Sales Management Exam Preparations PDF

LETABA TVET COLLEGE Page | 1 REPORT 191 – BUSINESS STUDIES ) SALES MANAGEMENT YEAR: 2/2023 LEVEL: N5 EXAMINATION PREPARATIONS  MODULE 1: NATURE AND EXTENT OF PERSONAL SELLING 1. Define personal selling Personal selling...

LETABA TVET COLLEGE Page | 1 REPORT 191 – BUSINESS STUDIES ) SALES MANAGEMENT YEAR: 2/2023 LEVEL: N5 EXAMINATION PREPARATIONS  MODULE 1: NATURE AND EXTENT OF PERSONAL SELLING 1. Define personal selling Personal selling is the oral and physical offering of a product by a salesperson, √to one or more prospective buyers with the purpose of identifying a problem or problems√ , which the product or service can Page | 2 solve, to close the sales transaction at a profit, for the business he represents √and to give after-sales services to the customer ‘s satisfaction√ 2. Define the role and importance of personal selling to the following. a. Economy Economic growth Optimum production Econ0mic welfare High standard of living Creating a demand for consumer goods b. Community Provision of information Introduction of new products and services Financing of community services General economic welfare of the society c. Business Serve as a source of income Promote profit and goal attainment Act as public relations officer Serve as a source of information Play a role in market research and advertising 3. Discuss the benefits MARKETINRESEACH Product planning Standardization and grading Price determination Distribution and transport Risk factor Advertising Promotion and sales 4. Disadvantages of personal selling Sales staff may not all give the same information about a product  It costs more money to promote goods or services using sales people than using an advert Businesses need to employ more people It takes the customer longer to hear about the business product if they use personal selling Page | 3 5. Advantages of personal selling Salespeople can provide information that is customized to suit each buyer Salespeople provide customers with more information than other forms of promotions Salespeople provide immediate feedback from face-face customer contact which is an important source of research Customers can find out what they need to know immediately and be persuaded to buy Customers are not easily distracted when a salesperson is doing a presentation 6. list four personality traits of a successful sales person creativity,resourcefulness and imaginativeness self motivation to attainment of goals persuasive and mentally sharp self confidence and self assuredness social person and service – orientated perseverance and drive observant and sharp-witted and studious adaptable and versatile reliable, responsible and punctuality empathy , tolerance and understanding 7. define the following terms a. job analysis is the systematic process of gathering data about the nature, scope and tasks related to a specific position or job b. job description it is an accurate, written description of the duties and responsibilities of the incumbent of a position c. job specification  is an explanation of the minimum personal characteristics, such as skills knowledge , experience, qualifications and abilities required by an incumbent to be able to fill a job 8. State six main sales tasks that a sales person must perform Page | 4 attaining customers through prospecting regular contact via e-mail/video conferencing and visits presentation and demonstration gaining information conveying information obtaining orders after sales services 9. State three aspects that a job description will cover JOB TITLE Whom to report to Work summary Duties/responsibilities Product to be sold Place/ area/territories 10. List the aspects of physical image that are important when dealing with customers Personal neatness and attire Appearance Good health Manner and habits Use of voice 11. Name the 4 p’s of marketing PRODUCT PLACE PRICE PROMOTION 12. list the steps in the selling process a. Prospecting b. Pre-approach to sales presentation c. The approach to the sales presentation d. The sales presentation  e. Handling objections f. Closing the sale g. After-sales service 13. Name four areas of knowledge that should be possessed by sales people to function effectively Page | 5 Knowledge of the market Industry/ company Competitors Knowledge of product 14. LIST the sources of knowledge available to sales person Experience gained in practice is the most important Training programmes Internet Mentor Local chamber of commerce Sales manuals, portfolios Sales meetings Educational institution Trade shows and exhibitions, Other sales people The library 15. Discuss the different aspects of product knowledge that are important to a salesperson Physical characteristics The sales person must be able to describe his product’s main features and the needs it satisfies. He must have knowledge to convert thi features into benefits for the customers Product ranges The sales person must also be knowledgeable about the composition of his product ranges and when and why the product range was extended. Matters such as specialized advantages when one product is sold Product support The sales person must know all about the afre-service the business offers. Matters include product guarantees, the terms and handling complains  Production methods The salesperson‘s knowledge must extend beyond the materials in the product. A prospective buyer will be impressed if the sales person also knows the specific techniques