Deck 7: Designing and Organizing the Sales Force

Question 1

The breakdown method and workload method are:

A)used to manufacture products in Sigma 6 compliant production plants
B)used to calculate how many salespeople a company should hire
C)used to compute sales commissions
D)used to balance the different types of salespeople employed by a company
E)used to deliver product to customers in various locations

Answer 1

B

Question 2

A product sales structure assigns salespeople:

A)by geographical area
B)by size of the customer
C)according to product lines or divisions
D)according to seniority
E)as if they were generalists

Answer 2

C

Question 3

In which of the following situations would generalist salespeople make more sense than specialist salespeople?

A)A company only has one product and the customers use it in disparate ways.
B)A company has a small product line that is used the same way by all customers.
C)A company has a large list of offerings and the customers have specific but differing needs.
D)A company has a small product line and the customers are divided into three discrete user groups.
E)A company has a large list of specialized products and two distinct user groups of customers.

Answer 3

B

Question 4

Once a company knows how many visits the sale force will need to make over the course of a year,what other things does it need to calculate?

A)the number of customers,then divide the number of calls by the customers to get the average per customer
B)the number of sales calls a salesperson can reasonably make each week,and then multiply that by 52
C)the number of sales calls a salesperson can reasonably make in a year,and an allowance for other duties that are not sales calls
D)the number of sales calls current salespeople make per day,on average
E)the number of accounts each salesperson will handle

Question 5

When a sales force is arranged geographically,the salespeople are:

A)generalists
B)specialists
C)hybrid
D)outsourced
E)agents

Question 6

The organization of a company's sales force is most heavily influenced by:

A)the sales manager
B)the marketing department
C)the goals of the entire organization
D)the metrics set by the sales department
E)the price customers are willing to pay for the product

Question 7

All of the following are roles of a sales manager that are affected by the structure of the sales force EXCEPT:

A)recruitment and selection of salespeople
B)training salespeople
C)compensating salespeople
D)carrying out marketing goals
E)evaluating performance of salespeople

Question 8

Which of the two calculating methods--breakdown and workload--is better?

A)The breakdown method is better because it is a simpler calculation.
B)The breakdown method is better because it strips away the complications and produces numbers that take into account multiple scenarios.
C)The breakdown method is better because it keeps the control in the hands of sales managers instead of the marketing department.
D)The workload method is better because it gives a fuller picture of the actual workload salespeople encounter and is therefore more realistic.
E)The workload method is better because the information can all be calculated using CRM software.

Question 9

The workload method of calculating the number of salespeople a company needs to hire:

A)asks salespeople to perform duties traditionally performed by other job functions
B)is logical in theory,but is impractical to calculate and implement
C)uses computations that are too difficult to be practical
D)takes into account the various duties of salespeople as well as the company's goals
E)is elegant,but overestimates the number of salespeople needed

Question 10

What is the guiding idea behind the way companies structure their sales forces?

A)The sales force should support the marketing department and its goals.
B)Buyers will be more satisfied if they can purchase what,when,and the way they want to.
C)A happy salesperson will sell more for the company,so maximizing sales staff satisfaction is key.
D)Fewer channels cause fewer complications,so choosing the simplest organizational structure is best.
E)Unless you guide them through the sales process,buyers will not buy,so direct contact with salespeople should be prioritized over other channels.

Question 11

The benefit of using the breakdown method to calculate how big the salesforce should be is that it is a simple calculation.The limitation of the method is that:

A)the manager might not know the yearly sales goal for the department
B)sales forecasts can vary widely from quarter to quarter
C)it does not account for the fact that some salespeople will sell more than others will
D)not everyone in the sales department knows what the yearly goals are
E)it is difficult to know the true costs of hiring a salesperson

Question 12

A geographical sales structure:

A)organizes the salesforce according to where salespeople live
B)organizes the salesforce in teams of salespeople,each representing different regions
C)organizes sales territories by customer account
D)organizes sales territories by product sold
E)organizes sales territories by physical areas of the world

Question 13

According to economic theory,sales managers should hire as many salespeople as possible:

A)until the market is saturated
B)until the salespeople feel too much competition in the workplace and become dissatisfied
C)as long as there are no compelling reasons to stop hiring
D)as long as the salespeople are willing to work for the wages offered
E)as long as each salesperson sells more than he or she costs the company

Question 14

Why would a company decide NOT to use geographical sales structure?

A)Its customers require in-person visits.
B)Its product line is complex and varied.
C)It only sells one product.
D)When business increases,they can divide up the territories.
E)Customers want to deal with only one salesperson.

Question 15

Which of the following is NOT an advantage of a geographical sales structure?

A)It is easy to lay out.
B)It reduces duplication of effort for salespeople.
C)It gives each customer one specific salesperson.
D)It helps schedule customer visits efficiently.
E)It means the salespeople have intimate knowledge of the customers' businesses.

