Deck 3: Sales Organization Structure and Salesforce Deployment

Question 1

Which of the following statements regarding sales organization structure is false?

A) The sales organization structure helps salespeople and sales managers perform required activities in an effective and efficient manner.
B) Sales organization structures are the vehicle through which strategic plans are translated into selling operations in the marketplace.
C) Strategic changes almost always necessitate adjustments in sales organization structure.
D) Sales organization structures can be extremely complex with many boxes and arrows.
E) Developing a sales organization structure is typically more difficult than implementing a change in sales organization structure.

Answer 1

E

Question 2

In the simplest type of sales organization structure, the following situation would exist:

A) Each salesperson is responsible for selling one particular product.
B) Each sales manager is responsible for only a few key accounts.
C) One sales manager concentrates on training activities and another concentrates on planning activities.
D) Each salesperson is responsible for selling all the company's products to all types of accounts.
E) Each salesperson calls on only certain designated customers.

Answer 2

D

Question 3

An organizational structure concept where individuals concentrate on performing some of the required activities to the exclusion of other tasks is

A) concentration.
B) customer-oriented.
C) market-oriented.
D) strategic account-orientated
E) specialization.

Answer 3

E

Question 4

The basic idea behind specialization is that

A) certain individuals are more ideally suited for some types of jobs than others.
B) if individuals can concentrate on a limited number of activities, they can become experts on those tasks.
C) division of labor will lead to the most cost-effective selling effort possible.
D) when salespeople become experts on certain products, integrating the efforts of different salesforces becomes easier.
E) customers would rather speak with a salesperson that specializes in selling one product.

Question 5

Centralization within the management structure can be best described as

A) the degree to which important decisions and tasks are performed at higher levels in the management hierarchy.
B) definitive in nature, as organizations are either totally centralized or totally decentralized.
C) the extent to which lower-level managers have become responsible for important decisions and tasks.
D) the amount of task specialization that takes place within the major branches of the sales organization structure.
E) characterized by the decision to divide sales efforts on the basis of products or related lines of products.

Question 6

Trends from transactions to relations, individuals to teams, and management to leadership are producing a more ______ organization in many sales organizations.

A) specialized
B) decentralized
C) generalized
D) centralized
E) functional

Question 7

A _________ structure facilitates decision making in the field and encourages the development of relationships with customers.

A) specialized
B) centralized
C) decentralized
D) generalized
E) functional

Question 8

Span of control refers to

A) the frequency with which subordinates are required to report to their immediate supervisor.
B) the number of different hierarchical levels of sales management within the organization.
C) the number of individuals that report to each sales manager.
D) the actual structure of the sales organization, whether it is considered flat or tall.
E) the amount of decision-making responsibility that each sales manager holds.

Question 9

Typically, span of control is _________ related to the number of sales management levels.

A) directly
B) not
C) indirectly
D) only sometimes
E) inversely

Question 10

In a flat sales management structure

A) there are more sales management levels and smaller spans of control.
B) there would be more district sales managers and less use of regional sales managers.
C) there are few sales management levels with each sales manager having a relatively large span of control.
D) there is a tendency for the organization to have a decentralization orientation.
E) the span of control tends to increase at higher sales management levels.

Question 11

In a tall sales management structure

A) there are more sales management levels and smaller spans of control.
B) there would be more district sales managers and less use of regional sales managers.
C) there are few sales management levels with each sales manager having a relatively large span of control.
D) there is a tendency for the organization to have a decentralization orientation.
E) the span of control tends to increase at higher sales management levels.

Question 12

Which of the following statements regarding a line sales management position is false?

A) It is part of the direct management hierarchy within the sales organization.
B) Line sales managers have direct responsibility for a certain number of subordinates.
C) Line sales managers report directly to management at the next highest level in the sales organization.
D) Line sales managers are responsible for only certain sales management functions (e.g., recruiting and selecting, training, etc.).
E) Line sales managers are directly involved in the sales-generating activities of the firm.

Question 13

Which of the following statements regarding a staff sales management position is false?

A) Staff sales management positions are more specialized than line sales management positions.
B) Staff sales management positions are not in the direct chain of command in the sales organization structure.
C) Those is staff sales management positions are directly involved in the sales-generating activities of the firm.
D) Those is staff sales management positions are responsible for only certain sales management functions (e.g., recruiting and selecting, training, etc.).

