CH-17 Personal Selling and Sales Management – MKTG : Exam Guide

Chapter 17—Personal Selling and Sales Management 1. Personal selling becomes a more important promotional tool as product value and complexity and increase. Answer: True Rationale: Generally speaking, personal selling becomes more important as the number of potential customers decreases, as the complexity of the product increases, and as the value of the product grows. See Exhibit 17.1. 2. Dave is in charge of finding sponsors for the 2013 Riverbend Festival. He is meeting with marketing representatives from Wrangler jeans and First Tennessee National Bank, attempting to convince them to sponsor the event. Dave is engaged in personal selling. Answer: True Rationale: Personal selling involves direct interactions between a salesperson and potential buyers to make a sale. Dave's meetings with marketing representatives to convince them to sponsor the event exemplify personal selling. 3. With relationship selling, the objective is to build long-term branded relationships with customers, not just to sell products. Answer: True Rationale: Relationship selling emphasizes building enduring, branded relationships with customers, prioritizing long-term customer satisfaction and loyalty over short-term transactional sales goals. 4. Relationship selling is more typical with selling situations for consumer goods. Answer: False Rationale: Relationship selling is more typical with selling situations for industrial-type goods. 5. With relationship selling, the salesperson would spend most of his or her contact time with the prospect talking about the product because the salesperson does not want to waste the customer’s time. Answer: False Rationale: With relationship selling, the salesperson spends most of his or her time attempting to build a problem-solving environment with the customer. See Exhibit 17.2. 6. Customer relationship management requires that organizations develop relationships with their customers through touch points and data mining. Answer: True Rationale: Customer Relationship Management (CRM) involves using touch points and data mining to understand and serve customers better, enhancing relationships and loyalty. 7. To initiate the CRM cycle, a company must first identify customer relationships within the organization. Answer: True Rationale: Identifying existing customer relationships is crucial for understanding and managing customer interactions effectively, which is the first step in the CRM cycle. 8. Customer-centric is an internal management philosophy similar to the marketing concept. Answer: True Rationale: Both customer-centric philosophy and the marketing concept focus on satisfying customer needs and building long-term relationships for organizational success. 9. Empowerment in a CRM environment is normally a process of collecting customer information through customers’ feedback on products. Answer: False Rationale: This is learning. Empowerment is the delegation of authority to solve customers’ problems quickly. 10. The interaction between a customer and the organization is the foundation on which a CRM system is built. Answer: True Rationale: CRM systems rely on customer interactions to collect data, which is then used to improve customer satisfaction and loyalty. 11. Consumers are reluctant to enter information through point-of-sale interactions because of privacy violation fears. Answer: False Rationale: Many point-of-sale software programs enable customers to easily provide information about themselves without feeling their privacy has been violated. 12. Campaign management is a process by which customer information is centralized and shared in order to enhance the relationship between customers and the organization. Answer: False Rationale: Knowledge management is a process by which customer information is centralized and shared in order to enhance the relationship between customers and the organization. 13. Volvo has a Web site that caters to car enthusiasts who might want to see concept cars evolve into real-life products. Volvo would likely have used data mining to locate people who were car enthusiasts and innovators. Answer: True Rationale: Data mining helps identify specific customer segments, such as car enthusiasts and innovators, enabling Volvo to tailor its marketing and engage these customers effectively. 14. Internet companies use product and customer profiling to reveal cross-selling opportunities while a customer is surfing their sites. Answer: True Rationale: Product and customer profiling helps internet companies identify and suggest additional products that may interest customers, increasing sales through cross-selling. 15. The first step in the selling process is approaching the customer and probing needs. Answer: False Rationale: The first step is generating leads. 16. Tara is a salesperson with several satisfied customers. She asks her customers to recommend her to their business associates. Tara is using cold calling to generate leads. Answer: False Rationale: This is a referral. 17. To qualify a sales lead, a salesperson must identify the person in an organization who has the authority to buy the product and must close the sale with that individual. Answer: False Rationale: Qualifying a sales lead consists of determining the prospect’s need, buying power, and receptivity and accessibility. 18. Before approaching the customer, a salesperson should learn as much as possible about the prospect’s organization and its buyer. Answer: True Rationale: Understanding the prospect's organization and its buyer helps the salesperson tailor their approach and offer solutions that meet the prospect’s specific needs. 19. If a potential customer has objections after the salesperson has made a presentation, that is an indication that the salesperson has done a poor job. Answer: False Rationale: Rarely does a prospect agree to make a purchase right after a presentation. Objections are common and expected in the selling process. 20. Jayson typically negotiates the price with prospective customers because he knows price is the most effective negotiating tool when closing a sale. Answer: False Rationale: Effective negotiators avoid using price as a sales tool. 21. The final selling duty for most successful salespeople is closing the sale. Answer: False Rationale: A salesperson’s responsibilities do not end with a sale; a follow-up is critical to encouraging repeat business. 22. In relationship selling, salespeople focus more time on generating leads than on qualifying leads. Answer: False Rationale: See Exhibit 17.5. In relationship selling, salespeople typically focus more time on qualifying leads rather than just generating them, as the goal is to prioritize quality interactions and build meaningful relationships with potential customers. 23. Meta Singh is expected to sell two surgical laser systems each month. This sales objective is an example of a quota. Answer: True Rationale: A sales quota is a specific sales target set for a salesperson to achieve within a given period, such as selling two surgical laser systems each month. 24. The final stage of sales management is evaluating the effectiveness and performance of the sales force. Answer: True Rationale: Evaluating the effectiveness and performance of the sales force ensures that sales goals are being met and identifies areas for improvement and further training. 25. Sales managers should look for sociability, creativity, and ego strength in applicants. Answer: True Rationale: These traits are important for sales success, as they help salespeople build relationships, think innovatively, and remain confident in challenging situations. 26. Compensation planning is one of the sales manager’s easiest jobs. Answer: False Rationale: This is one of the toughest jobs. MULTIPLE CHOICE 1. When compared to other forms of promotion, personal selling: A. is more important as the number of potential customers increases. B. is more effective in selling frequently purchased products. C. can use a message customized to the immediate needs of the customers. D. is best for selling simple, low-involvement products. E. is less expensive. Answer: C Rationale: Generally speaking, personal selling becomes more important as the number of potential customers decreases, as the complexity of the product increases, and as the value of the product grows. The sales message can be varied according to the motivations and interests of each prospective customer. 2. Macy’s, Nordstrom, Saks Fifth Avenue, and Barneys New York offer free personal shopping, whereby consultants pull clothing they feel will fit the customer’s style and specified need. This free service: A. encourages customers to develop a relationship with the store. B. puts pressure on customers to buy more. C. dissuades customers from shopping at the store. D. is a good way to sell low-cost, low-involvement products. E. Streamlines customer interactions, making sales easier. Answer: A Rationale: This free service encourages customers to continue using personal shoppers and develop a relationship with the store. 3. Personal selling is more important than advertising and sales promotion if: A. the products being sold are standardized. B. there are many customers for the product being sold. C. the product being sold has a low value. D. the buyers of the product are extremely dispersed. E. the products being sold are technically complex. Answer: E Rationale: Personal selling becomes more important as the complexity of the product increases. See Exhibit 17.1. 