Sales Management 
Teamwork, Leadership and Technology
 

Sales Management

Prof. Charles Futrell has been writing sales textbooks for many years and now his textbook on sales management is freely available in PDF format. The book has 16 chapters and covers all the major issues in managing a sales force.

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Contents  in  Brief 

Chapter 1 Sales Management: Its Nature, Rewards, and Responsibilities

Chapter 2 Social, Ethical, and Legal Responsibilities of Sales Personnel

Chapter 3 Building Relationships through Strategic Planning

Chapter 4 The Market-Driven Sales Organization

Chapter 5 Forecasting Market Demand and Sales Budgets

Chapter 6 Design and Size of Sales Territories

Chapter 7 Sales Objectives and Quotas

Chapter 8 Planning for and Recruiting Successful Salespeople

Chapter 9 Selection, Placement, and Socialization of Successful Salespeople

Chapter 10 The Management of Sales Training and Development

Chapter 11 Contents of the Sales Training Program: Sales Knowledge and the Selling Process

Chapter 12 Motivating Salespeople toward High Performance

Chapter 13 Compensation for High Performance

Chapter 14 Leading the Sales Team

Chapter 15 Analysis of Sales and Marketing Costs

Chapter 16 Evaluation of Salespeople's Performance

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Chapter Outlines

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Example Test Questions

Sales Management

Example Test Questions

Chapter 1

Question 1 :
The five functions of sales management are:
A. scheduling, organizing, selling, closing, and appraising
B. planning, training, selling, closing, and appraising
C. forecasting, motivating, selling, evaluating, and appraising
D. planning, staffing, training, leading, and controlling
E. planning, motivating, selling, evaluating, and revising

Answer : D

Question 2 :
To sales managers, ___________is the effort put forth by an employer to provide the salesperson job-related culture, skills, knowledge, and attitudes that result in improved performance in the selling environment.
A. staffing
B. leading
C. training
D. organizing
E. evaluating

Answer : C

Question 3 :
Organizational _________ is the degree to which the organization achieves a stated objective :
A. effectiveness
B. reliability
C. efficiency
D. validity
E. synergy

Answer : A

Question 4 :
The management function of _________ is primarily the province of top managers with time devoted to the function decreasing for middle and first-line managers.
A. organizing
B. staffing
C. planning
D. training
E. motivating

Answer : C

Question 5:
When a salesperson becomes a new manager, what kind of changes occur?
A. changes in relationships
B. changes in goals
C. changes in responsibilities
D. changes in satisfaction
E. all of the above are typical changes

Answer : E

Sales Management

Example Test Questions

Chapter 2

Question 1:
The text identified four main areas of responsibility an organization has to the various groups who have an interest in its activities. Which of the following is not one of those areas of responsibility?
A. economic
B. discretionary
C. technical
D. ethical
E. legal

Answer : C

Question 2:
Most sales managers operate at what level of moral development?
A. conscientious
B. principled
C. conventional
D. discretionary
E. preconventional

Answer : C

Question 3:
When a company takes proactive measures to ensure employees are not discriminated against, it receives the benefit of:
A. an image as a good employer
B. reduced legal fees
C. attracting good employees
D. less frequent recruitment efforts
E. all of the above

Answer : E

Question 4:
If a manufacturer requires that its wholesalers and retailers buy merchandise only from it, the contract is a/an _________ contract, and if the contract tends to lessen competition, it is prohibited under the Clayton Act.
A. reciprocity
B. product discrimination
C. exclusive dealing
D. wholesome
E. price discrimination

Answer : C

Question 5:
The most critical factor in improving the climate for ethical behavior in a sales force is:
A. local government action
B. fedral legislaton
C. the role of top-level managers in guiding the organization
D. hiring only ethical salespeople
E. consumer watchdog groups

Answer : C

Sales Management

Example Test Questions

Chapter 3

Question 1:
The company's mission, visions, values, objectives, strategies, and tactics are often referred to as a/an:
A. corporate culture
B. tactical statement
C. organizational culture
D. Gannt chart
E. strategic plan

Answer : E

Question 2:
For which of the following services is the service characteristic of fluctuating demand and perishability likely to have the LEAST affect?
A. restaurants
B. movie theaters
C. hair styling
D. house cleaning
E. life insurance

