Chapter–by–chapter aids: Chapter 14
Instructor’s Manual to Accompany Essentials of Marketing IV–14-1
CHAPTER 14: PERSONAL SELLING AND CUSTOMER SERVICE
CHAPTER 14 – COMMENTS ON QUESTIONS AND PROBLEMS
14– 1. See Exhibit 14-1. Strategy decisions should be made by the marketing manager because
personal selling is only a part of Promotion – which is only one of the four Ps. All of these must
be interrelated to have an effective marketing strategy. Leaving these decisions to a sales
manager commonly results in the personal selling area being run as an autonomous unit –
depends on how much he knows about the needs of the target market. Perhaps very general
guidelines will be all he can generate.. If this is the case, then it is likely that the resulting
strategy will be weak in some places and probably uncoordinated. Even if much is known
selling job – and affect its cost, the resulting sales, and the profitability of the firm.
14– 2. As with all questions of this type, it is extremely important to specify the target customers, the
nature of the product, and now, the place policies. Without some assumptions, it is almost
impossible to specify the kind of salesperson required and be correct for all situations. Here,
and the consumer.
14– 3. See the answer to Question 14-2.
14– 4. This would usually call for a fairly high–caliber order getter, who may be very useful in the early
stages of the product life cycle. Then, when the product is fairly well accepted, the marketing
manager may be able to use order takers who can follow through on the promotion job.
an important new account).
14– 5. Those specialty shops which can retain good order takers or even order getters – or who are
owned by good order takers/getters – may grow in sales as customers who desire special
service lack decent alternatives to these specialty shops. If mass selling develops strong brand
does not seem too likely, though.. And these are the products specialty shops have
emphasized.
Channel.”
14– 7. Students can readily identify with this common situation. In a class discussion, an instructor
may want to solicit a broad range of different experiences, “Can someone describe a
particularly bad example of customer service?” A follow–up question might be, “Would you buy
from this company again?” Sometimes you have interesting responses, for example, when a
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
Part IV
IV–14-2 Perreault, Cannon, & McCarthy
of customer service. The discussion is best focused on ways to improve customer service.
After this part of the discussion slows, an instructor might ask, “Can anyone describe a
that work.
14– 8. Few college campuses have a position of customer service rep – or something similar.
Students will likely advocate for such a position. Most have had at least some problems with
registration, buying books, paying bills, in–class instruction, etc. It is interesting to discuss why
customer service systems that primarily impact retention. This may be penny–wise and pound
foolish – a poor college experience with an inability to resolve problems can be detrimental to a
14– 9. Many firms have used this type of incentive for their customer service reps (CSRs) – usually to
the detriment of service quality. Such programs give CSRs an incentive to quickly get a
customer off the phone. This increases the likelihood of transferring a problem to another CSR
– and customers may have to start all over describing their problem. Or a CSR might give a
sales in the future. More broadly, this example shows how compensation schemes can
influence employee behavior.
14–10. Have two different pay scales – one for the experienced salespeople with much higher
incentives, perhaps a straight commission, and another with almost straight salary but enough
incentive to encourage rapid learning on the job. After a training period, the new person could
14–11. The intention here is to have students compare actual sales presentations they have
experienced with their notion of what would be an “ideal” sales presentation. The “ideal,” of
course, would depend upon the nature of the target market, and the rest of the marketing mix.
14–12. Students today are aware of many forms of presentation technology. And, of course, the low
cost of portable presentation technology – typically available on a laptop – makes its use
increasingly practical. Such an approach might have a number of benefits. As noted in the
relatively unskilled salesperson to deliver high quality information that is standardized and
consistent – usually the goal of canned presentations. The buyer’s interest may also be
14–13. The comments for Question 14–12 apply here. The only difference is that here the focus is on
the consultative sales presentation.
14–14. It is possible to conceive of a static society that had little or no need for personal salespeople.
The channels and relationships that had been established by previous promotion efforts could
continue serving the consumer satisfactorily – as long as preferences did not change and no
new products were introduced. Such a situation would probably encourage inefficiency among
established channels and prices might be raised without too much fear of competition.
