Chapter5

A complete statement of an industry's market potential must include

A)The names of all potential customers

B)An estimate of the maximum possible sales for an industry in a period of time

C)An assessment of potential competitors

D)The historical trends used to develop the statement

E)Territorial assignments

Feedback:Page: 128.Justification: Market potential is an estimate of the possible sales for an entire industry in a market during a stated period of time under ideal conditions.

2 INCORRECTWhich of the following statements BEST defines the relationship between sales potential and market potential?

A)The term market forecast is synonymous with the term sales potential.

B)The sales potential reflects what the company could sell in a territory if conditions were ideal; the market potential is the estimated sales for the entire industry in a market.

C)Sales potential estimates are always determined for a particular product; market forecasts are always determined for particular territories.

D)Sales potential is the portion of the market potential a specific firm can reasonably expect to achieve; market forecasts are estimates of the dollar or unit sales for a specified future period under a proposed marketing plan.

E)Market potential forecasts are typically higher than sales potential estimates.

Feedback:Page: 129.Justification: Few companies expect to get 100 percent of sales in a territory. Sales potential reflects what portion of the potential market sales the company thinks it can obtain.

3 INCORRECTPurchasing managers use sales forecasts to:

A)Determine production quantities and schedules

B)Control inventories of input and output materials

C)Schedule the arrival of raw materials and component parts

D)Allocate funds to their companies' functional areas

E)Plan marketing programs

Feedback:Page: 129.Justification: Sales forecasts have many uses. One of the important internal uses is to guide purchasing managers in their ordering decisions.

4 CORRECTWhich of the following methods for calculating sales forecasts is an objective method?

A)Market test

B)Decomposition

C)Moving averages

D)Statistical demand analysis

E)All of the above

Feedback:Page: 131.Justification: All of the choices are objective measures, using quantification rather than personal judgment. In addition, objective methods include exponential smoothing.

5 INCORRECTFiona's company has a new product, unlike anything on the market. She wants to estimate potential market sales quickly, before competitors enter the market. She will most likely use ___________ sales forecasting method.

A)Market test

B)User expectations

C)Moving averages

D)Statistical demand analysis

E)Exponential smoothing

Feedback:Page: 131.Justification: Since she has a new, unique product, there is no existing data and nothing to compare to. User expectations or buyer's intentions, relies on answers from potential customers. Though what people say they will do and what they actually do often differ, sometimes this is the only way to estimate market potential.

6 INCORRECTFor a sales quota to be effective, the quota must be:

A)Attainable

B)Easy to understand

C)Complete

D)Timely

E)All of the above

Feedback:Page: 139.Justification: Good sales quotas are attainable, easy to understand, be complete meaning covering all the criteria on which the salesperson is to be judged, and timely to allow for feedback.

7 CORRECTThe sales volume quota:

A)Is the least popular of all the types of sales quotas

B)Cannot be directly related to market potential

C)Can be expressed in dollars, physical units, or points

D)Is most effective because it is flexible, short-term-oriented, and challenging

E)Is less credible than other types of quotas

Feedback:Page: 141.Justification: Volume quotas are usually an essential part of assessing sales performance. Sales volume can be expressed in dollar amount, quantity sold, or points earned for achieving certain parts of the quota.

8 INCORRECTMethods for determining sales force size include all of the following EXCEPT

A)Breakdown

B)Scenario

C)Work load

D)Incremental

Feedback:Page: 144.Justification: The first common method for determining the size of a sales force is the breakdown method where forecasted sales volume is divided by estimated productivity per salesperson. The workload or buildup method uses time, effort, and activities determine the number of salespeople needed. The Incremental method uses compares incremental profit versus incremental costs associated with adding salespeople.

9 INCORRECTEdward is sales manager for a new, national book company. He takes the forecasted sales volume and divides it by the estimated productivity of one salesperson. Edward is engaged in:

A)Work load methodology

B)Iceberg prevention analogy

C)Sales force deployment

D)sales auditing

E)Breakdown method

Feedback:Page: 144.Justification: The breakdown method uses forecasted sales volume and divided by estimated productivity per salesperson.

10 INCORRECTWhich of the following statements about the work load method of calculating the sales force size is true?

A)Another name for the work load method is the buildup method.

B)The work load method does not allow for differences in sales response among accounts that receive the same sales effort.

C)The work load method assumes all salespeople use their time with equal efficiency.

