Deck 13: Sales Territories

Question 1

Properly designed sales territories help control the activities of sales reps.

Answer 1

True

Question 2

A company's sales territories typically are smaller in new markets than in areas where the firm is well entrenched.

Answer 2

False

Question 3

Many companies have found that a Metropolitan Statistical Area is an excellent basic control unit for sales territories.

Answer 3

True

Question 4

Research shows that over half of all territories are poorly designed.

Question 5

The establishment of sales territories should result in better coverage of the market.

Question 6

A GIS is not complete without people who are trained to operate the system.

Question 7

When establishing new territories or revising existing ones,a very strong principle to follow is to avoid overlapping territories.

Question 8

The buildup method for determining basic territories is particularly suited for manufacturers of consumer products or for companies that want intensive distribution.

Question 9

ZIP-code areas are too small a geographical area to use as a basic control unit for sales territories.

Question 10

For most companies,states do not serve well as the basic control unit for sales territorial boundaries.

Question 11

Once a route plan has been set up by management and agreed to by a salesperson,the rep should not deviate from this plan,or else there is no use in having the plan in the first place.

Question 12

Computer technology can be used effectively in establishing territories,routing the salespeople through their territories,and scheduling their time.

Question 13

A routing schedule for territorial coverage should be set by management and not by the salespeople covering the territories.

Question 14

All well-managed firms establish sales territories for their sales forces.

Question 15

Regardless of whether a company uses the buildup method or breakdown method for determining sales territories,all territories should be equal in size.

Question 16

In the buildup method for determining basic territories,the first step is to determine the number of accounts to assign to each salesperson.

Question 17

It is recommended that sales managers review their sales territory structure at least once every five years.

Question 18

Some companies intentionally design small territories for beginners or sales trainees.

Question 19

Most salespeople like to have their territories reduced in size because it cuts their travel time and general work load.

Question 20

In the concept and definition of a sales territory,the emphasis is on geographical areas rather than customers.

Question 21

All of the following,except for ______,are commonly used as control units for territorial boundaries:

A)Sales potentials.
B)Metropolitan Statistical Areas.
C)States.
D)Postal zip-code areas.
E)Counties.

Question 22

A sales territory is:

A)The sales potential in a geographic region.
B)The geographical pattern followed by sales reps when calling on their accounts.
C)A sales performance goal.
D)A number of customers located within a given geographical area and assigned to a salesperson.
E)A Metropolitan Statistical Area.

Question 23

Regarding the use of states as control units when establishing sales territories:

A)States often are a poor choice because customer buying behavior often pays no attention to a state line as a trade boundary.
B)It makes the job of designing territories more complex and expensive.
C)It works well for small firms selling in local markets.
D)It works well for a firm with a large sales force covering a national market with intensive distribution.
E)None of these is correct.

Question 24

When designing sales territories the ideal goal is to:

A)Have all reps reach approximately the same level of income.
B)Have all districts be equal in both sales potential and work load for the reps.
C)Have all districts be equal in size.
D)Have all territories provide the same profit potential.
E)Simply not have territories but use other managerial controls to achieve profit goals.

Question 25

All of the following are reasons for establishing sales territories,except:

A)It reduces the number of salespeople needed.
B)Helps to improve customer relations.
C)Management can better evaluate sales force performance.
D)Increases sales force effectiveness.
E)Improves sales force morale.

Question 26

The number of customers located within a geographical area and assigned to a salesperson is a:

A)Sales quota.
B)Sales potential.
C)Sales territory.
D)Territory budget.
E)Metropolitan Statistical Area.

Question 27

A county or group of contiguous counties with a combined population of 100,000,with a general urban area over 50,000,and with mainly nonagricultural employment is best described as a:

A)Sales territory.
B)Metropolitan Statistical Area.
C)County unit.
D)Trading area.
E)Census tract.

Question 28

A system of well-designed sales territories will most likely result in:

A)A reduction in selling costs.
B)The sales force feeling it is restricted too much.
C)More accurate estimates of sales potential.
D)Better sales selection techniques.
E)A reduction in control over sales representatives activities.

Question 29

Companies that use Metropolitan Statistical Areas (MSAs)as a control unit in designing territories experience the following problem:

A)difficulty in finding available market data for each MSA.
B)resulting territories cannot cross state lines.
C)resulting territories tend to be sparsely populated.
D)difficulty in pinpointing potential.
E)None of these.

