MKTG 433 Exam 4

What are ways in which sales and marketing departments are misaligned?

- Misaligned by economics and culture. - Sales and marketing often compete over how the company's budget is divided, each believing that the other gets too much of the budget. - Sales and marketing workers tend to exhibit different job cultures. Marketers tend to be more analytical, data oriented, and project focused. Sales team members, on the other hand, are action oriented, relationship driven, and short-term focused.

Why should companies embrace diversity? What are the benefits of having a diverse sales force?

- Multiculturalism is prompting senior managers of firms to adopt diversity initiatives. Demographics of the nation are shifting, and to remain competitive they mist diversity in order to meet the needs of their diverse customer bases.

Describe what benefits might be included in a rewards system.

- Retirement or pension benefit - Giving them income after they retire. - Defined contribution program - Jointly funded by the employer and the employee, they include 401k savings accounts, IRA's, profit-share programs. - Paid time off - Employees are paid for a certain amount of days off a year.

Explain what ROI and ROAM are and how they can be used by a sales manager.

- Return on investment (ROI) - Managers can evaluate their sales force. It is possible to compute the profitability rate for sales. - Return on Assets Managed (ROMA) - Allows managers to evaluate performance of sales at all levels. ROMA tells executives how well a firm's sales managers in different territories are managing the firm's assets individually (versus the firm as a whole)

Explain the four-factor model of evaluation. Is this a fair method or not?

- Sales = Days Worked * Call rate * Batting average * Average order size - Shows that sales can be increased by working more days, calling upon more customers per day, closing higher rates of sales per call, and selling larger orders when making a sale. - There are tradeoffs among the factors, more small accounts means smaller order quantities.

What is evaluation bias? Explain the different types.

- A systematic tendency toward a lack of objectivity, fairness, or impartiality on the part of the evaluator that is based upon personal preferences and beliefs, or a systematic error in the assessment instrument and procedures, or the interpretation and evaluation process. o Halo effect - When a sales manager allows one or more evaluation categories that are perceived to be important to influence the overall assessment of the salesperson. o Harshness tendency - Occurs when a salesperson is rated at the extremes - either outstanding or below average on most, or all performance attributes. o Central tendency bias - Practice by managers to rate in the center of the scale, can be just as detrimental to salespersons and human resources follow-up because little information is provided. o Interpersonal bias - Occurs when a manager's performance ratings are influenced by how much they like/dislike the individual being evaluated. o Outcome bias - Allowing the results of an action to influence the manager's assessment, can impact the overall evaluations.

Describe a total rewards system.

- All options a sales manager should utilize to reward performance, rather than just compensation and benefits.

Discuss the components of culture. Which are the most important to a sales manager?

- Communication - Communication is a major area of conflict. o Tone of voice o Timing of response o Interruptions o Degree of directness o Degree of embellishment - Religion - Different cultures celebrate different holidays and value different stuff. - Education - Important to be educated - Aesthetics - Each culture perceives different objects to be beautiful and visually appealing. - Social Organization - Different cultures have different social groups to which individuals belong in a society. - Technology - In Asian and European cultures they may value hard work and long days over advancements in technology. - Time - The observation of time varies by culture. - Values and Norms - Different cultures value different norms.

Explain the relationship between market potential, sales potential, and a sales forecast.

- Market potential shows the industry-wide sales expected for a product category during a period of time. Sales potential shows the maximum market share a particular company can expect to achieve and represents a percentage of the market's total sales. Based on this information a company can create a sales forecast of either the revenue or units his or her firm expects to sell, and then allocate the revenue or units to individual salespeople in the form of sales quotas.

Explain the dimensions of national culture that different cultures vary on.

- Composed of five distinct dimensions: o Power distance - The acceptance of unequal power and authority relations in society. Some cultures accept larger power distances between members of society or the organization, impacting buyer-seller relationships. o Uncertainty avoidance - How threatened society feels by uncertainty and ambiguity (the quality of being open to more than one interpretation). The higher the level of perceived ambiguity, the greater the need for well-defined rules for behavior. o Individualism/collectivism - Some cultures are more group-oriented than others in their decision-making processes. Individualism is high in US culture, however in other cultures (especially Asia) group cohesion and safety are important aspects of all business decisions. o Masculinity/femininity - Interpretations mirror traits valued by a society. Masculine traits include strength, success, and confidence. Feminine traits include nurturing, building relationships, and improving one's quality of life. o Long-term oriented - Focuses on virtues, like thrift and perseverance, that are oriented towards future rewards. Asian cultures rate highest on long-term team orientation.

Describe what might be included in a work/life balance program.

- Designed to help employees schedule when and where they work. May include options of working from home, irregular hours. o Paid leave of absence o Health and wellness programs o Community wellness programs o Care for dependents o Financial support program o Voluntary benefits

What are some of the unique challenges of forecasting sales in certain foreign countries?

- Different patterns of trends can throw off products that are working well in a different location.

List external factors that affect market potential and briefly outline what their influence on the potential is.

- Economy - The economy can make market potential greater or smaller. - Technology - New technology can create substitute products lowering demand for original products; change price structure; create new uses which expands market demand. - Legal and Regulatory - Can make products illegal, increase the cost of the product making them less competitive due to the new tariff. - Social Factors - Changes in trends and fashions can affect demand. - Demographic Trends - Retiring baby boomers increase the demand for vacation homes, which then influenced demand for lumber and other building supplies.

Why is evaluation of salespeople so important to the sales manager?

- Evaluation helps the sales manager know what is working and why so they can control the sales effort so that the firm's goals are accomplished. Without evaluations it will be impossible for the sales manager to know what about the new strategy is or is not working, why, and most importantly what should be done about it.

What are the different types of salespeople who can work in foreign countries and the strengths/weaknesses of each.