D)The work load method does not explicitly consider the profitability of the call frequencies.

E)The work load method of determining sales force size is accurately described by all of the above.

Feedback:Page: 146.Justification: The workload method involves many steps in assessing the size of the sales force needed.

11 INCORRECTWhich of the following statements about the incremental approach to determining the size of the sales force is true?

A)The incremental approach recognizes that there will be decreasing returns associated with the addition of salespeople.

B)The incremental approach is also referred to as the breakeven method.

C)The incremental approach is easy to implement.

D)The incremental approach is also referred to as the buildup approach.

E)The inputs used to determine the size of the sales force using the incremental method are readily available.

Feedback:Page: 147.Justification: Additional salespeople will, logically, be assigned to new or lower-potential accounts or territories resulting in fewer additional sales or decreasing returns to scale.

12 INCORRECTAfter the sales manager has chosen the basic control unit, his or her next step in territorial design is to:

A)Estimate market potential for each control unit

B)Determine the size of the sales force

C)Combine control units into tentative territories

D)Perform work load analysis

E)Determine areas of coverage difficulty

Feedback:Page: 148.Justification: After determining the control unit in geographic sales territories, often by county or city, the sales manager then estimates the potential sales within each control unit.

13 CORRECTWhich of the following statements about trading areas is true?

A)Trading areas are expensive to use as a geographic control unit.

B)Trading areas typically do not include any urban areas.

C)Trading areas are difficult to use because they vary from product to product.

D)Trading area boundaries follow political boundaries.

E)None of the above statements about trading areas is true.

Feedback:Page: 149.Justification: Trading areas are made up of a principal city and the surrounding dependent area. They are an economic unit that ignores political and other noneconomic boundaries.

14 INCORRECTWhich of the following is NOT one of the choices in selecting a basic control unit?

A)Counties

B)MSAs

C)Zip codes

D)Enterprise zones

E)Trading areas

Feedback:Page: 149.Justification: Enterprise zones are specially designated areas by government with incentives offered for economic development. They are not a basic control unit in geographic sales management design.

15 INCORRECTCarmen is classifying accounts according to their attractiveness. She is engaged in

A)Estimating market potential for each control unit

B)Determining the size of the sales force

C)Combining control units into tentative territories

D)Account analysis

E)Determining areas of coverage difficulty

Feedback:Page: 152.Justification: Account analysis assesses the sales potential for each customer and prospect in a territory. This is used to decide how often each account should be called on.

16 CORRECTThe ____________________ reflects the relative amount of sales call effort that should be allocated to the account in comparison to other accounts.

A)Iceberg principle

B)Sales effort allocation index

C)Scenario planning system

D)Workload decompression goal

E)Market potential index

Feedback:Page: 153.Justification: The sales effort allocation index is formed by multiplying each rating score by its factor importance weight, summing over all factors, and then dividing by the sum of the importance weights.

17 INCORRECTThe 80:20 principle illustrates the phenomenon of

A)Account activity analysis

B)A small percentage of customers or products accounting for a high percentage of the company's sales

C)North American Industrial Collective Concentration

D)Buying Power cooperation

E)Enterprise Resourcefulness Fulfillment

Feedback:Page: 156.Justification: The 80:20 principle or concentration ratio, where 80 percent of sales come from 20 percent of the customers, is found in many industries and many markets.

18 CORRECTDrew's company has just purchased technology that links bid estimation, order entry, shipping, billing systems, and other work processes. Drew's company purchased

A)Inventory management software

B)Capital account capturing software

C)Enterprise resources planning software

D)Market enhancement software

E)Customer solutions software

Feedback:Page: 158.Justification: Many companies are using ERP (enterprise resources planning) software to support and expedite selling.

19 INCORRECTA region's __________________ reflects the areas population, income, and general level of retail sales.

A)Isolate and explode computations

B)Buying Power index

C)Scenario planning system

D)Retail decompression goal

E)Market potential index

Feedback:Page: 161.Justification: The Buying Power Index assesses each region's retail buying power. Sales managers can use the BPI to assess changes in market potential.

20 CORRECTThe iceberg principle suggests

A)Never travel on a trans-Atlantic boat in winter

B)Turn a "cold shoulder" to unethical salespeople

C)Small, visible problems are often symptoms of large, unseen problems

D)It is often necessary to isolate and explode

E)Early rejection by customers should not be taken as seriously

Feedback:Page: 164.Justification: Like the saying "just the tip of the iceberg," the iceberg principle suggests that in many situations what seems like a small, isolated problem could be part of a much larger problem.