Answer : E

Question 3:
Which of the following is a general level of selling relationship that salesperson can develop with their customers?
A. transformational selling
B. partnering
C. co-oping
D. benefit selling
E. need-defining

Answer : B

Question 4:
Which of the following is characteristic of personal selling in contrast to advertising?
A. personal selling cannot arouse buying action or complete a sale
B. personal selling is a lower cost method of promotion
C. personal selling cannot deliver profitable sales
D. personal selling can be adjusted on the spot
E. personal selling reaches mass audiences very effectively

Answer : D

Question 5:
Objective based thinking should help you ( the sales manager ):
A. estimate market potential
B. reflect on your past accomplishments
C. establish corporate goals
D. determine your present situation
E. identify and prioritize those activities that are important

Answer : E

Question 1:
Which of the following sales job categories is less complex and less difficult than the others?
A. medical detailer
B. textbook salesperson
C. creative sale of tangibles
D. delivery salesperson
E. engineeering salesperson

Answer : D
 

Question 2:
_________ is the formal, coordinated process of communication, authority, and responsibility for sales groups and individuals.
A. organizational design
B. corporate interposition
C. organizational development
D. coordination channels
E. managerial development

Answer :A
 

Question 3:
Star Products Company has outgrown its simple organizational structure where all executives did a little bit of everything. The firm is being reorganized into functional groupings. Star's NEW structure is an example of a:
A. schematic organization
B. line organization
C. line and staff organization
D. heterogenous organization
E. staff directed organization

Answer :C
 

Question 4:
A Company with several separate and distinct markets accounting for major portions of its sales will often organize on the basis of these markets. This approach is called a:
A. product specialization
B. horizontal integration
C. geographical specialization
D. customer specializaton
E. functional specialization

Answer :D
 

Question 5:
Which of the following statements about coordination is true?
A. Coordination refers to the quality of collaboration across groups.
B. Without coordination, companies find it difficult to satisfy their customer needs.
C. Coordination is especially important in a global organization.
D. Coordination is required whether a company has a functional, divisional, or team organizational structure.
E. All of the above statements about coordination are true.

Answer :E
 

Sales Management

Example Test Questions

Chapter 5

Question 1:
When industry sales have a potential to increase, a useful market index should:
A. rise
B. fall
C. remain unchanged
D. report this increase only after it becomes a reality
E. do none of the above

Answer :A

Question 2:
The two categories of sales forecasting methods are:
A. the sales force composite and the executive opinion
B. test markets and trend analysis
C. correlation analysis and market factors analysis
D. the survey method and the mathematical method
E. the external method and the internal method

Answer :D

Question 3:
The _______ method of forecasting is based on polling actual and potential customers and asking them about their future buying plans.
A. Delphi
B. user's expectations
C. test market
D. naive
E. eyeball fitting

Answer :B

Question 4:
The impact of economic booms and recessions is accounted for in which component of time series analysis?
A. trend
B. erratic
C. cyclical
D. seasonal
E. horizons

Answer :C

Question 5:
________ is a statistical method used to incorporate independent factors thought to influence sales, such as population and advertising, into the forecasting procedure.
A. Exponential smoothing
B. regression analysis
C. the ratio method of forecasting
D. trend projections
E. correlation

Answer :B

Sales Management

Example Test Questions

Chapter 6

Question 1:
According to the text, the higher the similarity between the customer and the salesperson, the :
A. less likely the salesperson will have a long sales call
B. more likely the sales revenue will not support sales expense
C. more likely an initial sale can be made over the telephone
D. more likely the sales effort will be successful
E. less likely the sales manager should be concerned about time management

Answer :D

Question 2:
A firm that sells its product through only a limited number of intermediaries in a given market is using _______ distribution
A. exclusive
B. passive
C. intensive
D. aggressive
E. selective

Answer :E

Question 3:
The purpose of grouping accounts into categories such as key, regular, and unprofitable is to:
A. increase the profitability of a territory
B. standardize the selling approaches used by members of the sales force
C. insure equal time is spent with all of the firm's customers
D. insure equal treatment of the firm's prospects
E. do all of the above

