Marketing Management Chap 22 – Flashcards
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1) The catalog you receive from a large apparel store, displaying their new summer collection, is an example of ________ marketing. A) buzz B) direct C) virtual D) word-of-mouth E) interactive
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B
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2) A salesperson sends e-mails to persuade prospects to buy the products of his company. This is a type of ________ marketing. A) buzz B) virtual C) word-of-mouth D) direct E) viral
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D
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3) Market demassification has resulted in ________. A) niche market creation B) product standardization C) mass production practices D) intrinsic marketing channels E) just-in-time production
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A
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4) Which of the following is an example of a company that serves a niche market? A) a large apparel manufacturing company that produces a wide range of products for different segments B) a software company that creates standardized supply chain applications for manufacturers C) a manufacturer who creates tools such as bolts, latches, door handles etc. for left-handed individuals D) a large multinational manufacturer of consumer products, FMCG products, and consumer electronics E) a company that manufactures denim pants for men and women of all ages
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C
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5) Which of the following is NOT one of the advantages of direct mail? A) The cost per thousand is lower than for mass media. B) It permits target market selectivity. C) It can be personalized. D) It allows early testing and response measurement. E) It is flexible.
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A
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6) Greta is attempting to get as many orders as possible. Which direct marketing tool is generally associated with the highest order response rate? A) e-mail to an internal company list B) direct mail to an internal company list C) e-mail to a general list D) direct mail to a general list E) banner advertising on the company's Web site
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B
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7) Greta is marketing a product that is technologically advanced and requires a great deal of explanation. Which direct response tool should she use? A) direct mail B) e-mail C) infomercial D) inbound telemarketing E) outbound telemarketing
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C
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8) OrdOnline, a pure click company offering online auctioning, decides to launch a promotional program to increase its sales. The company identifies customers who have made at least three purchases and spent at least $150 in the past six months and offers discount coupons to these customers. Which of the following strategies is used here for targeting customers? A) viral marketing B) objective screening C) internal targeting D) catalog marketing E) RFM formula targeting
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E
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9) Which of the following is a major advantage of using direct mail? A) Direct mail permits target market selectivity. B) It is the best suited tool for selling complex products. C) Campaign testing is not needed for direct mail. D) Direct mail has very high conversion rates. E) It is the best method to sell industrial products.
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A
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10) Which of the following is a factor considered when a customer is evaluated based on the RFM formula? A) the amount of time passed after the customer's last visit B) the product categories purchased by the customer C) the mode of payment used by the customer D) the location from which the customer has bought goods E) the type of feedback provided by the customer
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A
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11) Which of the following is an element of an offer strategy? A) the medium used for delivery B) the number of customers in the locality C) the vision of the company D) the skills required for production E) the details of customer order received
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A
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12) In 2010, three top B-to-B ________ were Thermo Scientific lab and research supplies ($10.8 billion), Henry Schien dental, medical, and vet supplies ($7.5 billion) and WESCO International electrical and industry maintenance supplies ($5 billion). A) inbound telemarketers B) catalog sellers C) outbound telemarketers D) infomercial marketers E) mobile marketers
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B
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13) In 2010, the three top B-to-C ________ were Dell ($52 billion), Staples ($9.8 billion), and CDW ($8.8 billion). A) inbound telemarketers B) catalog sellers C) outbound telemarketers D) infomercial marketers E) mobile marketers
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B
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14) The practice of using call centers, where employees receive calls from customers and provide service by taking orders and answering queries, is called ________. A) customer response marketing B) guerilla marketing C) reactive marketing D) internal marketing E) inbound telemarketing
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E
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15) In outbound telemarketing, the call center employees ________. A) sell high-involvement products B) initiate calls from a location closer to prospects C) offer huge discounts to customers D) initiate calls to prospects and customers E) answer the queries of consumers who call for information
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D
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16) The management of Raleigh Bicycles observes that the company's selling costs are affected by the increased number of visits that salespeople make to meet dealers. The company decides to reduce its personal selling costs by making sales calls to dealers via telephone. This marketing strategy used by Raleigh is an example of ________. A) inbound telemarketing B) search marketing C) internal marketing D) outbound telemarketing E) paid-search marketing
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D
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17) Which of the following is a disadvantage of direct marketing? A) invasion of privacy B) inability to build brand awareness C) low chances of customers avoiding messages D) inability to control marketing communication E) inability to maintain information security
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A
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18) Catalog marketing and telemarketing are examples of indirect marketing.
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FALSE
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19) During the 2012 election, much of the $690 million raised online by the Obama campaign resulted from carefully targeted and tested e-mails.
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TRUE
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20) Direct marketing has not been growing as fast as US retail sales.
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FALSE
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21) Direct marketing produced $2.05 trillion in sales in 2012, accounting for approximately 8.7 percent of GDP.
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TRUE
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22) A direct marketer must consider returned merchandise and bad debts when s/he determines the needed break-even response rate for direct mail.
