END OF CHAPTER MATERIAL
Discussion and Critical Thinking
Discussion questions
13.1. Describe the roles that a salesperson and the sales force perform in marketing. (AASCB:
Communication; Reflective Thinking)
Answer:
The term salesperson covers a wide range of positions. At one extreme, a salesperson might
be largely an order taker, such as the department store salesperson standing behind the
counter. At the other extreme are order getters, whose positions demand creative selling,
The role of personal selling varies from company to company. Some firms have no
salespeople at all—for example, companies that sell only online, or companies that sell
through manufacturer’s reps, sales agents, or brokers. In most firms, however, the sales force
13.2. What traits and behaviors should an ethical salesperson possess? What role does the
sales manager play in ethical selling behavior? (AACSB: Ethical Understanding and
Reasoning)
13.3. Name and describe the four sales compensation elements. What are the various
compensation combinations and how can they be used to achieve the company’s
marketing objectives? (AACSB: Communication; Reflective Thinking)
Answer:
Compensation consists of four elements: a fixed amount, a variable amount, expenses, and
Management must determine what mix of these compensation elements makes the most sense
for each sales job. Different combinations of fixed and variable compensation give rise to
A sales force compensation plan can both motivate salespeople and direct their activities.
Compensation should direct salespeople toward activities that are consistent with the overall
13.4. Define sales promotion and discuss its objectives. (AACSB: Communication)
Answer:
Sales promotion consists of short-term incentives to encourage purchase or sales of a
product or service and includes tools such as coupons, sweepstakes, premiums, and trade
13.5. Discuss the different types of trade sales promotions and distinguish these types of
promotions from business promotions. (AACSB: Communication)
Answer:
Trade promotions can persuade resellers to carry a brand, give it shelf space, promote it in
advertising, and push it to consumers. Shelf space is so scarce these days that manufacturers
often have to offer price-offs, allowances, buy-back guarantees, or free goods to retailers and
allowance (usually so much off per case) in return for the retailer’s agreement to feature the
manufacturer’s products in some way. An advertising allowance compensates retailers for
Business promotions are used to generate business leads, stimulate purchases, reward
Critical Thinking Exercises
13.6. There are considerable free sales training resources available on the Internet. Search “free
sales training” to find some of these resources and access one of them. Create a
presentation highlighting what you learned. (AACSB: Communication; Use of IT;
Reflective Thinking)
Answer:
Students’ responses will vary. Searching “free sales training” provides several sources of free
13.7. Select a product or service and role-play a sales call—from the approach to the close—
with another student. Have one member of the team act as the salesperson with the other
member acting as the customer, raising at least three objections. Select another product or
service and perform this exercise again with your roles reversed. (AACSB:
Communication; Reflective Thinking)
Answer:
Students’ responses will vary, but they should demonstrate an understanding of the selling
process. During prospecting, salespeople will determine who at the company to approach
The preapproach step involves learning more about the companies. Hair salons would have
different cleaning needs than dentists’ offices. Knowing how long the companies have been
The role-playing activity begins with approach. Students should greet the customer by name,
13.8. In a small group, design a sales promotion campaign using online, social media, and
mobile marketing for a small business or organization in your community. Develop a
presentation to pitch your campaign to the business or organization and incorporate what
you’ve learned about the selling process. (AACSB: Communication; Reflective
Thinking)
Answer:
Students’ responses will vary, but they should incorporate elements of the selling process.
The selling process consists of seven steps: prospecting and qualifying, preapproach,
With respect to the sales promotion campaign, consumer promotions include a wide range of
tools—from samples, coupons, refunds, premiums, and point-of-purchase displays to
contests, sweepstakes, and event sponsorships. Beyond selecting the types of promotions to
Minicases and Applications
Online, Social Media, and Mobile Marketing: Snap It and Redeem It!
More than 300 billion coupons are distributed each year, with more than 90 percent of them
printed on paper. Consumers redeem only about one percent of coupons distributed, often
because they clip them but forget to use them in the store. SnipSnap has a solution for
consumers. Hailed as the Best Shopping App by About.com and winning Media Post’s Apply
Awards for Best Finance App, this app has mobilized those paper coupons for consumers.
SnipSnap now boasts four million users and more than 50 national retail partners. The app allows
consumers to snap a photo of retailers’ paper coupons and redeem them at the store. Users can
share with friends on Facebook and Twitter and follow others’ couponing. SnipSnap is the first
mobile app that scans the text, images, logos, and barcodes in printed coupons and creates a
mobile coupon. It also sends expiration date reminders and location-based notifications. Retailer
Lord & Taylor installed iBeacon technology and partnered with SnipSnap to send shoppers
targeted coupons based on where they are in the store. So if you want a good deal on a Michael
Kors purse, it knows you are looking at the item and might send you a coupon through the app.
SnipSnap employees noticed consumers were snapping pictures of “coupons” they created to
send to friends and family that were good for some special treatment, so the company created a
spin-off app called GoodFor. Now, if you want to send a special someone a coupon good for a
30-minute massage or your kid a “get out of chores free” coupon, GoodFor allows you to do it!