4. How can personal selling costs be controlled? A. By increasing the time that the sales force spends on personal selling. B. By adjusting the size of the sales force en masse. C. By offering the sales force benefits such as stock options. D. By dropping and replacing the entire sales force. E. By adjusting the size of the sales force in one-person increments. Answer: E Rationale: Personal selling costs can be controlled by adjusting the size of the sales force (and resulting expenses) in one-person increments 5. For which of the following products would its producer be more likely to choose personal selling rather than advertising or sales promotion to market it? A. Garden hose B. HD television C. Dry-cleaning D. Coffee mug E. Breakfast cereal Answer: B Rationale: HD televisions are complex, buyers purchase them only infrequently, and the product has a high value. See Exhibit 17.1. 6. Generally speaking, personal selling becomes more important as the number of potential customers _____ and as the value of the product _____. A. increases; grows B. increases; shrinks C. decreases; shrinks D. decreases; grows E. None of the above. Answer: D Rationale: Personal selling becomes more important as the number of potential customers decreases, as the complexity of the product increases, and as the value of the product grows. See Exhibit 17.1. 7. As a manufacturer of jams and jellies, Smucker’s sells a highly standardized product to consumers all over the United States. You would expect Smucker’s to rely on _____ to promote its product. A. public relations B. personal selling C. advertising and sales promotion D. publicity and direct marketing E. product innovation Answer: C Rationale: With a standard product of low value and widely dispersed customers, the producer should rely on advertising. See Exhibit 17.1. 8. What role does technology play in personal selling? A. Technology used to play a large role in personal selling, but its impact is diminishing. B. Technology is the most important aspect of personal selling. C. Technology plays an important role, especially in regards to social media. D. Technology is completely irrelevant to personal selling. E. Technology plays a small role in personal selling, but experts expect its importance to rise over time. Answer: D Rationale: Technology now plays an important role in personal selling through the use of social media like LinkedIn and Facebook, as well as the use of blogs and Twitter to establish expertise within a field. 9. Boeing is one of the largest aircraft manufacturers in the world. The company sells aircrafts to airlines around the world, such as Delta, China Air, and AirFrance. You would expect Boeing to rely on _____ to promote its vessels. A. publicity B. advertising and sales promotion C. sales promotion D. personal selling E. product innovations and direct marketing Answer: D Rationale: Boeing is selling a complex, high-value product to a few customers. See Exhibit 17.1. 10. Which of the following professions likely requires an individual to make sales? A. Salesperson B. Chemist C. Marketing manager D. Engineer E. All of the above. Answer: E Rationale: An individual may become a plant manager, a chemist, an engineer, or a member of any profession and yet still have to sell. During a job search, applicants must “sell” themselves to prospective employers in an interview. 11. Jefferson Smurfit Company is a multi-billion-dollar supplier of packaging materials. One of its salespeople rearranged production schedules at three different plants to satisfy an unexpected demand for boxes from General Electric. The salesperson’s action is typical of the company’s sales philosophy and indicates an emphasis on: A. consultative promotion. B. relationship selling. C. adaptive selling. D. transformational selling. E. transactional buying. Answer: B Rationale: Relationship selling, or consultative selling, emphasizes personalization and empathy as key ingredients in identifying prospects and developing them as long-term, satisfied customers. 12. When did marketers move away from making one-time sales and toward relationship selling? A. Marketers have always focused on relationship selling. B. During the Industrial Revolution. C. In the wake of the Great Depression. D. Just after World War II. E. Very recently. Answer: D Rationale: Until recently, marketing theory and practice concerning personal selling focused almost entirely on a planned presentation to prospective customers for the sole purpose of making the sale. 13. _____ is a sales practice that involves building, maintaining, and enhancing interactions with customers in order to develop long-term satisfaction through mutually beneficial partnerships. A. Networking B. Adaptive selling C. Stimulus-response selling D. Relationship selling E. Needs-dependent selling Answer: D Rationale: Relationship selling is a multistage process that emphasizes personalization and empathy as key ingredients in identifying prospects and developing them as long-term satisfied customers. 14. Which of the following is not true of traditional personal selling methods? A. They often attempt to persuade the buyer to accept a point of view. B. The objectives of the salesperson are frequently at the expense of the buyer. C. They have disappeared in the wake of relationship selling. D. They entail making a one-time sale and then moving on to the next prospect. E. They sometimes create a win–lose outcome. Answer: C Rationale: Although traditional sales approaches have not disappeared entirely, they are being used less and less often by professional salespeople. 15. Relationship selling is also called: A. long-term selling. B. win–win selling. C. consultative selling. D. experiential selling. E. interactive selling. Answer: C Rationale: Relationship selling is also called consultative selling. 16. Relationship selling is a _____ process that emphasizes _____ as a key ingredient in identifying prospects and developing them as long-term, satisfied customers. A. multistage, empathy B. popular, assertiveness C. short-term, persuasion D. win-lose, personalization E. modern, standardization Answer: A Rationale: Relationship selling is a multistage process that emphasizes personalization and empathy as key ingredients in identifying prospects and developing them as long-term, satisfied customers. 17. Relationship selling: A. is also called adaptive selling. B. is most concerned with making a sale. C. is more typically used when selling low-involvement products in the consumer market. D. is more concerned with developing customer trust than with making a sale. E. is declining in popularity among businesses because the costs are becoming prohibitive. Answer: D Rationale: Relationship selling is also called consultative selling. It is more concerned with developing customer trust than with making a sale. Typically, industrial-type goods are sold using relationship selling. 18. The knowledge that most businesses depend on repeat sales is the basis of: A. traditional personal selling. B. direct marketing. C. all trade promotions. D. relationship selling. E. product-oriented selling. Answer: D Rationale: The goal of relationship selling is to develop long-term satisfied customers. 19. Research has shown that positive customer–salesperson relationships result in: A. win–lose situations. B. decreased customer trust. C. customers who purchase from the company just once. D. higher costs for the company. E. None of the above. Answer: E Rationale: Positive customer–salesperson relationships contribute to trust, increased customer loyalty, and the intent to continue the relationship with the salesperson. 20. All of the following statements characterize the traditional personal selling approach EXCEPT: A. Traditional selling focuses on closing sales. B. Traditional selling uses short-term follow-ups that focus on product delivery. C. Traditional personal selling takes a team approach to the account. D. Salespeople sell products, not advice and assistance. E. Proposals and presentations used emphasize pricing and product features. Answer: C Rationale: Traditional personal selling takes a “lone wolf” approach to the account, whereas relationship or consultative selling takes a team approach. See Exhibit 17.2. 21. Stores carrying Revlon Super Lustrous lipstick have begun using touch-screen televisions that allow customers to see how different styles might look on their own faces without talking to a makeup artist. Which of the following statements does this new development support? A. Salespeople sell products, not advice and assistance. B. Personal selling has taken a technology turn in the last decade. C. Relationship selling promotes a win–win situation for both buyer and seller. D. Personal selling offers several advantages over other forms of promotion. E. Modern views of personal selling emphasize the relationship between a salesperson and a buyer. Answer: B Rationale: Stores that embrace younger shoppers’ love of technology and independence can gain loyal customers. 