Question 14

A staff sales management position is

A) less specialized than a line sales management position.
B) part of the direct management hierarchy within the sales organization.
C) responsible for only certain sales management functions (e.g., recruiting and selecting, training, etc.) and are not directly involved in sales generating activities.
D) directly involved in the sales generation activities of the firm.
E) directly responsible for a certain number of subordinates.

Question 15

With regards to designing the sales organization, which one of the following is not an emerging trend?

A) Many sales organizations are moving to some type of specialization.
B) Sales organization structures are flatter.
C) Sales managers typically have larger spans of control.
D) Sales management levels have been added.
E) Some staff positions have been eliminated.

Question 16

When selling effort is considered to be more important than selling skill, the salesforce should be

A) specialized.
B) expanded.
C) centralized.
D) decentralized.
E) generalized.

Question 17

When sales management wants to focus on specific skills within each selling contact the salesforce should be

A) specialized.
B) expanded.
C) centralized.
D) decentralized.
E) generalized.

Question 18

A specialized structure is best when all of the following exist except

A) environmental uncertainty is low.
B) environmental uncertainty is high.
C) salespeople and sales managers must perform creative and nonroutine activities.
D) adaptability is critical to achieving performance objectives.

Question 19

Centralization is most appropriate when all of the following exist except

A) environmental uncertainty is low.
B) environmental uncertainty is high.
C) sales organization activities are routine and repetitive.
D) performance emphasis is on effectiveness.

Question 20

When there is a high level of environmental uncertainty and when adaptability is critical to achieving performance objectives, a ___________ sales organization structure is suggested.

A) decentralized
B) generalized
C) specialized
D) centralized
E) flat

Question 21

The appropriate type of salesforce specialization depends on all of the following except

A) the similarity of customer needs.
B) the professionalism of the salesforce.
C) whether the economy is growing or not.
D) the complexity of products offered by the firm.
E) characteristics of the market environment.

Question 22

When the firm has a simple product offering but customers have different needs a ________ salesforce is recommended.

A) market specialized
B) product specialized
C) geographically specialized
D) product-market specialized
E) functionally specialized

Question 23

When the firm has a simple product offering and customers have similar needs a ________ salesforce is recommended.

A) market specialized
B) product specialized
C) geographically specialized
D) product-market specialized
E) functionally specialized

Question 24

When the firm offers a complex range of products and customers have similar needs a ________ salesforce is recommended.

A) market specialized
B) product specialized
C) geographically specialized
D) product-market specialized
E) functionally specialized

Question 25

When the firm offers a complex range of products and customers have different needs a ________ salesforce is recommended.

A) market specialized
B) product specialized
C) geographically specialized
D) product-market specialized
E) functionally specialized

Question 26

The least specialized and most generalized type of salesforce is one that is

A) product specialized.
B) market specialized.
C) geographically specialized.
D) functionally specialized.
E) strategic account specialized.

Question 27

Which type of salesforce specialization does not result in any duplication of sales effort to an account or geographic area?

A) Product specialized
B) Market specialized
C) Geographically specialized
D) Functionally specialized
E) Strategic account specialized

Question 28

Cooper Tire and Rubber's use of separate salesforces for Cooper brands, Falls brands, and house brands of tires is an example of

A) market specialization.
B) functional specialization
C) strategic account specialization.
D) geographical specialization.
E) product specialization.

Question 29

A company has one salesforce selling office equipment and another selling office supplies. They are organized according to geographic area and perform all selling activities to all types of accounts. They are considered to be

A) market specialized.
B) functionally specialized.
C) strategic account specialized.
D) product specialized.
E) geographically specialized.

Question 30

The basic objective of market specialization is

A) for salespeople to become experts in the assigned product category.
B) to guarantee that there will be no duplication of selling effort.
C) to ensure that salespeople understand how customers use and purchase their products.
D) to more cost effectively serve the different needs of the customer.
E) to make sure the needs of the large-volume customers are identified and met.

Question 31

An arrangement in which there is geographic duplication, but the salespeople call on different accounts, would be specialization by

A) geography.
B) market.
C) product.
D) function.
E) districts.

Question 32

Using a field salesforce to perform sales-generating activities and a telemarketing salesforce to perform account servicing activities is an example of

A) specialization by product.
B) specialization by geographic area.
C) specialization by function.
D) specialization by market.
E) specialization by strategic accounts.

Question 33

Which of the following statements regarding strategic accounts is false?

A) For many firms, a large percentage of their total sales come from a relatively few accounts.
B) National account management focuses on meeting the needs of specific accounts with multiple locations throughout a large region or country.
C) All accounts that generate a large volume of sales should be identified as strategic accounts.
D) All firms must determine how to identify their strategic accounts and how to organize for effective strategic account coverage.
E) Many firms are expanding their strategic account management programs into international markets.

