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2. How does Alison Capossela provide solutions for Xerox customers?
Answer:
3. Why is the Xerox training program so important to the company’s success?
Answer:
Epilogue
Xerox experienced extraordinary growth for many years, based on the success of its
flagship product—the photocopier. Despite substantial investments by Xerox in new printing
device innovation, demand began to decline as consumers shifted to electronic copies of
documents. The company appointed Anne Mulcahy as CEO in 2001. She quickly used her
experience as a Xerox sales representative to turn the company around by focusing on customer
relationships. She increased sales to $15 billion in 2009 when she became Chairman of the
Board and appointed Ursula Burns as the new CEO. When Burns took over the Chairman
responsibilities also a year later, Mulcahy commented, “I turn the company over to a gifted
leader at a point when our strategy is sound, our financial position is strong, and our
opportunities for growth are considerable.”
Today, Xerox is facing growing competition from other device manufactures, tablet and
e-book manufactures, and cloud solution providers. Consumer demands for printing, copying,
and information management are becoming increasingly sophisticated. In response, Xerox
continues to manufacture hardware, but it is also expanding its services. According to one Xerox
executive, “Just a couple of years ago, 80% of our revenues would come from selling hardware
Chapter 20 – Personal Selling and Sales Management
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and 20% from providing services. Now it is split equally.” The company’s strength is in its
expertise in office hardware combined with business processing solutions services.
Xerox is also expanding into emerging markets such as Brazil, Russia, India, and
Mexico. Mid-sized countries such as Turkey, Poland, Chile, Peru and Columbia represent
opportunities too because organizations in the public sector of those countries are embracing new
information technology. One indication of Xerox’s success is the increase in its stock price. It
recently reached its highest level in nearly three years!
Some interesting facts about Xerox include:
• Number of federal, state, county and local government clients: 1,700.
• Number of contact center interactions each day: 1.6 million.
• Typical document-related cost reduction for clients: 30%.
• Headquarters: Norwalk, CT.
• Previous name: Founded in 1906 as the Haloid Company. Changed its name to
Xerox in 1961.
20–42
TEACHING NOTE FOR APPENDIX D CASE D-20
Morgantown Furniture: Making Promotion Trade-offs
Synopsis
In its promotional plan, should Morgantown Furniture stress a “push” or a “pull”
strategy? Cast in terms of a disagreement between the firm’s advertising agency (Kelly, Astor,
and Peters or KAP) and Andrew Reed, Morgantown’s vice-president of marketing and sales,
this case raises the question of how to design a promotional plan including objective setting
and budgeting. KAP wishes to increase the budget for consumer advertising in magazines
while holding other expenditures constant. Andrew Reed disagrees and favors putting money
into hiring more sales people and increasing cooperative advertising and trade advertising
(booklets, point-of-purchase material, etc.). Students assess the purchase decision process for
furniture, identify promotional objectives, and allocate personal selling and advertising efforts.
Teaching Suggestions
Instructors should highlight the roles of different kinds of promotion in stimulating
demand at the retail and consumer level. The importance of “push” versus “pull” promotional
strategies is a critical issue. Furthermore, an opportunity exists for instructors to help students
view promotion as a “communication device” at different stages of the consumer furniture
buying process and recognize the importance of personal selling, sales promotion, and
advertising at each stage. This case is best suited for that portion of the course that emphasizes
promotional planning. Therefore, the case is typically assigned after chapters 17, 18, and 19
have been discussed. Chapters 5 and 6 lead nicely into the discussion, given the strong
behavioral emphasis in the case.
Answers to Questions
1. How might you describe furniture buying using the purchase decision process
described in Chapter 5?
Answers:
Four aspects of the buying process deserve consideration:
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2. How might each of the elements of the promotional program influence each stage in
the purchase decision process?
Answers:
3. What should Morgantown’s promotional objectives be?
Answer:
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4. How many salespeople does Morgantown need to adequately service its accounts?
Answers:
a. This question will require students to compute sales force size using the workload
formula described in Chapter 20.