22. Consultative selling: A. uses limited sales planning. B. uses a “lone wolf” approach to selling. C. sells advice, assistance, and counsel rather than products. D. uses short-term follow-ups, which focus on product delivery. E. emphasizes closing the sale during the sales presentation. Answer: C Rationale: See Exhibit 17.2. Consultative selling involves selling advice, assistance, and counsel rather than just products, focusing on understanding and addressing the customer's specific needs and providing tailored solutions. 23. _____ is the ultimate goal of a new trend in marketing that focuses on understanding customers as individuals instead of as part of a group. A. Organizational optimization B. Consumer relationship marketing (CRM) C. Total quality management (TQM) D. Customer relationship management (CRM) E. Market aggregation Answer: D Rationale: This is the definition of customer relationship management (CRM). 24. Using technology provided by Smart Button software, the WNBA’s Los Angeles Sparks have implemented a new system that gathers information about its best customers, season ticket holders, and rewards those customers in many ways, including free tickets to Sparks home games and cash prizes. This is an example of a(n) _____ system. A. organizational optimization B. corporate relationship marketing (CRM) C. total quality management (TQM) D. customer relationship management (CRM) E. call response marketing (CRM) Answer: D Rationale: CRM is a company-wide business strategy designed to optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer segments. 25. Customer relationship management initially was popularized as _____. A. one-to-one marketing. B. a mass marketing approach. C. total quality management. D. a customer satisfaction program. E. a differentiation strategy. Answer: A Rationale: Customer relationship management initially was popularized as one-to-one marketing. But CRM is a much broader approach to understanding and serving customer needs than is one-to-one marketing. 26. _____ in a CRM environment involves collecting customer information through comments and feedback on product and service performance. A. Uncovering B. Researching C. Learning D. Recording E. Absorbing Answer: C Rationale: This is the definition of learning. 27. To initiate the CRM cycle, a company must first: A. establish marketing objectives. B. capture relevant customer data on interactions. C. identify customer relationships with the organization. D. understand the interactions the company has with current customers. E. decide on a segmentation strategy. Answer: C Rationale: To initiate the CRM cycle, a company must first identify customer relationships with the organization. 28. When Burpee Gardening company collects relevant information from customers, such as date of last communication with the customer and how often the customer contacts the company, this is an example of: A. establishing marketing objectives. B. capturing relevant customer data on interactions. C. identifying customer relationships with the organization. D. understanding the interactions the company has with current customers. E. deciding on a segmentation strategy. Answer: B Rationale: This is an example of a company that uses a CRM approach to capture relevant customer data on interactions. 29. Which of the following statements about a CRM system is true? A. A critical component of a CRM system is the use of the appropriate technology to store and manage customer data. B. A CRM system operates on the theory that all customers are equally important. C. Due to privacy laws, a CRM system only disseminates customer information to those who are actually in day-to-day contact with customers. D. A company using a CRM system must view its customers as bits of data. E. All of these statements about a CRM system are true. Answer: A Rationale: The large volume of data resulting from a CRM initiative can be managed effectively only through technology. Once customer data are collected, the question of who owns those data becomes extremely salient. 30. Best Buy instituted a system in all of its stores that customizes their product offerings for the five key customer segments it has identified: affluent professional males, young entertainment enthusiasts, upscale suburban moms, families who are practical technology adopters, and small businesses with fewer than 20 employees. This focus implies that Best Buy is: A. ethnocentric. B. demand based. C. sales-centric. D. supply based. E. customer-centric. Answer: E Rationale: A customer-centric focus is an internal management philosophy to the marketing concept. 31. Sony wants to build long-lasting relationships by focusing on what satisfies and retains their customers. For example, Sony’s PlayStation Web site is designed to create a community of users who can join PlayStation Underground where they will “feel like they belong to a subculture of intense gamers.” Sony evidently: A. is sales oriented. B. has a standardization focus. C. is ethnocentric. D. has a customer-centric focus. E. is product oriented. Answer: D Rationale: A customer-centric focus is an internal management philosophy similar to the marketing concept. 32. _____ involves delegating authority to solve customers’ problems. A. Consumer learning B. Customerization C. Empowerment D. Autonomy E. Interaction Answer: C Rationale: Empowerment is the delegation of authority to solve customers’ problems quickly––usually by the first person the customer notifies regarding the problem. 33. _____ is the process by which learned information from customers is centralized and shared in order to enhance the relationship between customers and the organization. A. Knowledge management B. Learning C. Database marketing D. Interactive marketing E. Information marketing Answer: A Rationale: This is the definition of knowledge management. 34. When Sony PlayStation users want to access amenities on the Sony Web site, they are required to log in and supply information such as their name, e-mail address, and birth date. They are also given the opportunity to complete a survey that captures much more information about them and their gaming habits. Sony gathers this information and makes it available internally to better serve the customer. This is an example of a company using: A. learned research. B. stimulus/response marketing. C. knowledge management. D. sales-oriented marketing. E. motivational research. Answer: C Rationale: Knowledge management is the process by which learned information from customers is centralized and shared in order to enhance the relationship between customers and the organization. 35. Zappos is an online shoe and apparel retailer that promotes the highest quality of customer service by maintaining the importance of each _____, the point at which customer and store personnel exchange information and develop learning relationships. A. moment of truth B. intervention C. data capture D. response situation E. interaction Answer: E Rationale: An interaction is the point at which a customer and a company representative exchange information and develop learning relationships. 36. Apple, Inc. has stores, a Web site, and a toll-free phone number where consumers can provide valuable information to the company in developing a CRM system. All these possible areas of the company where consumers can communicate with the business are called: A. touch points. B. focus areas. C. data mining. D. information search periods. E. experimental points. Answer: A Rationale: In a CRM system, touch points are all areas of the business where customers have contact with the company and data may be gathered and used to guide and direct the decision making within that business unit. 37. Les Ailes de la Mode, a Quebec retail store that promotes the highest quality of customer service, has not only established itself as a top retailer in the province but also has a credit card and point program company, a cataloger and Internet seller, and even a publisher. Through gathering customer information for its credit cards and point program, through catalog and Internet orders, and through subscriptions to its publications, Les Ailes de la Mode has created several different: A. focus areas. B. touch points. C. interrelationship promotions. D. distribution channels. E. sources of distribution information. Answer: B Rationale: Touch points are all areas of the business where customers have contact with the company and data may be gathered and used to guide and direct the decision making within that business unit. 38. Communications between customers and organizations that occur in stores or at information kiosks are called: A. live interactions. B. point-of-sale interactions. C. empowerment points. D. survey interactions. E. product interactions. Answer: B Rationale: Point-of-sale interactions occur in stores or at information kiosks. 39. Which of the following would be an example of “social” CRM? A. Placing a phone call to a local department store B. Leaving a comment on a company’s blog C. Mailing a survey card back to an organization D. Telling a friend about your experience with an online retailer E. All of the above are examples of “social” CRM Answer: B Rationale: Social CRM incorporates social media with the best of traditional CRM. 40. Which of the following is an example of a channel through which customer data are traditionally gathered? A. Store visits B. Conversations with salespeople C. Interactions via the Web D. Phone conversations E. All of these Answer: E Rationale: Channel interactions include store visits, conversations with salespeople, interactions via the Web, traditional phone conversations, and wireless communications. 