13.9. Research other types of apps that rely on smartphone cameras to redeem a sales
promotion offer. Explain how they work and how they are similar to and different from
SnipSnap. (AACSB: Communication; Use of IT; Reflective Thinking)
Answer:
One example is Checkout51 (www.checkout51.com). In this app, consumers browse the
offers in the app, go to the store and purchase the product, and then snap a picture of their
SnipSnap (www.snipsnap.it) enables consumers to snap pictures of retailers’ coupons and
For more information on both of these apps, see Torrey Kim, “These 2 Money-Saving Apps
13.10. The profitable growth potential for SnipSnap is in the enterprise market where it provides
mobile promotion services to retailers. SnipSnap is working with retailers to create and
manage geo-conquesting campaigns. Research what this is and create a presentation
explaining how it works. (AACSB: Communication; Use of IT; Reflective Thinking)
Answer:
Geo-conquesting focuses on targeting consumers when they are nearby (based on their
phone’s location). It can be used to send a message or offer to a consumer who is near a
For more information, see Love Hudson-Maggio, “What Is Geo-Conquesting and How Can
For an example of how Outback Steakhouse used geo-precision targeting, see
For a good how-to brief, see Shannon E. Denison, “A Marketer’s Guide to Mobile
Marketing Ethics: “Dollars for Docs”?
The pharmaceutical industry is innovating at a dizzying pace, but it is getting more difficult for
pharmaceutical sales reps to reach doctors to inform them of new or improved products. One
option is to host educational seminars. However, many educational seminars are held at lavish
restaurants or destinations underwritten by pharmaceutical companies, and doctors providing the
education are paid consulting and speaking fees to the tune of more than $2 billion since 2009. In
some cases, speakers are given scripts developed by the pharmaceutical company, leading to the
criticism that this is company-scripted marketing and the distinguished speaker is merely a “paid
parrot” selling drugs for the company. Critics also claim that such promotion results in
needlessly increased prescriptions for expensive branded drugs that are no better than generic
alternatives. Many drug makers are reducing expenditures for such product promotions because
of the Physician Payment Sunshine Act, a provision of the Affordable Care Act of 2010. Pro
Publica has a “Dollars for Docs” searchable database, and as part of the Sunshine Act, a
searchable government Web site is available to the public to shed light on pharmaceutical sales
practices.
13.11. Is it wrong for pharmaceutical companies to explain the benefits of their products to
physicians this way? Suggest other alternatives for reaching doctors to inform them of the
benefits of a company’s products. (AACSB: Communication; Ethical Reasoning;
Reflective Thinking)
Answer:
Students’ answers will vary. Many professionals attend conferences and dinners to stay
13.12. Learn about the Physician Payment Sunshine Act. Search Pro Publica’s “Dollars for
Docs” database (http://projects.propublica.org/docdollars/) for local physicians to see if
they have received payments from pharmaceutical companies. Search the government’s
Web site (https://openpaymentsdata.cms.gov/) and compare your findings with that of
Pro Publica’s database. Write a report on what you found. (AACSB: Communication;
Use of IT; Reflective Thinking)
Answer:
Students will be able to find considerable information about the Sunshine Act. For a good
overview of the final ruling that provides links to the original documents see Nicole Fisher,
The amount shown on the government’s Web site was $4,000 lower than the amount Pro
Marketing by the Numbers: Salesforce Analysis
Wheels, Inc. manufactures bicycles sold through retail bicycle shops in the southeastern United
States. The company has two salespeople that do more than just sell the products—they manage
relationships with the bicycle shops to enable them to better meet consumers’ needs. The
company’s sales reps visit the shops several times per year, often for hours at a time. The owner
of Wheels is considering expanding to the rest of the country and would like to have distribution
through 1,000 bicycle shops. To do so, however, the company would have to hire more
salespeople. Each salesperson earns $40,000 plus 2 percent commission on all sales annually.
Another alternative is to use the services of sales agents instead of its own sales force. Sales
agents would be paid 5 percent of sales.
13.13. Refer to Appendix 3 to answer this question. Determine the number of salespeople
Wheels needs if it has 1,000 bicycle shop accounts that need to be called on four times
per year. Each sales call lasts approximately 2.5 hours, and each sales rep has
approximately 1,250 hours per year to devote to customers. (AACSB: Communication;
Analytical Reasoning)
Answer:
The workload method uses the following formula to determine the sales force size:
NC FC LC
NS = ————————
TA
where,
NS = number of salespeople
so,
13.14. At what level of sales would it be more cost efficient for Wheels to use to sales agents
compared to its own sales force? To determine this, consider the fixed and variable costs
for each alternative. What are the pros and cons of using a company’s own sales force
versus independent sales agents? (AACSB: Communication; Analytical Reasoning;
Reflective Thinking)
Answer:
To determine the level of sales at which one alternative would be as efficient as the other, we
Total Costssalesforce = Total Costssales agents
Total costs consist of fixed costs and variable costs, so for the salesforce option, total costs
would equal the total salaries for the 8 salespeople (fixed costs) plus the commissions on
sales (variable costs). Total costs for the sales agent option are just variables costs. Therefore:
Set the two equations equal to each other and solve for sales:
Total Costssaleforce = Total Costssales agents
Therefore,
If Wheels expects sales to be greater than $10,666,667, then using its own salesforce will be
Sales agents are independent of the manufacturer’s organization and typically are paid on
commission, so a manufacturer does not have the fixed costs that are necessary to maintain a
full-time sales force. A manufacturer’s selling costs are based on the amount the sales agent