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END OF CHAPTER MATERIAL
Discussion Questions
16-1 Define personal selling and discuss its role in a company’s promotion mix. (AASCB:
Communication; Reflective Thinking)
Answer: Student answers will vary based on their personal response. Refer to the MyLab for an
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:
Compensation consists of four elements: a fixed amount, a variable amount, expenses, and fringe
benefits. The fixed amount, usually a salary, gives the salesperson some stable income. The variable
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 four basic
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 sales
16-3 To what extent have online and social media resources replaced salespersons? (AACSB:
Communication; Reflective Thinking)
Answer:
Students could debate in favor of the notion or against it. Social media, customer reviews, and
professional review sites as well as blogs and comments can, in theory, provide an unbiased view of a
16-4 What do you understand by the term “relationship marketing”? (AACSB: Communication)
Answer: Relationship marketing is a process or approach that aims to create a long-term relationship
16-5 What activities can be used in customer relationship building? (AACSB: Communication)
Answer:
The chapter outlines many of the different sales promotion tools that can be used to achieve this aim.
Key tactics can include building up networks of customers, maintaining frequent contact with
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:
Students’ responses will vary. Searching “free sales training” provides several sources of free training
opportunities. Students will likely have to register for the resources but they are free. For example,
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)
Answer: Student answers will vary based on their personal response. Refer to the MyLab for an
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, presentation and
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,
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 offers in the
app, go to the store and purchase the product, and then snap a picture of their receipt. Checkout51
credits the user’s account the value of the offer. For example, if there was a $5.00 rebate offer, the
SnipSnap (www.snipsnap.it) enables consumers to snap pictures of retailers’ coupons and redeem
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 phone’s
location). It can be used to send a message or offer to a consumer who is near a competitor’s location.
For an example of how Outback Steakhouse used geo-precision targeting, see
www.xad.com/press-releases/geo-conquesting-is-the-new-craze-in-mobile-advertising-according-to-t
he-xad-q2-2013-mobile-location-insights-report/.
For a good how-to brief, see Shannon E. Denison, “A Marketer’s Guide to Mobile Conquesting,”
ClickZ, April 2, 2014,
www.clickz.com/clickz/column/2337286/a-marketer-s-guide-to-mobile-conquesting.
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 salesperson, and the
customer. According to the text, sales force management is “planning, organizing, leading, and
According to the text, the goal of motivation is to encourage salespeople to work hard and
energetically toward sales force goals. If salespeople work smart and work hard, they will realize their
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 company’s printed
ethics code. Students’ research will provide a variety of supportive arguments such as the
following:
Sales and marketing include promoting your products and services to potential customers.
Ethical promotion portrays your offers honestly and accurately. Salespeople have to promote
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 the
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:
The workload method uses the following formula to determine the sales force size:
NC FC LC
NS= ————————
TA
where,
NS = number of salespeople
NC = number of customers
so,
1,000 4 2.5
NS = ——————— = 8 salespeople
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:
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:
Total costssalesforce = ($40,000 x 8 salespeople) + (0.02 x sales)
Set the two equations equal to each other and solve for sales:
Total Costssalesforce = Total Costssales agents
Therefore,
$320,000
0.03
If Wheels expects sales to be greater than $10,666,667, then using its own sales force will be more
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 sales representative is an employee of the company, and the company incurs all the
costs of employment. Even if a sales representative only receives compensation based on commission,
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.
Before – product sales force structure with sales people assigned by division and product line.
After – market sales force structure with sales people assigned to clients and selling all SunGard
16-19 What are the positive and negative aspects of SunGard’s new sales force structure?
Positive – As Neve and Powell point out, the new sales force structure is designed to maximize
Negative – There is always resistance to major change. This new structure requires sales reps with
16-20 How would the challenges faced by SunGard have impacted sales productivity had the company
not initiated its transformational plan?
The company was doing well. This is a case where top brass initiated major change before they were
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
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 faced before
those problems had become extreme or insurmountable. The case points out the difference between
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?
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)
a. What does Salesforce look for in its salespeople?
b. What tools does it provide them to ensure they succeed?
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:
Step 1: Prospecting and Qualifying. In this case, there is no prospecting involved. The potential
Step 2: Preapproach. The salesperson has the responsibility of preparing his/her initial greeting
Step 3: Approach. The opening lines are important. It is necessary not only to build an immediate
Step 4: Presentation and Demonstration. The salesperson should have their method of
Step 5: Handling Objections. If the (potential) buyers believe the price is too high, the salesperson
can demonstrate how their financing options can lower the monthly amounts to a reasonable
Step 6: Closing. This is the moment where it is important for our salesperson to ask for the sale.
Step 7: Follow-Up. The sale is never over. It is important to remain in contact with the buyer as
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:
Death of a Salesman deals only tangentially with sales and the selling process. But it does so
Willy Loman, a salesman based in New York City, returns home from a trip to Yonkers where his
Willy is reminded of his brother Ben. Through flashbacks, Ben begins a dialogue with Willy, who
Throughout the play, Willy has these imaginary conversations with Ben, during most of which he
asks Ben how he made his millions. Ben had tried to go to Alaska to get involved in logging but
Willy feels that he can also become successful by luck alone.
Whenever Willy asks Ben (in his flashbacks) how he made his millions, Ben only answers “When
In addition, Willy worked for a man who only had to wake up in the morning, put his slippers on,
This philosophy does not work out for Willy.
The primary point to drive home is that success in selling does not come by accident. Professional