Question 30

As part of scheduling the activities of their salespeople,many companies have set up technology-based sales support systems to aid in planning,executing,and reporting on sales calls.

Question 31

In which of the following situations is it best for the company to have a formal sales territorial structure?

A)The company is expanding into a new geographical area.
B)A small company with three salespeople plans to sell in a local market.
C)A medium-sized manufacturer of gardening tools is selling to garden nurseries throughout five Midwestern states.
D)A market situation where personal friendships are extremely important in making a sale.
E)None of these should have sales territories.

Question 32

Which of the following usually is the first step in the process for establishing sales territories?

A)Select the basic control unit.
B)Analyze the job description.
C)Analyze the salespeople's work load.
D)Determine the market potential.
E)Decide whether to use the buildup or breakdown approach.

Question 33

Regarding the use of Metropolitan Statistical Areas as territorial control units:

A)They bear no relationship to consumer buying habits.
B)They do not cross state lines,the way some markets do.
C)They are difficult to define.
D)They are okay for wholesalers,but are not very useful to manufacturers.
E)They constitute lush,concentrated markets for many consumer and industrial products.

Question 34

Which of the following is the most important reason for setting up sales territories?

A)All reps then have the same work load.
B)Territories eliminate conflicts with customers.
C)Territories reduce the size of the sales force.
D)They equalize the commissions earned by the reps.
E)They improve the likelihood of properly covering the potential market.

Question 35

A sales territory is a geographical area.But the key words in the definition or concept of a sales territory are:

A)Basic control unit.
B)Present and potential customers.
C)Salesperson or sales branch.
D)Effective use of a salesperson's time.
E)Political boundary lines.

Question 36

Probably the most serious drawback to using counties as a basic control unit in territorial design is that:

A)They are political units rather than economic boundaries.
B)There is insufficient market data available on a county basis.
C)They are inflexible for purposes of territorial revisions.
D)For a large company they make it very difficult to pinpoint potential business.
E)For some companies (or for some counties)the county unit is still too large.

Question 37

Planning territorial coverage includes:

A)Determining which products to sell to which accounts.
B)Determining which promotions to offer to which accounts.
C)Determining what margins should be offered.
D)Determining how frequently the rep should call on each account.
E)All of these.

Question 38

Regarding the use of a state as a control unit when establishing territorial boundaries:

A)No company should do it.
B)It ties in nicely with consumer buying habits.
C)It is a small enough unit so that sales operations can be easily evaluated.
D)This system is simple,inexpensive,and convenient to establish.
E)It is the most widely used control unit.

Question 39

In sales territory design,which of the following factors is least likely to affect the salespeople's work load?

A)Whether the sales force is paid under a straight salary or a combination plan.
B)Whether the company uses exclusive distribution or mass distribution.
C)Whether the reps are selling in new markets or established ones.
D)Whether the company is selling a complex product or a simple one.
E)The intensity of competition.

Question 40

Which of the following is likely to be a benefit derived from establishing sales territories?

A)An improvement in quality of customer service.
B)An increase in the sales representatives' effectiveness.
C)An aid to management in evaluating the sales representatives' performance.
D)All of these.
E)Only two of A-B-C are the usual benefits.

Question 41

When using the breakdown method to establish sales territories,the first step ordinarily is to:

A)Determine the desirable call patterns.
B)Determine the company's sales potential (that is,the total sales volume that the company can except in its full market).
C)Decide how much sales volume should be generated by each rep.
D)Decide how many accounts to assign to each rep.
E)Draw tentative boundary lines,realizing that later they will have to be adjusted.

Question 42

When using the buildup method to establish sales territories,the first step ordinarily is to determine:

A)How many accounts to assign each salesperson.
B)How many territories are needed.
C)The call frequency per account per year.
D)The market potential.
E)Call frequency for the average salesperson.

Question 43

Which of the following does not affect the number of calls a rep can effectively make in one day?

A)The amount of missionary work to be done.
B)The amount of travel time between customers.
C)The average length of time required for a call.
D)Whether the buildup or breakdown method is used.
E)All of these have an effect.

Question 44

When sophisticated computer modeling is used to design territories,

A)the resulting design tends to be inferior to the build-up method.
B)it typically involves computer technology known as GIS.
C)that there will be no need for adjustment.
D)firms typically spend in excess of one million dollars.
E)None of these.

