978-0134492513 Chapter 16 Solutions Manual

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Discussion Questions

 16-1 Define personal selling and discuss its role in a company’s promotion mix. (AASCB:

Communication; Reflective Thinking)

16-2 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:

16-3 What is social selling, and how is it affecting the sales function in organizations? (AACSB:

Communication; Reflective Thinking)

Answer:

Ultimately, online and social media technologies are helping to make sales forces more

efficient, cost-effective, and productive. The technologies help salespeople do what good

salespeople have always done—build customer relationships by solving customer problems

—but do it better, faster, and cheaper.

16-4 Name and explain the steps in the selling process. (AACSB: Communication)

16-5 What is sales promotion? Discuss its growth as a short-term consumer promotion tool.

(AACSB: Communication)

Answer:

Critical Thinking Exercises

16-6 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:

16-7 You are the district manager for Pureation Beverage Group, a beer and wine distributor.

The company has experienced rapid growth and needs to add additional salespeople to its

team. Using the sales force management steps in Figure 16.1, discuss what needs to be done

to effectively manage your sales force. Support your position. (AACSB: Communication;

Reflective Thinking)

16-8 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, approach,

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

APPLICATIONS AND CASES

Online, Mobile, and Social Media Marketing: Snap It and Redeem It!

More than 320 billion coupons are distributed each year, with more than 90 percent of them

printed on paper. Consumers redeem only about 1 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 4

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 spinoff

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!

16-9 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

SnipSnap (www.snipsnap.it) enables consumers to snap pictures of retailers’ coupons and

redeem them at the store. Unlike Checkout51, it does not support manufacturers’ coupons.

Checkout51 also supports other types of price-based promotions, such as rebates.

16-10 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

For an example of how Outback Steakhouse used geo-precision targeting, see

Marketing Ethics: Walking the Customer

Employees at Staples face a challenging work environment. According to The New York Times,

Staples maintains an internal reporting system nicknamed “Market Basket” that carefully tracks

all equipment and protection plan add-ons that each sales staff member sells. Staples expects that

each salesperson will upsell each transaction by $200 with additional merchandise and warranty

contracts. Staples salespeople have been trained to push until they get at least three objections.

This is a classic hard-sell technique. Sales staff who do not meet their goals are coached. If that

doesn’t work, the underperforming employees face disciplinary action that can lead to more

night and weekend shifts, reduced work hours, or even termination.

Store managers also face intense scrutiny. They have received a clear message that to avoid

bringing down a store’s Market Basket averages, salespeople should “walk the customer” if they

cannot be successfully upsold. The customer is informed that the merchandise is not in stock and

then leave the store empty- handed. Salespeople have another option: They can escort customers

to an in-store kiosk to place an online order. Online orders are not subject to Staples’s key

performance indicators (KPI) and are not reported to a store’s Market Basket. (For more reading,

see David Haggler, “Selling It with Extras, or Not at All,”

www.nytimes.com/2012/09/09/your-money/sales-incentives-at-

staples-draw-complaints-the-haggler.html?smid=pl-share.)

16-11 A company’s sales force creates and communicates customer value by personally engaging

customers and building customer relationships. With its Market Basket approach, was Staples

focusing on building customer value and relationships? Explain.

Answer:

Companies can create goals that make sense at a corporate level. But when the goals are

counter to building strong customer relationships, everyone loses—the company, the

According to the text, the goal of motivation is to encourage salespeople to work hard and

16-12 Read Staples’s code of ethics at www.staples.com/

sbd/cre/marketing/staples_soul/documents/staples- code-of-ethics_english.pdf. Is the

situation outlined above consistent with Staples’s ethics policies? Is “walking the customer” a

violation of the ethics code? Provide specific examples.

Answer:

Most students will view “walking a customer” as having negative ethical implications. It

is not specifically addressed in the company code of ethics but is clearly against the

Sales and marketing include promoting your products and services to potential

At the National Ethics Association, we believe there is no easy, quick path to success.

Expedient sales practices might take you one step close to higher revenue but derail

Marketing by the Numbers: Sales Force Analysis

Wheels, Inc. is a manufacturer of bicycles sold through retail bicycle shops in the southeastern

United States. The company has two salespeople who 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. 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.

16-13 Refer to Appendix 2 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:

16-14 At what level of sales would it be more cost efficient for Wheels to use 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 over

independent sales agents? (Objective 2) (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

must set the costs equal to each other. Because variable costs are a function of sales, we can

solve for the sales level at which the two would be equal:

Company Case Notes

SunGard: Building Sustained Growth by Selling the SunGard Way

Synopsis

SunGard got its start in the late 1970s as a data recovery backup center for the Sun Oil Company

(Sunoco). That division was spun off into its own company and began servicing clients of all

types and sizes. SunGard is now one of the leading software and services companies. In the past

decade, SunGard has done well despite facing many industry challenges such as government

regulations and globalization. SunGard chose to radically transform its sales force and process

while times were good, rather than wait and be forced to do so. This case outlines the details of

that transformation.

Teaching Objectives

The teaching objectives for this case are to:

1. Allow students to consider the role of a company’s salespeople in creating value for and

building relationships with customers.