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TRUE
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23) If a specific campaign does not break even in the short run, it will not be profitable in the long run if we factor in customer lifetime value by calculating the average customer longevity, average customer annual expenditure, and average gross margin, minus the average cost of customer acquisition and maintenance (discounted for the opportunity cost of money).
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FALSE
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24) One of the shortcomings of direct marketing is that the firm cannot easily measure the response.
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FALSE
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25) Direct mail permits target market selectivity and allows early testing and response measurement.
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TRUE
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26) A company's best prospects are customers who have never bought its products.
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FALSE
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27) Direct marketing has the ability to test different elements of an offer strategy under real marketplace conditions.
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TRUE
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28) Although it varies with product category, price, and the nature of the offering, in general, average response rates for e-mails is higher than order-response rates for letter-sized direct mail.
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FALSE
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29) Direct mail can produce prospect leads, strengthen customer relationships, inform and educate customers, remind customers of offers, and reinforce recent customer purchase decisions.
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TRUE
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30) Points are established for varying RFM levels; the more points, the more attractive the customer.
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TRUE
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31) The Internet and catalog retailing industry includes 20,000 companies with combined annual revenue of $350 billion.
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TRUE
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32) Direct marketers use the RFM formula to select customers according to how much time has passed since their last purchase, how many times they have purchased, and how much they have spent since becoming a customer.
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TRUE
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33) If a company exaggerates the features of its products in its product catalogue, it can be classified as deception.
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TRUE
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34) Business-to-business telemarketing is increasing.
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TRUE
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35) Business-to-consumer telemarketing is increasing.
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FALSE
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36) What is direct marketing? What are the various channels that direct marketers use?
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Direct marketing is the use of consumer-direct (CD) channels to reach and deliver goods and services to customers without using marketing middlemen. Direct marketers can use a number of channels to reach individual prospects and customers: direct mail, catalog marketing, telemarketing, interactive TV, kiosks, Web sites, and mobile devices. They often seek a measurable response, typically a customer order, through direct-order marketing.
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37) How did the Obama campaign use direct marketing during the 2012 election?
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Much of the $690 million raised online by the Obama campaign resulted from carefully targeted and tested e-mails. Every day, the campaign used small groups of supporters to test as many as 18 different versions of e-mails varying in subject line, amounts requested, and sender. The winning combination went to the broad base of tens of millions of supporters. Campaign analysts found that a casual tone (such as the word hey) was often effective in subject lines and that supporters seemed to never tire of the e-mails.
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38) How have consumers benefited from market demassification?
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Consumers short of time and tired of traffic and parking headaches appreciate toll-free phone numbers, always-open Web sites, next-day delivery, and direct marketers' commitment to customer service. In addition, many chain stores have dropped slower-moving specialty items, creating an opportunity for direct marketers to promote these to interested buyers instead.
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39) How have sellers benefited from market demassification?
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Direct marketers can buy a list containing the names of almost any group: left-handed people, overweight people, or millionaires. They can customize and personalize messages and build a continuous relationship with each customer. New parents will receive periodic mailings describing new clothes, toys, and other goods as their child grows. Direct marketing can reach prospects at the moment they want a solicitation and therefore be noticed by more highly interested prospects. It lets marketers test alternate media and messages to find the most cost-effective approach. Direct marketing also makes the company's offer and strategy less visible to competitors. Finally, direct marketers can measure responses to their campaigns to decide which have been the most profitable.
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40) How do successful direct marketers view customer interactions?
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Successful direct marketers view a customer interaction as an opportunity to up-sell, cross-sell, or just deepen a relationship. They make sure they know enough about each customer to customize and personalize offers and messages and develop a plan for lifetime marketing to each valuable customer, based on their knowledge of life events and transitions. They also carefully orchestrate each element of their campaigns.
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41) Why is direct mail popular among marketers? What are its weaknesses?
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Direct mail is a popular medium because it permits target market selectivity, can be personalized, is flexible, and allows early testing and response measurement. Although the cost per thousand is higher than for mass media, the people reached are much better prospects. Direct mail can produce prospect leads, strengthen customer relationships, inform and educate customers, remind customers of offers, and reinforce recent customer purchase decisions. The success of direct mail, however, has also become its liability — so many marketers are sending out direct-mail pieces that mailboxes are becoming stuffed, leading some consumers to disregard the blizzard of solicitations they receive.
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42) What are the elements of a direct mail offer? How can each be tested?
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The offer strategy has five elements — the product, the offer, the medium, the distribution method, and the creative strategy. Fortunately, all can be tested. The direct-mail marketer also must choose five components of the mailing itself: the outside envelope, sales letter, circular, reply form, and reply envelope. A common direct marketing strategy is to follow up direct mail with an e-mail. The different elements of an offer strategy, such as products, product features, copy platform, mailer type, envelope, prices, or mailing lists, can be tested under real market conditions.
