MBA Sales Management Exam 2 Study Guide
The testing style and question format for exam 1 will be very similar to exam 2.
General Tips:
1] You might consider a vocabulary sheet that has the terms alphabetized. This will prevent getting
stumped by a question because you were unfamiliar with a term.
2] I generally ask two different types of math problems. One set will come from the take home data.
That should be analyzed prior to the exam and the results taken to the test. The second type of problem
generally has the student do the calculation and then make a decision based on the results. Be sure that
you can do all of the analyses covered in the readings, lectures and cases. Work all problems in cases,
notes and lectures before taking the test. Be sure you can both do the math and make the right
management decision resulting from the information gained from the calculation.
3] I always ask a number of questions where I pose a problem and ask the students to make a decision.
The problem relates back to course material but does not explicitly point out the part of the class that it
comes from. An example may clarify this:
“Your accountant provides a report which questions some of the gifts and entertainment expenditures
by Sally. Sally is one of your sales reps. The expenditures were for a nail salon (3 visits) and totaled $65.
Sally has been a salesperson for your company for two years and no major problems have ever been
attributed to her. Specifically, what should you do here?”
This question relates back to at least two assignments: How to deal with an ethical dilemma (Topic 4)
and the Dale Carnegie readings (how to deal with conflicts). It also fits with how the “World Class Bull”
case went in terms of an accusation being made by someone outside of the sales unit of unethical
conduct and then the facts were gathered prior to your making a decision in the case.
Reasonable Solution: Next time you see Sally ask for her side of the story. There may be a very
reasonable explanation. For example, she could have made the charges to a company credit card by
accident. Or, it may be that the only way she can get an important client or a potentially major new
client is to sit with them and talk while they are both getting manicures. Or she could be charging her
expense account improperly and should be asked to reimburse the money to the company. Both Dale
Carnegie and Solving Ethical Dilemmas (Topic 4) say that you should get the facts first before jumping to
conclusions. Dale says you should let people save face if need be. This may be best handled in person
rather than by email.
I’m testing you on practical decision making. You could reference the specific material – or not. As long
as you have a valid solution which fits the course then it would be fine.
However, don’t fool yourself into thinking that my exams are “anything goes.” Some questions have
very clear right and wrong answers – like a math problem. Other problems have a narrow range of
correct answers and a broad array of incorrect ones. Take the problem above, if you reprimanded or
fired Sally without getting her side of the story it would be the wrong decision and graded accordingly.
4] I’m not testing you on the ability to memorize facts. You can take your notes to the test. I’m testing
on your ability to make good sales and marketing decisions. It is important to view the lectures, read
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the notes, and carefully think about them. Also, get a good night’s sleep before the test. You need to be
able to think clearly.
5] I would organize my notes carefully before starting the test. You have a limited time period and you
need to be able to find the right section in your notes. Don’t burn up a bunch of time answering a
couple of questions “perfectly” and forget about the time limit. When this happens you answer half the
exam in 15 minutes – usually with poor results.
6] Read the question carefully. Be sure to answer all parts of a question.
7] Beware of trying to do a memory dump on everything you know about a topic instead of answering
the question itself. Go back to the example in “3” above. You could start a big list of all of the points
from the ethics lecture and/or Dale – and still not answer the question.
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Topic 13:
1] Understand how to do the sales forecasting calculations on a spreadsheet. Also, you should be able
to do any of the forecast calculations (including MAPE) with a small number of data points with a
calculator.
2] Understand the goal is accuracy. Be aware of the general advantages and disadvantages of using
historical data and using human opinion.
3] Understand the concept of market shocks and how that impacts forecasting accuracy and the types of
forecasts that are/are not useful in this situation.
4] Understand when forecasts tend to be accurate or inaccurate.
5] Review chain ratio method and leading indicators. These are often forgotten about.
6] If you don’t understand when the forecast methods are useful, doing the calculations themselves is
not helpful. The video discusses a lot of conceptual factors that directly impact the usefulness of
different forecasting techniques. It is important to note that this is usually situational and not always
driven by MAPE.
7] Remember there is a reading assignment associated with this lecture. Be familiar with issues that are
only discussed in the assignment but not in lecture or the lecture notes.
Topic 14:
1] Is sales organization equally important for small, medium and large firms?
2] How often should you review your sales organization? Why that time frame?
3] The goals of a sales organization are pretty clear. But actually implementing them can cause
problems. Examples include: World Class Bull, Rick Fire, Zeus, and Inject Plastics. It is a huge issue in
Rick Fire and a lesser example in these other cases. For the exam consider logically what is going on and
if the organization is a contributing factor.
4] Understand why marketing does not get along real well with production or logistics. Further,
understand how operational goals can differ from strategic goals and how the CEO must reward division
heads differently from lower level managers because of this conflict.
5] Understand the customer service/product knowledge/cost trade-offs between the basic sales
organizations. These are all trade-offs and not a clear good/bad factor.
6] Open door policies. Understand why they exist, what they can and cannot accomplish, and when an
individual would go outside of channels. This is discussed extensively in Rick Fire & Inject Plastics cases.
7] What is inside sales compared to outside sales? How can these two separate sales organizations work
well together? How do you deal with the common problems associated with inside sales forces? Last,
are the skill sets for inside sales consistent for all inside sales jobs?
8] Understand what national accounts are, when they are used, and the costs/benefits associated with
them. Understand the cost/benefit options available when setting up a national accounts sales force.
Again, another trade-off situation with grey areas.
9] What are independent reps, when are they used, and what are their generic advantages and
disadvantages? You should be able to do the break-even calculation between a company sales force
and independent reps (see Zeus case & example in the notes).
Topic 15: Zeus Case
1] Case provides a good example of the speed of logistics & information. Also the trade-off between
flexibility & lowest cost.
2] Case provides discussion & numeric example of independent reps & company salespeople.
3] Case provides a good example of marketing on a very low budget and how plans get rapidly adjusted.
4] Also provides a direct example of the impact of raising price on cash flow.
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5] Long, practical discussion of sales forecasting & how the forecast drives production, logistics, and
sales organization decisions.
6] Detailed example of what is known, what could be determined with study and research, and what is
inherent uncertainty. It also shows how some opportunities are fleeting if not taken advantage of.
This is a very complicated topic that is faced by marketing & sales managers every day. There is
considerable discussion of this on the tape.
7] This case is a practical example of when legal issues arise & how they should be handled.
Topic 16:
1] The lecture follows the recruiting process. This process outline can prevent some hiring mistakes.
Like most other business issues, it lowers the chances of mistakes but does not eliminate them.
2] Should you discuss negative aspects of a job if you are the employer? Why?
3] How can you get a fit between candidates and company culture and values? Should you even try?
4] Study the legal issues in hiring & review the tape. There are some very clear legal/illegal practices you
need to be aware of.
5] Number of applicants needed formula should be reviewed.
6] Internal/External sources of applicants. Should you reward people who recommend good applicants?
If so, when and how?
7] How are internships used in recruiting?
8] When is it cost-effective to use background checks?
9] How can personal interviews be done to maximize the benefit? What is done on third
interviews/shadowing?
10] Testing is tricky from a legal perspective. Review this.
11] Should you recruit for the job or for advancement potential? Why?
12] How do 30/60/90 day goals work in recruiting?
13] You should be able to design a practical validation process for hires.
Again, this lecture has a lot of personnel law in it. Some things that seem reasonable but are illegal. Be
aware of the law to avoid being tripped up.
Topic 17:
1] There is a discussion of key leadership skills. Most of this is common sense. Review for application.
2] The Power discussion clearly indicates when things can go well and wrong. Most again is common
sense if you think it through. Be able to apply.
3] Directive versus supportive behavior has some big trade-offs. Is one always optimal? Should
managers use different techniques with different salespeople?
4] Taking a new position gives a step-by-step way to avoid many mistakes. This fits with the Green Acres
case.
5] Team building builds on Dale Carnegie.
6] Coaching. This is a very specific, how-to guide for coaching. The video provides a direct example of
how to do this. Unlike most topics, much of what works and does not work in coaching is counterintuitive. I would probably briefly review the notes and re-watch the example from class. The time
sequencing of what you do in coaching is critical. You also must be systematic to get the best long-run
benefits.
7] Taking a new position and coaching are very fact intensive and step-by-step process. Be sure you
understand the time sequence for both topics clearly.
8] Sales meetings: be able to calculate direct & indirect costs. Understand how to run an meeting
effectively.
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9] Illegal Drugs & Alcohol – can be handled quite differently because one is illegal and the other is not. I
don’t have great solutions for this but the discussion of the problem is pretty clear.
10] Sexual Harassment: There are specifics on how individuals can avoid problems. There is a detailed
discussion of the law covering what you can and cannot do as a manager. I have a couple of novel
solutions to this that can work.
11] Firing people – how, when and different reasons for firing. Very long discussion of this in Zeus &
Inject Plastics cases. You also should be able to tie this back into company policy, annual reviews, and
accelerated review cycles. The three topics are tightly linked.
12] Plateauing – what is it, how can you deal with it, and how do you deal with superstars who lose their
motivation to be top producers?
Topic 18:
1] Conceptually compensation is easy. There are trade-offs in motivation, incentive, fixed/variable costs
and total costs between salary, bonus & commission systems. The trade-offs between the three
payment methods are mirror-images of each other.
2] Be able to relate the compensation plan back to fixed and variable costs and company risk. Be able to
understand the motivation factors for each system.
3] There are a couple of different commission systems. Understand the basics and how to do the
calculations. You should also be able to do the calculations of compensation costs as done in homework
3.
4] Be sure to understand gross margin commissions and how they differ from sales commission. Review
the notes example carefully in how they interact with price changes.
5] “Other commission issues” in the lecture ties in some of the less obvious trade-offs between the
compensation systems.
6] Expense account methods have clear distinctions and the advantages/disadvantages of the different
approaches.
7] Should be able to work the notes problem and homework 3.
8] The final thoughts tie some macro issues in terms of how hard different selling jobs are, the
importance of superstars, and other issues.
9] This topic is a mix of motivation, math, and overall company strategy. The math applications are
pretty easy and used in Zeus & Inject. Tying the motivation and strategy issues back into the cash flows
is essential to effective management.
Topic 19:
1] Performance reviews summarizes a lot of previous topics.
2] Understand why different pay systems have different performance review cycles.
3] The performance review checklist is a step-by-step guideline that ties into business law.
4] Can subjective aspects of performance reviews be avoided? Why?
5] When can MBO work? Not work? Should you use it with some employees but not others?
6] Ranking procedures: understand what they are and what the flaw in the system is.
7] Should you reward top performers in underperforming districts?
8] Compensating sales teams is a very complex topic. I provide a few suggestions that you should
review. Unlike the performance review checklist, this topic lacks an ABC solution.
9] You should be able to take any performance review/goal situation and review it for legal issues,
motivation, and practical implementation.
10] What is the difference between a judge and a coach in a performance review? Are both aspects
necessary? Only one? Which causes conflict – or do both?
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Topic 20:
1] Case provides example of how companies test sales and marketing strategies.
2] Detailed discussion of firing people, including legal & long term morale aspects.
3] Discusses how downsizing works and the critical management issue of retaining wanted people.
4] “Choose nice when you can” is a major theme of this class and this case. What does it mean? Do you
agree with it? Does Dale Carnegie concur? Can you always be nice as a sales manager?
5] There is a somewhat lengthy discussion of how the internet generation and older generations view
and handle job conflict. What is the big deal here? How can internet generation norms be adjusted?
6] Another lesson that can be drawn from this case is “Trust No One.” Do you agree? How can “trust no
one” be reconciled with “choose nice when you can” or do these two concepts always collide?
Topic 21:
1] Training benefits are pretty clear if you think them through.
2] Do all salespeople need the same type of training?
3] Can training expenses be avoided for experienced and productive salespeople?
4] How are training needs determined by a sales manager?
5] Advantages of centralized and decentralized training should be reviewed.
6] Training methods has some pretty clear advantages and disadvantages. Ones that are less clear are
on the job and internet training.
7] How can you cost-effectively assess training programs?
Topic 22:
1] Is motivation more important for salespeople compared to other employees?
2] Herzberg is important and counter-intuitive. Reread this and understand how it works.
3] The rest of the motivation theories are pretty clear. If I give you a management situation you should
be able to dissect it for parts that motivate or demotivate employees.
4] Can managers motivate salespeople? Demotivate salespeople?
5] In career stages there are different management tasks for salespeople at different points in their
careers. Review this for practical situational management decision making.
6] Behavioral Self-Management is pretty much identical to management by objectives.
7] Incentive Programs – what are they? What are some clear design problems? Design advantages?
You should be able to look at an incentive program and determine if it is likely to work or not.
8] What are recognition programs and how do they work? Will recognition programs work for all
salespeople?
9] Leader boards. What are they and how are they used?
10] You should be able to give practical examples of using cars as motivators.
11] Most of Dale Carnegie is a practical how-to motivation guide.
Topic 23:
Do you have any suggestions on improving the class? Please be specific and give them to me in writing.
Likewise, what are some specific problem areas in the course? Can you figure out a way to fix the
problem?
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Most importantly, are there topics I’m covering that are not useful to practical marketing and sales
managers? If so, please let me know. I don’t want to bog the class down with a bunch of material that
is tedious and useless.
These would make excellent bonus point questions on the final.
A final point: The final will be a similar testing style to the midterm. Review the midterm and where
you did and did not have problems. Doing this can make your studying more efficient.
Good luck & War Eagle!
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