Question 45

All other factors being equal,a salesperson is likely to have a smaller territory if:

A)The district is a newly-opened market,rather than being a well-developed territory.
B)The firm uses selective,rather than intensive distribution.
C)The rep sells a specialty product,rather than a convenience good.
D)The rep sells directly to retailers instead of going through wholesalers.
E)None of these makes for smaller territories.

Question 46

With respect to revising sales territories:

A)Once a set of territories is carefully and accurately established,the boundaries should not be tampered with.
B)When a territory is reduced in size,the sales rep should be allowed to retain key accounts in his or her former district,especially if those customers prefer to deal with him or her.
C)Good sales reps should not be limited by territorial boundaries.
D)Overlapping territories are okay if they stimulate competition in the sales force.
E)If territorial revision has been done properly,a sales rep in a now-smaller district may end up with higher sales and earnings than before the redistricting.

Question 47

It is recommended that sales managers review their territory structure:

A)Once every month.
B)Once every year.
C)Once every five years.
D)Once every ten years.
E)Territories do not need to be reviewed.

Question 48

Which of the following data types is most commonly used as a GIS input?

A)Sales reps' income.
B)Features of the selling firm's products.
C)Aerial photographs.
D)Location of competitors.
E)None of these.

Question 49

When designing sales territories,the task of determining desirable call patterns includes:

A)Determining the number of calls to be made by a rep in a day.
B)Deciding on the frequency of calls on each account.
C)Determining the number of territories needed.
D)All of these.
E)Only two of A-B-C above.

Question 50

For which of the following reasons are computers used in sales?

A)Improved accuracy of orders.
B)Decrease in order processing time.
C)Increased customer service capabilities.
D)All of these.
E)None of these.

Question 51

Regarding the drawing of territorial boundary lines:

A)This usually is the first or second step in determining basic sales territory.
B)The lines should be drawn so that the territories are all about the same physical size.
C)A good generalization to follow is this: Do not split one of your basic control units.
D)The boundaries should be drawn after reps are assigned to a territory.
E)None of these is correct.

Question 52

One major step in the "buildup" method of designing sales districts is to establish a set of territories based on statistical measures.This step is least likely to include a determination of the:

A)Daily call rate of sales rep.
B)Location and size of customers.
C)Sales forecast.
D)Number of accounts to assign to each rep.
E)Call frequency for each account.

Question 53

A GIS typically includes:

A)software.
B)hardware.
C)data.
D)trained people.
E)All of these.

Question 54

Which of the following is least likely to indicate that some of a company's sales territories may need revising?

A)A rep's total compensation has increased 10 percent a year for the past five years.
B)Territories are too small.
C)Some sales reps are overlapping in their territory coverage.
D)Some reps are going outside their new districts to sell to old customers in other territories.
E)Some reps are skimming rather than intensively covering their territory.

Question 55

A sales rep will most likely have a larger territory if that person:

A)Is selling convenience goods to retailers rather than specialty goods.
B)Is a new rep rather than an experienced one.
C)Is selling to wholesalers rather than directly to retailers.
D)Is selling in a well developed territory,rather than being located in a newly opened market.
E)Is selling for a firm that distributes on a mass basis rather than using selective distribution.

Question 56

In the buildup method:

A)It is never appropriate to split a control unit.
B)Splitting a control unit may make sense if it reduces inequities among sales territories.
C)Territorial boundary lines should never be modified.
D)No adjustment should be made for territories requiring more intensive selling efforts due to competitive threats.
E)Reps should sell in each other's territories.

Question 57

Which of the following changes is apt to decrease the geographical size of a territory?

A)Company substitutes a selective distribution policy instead of mass distribution.
B)Cover an area more intensively with increased call frequencies,etc. ,in order to meet competition more effectively.
C)Company decides to sell to retailers instead of door-to-door.
D)Have a sales rep discontinue the missionary phases of his job and do nothing but straight selling.
E)None of these.

Question 58

The managerial activity that establishes a formal pattern for sales reps as they go through their territories is called:

A)The buildup method.
B)Call frequency.
C)Routing.
D)Breakdown method.
E)Establishing territories.