41. A(n) _____ allows marketers to track customers’ relationships to the company’s products and services. A. database B. data profile C. algorithm D. byte E. interaction profile Answer: A Rationale: Using transaction and purchase data, a database allows marketers to track customers’ relationships to the company’s products and services and modify the marketing message accordingly. 42. Walmart captures point-of-sale transactions from thousands of stores in several countries and continuously transmits these data to its massive data warehouse. Walmart allows more than 3,500 suppliers to access data on their products and perform data analyses. These suppliers use the data to identify customer buying patterns at the store level. They use this information to manage local store inventory and identify new merchandising opportunities. Both Walmart and its suppliers are engaged in: A. information formatting. B. database enhancement. C. data mining. D. data shading. E. descriptive modeling. Answer: C Rationale: Data mining is a data analysis approach that identifies patterns of characteristics that relate to particular customers or customer groups. 43. Outdoor gear retailer Recreational Equipment, Inc. (REI) in Washington collects a vast amount of data through its Web site, direct mailings, and retail stores. When REI considers new store locations, it examines order data to find places with high concentrations of customers buying online and through the company’s catalogs. REI would be using _____ to identify potential store locations. A. information formatting B. database enhancement C. data mining D. data shading E. customer prediction Answer: C Rationale: Data mining is a data analysis approach that identifies patterns of characteristics that relate to particular customers or customer groups. 44. _____ involves developing product or service offerings customized for the appropriate customer segment and then pricing and communicating these offerings for the purpose of enhancing customer relationships. A. Transaction management B. Campaign management C. Data mining D. Consumerism E. Knowledge management Answer: B Rationale: This is the definition of campaign management. 45. Which of the following is a common CRM marketing database application? A. Campaign management B. Retaining loyal customers C. Cross selling other products and services D. Designing targeted marketing communications E. All of these Answer: E Rationale: Reinforcing customer purchase decisions, inducing product trial by new customers, and increasing effectiveness of distribution channel marketing are other common CRM marketing database applications. See Exhibit 17.4. 46. To target outdoor enthusiasts, Subaru of America added an outdoor life section to its Web site that is organized by area of interest. The site will serve as a platform for co-marketing and promotional programs. This offering of customized products to a customer segment for the purpose of enhancing the auto manufacturer’s customer relationships is an example of: A. campaign management. B. customer aggregation. C. transaction segmentation. D. data mining. E. knowledge management. Answer: A Rationale: Developing customized offerings for the appropriate customer segment is a common tactic in campaign management. 47. Many high-end hotel chains award points for every dollar spent in one of their hotels. Customers who earn a high number of points are given special privileges that may include upgraded hotel rooms or several free nights. This is an example of the leveraging of customer information to: A. retain loyal customers. B. reinforce competitive promotional decisions. C. cross-sell other products and services. D. design targeted marketing communications. E. induce product trial by new customers. Answer: A Rationale: Loyalty programs reward loyal customers for making multiple purchases with the objective of building long-term relationships. 48. When a company retains an additional 5 percent of its customers each year, profits will increase by as much as _____. A. 5 percent B. 15 percent C. 25 percent D. 35 percent E. 45 percent Answer: C Rationale: If a company has identified its best customers, then it should make every effort to maintain and increase their loyalty. When a company retains an additional 5 percent of its customers each year, profits will increase by as much as 25 percent. 49. Every time Barry orders running shoes from Road Runner Sports, the Web site or the operator on the phone always tries to sell him something in addition to the shoes he ordered, such as socks or other apparel. This is an example of: A. data mining. B. cross-selling. C. trading up. D. database enhancement. E. a database channel. Answer: B Rationale: Past purchases on a particular Web site and the site a surfer comes from give online marketers clues about the surfer’s interests and what items to cross-sell. 50. According to the CEO of Allied Office Products, “We’re a head-count business: I know that if you have a 60-person office, you should buy $300 worth of basic office supplies—paper, pens, staples—from us with each order, but if that’s all we get, we stagnate. For us to grow, we have to convince the customer, who already likes our products and service, to buy more than just basic supplies; we have to increase the order by 10, 20, or 30 times.” Allied’s salespeople are trained to push the company’s less traditional, higher-margin lines such as coffee and refreshments, printing and forms management, and office furniture. Allied’s salespeople are engaging in: A. cross-selling. B. trading up. C. buyer empowerment. D. alliance building. E. bundling. Answer: A Rationale: Cross-selling uses past customer buying information to ask for additional sales. 51. After Ruth and Mike had paid in advance for their week’s stay at a Vermont Inn, Ruth felt that they might have chosen poorly and that they were committing themselves to stay at a place they might hate. Then Ruth got a letter from the Inn’s owner stating that she was looking forward to their visit and asking what they most enjoyed for breakfast. The hospitality of the letter dealt with Ruth’s cognitive dissonance by: A. cross-selling. B. disintermediation. C. spamming and flaming. D. implementing a penetration strategy. E. reinforcing her purchase decision. Answer: E Rationale: A database offers marketers an excellent opportunity to reach out to customers to reinforce the purchase decision. 52. The set of steps a salesperson goes through to sell a particular product is called the: A. P-O-S cycle. B. stimulus-response hierarchy. C. sales presentation. D. sales process. E. sales continuum. Answer: D Rationale: The sales process is also called the sales cycle. 53. _____ provide the fuel that keeps the corporate engines humming. Without them, there would be no business. A. Marketing messages B. Sales C. Communications D. Managers E. JIT processes Answer: B Rationale: There is an old adage in business that nothing happens until a sale is made. Without sales there is no need for accountants, production workers, or even a company president. Sales provide the fuel that keeps the corporate engines humming. 54. The first step in the selling process is: A. qualifying leads B. approaching the customer and probing needs C. developing and proposing solutions D. making a sales presentation E. generating leads Answer: E Rationale: The steps in the selling process are: (1) generating leads, (2) qualifying leads, (3) approaching the customer and probing needs, (4) developing and proposing solutions, (5) handling objections, (6) closing the sale, and (7) following up. 55. The seven steps of the selling process closely follow the: A. AIDA concept. B. hierarchy of needs. C. traditional communications model. D. process of forecasting and satisfying industry demand. E. JIT process. Answer: A Rationale: The seven steps attempts to move the customer from attention to interest to desire, and finally to action. 56. _____, or prospecting, is the identification of those firms and people most likely to buy the seller’s offerings. A. Lead generation B. Lead qualification C. Customer mining D. Referral calling E. Cold calling Answer: A Rationale: This is the first step in the selling process. 57. What is needed for sales management to be effective? A. Impersonal relationships with customers. B. A success-oriented sales force. C. Relaxed sales objectives. D. Extensive advertising campaigns. E. Answers B and D. Answer: B Rationale: Effective sales management stems from a success-oriented sales force that accomplishes its mission economically and efficiently. 58. AutoFry is the leading manufacturer of ventless deep fryers for supermarket deli and food-service operations. It has developed a new high-capacity fryer. The company has decided to purchase a mailing list of thousands of food-service managers and to send out brochures with a detachable card that the managers can use to request more information. AutoFry is involved in: A. lead qualification. B. lead generation. C. sales presentation. D. the close procedure. E. moving through the sales continuum. Answer: B Rationale: Lead generation is the identification of those firms and people most likely to buy the seller’s offerings. 