Deck 6: Sales Force Organization

Question 1

A simple geographic organization of a sales force generally works best when the product line is fairly broad and complex.

Answer 1

False

Question 2

Executives generally expect more and more sales forces to be organized according to the type of customer.

Answer 2

True

Question 3

An example of a functional specialist type sales organization is to have new customer and retention specialists.

Answer 3

True

Question 4

Most sales forces are organized along functional lines.

Question 5

One of the key advantages of a customer specialization type of sales force organization is that it minimizes the sales force's travel time.

Question 6

Strategic accounts are often large chain retailers or original equipment manufacturers that buy in large volumes.

Question 7

The organization of salespeople along product lines is often found in small firms where technical knowledge is not important.

Question 8

One of the problems with organizing your company's sales force as generalists is that salespeople have a great deal of latitude to decide which products to emphasize.

Question 9

A strategic account program is essentially an effort to provide the kinds of services and products necessary to establish a long-term relationship with key customers.

Question 10

The most common way to organize a field sales force is in a generalist structure.

Question 11

Organizing along product lines is the most common form of sales force organization today.

Question 12

One benefit of a customer specialized sales force is that they are able to be very knowledgeable about their clients and the clients' industry.

Question 13

Multiple salespeople calling on the same customer may be a problem when a sales force is organized along product lines.

Question 14

With customer specialization, each salesperson typically sells the entire product line to selected types of customers.

Question 15

A 3M engineer responsible for working with the design engineers in an customer account is an example of an end-user specialists

Question 16

One reason more and more companies are establishing strategic account programs is that a select group of customers are accounting for a disproportionately large share of total sales.

Question 17

The most common form of sales force organization today is according to geographic territories without farther specialization.

Question 18

Multiple salespeople calling on the same customer is one of the drawbacks to customer specialization type of sales force organization.

Question 19

Sales managers are expecting that organizing the sales force according to specific types of customers will become more popular with companies in the future.

Question 20

One of most serious problems with geographical organizations is that salespeople must sell the entire line, when they may not be equally knowledgeable about all product lines.

Question 21

One of the primary disadvantages of telemarketing is the high cost per sales call.

Question 22

With permission marketing, the customer initiates the selling process.

Question 23

Motivation and retention continue to be two management problems associated with telemarketing sales forces.

Question 24

The internet has the potential to entirely replacing most organizations' telemarketing efforts.

Question 25

Telemarketing is frequently used to sell to smaller customers.

Question 26

A highly successful management practice is to select the largest customers in terms of sales volume as strategic account management.

Question 27

Working with a telemarketing sales force is generally welcomed by the outside sales force.

Question 28

If a company's objective is to minimize total sales force costs, then a generalist sales force structure is the best option for organizing your sales force.

Question 29

Sales agents are usually employed when a company has a high sales volume in a particular geographic area.

Question 30

Permission marketing refers to first asking the customer for permission to make a sales call.

Question 31

Given enough analysis, it is usually easy to find a firm's optimal organization structure.

Question 32

It is not uncommon for firms to turn to independent sales agents to develop new markets.

Question 33

Assigning strategic accounts to sales executives can be an effective way to implement a strategic account program.

Question 34

To be successful, specialized sales force structures often require exceptional training capabilities.

Question 35

Many companies service their small accounts by using telemarketing.

Question 36

If a company's objective is to minimize total sales force costs, then some form of sales force specialization is the best sales force structure option.

Question 37

One reason organizations are initiating strategic account programs is the concentration of their sales to a few very important customers.

Question 38

Telemarketing refers to customer contacts utilizing telecom-
munications technology for personal selling without face-to-face contact.

Question 39

Breakeven sales analysis can be used to choose between a company sales force and independent sales agents.

Question 40

Independent sales agents are almost always compensated by paying a commission on sales.

Question 41

One benefit of a customer oriented sales force organization is that:

A) it is more closely identified with clients.
B) it consolidates the support services.
C) it allows for product specialization.
D) there are usually smaller territories.
E) it requires less travel time and costs.

Question 42

The primary means by which a company influences the behavior of independent sales agents is through commissions.

Question 43

Which of the following are examples of functional specialists?

A) salespeople responsible for landing new customers.
B) salespeople responsible for increasing sales to existing customers.
C) salespeople responsible for selling to end-users.
D) only a and b above.
E) a, b and c are all examples.

Question 44

With the type of sales force organization, salespeople are better able to identify strategic problems in the client's operation that a supplier can address.

A) matrix
B) product-oriented
C) customer-oriented
D) functional
E) none of the above

Question 45

The most widely used form of sales force organization in use today is:

A) customer.
B) geographic.
C) product lines.
D) both a and b above.
E) none of the above.

Question 46

The same company will not use both a company sales force as well as sales agents.

Question 47

The need to customize solutions to individual customers has led some manufacturers to using selling partners who can provide technical and operating support.

Question 48

The primary objective of forming a functional team sales organization is to develop a closer customer relationship when servicing existing customers.

Question 49

The amount of time a sales agent will spend selling for a company will depend on how many product lines the company has for the sales agent to sell.

Question 50

Sales agents are likely to be used when the company needs to have tight control over the selling effort.

Question 51

J&J Medical has over 100 operating units producing products such as orthopedic implants, pharmaceuticals, and sutures. Based on this information, how is their sales force most likely to be organized?

A) geographically
B) along product lines
C) customer specialization
D) functional specialization
E) both c and d above

Question 52

Which of the following are commonly used types of sales specialization?

A) customer specialization
B) product specialization
C) generalist structure
D) both a and b above
E) all of the above

Question 53

The main objective of developing a strategic account program is to:

A) expand geographic sales coverage on a nationwide basis to take full advantage of total sales potential.
B) Provide an enterprise type of relationship with some customers and a consultative relationship to others.
C) free-up more of the regular sales force's time.
D) both a and b above.
E) all of the above.

