questions to ask when closing a sale

Ask for the order --> May I write that order up for you? --> When do you want it delivered? Ask the client to choose between two alternative decisions --> Will that be cash or charge? --> Do you want the blue or the red one?

Prospecting for Customers

Cold canvassing, telemarketing generating leads through the internet, etc.

D

Fiona is creating a new sales force. To develop an effective sales force she will: A. Start with an annual sales target B. Avoid existing sales efforts C. Allow new salespeople independence D. Avoid compensation snafus E. Develop her sales force secretly

D

In a survey of sales managers, the highest rated success factor was A. Creativity B. Diligence C. Asserviceness D. Listening skills E. Prospecting skill

Opening the Relationship

Initial approach to a prospective customer, the sales rep should try to open the relationship by accomplishing two things --> Determine who within the organization is likely to have the greatest influence or authority to initiate the purchase process and who will ultimately purchase the product --> Generate enough interest within the firm to obtain the information needed to qualify the prospect as a worthwhile potential customer

Distribution Structure

Karen is studying the potential for selling her products in China. As a part of that analysis in assessing the number, type and availability of wholesalers and retailers. What is she studying about that country?

A

Lisa inherits a sales force that does what it wants. She wants to increase her control. How can she control her sales force? A. By establishing operating procedures and policies B. By delegating more sales responsibilities to independent representatives C. Through assertiveness training classes D. Through understanding the needs of her sales force E. All of the above

C

Most marketing executives argue it is best to use sales representatives and selling agents A. In stable marketing environments B. When the company is large C. For territories with low sales potential D. When greater control over selling efforts is needed E. All of the above

Closing the sale

Obtaining a final agreement to purchase

Qualifying the prospect

Requires salespeople to put aside eternal optimism and make an objective, realistic judgment about the probability of making a profitable sale. --> Does the prospect have a need for my product or service? --> Can I make the people responsible for buying so aware of that need that I can make a sale? --> Will the sale be profitable to my company?

D

Sales management is a multi-step interrelated process. Which step is concerned with environmental factors and attempts to organize the overall selling efforts as well as integrate them with other elements of the firm's marketing strategy? A. The organizing stage of the sales program B. The implementation stage of the sales program C. The evaluation and control of sales force program D. The formulation of the sales program E. All of the above process are concerned with environmental factors, and attempts to organize the overall selling efforts as well as integrate them with other elements of the firm's marketing strategy

E

Sales staff executives are commonly used to: A. Recruit new salespeople B. Analyze sales trends and make forecasts C. Train new salespeople D. Collect and gather environmental information which line managers may need for decision making E. Do all of the above

E

Sales volume quotas based on historical data: A. Create a quota plan that is difficult to administer B. Give equal weight to both current and past conditions C. Require extensive statistical analysis to set appropriate quotas D. Are basically derived from the market potential in each individual territory E. Can demoralize salespeople and cause undesirable behavior

B

Selling in B2B markets involves sales to: A. Resellers, consumers, and institutions B. Resellers, business users, and institutions C. Consumers, business users, and institutions D. Resellers, business users, and consumers E. None of the above

Why would a firm use zip code as a basic geographic control unit?

Small geographic controls are preferable to large ones because --> With large units, areas with low potential may be hidden by their inclusion in areas with high potential, and vice versa; making it difficult to pinpoint true geographic potential which is a primary reason for forming geographically defined sales territories in the first place --> small control units make it easier to adjust sales territories when conditions warrant

D

Team Selling: A. Is appropriate for small, innovative customer who need products B. Only allows members from marketing, production and sales department to participate in the process C. Is easy to coordinate D. Is appropriate for the largest customers, where the potential purchase represents enough dollars and involves enough functions to justify the high cost E. Is only used to win new accounts and not for maintenance selling

C

Telemarketing has proven to be useful in performing all of the following activities EXCEPT: A. Prospecting B. Providing technical assistance C. Negotiation D. Repeat purchases E. Speeding up marketing communications

B

The Phenomenon of a small percentage of customers or products accounting for a high percentage of company's sales is called the A. Account activity analysis B. 80:20 principle C. NAICS construct D. Buying Power Boose E. The Iceberg Principle

C

The difference between a law and ethics is best described by A. What is ethical may not be legal B. Laws are concerned with the development of moral standards C. What is legal may not be ethical D. Formal policies define what is legal and ethical for salespeople E. Legal puffery is ethical too

E

The improvement of post-sale customer service and loyalty: A. Creates positive word-of-mouth for the seller and its product(s) B. Allows a company to avoid the high costs associated with acquiring a new customer C. Increases the number of customer referrals D. Produces larger volume sales with lower selling and distribution costs E. Does all of the above