59. Joe Hamas sells for Rush Beverages. He is trying to convince retailers to carry his company’s Ginseng Rush, a new all-natural beverage that delivers an energy punch without caffeine. When he gets retailers to agree to stock his product, he asks them for the names of other retail operations that might be interested in carrying it. He is using _____ to get his sales leads. A. networking B. cold calling C. referrals D. direct marketing E. noncompeting sales Answer: C Rationale: A recommendation from a customer or business associate is a referral. 60. When salespeople use price as their go-to tool for negotiation, they may inadvertently: A. decrease the value of the product. B. increase the value of the product. C. render price a nonissue. D. reinforce product advertising. E. None of the above. Answer: A Rationale: Effective negotiators avoid using price as a negotiation tool. Because companies spend millions on advertising and product development to create value, when salespeople give in to price negotiations too quickly, it decreases the value of the product. 61. _____ is a process of finding out about potential clients from friends, business contacts, coworkers, acquaintances, and fellow members in professional or civic organizations. A. People surfing B. Networking C. Co-opting D. Lead intermediation E. Looking for the golden parachute Answer: B Rationale: Networking is using friends, business contacts, coworkers, acquaintances, and fellow members in professional and civic organizations to identify potential clients. 62. Christy recently began selling Arbonne skin-care products on a part-time basis. She began by telling all her friends and relatives about the product. Then she called old friends from her college days and reached out to the friends of her friends. This technique for generating leads is called: A. cannibalizing. B. networking. C. snowballing. D. incremental approach. E. multiplier effect. Answer: B Rationale: Networking uses friends, business contacts, coworkers, and acquaintances as a means of meeting potential clients. 63. _____ involves determining which sales prospects have a recognized need, buying power, and receptivity and accessibility. A. Prospect examination B. Customerization C. Lead reciprocity D. Lead qualification E. Bird-dogging Answer: D Rationale: When a prospect shows interest in learning more about a product, the salesperson has the opportunity to follow up, or qualify, the lead to determine if the prospect has a recognized need and buying power. 64. A _____ is a written document or professional presentation. A _____ is a formal meeting. A. sales proposal; sales performance B. sales performance; sales production C. sales presentation; sales performance D. sales proposal; sales presentation E. sales production; sales proposal Answer: D Rationale: A sales proposal is a written document or professional presentation that outlines how the company’s product or service will meet or exceed the client’s needs. The sales presentation is the formal meeting in which the salesperson has the opportunity to present the sales proposal. 65. Lead qualification involves determining whether a prospect has: A. a recognized need, buying power, and a willingness to see a salesperson. B. any interest in a product. C. a real or imagined need for a product. D. any resources. E. a line membership in the company’s buying center. Answer: A Rationale: Lead qualification involves determining three things about the prospect: a recognized need, buying power, and receptivity and accessibility. 66. Often the task of lead qualification is handled by a telemarketing group or a sales support person who frees the sales representative from the time-consuming task by engaging in: A. prequalification. B. database mining. C. co-opting. D. cold calling. E. Networking. Answer: A Rationale: A telemarketing group or a sales support person often prequalifies the lead for the salesperson. 67. The _____ is a process that describes the homework that must be done by a salesperson before he or she contacts a prospect. A. pre-sales dialogue B. pre-approach C. prospect customerization D. closing preamble E. sale profiling procedure Answer: B Rationale: Before approaching customers, the salesperson should learn as much as possible about the prospect’s organization and its buyers. This process is called the pre-approach. 68. Knowing the industry requires active research by the salesperson. Which of the following is not a way to learn about the industry when conducting a needs assessment? A. Attending industry and trade association meetings B. Reading articles published in industry and trade journals. C. Keeping track of legislation and regulation that affect the industry D. Being aware of product alternatives from competition E. Memorizing a product’s pricing and billing procedures Answer: E Rationale: Memorizing pricing and billing procedures is part of knowing the product or service. Attending industry and trade association meetings, reading articles published in industry and trade journals, keeping track of legislation and regulation that affect the industry, and being aware of product alternatives are all part of knowing the industry. 69. During the pre-approach, the salesperson would: A. ask for referrals. B. learn as much as possible about the prospect’s organization and its buyers. C. create point-of-purchase displays. D. handle pricing objections. E. do all of these things. Answer: B Rationale: The pre-approach is a process that describes the ‘homework” that must be done by a salesperson before he or she contacts a prospect. 70. A salesperson engaged in needs assessment does all of the following EXCEPT: A. researching the industry. B. finding out about the competition. C. knowing everything there is to know about the customer and its needs. D. learning about the product or service. E. handling objections. Answer: E Rationale: Handling objections occurs during the fifth step. 71. _____ means having both the authority to make the purchase decision and the funds to pay for it. A. Purchase management B. Procurement specialization C. Right to acquire D. Buying power E. None of the above. Answer: D Rationale: To avoid wasting time and money, a salesperson needs to identify the purchasing authority and his or her ability to pay before making a presentation. 72. A _____ is a determination of the customer’s specific needs and wants and the range of options the customer has for satisfying them. A. stimulus-response continuum B. needs hierarchy C. needs assessment D. NASIC comparison E. sales probability Answer: C Rationale: This is the definition of a needs assessment. 73. As part of the needs assessment, the consultative salesperson must learn everything there is to know about: A. the product he or she is selling. B. the customers and their needs. C. the competition. D. the industry in which he or she is selling. E. all of the choices. Answer: E Rationale: Using this information, a customer profile is created. 74. Creating a(n) _____ during a sales approach helps salespeople optimize their time and resources. A. sales proposal B. customer profile C. sales presentation D. forecast of needs E. AIDA assessment Answer: B Rationale: This profile is then used to help develop an intelligent analysis of the prospect’s needs in preparation for developing and proposing solutions. 75. Increasingly, sales professionals are using _____ to connect with targeted leads and clients around the world. A. networking sites such as LinkedIn B. online games such as World of Warcraft C. messaging tools such as Google Talk D. delivered memos such as telegrams E. None of these. Answer: A Rationale: Some of LinkedIn’s estimated 30 million users have reported response rates between 50 and 60 percent, versus 3 percent from direct marketing efforts. 76. A _____ is a written document or professional presentation that outlines how a company’s product will meet or exceed the client’s needs. A. customer profile B. needs assessment C. sales proposal D. qualifying document E. forecast of needs Answer: C Rationale: Solutions are typically offered to the client in the form of a sales proposal delivered during a sales presentation. 77. Jel Sert Company makes convenient, durable, and eye-catching packaging. Its salesperson is demonstrating to a manufacturer of sports drinks how Jel Sert’s packaging would serve as a silent salesperson for its products. The salesperson is conducting a _____. A. negotiation B. sales presentation C. follow-up D. sales approach E. closing Answer: B Rationale: The sales presentation often involves a face-to-face presentation of the product or its benefits to a prospect. 78. For a powerful sales presentation, salespeople must do all of the following EXCEPT: A. ask close-ended questions. B. incorporate visual elements that impart valuable information. C. practice. D. use direct eye contact. E. use hand gestures and voice inflections. Answer: A Rationale: Salespeople need to ask open-ended questions. 79. Which of the following statements about handling objections is true? A. A professional salesperson should not anticipate objections. B. A salesperson should view objections as requests for more information. C. Objections should not be used to close the sale. D. A good salesperson dreads having to handle sales objections. E. Objectives can only be handled when they arise, not anticipated beforehand. Answer: B Rationale: A good salesperson should anticipate objections and be prepared to answer them. The way an objection is handled can be used to close a sale. A good salesperson welcomes objections as a legitimate part of the purchase decision. 