Answer :A

Question 4:
To use the incremental approach to determine basic territories, a sales manager must know :
A. the likes and dislikes of the company's key accounts
B. how and when follow-up-service must be offered
C. the average purchase size of each customer
D. the point at which the product will become obsolete
E. all selling costs

Answer :E

Question 5:
Which of the following is an example of a basic routing plan?
A. criss-cross
B. spherical
C. rectangular
D. cloverleaf
E. all of the above are basic routing plans

Answer :D

Question 1:
A sales quota based on the number of dollars generated after subtracting the cost of goods sold is a _________ quota.
A. dollar sales volume
B. expense
C. net profit
D. gross margin
E. payback

Answer :D
 

Question 2:
_________ quotas typically should not be the basis for rewards. Rather they help the manager better understand why the salespeople did or did not meet their sales volume quota.
A. payback
B. net profit
C. activity
D. gross margin
E. project

Answer :C
 

Question 3:
Regional plans determine:
A. which regions, markets, and products to emphasize
B. the projected return on time invested
C. the dollar allotment for promotion
D. which accounts to emphasize and who is responsible for each account
E. all of the above

Answer :D
 

Question 4:
Salespeople to achieve a performance rating of excellence must excel in achieving three different types of annual objectives. These objectives are categorized as:
A. day-to-day, weekly, and monthly
B. regular, problem-solving, and innovative
C. star , cash cow, and problem
D. strategic, tactical, and operational
E. profit, activity, and sales volume

Answer :B
 

Question 5:
Which of the following statements about selling by objectives (SBO) is true?
A. The salesperson typically has no input in SBO.
B. The main drawback to SBO is the lack of connection between the objectives set and the rewards received by the salesperson.
C. SBO is simply a philosophy and is therefore difficult to implement.
D. Upper management typically retains the power to veto objectives set using SBO.
E. All of the above statements about SBO are true.

Answer :D
 

Question 1:
People planning involves:
A. the determination of the number and type of people to hire
B. the selection of intrinsic and extrinsic rewards
C. the implementation of leadership models
D. recruitment and selection
E. employee socialization

Answer :A
 

Question 2:
The primary or basic determinant of how many salespeople a firm will employ is the:
A. level of compensation offered
B. number of sales managers it has
C. number of people who apply for sales jobs
D. number of sales territories and sales positions
E. corporate human resources department

Answer :D
 

Question 3:
_________ convert job descriptions into qualifications the organization feels are necessary for successful performance of the job.
A. Job specifications
B. Task inventories
C. Strategic job designs
D. Personnel inventories
E. Job provisions

Answer :A
 

Question 4:
Which of the following is NOT an internal source of recruits?
A. walk-ins
B. friends of employees
C. transfers
D. former employees
E. former applicants

Answer :A
 

Question 5:
A realistic job preview :
A. sets initial job expectations too high
B. results in higher job satisfaction
C. results in frequent thoughts of quitting
D. better matches job to the company's needs
E. does not present the unattractive features of the job

Answer :B
 

Question 1:
PIP's are employee tests used to :
A. determine whether the applicant should participate in an assessment center
B. determine the level of sales training needed
C. used to measure one's personality, interests, and preferences
D. used to measure one's physical ability, income goals, and performance level
E. create a job description for future recruits

Answer :C
 

Question 2:
In a patterned or structured interview, the recruiter:
A. begins by asking open-ended questions to set the pattern
B. may not permit the applicant to qualify his/her answers
C. must be highly skilled to use this approach effectively
D. customizes the interview to the individual applicant
E. does not use preplanned questions

Answer :B
 

Question 3:
Postinterview activities include :
A. the recording of any promises made to the job applicant
B. a summarization of what will be discussed in the interview
C. the assessment of the standardized interview questions
D. a review of the information provided by the applicant's resume
E. employment tests

Answer :A
 

Question 4:
A/An ________ is a centralized organizational unit within a firm; its purpose is to evaluate all qualified applicants in a comprehensive and uniform manner.
A. polygraph
B. determination center
C. categorization department
D. assessment center
E. applicant mastery department

Answer :D
 

Question 5:
The ________ is established when the sales manager conveys to the new salesperson the belief that he/she will do well.
A. halo effect
B. mirroring phenomenon
C. Pygmalion effect
D. transition orientation
E. sales ego