use in the manufacturing process Page | 6 Product uses The more uses the salesperson can establish for his product, the more opportunities he has to suit the use to a specific need of a prospective buyer 16. Explain what company/industry knowledge the salesperson should have. Is the business market local/national/interntional/combination History of the industry Market growth and profit potential of the industry What current events could affect your industry Size and trends of the industry Future tendencies of the industry What government regulations currently affect the industry His business market share and competitive advantages in the industry Is the industry seasonal? MODULE 3 SALES FORECASTING 1. Explain how you can use the following methods of forecasting: i. Delphi technique It uses the opinions of the executives without face to face discussions Opinions are given anonymously. This gives more accurate forecast than the jury of the executives The forecaster will take the predictions of each executive member and combine them into an anonymous summary The process is repeated several times until a consensus is reached ii. Sales force composite It uses the opinions of the sales force about the future sales Each sales person project a number he thinks he will make during the forecasted period Salespeople will use previous sales figures as well as their experiences in making their call 2. Give TWO advantages of each of the following i. Delphi technique Members stay anonymously Independent judgement are reached by all individuals Page | 7 It is more scientific and systematic than jury of the executive opinions because the executive do not communicate with each oth It minimizes the effect of group dynamics ii. Sales force composite The knowledge and expertise of the people closest to the customer are used The sales people are aware of trends, buying motives and buying behavior of customers The sales force is under more pressure tom make the sales forecast happen Sales people have greater confidence in forecasts, quotas and budgets because they also had an input 3. Give TWO reasons why the Delphi technique is used rather than the jury of the executive opinion method The Delphi technique is more scientific and systematic than Jury of the executive opinion, because the executives do not communicate with each othersand their opinions are systematically processed to develop a consensus There is no dominat person and no group pressures that influence one another 4. Name the advantages of the Users’ Expectations approach as a forecasting method. Forecasts are determined by the actual product users It is relatively fast and inexpensive when only few customers are involved Useful in forecasting new-to-the market products Management can get direct feedback of the thinking of the people in the market Detailed product usage information can be obtained 5. Clearly distinguish between market potential and sales potential of a product. Use the call phone industry in south Africa as an example to motivate your answer.  Market potential – refers to the total expected sales for a given product or service for the entire industry in a specific period of time Sales potential or market share – refers to the market potential that an individual company can reasonably expect to achieve Page | 8 6. Discuss the jury of Executive Opinion as a method to forecast Toyota’s sales Toyota top executives will meet and offer their individual opinions on the forecast for the period in question. Individual opinions may be averaged or consensus reached on the number of executives that agree. It is a subjective method , seeing that each person gives his opinion based on his own experience. It is very useful in situations where no previous data is available. 7. Discuss the sales force composite method to forecast sales figures. Also refer in the answer to the advantages of the method. This method is based on an analysis of opinions and judements of a company ‘s entire sales force. Salespeople provide their own forecast for each product by customer in their sales territories. Salespeople interact with customers on a daily basis so they have expert knowlwdge of their customers, businesses, needs and expectations which is vital information. This individual estimates are then combined and modified by management to produce a company sales forecast Advantages Draws on the knowledge and expertise of salespeople who are slode to the customers and know their needs, problems, and expectations It motivates the sales force to make a forecast happen because they developed it themselves Salespeople are aware of the competitive activities and can advise management to adjust accordingly Salespeople have reater confidence in forecasts 8. List another four method, except the Delphi technique ‘ that the managers of Adidas can use to forecast the sales of their products in south africa. Jury of the executive method Sales force composite User’s expectation  Time series analysis Indicators 9. Name and explain five factors influencing the selection of a forecasting method for Builder’s Warehouse. Page | 9 Type of forecasting Amount of time available for forecasting The nature of available data How accurate the forecast must be What resources are available M0DULE 4: SALES TERRITORIES 1.