[See AppD20MorganFurnQ4.xls]
In short, Morgantown is not adequately servicing accounts given its salesforce
objectives and a salesforce composed of only 10 people.
c. Since Morgantown will be adding 30 new accounts this year, the need for 16
salespeople becomes very real:
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[See AppD20MorganFurnQ4.xls]
d. Given that 6 additional salespeople are needed at a base salary of $50,000 per year, then
$300,000 will be needed to pay these salespeople (6 salespeople × $50,000 base salary
= $300,000). This figure compares with the $300,000 incremental increase in the
promotional budget scheduled for next year.
5. Should Morgantown Furniture emphasize a push or pull promotion strategy? Why?
Answers:
Epilogue
Edward Meadows, president of Morgantown Furniture, decided that the sales effort, trade
advertising, and cooperative advertising was in most need of attention. The final budget
allocation was:
Budget Allocation:
• Sales Expense & Administration $772,500
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FIGURE A
Descriptive Model of Furniture Purchase Process and Possible Information Sources
Problem Recognition
a. Change in Family Life Cycle
b. Need for Change
c. Change in Financial Status, etc.
Initial Information Search
Wife asks: Where is it
What is available? available?
Shelter Mags.
Store Advertising
Formal/Overt Information Search
Visit Store #1
a. Meet salesmen/discuss furniture
b. Obtain information about furniture
(Furniture Mfgr. Brochures?)
c. Examine variety of merchandise
Visit Store #2, 3+
a. Same as above
b. Same as above
Morgantown
Furniture
Salesmen
Alternative Evaluation
a. Evaluate furniture seen
b. Discuss with spouse
c. Rethink furniture
Husband and Wife visit
select stores with specific furniture
Visit Store “X”,
meet salesmen, discuss furniture
Purchase
Decision
Buy
Don’t Buy
Shop around
20–48
ICA 20-1: IN-CLASS ACTIVITY
Students’ Perceptions of Selling
Learning Objective. To have students investigate the stereotypes of sales and selling.
Nature of the Activity. Using a “quick quiz” on sales and selling, have students
compare their perceptions and ideas about selling to actual practice.
Estimated Class Time and Teaching Suggestions. About 10 minutes using active class
participation.
Steps to Teach this ICA.
1. Explain that the media have reinforced negative stereotypes of personal selling held
2. Ask students to describe what salespeople do as part of their selling jobs.
3. Ask students if any of them plan on a sales career. For those who say, ‘Yes,’
5. Respond to the students’ comments with the “key observations” from the Sales and
Selling Quiz: Some Key Observations:
a. Sales people push products on people.
Observations. The most successful companies and sales forces increasingly are
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b. Anybody can get a job in sales. You don’t need a degree to work in sales.
Observations. Most companies go to colleges to recruit members of their sales
force, especially if they require good communications skills and an ability to
understand the key features or characteristics of what they are selling.
c. Sales people are born, not trained.
Observations. Knowledge is key for a successful sales person. This means more
than valuable sales skills such as listening and probing to understand needs.
It means product, industry, and customer knowledge. Consider the following:
“Our sales people have to know the big picture. Sometimes that means
legislative issues, politics, and trade. We want them to be the best source of
information in the industry.”—Martin L. Andreas, Senior Vice President,
Archer-Daniels-Midland.
Marketing Lesson. Sales and selling will continue to change. After all, if you were a
buyer, would you want to waste your time talking to the stereotypical pushy, obnoxious sales
person? Selling will continue to emphasize “finding solutions to customers’ problems.”1
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SALES AND SELLING QUIZ
Are the following statements
“Fact” or “Fallacy?”
A. Sales people push products on
people.
B. Anybody can get a job in sales.
You don’t need a degree to
work in sales.
C. Sales people are born, not
trained.
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ICA 20-2: IN-CLASS ACTIVITY
Personal Selling Process: Direct Selling of the Mary Kay® Lip Protector
Learning Objectives. To have students engage in a segment of the personal selling
process known as direct selling to illustrate one kind of sales job many of them can consider
while in college or after graduation.