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43) How do direct mail response rates relate to a campaign's long-term impact? Provide an example.
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Response rates typically understate a campaign's long-term impact. Suppose only 2 percent of the recipients who receive a direct-mail piece advertising Samsonite luggage place an order. A much larger percentage became aware of the product (direct mail has high readership), and some percentage may have formed an intention to buy at a later date (either by mail or at a retail outlet). Some may mention Samsonite luggage to others as a result of the direct-mail piece. To better estimate a promotion's impact, some companies measure the impact of direct marketing on awareness, intention to buy, and word of mouth.
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44) Most direct marketers apply the RFM formula to select customers. Explain this formula and how it is used to select customers.
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Most direct marketers apply the RFM (recency, frequency, monetary amount) formula to select customers according to how much time has passed since their last purchase, how many times they have purchased, and how much they have spent since becoming a customer. Suppose a company is offering leather jackets. It might make this offer to the most attractive customers, those who made their last purchase between 30 and 60 days ago, who make three to six purchases a year, and who have spent at least $100 since becoming customers. Points are established for varying RFM levels; the more points, the more attractive the customer.
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45) Why do companies use infomercials?
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Infomercials combine the selling power of television commercials with the draw of information and entertainment. Infomercials promote products that are complicated or technologically advanced or that require a great deal of explanation.
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46) Describe the darker side of direct marketing solicitations.
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• Irritation. Many people don't like hard-sell direct marketing solicitations. Firms have been popping up to help block unwanted junk mail. • Unfairness. Some direct marketers take advantage of impulsive or less sophisticated buyers or prey on the vulnerable, especially the elderly. • Deception and fraud. Some direct marketers design mailers and write copy intended to mislead or exaggerate product size, performance claims, or the "retail price." The Federal Trade Commission receives thousands of complaints each year about fraudulent investment scams and phony charities. • Invasion of privacy. It seems that almost every time consumers order products by mail or telephone, apply for a credit card, or take out a magazine subscription, their names, addresses, and purchasing behavior may be added to several company databases.
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47) DB Bank is launching a new investment product targeting senior citizens in the United States. The company decides to use direct marketing for selling the product. What direct marketing strategy would allow the company early testing and response measurement of the product?
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The company can use direct mail to communicate with prospects. It permits target market selectivity, can be personalized, is flexible, and allows early testing and response measurement.
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48) What are the five elements of an offer strategy?
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The five elements of the offer strategy are the product, the offer, the medium, the distribution method, and the creative strategy.
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49) Integron Inc., a company that manufactures office furniture, has recently observed a dip in its profitability. Salespeople visit an average prospect at least six times before closing a deal. What suggestion can you give the company to reduce this expense of direct marketing and increase its profitability?
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Student answers will vary. The company can replace some of the sales calls with telemarketing. This would help them reduce the costs and increase profitability.
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50) Roler Telecom, a leading mobile telephone operator in Asia, engages in aggressive marketing promotions. The company sends promotional messages to customers and makes promotional calls on a regular basis. However, these aggressive promotion efforts often irritate its customers. What could be the likely outcome of this?
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Many people don't like hard-sell, direct marketing solicitations from marketers. The given scenario is one example of this. This issue, if left unattended, will lead to increasingly negative consumer attitudes, lower response rates, and calls for greater state and government regulation.
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51) The Internet provides marketers and consumers with opportunities for much greater interaction and ________ than do other marketing channels. A) control B) data security C) high involvement selling D) order conversion E) individualization
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E
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52) The offer strategy has five elements: the product, the offer, the medium, the distribution method, and the ________. A) outside envelope B) creative strategy C) sales letter D) circular E) reply form
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B
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53) The darker side of direct marketing, from a consumer perspective, includes all of the following EXCEPT ________. A) irritation B) unfairness C) deception and fraud D) federal regulation E) invasion of privacy
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D
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54) Which of the following is NOT conducive to database marketing? A) Rushbury Theater relies on the generosity of donors to keep functioning. B) Kenilworthy retails luxury handbags and leather accessories to a select clientele. C) 2Wheels sells its most profitable products to repeat customers. D) Uncle Jim's sells its range of snacks in stores throughout the country. E) PetZone offers obedience classes, a doggie daycare, and other services for pets in the Manhattan area.
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D
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55) In which of the following cases is building a database worthwhile for the company? A) Clare's creates personalized sculptures for special occasions. B) Sales of Clarity soap have fallen over the past few months in all regions. C) 2Wheels sells its most profitable products to repeat customers. D) Uncle Jim's sells its range of snacks in stores throughout the country. E) Ready-to-wear clothes brand Zeep targets the teen and tween market throughout the United States.
