Sales Management N5 Past Exam Paper Revision 2020 – 2023

Choose a term from the list that matches the description below

1.1.1 Accurate, written description of the duties and responsibilities of the incumbent of a position

Job description

1.1.2 Travel plans or pattern used by a salesperson when visiting customers

Routing

1.1.3 Aspects such as specifications, dimensions, capacity, and design

Physical characteristics

1.1.4 They select suppliers

Buyers

1.1.5 Salespeople getting the names of family, friends, and acquaintances from every customer to whom he/she sells to

Endless chain technique

1.1.6 Salesperson intentionally acts as if the prospect agreed to buy the product

Assumptive close

1.1.7 Criteria to qualify a prospect

Authority to buy

1.1.8 Method that relies on answers from actual users regarding their intent to buy the product during a forecasting period

User’s expectation

1.1.9 Supplementary service task of a salesperson

Activity quotas

1.1.10 Technique based on every person’s desire to receive gifts or something for free

Premium approach

1.1.11 Marketing function

Product planning

1.1.12 Used to control how sales personnel allocate their time and efforts among different activities

activity quotas

1.1.13 Poor planning of daily activities

Time traps

1.1.14 When a well-known person or association puts a stamp of approval on a product

Endorsement

1.1.15 Place of sale, method of payment, or size of transaction may prevent the customer from buying

Inconvenience

QUESTION

Give ONE term for each of the following descriptions

1.2.1 First step in effective and successful personal selling

Prospecting

1.2.2 Objections that refer to a prospect’s thought processes, feelings, attitudes, values, and personality

Psychological objections

1.2.3 Technique known as cold canvassing or door-to-door selling

Direct prospecting

1.2.4 Distress that an individual experiences when confronted with extra information which is in conflict with his/her current ideas/values

Cognitive dissonance

1.2.5 Total expected sales for a given product or service for the entire industry in a specific market over a specific period of time

Market potential

QUESTION

Which aspects of industry knowledge should a salesperson familiarise themselves with?

For a salesperson to be effective and competitive, they must have an in-depth understanding of the industry in which they operate. This knowledge helps them make informed decisions, better serve customers, and adapt to changes. The key aspects a salesperson should familiarise themselves with include:

• Market Scope of the Business: It is crucial for the salesperson to understand whether their company operates at a local, national, or international level, or a combination of these. This knowledge allows them to tailor their sales approach to fit different markets and customer needs.
• Industry History: A clear understanding of the past evolution of the industry can provide insights into trends and patterns that may shape its future. This historical context helps salespeople anticipate changes and adapt their strategies accordingly.
• Market Growth and Profit Potential: Knowing whether the industry is growing or declining is essential. A salesperson should be able to identify areas with the highest potential for growth and profitability. This helps them focus on the most promising opportunities and set realistic sales targets.
• Current Events Impacting the Industry: Political changes, economic fluctuations, environmental issues, and government policies can all significantly impact an industry. A well-informed salesperson should stay updated on these factors to adjust their sales strategy and advise customers accordingly.
• Government Regulations: Salespeople need to be knowledgeable about the laws and regulations governing their industry. This includes understanding any legal requirements, restrictions, or incentives that may affect product offerings, pricing, or customer relations.
• Industry Size and Trends: The overall size of the industry and its current trends can help a salesperson gauge its maturity and identify emerging opportunities. This includes knowing whether the market is saturated, growing, or ripe for innovation.
• Key Competitors and Market Leaders: Familiarity with the major players in the industry, including their strengths and weaknesses, allows salespeople to better position their products or services. Knowing the competitive landscape helps in formulating strategies to differentiate the business from its competitors.
• Market Share and Future Prospects: Salespeople should keep track of the company’s market share relative to competitors, as well as future tendencies that could affect the industry. This might include technological advancements, shifts in consumer preferences, or economic forecasts.
• Relevant Legislation and Recent Developments: Staying up to date with industry-specific legislation, as well as new technological or market developments, is crucial. Salespeople must be aware of how laws and innovations may affect their products, processes, and the overall market.

List, in sequence, the FIVE steps in designing sales territories.

Designing effective sales territories requires a systematic approach to ensure that each salesperson has a manageable workload and that all areas receive sufficient coverage. By following these steps, a company can optimize its sales efforts, enhance productivity, and maximize revenue. The key steps are:

1. Select a Geographical Control Unit: The first step is to divide the market into specific regions or control units. This can be done based on various factors such as state, city, postal code, or even customer density. For example, a company selling agricultural equipment might divide regions based on rural areas with large farms, while an urban tech company may assign territories by city or metropolitan area.
2. Determine the Sales Potential in Each Control Unit: Once the regions are defined, it’s crucial to analyze the sales potential in each area. This involves assessing the number of potential customers, historical sales data, economic activity, and other factors that indicate revenue opportunities. For instance, a control unit in a booming industrial city may offer high sales potential for construction materials compared to a small, rural town.
3. Analyze Salespeople’s Workload: Next, evaluate how much time and effort each salesperson would need to cover their assigned area effectively. This includes factors such as travel time, number of clients, frequency of visits, and administrative tasks. For example, a salesperson covering a vast rural region may require more time for travel, while one in a dense urban area may handle more client meetings in less time.
4. Determine the Basic Territories: Based on the sales potential and workload analysis, you can now create the sales territories. These territories should be designed to balance the sales potential with the workload, ensuring that each salesperson has a fair and manageable area to cover. For example, if two territories have similar sales potential but one requires significantly more travel, the boundaries should be adjusted to balance the workload.
5. Assign Salespeople to Territories: Finally, territories are assigned to individual salespeople. This assignment should consider each salesperson’s strengths, experience, and familiarity with specific regions. For instance, a salesperson who has successfully managed urban clients might be better suited for a busy city territory, while someone with experience in rural areas might handle regions that require more travel and relationship building with fewer clients.

QUESTION

Give reasons for using a buying team.

A buying team can be highly effective, particularly when making large or complex purchases. By involving multiple people with different expertise, the team can make better, more informed decisions. Here are several key reasons why using a buying team is beneficial:

1, Maintains Competitiveness: In a competitive marketplace, having a well-organized buying team ensures that the company stays ahead of its rivals. By evaluating trends, assessing competitor actions, and making informed purchases, the team helps the company make strategic investments that enhance its competitive position. For example, timely investments in the latest technology can give the company an edge in efficiency or product offerings.

2, Varied Viewpoints and Expertise: A buying team consists of individuals from different departments, each bringing their own experience and knowledge. For example, in a manufacturing company, a purchasing decision for new equipment might involve the production manager, finance director, and quality control specialist. Each member offers unique insights, such as the equipment’s performance, budget constraints, or quality standards, leading to a more balanced decision.

3, Scientific Decision-Making: When decisions are made by a team, they are often grounded in data, research, and analysis, rather than personal preferences or biases. For instance, when selecting a new supplier, a team may look at performance metrics, customer reviews, and price comparisons, ensuring that the final choice is based on solid evidence rather than an individual’s opinion.

4, Reduces Pressure in the Buyer-Seller Relationship: Having a team to discuss and evaluate the purchase reduces the pressure on any single individual to make the right decision. For example, in a high-stakes negotiation, the buyer doesn’t have to face the seller alone. The team can share responsibility, allowing for a more relaxed and thoughtful decision-making process, without undue influence or haste.

5, Risk Reduction: A buying team helps reduce the risk of costly errors, especially in high-value or strategic purchases. For instance, purchasing a new software system for an organization involves several risks, such as budget overruns, compatibility issues, or unmet needs. By involving multiple experts—such as IT, operations, and finance—a team can thoroughly evaluate all risks, minimizing the likelihood of a poor decision.

6, Alignment with Business Growth Plans: The buying team ensures that purchases are aligned with the company’s long-term goals and strategies. For example, if a company is focused on expanding its operations into international markets, the team can assess whether the purchase of new logistics software supports this expansion by improving global shipping processes and managing overseas suppliers.

7, Brand Protection: A buying team ensures that the purchase is in line with the company’s values, reputation, and brand image. For example, if a company is committed to sustainability, the buying team might include experts in environmental practices who can evaluate whether a new supplier meets the company’s green standards, protecting the company’s eco-friendly image.

8, Handling Complex Tasks: Certain purchases, like information technology systems or large machinery, require input from various specialists due to the complexity involved. For instance, when buying a new IT system, input from the IT department, finance, and operations is crucial to ensure that the system meets all technical requirements, fits within budget, and supports daily operations.

QUESTION

What are the objectives of an effective sales presentation?

An effective sales presentation is designed to persuade the prospect to make a purchase by addressing their needs and demonstrating the value of the product or service. To achieve this, the presentation should meet several key objectives:

1. Capture the Prospect’s Attention: The presentation should begin with a strong and engaging introduction that grabs the prospect’s attention. This could be a compelling story, a surprising statistic, or a provocative question. For instance, if you’re selling a new software solution, start with a statistic about how businesses like theirs have increased productivity by implementing similar technology. The goal is to make the prospect curious and eager to learn more.
2. Highlight the Prospect’s Problem or Need: Once you have their attention, the next objective is to make the prospect aware of their existing problem or need. This involves clearly identifying and articulating their pain points or gaps that your product or service can address. For example, if you are presenting a new CRM system, explain how current issues such as disorganized customer data and inefficient tracking are causing problems in their sales process.
3. Demonstrate the Benefits of Your Product or Service: After establishing the problem, shift focus to explaining how your product or service offers a solution. Highlight the specific advantages and features that address the prospect’s pain points. For instance, showcase how your CRM system provides features like automated customer follow-ups and detailed analytics that can streamline their sales process and boost efficiency.
4. Provide Evidence of Effectiveness: To build credibility and support your claims, provide concrete evidence of the product’s effectiveness. Use case studies, testimonials, and data to demonstrate how other clients have benefited from your product or service. For example, share a case study of a similar company that saw a 30% increase in sales efficiency after implementing your CRM system, and include quotes from satisfied customers who have seen tangible results.
5. Encourage Action: Conclude the presentation with a clear call to action that prompts the prospect to take the next step. This could be placing an order, signing a contract, or scheduling a follow-up meeting. Make the call to action specific and easy to follow. For example, you might say, “To start experiencing these benefits, let’s schedule a demo next week where we can walk you through the setup process and answer any questions you may have.”

