Question 1

When determining salesforce size, it is important to consider
A) productivity.
B) turnover.
C) organizational strategy.
D) all of the above.
E) none of the above.

Accepted Answer

When determining salesforce size, it is crucial to consider all of the above factors - productivity, turnover, and organizational strategy. Productivity levels can help determine how many salespeople are needed to meet sales goals. Turnover rates can impact recruitment and retention efforts, as well as the overall size of the salesforce. Organizational strategy can influence the scope of sales efforts, leading to changes in the size and structure of the salesforce. Therefore, all of these factors should be taken into account when determining the appropriate size for a salesforce.

Question 2

Productivity is normally defined as
A) a ratio between outputs and inputs.
B) the number of salespeople in the field.
C) a ratio of selling effort employed to number of salespeople.
D) a ratio of sales generated to number of accounts.
E) a ratio of accounts to salespeople.

Accepted Answer

Productivity is typically defined as the ratio between outputs (or results) and inputs (or resources). This could be measured in terms of output per hour of labor, output per dollar of investment, or any other relevant input-output relationship. The other choices, such as number of salespeople or accounts, may be useful metrics in certain contexts, but they do not capture the essence of productivity as a ratio of outputs to inputs.

Question 3

Sales generally increase in a ________ manner with the addition of salespeople, while costs typically increase in a ________ manner.
A) direct, indirect
B) linear, nonlinear
C) step-wise, linear
D) nonlinear, linear
E) nonlinear, step-wise

Accepted Answer

Sales do not necessarily increase in a direct or linear manner with the addition of salespeople, as there may be factors such as market saturation or product demand that limit the impact of additional salespeople. On the other hand, costs typically increase in a linear manner as each additional salesperson incurs a set amount of base salary and other expenses. Therefore, the best choice is D, where sales increase nonlinearly and costs increase linearly with the addition of salespeople.

Question 4

The profit maximization point is when
A) the total possible sales effort has been achieved.
B) the marginal costs of adding a salesperson are equal to the marginal profits generated by that salesperson.
C) the marginal profits for a salesperson are maximized by assigning them to a certain territory.
D) the incremental profits of a salesperson provide a return over and above the cost to employ him or her.
E) the optimal account to salesperson ratio has been determined.

Accepted Answer

The profit maximization point is achieved when the marginal costs of adding a salesperson are equal to the marginal profits generated by that salesperson. At this point, any additional salesperson would result in a decrease in profits, as the additional cost would outweigh the additional revenue generated.

Question 5

Because of the existence of salesforce turnover,
A) firms should scale down their sales efforts to a level that the current salesforce can manage.
B) firms should redesign their compensation programs if they are losing substantial salespeople each year.
C) firms should have alternative sales allocation plans based on both a full strength and reduced salesforce.
D) firms should determine the desired salesforce size and then adjust this figure to reflect expected turnover.
E) firms should solicit their competitor's best salespeople to offset the opportunity costs of turnover.

Accepted Answer

To account for the existence of salesforce turnover, firms should determine the desired salesforce size and then adjust this figure to reflect expected turnover. This allows firms to plan for turnover and ensure that they always have the optimal level of salespeople to achieve their objectives. Scaling down sales efforts or soliciting competitor's salespeople may not be effective solutions, while redesigning compensation programs and alternative sales allocation plans could be considered in conjunction with determining the desired salesforce size.

Question 6

All of the following make salesforce size a difficult decision except
A) sales
B) costs
C) productivity
D) profitability
E) turnover

Accepted Answer

Profitability is the result of salesforce size decisions, not a factor that makes the decision difficult.

Question 7

The different types of salesforce size decisions include all of the following except
A) number of salespeople assigned to districts or zones.
B) size of each specialized salesforce.
C) number of specialized salesforces.
D) total size of a generalized salesforce.
E) total size of all specialized salesforces.

Accepted Answer

The answer of The different types of salesforce size decisions...

Question 8

Three different analytical methods that can be used to determine the appropriate salesforce size are as follows:
A) incremental, decision, single factor.
B) productivity, breakdown, incremental.
C) territory, workload, zone.
D) breakdown, decision, workload.
E) workload, breakdown, incremental.

Accepted Answer

The three analytical methods that can be used to determine the appropriate salesforce size are workload, breakdown, and incremental. The workload method estimates the number of sales calls needed to achieve sales targets, the breakdown method divides the total sales target by the average sales per salesperson, and the incremental method assesses the cost of adding one salesperson against the additional sales that person would generate.

Question 9

The following formula is used to calculate salesforce size for this approach: Salesforce size = Forecasted sales/Average sales per salesperson
A) incremental method.
B) decision method.
C) workload method.
D) productivity method.
E) breakdown method.

Accepted Answer

The breakdown method calculates salesforce size by dividing forecasted sales by the average sales per salesperson, which aligns with the formula provided.

Question 10

This approach to determining salesforce size is best suited for relatively stable selling environments where sales change in slow and predictable ways and no major strategic changes are planned:
A) incremental method.
B) decision method.
C) workload method.
D) productivity method.
E) breakdown method.

Accepted Answer

The breakdown method is best suited for stable selling environments as it involves dividing the total sales forecast by the sales expected from each salesperson, assuming sales change slowly and predictably.

Question 11

The following formula is used to calculate salesforce size for this approach:
Number of salespeople =
Total Selling Effort Needed
Average Selling Effort Per Salesperson
A) incremental method.
B) decision method
C) workload method.
D) productivity method.
E) breakdown method.

Accepted Answer

The formula used to calculate salesforce size for this approach is known as the workload method. This method takes into account the total selling effort needed and the average selling effort per salesperson to determine the number of salespeople needed to achieve the desired sales goals. Therefore, the best choice is C, the workload method.