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C
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56) In which of the following cases is building a database worthwhile for the company? A) where the product is a once-in-a-lifetime purchase B) where customers show little loyalty to a brand C) where the company has a long relationship with its customers D) where the unit sale is very small E) where the cost of gathering the information is high
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C
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57) Which of the following is most likely to use database marketing? A) an airline B) a candy bar manufacturer C) a fast-food chain D) a toothpaste manufacturer E) a hairstylist
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A
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58) Which of the following statements demonstrates behavioral loyalty toward a brand? A) 2Wheels has very customer-friendly return policies for its products. B) I always buy 2Wheels products when I'm looking for bike accessories. C) Most of my friends agree that 2Wheels is the best place for durable biking gear. D) 2Wheels has the friendliest customer service people I've ever met. E) I think that 2Wheels products are the highest-quality products in their price range.
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B
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59) Which of the following is a positive factor when considering the development of a customer database? A) The product is a once-in-a-lifetime purchase. B) There is no contact between the buyer and seller. C) There is a lot of customer churn. D) The unit sale is very small. E) Customer lifetime value is high.
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E
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60) Database marketing is ideal when a company does not have direct contact with its customers.
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FALSE
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61) What are the five main challenges associated with database marketing?
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The five main challenges associated with database marketing include: 1. Some situations are just not conducive to database marketing. Building a customer database may not be worthwhile when: (1) the product is a once-in-a-lifetime purchase (a grand piano); (2) customers show little loyalty to a brand (there is a lot of customer churn); (3) the unit sale is very small (a candy bar) so customer lifetime value is low; (4) the cost of gathering information is too high; and (5) there is no direct contact between the seller and ultimate buyer. 2. Building and maintaining a customer database require a large investment. Computer hardware, database software, analytical programs, communication links, and skilled staff can be costly. It's difficult to collect the right data, especially to capture all the occasions of company interaction with individual customers. Sometimes companies mistakenly concentrate on customer contact processes without making corresponding changes in internal structures and systems. 3. Employees may resist becoming customer-oriented and using the available information. Employees find it far easier to carry on traditional transaction marketing than to practice CRM. Effective database marketing requires managing and training employees as well as dealers and suppliers. 4. Not all customers want a relationship with the company. Some may resent knowing the company has collected that much personal information about them. Online companies should explain their privacy policies and give consumers the right not to have their information stored. European countries do not look favorably on database marketing and are protective of consumers' private information. The European Union passed a law handicapping the growth of database marketing in its 27 member countries. 5. The assumptions behind CRM may not always hold true. High-volume customers often know their value to a company and can leverage it to extract premium service and/or price discounts, so it may not cost the firm less to serve them. Loyal customers may also be jealous of attention lavished on other customers. Loyal customers also may not necessarily be the best ambassadors for the brand. One study found those who scored high on behavioral loyalty and bought a lot of a company's products were less active word-of-mouth marketers than customers who scored high on attitudinal loyalty and expressed greater commitment to the firm.
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62) In general, what are the five ways companies use database marketing?
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In general, companies can use their databases in five ways: 1. To identify prospects — Many companies generate sales leads by advertising their product or service and including a response feature, such as a link to a home page, a business reply card, or a toll-free phone number, and building a database from customer responses. The company sorts through the database to identify the best prospects, then contacts them by mail, e-mail, or phone to try to convert them into customers. 2. To decide which customers should receive a particular offer — Companies interested in selling, up-selling, and cross-selling set up criteria describing the ideal target customer for a particular offer. Then they search their customer databases for those who most closely resemble the ideal. By noting response rates, a company can improve its targeting precision. Following a sale, it can set up an automatic sequence of activities: One week later e-mail a thank-you note; five weeks later e-mail a new offer; 10 weeks later (if the customer has not responded) e-mail an offer of a special discount. 3. To deepen customer loyalty — Companies can build interest and enthusiasm by remembering customer preferences and sending appropriate gifts, discount coupons, and interesting reading material. 4. To reactivate customer purchases — Automatic mailing programs (automatic marketing) can send out birthday or anniversary cards, holiday shopping reminders, or off-season promotions. The database can help the company make attractive or timely offers. 5. To avoid serious customer mistakes — A major bank confessed to a number of mistakes it had made by not using its customer database well. In one case, the bank charged a customer a penalty for late payment on his mortgage, failing to note he headed a company that was a major depositor in this bank. The customer quit the bank. In a second case, two different staff members of the bank phoned the same mortgage customer offering a home equity loan at different prices. Neither knew the other had made the call. In a third case, the bank gave a premium customer only standard service in another country.
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63) What situations are not conducive to database marketing?