Question 59

When done correctly,routing should

A)reduce travel expenses.
B)allow reps to better manager their time.
C)increase the likelihood that all customers get regularly serviced.
D)increase sales.
E)All of these.

Question 60

If a rep works eight hours per day and the average length of a call is 30 minutes and the average travel time is 30 minutes and the rep works 250 days per year,then what is the total annual number of calls the rep can make?

A)1,750.
B)2,000.
C)2,100.
D)2,400.
E)2,450.

Question 61

Most sales executives believe that claim jumping by sales reps:

A)lowers selling costs.
B)is a necessary evil.
C)is often a sign that territories are too big.
D)can be indication for territorial adjustment.
E)All of these.

Question 62

Routing makes the most sense when call frequencies are:

A)infrequent.
B)regular.
C)highly value-added.
D)equal to workload capacity.
E)All of these.

Question 63

_____________ is when a salesperson sells to a customer that is in another salesperson territory.

A)Call frequenting
B)Buildup
C)Claim jumping
D)Routing
E)None of these.

Question 64

In volatile industries such as telecommunications and automotive,salespeople and their managers have been:

A)downsized.
B)under constant pressure to increase productivity.
C)unable to adequately cover their territory.
D)overworked and stressed salespeople.
E)All of these.

Question 65

In which of the following jobs will management most likely plan the routing for the sales force?

A)Xerox selling office copier systems.
B)Salespeople are opening a new geographical market.
C)Sales force sells oil-well drilling equipment in the field.
D)Driver-sales representatives for a beer distributor.
E)Insurance salespeople covering a suburb of Chicago.

Question 66

In which of the following jobs will management most likely plan the routing for the sales force?

A)Driver-salespeople for a Pepsi Cola distributor.
B)The reps are selling conveyor belts to manufacturers of all kinds of footwear.
C)Insurance salespeople selling group policies to large buyers.
D)The reps are selling industrial valves and gauges in the Mid-East oil fields.
E)The salespeople are opening a new geographical market.

Question 67

Which of the following is correct regarding the use of computers in the management of sales territories?

A)Some sales reps send in their customers' orders by computer.
B)Computers are being used to plan daily and weekly routing schedules for calling on customers.
C)Computers are excellent for preparing a sales call but they are not used by reps during a sales call.
D)All of these are correct.
E)Only two of A-B-C are correct.

Question 68

Regarding the managerial practice of routing the sales force:

A)A major reason for this activity is to ensure an orderly,thorough coverage of the market.
B)In a routine,low-level type of sales job it is customary to let the reps set their own route schedule.
C)Managerial routing rarely saves travel expenses because the territory has to be covered regardless of whether management or the reps do the routing.
D)All companies set up formal,planned route schedules;the only difference is who does this planning - management or the reps.
E)The primary goal of managerial routing is to determine the frequency and length of the reps' calls on customers.

Question 69

Experts have estimates that ______________ of sales territories are either too big or too small.

A)about 10%
B)about 25%
C)about 50%
D)about 75%
E)about 90%

Question 70

Once territories are established,sales managers should:

A)seldom - if ever - revise them.
B)revise them regularly as companies and markets change.
C)regularly rotate salespeople through each territory.
D)encourage claim jumping.
E)Both A and C are correct.

Question 71

Over time,sales territories:

A)increase in sales potential.
B)decrease in sales potential.
C)increase in workload.
D)decrease in workload.
E)It depends - a given territory might increase or decrease in either category.

Question 72

The ways a rep might use a laptop computer during a sales call include:

A)To get up-to-the-minute information on inventory and delivery conditions.
B)To graphically present product information.
C)To access large sophisticated databases with product and application information.
D)To obtain accurate price quotations.
E)All of these.

Question 73

As the sales potential of a given territory increases,sales performance of the sales rep assigned to that territory will generally:

A)decrease.
B)stay the same.
C)increase at the same rate as the increase in sales potential.
D)increase for a time,but then level off.
E)increase for a time,but then decrease significantly.

Question 74

Each of the following is a reason why so many sales organizations have a problem with unbalanced territories,EXCEPT:

A)the responsibility of designing territories is too often given to a high-level executive.
B)the executives in charge are typically too busy with other responsibilities.
C)organizations often fail to have a good definition of what constitutes good alignment.
D)executives are afraid of offending veteran salespeople.
E)many times the district boundaries are not designed optimally.