• Size of the sales force.

The number of salespeople affects the amount of supervision, coordination and management structure required.

• The firm's long-term objectives.

Long-term objectives indicate what the sales organisation must support, such as growth, expansion or a change in direction.

• The nature of the firm's products and services.

Different products or services may require different selling methods, technical knowledge and customer support.

• Physical location of customers.

Customer locations affect territory design, travel requirements and how sales coverage is organised.

• The amount of customer services required.

The level of service customers require can determine whether representatives need dedicated service responsibilities or specialist support.

• Types of distribution channels being used.

Different distribution channels involve different selling relationships and responsibilities, so the structure should fit the channels used.

• General cost policy of the firm.

The firm's cost policy determines the resources available for sales staff, supervision, travel and administration.

The question requires five factors. The marking guideline provides seven acceptable factors; any five relevant factors may be stated.

Geographical specialisation: In geographical specialisation, the firm's sales force is divided into specific sales territories, with each salesperson responsible for selling the company's products to customers in that area. This arrangement helps the salesperson become familiar with local customers and market conditions. It can also reduce duplicated visits because responsibility for each area is clearly allocated.

Product specialisation: In product specialisation, the sales force is organised around different product groups, with each group managed by a product or brand manager. Salespeople therefore develop detailed knowledge of the products they sell. As a result, they are better equipped to explain product features and provide informed advice to customers.

Specialisation according to type of client: A company may also organise its sales force according to the types of clients it serves, such as different industries or distribution channels. This enables salespeople to understand the particular requirements and buying practices of each customer group. Consequently, the company can adapt its selling approach to meet those customers' needs more effectively.

Functional specialisation: With functional specialisation, sales activities are divided into specific functions, which are then grouped into departments. Management formalises the tasks, rules and responsibilities within each function. This allows employees to develop expertise in their particular areas, although the departments must coordinate their work to ensure that customers receive a consistent service.

Matrix specialisation: Matrix specialisation combines product and functional specialisation. Employees with different areas of expertise work together on important projects or problems identified by top management. In this way, the company can bring together the knowledge needed to address strategic issues while drawing on both product and functional skills.

Task description: A collection of general information that describes a task, such as its number, name and location, and the tools and equipment needed to perform the task.

Selection: A decision-making process in which managers choose to appoint an incumbent from those who have been recruited, screened and evaluated.

Job specification: A document that specifies the personal characteristics and qualifications a person should have in order to fill a sales position satisfactorily.

Application form: A standardised official form that employers require all applicants to fill out.

Reference checking: Confirmation of the accuracy of facts that candidates provided when applying for positions.

• Company notice boards.

Notice boards make vacancies visible to employees at the workplace and allow existing staff to apply.

• Company emails.

Company emails distribute vacancy information directly to employees, including staff who may not see physical notices.

• Internal newsletters.

Internal newsletters communicate vacancies and opportunities across the organisation.

• Word-of-mouth.

Word-of-mouth allows employees and managers to tell suitable colleagues about a vacancy. Candidates must still be assessed fairly.

• Performance appraisals.

Performance appraisals can identify employees with the ability, experience or potential to move into another role.

First aim: Firstly, the audit identifies the knowledge, skills and attitudes that salespeople currently possess. This gives the sales manager a clear picture of employees' existing abilities and shows what they are already capable of doing.

Second aim: Secondly, the audit establishes the knowledge, skills and attitudes that salespeople should have to perform their duties effectively. These required competencies provide a standard against which the employees' current abilities can be assessed.

Third aim: Finally, the manager compares the current competencies with the required competencies to identify the training gap. The results are then used to determine the content of a training programme that will address the gap and improve sales performance.

• The cost is much lower in terms of travelling and accommodation.

Training near the sales territory reduces travel and accommodation expenses associated with a central venue.

• Salespeople remain in the field and therefore are productive in terms of sales.

Salespeople spend less time away from customers and can continue their sales activities while training is arranged around their work.

• Training that is done over a period of time is more productive.

Training over time gives employees opportunities to practise and apply what they learn.

• Managers can evaluate salespeople during training sessions.

Managers can observe employees during training and assess whether they understand and can apply the material.

• Trainees have the opportunity to discuss their problems with sales managers.

Trainees can raise practical work problems with their sales managers and receive relevant guidance.

Decentralised training can reduce travel costs, keep salespeople active in their territories and allow ongoing coaching and evaluation.

Opportunities for promotion: Firstly, opportunities for promotion can motivate salespeople who value status, career development and greater responsibility. A successful salesperson may become more interested in progressing to a sales management position than in simply earning more money in the same role. Promotion therefore provides recognition of achievement while offering a new career challenge.

Sales contests: Secondly, sales contests can be organised for the entire sales force or for groups with similar experience levels or territories. By setting a specific target and time period, management can create a challenge that encourages salespeople to increase their efforts. For example, a contest may motivate the team to sell slow-moving stock within a particular period.

Recognition and honour awards: Another useful technique is to recognise and reward employees for their hard work and achievements. Honour awards make good performance visible and show salespeople that their contribution is valued by the company. This recognition can strengthen morale and encourage employees to maintain their performance.

Sales meetings: Sales meetings also serve as a non-monetary motivational tool because they provide an opportunity for two-way communication and interaction among members of the marketing team. During these meetings, salespeople can become more involved in company activities and gain a better understanding of its strategies and objectives. This helps them see how their own work contributes to the organisation's goals.

Sales training programme: Finally, a sales training programme can motivate employees by improving their product knowledge and selling skills. As salespeople gain knowledge and become more competent, their self-confidence can increase. They are then better prepared to deal with customer questions and carry out their responsibilities effectively.

• How much a firm can afford to spend on motivating its staff.

The programme must fit the firm's budget. A plan the company cannot afford to maintain is not sustainable.

• The individual needs of salespeople.

Salespeople have different needs and may respond to different forms of motivation. The programme should account for those differences.

• The expectations of salespeople regarding the compensation they should receive from management for their performance.

Management should consider what employees expect as fair compensation for their performance.

• The degree of control required over the sales force's activities.

The compensation plan affects how closely management can direct and monitor sales activities.

• How much incentive will be needed to reach objectives?

The plan should offer enough incentive to encourage the behaviours and results needed to achieve company objectives.

• How much are the total costs of different compensation plans?

Management must compare the total cost of each option and ensure the plan is financially sustainable.

Progressive commission rate: A progressive commission rate increases as the salesperson's sales volume increases. This means that the salesperson earns a higher commission percentage when a higher level of sales is achieved. The arrangement therefore rewards increased sales performance.

Regressive commission rate: In contrast, a regressive commission rate decreases as sales volume increases. As the salesperson sells more, the commission percentage becomes lower. The rate therefore moves in the opposite direction to a progressive commission structure.

Varied commission rate: A varied commission rate is based on the profitability of the products sold. For example, the company may pay a higher commission for selling products that generate greater profit and a lower commission for less profitable products. This encourages salespeople to give attention to products that make a stronger contribution to the company's profitability.

Qualitative standards: The guideline describes these as subjective and not exactly measurable. Instead, the salesperson’s job activities are evaluated. Examples given are the number of sales calls made and the number of demonstrations.

Quantitative standards: The guideline describes these as specific end results expressed in exact quantities. Examples given are the number of units sold and the number of new accounts.

Marketing costs: The total amounts of money that a company uses to deliver its goods or services to its customers.
Examples: Transportation costs or advertising costs.

• According to ledger account.

Grouping costs by ledger account lets management examine costs according to the accounts in which they are recorded.

• According to activity classification.

Activity classification groups costs by the activities that create them, helping management identify resource use.

• According to territories and products.

Analysing costs by territory and product allows comparisons between sales areas and product groups.

The marking guideline lists these three bases for analysing marketing costs.

• Honesty.

Honesty builds trust. Customers and the employer must be able to rely on what the salesperson says and does.

• Enthusiasm.

Enthusiasm gives the salesperson energy and a positive approach when dealing with customers and daily work.

• Decisiveness.

Decisiveness is the ability to make timely choices when responding to customer needs or sales situations.

• Perseverance.

Perseverance helps a salesperson continue towards targets despite rejection, delays or other obstacles.

• Self-confidence.

Self-confidence helps a salesperson present products, communicate clearly and respond to questions.

• Empathy.

Empathy helps a salesperson understand a customer's point of view and respond to the customer's needs.

The guideline lists six characteristics; any four may be stated.

Faster productivity: Firstly, an induction programme helps new employees become productive within a shorter period because it introduces them to their duties, the organisation and the standards expected of them. They can therefore begin performing their work with a clearer understanding of what is required.

Information about conditions of service: In addition, employees receive detailed information about their conditions of service and working conditions. This helps them understand the practical terms of their employment, the rules they must follow and what the organisation expects from them.

Job satisfaction and commitment: An induction programme can also improve job satisfaction, motivation and commitment. When employees receive clear information and support from the beginning, they are more likely to feel welcomed, valued and confident in their new positions.

Lower staff turnover: Furthermore, effective induction can contribute to a lower staff-turnover rate. Employees who understand their roles and feel supported are more likely to settle into the organisation, which may reduce the likelihood of them leaving soon after appointment.

Reduced anxiety and uncertainty: Finally, induction reduces the anxiety and uncertainty that often accompany starting a new job. By explaining the workplace, responsibilities and procedures, the programme helps employees adjust more comfortably to their new working environment.

• When team selling makes it difficult to identify individual sales efforts.

When several people contribute to one sale, individual effort may be difficult to measure. A salary avoids individual commission calculations.

• When there are large differences in sales potential between territories.

When territories have different sales potential, commission earnings may reflect territory conditions rather than effort. A salary can reduce this difference.

• In business-to-business sales, high-tech industries and industries where sales fluctuate.

These environments may involve long selling cycles, specialist knowledge or fluctuating demand. A salary provides stable income.

• Where customer service is important to an organisation.

Where customer service is important, a salary can support service work that may not lead directly to an immediate sale.

• If the company wants to maintain control of its sales force but still needs a way to motivate it.

A salary gives management predictable compensation costs and can support control over sales activities.

Lack of incentive for extra sales: Firstly, a straight salary does not directly reward salespeople for making additional sales. As a result, employees may have less financial incentive to put in extra effort or exceed their sales targets.

Focus on easy-to-sell products: Secondly, salespeople may concentrate on products that are easy to sell instead of making an effort to promote the full product range. This can be a disadvantage when the company needs them to sell particular products or develop demand for slower-moving items.

High fixed cost during low sales: Another disadvantage is that salary payments remain a fixed cost even when sales are low. The company must continue paying employees regardless of the revenue generated, which can place pressure on the business during periods of weak sales.

Potentially unfair income distribution: A straight salary may also create a perception of unfair income distribution. Employees who contribute more or achieve better results may receive the same salary as colleagues who contribute less, which can lead to dissatisfaction.

Reduced motivation: In addition, the arrangement may negatively affect motivation among salespeople who expect their earnings to increase when they perform better. If extra effort does not lead to higher pay, these employees may become less motivated to improve their results.

Competition between colleagues: Finally, salespeople may begin to compare themselves with one another rather than focusing on competition in the market. This can weaken cooperation within the sales team and may reduce overall productivity.

Step 1 — Establish basic evaluation policies: The first step is to establish a clear policy for evaluating sales performance. The sales manager should state the objectives of performance appraisals and explain how the evaluation process will be conducted. This gives managers and salespeople a common understanding of the purpose and procedures of the evaluation.

Step 2 — Establish performance standards: The next step is to establish performance standards against which salespeople will be assessed. These standards should be realistic, fair and challenging, and should include both quantitative and qualitative measures where appropriate. Clear standards provide a benchmark for judging whether the required level of performance has been achieved.

Step 3 — Obtain agreement on performance standards: After the standards have been established, the manager should obtain the salesperson's agreement to the targets set for the relevant territory. In doing so, the manager must consider the territory's sales potential and whether the standards are achievable. Agreement helps ensure that the salesperson understands the expectations and accepts the basis on which performance will be evaluated.

Step 4 — Compare actual performance with predetermined standards: Once the evaluation period has passed, the salesperson's actual performance must be compared with the predetermined standards and targets for that same period. This comparison shows whether results are above, below or in line with expectations. Where significant deviations occur, management may need to adjust sales objectives or revise its strategies.

Step 5 — Determine reasons for deviations: The final step in this part of the process is to determine why actual performance differed from the standards. The sales manager and salesperson should examine both positive and negative deviations and identify the reasons behind them. By understanding what caused the differences, they can decide which successful practices should continue and what corrective action or support may be needed.