* Name five benefits derived from establishing sales territories. Ensure proper market coverage Workload equalization Increases salespeople s’ morale Better evaluation and control over sales force Better analysis and planning of sales activities Sales are improved Reduce conflicts and disputes Improves/ strengthens customer relations Reducing selling costs Better coordination between selling and other marketing activities 2. List the five steps (procedures) in designing sales territories. Select the geographical control unit Analyse salespeople ‘s workload Determine sales potential in each control unit Determine the basic territories Assign sales people to territories 3. List five factors influencing sales territories. Nature of the sales job Stage of the market development Intensity of market coverage Intensity of competition  Intensity of competition 4. Briefly discuss three problems that are sometimes experienced during sales territory design. Resistence to change is one of the problems that can be experienced during Page | 10 sales territory design. Especially if there is an organization that is currently servicing the market Usually an uneven spread of customers EXISTS in the market, which means there is an imbalance in potential across geographiacal territories Matching salespeople to territories from a personality point of view is another problem. Different saes territories have different types of customers and the sales manager will need to be careful that no mismatch occurs when the sales people is assigned to cover a particular territory MODULE 5: QUOTAS/TARGETS 1. Give four objectives (reasons) for using sales quotas. To provide quantitative performance standatrds To obtain tighter sale and expense control To motivate desired performance To use in connection with sales contests/ competitions 2. Name four types of quotas. Sales volume quotas Budget quotas Activity quotas Combination and point system quotas 3. Name three types of sales volume quotas. sales volume quotras in currency value unit sales volume quotas pointsales volume quotas 4. Give three reasons why it is important for sales people to participate in the setting of quotas. The task of explaining quota and how they are determined is simplified Sales personnel have some information about their territories that management does not have It can lead to more accurate quotas They are more easily convinced of their accuracy MODULE 6: TYPE OF SELLING 1. List six roles of a buying team and explain each role briefly.  a. Users They are the actual users of the product They can also be influencers User’s feedback is of utmost important in evaluating the performance of the product b. Initiators Page | 11 They are the people that recognizes the problem and requests a purchase of a product. This person starts the buying process c. Influencers Can have either direct or indirect influence on the purchase decision. This person will establish the specifications that the product must meet d. Final decision makers This are the people that will decide in the end whether the product will be purchased They have a final say on which brand it should be. and they are not necessarily top management e. Buyers They select the supplier and negotiate the terms and conditions of the contract They sign the purchasing contract In many companies a buyer is also refered as purchasing manager f. Gatekeepers This person controls the flow of information to and from the people in the buying team. This can be the secretary 2. Name five uses (advantages) of telesales. Enlarge the market share Qualify bsales leads Decrease sales costs Support sales in the field Manage smaller accounts/customers more profitably Take orders by e-mail Improve customer service Segment the market Increase advertising effectiveness Increase potential 3. List five guidelines to be followed in telesales.  The contact person must immediately give his name, the name of the company and the purpose of the call Offer should be clear and unambiquous Provide the price of the product, conditions, instalments to the customer before they commit themselves People should not be contacted at unreasonable hours Page | 12 Unlisted telephone subscribers must be left in peace Telephone orders must be delivered as quickly as possible The telesales must be subject to the usual code of ethics that applies tom professional salespeople 4. Can a person fulfill more than one role on the buying team? Explain your answer by giving an example. Yes! It depends on whether the product purchase is a straight re-buy or a new purchase. Repeat buying can be done by a single person. The size of the organization also matters. The parent can be both the buyer and influencer at the same time. NB: ONE PERSON CAN DEFINITELY FULFILL MORE ROLES 5. What factors influence the size of the buying team? Name at least five factors. Size of the organization Price Type of purchase Company policy Risk involved Time pressures Type of product MODULE 7: PROSPECTING 1. On which factors will the prospecting technique(s) chosen by the sales person depend on? The industry The size of the business The product or service sold The competitors Type of customers The salesperson 2. Discuss possible prospecting techniques that a sales person selling new car can use.  a. Personal contact and observation The sales person can use social events with friends /family to find new prospective buyers b. Business leads Sales person can use stored information on current customers Page | 13 to see when their cars need replacement. The salesperson can get referrals from other car sales people c. Publications, newspapers, trade