Design and Size of Sales Territories
MULTIPLE
CHOICE QUESTIONS
6-1 A sales territory comprises:
A. all of the customers who do business with a
certain company
B. the salespeople who fall under the
jurisdiction of a particular sales manager
C. the actual sales made by individual
salespeople, not the sales potential
D. the group of customers assigned to a
salesperson
E. all of the geographic areas in which an
international company sells its product
C 120-121
6-2 Which of the following statements about sales territories is
true?
A. The establishment of sales territories
typically duplicates sales efforts to increase the probability of a sale.
B. Sales territories must have geographic
boundaries.
C. Sales territories are intended to insure
thorough coverage of the market.
D. A sales territory typically contains no
potential customers.
E. A sales territory is assigned to a sales
manager.
B 120-121
6-3
According to the text, one of the
reasons for establishing sales territories is to:
A. increase company costs and lower company
profits
B. improve customer relations
C. match the wants of the salesperson with the
needs of the customers served
D. facilitate utilization of the undifferentiated
selling approach
E. increase the salesperson's flexibility in
managing territorial coverage
B 120-121
6-4 Which of the following is NOT a typical reason for establishing
sales territories?
A. to better match salespeople to customers
B. to increase the usefulness of the canned sales
presentation
C. to improve customer relations
D. to evaluate performance
E. to obtain thorough coverage of the market
C 120-121
6-5 Which of the following is NOT given by the text as an important
reason for establishing sales territories?
A. to
establish each salesperson's responsibilities
B. to
obtain thorough coverage of the market
C. to
facilitate the implementation of SBO
D. to evaluate performance
E. to reduce sales expense
A 120-121
6-6 Which
of the following is NOT listed in the text as a reason to establish sales
territories?
A. to facilitate utilization of the
undifferentiated selling approach
B. to better establish a salesperson's
responsibilities
C. to aid in reaching the firm's objectives
D. to provide company salespeople the opportunity
to meet their personal needs
E. to provide the company's CEO with an easy
method to check on individual sales effort
D 121
6-7 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 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 it is that the sales manager will
be concerned about time management
C 121
6-8 Because
Louis Arkahian was raised on Long Island, he is:
A.
less likely to
make long sales calls
B.
more likely to
be successful selling in rural South Carolina than his more rural peers
C. more likely to be successful selling in New
York City than in rural Alabama
D. more likely to make an initial sales call over
the telephone
E. less likely to have developed good time
management skills
A 122
6-9 Which
of the following does the text give as one reason why having established sales
territories could be viewed as a disadvantage?
A. Salespeople may be more motivated if they are
not restricted to a certain territory
B.
The company may
be too large to be concerned with segmenting the market into sales areas
C.
Customer
goodwill is created when customers receive regular sales calls
D.
Personal
friendships can lower the average number of sales calls
E.
None of the
above is a disadvantage; sales territories are always a good idea
E 122
6-10 According
to the text, which of the following statements describes a reason why a company
might NOT want to establish sales territories?
A.
Management may
not want to take the time.
B.
Personal
friendship may be the basis for attracting customers.
C.
The salespeople
may be more motivated if they are not restricted by territorial boundaries.
D.
The company may
be too small to be concerned about segmenting the market into sales areas.
E. All
of the above are reasons for not establishing territories.
C 122
6-11 "To increase the number of weekly sales calls by ten
percent," is an example of a:
A.
product mandate
B.
derived
allocation
C.
sales objective
D.
future product
allocation
E.
product mandate
E.
E 123
6-12 Territorial boundaries can be based on:
A.
trading areas
B.
major accounts
C.
metropolitan
statistical area
D.
cities and ZIP
code areas
E.
any of the above
D 123
6-13
Territorial
boundaries are NOT based on:
A.
trading areas
B.
ZIP code areas
C.
states
D.
derived demand
E.
metropolitan
statistical areas
E 123
6-14 The nucleus around which sales territories are formed is:
A.
metropolitan
statistical areas
B.
product demand
C.
salesperson's
ability
D.
the interstate
highway system
E.
customers and
prospects
D 123
6-15 Which of the following is NOT identified by the text as one of
the main influences on a salesperson's work load?