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Building a customer database may not be worthwhile when: • the product is a once-in-a-lifetime purchase (a grand piano) • customers show little loyalty to a brand (there is a lot of customer churn) • the unit sale is very small (a candy bar) so customer lifetime value is low • the cost of gathering information is too high • there is no direct contact between the seller and ultimate buyer
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64) The original and oldest form of direct marketing is ________. A) billboards B) banner advertising C) mail campaigns D) outbound telemarketing calls E) field sales calls
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E
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65) A salesperson performing over-the-counter sales in a medical store can be referred to as a(n) ________. A) order taker B) demand creator C) solution vendor D) phisher E) missionary
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A
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66) Alduro Chemicals, a manufacturer of detergents, delivers chemicals used for commercial washing to various hoteliers in the United States. Most of the company's revenue comes from routine orders from its existing customers. The company uses unskilled salespeople to collect requirements from its customers. These unskilled customers are known as ________. A) demand creators B) deliverers C) missionaries D) order takers E) solution vendors
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D
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67) Gordron Inc. manufactures and markets medical equipment. To ensure that its salespeople are knowledgeable enough to answer all product queries, the company hires only those individuals who have a good understanding of both the medical profession and the mechanics of the equipment used. Which of the following is the most accurate classification of Gordron's salesforce? A) technicians B) demand creators C) deliverers D) order takers E) missionaries
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A
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68) Robert is hired as a sales representative for a company that manufactures fire extinguishers. His job description reads as follows: "The key duty of the sales representative is to unravel the customer's problems using the company's products." Which of the following positions would best describe Robert's profile? A) deliverer B) technical salesperson C) missionary salesperson D) order taker E) solution vendor
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E
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69) A sales representative whose expertise is in unraveling customers' problem is called a(n) ________. A) order taker B) missionary C) technician D) solution vendor E) demand creator
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D
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70) A salesperson who relies on creative methods for selling a company's tangible or intangible offerings is called a(n) ________. A) demand creator B) deliverer C) order taker D) missionary E) solution vendor
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A
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71) Which of the following tasks of the salesforce refers to conducting market research and doing intelligence work? A) servicing B) communicating C) targeting D) prospecting E) information gathering
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E
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72) US firms spend more on sales forces and sales force materials than on any other promotional method.
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TRUE
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73) In 2012, more than 20 percent of the total workforce worked full time in sales occupations, both nonprofit and for profit.
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FALSE
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74) A salesperson calling on supermarkets to take repeat orders is called an order taker.
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TRUE
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75) To manage costs, most companies are choosing a leveraged sales force that focuses reps on selling the company's more complex and customized products to large accounts and uses inside salespeople and online ordering for low-end selling.
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TRUE
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76) Demand creators are not permitted to take an order but expected rather to build goodwill or educate the actual or potential user.
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FALSE
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77) Targeting refers to the process of deciding which customers will get scarce products during product shortages.
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FALSE
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78) Information gathering refers to the act of conducting market research and doing intelligence work.
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TRUE
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79) The term sales representative covers a broad range of positions, tasks, and responsibilities. List and briefly describe each of the positions.
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The positions include: • deliverer: the major task is the delivery of a product • order taker: who acts predominantly as an inside order taker or outside order taker • missionary: a salesperson who is not expected or permitted to take an order but whose major task is to build goodwill or to educate the actual or potential user • technician: a salesperson with a high level of technical knowledge • demand creator: one who relies on creative methods for selling tangible products • solution vendor: one whose expertise is in the solving of a customers' problems.
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80) Briefly explain the various tasks that the salespeople of an organization perform.
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The following are the basic tasks that salespeople perform: • prospecting: searching for new leads or prospects • targeting: deciding how to allocate time among prospects and customers • communicating: communicating information about the company's products and services • selling: approaching, presenting, answering questions, overcoming objections, and closing sales • servicing: providing various services to the customers — consulting on problems, rendering technical assistance, arranging financing, expediting delivery • information gathering: conducting market research and doing intelligence work • allocating: deciding which customers will get scarce products during product shortages
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81) Jack is the sales representative of a company that designs and installs modular kitchens. The company's salesforce is trained to customize their offerings as per customer requirements. After analyzing factors such as the space available and the budget, Jack provides personalized designs to individual customers. What kind of a salesperson is Jack? Briefly explain your answer.
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A salesperson whose expertise is solving a customer's problem, often with a system of the company's products and services is called a solution vendor. Here, Jack is providing different solutions to different customers after analyzing their problems. Jack can be called a solution vendor.
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82) You are appointed as the B-to-B sales representative of a manufacturing company. What are the various tasks that you will have to perform as a B-to-B salesperson?
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The following activities have to be performed by a salesperson: • prospecting • targeting • communicating • selling • servicing • information gathering • allocating
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83) You are the sales manager of a company that manufactures and markets server computers. The company's products require high-involvement from the sellers and require salespeople to provide complex and technical information. What kind of a compensation structure do you select for your sales representatives?
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The salespeople in the given scenario should have a pay structure that gives prominence to fixed pay. Fixed compensation is common in jobs with a high ratio of nonselling to selling duties, and jobs where the selling task is technically complex and requires teamwork.
