Deck 4: Organizing the Sales Effort

Question 1

In some high tech industries, where customers buy systems made up of components manufactured by several suppliers, many suppliers are forming _________________ to develop and jointly market and sell integrated systems.

A) Matrix organizations
B) Co-marketing alliances
C) Multilevel systems
D) Leveraged buyouts
E) Span of control documentation systems

Answer 1

B

Question 2

Telemarketing in business-to-business markets:

A) Is used to increase the productivity of a firm's sales efforts
B) Is typically despised by customers
C) Is a form of organization by customer
D) Is not an appropriate tool for repeat purchases
E) Uses the problem-solving approach to selling

Answer 2

A

Question 3

Which of the following statements about the use of a separate sales force to handle key accounts is true?

A) This is a relatively low cost approach for making sure someone services the company's largest customers high in the organizational hierarchy
B) National sales force members are always treated as equal to the company's regular sales force
C) The national sales force typically consists of the company's most experienced and talented salespeople
D) The national sales force is typically overworked because of the demands placed on it by its major accounts
E) In many companies, the regular sales force serves as a motivator to the national sales force

Answer 3

C

Question 4

Organization of the sales force by customer type:

A) Has the same disadvantages as those associated with organization by product
B) Allows the use of different selling approaches for different types of customers
C) Is a natural extension of the market concept
D) Should be used when a company wants to implement a market penetration strategy
E) Is accurately described by all of the above

Question 5

Some authorities recommend firms have one sales force that specializes in prospecting for new accounts and another sales force to call on existing customers. Which of the following statements about this recommendation is true?

A) This form of specialization is a form of customer specialization
B) This form of specialization is typically referred to as a networked organization
C) This form of specialization is most suitable for companies that are implementing a maintenance strategy instead of a growth strategy
D) This form of specialization can be difficult to implement since new customers might object to being turned over to an unfamiliar salesperson
E) This form of specialization eliminates the tendency of salespeople to view other salespeople working in the same company as rivals

Question 6

Why would buyers agree to a logistical alliance?

A) To reduce the number of people they have to keep track of
B) It is convenient and flexible
C) Alliances result in lower prices
D) Alliances commit the seller to selling more to the customer
E) They prefer to interact with salespeople

Question 7

Which of the following statements about logistical alliances is true?

A) Logistical alliances are a variation of team selling
B) From a customer's point of view, logistical alliances are less convenient than placing orders through salespeople
C) Logistical alliances could potentially make salespeople redundant
D) From the customer's point of view, logistical alliances are more time consuming than placing orders through salespeople
E) All of the above

Question 8

_____ selling, a variation of team selling, uses an ad hoc arrangement where individuals at different organizational levels are responsible for maintaining a key relationship with the customer but not as part of an established team.

A) Functional
B) Key account
C) Co-marketing
D) Multilevel
E) Logistical alliance

Question 9

Organization of the sales force by product:

A) Is not advisable for companies selling highly technical products
B) Is best used when cost is the deciding factor on which organizationally structure to use
C) Requires fewer sales management personnel and lower administrative costs than a geographic organization
D) Can result in duplication of sales effort
E) Is most commonly used by firms that manufacture only one product line

Question 10

Team selling:

A) Is appropriate for small, innovative customers who need customized 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

Question 11

One of the benefits of team selling is:

A) Higher commissions
B) Questions can be answered faster
C) Reduced costs
D) Lowered role ambiguity
E) All of the above

Question 12

The major reason why a firm with many different products based on widely differing technologies would organize its sales force by product is:

A) A commitment to the marketing concept
B) Because it allows salespeople to develop highly specialized knowledge about one product or a few similar products
C) The simplicity inherent in implementing and using such a system
D) To take advantage of the benefits of specialization of labor inherent in this vertical organization form
E) Because it eliminates any duplication of sales efforts

Question 13

The span of control should be smaller and the number of levels of management should be larger when:

A) The salespeople in the company are well paid and professional
B) The salespeople in the company are new inexperienced recruits
C) The sales task is relatively simple
D) The profit impact for the performance of each individual salesperson is low
E) The sales job is defined as easy by the people hired to sell

Question 14

Why would a small firm most likely assign key accounts to top sales executives rather than set up a separate department for key accounts?

A) Customer delight
B) Limited financial resources
C) Centralized production quality control
D) Selling center satisfaction
E) To remind executives what it is like to sell

Question 15

From the seller's point of view, a combination of inside and outside sales force offers a way to improve the overall efficiency of sales effort by:

A) Requiring separate policies and procedures for each sales force
B) Reducing overall personnel costs
C) Reducing the costs expended to reach small customers
D) Reducing the amount of contact between buyer and seller
E) None of the above

Question 16

As a developmental salesperson, Allen:

A) Sells for a company that organizes its products around its products
B) Sells for a company that organizes its products around selling functions
C) Sells for a company that has a limited product line of non-technical products
D) Uses a telemarketer to locate sales leads
E) Is a salesperson for a manufacturers' representative

Question 17

Organizing the sales force along functional lines:

A) Allows salespeople with different talents and abilities to perform different selling tasks
B) Is easy to implement
C) Eliminates any rivalry that might exist in a company's sales force
D) Makes it easy for the manager to coordinate all sales activities
E) Is accurately described by all of the above

Question 18

A sales manager who develops a team selling approach will:

A) Hire salespeople motivated by personal achievement
B) Organize the team into silos to encourage competition
C) Compensate team members based on their individual performance
D) Develop communication links among all team members
E) All of the above

Question 19

The key to successful team selling lies in:

A) Developing the right product
B) Creating a sustainable competitive advantage
C) The ease with which repeat purchases can be made
D) The size of the buying center
E) Understanding the needs of the customer

Question 20

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

Question 21

Which of the following sales-related functions is the least visible but most important?