Answer :C
 

Question 1:
During the planning period for sales training, the first step is organizational analysis. What is the next step?
A. salesperson analysis
B. product analysis
C. operational analysis
D. territorial analysis
E. needs assessment

Answer :C
 

Question 2:
Which of the following factors should be used in the selection of sales training method to be used with new and experienced employees?
A. the trainer's expertise
B. cost of training materials
C. training objectives
D. the number of trainees
E. all of the above

Answer :E
 

Question 3:
When does a plateau in the learning curve typically appear during the sales training process?
A. immediately after the conscious usage stage
B. during the natural usage phase
C. during the awkward usage phase following initial training
D. after the conscious usage stage begins but before the awkward stage is concluded
E. during the knowledge rejection stage

Answer :C
 

Question 4:
Which of the following is an advantage of decentralized training?
A. it costs more than centralized training
B. it permits salesperson to escape the humdrum job of selling for a short while
C. it is seldom used outside the training facilities
D. it costs less than centralized training
E. it limits the interaction between salespeople

Answer :D
 

Question 5:
The advantage of using _________ for evaluating sales training programs is their flexibility.
A. observations
B. questionnaires
C. on-site testing
D. role-playing
E. interviews

Answer :E
 

Question 1:
During the planning period for sales training, the first step is organizational analysis. What is the next step?
A. salesperson analysis
B. product analysis
C. operational analysis
D. territorial analysis
E. needs assessment

Answer :C
 

Question 2:
Which of the following factors should be used in the selection of sales training method to be used with new and experienced employees?
A. the trainer's expertise
B. cost of training materials
C. training objectives
D. the number of trainees
E. all of the above

Answer :E
 

Question 3:
When does a plateau in the learning curve typically appear during the sales training process?
A. immediately after the conscious usage stage
B. during the natural usage phase
C. during the awkward usage phase following initial training
D. after the conscious usage stage begins but before the awkward stage is concluded
E. during the knowledge rejection stage

Answer :C
 

Question 4:
Which of the following is an advantage of decentralized training?
A. it costs more than centralized training
B. it permits salesperson to escape the humdrum job of selling for a short while
C. it is seldom used outside the training facilities
D. it costs less than centralized training
E. it limits the interaction between salespeople

Answer :D
 

Question 5:
The advantage of using _________ for evaluating sales training programs is their flexibility.
A. observations
B. questionnaires
C. on-site testing
D. role-playing
E. interviews

Answer :E
 

Question 1:
_________ refers to the integrated pattern of the salespeople's values, ideas, beliefs, attitudes, customs, and any other capabilities and habits shared as a member of the sales group.
A. sales mix
B. intrinsic motivation
C. extrinsic motivation
D. motivational quota
E. sales culture

Answer :E
 

Question 2:
In making their decision about whether to expend extra effort to produce a higher level of sales, salespeople often ask themselves:
A. "What is my probability of success?"
B. "Will I be rewarded for success?"
C. "Are the rewards fair?"
D. "Are the rewards worth it?"
E. all of the above questions

Answer :E
 

Question 3:
Personal factors in the salesperson's behaviour model include:
A. organizational rewards
B. competition
C. the economy
D. energy
E. none of the above

Answer :D
 

Question 4:
Low motivator incentives:
A. prevent dissatisfaction
B. are used to produce positive attitudes
C. can encourage role ambiguity
D. cost very little to implement into a sales strategy
E. satisfy ego and self-actualization needs

Answer :A
 

Question 5:
Motivation :
A. is a cure-all managerial action plan for sure success
B. can cure problems brought about by ineffective training
C. cannot cure problems caused by lack of planning
D. is the best when delivered as a general method of improving sales rather than tailored to each individual's idiosyncrasies needs
E. works equally well with all salespeople

Answer :C
 

Question 1:
The pay differential among different sales levels within an organization is the:
A. pay equity
B. pay hierarchy
C. discretionary pay
D. wage structure
E. pay ratio

Answer :D
 

Question 2:
If Pete does not want the salespeople employed by his financial services company to use high-pressure selling techniques, he should use a ___________ plan.
A. straight commission
B. salary and commission
C. structured commission
D. straight salary
E. salary and bonus