Question 16

To calculate the number of sales calls salespeople will need to make over the course of a year,the workload method starts by:

A)dividing current buyers into categories depending on how much contact they will need
B)determining the optimal number of visits to make to a customer
C)determining what the budget is for hiring salespeople
D)calculating the maximum number of sales calls one salesperson can make each day
E)asking current buyers whether they would prefer to be visited more often by salespeople

Question 17

All of the following are factors that can affect the way a company structures its sales force EXCEPT:

A)the recommendations of companies in other industries
B)the structure of the competition
C)the cost of each method of selling
D)the sales history of different channels in the company
E)the habits of its customers

Question 18

Which of the following is a mistake companies often make when choosing a structure for their sales force?

A)They design the structure of the sales force according to the salespeople they currently employ.
B)They determine how many sales are necessary to achieve the company's goals.
C)They choose a structure that includes different methods to appeal to different types of buyers.
D)They factor in CLV of different segments of their customers when choosing a sales structure.
E)They put more weight on customer satisfaction than on margins.

Question 19

The organization of the sales force should work toward which of the following two goals?

A)the sales force carries out the goals set by the marketing department and the salespeople increase sales each month
B)the salespeople maximize their commissions and the sales department is as small as possible
C)the salespeople increase their sales each month and the customers award the company a sole supplier contract
D)the sales quotas of the department are met and the customers pay the highest prices the market will bear
E)the sales quotas of the department are met and the department runs as efficiently as possible

Question 20

The three sales structures (geographic-based,product-based,and market/customer-based)have all of the following executive positions in common EXCEPT:

A)Sales Promotion Manager
B)General Sales Manager
C)Advertising Manager
D)Sales Analyst
E)Market Research Manager

Question 21

The market sales structure is a sales model based on:

A)achieving efficiency by reducing the number of salespeople
B)maximizing return by segmenting customers
C)understanding the customer's needs
D)selling at the price the market will bear
E)sending multiple salespeople to the same account

Question 22

What is the main disadvantage of assigning a regular territory-based salesperson to a key account?

A)The salesperson might be unwilling to share information about the customer with other departments in the company.
B)The salesperson might misread the buying signals of the decision-makers at such a senior level.
C)The salesperson might focus on quick sales instead of understanding the customer's needs to generate a long-term relationship.
D)The customer might be insulted that a lower-level salesperson has been assigned to their account.
E)The customer might negotiate lower prices with an inexperienced salesperson.

Question 23

An ethical dilemma that comes up when a company uses sales agents to sell its products comes into play when the agents sell so much of the product that the company decides to:

A)decrease the retail price of the products
B)fire the agent and use an in-house sales staff without giving the agent any commissions on renewal or repeat business the agent established
C)give the sales agents a larger margin on the products they sell
D)hire those sales agents in as in-house salespeople for the company
E)ask the sales agents to codify the sales process they go through to routinize best practices for selling to certain market segments

Question 24

What is the best practice for a harmonious relationship between a company hiring an independent sales agent and the sales agent?

A)The sales agent should ask for a benefits package from the company.
B)The company should not expect the sales agent to make as many sales as an in-house sales representative would.
C)The company should commit to hiring the sales agent for a minimum of 18 months before reevaluating the arrangement.
D)The parties should agree to enter a mediation process if one or the other wants to terminate their business arrangement.
E)The parties should write up an agreement about the level of reporting and feedback they expect from each other.

Question 25

An independent sales representative is:

A)a salesperson who is not employed by the company and may sell products from several companies
B)a salesperson who works on straight commission,with no base salary
C)a salesperson who is employed by the company,but does not work from an office
D)a salesperson who gives sales presentations but does not close sales
E)a salesperson who is employed by two companies at the same time and divides time equally between them

Question 26

In a line organization reporting structure,the main disadvantage is that:

A)decision-making is shared equally among all the management levels
B)salespeople are competing for customers with each other
C)salespeople have no idea who their managers report to
D)salespeople have little leeway to make on-the-spot decisions to keep customers happy
E)managers can only discipline the employees directly below them

Question 27

A break-even analysis is a calculation that helps sales managers figure out:

A)the monthly commissions they pay to salespeople
B)which products have the highest margins for the company
C)whether it is more cost-effective to hire in-house salespeople or independent sales agents
D)how to structure the sales force for maximum efficiency
E)if they should use a line organization reporting structure or a flattened-out reporting structure

Question 28

One of the biggest issues companies who use computerized sales must deal with in relation to their customers is:

A)avoiding sending salespeople to call on them in person
B)making sure that the email messages they send to customers are not experienced as spam
C)making products that appeal to customers who prefer to do business by computer
D)convincing salespeople to give their customer records to be inputted to computers
E)hiring reputable tech maintenance firms

Question 29

The biggest challenge of a functional sales structure is:

A)advising the customers of who is servicing them
B)remembering which specialists are assigned to which customers
C)finding specialist salespeople with the appropriate expertise in their areas
D)coordinating all the specialists so they service the customer appropriately
E)compensating the specialists for the sales they make

Question 30

What is the core dilemma for an independent sales agent representing a product line for a company?

A)The company that hires the agent may not have face-to-face contact with the agent.
B)The company that hires the agent gets to set the retail price of the product.
C)The agent cannot ever know as much about the product as the company that manufactures it does.
D)The agent is likely to lose the sales account if the agent sells too much or too little of the product.
E)The agent may not have the specialized knowledge to sell the product effectively.