journals By keeping an eye in the newspaper and reading trade journals, a car salesperson can find potential leads. Eg reading about a new planned avis store. This is a potential lead because avis will need to buy cars NB: must be discussed 3. List and explain five business leads that a sales person can make use of find prospects. a. Business records Company records can lead to prospects b. Business leads and aids Enquiries that came through. E.g., email or telephone calls from potential customers are leads c. Direct mail and brochures Because of newsletters sent out by the company or advertisement /special offers by the company, the salesperson will get enquires d. Shows and exhibitions A salesperson attending exhibitions and hosting people, telling them about his company’s product will generate leads 4. Indicate whether the following statement are true or false; 4.1 A spotter is a person that refers prospects to the sales person. FALSE 4.2 An example of an influence centre can be a well-known sport star representing a specific product. - TRUE 4.3 Cold canvassing means sales person has some knowledge of the prospect. FALSE 5. Explain how sales person from that OUT-surance can use the following prospecting technique to find prospective buyers and give example. 5.1 Influence centre  OUTsurance uses many influence centres such as katlego maboe to advertise their products. Many people that follows Katlego and look up to him will contact OUTSURANCE as prospective customers. The salesperson must follow up on these leads 5.2 Endless-chain technique Page | 14 The outsurance salesperson can ask each of his satisfied customers for names sof family/frinds who might be interested I n OUTsurance ‘s services, he can then contact this leads 5.3 Direct mail and brochures E-mails and newsletters sent out by OUTsurance will generate enquiries. The salespesrson must follow up on these enquiries 5.4 Social media OUTsurance makes use of social media to advertise their products and to engage with prospective customers. 6. What advantages does the endless-chain technique provide? Prospecting and approach times are reduced Appointments are more easily obtained The prospect has to an extent already been qualified in terms of need/use and the ability to buy, by the person who referred him to the salesperson A satisfied customer is a good reference MODULE 8: PLANNING THE SALES PRESENTATION(PRE-APPROACH) 1. Discuss the importance of gathering pre-approach information. It provides the saleperson with background information in order to plan his presentation It saves the salesperson valuable time and energy by being able to ditiguish between prospects and general leads Information gained provide clue indicating the prospect’s real buying motives It provide information to help the salesperson decide what would be the best way to approach the prospect and how to plan for the presentation It prevents the prospect from making serious mistakes Ensures more successful results It ensures that salesperson regularly supplement the information in an organized way The information provides the basis for questions 2. List the criteria used to qualify a prospect. Need or use Ability to buy Size and the importance of the transaction Page | 15 Frequency of need Urgency of need Authority to buy 3. List eight source of information that can be used by the sales person in order to sell product effectively. Customers The internet Social media Financial institution Other businesses Other salesperson Credit and trade references The company’s own records Personal observation The prospect Local directories 4. You have identified clicks as a prospective client. The person you deal with at clicks is Gregory mead. 4.1 What pre-approach information should you gather about clicks? Name, address and type of business The history and other information about the business and the personnel The operational functioning of the business Industry competitors and buying procedures Future perspective 4.2 What information should you gather about Gregory mead? Prospect name, surname and initials age and the date of birth home address and private telephone number educational background reputation marital status and family details  authority to buy the best time of an appointment social contacts additional personal information Page | 16 MODULE 9: THE APPROACH TO THE SALES PRESENTATION 1. Discuss the factors that ensure an affective successful approach. The appointment requires good planning and preparation, it must be arranged I n time and the salesperson must be in time Set out clear objectives for the approach Planning for the approach must provide for any possible eventuality The sales person must pay special attention to his appearance, personality, attitude,posture,general behaviourand gestures Never ask questions that require negative answers Do not appear self important Be friendly and sincere Choose an approach that will immediately get your prospect’s attention Get prior knowledge and information about the product 2. Choose an approach from the list below to match a sentence. Product approach 2.1. Listen to the music over this speaker, it’s so clear 2.2. Wow, you have a beautiful Compliment approach kitchen. It will look wonderful with the new cupboards Premium approach 2.3. Subscribe now to the fitness magazines and receive a free gym membership at virgin active for three months Question approach 2.4. Are you interested in saving 20% on