Answer :D
 

Question 3:
A new firm with limited capital resources needing a large number of salespeople should adopt which method of compensating its sales force?
A. straight commission
B. salary and commission
C. structured commission
D. straight salary
E. salary and bonus

Answer :A
 

Question 4:
Productivity bonuses can be based on all of the following EXCEPT:
A. number of units sold
B. number of years with the company
C. gross margins on the products sold
D. number of new accounts acquired
E. sales performance appraisal by the sales manager

Answer :B
 

Question 5:
Which of the following is a type of fringe benefit a salesperson can legitimately expect to receive?
A. financial counseling
B. health insurance
C. unemployment compensation
D. retirement programs
E. all of the above

Answer :E
 

Question 1:
Legitimate power is based on an individual's:
A. ability to recommend punishment or bestow rewards
B. formal position in the organization
C. special skill regarding the task performed by followers
D. personality
E. ability to command respect and admiration from his/her subordinates

Answer :B
 

Question 2:
A leader who describes the duties and responsibilities of an individual or group is exhibiting :
A. achievement-oriented behavior
B. relationship behavior
C. instrumental behavior
D. task behavior
E. referent behavior

Answer :D
 

Question 3:
Ken is a seasoned veteran. He has worked as a sales rep for a pharmaceutical company for years and is highly self-motivated. Which of the four basic leadership styles from the leadership continuum should his sales manager use when dealing with Ken?
A. telling
B. controlling
C. delegating
D. persuading
E. participating

Answer :C
 

Question 4:
Throughout the joint sales call, the sales manager should be making notes about:
A. the salesperson's attire
B. the condition of the salesperson's car
C. the loudness of the salesperson's voice
D. how well the salesperson is groomed
E. all of the above

Answer :E
 

Question 5:
What leadership style would be appropriate for use with a new salesperson who has not yet developed high ability or high motivation?
A. tell
B. laissez-faire
C. delegate
D. participation
E. persuade

Answer :A
 

Question 1:
Sometimes averaging, summarizing, and aggregating data can cover up individual problem areas. This consequence is known as the:
A. 80/20 principle
B. profit margin analysis
C. profit/sales effect
D. iceberg principle
E. net sales volume analysis

Answer :D
 

Question 2:
Marketing cost analysis can serve as the basis for management decisions about :
A. salespeople
B. products
C. physical distribution
D. optimum order sizes
E. all of the above

Answer :E
 

Question 3:
Warehousing, advertising, general administration, and sales promotion are all examples of:
A. natural account
B. direct costs
C. functional marketing groups
D. marketing subsets
E. indirect costs

Answer :C
 

Question 4:
The full cost approach to determining profitability is also called the:
A. iceberg approach
B. contribution margin approach
C. ROI procedure
D. liquidity technique
E. net profit approach

Answer :E
 

Question 5:
Variance analysis would be most suitable for which marketing costs?
A. regional advertising expenses
B. sales force commissions
C. order filling costs
D. sales force salaries
E. variance analysis is equally suited for any marketing costs

Answer :C
 

Question 1:
Which of the following is one of the developmental purposes of performance appraisals?
A. promotions
B. penalties
C. compensation
D. goal setting
E. legal compliance

Answer :D
 

Question 2:
A salesperson should be evaluated at the end of every :
A. performance cycle
B. fiscal cycle
C. standard cycle
D. quota period
E. sales criteria period

Answer :A
 

Question 3:
The text identifies __________ as a performance appraisal form.
A. graphic appraisal scales
B. descriptive statements
C. behaviorally anchored rating scales
D. management by objectives
E. all of the above

Answer :E
 

Question 4:
What type of performance evaluation error is most likely to occur when the appraiser is using graphic rating scales?
A. central-tendency error
B. leniency error
C. recent performance error
D. halo error
E. masking-tendency error

Answer :A
 

Question 5:
When terminating an employee, a sales manager should:
A. provide a written explanation of severance benefits
B. encourage debate during the termination session
C. let a colleague be the first to tell the employee about his/her termination
D. refuse to provide any outplacement services
E. allow at least two hours for the termination session

Answer :A