Depending on how carefully the law was written, even written contracts between buyers and
sellers might be prohibited, except to state prices and quantities. In this case, new customers
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
Chapter–by–chapter aids: Chapter 14
might have difficulty obtaining information about the relative merits of available products. Thus,
it would seem desirable to permit at least some personal selling to provide information (answer
questions). But once some personal selling effort is allowed, then it would be almost
impossible to regulate equitably – as there are so many different types of selling situations. It
would be difficult for legislative bodies to correctly anticipate and evaluate all of these
situations (most business managers lack the know–how to do this for their business).
DISCUSSION OF COMPUTER-AIDED PROBLEM 14: SALES COMPENSATION
In this problem, a sales manager is trying to decide between a commission plan and a combination plan
for compensating a sales rep in a new territory. The sales reps will sell two products – and the manager
wants to motivate the rep to spend more time on one of them (Product B) by assigning it a higher
commission rate. The student analyzes the costs of the two plans relative to possible benefits in
increased sales and contribution to profit. One of the questions in the Learning Aid exercise for this
problem adds a different dimension – a looki at how price–cutting by the rep affects his compensation and
company profits.
The initial spreadsheet for the problem is given below:
P L U S – Spreadsheet
Commission
Combination
Plan
Salary Component of Pay
0.00
15000.00
*
PRODUCT A: Price
110.00
*
110.00
*
Commission Percent (Of Sales $)
5.00
*
3.00
*
Expected Sales (Units of A)
4000
*
3600
*
Unit Cost–Product A
75.00
*
75.00
*
PRODUCT B: Price
150.00
*
150.00
*
Commission Percent (Of Sales $)
8.00
*
5.00
*
Expected Sales (Units of B)
1000
*
1250
*
Unit Cost–Product B
105.00
*
105.00
*
Total (Sales) Revenue (TR)
590000.00
583500.00
Total Compensation (TC)
34000.00
36255.00
“Profit Contribution”
151000.00
145995.00
Answers to Computer–Aided Problem 14:
a. From the initial spreadsheet (above), at the planned volumes for Products A and B, the rep would get
the highest compensation ($36,255) under the Combination Plan and Nanek would get the highest
b. If increase in unit sales per se is the objective, it might be reasonable to do what the sales manager
has in mind since unit sales will increase from $590,000 to $605,000. But it does not appear to make
sense from a profit perspective. While the proposed arrangement would increase the rep’s
compensation to $38,500 (a $4,500 raise), the change does not alter Nanek’s bottom line; it remains
unchanged at $151,000! Thus, if the basic reason for increasing unit sales was to increase profit, this
approach has not worked. It might make sense for the manager to think about other alternatives –
Part IV
Chapter–by–chapter aids: Chapter 14
Part IV
Situation: Assume that you are a sales rep and sell costly electronic systems used in automated factories.
You made a sales presentation to a customer, but he didn’t place an order—and then wouldn’t take your
calls when you tried to inform him that your company was coming out with a more reliable model at the
same price. Months later, he faxes a purchase order for immediate delivery on the model you originally
discussed. You have the old model in stock, and it will be difficult to sell once the new model arrives in
two weeks. In fact, your company has doubled the usual commission rate to clear out the old model. Do
Sales representatives often face situations where there is incentive to relax ethical standards. Some of
the difficult areas relate not to outright lies but rather to situations, like this one, where the representative
must decide how much information needs to be volunteered, especially when the customer doesn’t seem
very interested,
In this scenario, the salesperson made reasonable efforts to follow up and inform the customer of the new
model. Further, and perhaps it is an emotional issue rather than something else, the purchasing agent
Chapter–by–chapter aids: Chapter 14
There are many different approaches that HVC might use to promote its reputation for customer service.
Given the company’s “compassionate care” positioning, a high level of customer service is probably
expected by customers. To achieve that, the clinic might have someone make a follow–up call to all
customers the day after a clinic visit to assure there are no continuing issues of concern. A customer
satisfaction program is described in the Control section of the marketing plan. HVC might also leave more
time during the day “unscheduled” to be available for patients on short notice. The clinic could establish a
Part IV