- Expatriate - Salespersons move from the home country to an overseas location. They know the product line and are familiar with company policies, however may lack the culture/market knowledge and cost. - Local-hire salesperson - Individuals who love in the country where the business is conducted. Local salespersons include lower costs and higher cultural and market knowledge, however they have lower product knowledge and company policies. - Third-country salesperson - An individual who was born outside both the firm's home and the targeted markets. Possess a higher level of understanding of the marketplace and culture than do expatriates, and are willing to work for a lower salary. However they are less influenced with the home office and potential burnout from working overseas.

Pick a theory of motivation and describe how it can be applied in a sales situation?

- Extrinsic motivation factors - If a salesperson meets the goal that's set for them, they may be rewarded with recognition from the manager and the sales staff which will socially boost the salesperson.

What can compromise a sales forecast? In what situation are sales forecasts most likely to be accurate?

- If you use the trend analysis approach and are in a market that changes frequently, you might overestimate sales after a period of rapid growth, or underestimate sales following a brief downturn. - Trend analysis is useful and accurate in markets where changes are very few and not dramatic. - Moving average makes it more accurate because it takes the rate of change for the past few periods and averages them. - Exponential smoothing is a type of moving average that puts more emphasis on the most recent period.

What's the difference between intrinsic and extrinsic motivation?

- Intrinsic motivation factors - Those items that are done because the person finds doing the activity a reward in itself. - Extrinsic motivation factors - External to the job, and the work is done in order to obtain monetary, physical, or social reward - or to avoid punishment.

Since sales forecasts are not guaranteed to be accurate over the long-term, how can firms use sale forecasts in a useful way?

- It is important to get data from all locations and countries and have one set of numbers across all countries and sectors so that the supply chain can support sales. - Use multiple methods so you can determine the right method for your company.

If salespeople do not hit their targets, whose fault is it? What are the factors a sales manager should consider?

- It may be the salespersons fault, however it may also be due to the economy. The sales manager should consider sales revenues generated, sales revenues generated per account, number of orders generated, number of new customers wok, number of sales to new customers, canceled orders, and lost accounts.

Discuss the differences between low-performance and high-performance cultures.

- Low-performance cultures - Firms with weak cultures are associated with lower financial performance and exhibiting a number of unhealthy characteristics that include: o Similar thinking o Resistance to change o Politicized internal environment o Unhealthy promotion practices - High-performance cultures - Firms with strong corporate cultures are more likely to report higher financial performance. Strong corporate culture characteristics include: o People-oriented o Results-oriented o Stress on achievement and excellence o Reinforcement of cultural beliefs.

Which departments in a firm use a sales forecast and customer data?

- Manufacturing - Product development - Finance and Accounting - Marketing - Sales Management - Human Resources

How is recruiting for salespeople conducted?

1) Forecast turnover to plan out how many people you will need to replace and add to your salesforce this year. 2) Conduct a sales analysis to determine what duties and behaviors you are looking for in your salespeople 3) Write a job description to describe the nature of the position and the responsibilities/demands of the job. 4) Determine the number of applicants needed to generate enough quality hires to fill openings 5) recruit internally (referrals) or externally (ads, job fairs, private recruits)

Describe 3 different components of compensation.

Base salary - A fixed amount of compensation an individual receives. The starting salary is based on the persons skills, education, work experience ect. Straight salaries are good when it is difficult to trace what role in the sale each individual played. Variable pay - Acts as an incentive for the salesperson. Someone might be particularly motivated because they know their extra effort will pay off. Motivations include bonuses, stock investment options, commission, team-based pay, progressive plans (different levels of sales with increased commission in each), regressive plans (decrease the percentage of commission as they sell more) Combination plans - Plans that include both salaries and incentives. Combination plans are designed to capitalize on the advantages a base salary and incentive programs offer, and minimize their disadvantages.

Describe the factors that influence a reward system.

Marketplace environment - Factors such as the level of industry competition, the use of technology, the financial resources available to firms in the industry, the competition for sales personnel, and the level of training salespeople require. Organizational culture - Many organizations make efforts to strengthen this by choosing certain rewards to offer their sales representatives that will strengthen the culture of the firm. Business strategy - If a company's plan includes achieving aggressive growth in new markets, it needs to reward those who land new accounts.

How can a sales manager rate a salesperson on qualitative measures? What are the different methods that can be used?

Qualitative measurements are judgments made by the salesperson's supervisors about their performance and abilities. They may analyze them based on: - Essay technique - Brief statement written by sales manager to describe the overall salesperson's performance level. - Rating scales - Using phrases or terms as anchors that describe the salespersons personal characteristics or performance. - Forced ranking - When each salespersons performance is ordered from highest to lowest within a district or region. - Management by objectives - Goal-setting and evaluative process that results in mutually agreed upon performance measures and assessments between a supervisor and an employee. - Behaviorally anchored rating scale - A set of scaled statements that describe the level of performance a salesperson received in terms of various job behaviors. The linking of behaviors and results becomes the basis for evaluating a salesperson's performance.

Explain why 4 generations of workers have different values to what motivates them.

The four different generations have grown up in different time eras and have different values that they were raised on. - Matures - Place value on duty before fun. - Baby Boomers - Idealistic, time stressed - Generation x - Set their own rules, flexible - Millennial's - Multi tasker's, well traveled

What are examples of selection instruments you might use in selecting a salesperson?

a. Application forms - an electronic or paper form that requires the job candidate to provide a standard list of information about his or her background, education, and work experience. b. Testing i.Psychological tests ii.Personality tests iii.Intelligence tests iv.Ability tests v.Aptitude tests c. Personal Interview i.Structured ii.Unstructured iii.Stress iv.Group v.field d. Background Check e. Conducting Physical exam (when appropriate)