E

The potential demand for a product within a country depends on that country's A. Economic growth rate B. Unemployment rate C. Inflation rate D. Disposable income E. All of the above

D

The question of what business a firm is in is addressed in its: A. Organization-wide strategic plan B. Opportunity analysis C. Tactical plans D. Mission statement E. Market segmentation strategy

Missionary Seller

The sales force's primary job is to increase business from current and potential customers by providing them with product information and other personal selling assistance

New Business Seller

The sales force's primary responsibility is to identify and obtain business from new customers

Technical Seller

The sales force's primary responsibility is to increase business from current customers and potential customers by providing them with technical and engineering information and assistance

Relationship Selling

Type of selling that narrows the vendor pool, improves efficiency, works directly with customers to solve problems

Transaction selling

Type of selling where transactions involve separate organizations, each entering into an independent contract

B

Victor is considering replacing his company's independent sales representatives. He is frustrated because the reps spend little time on the many potential small accounts and provide almost no post-sale service to customers. Victor is struggling with what is called: A. Core dependency B. Transaction cost analysis C. Division of labor specialization D. Co-marketing alliances E. Logistical support supervision

D

When it comes to sales force deployment it refers to decisions regarding... A. Sales force size and the number of territories B. Design of individual territories C. Allocation of the total selling effort D. Simultaneous decision making out of all of the above

The isolate-and-explode principle

Where concentration of sales within certain territories product or customers, hiding specific weakness is an example of _____________________________

D

Which of the following is NOT one of the six drivers of change identified in reinventing sales organizations? A. Building long-term relationships with customers B. Creating sales organizational structures that are more nimble and adaptable to the needs of different customer groups C. Shifting sales management style from commanding to coaching D. Organizing sales teams into regional office structures E. Better integrating salesperson performance evaluation

D

Which of the following is an example of the external natural environment for a manufacturer of metal lawn furniture? A. A longer than usual distribution channel due to a rail strike B. Consumer trend toward treating gardens like another room C. The popularity of metal lawn furniture that looks vintage rather than newly bought D. A flood at the manufacturer's main warehouse E. Inflationary pricing by competitors

C

Which of the following is the best example of a straight rebuy? A. The purchase of 5,000 mildew-resistant shower curtains for a hotel chain B. The selection of a site to hold the first company-wide seminar on employee rights C. The renewal of a subscription to a trade journal D. The purchase of a school bus for carrying special education students E. The selection of a menu for a $1,000 a plate fundraising banquet for a new geriatric hospital wing

E

Which of the following statements about sales quotas is true? (hw) A. They emphasize sales or some aspect of sales volume B. They focus on the activities in which sales reps are supposed to engage C. They examine financial criteria such as gross margin or contribution to overhead D. All of the above E. None of the above

A

Which of the following statements about the economic criteria used to decide between using an independent agent or an internal sales force is true? A. The fixed costs of using independent agents are lower than those of using a company sales force B. The variable costs of using independent agents do not change over time C. The variable costs of using independent agents are equal to the variable costs expended on an internal sales force D. In terms of cost efficiency, an internal sales force is always more expensive than independent agents E. The cost of using independent agents tend to level off as sales volume increase

C

Which of the following statements about the sales force in the 21st century is true: a) Sales managers will use a hands-off approach and let the salesperson be his or her own boss b) Transactional exchanges no longer occur C) Sales management must be smart and nimble and provide technology-centered solutions to support the sales effort D) Salespeople make little use of internet because they realize the importance of the personal touch E) All of the above statements about the sales force in the twenty-first century are true

E

____ is the core of the selling process A. Closing the sale B. Prospecting the consumer C. Servicing the account D. Qualifying the prospect E. The sales presentation

sales forecast

an estimate of the dollar or unit sales for a specified future period; specifies the commodity, customer group, geographic area, and time period and includes a specific marketing plan and accompanying marketing program as essential elements

Sales volume quotas

most popular type of sales quota

Cross-Selling

similar to full-line selling but reflects selling products that may not be related. --> Works best when the salesperson can leverage the existing relationship with the buyer

Transaction and relationship

the key difference between ____________________________ is the effort devoted by the salesperson to the ongoing maintenance and management of the relationship, especially between actual face-to-face encounters with the customer

Sales potential

the portions of the market potential that a particular firm can reasonably expect to achieve; reflects the maximum possible sales for an individual firm

estimate sales potential helps develop the sales forecast

the relationship between sales forecast and sales potential

trade servicer

the sales force's primary responsibility is to increase business from current and potential customers by providing them with merchandising and promotional assistance