Question 31

What is one danger of a product-based sales structure?

A)It is easy to divide up product territories.
B)Customers have one specific sales representative to deal with.
C)Sales calls are close together geographically,so are easy to schedule.
D)Salespeople can be experts in the specific products they sell.
E)Different salespeople may call on the same customer,confusing the customer.

Question 32

A functional sales structure takes the sales process and:

A)makes it easier by cutting out several steps
B)codifies the process in CRM software
C)unifies it by asking salespeople to implement the products they sell to customers
D)separates it into several steps,each performed by a specialist
E)repeats it in multiple markets

Question 33

In the market sales structure,salespeople are assigned to customers based on:

A)the area of the country the customer is in
B)the market the customer is in
C)the product the salesperson knows best
D)the step in the sales process the customer is in
E)the seniority the salesperson has

Question 34

If two or more salespeople call on the same account they may confuse the customer.What is another negative result of structuring a sales force so multiple salespeople deal with each account.?

A)The salespeople may not share information about the account with each other,so they will be doing unnecessary work.
B)The salespeople may each have specialized knowledge of the products they sell.
C)The salespeople may spend less time per sales call on the customer.
D)The customer may award the company a sole supplier contract.
E)The customer may order more products that it would have with just one sales contact.

Question 35

In general,the more specialized the selling:

A)the more customers each salesperson will have
B)the shorter the sales process will take
C)the fewer salespeople one manager can manage
D)the more salespeople one manager can manage
E)the less time each sale will take

Question 36

A seller who wants to enter a new market will likely choose to structure its sales force using the:

A)geographic sales structure
B)product sales structure
C)market sales structure
D)functional sales structure
E)combination sales structure

Question 37

Telemarketing salespeople can do all of the following EXCEPT:

A)receive calls from customers interested in buying a product
B)place calls to current customers for the purpose of selling more products to them
C)set appointments with customers for outside salespeople to visit them
D)travel to visit customers for in-person meetings
E)call customers to tell them where the company will be at trade shows near them

Question 38

Key accounts get more attention from salespeople because they exemplify the 80/20 Rule,which states that:

A)80% of the market is dominated by 20% of the vendors in the industry
B)80% of customers pay their bills on time,while 20% will delay paying
C)80% of a company's salespeople service 20% of its customers
D)80% of the customers are serviced by 20% of the salespeople
E)80% of a company's profits come from 20% of its customers

Question 39

A key account (or national account)is a customer that is:

A)large in size and in a transactional relationship with the seller
B)large in size and strategically important to the seller
C)large in size and spread out over many locations
D)any size but with several locations
E)any size but in an integrative relationship with the seller

Question 40

A common customer perception that offshore call centers provided lower-quality service has led to:

A)companies moving their call centers back to their home countries
B)increased demand for these offshore call centers
C)higher costs for the companies using these call centers
D)new job duties for call center employees
E)a "push" model of customer service

Question 41

A geographical sales structure tends to be easier to create and manage than other sales structures.

Question 42

What are the differences between generalist and specialist salespeople? Which type should a company choose?

Question 43

What are the advantages of a geographical sales structure? What are the disadvantages?

Question 44

A functional sales structure is simple because a single representative takes care of each customer for the lifetime of the relationship.

Question 45

What is the difference between a market sales structure and a functional sales structure?

Question 46

Doing a break-even analysis will give the actual costs of choosing a company salesperson over a sales agent.

Question 47

Structuring a sales force around the current sales force creates efficiency in the sales process.

Question 48

The best way to structure a sales force varies from company to company,even within the same industry.

Question 49

The best structure for a sales force is one that carries out the goals of the entire organization.

Question 50

What are the problems customers encounter when sales and service functions are outsourced to foreign countries?

Question 51

Computerized sales are growing as a method of sales for most companies despite the fact that they cost a company more per sale than inside sales representatives do.

Question 52

Explain the breakdown method of calculating the size of a company's salesforce.What is the weakness of this method?

Question 53

What are the steps of the workload method of calculating the size of the sales force a company should have.

Question 54

Companies will increase sales revenue by replacing generalist salespeople with specialists.

Question 55

What is the main factor that tells managers how to organize a company's sales force? What is one common mistake managers make when organizing their sales force?

Question 56

What is the 80/20 rule,and how does that apply to key accounts?

Question 57

Because it is simpler to calculate,the breakdown method is more easily implemented than is the workload method of determining how many salespeople a company needs.

Question 58

What are the disadvantages of a product sales structure?

Question 59

What are some of the tasks that telemarketers can perform for a company?

Question 60

Flattening sales organizations' structures gives salespeople greater leeway to service their customers appropriately.

Question 61

What is the main disadvantage of a line organization reporting structure,and how can that problem be fixed?

Question 62

Why are electronic data interchange systems so beneficial for both the seller and the buyer?

Question 63

What is a break-even analysis? What does it compare?

Question 64

What does "span of control" mean? What is the relationship between the amount of specialization salespeople have and span of control?

Question 65

Discuss the ethical issues involved in the relationship between and independent sales agent and the company that hires the agent.