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84) The process of deciding how to allocate company's time among prospects and customers is called ________. A) targeting B) prospecting C) allocating D) dispersing E) delegating
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A
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85) Which of the following refers to the process of deciding which customers will get scarce products during product shortages? A) delegating B) prospecting C) allocating D) dispersing E) targeting
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C
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86) A company uses sales representatives for selling the company's more complex and customized products to large accounts, while using inside salespeople and Web ordering for low-end selling. Which of the following describes the company's sales force best? A) demand creators B) direct marketing force C) missionary sellers D) technical salesforce E) leveraged salesforce
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E
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87) Your company has customer-service representatives who provide you with leads, write up proposals, fulfill orders, and provide post-sales support. Your responsibilities are to concentrate on the larger accounts with more complex and customized needs. Your company most likely has a ________ salesforce. A) distributive B) territory based C) leveraged D) decentralized E) parallel
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C
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88) A medical "detailer" that represents an ethical pharmaceutical house, who builds goodwill or educates the actual or potential user but is not permitted to take an order, is an example of a ________. A) missionary salesperson B) technician C) demand creator D) solution vendor E) deliverer
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A
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89) Consulting on problems, rendering technical assistance, arranging financing, and expediting delivery are examples of the ________ task in the selling context. A) information gathering B) targeting C) communicating D) servicing E) allocating
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D
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90) ________ sales force consists of manufacturers' reps, sales agents, and brokers who earn a commission based on sales. A) Virtual B) Domestic C) Contingent D) Contractual E) Decentralized
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D
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91) Part-time paid employees who work exclusively for the company are a part of the ________ sales force. A) direct B) virtual C) contractual D) implicit E) brokered
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A
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92) Fixed compensation receives more emphasis in sales rep jobs with ________. A) a high ratio of selling to nonselling duties B) a high requirement for individual initiatives C) an intensive focus on selling activities D) very little need for teamwork E) technical complexities
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E
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93) Identify the first step in the workload approach to establish sales force size. A) grouping customers into size classes according to annual sales volume B) establishing desirable call frequencies for each customer class C) determining the total workload for the country in terms of sales calls per year D) determining the average number of calls a sales representative can make per year E) calculating the total number of sales reps needed
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A
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94) Which of the following sales positions is most likely to have fixed compensation? A) an FMCG salesperson selling to supermarkets B) a salesperson who handles the industrial customers C) an insurance agent who works part time D) a service representative in charge of handling incoming customer queries E) a telemarketer calling up existing customers to bring in additional sales
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B
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95) Which of the following is NOT a main part of managing the sales force? A) recruiting and selecting sales representatives B) identifying prospects for sales representatives C) training sales representatives D) motivating sales representatives E) evaluating sales representatives
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B
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96) ________ helps sales representatives understand how they spend their time and how they might increase their productivity. A) Time-and-duty analysis B) A sales quota C) A feed-forward approach D) An expense allowance E) A norm for prospect calls
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A
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97) Kate is coaching members of her field sales team to help them understand how they spend their time and how they might increase their productivity. She is using ________ to provide them with feedback. A) time-and-duty analysis B) a sales quota C) a feed-forward approach D) an expense allowance E) a norm for prospect calls
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A
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98) Key indicators of sales performance include all of the following EXCEPT ________. A) average number of sales calls per salesperson per day B) average revenue per sales call C) advanced marketing cost per sales call D) average cost per sales call E) entertainment cost per sales call
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C
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99) Which of the following is NOT one of the advantages of inside selling? A) Inside selling is less expensive than in-person selling. B) Inside salespeople spend more time checking inventory. C) Inside salespeople spend more time following up orders. D) Inside salespeople spend more time phoning smaller accounts. E) All of the above are advantages.
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E
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100) Which of the following statements about technology support for salespeople is NOT true? A) Computer-based decision support systems have been created for sales manager and sales representatives. B) A Web site can help define a firm's relationships with individual accounts and identify those whose business warrants a personal sales call. C) Social media is useful in front-end prospecting and lead qualification. D) Social media is useful in back-end relationship building and management. E) All of the above are true.
answer
E
question
101) Compensation plans may need to vary depending on the type of salespersons. Which type of salesperson benefits from no ceiling or caps on commissions, overachievement commissions for exceeding quotas, and prize structures that allow multiple winners? A) stars B) core performers C) dogs D) cash cows E) laggards
answer
A
question
102) Randi is most motivated when there is no ceiling or caps on her commissions, she can earn overachievement commissions for exceeding quotas, and benefits from prize structures that allow multiple winners. She is probably a ________. A) star B) core performer C) dog D) cash cow E) laggard
answer
A
question
103) Compensation plans may need to vary depending on the type of salespersons. Which type of salesperson benefits from multi-tier targets that serve as stepping stones for achievement and sales contests with prizes that vary in nature and value? A) stars B) core performers C) dogs D) cash cows E) laggards
answer
B
question
104) Compensation plans may need to vary depending on the type of salespersons. Which type of salesperson benefits from consistent quarterly bonuses and social pressure? A) stars B) core performers C) dogs D) cash cows E) laggards
answer
E
question
105) Company call center executives provide procedural information to clients who call in about the specifications and operation of the product. These call center employees can be called ________. A) technical support people B) sales assistants C) telemarketers D) deliverers E) consultants
answer
A
question
106) A contractual sales force consists of part-time employees who work exclusively for the company.