a banking cost per month Stimulating statement approach 2.5. Everybody deserves to look beautiful. Would you like to see our new make-up range Page | 17 MODULE10: THE SALES PRESENTATION What would you need to prepare (prior arrangements) in order to demonstrate the following product: 1. Make-up Nenue Make up kit itself containing all the make up as well as make up brochures Model Mirror Current lighting Makeup remover Make up remover cotton pads 2. Vacuum cleaner Venue Various surfaces The vacuum cleaners itself Water, red wine Electrical point 3. Sausage tasting Venue Electrical frying pan Enough sausage Toothpicks Frying oil Spices Serviettes Serving plate QUESTION 2 1. What are the objectives of an affective sale presentation? Get the prospect’s attention Make the prospect aware of his problem or need  Point out the advantages to the prospect Provide proof of adfvantages 2. A salesperson selling speaker system can use demonstration during his sales presentation to market his product more convincingly. Page | 18 2.1 What principles must he apply to ensure an affective demonstration? List six. Plan each demonstration individually Suit the sales talk to the demonstration Be prepared Cover the most important product features Get the prospect involved Demonstrate step by step Maintain control Time and pace the demonstration The closing and follow up of the demonstration 2.1 Briefly explain the importance of demonstration by highlighting five points Draws attention Ensures interest and involvement Can involve all the prospect senses Let the product sell itself Provide visual support to improve quality of the presentation Demonstrate to the prospect what the product can do to them, that it can solve their problem, that they can use the product Confirm what the salesperson has said and put words into action Saves time Takes the prospect through the AIDAs STEPS and leads to action 3. A new ocean Basket is opening soon and needs to be tiled inside. What visual aids can the tiled inside use during his presentation to convince the owner of Ocean basket to make use of his service? The product itself Models Illustrated brochures Videos and films Slesportfolio/personal file of the sales person Samples 4. What technique can a sales person selling skincare products use to prove claims he makes about the products? Guarantees Testimonials Page | 19 Referrals Documentation Demonstration Quality stamps Data of previous sales Independent research findings Endorsements 5. A young man, 25 years old, wants to buy a new watch. Discuss the point you most bear in mind when you highlight the advantage of the benefit of the watch. Motivate with appropriate examples. The advantage must be applicable to the specific buying motive of the prospect. Example : the watch also serve as a phone , then there wont be a need to carry a phone in the pocket Every advantage must be personalized, in other words turned into a benefit for specific prospect. Example : since you wake up early in the morning you can also set alarm for work Show and explain the prospect howthe product can benefit them Demonstration: put a sim card and set alarm to show the prospect what the watch can do, Create word pictures of the advantages Put your self in the prospect position. Not all prospect are interested in the same advantage Be alert to body signal and language MODULE 11: HANDLING OBJECTIONS 1. What are the two types of objections? Physical objection Psychological objection 2. What objections are presented in the following scenarios? 2.1. I feel the price is too high – price objection  2.2. No, I am not interested. I am only interested in Nike running shoes – prejudice 2.3. I don’t have money right now – money objection Page | 20 2.4. I don’t know whether I should take the brown chairs or the green chairs – indecision 2.5. I don’t have cash on me right now - inconvenience 2.6. I am actually on my way to a meeting, so I can’t talk right now – wrong time objection 2.7. I am not sure whether I am making the right decision buying this ipad – FEAR 3. Name five techniques a salesperson can use to overcome objections ask more specific questions convert the objection into an advantage provide proof agree and qualify provide more information overcome with agreement compare product and services show the prospect what delay could cost relate the prospect tomthe prospect’s buying motives limit objections 4. Name the psychological objections a prospective client may have. Prejudice Ignorance Fear Self satisfaction Indecision MODULE 12: CLOSING THE SALES 1. What are the closing signals a prospect can give to show that he is ready to close the deal? Briefly explain each and give examples Facial expression Non – verbal language has a bigger impact about what someone is saying.an experienced salesperson knows what to lookfor in a person. Page | 21 Some of the non verbal cues to consider are the eyes. Physical signs This referes to action and movements most prospects can give some indication od what they are thinking by shysical reaction. Example the way in which and the number of time a prospect handle the an articles in whioch they are inetersted Or the prospect can take the contract and study it carefully Verbal signs Positive statements made by prospects. Example this will look great in my bathroom 2. What are the steps recommended for a salesperson after an unsuccessful close? Create goodwill Review the sales presentation Record everything that