A. intensity of market coverage
B. nature of the job
C. products sold
D. amount of compensation
E. whether the salesperson is expected to perform
any missionary selling
C 123
6-16 A
firm using _____ distribution sells its product in every outlet where final
customers might reasonably look for it.
A. exclusive
B. positive
C.
intensive
D.
penetrating
E.
selective
E.
C 123
6-17 For which of the following products would a
sales manager be most likely to use intensive distribution?
A. Bose automotive music system
B. decorative thermometers
C. Butterfinger candy bar
D. Betty Crocker brownie mix
E. magazine for American Legion members
E 123
6-18 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.
discriminating
E.
selective
E.
E 123
6-19 For
which of the following products would a sales manager be most likely to use
selective distribution?
A. Wrigley's chewing gum
B. Tiffany jewelry
C.
Elmer's rubber
cement
D.
People
magazine
E.
La-Z-Boy
reclining chair
E.
A 124
6-20
For which of the
following products would a sales manager be most likely to use exclusive
distribution?
A.
Rolls-Royce
automobiles
B.
Kraft macaroni
and cheese
C.
car insurance
D.
Marks-A-Lot
permanent markers
E.
Wrigley's
chewing gum
A 124
6-21 A
firm that sells its product through only one intermediary in a given market is
using _____ distribution.
A.
exclusive
B.
passive
C.
intensive
D.
aggressive
E.
selective
E.
C 124
6-22 Which distribution strategy would be
expected to require the greatest number of sales territories?
A.
exclusive
B.
aggressive
F.
intensive
G.
penetrating
E.
selective
A 124
6-23 To calculate the needed sales force size, a
sales manager can use the _____ approach and divide forecasted sales by the
average number of sales per salesperson.
A. breakdown
B. buildup
C.
target market
D.
top-down
E.
bottom-up
D 124
6-24 The first step to consider when determining a firm's basic
territories is:
A. determine the number of accounts for each
territory
B. determine the sales volume needed for each
territory
C. determine the total number of territories the
firm will have
D. forecast sales and determine sales potentials
E. select type of marketing research to use
C 125
6-25 There are six steps to consider when determining a firm's basic
territories. Once a sales manager has
forecasted sales and determined sales potential, he or she should:
A. determine if there are any key accounts
B. eliminate all unprofitable accounts
C. determine the sales volume needed for each
territory
D. determine the ideal number of sales
territories
E. calculate time required for each sales call
A 125
6-26 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. minimize draw accounts
C 125
6-27 Another
name for a company's extra-large accounts is:
A.
house accounts
B.
revenue accounts
C.
key accounts
D.
undifferentiated
accounts
E.
breakeven
accounts
D 125
6-28 The
letters in the acronym ELMS stand for:
A.
ethically-lead
marketing system
B.
economically
leading market segments
C.
every labor
makes sales
D.
extra large,
medium, and small
E.
ethics learned
equals more sales
E 125
6-29 The 80-20 principle:
A. is a territory management concept that favors
a salesperson putting 80 percent of his time on planning and 20 percent on
action
B. refers to the fact that eighty salespeople
require twenty sales managers to keep the appropriate 4-to-1 ratio of
supervisors to employees
C. is a territory management concept that favors
a salesperson putting 20 percent of her time on planning and 80 percent on
action
D. indicates that no matter how hard a
salesperson tries, 80 percent of customers' potential business ends up going to
competitors
E. refers to the idea that a small portion of a
firm's customers account for a large portion of its profitable sales
C 126
6-30 Usually the frequency of sales calls will increase as the:
A. complexity of the products sold decreases
B. number of orders placed diminishes
C. future sales potential increases
D. number of product lines sold decreases
E. size of the territory increases
E 126
6-31 Maeve
O'Reilly believes her company should increase the number of sales territories
it has. In fact, she thinks it should
keep adding territories until the last one added just covers the cost of adding
it. Obviously, this sales manager would
advocate the _____ method of revising her firm's number of territories.