A) Installation and delivery
B) Special product design and engineering
C) Repair and maintenance
D) Information gathering
E) Order processing and expediting

Question 22

Which of the following statements about major and key accounts is true?

A) Major accounts often require more detailed and sophisticated treatment than smaller customers
B) Salespeople who handle major accounts typically receive the same or lower commission rates than salespeople who handle smaller accounts
C) Having major accounts greatly complicates the coordination of selling activities
D) The trend toward decentralized purchasing has accelerated the development of national and key accounts
E) All of the above statements about major and key accounts are true

Question 23

The span of control should usually be smaller at higher levels in the sales organization because:

A) Of a need to control variable expenses
B) Top-level managers should have more time for analysis and decision making
C) The lower-level people who report to them need an authoritative work environment
D) Most sales organizations are decentralized
E) Field selling is viewed as a training ground for future sales or marketing managers

Question 24

What are the advantages of geographic sales organization?

Question 25

Which of the following is NOT one of the key building blocks to starting a sales force?

A) Define the sales force's mission
B) Leverage existing organizational strengths
C) Allows salespeople to go find out what works
D) Provide support
E) Develop compensation plans that motivate

Question 26

What coordination and integration issues need to be addressed by sales managers regardless of the sales force structure?

Question 27

How does telemarketing fit within a sales strategy?

Question 28

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) All of the above

Question 29

Compare the four common bases for structuring sales efforts in an organization. What are the advantages and disadvantages of each?

Question 30

Span of control and management responsibility decisions are constantly changing primarily due to changes in:

A) Technology
B) Integrative institutional supply chains
C) Transaction cost analysis
D) Government regulation
E) Sales force attitudes

Question 31

What is transaction cost analysis? What does it imply for sales managers?

Question 32

What are some of the problems associated with team selling?

Question 33

Which of the following statements about the selling responsibilities of the sales manager is true?

A) Sales managers often prefer to remain active in selling activities
B) Sales managers are usually not qualified to sell
C) Once a salesperson is promoted to management, he or she should not remain active in selling activities
D) It is more important for sales managers in larger firms to remain active in selling, than those in smaller firms
E) Most sales managers devote the largest percentage of their time to face-to-face selling

Question 34

Which of the following statements about decision making within the sales organization is true?

A) The significance of the decision has no effect on the level at which the decision will be made
B) Firms that have many low-paid salespeople who perform relatively routine sales tasks usually place the decision-making authority in the hands of its top sales executives
C) As a general rule of organization, the more important a decision is for the success of the firm, the higher the level of management that should make the decision
D) As a rule, field-line sales managers are responsible for seeing that sales tasks are completed, but have no decision-making authority
E) Firms that have professional salespeople who perform complex sales tasks typically place all decision-making authority in the hands of its salespeople

Question 35

What issues and questions need to be addressed in vertical sales organizations?

Question 36

What is the primary advantage of organizing a sales force by product?

Question 37

Generally, the employment of staff specialists is justified only when:

A) The organization has a large turnover
B) Such staff can be used to improve employee morale and working conditions
C) Line managers are unable to collect any useful data
D) The sales organization is large enough to provide staff specialists with enough work to keep them busy
E) The sales organization is introducing a new product

Question 38

What are the benefits of a computerized ordering system?

Question 39

What is the first key building block in starting a new sales force?

Question 40

What two key questions must be answered in designing an effective vertical structure for a sales organization?

Question 41

What guidelines should a sales manager use in choosing an independent manufacturing sales rep?

Question 42

A manufacturer of security systems that organized its sales force by home owner, store owner, warehouse owner and manufacturing facility would be organizing by product type.

Question 43

The major disadvantage of a sales force organized by product type is duplication of effort.

Question 44

Manufacturers' representatives are intermediaries who take neither ownership nor physical possession of the goods they sell, but concentrate instead on the selling function.

Question 45

Logistical alliances involve the development of computerized information and ordering systems.

Question 46

What are the six key building blocks for starting a sales force?

Question 47

The first guideline to starting a sales force should be to appoint an expansion team.

Question 48

When the sales task is complex, the span of control should be larger and the number of levels of management should be smaller.

Question 49

Activities that do not rely directly on the firm's core competencies or transaction-specific assets can often be performed more effectively and efficiently through outsourcing.