80. What should the consultative salesperson do when the prospect says, “Are you telling me that your packaging will protect my fragile products better than your competitor’s packaging can?” A. Conduct an unplanned needs assessment. B. Handle the question as an objection. C. Immediately leave the prospect’s office. D. Ask for referrals. E. Modify his or her sales proposal. Answer: B Rationale: The client is objecting to the product. 81. When a salesperson asks for the sale, he or she is: A. closing the sale. B. creating empathy. C. reducing cognitive dissonance. D. creating long-term reciprocal arrangements. E. qualifying the sale. Answer: A Rationale: Closing requires courage and skill. 82. Danita is in charge of new business development for her advertising agency. She recently made a sales presentation to the administration of Northwest Medical System to discuss the creative approaches her agency would use to differentiate Northwest Medical from its competition. Danita ended the presentation by asking, “When would you like our firm to begin working on your new brand awareness campaign?” In which stage of the selling process would such a question most likely be asked? A. Closing the sale B. Follow-up C. Dealing with cognitive dissonance D. Handling rejection E. Qualifying the prospect Answer: A Rationale: Closing the sale means asking for the sale. The request can be placed indirectly, as this one is. 83. _____ is the process during which both the salesperson and the prospect offer special concessions in an attempt to arrive at a sales agreement. A. Conciliation B. Negotiation C. Compromise D. Concession E. Dispensation Answer: B Rationale: Negotiation often plays a key role in the closing of the sale. 84. When a salesperson offers a discount if a prospect places a larger order, he or she is using the process of: A. summary. B. assumption. C. negotiation. D. adaptation. E. follow-up. Answer: C Rationale: Negotiation involves offering special concessions during the closing of the sale. 85. Salespeople ensure that delivery schedules are met, that the good or service performs as promised, and that buyers are trained in the use of the product. All of these functions are part of _____, the final step in the selling process. A. the pre-approach B. closing C. lead qualification D. following up E. the sales presentation Answer: D Rationale: The follow-up is the final step of the selling process and is one of the most important aspects of a salesperson’s job. 86. Which of the following statements about the relative amount of time spent in the selling process by different types of salespeople is true? A. A consultative salesperson would spend a lot of time generating leads. B. A traditional salesperson would spend a lot of time following up the sale. C. A relationship salesperson would spend a lot of time handling objections. D. A relationship salesperson would spend a lot of time qualifying leads. E. A consultative salesperson would spend a lot of time closing the sale. Answer: D Rationale: See Exhibit 17.5. A relationship salesperson would spend a lot of time qualifying leads, as building strong relationships starts with identifying and understanding potential customers who are likely to benefit from the products or services offered. 87. In traditional selling, more time is spent _____ than in relationship selling. A. qualifying leads B. following up C. handling objections D. approaching the customer and probing needs E. designing and proposing solutions Answer: C Rationale: See Exhibit 17.5. In traditional selling, more time is typically spent handling objections compared to relationship selling. Traditional selling often involves a more transactional approach where objections need to be overcome to close the sale. 88. All of the following are responsibilities and decisions for a sales manager EXCEPT: A. developing the product design B. evaluating the sales force C. compensating and motivating the sales force D. recruiting and training the sales force E. determining the sales force structure Answer: A Rationale: Another sales manager responsibility is defining sales goals and the sales process. 89. What trait, meaning the ability to put oneself in someone else’s shoes, is something sales managers should look for in applicants? A. Sympathy B. Ego strength C. Kindness D. Assertiveness E. Empathy Answer: E Rationale: Empathy—the ability to place oneself in someone else’s shoes—enables sales people to understand the client. 90. Effective sales management begins with: A. determining sales goals B. determining the most efficient structure for the sales force C. determination the sales force size D. determining a compensation plan E. recruiting the sales force Answer: A Rationale: Without goals to achieve, salesperson performance would be mediocre at best, and the company would likely fail. 91. A(n) _____ is a statement of sales goals, usually based on sales volume alone. A. breakeven statement B. trend analysis C. order forecast D. account report E. quota Answer: E Rationale: A quota is a statement of the individual salesperson’s objectives, usually based purely on sales volume, but sometimes including other factors 92. Guilden Corporation has instructed its new salesperson that she is responsible for selling five display cases with infrared heating capability per week, plus calling on five current and 10 potential customers. These objectives comprise her: A. promotion goal B. fulfillment C. quota D. contribution E. potentiality Answer: C Rationale: A quota is a statement of sales objectives given to an individual salesperson. 93. Sales departments have traditionally been organized by all of the following EXCEPT: A. geographic region B. product line C. competition D. marketing function E. industry Answer: C Rationale: Another structure is based on the client or account. 94. _____ structures for sales force are gaining popularity in today's competitive selling environment for companies that emphasize relationship selling. A. Geographic-based B. Industry- or market-based C. Product-based D. Customer-based E. Buying center-oriented Answer: B Rationale: Being familiar with one industry or market allows sales reps to become experts in their fields and thereby offer better solutions and service. 95. A new salesperson generally receives training in all of the following EXCEPT: A. company policies and practices B. accounting procedures C. product knowledge D. industry characteristics E. nonselling duties, such as filling out information reports Answer: B Rationale: Accounting procedures and policies are not a typical part of a sale person's domain. 96. All of the following statements about recruiting and training the sales force is true EXCEPT: A. Training should not be limited to just the new sales force members. B. One of the most important traits to look for in a sales job candidate is ego strength. C. Sales training should begin after a brief orientation. D. Aggressiveness is an important trait to look for when recruiting salespeople. E. Salespeople are typically trained to be negotiators. Answer: D Rationale: Effective salespeople are assertive without being overbearing or assertive. 97. Generally, companies with lower levels of compensation: A. suffer higher turnover rates B. experience overall decreased cost C. experience increased effectiveness D. experience lower termination rates E. experience improved customer satisfaction Answer: A Rationale: Companies with lower levels of compensation suffer higher turnover rates, which increases costs and decreases effectiveness. 98. The most popular sales incentives are _____. A. cash awards B. vacations C. plaques and trophies D. stock options E. public recognition in front of family and peers Answer: A Rationale: Cash awards are the most popular sales incentive and are used by virtually all companies. 99. In motivating their sales force, sales managers must be careful not to encourage: A. increased turnover B. unethical behavior C. excessive costs D. lowered morale E. lowered customer satisfaction Answer: B Rationale: Sales managers offer rewards, but they must be careful not to encourage unethical behavior. 100. Sometimes the compensation plan alone is not enough to motivate a sales team to produce the volume of sales or the profit margin required by management. Which of the following can be used to further motivate a sales team? A. vacations B. recognition at annual sales meeting C. pay raises D. cash bonuses E. all of these Answer: E Rationale: All of these are listed as motivational tools. 101. All of the following are typical sales force performance measures EXCEPT: A. size of the sales force B. sales volume C. contribution to profit D. calls per order E. percentage of calls achieving specific goals Answer: A Rationale: Another measure is sales or profits per call. 102. Aside from the usual characteristics, sales managers look for _____ in sales recruits. A. Sociability B. Creativity C. Ego strength D. Empathy E. All of these choices Answer: E Rationale: In addition to the above traits, almost all successful salespeople say their sales style is relationship oriented rather than transaction oriented. 