A. intensive
B. ELMS
C.
average cost
D.
total cost
E.
incremental
E 127
6-32 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
A.
how and when
follow-up-service must be offered
B.
the average
purchase size of each customer
D. the point at which the product will become
obsolete
E. all selling costs
C 128
6-33
There are six
steps to consider when determining a firm's basic territories. In the final step, the:
A.
salesperson
draws a routing schedule
B.
sales manager
gets approval from top management
C.
territorial
boundary lines are drawn
D.
sales manager
calculates the sales forecast for each territory
E.
salesperson
visits each customer in the assigned sales territory
A 129
6-34 To
help the salespeople he supervises improve their effectiveness, Tyler Parks
works with them as they schedule their sales calls and determine the best
routes to use moving about their territories.
In other words, Tyler helps them develop their:
A. customer contact plan
B. break-even travel plan
C. key account analysis
D. routing reports
E. incremental territory analysis
B 129
6-35 As
part of his territory management activities, Elliot Rose plans to visit a
customer's place of business on a certain day and time. This activity is called:
A. account grouping
B. scheduling
C.
customer time
allocation
D.
territory sales
planning
E.
routing
D 129
6-36 _____ is the establishment of a travel
pattern to be used by the salesperson in working his or her assigned territory.
A. Account grouping
B. Account time allocation
C.
Territory sale
planning
D.
Routing
E.
Scheduling
A 129
6-37 A routing report:
A. states where the salesperson will be working
in the future
B. states where the salesperson worked on the day
for which it was submitted
C.
should be filled
out at the conclusion of each week
D.
is required by
most companies especially when overnight travel is not necessary to cover the
territory
E.
includes only
travel time
B 129
6-38 Last
night Aprille was preparing a statement to send to her sales manager that
showed she planned to be in Nashville on Monday and Tuesday, Murfreesboro on
Wednesday, Shelbyville on Thursday, and Tullahoma on Friday. Aprille was working on her:
A. time management form
B. routing report
C.
market coverage
D.
scheduling
portfolio
E.
sales coverage
summary
B 129-130
6-39 In
theory, a company gives its salespeople strict formal route plans to enable the
company to:
A.
deter
competitive salespeople from calling on customers
B.
establish
communications between management and the sales force concerning location and
activities of individual salespeople
C. set
aside time for cold calls
D. prevent
the salesperson from having to spend several nights a week on the road
E. do all of the above
D 131
(See Figure 6.2)
6-40 Which of the following is an example of a basic routing plan?
A.
criss-cross
B.
spherical
C.
rectangular
D.
cloverleaf
C.
all of the above
E 131
6-41 Which of the following statements about
using the telephone for territory coverage is true?
A. The telephone should never be used for
handling complaints.
B. It is appropriate to use the telephone to deal
with key accounts
C.
Assign large
accounts, those that contribute more than 5 percent of business, primarily to
telephone selling.
D.
Telephones
should not be used as sources of leads.
E. If possible, the telephone should be used to
replace some personal visits to geographically distant accounts
D 131
6-42 The
telephone can be used by salespeople to save time and money. Which of the following statements about its
correct usage is true?
A. Larger accounts can be more easily maintained
through telephone contact than by individual sales calls.
B. Smaller accounts cannot be easily serviced
over the telephone because sales to them need to be increased.
C.
Complaints
should always be handled in person.
D.
Telephone usage
can facilitate order processing.
E.
Telephones are
the best way to monitor a salesperson's activities.
D 132
6-43 _____
is the establishment of standards of performance for the individual territory
in the form of qualitative and quantitative goals.
A.
Incremental
implementation
B.
Workload control
C.
Territorial
assignment]
D.
Territorial
control
E.
Quota
aggregation
A 133
6-44 _____ are those left vacant until new salespeople are assigned
to them.
A. Open sales territories
B. Unassigned areas
C.
Undifferentiated
markets
D.
Vacant
territories
E.