Question 34

According to the textbook, a strategic account may also be referred to as a

A) key account.
B) major account.
C) both a key account and major account.
D) significant account.
E) prime account.

Question 35

A ____________________ represents a type of market specialization based on account size and complexity.

A) product sales organization
B) functional sales organization
C) market sales organization
D) geographic sales organization
E) strategic account organization

Question 36

To be considered as strategic, an account should be both ________ and ________.

A) high in volume sales, high in total dollar sales
B) large, buy large amounts of one product
C) complex, small
D) profitable, large
E) large, complex

Question 37

________ serves the needs of strategic customers with locations around the world.

A) National account management
B) International account management
C) Geographic account management
D) Specialized account management
E) Global account management

Question 38

An account can be considered complex under any of the following circumstances except when

A) it has multiple buying locations.
B) top management heavily influences its purchasing decisions.
C) multiple functions are involved in buying decisions.
D) it requires special services.
E) it purchases standardized products.

Question 39

The different ways in which strategic accounts can be served typically include all of the following except

A) establishing a separate strategic accounts salesforce.
B) assigning strategic accounts to service managers.
C) assigning strategic accounts to sales managers.
D) assigning strategic accounts to salespeople along with other accounts.
E) establishing formal sales teams to serve specific strategic accounts.

Question 40

Research indicates that the effectiveness of the strategic account salesforce depends upon all of the following except

A) the esprit de corps of those serving the strategic account.
B) access to sales and marketing resources.
C) the number of activities performed with the strategic account.
D) top management involvement.
E) formalization of the strategic account salesforce approach.

Question 41

A hybrid sales organization structure is

A) generally composed of a combination of the strategic account and geographic sales organization structures.
B) based on the premise that a mix of the different sales organization structures is always much better than any one.
C) easier to implement than other sales organization structures.
D) a complex structure that might include elements of geographic, product, market, function, and strategic account organizations.
E) able to reduce geographic and customer duplication by using elements of a functional sales organization.

Question 42

One main advantage of the functional sales organization structure is

A) no geographic duplication.
B) no customer duplication.
C) sales efforts do not have to be coordinated.
D) low cost to the firm.
E) efficiency in performing specific selling activities.

Question 43

Advantages of the geographic sales organization structure include all of the following except

A) fewer management levels.
B) no geographic duplication.
C) salespeople develop better understanding of unique customer needs.
D) low cost.
E) no customer duplication.

Question 44

Which of the following is a disadvantage of a product sales organization structure?

A) Limited specialization
B) Customer duplication
C) Need for coordination
D) Lack of management control over product emphasis
E) Fewer management levels

Question 45

Decisions regarding the allocation of selling effort, salesforce size, and design of territories are referred to as

A) salesforce distribution.
B) salesforce allocation.
C) salesforce deployment.
D) territorial apportionment.
E) coverage decisions.

Question 46

Decisions regarding the allocation of selling effort, salesforce size, and design of territories should be addressed

A) independently.
B) prior to determining the organizational structure.
C) as being completely unrelated decisions.
D) in an interrelated manner.
E) as different parts of the puzzle.

Question 47

Which of the following decisions can be regarded as the starting point in a comprehensive salesforce deployment approach?

A) Deciding how many salespeople are required to provide the desired amount of selling effort.
B) Deciding how territories should be designed to ensure proper coverage of accounts.
C) Deciding how much selling effort is needed to cover accounts and prospects so that sales and profit objectives will be achieved.
D) Deciding how to provide each salesperson with a reasonable opportunity for success.
E) Deciding how many sales calls each salesperson should make on an annual basis.

Question 48

Which of the following statements concerning the allocation of selling effort to accounts is false?

A) It is one of the most important deployment decisions.
B) Salesforce size and territory decisions are based on this allocation decision.
C) Determining how much selling effort to allocate to individual accounts is an extremely important strategic decision.
D) Selling effort is a major determinant of account sales and a major element of account selling costs.
E) Territories are always assigned an equal number of sales calls.

Question 49

The three basic analytical approaches used in selling effort allocation decisions are the

A) single factor model, multiple factor model, portfolio model.
B) multiple factor model, decision model, historical model.
C) portfolio model, single factor model, decision model.
D) single factor model, cost based model, decision model.
E) multiple factor model, portfolio model, historical model.