QUESTION

Discuss each of the following closing techniques:

.1 The assumptive close

2 The inducement technique

3 The emotional closing technique

4 The standing room only technique

Closing Techniques in Sales

Closing techniques are crucial for converting prospects into customers. Each technique serves a unique purpose and is tailored to different scenarios in the sales process. Let’s discuss four common closing techniques:

1 The Assumptive Close

The assumptive close is a technique where the salesperson operates under the assumption that the prospect has already decided to make the purchase. This approach simplifies the closing process by shifting the focus from persuading the prospect to finalizing the minor details of the sale.

How It Works:

• Presumption of Agreement: The salesperson proceeds with the conversation as though the decision to purchase has already been made. For instance, after discussing the product’s features, the salesperson might ask, “Which color would you prefer?” or “Would you like the standard or express delivery?”
• Focus on Minor Details: By focusing on details like color, size, or delivery options, the salesperson moves the conversation away from the decision-making process and towards completing the transaction.
• Completion of Sale: If the prospect does not object or stop the salesperson, it implies that the sale is likely completed. The salesperson then finalizes the administrative procedures, such as processing the payment or preparing the contract.

Example: If a customer is looking at a new phone, the salesperson might say, “Let’s go ahead and arrange for delivery next week. Do you prefer the blue or the black model?” This assumes the customer is ready to purchase and only needs to finalize the details.

2 The Inducement Technique

The inducement technique involves offering additional incentives to encourage the prospect to make a purchase. This technique is particularly effective when a prospect is interested but hesitant to finalize the deal.

How It Works:

• Offer Special Incentives: The salesperson provides extra benefits, such as discounts, free upgrades, or added features. For example, “If you purchase today, we’ll include a free extended warranty.”
• Create a Sense of Urgency: Inducements often come with a sense of urgency, suggesting that the offer is limited or could expire soon. For instance, “This special offer is available only until the end of the week.”
• Encourage Immediate Decision: By offering something additional, the salesperson motivates the prospect to make a decision quickly to avoid missing out.

Example: A furniture salesperson might offer, “If you buy this sofa today, you’ll get a free coffee table with your purchase.” This added incentive can push the prospect to complete the sale rather than delaying.

3 The Emotional Closing Technique

The emotional closing technique leverages the prospect’s emotions to drive the decision-making process. This approach is based on the idea that people often make purchasing decisions based on feelings rather than just logic.

How It Works:

• Appeal to Emotions: The salesperson connects with the prospect’s emotional needs or desires. For instance, when selling a family vacation package, the salesperson might highlight how it will create lasting memories and strengthen family bonds.
• Personalize the Appeal: The emotional appeal is tailored to the individual’s situation and emotions. This personalization makes the prospect feel understood and valued.
• Avoid Threats: The emotional closing technique should never be used as a threat but rather as a way to show genuine concern and interest in the prospect’s needs.

Example: A car salesperson might say, “Imagine the pride you’ll feel every time you drive this car. It’s not just a vehicle; it’s a symbol of your success and achievements.” This emotional appeal aims to make the prospect feel a deeper connection to the purchase.

4 The Standing Room Only Technique

The standing room only technique creates a sense of urgency by suggesting that the product or offer is in high demand and may not be available for long. This technique leverages the natural human tendency to desire what others have and to act quickly to avoid missing out.

How It Works:

• Highlight Scarcity: The salesperson emphasizes that the product is in limited supply or that there is high demand. For example, “We only have a few of these models left in stock, and they’re selling fast.”
• Create Urgency: By suggesting that the opportunity might soon be gone, the salesperson encourages the prospect to act quickly. This urgency can drive the prospect to make a decision sooner.
• Ensure Honesty: This technique should only be used if the claim about scarcity is true. It’s unethical to use this technique to offload slow-moving inventory or products that are not in high demand.

Example: A real estate agent might tell a prospective buyer, “There’s a lot of interest in this property, and we’ve already had multiple offers. If you’re interested, we need to move quickly to secure it.” This creates a sense of urgency and encourages the prospect to make an offer promptly.