Question 54

Which of the following are examples of functional specialists?

A) salespeople responsible for landing new customers.
B) salespeople responsible for selling a new product line.
C) salespeople responsible for selling to end-users.
D) Only a and b above.
E) Only a and c above.

Question 55

Customers who are good candidates for a strategic account program are large customers who exhibit all the following characteristics except:

A) purchase centrally.
B) expect specialized attention and service.
C) are geographically close to headquarters.
D) involve multiple people in the purchasing process.

Question 56

The most serious problem with geographic organization is:

A) salespeople must sell the entire line and may not be sufficiently knowledgeable about all products.
B) it is difficult to set up an equitable geographic organizations.
C) it generally results in extensive travel time.
D) it is a usually the most costly alternative.
E) salespeople usually do not like it.

Question 57

Sales agents are likely to be used when the company is selling only a few products.

Question 58

Relatively smaller territories and reduced travel time and expenses are advantages related to which organizational approach?

A) geographical
B) product
C) customer
D) matrix
E) functional

Question 59

When Hyatt Hotels had a separate sales force dedicated to each of its hotel properties, its sales force was organized according to:

A) geography.
B) product line.
C) customer.
D) functional.
E) none of the above.

Question 60

Which form of sales force organization is expected to increase in popularity the most over the next five years?

A) customer
B) geographic
C) product line
D) functional
E) both a and b above

Question 61

A company is thinking of switching from independent sales agents to hiring its own sales force. If 10 salespeople were hired, they would be paid a 3% commission on sales plus a salary of $20,000 each. Independent sales agents are currently paid a commission of 5% on sales. At what sales volume is the company economically indifferent about which sales organization to use in a selling situation?

A) $1,000,000
B) $2,500,000
C) $10,000,000
D) $25,000,000

Question 62

When purchasing a Dell computer, the customer can see the computer alternatives they may consider purchasing on Dell's website, as well as calling a Dell representative to answer any additional questions. This is an example of:

A) internet marketing.
B) telemarketing.
C) permission marketing.
D) both a and b above.
E) all of the above.

Question 63

The functions for which telemarketing is used differs from one business to the next. Some common uses of telemarketing include:

A) customer service.
B) lead generation.
C) data gathering.
D) lead qualification.
E) all of the above.

Question 64

One common concern by manufacturers who use independent agents is:

A) higher promotional support costs.
B) the time needed to establish relationships with accounts in the territory.
C) agents not devoting enough of their time to selling your product.
D) both b and c above.
E) none of the above.

Question 65

With which of the following functional areas is a sales force likely to interact with the most?

A) engineering
B) marketing
C) accounting
D) finance
E) customer service

Question 66

Companies often use which of the following to sell to their strategic accounts when they first set-up a strategic account organization:

A) the existing sales force.
B) sales management.
C) sales agents.
D) a separate sales force.
E) a cross functional sales team.

Question 67

Some common ways in which telemarketing is used by businesses includes all of the following except:

A) customer service - "800" numbers.
B) prospecting and lead qualification.
C) sales support - selling of services to compliment product purchases.
D) sales training - answering salespeople's questions about specific products.

Question 68

Which of the following is true about independent sales agents?

A) They are employees of the firm.
B) They take ownership and physical possession of the products they sell.
C) They are generally more cost effective when sales volumes are low.
D) They are usually compensated solely by a combination of salary and commission.
E) all the above are true.

Question 69

Typical issues requiring coordination between the sales force and customer service include:

A) equipment installation.
B) warranty servicing.
C) customer training on equipment.
D) both a and b above.
E) all of the above.

Question 70

If independent sales agents receive a 7% commission on sales with overhead of $70,000 and company salespeople receive a 5% commission with salary and overhead costs of $500,000, what is the break-even point between the two choices?

A) $28,500,000
B) $21,500,000
C) $25,000,000
D) $23,500,000
E) $20,500,000

Question 71

Although telemarketing holds many benefits, gaining acceptance for telemarketing by the field sales force can be difficult because:

A) field salespeople may feel threatened by telemarketers.
B) field salespeople fear an increased work load.
C) telemarketers are unfriendly towards field salespeople.
D) both a and b above.
E) none of the above.

Question 72

Which of the following factors is not important when deciding to use sales agents in a particular geographic area?

A) how close the business prospects are to your headquarters
B) level of control over the actions of the sales force
C) the volume of business in the geographic area
D) the predictability of sales from the geographic area

Question 73

What actions are companies taking to encourage better coordination and communications between marketing and sales?

A) Holding regular meetings between sales and marketing.
B) Having marketing people go along sales calls.
C) Having salespeople help in developing marketing plans.
D) Co-locate marketers and salespeople.
E) All the above steps are being taken.

Question 74

Despite its considerable merits, venturing into telemarketing has its challenges. Key challenges include all of the following except:

A) acceptance by the field sales force.
B) effective organization of the telemarketing effort.
C) developing telemarketing equipment.
D) both a and b above
E) none of the above.

Question 75

A company is considering whether to hire independent agents or develop its own sales force. Agents are paid a 4% commission, alternatively a company sales force would consist of 6 people paid a $25,000 salary each along with a 2% commission. A company sales force is economically viable if sales are forecasted to be:

A) below $1,250,000.
B) above $1,250,000.
C) below $7,500,000.
D) above $7,500,000.

Question 76

Reason(s) for the growing popularity of telemarketing include:

A) telemarketing sales calls can be very cost effective.
B) ease in retraining a telemarketing sales force.
C) telemarketers are easy to motivate.
D) only a and c of the above.
E) all of the above.