answer
FALSE
question
107) A company that sells one product line to one end-using industry with customers in many locations would use product or market structure for its salesforce.
answer
FALSE
question
108) The first step in the workload approach for designing salesforce size is to establish desirable call frequencies for each customer class.
answer
TRUE
question
109) The fixed amount in a salesperson's salary is primarily designed to stimulate and reward efforts from salespeople.
answer
FALSE
question
110) Variable compensation is common in jobs where the selling task is technically complex and requires teamwork.
answer
FALSE
question
111) What key indicators of sales performance do sales managers extract from call reports?
answer
These reports provide raw data from which sales managers can extract key indicators of sales performance: • average number of sales calls per salesperson per day • average sales call time per contact • average revenue per sales call • average cost per sales call • entertainment cost per sales call • percentage of orders per hundred sales calls • number of new customers per period • number of lost customers per period • sales force cost as a percentage of total sales
question
112) What can you learn from John Smith from the sales report reflected in the table?
answer
The sales manager can learn many things about rep John Smith from this table. Total sales increased every year (line 3). This does not necessarily mean Smith is doing a better job. The product breakdown shows he has been able to push the sales of product B further than the sales of product A (lines 1 and 2), though A is more profitable for the company. Given his quotas for the two products (lines 4 and 5), Smith could be increasing product B sales at the expense of product A sales. Although he increased total sales by $1,100 between 2013 and 2014 (line 3), gross profits on total sales actually decreased by $580 (line 8). Sales expense (line 9) shows a steady increase, though total expense as a percentage of total sales seems to be under control (line 10). The upward trend in total dollar expense does not seem to be explained by any increase in the number of calls (line 11), though it might be related to success in acquiring new customers (line 14). Perhaps in prospecting for new customers, this rep is neglecting present customers, as indicated by an upward trend in the annual number of lost accounts (line 15). The last two lines show the level and trend in sales and gross profits per customer. These figures become more meaningful when compared with overall company averages. If Smith's average gross profit per customer is lower than the company's average, he could be concentrating on the wrong customers or not spending enough time with each customer. A review of annual number of calls (line 11) shows he might be making fewer annual calls than the average salesperson. If distances in the territory are similar to those in other territories, he might not be putting in a full workday, might be poor at sales planning and routing, or might be spending too much time with certain accounts.
question
113) Today's customers expect a salesperson to have extensive product knowledge, to be efficient and reliable, and to provide ideas to improve the customer's operations. These demands are forcing companies to make higher investments in ________. A) sales training B) internal selling C) management controls D) advertising E) sales promotions
answer
A
question
114) ________ questions ask about the consequences of the buyer's problems. A) Situation B) Problem C) Implication D) Need-payoff E) Solution
answer
C
question
115) Jackson, the sales representative of a European manufacturer of commercial heavy duty washing machines, calls on the hotels in California. During a sales call, he asks the housekeeping manager of a hotel "How many bed sheets do you wash in a day, on average?" This question can be classified as a(n) ________ question. A) situation B) problem C) implication D) need-payoff E) consequence
answer
A
question
116) Which of the following is an example of a problem question? A) What system are you using to invoice your customers? B) How does this problem affect your people's productivity? C) What parts of the system create errors? D) How much would you save if our company could help reduce errors by 80 percent? E) Which operating system have you installed in your personal computer?