Chapter 6Which of the following is NOT a determinant of a salesperson's performance?

A)Role perceptions

B)Aptitude

C)Skill level

D)Motivation level

E)Grades

Feedback:Page: 187.Justification: Salespeople's performance is determined by role perceptions, aptitude, skill level, and motivation level.

2 CORRECTSkill levels include all of the following EXCEPT

A)Presentation skills

B)Interpersonal skills

C)Leadership

D)Technical knowledge

E)Job satisfaction

Feedback:Page: 188.Justification: While job satisfaction influences motivation level, skill levels include presentation, interpersonal, leadership, and technical knowledge.

3 CORRECTWhich of the following statements is true?

A)There is significant published research concerning the effects of training programs on skill levels.

B)Different kinds of skills are needed for different types of selling tasks.

C)Aptitude and skill levels are independent constructs.

D)Salespeople's past experience does not influence skill level

E)The skill set needed for technical sales is similar to the skill set needed for automobile sales.

Feedback:Page: 188-189.Justification: The type of skill and the type of salesperson will vary depending on the product, customer, and market situation.

4 CORRECTMotivation, in sales management, refers to the amount of ___________ the salesperson desires to expend on each activity or task.

A)Money

B)Valence

C)Effort

D)Skill

E)Instrumentality

Feedback:Page: 189.Justification: Motivation, in sales, refers to the amount of effort a salesperson is willing to spend on a task or activity. Motivation is influenced by expectancies and valences for performance.

5 INCORRECTRon Roberts believes that he could easily improve his selling performance by working a bit harder, and he also thinks that management would reward him more for any performance improvement. Which of the following statements describes Ron?

A)He has high expectancy and low instrumentality.

B)He has high expectancy and low valence for rewards.

C)He has high valence for performance and low expectancy.

D)He has high expectancy and high instrumentality.

E)He has high valence for performance and high instrumentality.

Feedback:Page: 189.Justification: Expectancy is a salesperson's estimate of the probability that expending an effort will lead to improved performance. Instrumentality is the salesperson's estimate of the probability that improved performance will lead to increased attainment of particular rewards.

6 INCORRECTLoretta wants to win the trip to Hawaii being offered to the top salesperson this month. Loretta has a high

A)Personal satisfaction

B)Expectancy for reward

C)Instrumentality

D)Performance valence

E)Valence for rewards

Feedback:Page: 189.Justification: Valences for rewards are the salesperson's perceptions of the desirability of receiving increased rewards as a result of improved performance.

7 CORRECTWhich of the following organizational citizenship behaviors is exemplified willingness to work beyond the "normal" expectations?

A)Sportsmanship

B)Civic virtue

C)Conscientiousness

D)Altruism

E)Competition

Feedback:Page: 191.Justification: Organizational citizenship behaviors include sportsmanship, civic virtue, conscientiousness, and altruism. Conscientiousness, for salespeople, could involve working late or weekends.

8 INCORRECTBrent's company is offering a bonus to the first salesperson to sell one hundred cars this year. This is an example of _____ as incentive.

A)An intrinsic reward

B)Job satisfaction

C)Instrumentality

D)An extrinsic reward

E)A lower-level need

Feedback:Page: 193.Justification: An extrinsic reward is offered by people other than the salesperson.

9 INCORRECTOn the first day of graduate school, many professors tell their students not to expect significant remuneration from their career but, instead, to relish in the "psychic" rewards of their chosen profession. These professors are suggesting academic careers, like some sales positions have

A)Intrinsic rewards

B)Job embellishment

C)Instrumentality

D)Extrinsic rewards

E)A lower-level need

Feedback:Page: 193.Justification: Intrinsic rewards are those that salespeople primarily attain for themselves.

10 INCORRECTWhich of the following is NOT considered a dimension of job satisfaction?

A)Company policies and support

B)Supervision

C)Pay

D)Promotion and advancement opportunities

E)Competitors

Feedback:Page: 193.Justification: Company policies and support, supervision , pay, and promotion and advancement opportunities all contribute to job satisfaction. Competitors usually reduce job satisfaction.