103. How can technology be helpful as a sales tool? A. It can cost-effectively process orders and service requests B. It can free sales reps from tedious administrative tasks C. It can help to improve the relationship between salesperson and customer D. It can give salespeople more time to focus on the needs of their clients E. All of these choices Answer: E Rationale: Technology can make sales management more effective, too. 104. _____, buying, selling, marketing, collaborating with partners, and servicing customers electronically using the Internet, has had a significant impact on personal selling. A. I-marketing B. M-commerce C. E-business D. C-focusing E. None of these choices Answer: C Rationale: Virtually all large companies and most medium and small companies are involved in e-commerce and consider it to be necessary to compete in today’s marketplace. Kraft Foods Kraft Foods has established dedicated teams to focus on their business with many of their largest customers. With “Team Kroger,” Kraft has combined with Nabisco selling organizations in order to bring more unique shopper insights to Kroger supermarkets. This helps Kroger understand their shoppers and customize their programs to grow even more. At the same time, Kraft has strengthened its relationship with Kroger by gaining a better understanding of the supermarket’s needs and how it can help support Kroger’s business objectives concurrently with its own. 105. Refer to Kraft Foods. Which type of selling does this Kraft perform with Kroger? A. Traditional personal selling B. Relationship or consultative selling C. Customer selling D. Interactive selling E. Focused selling Answer: B Rationale: Relationship or consultative selling focuses on improving the customer’s bottom line. See Exhibit 17.2. 106. Refer to Kraft Foods. The AIDA concept is encouraged among the sales teams that focus on other resellers besides Kroger because it can help in the _____ process. A. JIT B. communication C. networking D. selling E. cold calling Answer: D Rationale: The steps of the selling process closely follow the AIDA concept (attention, interest, desire and action). 107. Refer to Kraft Foods. _____ is the identification of those firms and people most likely to buy Kraft products. A. Prospecting B. Lead qualification C. The sales presentation D. The close procedure E. The sales approach Answer: A Rationale: When Kraft identifies the firms most likely to buy its products, it is engaging in lead generation, or prospecting. 108. Refer to Kraft Foods. Each Kraft sales team member is given a statement of his or her individual sales objectives, usually based on sales volume. This is called a(n): A. sales lead B. objective report C. order forecast D. account report E. quota Answer: E Rationale: A quota is a statement of the individual salesperson’s sales objectives, usually based on sales volume alone but sometimes including key accounts, new accounts, repeat sales, and specific products. 109. Refer to Kraft Foods. The sales team in Bentonville, Arkansas, devotes all of its efforts on satisfying the needs of its largest customer, Walmart. This is an example of a sales force organized by: A. geographic region B. product line C. market D. industry E. individual client or account Answer: E Rationale: Wal-Mart is one client or account that Kraft Foods sell to, but an entire sales team is devoted to this client. College Entertainers Most colleges and universities have a campus activity board that brings entertainers and special events to campuses. To locate and hire these entertainers, many campuses send their student activity board members to one of the seven regional conventions or the National Association of Campus Activities (NACA) convention. More than 100 entertainers, talent agencies, and companies that provide promotional services exhibit their products at these conventions in an area similar to a trade show. (Conference attendees call this the Marketplace.) Approximately 20 entertainers are selected to present a short program (called a showcase) in which they demonstrate what they would do if hired to perform on campus. Many other entertainers have videos and CDs, which they hand out to student attendees. Only one or two members of any student group can actually set up a contractual agreement with an entertainer or his or her agency. Other student attendees provide input as to which entertainers best match the demographics of their institutions. 110. Refer to College Entertainers. The entertainers and agency representatives engage in _____ in the Marketplace. A. transformational management B. countertrades C. all types of marketing communications D. personal selling E. loyalty marketing programs Answer: D Rationale: Personal selling is a purchase situation involving a personal, paid-for communication between two people in an attempt to influence each other. 111. Refer to College Entertainers. Every time a talent agency or entertainer exchanges information with an activity board representative at the NACA convention—for example, through a showcase—he or she can claim a successful _____ with that representative. A. interface B. countertrade C. campaign D. interaction E. countertrade Answer: D Rationale: An interaction occurs when a customer and a company representative exchange information and develop learning relationships. 112. Refer to College Entertainers. The student activity board members who attended a NACA convention were approached by a talent agent who represents a group of comedians who have been known to use profane language in their routines. Several of the college students told the agent that this type of language would not be welcome at their college. The agent promised the group that the comedians were able and willing to perform an act that the students could bring their grandmothers to see without being embarrassed. In this example, the agent was: A. getting referrals. B. doing a pre-approach. C. qualifying leads. D. using trade promotions. E. handling objections. Answer: E Rationale: The prospect often raises objections or asks questions about the proposal and the product, and an effective salesperson should anticipate objections. 113. Refer to College Entertainers. The student members might agree to pay lodging and travel expenses in return for the entertainer reducing his or her fees by $100. This is an example of: A. engaging in cross promotion. B. negotiation. C. countertrade. D. a cross-sell. E. creating a value chain. Answer: B Rationale: Negotiation is the process during which both the salesperson and the prospect offer special concessions in an attempt to arrive at a sales agreement. Advanced Bionics Advanced Bionics is a global leader in the development of implantable, high-tech neurostimulation devices used to treat deafness and chronic pain. Just two-and-a- half years after introducing its new stimulators, the firm is doing $200 million in domestic sales. How has Advanced Bionics been so successful? Its success can be attributed to its outstanding products and to three aspects of its sales approach. First, Advanced Bionics hired the right talent for its sales force. Companies tend to use experienced sales reps—often hired away from competing companies—to sell new medical devices. This can be very expensive since experienced reps generally expect as much as $200,000 in annual income. So when Advanced Bionics brought its medical device to market, it hired people with no experience selling medical devices and turned them into sales reps. Hiring inexperienced salespeople created some problems, however, and the company experienced high turnover rates during its first two years in operation. Second, Advanced Bionics provided salespeople with a rigorous training program. Third, Advanced Bionics allowed salespeople to plan their own activities while managers monitored their progress and pushed them to improve. In short, the company has been able to succeed by selecting good people, training them well, and managing them carefully. 114. Refer to Advanced Bionics. Advanced Bionics has cutting-edge technology and its customers are very sophisticated. Salespeople need to persuade physicians, neurosurgeons, and orthopedic doctors to use Advanced Bionics’ products. Which of the following statements is NOT an advantage that personal selling offers the company? A. It can tailor the message to the customer needs. B. It is good for explaining the merits of complex products. C. It is inexpensive on a per contact basis. D. It can be specifically directed to the different types of accounts. E. It is effective in convincing a prospective client. Answer: C Rationale: Personal selling is more expensive than other tools when calculated on a per contact basis. 115. Refer to Advanced Bionics. Personal selling is important for Advanced Bionics because: A. its products are standardized. B. its buyers are not very technologically savvy. C. the complexity of its products has decreased. D. its buyers are extremely dispersed. E. its products are high value. Answer: E Rationale: Customers usually need more information and demonstrations to answer their questions about high-value products. See Exhibit 17.1. 