Nature of the Activity. To have students participate in the direct (personal) selling
process for one of Mary Kay’s products.
Estimated Class Time and Teaching Suggestions. About 20 minutes, taught in class in
6-person teams; 25 minutes if ABC Nightline video is viewed.
Materials Needed. Copies for each student of the Mary Kay Direct (Personal) Selling
Process handout.
Steps to Teach this ICA.
1. OPTIONAL: Bookmark the following websites on your classroom computer:
a. The “Mary Kay Video” on Mary Kay’s YouTube channel
2. Give the following mini-lecture on the direct selling industry:
“According to the Direct Selling Association (DSA), ‘Direct selling is the sale of a
consumer product or service, person-to-person, away from a fixed retail location, and
marketed through independent sales representatives.’2 Direct selling is a subset of
direct marketing: the former involves face-to-face interpersonal relationships whereas
the latter involves more impersonal contact via telephone, catalogs, and direct mail.
The DSA estimates that direct sales reached almost $31.6 billion in the U.S. in 2012.
Consumers can buy many products through direct selling. In fact, about 75 percent of
consumers have purchased offerings through direct selling.3
With direct selling, consumers can:
a. See the product demonstrated or try it before they buy it.
b. Ask more in-depth questions about the offering.
c. Receive more personalized attention given by the direct sales representative.
d. Appreciate the convenience of in-home or in-office shopping instead of going
to a retail outlet.
e. Enjoy the social aspect of shopping with friends in a more intimate setting.
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You may be familiar with notable direct sellers Mary Kay, Tupperware, Avon, Fuller
Brush, Pampered Chef, Cutco, etc. The most popular direct selling methods that
3. Click on the Internet icon “Mary Kay Video” [TRT = 1:06] to view a recent video
about the opportunity to become a Mary Kay Independent Beauty Consultant. Ask
students what they think of the ad.
4. Give the following mini-lecture on Mary Kay:
“In 1963, Mary Kay Ash founded Mary Kay Cosmetics in Dallas, TX with $5,000
in savings. Today, Mary Kay is one of the largest direct selling firms in the
world, selling its 200-plus skin care, make-up, body, fragrance, and sun care
products worldwide. In 2013, Mary Kay generated sales of $3 billion from 3
million Independent Beauty Consultants globally. About 1,500 independent
salesforce members have earned the right to drive a Mary Kay Pink Cadillac!4
Mary Kay Independent Beauty Consultants come from all gender, age,
ethnic/race, and income groups. They want to sell Mary Kay products to:
(1) supplement their incomes, (2) buy the products they sell at a discount,
(3) meet others in business and social settings, and (4) be recognized for
achieving success. As the video indicates, Mary Kay Independent Beauty
Consultants one must have the following are key characteristics to be successful:
• Has an entrepreneurial spirit.
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5. Form students into 6-person teams, each representing a particular stage in the Mary
Kay direct (personal) selling process (but don’t tell them that at this point!).
Students on these teams will act as an Independent Beauty Consultant for the Mary
Kay Lip Protector Sunscreen SPF 15. [Yes, even the men—it will be good sales
practice for them!] Each student team’s tasks are to:
a. Identify the need or want that the Mary Kay Lip Protector Sunscreen SPF 15
product can satisfy.
b. Suggest ideas for each action to be taken for each stage of the direct (personal)
selling process for the Mary Kay Lip Protector Sunscreen SPF 15 product.
6. Pass out copies of the Mary Kay Direct (Personal) Selling Process Handout to each
student.