Question 12

The most rigorous approach for calculating salesforce size is the
A) incremental method.
B) breakdown method.
C) productivity method.
D) workload method.
E) decision method.

Accepted Answer

The answer of The most rigorous approach for calculating salesforce...

Question 13

This approach to determining salesforce size cannot normally be used for a new salesforce because it requires historical data or accurate management judgments:
A) incremental method.
B) decision method.
C) workload method.
D) productivity method.
E) breakdown method.

Accepted Answer

The incremental method relies on analyzing historical sales data and costs to determine the optimal size of a salesforce. This approach is not suitable for a new salesforce because there is no historical data to analyze.

Question 14

Evidence suggests that many firms may lose as much as ____ percent in sales productivity due to the loss in sales from vacant territories or low initial sales when a new salesperson is assigned to a territory.
A) 5
B) 10
C) 15
D) 20
E) 25

Accepted Answer

The answer of Evidence suggests that many firms may lose...

Question 15

A company may want to ______________ the salesforce in situations where they need salespeople quickly, for short periods of time, for smaller customers, or for other reasons, but when they do not want to hire additional salespeople.
A) source
B) outsource
C) source out
D) increase
E) motivate

Accepted Answer

Outsourcing the salesforce allows a company to hire a third-party provider to handle their sales needs, rather than hiring additional salespeople themselves. This can be a cost-effective option for situations where the company doesn't want to make a long-term commitment or investment in a larger sales team.

Question 16

A territory is considered to be
A) a geographical area in which the company has not previously prospected for accounts.
B) the amount of geographical area that any one salesperson can cover effectively.
C) all of the firm's accounts that do business within a certain area.
D) the geographical area in which a salesperson resides.
E) the assignment of specific accounts to a specific salesperson.

Accepted Answer

The answer of A territory is considered to be
A) a...

Question 17

The overall objective of territory design is to
A) motivate salespeople to their fullest potential.
B) ensure that all accounts are assigned salesperson responsibility and that each salesperson can adequately cover the assigned accounts.
C) evaluate the workload for each territory.
D) group the planning and control units into territories that are as equal as possible in opportunity.
E) assess the potential sales that the firm might achieve in each planning and control unit.

Accepted Answer

Territory design is the process of dividing a market into smaller groups of customers or regions that can be served most effectively and efficiently by a salesperson or sales team. The overall objective is to ensure that all accounts are assigned salesperson responsibility and that each salesperson can adequately cover the assigned accounts. This helps to optimize sales performance and ensure that customers are served effectively while minimizing travel time and costs.

Question 18

All of the following are consequences of ineffective territory design except
A) a salesperson might get frustrated because there is little potential for generating additional sales in his or her territory.
B) the firm could lose sales opportunities because of a lack of selling attention.
C) a salesperson may not be motivated to develop the potential of the territory and instead merely "skim the cream" from the best accounts.
D) all salespeople have equal opportunities for generating sales and profits.
E) too much sales effort being expended for the level of sales opportunity that exists.

Accepted Answer

The other four options (A, B, C, and E) are all potential consequences of ineffective territory design, while D is not a consequence. Effective territory design should result in equitable opportunities for salespeople based on the potential of their respective territories, but not necessarily equal opportunities for all salespeople regardless of their territories.

Question 19

The concept "planning and control unit" can be defined as
A) the division of the total market area of the firm into geographic areas with an equal number of accounts.
B) the division of the total market area of the firm into geographic areas containing the same approximate square miles.
C) the division of the total market area of the firm into geographic areas with an equal number of road miles.
D) some entity smaller than a territory into which the total market area of the firm is divided.
E) the division of the total market area of the firm into geographic areas called territories.

Accepted Answer

The concept "planning and control unit" refers to a smaller entity than a territory, into which the total market area of a firm is divided for better management and control. Therefore, option D is the best choice as it defines the concept accurately.

Question 20

The most often used measure of opportunity in planning and control units is
A) the number of accounts.
B) the number of sales calls required to cover the accounts.
C) the total number of customers and prospects.
D) market potential.
E) last year's total sales.

Accepted Answer

Market potential is the most often used measure of opportunity in planning and control units because it provides an estimate of the maximum sales possible in a given market, helping businesses to set realistic goals and allocate resources effectively.

Quiz 3: Sales Organization Structure and Salesforce Deployment

When determining salesforce size, it is important to consider

Productivity is normally defined as

Sales generally increase in a manner with the addition of salespeople, while costs typically increase in a manner.

The profit maximization point is when

Because of the existence of salesforce turnover,

All of the following make salesforce size a difficult decision except

The different types of salesforce size decisions include all of the following except

Three different analytical methods that can be used to determine the appropriate salesforce size are as follows:

The following formula is used to calculate salesforce size for this approach: Salesforce size = Forecasted sales/Average sales per salesperson

This approach to determining salesforce size is best suited for relatively stable selling environments where sales change in slow and predictable ways and no major strategic changes are planned:

The following formula is used to calculate salesforce size for this approach: Number of salespeople = Total Selling Effort Needed Average Selling Effort Per Salesperson

The most rigorous approach for calculating salesforce size is the

This approach to determining salesforce size cannot normally be used for a new salesforce because it requires historical data or accurate management judgments:

Evidence suggests that many firms may lose as much as ____ percent in sales productivity due to the loss in sales from vacant territories or low initial sales when a new salesperson is assigned to a territory.

A company may want to ______________ the salesforce in situations where they need salespeople quickly, for short periods of time, for smaller customers, or for other reasons, but when they do not want to hire additional salespeople.

A territory is considered to be

The overall objective of territory design is to

All of the following are consequences of ineffective territory design except

The concept "planning and control unit" can be defined as

The most often used measure of opportunity in planning and control units is