Question 50

What four sets of factors will sales managers consider when deciding whether to use independent agents or a company sales force?

Question 51

The most common functions performed by staff specialists in sales organizations are recruitment, training and sales analysis.

Question 52

How many people each sales manager supervises is called a manager's spam of control.

Question 53

The major disadvantage of geographic sales organization is its emphasis on specialization of labor.

Question 54

A company that has organized its sales force into telemarketers and outside field salespeople has organized by selling function.

Question 55

The simplest and most common method of organizing a company's sales force is to assign individual salespeople to separate geographic territories.

Question 56

The primary function of the vertical structure of a firm's sales organization is to identify the subordinates of those in leadership roles.

Question 57

The starting point in organizing a sales force is determining the goals to be accomplished, as specified in the firm's overall marketing plan.

Question 58

Co-marketing alliances are often used by suppliers of components in technology industries.

Question 59

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

Question 60

Division and specialization of labor increase productivity.

Question 61

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

Question 62

Why do most sales and marketing managers believe company salespeople are more likely to produce a higher volume of total sales than agents?

A) Company salespeople concentrate entirely on the firm's products
B) They are better trained
C) They tend to be more aggressive since their future depends on the company's success
D) Customers prefer to deal directly with a supplier
E) All of the above

Question 63

Which of the following statements about the control and strategic criteria used to decide between using independent agents or an internal sales force is true?

A) Independent agents are especially good at cultivating and servicing new accounts
B) Customer loyalty to the independent agent can make it difficult to replace an agent with an internal sales force
C) When sales are below manufacturer's expectations, the manufacturer immediately knows that the blame lies with the independent agent
D) It is as easy to monitor an independent agent as it is to monitor an internal sales force
E) Independent agents are viewed as more effective over the long-run than internal sales forces

Question 64

Large firms typically rely on external agents rather than creating their own sales force.

Question 65

The key to developing successful team selling lies in the ability of the sales manager to identify the needs of the customer.

Question 66

Multilevel selling is a variation of team selling.

Question 67

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

Question 68

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 costs of using independent agents tend to level off as sales volumes increase

Question 69

A small company that manufactures paper products might choose to use a geographic organization for its sales force because:

A) It wants to enjoy the benefits associated with division and specialization of labor
B) It is a low-cost method of vertically organizing a sales force
C) It is not concerned about the increased travel and expense time such an organization produces
D) Each of its salespeople can specialize in a particular product line
E) It is simple to implement

Question 70

The theory of transaction cost analysis (TCA) states that when substantial transaction-specific assets are necessary to sell a manufacturer's product, the costs of using and administering the independent agents are likely to be lower than the costs of hiring and managing a sales force.

Question 71

An account executive with a global team of salespeople and support of functional resources creates multilevel selling.

Question 72

Robin is looking for sales reps to sell her line of clothing. In searching for a sales rep, Robin will most likely look for someone:

A) Who sells distinctly different product lines
B) Who does not sell in her targeted territories
C) Who is already selling in her industry
D) Who is selling many product lines
E) Who is not yet established in the industry

Question 73

Which of the following statements about organizing the sales effort is true?

A) Organizing the activities and management of the sales force is a major part of strategic sales planning
B) Sales managers need to be more reactive in restructuring sales organizations
C) The starting point in organizing a sales force is the organizational culture
D) Once a firm has a sales organizational structure in place, it should not change it
E) All of the above

Question 74

The most troubling problems with a separate sales force for key accounts concern a prima donna attitude among members.

Question 75

The theory of transaction cost analysis states that:

A) Short-term increases in sales volume will eliminate any switching costs acquired as the result of replacing an independent agent with an internal sales force
B) The costs of product failure will be minimized with the use of an independent agent and maximized with an internal sales force
C) When substantial transaction-specific assets are necessary to sell a manufacturer's product, the costs of using and administering independent agents is likely to be higher than the costs of hiring and managing an internal sales force
D) Costs of using and administering independent agents tend to rise faster as the manufacturer's sales volume increases
E) When substantial transaction-specific assets are necessary to sell a manufacturer's product, the costs of using and administering independent agents is likely to be lower than the costs of hiring and managing an internal sales force

Question 76

Geographic organization of the sales force:

A) Permits beneficial division and specialization of labor
B) Is not used by large organizations like 3M and IBM
C) Allows the individual salesperson to develop familiarity with the technical attributes, applications and the best selling methods to use with each product
D) Requires fewer managerial levels for coordination of sales activities than other methods of organizing the sales force
E) Is a low-cost method of vertically organizing a sales force

Question 77

Because major or key accounts tend to be sellers with which the company has built a long-term relationship, these large accounts require no different treatment than smaller accounts.

Question 78

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

Question 79

Alton's new firm operates in an uncertain and rapidly changing market with shifting technology and short product life cycles. Alton is considering the use of independent sales reps because they will give him greater _____________ in distribution channels.

A) Geographic concentration
B) Team selling
C) Flexibility
D) Outsourcing of production
E) Matrix divisional dissection

Question 80

One of the criteria for selecting a sales representative is finding someone with compatible product lines.