Question 50

The analytical method for allocating selling effort that is the easiest to develop and use is the

A) multiple factor model.
B) decision model.
C) historical model.
D) single factor model.
E) portfolio model.

Question 51

If the company evaluates the market potential of each account, classifies all accounts into A, B, C, and D market potential categories, and then calculates and evaluates the average number of sales calls to make to an account in each category, they are using this analytical method:

A) multiple factor model.
B) decision model.
C) historical model.
D) single factor model.
E) portfolio model.

Question 52

Which of the following statements regarding the use of the portfolio model to allocate selling effort is false?

A) More attractive accounts receive more selling effort.
B) It can be a valuable tool for helping sales managers improve their account effort allocation strategy.
C) All accounts are classified into categories of similar size to determine the level of sales effort needed.
D) Each account served by a firm is considered as part of an overall portfolio of accounts.
E) Each account segment represents a different situation and should receive a different level of selling effort.

Question 53

Use of this analytical method requires that account opportunity and competitive position be measured for each account:

A) multiple factor model.
B) decision model.
C) historical model.
D) single factor model.
E) portfolio model.

Question 54

Account opportunity is defined as

A) an account's basic desire for the firm's brand of products.
B) the ability of the firm to service the account.
C) an account's location within the firm's geographic distribution area.
D) an account's forecasted potential for growth.
E) an account's need for and ability to purchase products of the type sold by the firm.

Question 55

Competitive position is defined as

A) the strength of the relationship between the selling firm and an account.
B) the number of active competitors for the account.
C) the strength of the relationship between an account and each competing firm.
D) a measure of the competitive strength of the firm in an area.
E) a rank order of account desirability determining to what extent selling effort should be expended to win it.

Question 56

When a firm's competitive position is weak, but account opportunity is high, the selling effort strategy should be to:

A) perform additional analysis to identify accounts where the sales organization's competitive position can be strengthened and invest heavy selling effort in these accounts.
B) provide minimal selling effort to accounts and replace the personal selling effort with advertising.
C) invest heavy selling effort in accounts.
D) invest sufficient selling effort in accounts to maintain current competitive position.
E) provide minimal selling effort to accounts and use less costly forms of marketing to replace selling efforts on a selective basis.

Question 57

When a firm's competitive position is weak, and account opportunity is low, the selling effort strategy should be to:

A) perform additional analysis to identify accounts where the sales organization's competitive position can be strengthened and invest heavy selling effort in these accounts.
B) provide minimal selling effort to accounts and replace the personal selling effort with advertising.
C) invest heavy selling effort in accounts.
D) invest sufficient selling effort in accounts to maintain current competitive position.
E) provide minimal selling effort to accounts and use less costly forms of marketing to replace selling efforts on a selective basis.

Question 58

When a firm's competitive position is strong, but account opportunity is low, the selling effort strategy should be to:

A) perform additional analysis to identify accounts where the sales organization's competitive position can be strengthened and invest heavy selling effort in these accounts.
B) provide minimal selling effort to accounts and replace the personal selling effort with advertising.
C) invest heavy selling effort in accounts.
D) invest sufficient selling effort in accounts to maintain current competitive position.
E) provide minimal selling effort to accounts and use less costly forms of marketing to replace selling efforts on a selective basis.

Question 59

When a firm's competitive position is strong, and account opportunity is high, the selling effort strategy should be to:

A) perform additional analysis to identify accounts where the sales organization's competitive position can be strengthened and invest heavy selling effort in these accounts.
B) provide minimal selling effort to accounts and replace the personal selling effort with advertising.
C) invest heavy selling effort in accounts to take advantage of opportunity and maintain/improve competitive position.
D) invest sufficient selling effort in accounts to maintain current competitive position.
E) provide minimal selling effort to accounts and use less costly forms of marketing to replace selling efforts on a selective basis.

Question 60

This sales effort allocation model calculates the optimal allocation of sales calls to accounts that will maximize total firm sales:

A) multiple factor model.
B) decision model.
C) historical model.
D) single factor model.
E) portfolio model.

Question 61

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.

Question 62

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.

Question 63

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

Question 64

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.

Question 65

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.

Question 66

All of the following make salesforce size a difficult decision except

A) sales
B) costs
C) productivity
D) profitability
E) turnover

Question 67

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.

Question 68

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.

Question 69

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.

Question 70

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.

Question 71

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.

Question 72

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.

Question 73

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.

Question 74

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

Question 75

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

Question 76

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.

Question 77

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.

Question 78

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.

Question 79

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.

Question 80

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.