7. Mary Kay Lip Protector Sunscreen SPF 15. Briefly describe the product below:
“This little stick applicator contains a lot of protection. Exclusively formulated with
beneficial moisturizers and antioxidants, Mary Kay Lip Protector Sunscreen SPF 15
helps keep lips protected and guarded from the drying effects of sun and wind. It
8. Describe the setting for this activity:
“For the next few minutes, each person in your team will be responsible for one stage
9. Give students the following instructions:
“In your teams, each person must now choose one of the six stages of the direct
(personal) selling process that he or she will ‘role play’ as the Mary Kay Independent
10. Have all student teams complete the Mary Kay Direct (Personal) Selling Process
Handout. Remind the teams that they must:
a. Identify the needs or wants of their prospective customers that Mary Kay Lip
Protector SPF 15 product can fulfill.
20–54
11. Spend 8 minutes and ask a representative from 2 or 3 teams each to share their
(1) needs/wants assessment and (2) suggestions regarding the actions to be taken for
the specific stage of the direct (personal) selling process listed below:
• Prospecting. Person 1—Direct selling suggestions. Assume prospects at the
house party were identified through a response to TV advertising and then went to
• Approach. Person 3—Direct selling suggestions. Need to make a great first
impression, cultivate a warm, business-like relationship, reference common
acquaintances and interests, conduct a product demonstration, leave a brochure or
other sales materials, allow prospect to try the product, etc.
• Presentation. Person 4—Direct selling suggestions. Use suggestive selling,
focus on needs/wants (to protect one’s lips from the damaging effects of the sun,
such as premature aging, skin cancer, dryness/chapped lips, etc., compare the
benefits to the cost, probe by asking questions then listen and act on the
inform her about new products she might be interested in, etc.
Marketing Lessons. Marketers use the direct (personal) selling process to develop
satisfied, long-term customer relationships. When executed properly, it leads to satisfied
customers who may generate additional sales through increased sales and referrals, which leads
to the first stage of the process. Also, in the case of Mary Kay, some customers may become
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MARY KAY DIRECT (PERSONAL) SELLING PROCESS HANDOUT
(1) Needs and wants fulfilled with the Mary Kay Lip Protector SPF 15 product:
________________________________________________________________________________
STAGE
SALES OBJECTIVE
(2) IDEAS TO MEET OBJECTIVE IN THE
DIRECT (PERSONAL) SELLING PROCESS
Prospecting
Search for and
qualify prospects
•
•
•
Preapproach
Gather information
and decide how to
approach the
prospect
•
•
•
Approach
Gain prospect’s
attention, stimulate
interest, and make
the transition to the
presentation
•
•
•
Presentation
Begin converting a
prospect into a
customer by
creating a desire for
the product or
service
•
•
•
Close
Obtain a purchase
commitment from
the prospect and
create a customer
•
•
•
Follow-up
Ensure that the
customer is satisfied
with the product or
service
•
•
•
Chapter 20 – Personal Selling and Sales Management
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Connect Application Exercises
Application Exercise 1: Personal Selling Process
Activity Summary: In this case analysis, students apply the personal selling process to new
home sales. Students review the personal selling process and learn about Pulte Homes’ history.
After reviewing the mini-case, students answer five questions covering the stage of the personal
selling process and presentation formats.
Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)
Topic: Steps in the Personal Selling Process
Learning Objective LO 20-03 Explain the stages in the personal selling process.
AACSB: Analytical Thinking
Blooms: Apply
Difficulty Level: 2 Medium
Follow-Up Activity: Instructors could divide the students into pairs, assigning one student to be
the new home seller and the other to be the new home buyer. Provide the students with a brief
description of the house/neighborhood they are selling for (suggestion: pull an actual new home
Application Exercise 2: The Many Forms of Personal Selling
Activity Summary: In this click and drag activity, students are provided with six forms of
personal selling (outside order taker, inside order taker, outside order getter, inside order getter,
missionary sales, and sales engineer). Students drop the appropriate job description (salesperson
visits, sales clerks, finds and closes, finds and closes by phone, perform promotions, identifies
problems) and example job (Frito-Lay salesperson, Kohl’s cashier, Xerox rep in DC, Ford
salesperson, Plavix rep, Dow Chemical rep) onto the correct form of personal setting. Students
receive hints as they mouse over the job description and example job.
Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)
Topic: Define Personal Selling
Learning Objective LO 20-02 Identify the different types of personal selling.
AACSB: Analytical Thinking
Blooms: Apply
Difficulty Level: 2 Medium
Follow-Up Activity: Instructors could create two sets of cards, one with the forms of personal
selling (outside order taker, inside order taker, outside order getter, inside order getter,
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Application Exercise 3: Sales Management Process
Activity Summary: In this click and drag activity, students are given the three stages of the
sales management process (sales plan formulation, sales plan implementation, and salesforce
evaluation) as the drop areas. The clickable items representing sales tasks (setting objectives,
organizing the salesforce, developing account management policies, salesforce recruitment and
selection, salesforce training, salesforce motivation and compensation, quantitative assessment,
behavioral evaluation) provide students with hints as they mouse over the item. Students drop the
sales tasks into the correct stage of the sales management process.
Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)
Topic: Functions of Sales Management
Learning Objective LO 20-04 Describe the major functions of sales management.
AACSB: Analytical Thinking
Blooms: Apply
Difficulty Level: 2 Medium
Follow-Up Activity: Instructors could ask students to imagine that they are sales managers and
need to provide year-end feedback to their salesforce in an industry of choice. Using the
Application Exercise 4: Xerox: Building Customer Relationships through Personal Selling
Activity Summary: In this 11-minute video, students learn about the history of Xerox and the
role personal selling has played in its success. After watching the video, students are answer five
questions related to personal selling, presentation formats, handling objections, salesforce
organization, and sales management.
Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)
Topics: Define Personal Selling, Steps in the Personal Selling Process, Functions of Sales
Management
Learning Objectives: LO 20-01 Discuss the nature and scope of personal selling and sales
management in marketing.
LO 20-03 Explain the stages in the personal selling process.
LO 20-04 Describe the major functions of sales management.
AACSB: Knowledge Application, Analytical Thinking
Blooms: Apply
Difficulty Level: 1 Easy, 2 Medium
Follow-Up Activity: Instructors could ask students to consider whether or not they would pursue
a job in sales. Have students list the character traits that they feel would be desirable in a
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Application Exercise 5: iSeeit! Video Case: Business to Business Marketing Strategy
Activity Summary: In this straightforward whiteboard animation video, students learn about the
role personal selling plays in B2B sales between Hope Springs and the Coffee Collective. After
watching the 3-minute video, students are asked three follow-up questions covering relationship
selling and the forms of personal selling.
Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)
Topic: Define Personal Selling
Learning Objectives: LO 20-01 Discuss the nature and scope of personal selling and sales
management in marketing.
LO 20-02 Identify the different types of personal selling.
AACSB: Knowledge Application
Blooms: Understand
Difficulty Level: 2 Medium
Follow-Up Activity: Instructors could ask students to assume the role of the salesperson at Hope
Springs and the role of the customer at the Coffee Collective. Provide the students with a
scenario in which Hope Springs is attempting to get a buying commitment of 20 cases a month
Multiple rounds can be role-played with students switching between buyer and seller roles.
Analytics Exercise 6: Marketing Metrics: Evaluating Sales Force Performance
Activity Summary: In this analytics activity, students read a mini-case about a business to
business technology solutions company supported by four salespeople. The sales manager is
tasked with evaluating his salesforce using a number of metrics including sales revenue, selling
expense, gross margin, profit, average order size, new customers, customer satisfaction, and
number of sales calls per month. Students answer five multiple choice questions in which the
students utilize the spreadsheet to evaluate the salesforce using the metrics given.
Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)
Topic: Marketing Analytics
Learning Objectives: LO 20-04 Describe the major functions of sales management.
AACSB: Analytical Thinking
Blooms: Analyze
Difficulty Level: 2 Medium
Follow-Up Activity: Instructors could ask the students to assume the role of the sales manager
by writing a performance review for each of the four salespeople. As part of the review, students
should identify the strengths and weaknesses of the salesperson’s performance as well as provide