happened Ask the prospect why he declined your proposition and listen carefully List all the mistakes Maintain contact with the prospect 3. List six closing techniques a salesperson can use of to close a sale The assumptive closing technique The minor question technique The direct approach technique The inducement technique The emotional closing technique The physical action technique Weighing advantages against disadvantages The standing room only technique 4. Classify the following closing techniques 4.1. “ I can understand your hesitation; the colour is certainly not exactly what you had in mind. But many of our customers felt the same way,  until their friend received the gift. They found that this colour is very popular - CLOSING ON AN OBJECTION 4.2. One of the reasons I wanted to finalise this today for you is that we only have five blue items left in stock” – The standing room only technique Page | 22 4.3. If you join this month, you will receive this gym bag for free – The Inducement technique 4.4. “would you prefer the green or yellow one? – CLOSING ON A CHOICE 4.5. “Where can we deliver it for you” – Assumptive close technique 4.6. “Would you like to place an order” – The direct approach technique MODULE 13: AFTER-SALES SERVICE 1. Why must customers be followed –up? List at least five reasons To ensure customer satisfaction To make the customer feel important To ensure customer loyalty To buid strong long term relationship with customers To provide support for the customer To handle complaints To provide customer care and after sale services 2. List and discuss the follow-up activities that take place Thank the customer Confirm delivery details of the product Follow up to ensure continued satisfaction Follow up to determine future needs Adjustments to order Follow up of existing customers for obtaining prospects Follow up with a view of providing service On customer’s request NB: be able to discuss the titles above. You write the title and then the discussion information below each title. 3. How can customer loyalty be retained? List any six guidelines  Show the customer that you care, through regular contact Show sincere interest by making the customer’s needs and problems your own Show the customer how important he is by your willingness to be of service Show your gratitude for his dupport Page | 23 Develop a pleasant and acceptable personality, exemple be polite Know your customers and their staff Keep the customer’ enthusiasm Keep promises and undertakings The salesperson must be reliable The salesperson must be consistent in his approach Limit mistakes Follow up complaints immediately Ask for feedback and take note of customer suggestion and recommendations 4. What can a salesperson do to prevent complaints. GIVE THREE WAYS Not make any promises s/he and business cannot keep Give advice and recommendations that will satify the customer’s needs Make sure all ducumentations has been completed correctly to avoid any misunderstanding Execute continuous control over all aspect of the customer’s order 5. What mechanisms can business use to facilitate feedback from customers? List atleast three mechanisms Social networks Questionnaires are an important aid to obtaining feedback on products and services Another source of feedback is via their salespeople Live chats 6. Who is responsible for complaints about the product sold and why? The salesperson remain the person responsible for complaints on product sold because in most cases the customer only knows the sales person and expect them to provide them with every answer to all their questions. The sales person is the link between the business and the customer 7. What does it mean if a customer has become inactive? Is a customer who has stopped buying. 8. Give three reasons why sometimes customers become inactive  The product can be outdated Packaging might be inconvenient The result of a misunderstanding, delivery or distribution problems Competitor’s lower prices Invoicing errors Page | 24 Poor salesmanship in terms of approaching or handling of objectionsby sales staff MODULE 14: TIME AND AREA MANAGEMENT 1. A salesperson should divide his time between five main activities. List these five activities. Travel Waiting Face-to-face selling Service Administration/paperwork 2. List five time traps that sales should avoid Poor planning of the day’s activities Calling on unqualified prospects Insufficient use of the telephone Taking long lunch ours Insufficient use of waiting time Too much entertaining of customers Too many coffee breaks Inefficiency in paperwork 3. List five time management tools a salesperson can make use of to use his time effectively Telephone Cellphones The internet Smart devices Computers 4. What are the THREE advantages of properly designed routing system? Reduced travel time and selling costs  Improved territory coverage Improved information 5. What must a sales person keep I n mind when setting up the schedule The number of calls to be made each day by the salesperson The call frequency on each class of customer Page | 25 The distance to each customer The method of transportation to be used 6. You have an appointment with three of your customers today draw up a daily activity schedule by using your own information(customer name, time, date, type of visit, salesperson name, area) This question requires you to develop you own daily activities, an example of an activity schedule is in page 118 of your textbook