116. Refer to Advanced Bionics. Medical Education Training Associates (META) handles the training of new Advanced Bionics sales reps. One of META’s advanced courses focuses on building networks among the company’s various stakeholders. Networking is often discussed as an approach for developing: A. new product ideas. B. potential new clients. C. strategic resources. D. sales force morale. E. cost reduction strategies. Answer: B Rationale: Networking is using friends, business contacts, coworkers, acquaintances, and fellow members in professional and civic organizations to identify potential clients. 117. Refer to Advanced Bionics. One of the keys to Advanced Bionics’ success has been finding and hiring the right talent for sales positions. Finding and hiring new salespeople is known as _____. A. sales force motivation B. sales force evaluation C. sales force personnel management D. sales force recruiting E. sales force qualification Answer: D Rationale: Sales force recruiting should be based on an accurate, detailed description of the sales task as defined by the sales manager. 118. Refer to Advanced Bionics. District sales managers at Advanced Bionics often spend three days per week in the field coaching and monitoring sales reps. This time in the field with sales reps is an important final task in the management process known as: A. compensation B. networking C. quota determination D. qualifying sales leads E. evaluating performance Answer: E Rationale: The final task of sales managers is evaluating the effectiveness and performance of the sales force. ESSAY 1. List the advantages personal selling offers over other forms of promotion. Answer: • Personal selling provides a detailed explanation or demonstration of the product. This capability is especially needed for complex or new goods and services. • The sales message can be varied according to the motivations and interests of each prospective customer. Moreover, when the prospect has questions or raises objections, the salesperson is there to provide explanations. In contrast, advertising and sales promotion can only respond to the objections the copywriter thinks are important to customers. • Personal selling can be directed only to qualified prospects. Other forms of promotion include some unavoidable waste because many people in the audience are not prospective customers. • Personal selling costs can be controlled by adjusting the size of the sales force (and resulting expenses) in one-person increments. On the other hand, advertising and sales promotion must often be purchased in fairly large amounts. • Perhaps the most important advantage is that personal selling is considerably more effective than other forms of promotion in obtaining a sale and gaining a satisfied customer. 2. Discuss the customer and product conditions that suggest personal selling is more important than advertising and sales promotion. Give some examples of products for which personal selling would likely be the best tactic. Answer: Personal selling is more important if: • the product has a high value • the product is custom-made • there are few customers • the product is technically complex • customers are concentrated Product examples include insurance policies, home remodeling, business jets, automobiles, pharmaceutical drugs, and private communication systems. Students will provide other examples. See Exhibit 17.1. 3. Compare and contrast relationship selling and traditional personal selling. Answer: Traditional selling: • focuses solely on the sales transaction • focuses on closing sales • emphasizes a planned presentation for the sole purpose of making the sale • attempts to persuade buyers to accept a point of view or convince the buyer to take some action • has objectives that are frequently at the expense of the buyer (win–lose outcome) Relationship or consultative selling: • emphasizes the relationship that develops between a salesperson and a buyer • builds, maintains, and enhances interactions with customers to develop long-term satisfaction through mutually beneficial partnerships • develops trust over time • emphasizes solution development over a long-term relationship (a win–win outcome) See Exhibit 17.2. 4. Describe the actions of a company that is referred to as having a customer-centric focus. Answer: Companies that have a CRM system follow a customer-centric focus or model. Customer-centric is an internal management philosophy similar to the marketing concept. Under this philosophy, the company customizes its product and service offerings based on data generated through interactions between the customer and the company. 5. What is knowledge management? What type of companies use knowledge management? Answer: Knowledge management is a process by which learned information from customers is centralized and shared in order to enhance the relationship between customers and the organization. Companies that have a CRM system need to use knowledge management. 6. Explain the importance of interactions in a customer relationship management (CRM) system. Most colleges and universities have some form of CRM system. Describe an interaction that occurs at your institution. Answer: An interaction occurs when a customer and a company representative exchange information and develop learning relationships. There are several examples––probably, the best occurs when the student goes through the admission process. The applying student provides information for the registrar’s office, and the registrar’s office provides information to the student about classes, living arrangements, food plans, and so on. 7. What is a touch point? Give two examples of touch points. Answer: Touch points are all possible areas of a business where customers communicate with that business. Touch points would include sales, requests for information, complaints, warranty applications, and credit applications. Students may develop other equally correct answers. 8. List the seven steps in the personal selling process. Answer: 1. Generating leads 2. Qualifying leads 3. Approaching the customer and probing needs 4. Developing and proposing solutions 5. Handling objections 6. Closing the sale 7. Following up 9. Tremaine Hughes is a salesperson for Allied Pets, a company that sells veterinarian supplies. He is working on a needs assessment for East Athens Veterinary Clinic. What information will he need to find out about East Athens? Answer: A consultative salesperson must know everything there is to know about: • the products that Allied Pets offers • East Athens as a customer and have an understanding of its specific needs • the competition East Athens faces • the industry East Athens operates in 10. The first step in the personal selling process is generating leads. Define lead generation and explain why referral is a superior method for generating leads. Answer: Lead generation, or prospecting, is the identification of those firms and people most likely to buy the seller’s offerings. These firms or people become “sales leads” or “prospects.” Referrals are recommendations from customers or business associates. The advantages of referrals over other forms of prospecting include highly qualified leads, higher closing rates, larger initial transactions, and shorter sales cycles. 11. Shelby is a salesperson for Kohler, a company that sells plumbing fixtures. He has a prospect who is showing interest in learning more about his company’s products, so now he must qualify this sales lead. What will Shelby do? Answer: Lead qualification involves determining whether the prospect has three things: A RECOGNIZED NEED. First, the salesperson must determine if the prospect has a need that is not being satisfied. Preliminary interviews and questioning may help in this process. BUYING POWER. To avoid wasting time and money, the salesperson should identify the purchasing authority before making a presentation and determine that the prospect has the funds to pay for the product. An organization chart can qualify the prospect. Additionally, information on a firm’s credit standing can be obtained from credit and financial reporting services. RECEPTIVITY AND ACCESSIBILITY. The prospect must be willing to see the salesperson and be accessible to the salesperson. 12. Use the chart to indicate the relative amount of time spent in each of the key steps of the selling process for both traditional selling and relationship/consultative selling. The first step has been completed for you. Answer: See Exhibit 17.5. 13. What is automated e-mail follow-up marketing? How does it work? Answer: Automated e-mail follow-up marketing is a combination of sales automation and Internet technology that enhances customer satisfaction as well as brings in more business for some marketers. It works like this: After the initial contact with a prospect, a software program automatically sends a series of personalized e-mail messages to the prospect over a period of time. 14. You are the sales manager for Cone Machinery, a manufacturer of custom-made sawmill machinery. You are responsible for designing the training program for its new salespeople. List four major areas in which you would like your salespeople to receive instruction. Answer: A new salesperson generally receives instruction in company policies and practices, selling techniques, product knowledge, industry and customer characteristics, and nonselling duties such as filling out sales and market information reports or using a sales automation computer program. Test Bank for MKTG Charles W. Lamb, Jr. Hair, Joseph F., Carl McDaniel 9781285091860