MANAGEMENT OF A SALES FORCE 12TH Individual homework questions on Week 1 reading
ID: 446085 • Letter: M
Question
MANAGEMENT OF A SALES FORCE 12TH
Individual homework questions on Week 1 readings and lectures
Homework assignments are essentially “check points for learning”, requiring the student to demonstrate that they understand key concepts from the readings and lectures.
Guidelines on maximum answer length are provided below. Students should summarize the concepts in their own words, without quotes from the text.
1. (5 pts) How is Personal Selling different than Sales Management? List a few skills or traits needed to be successful in each. (< ~ 100 words)
2. (5 pts) Describe two sales roles: the new business seller and the consultative seller. (< ~100 words)
4. (5 pts) Describe the geographic and market specialization approaches to sales force organization.
(< ~100 words)
5. You work for a fairly global company, with 30% of its revenues coming from the North America, 25% from Europe and 15% coming from Japan and S. Korea. You have mostly direct offices but you also make use of distributors in some regions. Currently, you sell a product line that requires some (but not excessive) technical support.
You are mulling options to increase sales in the Philippines. This region had been weakly supported in the past from your office in Australia. You attended a trade show in Jakarta a few months ago and met a distributor there that you believe should be successful selling your products; the distributor is agreeable to a three year contract with a commission of 25%. While you were there you also researched office space and compensation packages for the various roles you believe you will need to be successful, which are broken down as follows (annually):
Office rental costs: $140,000
Administrator: $35,000
Tech support person: $60,000
Sales manager + seller: Base: $40,000 Commission: 7%
New business seller: Base $20,000 Commission: 7%
a) (10 pts) At what level of annual Sales are the “Cost of Sales” equal for both distributor and direct office? Show calculation.
b) (10 pts) You expect annual sales in the region to reach $1m in the second year you are there (with either approach) and long-term annual sales to level off at $2m by the fourth year (by the fourth year you would need to add another new business seller. Which approach do you recommend and why? If the company strategy changed (from the first paragraph) to add a new, very technical product, how would that influence your recommendation?
Explanation / Answer
1. Personal selling is the process of selling a good or service by an individual sales person, directly to a client. Sales management is the practical application of sales techniques and management of an organization's sales operations. Sales management included all tasks involving the analysis, planning and organizing of a company's sales efforts. Thus, personal selling is a process of selling whereas sales management is the management of the entire sales process and system in a company. Traits for personal selling - effective communication, knowledge of consumer requirement, convincing power. Traits for sales management - planning and implementation skills, people skills, effective communication.
2. The new business seller is responsible for developing new business opportunities for the product or service. The focus is on the product or the service in question, and developing new markets for the product.Consultative seller uses the customer needs as a basis to initiate sales. The sale is based on consultation with the customer. The seller lays emphasis on the needs and requirements of the customer.
4. The geographic approach to sales force organization divides the sales force into zones like the east zone, south zone, north zone and west zone. There are zonal managers for each zone and these managers are responsible for the sales people, sales target etc, for their zones. The market specialization approach leads to the sales force becoming experts on certain tasks. The selling activities are focused on certain products only or certain customers only.
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