11 CORRECTGayatri frequently hears her salespeople comment that management is not very progressive. Which of the following dimensions of job satisfaction will she hopefully assess and attempt to change?

A)The job itself

B)Coworkers

C)Company policies and support

D)Pay

E)Customers

Feedback:Page: 194.Justification: Company policies and support affect the environment in which salespeople work, creating either support or frustration for their efforts.

12 INCORRECTThe three-step process where, role partners communicate expectations, salespeople develop perceptions, and salespeople convert perceptions into behaviors, defines a salesperson's

A)Motivation

B)Role

C)Valence

D)Ambiguity

E)Satisfaction

Feedback:Page: 195-196.Justification: The salesperson's role is defined through a three-step process. First, role partners communicate expectations. Second, salespeople develop perceptions. Third, salespeople convert perceptions into behaviors.

13 INCORRECTLaura, a sales rep for a vacation resort company, thinks her supervisor wants her work weekends but her manager just wants her to get the job done. Laura is experiencing __________ concern.

A)Role expectancy

B)Role ambiguity

C)Role conflict

D)Role inaccuracy

E)Role rotation

Feedback:Page: 196.Justification: Perceived role inaccuracy occurs when the salesperson's perceptions of the role partner's demands are inaccurate.

14 CORRECTAndrew, a sales rep for an office furniture company, is told to focus on existing customers by his sales manager but told to find new customers by the vice president for marketing. Andrew is experiencing __________ concern.

A)Role expectancy

B)Role ambiguity

C)Role conflict

D)Role inaccuracy

E)Role rotation

Feedback:Page: 196.Justification: Perceived role conflict exists when a salesperson believes the role demands of two or more members of the role set are incompatible.

15 INCORRECTBecause sales people occupy ________________ they face the potential of demands from customers, sales managers, and others in the company.

A)Supervisory

B)Valence

C)Contractual

D)Boundary positions

E)Organizational citizenship

Feedback:Page: 197.Justification: Salespeople operate on the outer edge of their organization, interacting with both internal organization members and external market situations (customers and competitors.)

16 INCORRECTRole expectations:

A)Vary from one sales position to another

B)Vary from one type of role partner to another

C)Are consistent among salespeople

D)Often conflict with expectations of family members or supervisors

E)Are accurately described by all of the above

Feedback:Page: 200-201.Justification: It is next to impossible to develop one set of expectations common to all sales jobs.

17 INCORRECTWhich of the following statements is false?

A)Small doses of role conflict and ambiguity may be good for a salesperson.

B)Different role partners emphasize different types of expectations.

C)Most salespeople perceive conflicts between some company policies and their customer's demands.

D)Some role stress can lead to useful adaptation and change.

E)All of the above are true

Feedback:Page: 202.Justification: When there are no disagreements and no uncertainty associated with a role, people can become so comfortable they strive to preserve the status quo. Some role stress can lead to useful adaptation and change. Different role partners are likely to generate different expectations, causing some role stress.

18 CORRECTClose supervision of the sales force by the sales manager has been referred to as a ________________ because it helps reduce role ambiguity while increasing role conflict.

A)Motivational strategy

B)Expectancy model

C)Two-edged sword

D)OCB parallel

E)Extrinsic-intrinsic conflict

Feedback:Page: 204.Justification: Close supervision reduces uncertainty about what is expected but also reduces the latitude a salesperson has to handle situations, increasing role conflict.

19 INCORRECTJohn is not sure increased sales will lead to a promotion. This type of problem is common among salespeople because

A)Expectancies equal returns divided by output

B)Sales activities, performance dimensions, and rewards are multidimensional.

C)Sales managers want their salespeople to be slightly confused in order to get them to work harder

D)No good system of multidimensional role accuracy linkage exists

E)Organizational dynamics often conflict with role conflict

Feedback:Page: 205.Justification: Role inaccuracy is often a potential problem because activities, performance dimensions, and rewards are multidimensional.

20 CORRECTToday, salespeople may only be one individual in a complex relationship that consists of technical specialists, customer service representatives, and others who interact with the customers on a regular basis. As such, salespeople are becoming

A)Dating specialists

B)Relationship managers

C)Customer instruments

D)Structurally unemployed

E)Citizenship representatives

Feedback:Page: 207.Justification: With customers interacting with many representatives of the firm, salespeople often become relationship managers resolving conflicts and reducing communications problems for the customer.