answer
C
question
117) Which of the following types of questions directly enquires about the value or usefulness of a proposed solution? A) situation questions B) problem questions C) implication questions D) consequence questions E) need-payoff questions
answer
E
question
118) Which of the following is the first step in the process of personal selling? A) prospecting and qualifying B) sales preapproach C) sales presentation D) unearthing objections E) demonstrating advantages
answer
A
question
119) A salesperson who is contacting possible buyers by mail or phone to assess their level of interest and financial capacity is in the ________ step of the selling process. A) preapproach B) prospecting C) qualifying D) following up E) objection handling
answer
B
question
120) "How does this problem affect your people's productivity?" is an example of a(n) ________ question. A) situation B) implication C) problem D) need-payoff E) challenge
answer
B
question
121) In which of the following stages of personal selling does a salesperson tell the product story to the buyer? A) preapproach B) prospecting C) presentation D) closing E) objection handling
answer
C
question
122) Representatives who are taught the SPIN method to build long-term relationships may ask each of the following types of questions EXCEPT ________. A) situation B) speculation C) problem D) need-payoff E) implication
answer
B
question
123) When Saul asks his client, "What system are you using to invoice your customers?" he is asking a ________ question. A) situation B) speculation C) problem D) need-payoff E) implication
answer
A
question
124) When Shen asks his client, "How much would you save if our company could help you reduce errors by 80 percent?" he is asking a ________ question. A) situation B) speculation C) problem D) need-payoff E) implication
answer
D
question
125) IBM uses the BANT acronym during which stage of the sales process? A) prospecting and qualifying B) sales preapproach C) sales presentation D) unearthing objections E) demonstrating advantages
answer
A
question
126) In IBM's BANT acronym, B stands for ________. A) budget B) background C) baseline D) benchmark E) basic
answer
A
question
127) In IBM's BANT acronym, A stands for ________. A) action B) authority C) activate D) austerity E) autonomy
answer
B
question
128) In IBM's BANT acronym, N stands for ________. A) noticeable B) necessary C) need D) necessity E) notify
answer
C
question
129) In IBM's BANT acronym, T stands for ________. A) touch B) tempt C) team D) timeline E) turn over
answer
D
question
130) Which company uses 150 different signals — including dozens of online data feeds — to rate customer leads? A) IBM B) Avon C) SAS D) FABV E) Infer
answer
E
question
131) Which of the following questions is LEAST relevant during the preapproach stage of the sales process? A) How is the purchasing process conducted at the company? B) How is the purchasing department structured? C) How can I overcome psychological resistance? D) Is purchasing centralized? E) What is the best contact approach?
answer
C
question
132) In the FABV approach, ________ describe the economic, technical, service, and social pluses delivered. A) features B) advantages C) benefits D) value E) macroenvironment
answer
C
question
133) If Jose is describing chip processing speeds and memory capacity, he is describing the ________ of his firm's offering in the FABV approach. A) features B) advantages C) benefits D) value E) macroenvironment
answer
A
question
134) In the FABV approach, if the salesperson is discussing the monetary terms associated with the offering, s/he is talking about ________. A) features B) advantages C) benefits D) value E) macroenvironment
answer
D
question
135) ________ includes resistance to interference and a neurotic attitude toward money. A) Psychological resistance B) Logical resistance C) Price sensitivity D) Relationship inertia E) Reactance
answer
A
question
136) If a prospective client does not want to buy from you because he has a preference for an established supply source, you are facing an objection due to ________. A) psychological resistance B) logical resistance C) price sensitivity D) relationship inertia E) reactance
answer
A
question
137) ________ includes objections due to proposed contract completion time, quality of goods and services offered, purchase volume, product safety, and responsibility for financing, risk taking, promotion, and title. A) Psychological resistance B) Logical resistance C) Price sensitivity D) Relationship inertia E) Reactance
answer
B
question
138) If a prospective client does not want to buy from you because she feels the price is too high, you are facing an objection due to ________. A) psychological resistance B) logical resistance C) apathy D) relationship inertia E) reactance
answer
B
question
139) Sales representatives who are paid mostly in commissions require more supervision than other salespeople.
answer
FALSE
question
140) An employee who provides clerical backup for outside salespersons, runs credit checks, follows up on deliveries, and answers customers' business-related questions is called a sales assistant.
answer
TRUE
question
141) A manager is using feed-forward sales supervision when he communicates what the sales reps should be doing and motivates them to do it.
answer
TRUE
question
142) Implication questions ask about the consequences of a buyer's problems, difficulties, or dissatisfactions.
answer
TRUE
question
143) Situation questions focus on the problems, difficulties, and dissatisfaction a buyer might be experiencing with the existing situation.
answer
FALSE
question
144) Closing signs from the buyer include physical actions, statements or comments, and questions.
answer
TRUE
question
145) Most companies set annual quotas. Quotas can be on dollar sales, unit volume, margin, selling effort, or activity and product type. Compensation is often tied to the degree of quota attainment. What problems does the setting of quotas present to both the company and to the sales representative?
answer
If the company underestimates and the sales reps easily achieve their quotas, the company has overpaid its reps. If the company overestimates sales potential, the salespeople will find it very hard to reach their quotas and be frustrated or quit. Another downside is that quotas can drive reps to get as much business as possible — often resulting in their ignoring the service side of the business.
question
146) What are the six steps in personal selling?
answer
The six steps are: 1. prospecting and qualifying 2. preapproach 3. presentation and demonstration 4. overcoming objections 5. closing 6. follow-up and maintenance
question
147) Which type of questions allow salespeople to understand facts or explore the buyer's present state of affairs?
answer
Situation questions ask about facts or explore the buyer's present situation.
question
148) You work as a sales representative in a company that manufactures surgical equipment. Before calling on an important prospect, you decide to search the Internet and find out details about him. What step in the selling process is being carried out here? What is the importance of this step?
answer
This step is called preapproach. This helps to understand aspects such as how the purchasing process is conducted at the company, how is purchasing structured, number of purchasing departments in larger companies, and so forth. This information is useful to qualify the prospect, gather information, or make an immediate sale.