Non-key areas
E 133
6-45
_____ refers to
the lost sales due to both the vacancy and the time required for a new
salesperson to produce at average.
A.
Orphaned selling
B.
Account orphans
C.
Market trickle
D.
Incubation time
E.
Sales leakage
E 133
6-46
The sales
manager for Minerva Publishing Company was concerned that there was no
salesperson in the company's Midwestern territory. Then when the company finally hired someone
to fill the position, it took another seven months before the territory was
producing the same revenue as the other territories in the firm. The sales manager was actually worried about:
A.
orphaned selling
B.
account orphans
C.
market trickle
D.
incubation time
E.
sales leakage
TRUE
FALSE QUESTIONS
T 120
6-47
A sales
territory comprises a group of products or a geographical area assigned to a
salesperson.
T 121
6-48 Fewer overnight trips and contacting the most productive customers
regularly can reduce sales expenses and improve a firm's sales-cost ratio.
F 121
6-49 Generally,
it is a good idea to maximize the difference between the salesperson and the
customers he or she serves because the differences help the salesperson control
the sales interview.
F 122
6-50 Even
small companies that do not segment their market into sales areas typically
find the establishment of sales territories necessary.
F 123
6-51 The design of a firm's sales territories has little influence on
its success in the marketplace.
T 123
6-52 Workload is the quantity of work expected from sales personnel.
F 123-124
6-53 A
salesperson for a convenience product would probably be able to cover a
geographically larger territory than would a salesperson for a specialty
product.
F 124
6-54 The
incremental approach to determine the number of sales territories needed by a
firm divides the total number of sales force calls by number of calls a typical
salesperson can be expected to make.
F 125
6-55 The ELMS system refers to a method of designing the most
profitable routing plans.
T 126
6-56 No territory should ever have more than one key account.
F 126
6-57 Another
name for the incremental method of determining sales territories is the bottom-
up approach.
T 128
6-58 When
assigning salespeople to particular sales territories, it is appropriate to
consider the personal desires of the salespeople themselves.
F 129
6-59 Scheduling refers to the travel pattern a salesperson uses in
working his or her territory.
F 129
6-60 A routing report is usually filed twice
each month.
T 130
6-61 The first step for a salesperson who is
attempting to do route planning is to plot the location of his or her customers
on a map.
F 130
6-62 The critical factor in route planning is to minimize the number
of miles traveled.
T 132
6-63 Territorial control is the establishment of
standards of performance for an individual territory in the form of qualitative
and quantitative quotas or goals.
F 133
6-64 If
set correctly the first time, territory boundaries can be left unchanged from
one decennial U.S. census to the next.
T 133
6-65 Sales
leakage refers to the lost sales due to both the territory vacancy and the time
required for the new salesperson to produce at average.
T 133-134
6-66 A
prime benefit of computerized territory design is the increased speed with
which options can be evaluated.
SHORT
ANSWER QUESTIONS
6-67
List the three
influences that determine workload?
Ans: the nature of the job, the intensity of market coverage, and the
type of product sold
Page: 123
6-68
What intensity
of market coverage would be used for light bulbs, chewing gum, nail clippers,
and candy bars?
Ans: intensive
Page: 123
6-69
What is the
first step in the process for designing sales territories?
Ans: forecast sales and determine sales potential
Page: 124
6-70
What is the
formula used in the breakdown approach to designing sales territories?
Ans: sales force size = forecasted sales divided by average sales per
salesperson
Page: 124
6-71
What is the
formula used in the incremental approach to designing sales territories?
Ans: total sales force customer calls divided by individual customer
calls equals the number of sales territories
Page: 126
6-72
What is the
primary reason why many sales managers find the incremental approach to
designing sales territories difficult to use?
Ans: the difficulty associated with calculating marginal costs
Page: 127
6-73
What the three
basic routing patterns used by salespeople?
Ans: straight-line, major-city, and cloverleaf
Page: 131
6-74
What causes sales
leakage?
Ans: open sales territories and the time required to get a new
salesperson to produce at average
Page: 133
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