2. Help students understand how companies make sales force strategy decisions.

3. Give students exposure to the different aspects of sales force management.

4. Consider the dynamics of the marketing environment and their impact on sales

organizations.

Discussion Questions

16-18 Compare SunGard’s sales force structure before and after the transformation.

16-19 What are the positive and negative aspects of SunGard’s new sales force structure?

16-20 How would the challenges faced by SunGard have impacted sales productivity had the

company not initiated its transformational plan?

16-21 Identify specific ways SunGard’s transformational plan addresses the different steps of

managing the sales force.

As already noted, the transformational plan realigned the sales force structure. Given the

need for sales reps with different skills, a new-talent assessment tool was put into play for

recruiting. Given that sales reps would now need greater knowledge and expertise of the full

line of company products, the transformational plan also provided better training to that end.

The plan provided administrative help to allow salespeople to concentrate on becoming more

familiar with company products and to interface more with clients. Better tools were also

provided by way of Salesforce CRM and sales management software, giving sales reps better

access to data, tracking, and performance.

16-22 Will “Selling the SunGard Way” really work? Why or why not?

As pointed out in question 16-20, SunGard had the benefit of addressing the problems it

Teaching Suggestions

Most people don’t have much of an idea as to what B2B sales representatives do. Lead a

discussion based around the question, “What do B2B sales representatives do?” Let students

respond, then guide that discussion in a manner that directs it more toward developing

relationships with customers rather than just pushing product.

This case also works well with the customer value chapter (Chapter 1) and the marketing

strategy chapter (Chapter 2).

Go to mymktlab.com for the answers to the following Assisted-graded writing questions:

16-23 Describe the roles a salesperson and the sales force perform in marketing.

16-24 What is team selling, and why has it become more important? Are there any pitfalls to this

approach?

ADDITIONAL PROJECTS, ASSIGNMENTS, AND EXAMPLES

Projects

1. Take a look at Microsoft (www.microsoft.com). What is the role of the personal sales

force in that company? (Objective 1)

2. Examine Dell (www.dell.com). How is Dell’s sales force structured? (Objective 2)

3. List and describe each step of the personal selling process. Analyze your own potential as

a salesperson at each step of the process. What steps of the process would be the easiest

for you to handle and what steps the most difficult? Why? (Objective 3)

4. Consider your college/university. How could they effectively use sales promotion as a

recruiting tool? (Objective 4)

5. Think about the popular Web-based travel site, Kayak (www.kayak.com). How could

Kayak use event marketing to effectively promote its business? (Objective 4)

Small Group Assignments

1. Form students into groups of three to five. Each group should read the opening vignette

to the chapter on Salesforce. Each group should then answer the following questions and

share their answers with the class. (Objective 1, 2, and 3)

c. In addition to the

customer focus and

the strong sales

skills, what does Salesforce offer its clients? What are these products and services

valuable?

a. What does Salesforce look for in its salespeople?

b. What tools does it provide them to ensure they succeed?

2. Form students into groups of three to five. Each group should read Real Marketing 16.2:

Red Bull: The Mother of All Event Marketers. Each group should then answer the

following questions and share their answers with the class. (Objective 4)

a. What made the Red Bull approach such a unique promotion?

b. Can using social media to expand the reach of an onsite promotion such as the Red

Bull events be effective?

c. Does the Red Bull event marketing approach provide a method to bridge social media

and personal selling in a single event? Can it be applied to other promotions? Explain.

d. What kinds of other companies might be able to follow this approach and create

engagement and loyalty similar to what Red Bull has achieved?

Individual Assignments

1. The sales force serves as a critical link between a company and its customers. They

represent the company to customers and they represent customers to the company.

Explain how this would work for a company such as CDW. (Objective 1)

2. Recruiting qualified sales applicants is a difficult job for a sales manager. Review the

position openings for sales people at Boeing (https://jobs.boeing.com/), IBM

(www.ibm.com/us/) and Mars (www.mars.com/global/home.htm). See the requirements

for a sales position with each of these companies. (Objective 2)

Think-Pair-Share

Consider the following questions, formulate an answer, pair with the student on your right, share

your thoughts with one another, and respond to questions from the instructor:

1. What do you believe to be the major advantages and disadvantages of team selling?

(Objective 2)

2. What are the major forms of sales force compensation? Which do you believe to be

superior? Why? (Objective 2)

3. List and briefly describe the stages of the personal selling process. (Objective 3)

4. In the personal selling process, when would you consider the sell over? Why?

(Objective 3)

5. In the past, pharmaceutical companies have provided and paid for educational seminars

in exotic locations for physicians to which they were promoting a specific drug. The hope

was that the physician would then prescribe their medication. Do you believe this is

ethical? Why or why not?

Outside Examples

1. Consider that you are a salesperson for the local Toyota dealership. A young, newly

married couple enters the lot. Walk us through the personal selling process, using this

couple as your target. (Objective 3)

Possible Solution:

2. Rent the classic movie Death of a Salesman. This was originally a play on Broadway

authored by Arthur Miller, in 1949. It was later made into a successful movie. Watch it

and review the approach to selling discussed. (Objective 3)

Possible Solution: