CLEP Principles of Marketing Study Notes

An interactive presentation one in which the

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An interactive presentation - one in which the salesperson interacts with the prospect to determine his needs, and then explains how the product will address those needs. Quite often, a salesperson will have a bit of both in his presentation--a prepared, and an interactive portion. Drawing Account Method – modification of straight commission plan, sales commission. Credited to each salesperson’s account. There are 3 basic types of Salesforce Compensation plans: 1. Straight salar y compensation plan - salespeople are paid a specified amount per time period. Salesperson receives a straight salary. 2. Straight Commission Plan - a salesperson's compensation is determined solely by the amount of their sales for a given time period. Salesperson's entire paycheck is based on how much in sales he made during a given time period. 3. Combination Compensation plan - When choosing a compensation plan for salespeople, the main factor is balancing the need to provide income security versus incentives . Salary provides income security, while Commission provides sales incentives. In a Combination compensation plan, salary is combined with a commission to provide for some level of both needs. Demand for industrial products is derived from the demand for consumer products. Derived demand is based on the demand for consumer products. For example, if an organization sells tires to car manufacturers, its demand is derived because the number of tires it sells depends on how much of a demand there are for the cars. The higher the demand for the cars, the higher the demand for its tires. When evaluating salespeople's performance, a lot of information can be obtained from reports, which describe each salesperson's schedule of calls and sales results . Sales Reports are a big part of what sales management looks at when evaluating performance . The dimensions used to measure a salesperson's performance are based on the sales objectives. Qualitative measures can also be a factor; i.e. through customer feedback. Sales promotion - activities which are intended to provide short-term boosts in product sales. Examples are coupons, contests , sweepstakes, free trial offers. They can be directed at intermediaries also, and include sales contests, trade shows, quantity discounts, etc.. All paid marketing communications other than advertising, public relations, and personal selling falls under Sales Promotion. PART VII Price Elasticity of Demand provides a measure of the sensitivity of demand to changes in price. Formally defined as the percentage change in quantity demanded relative to a given percentage change in price. Basically, it is supposed to tell us, for a given change in a product's price, how this will affect the demand for the product. The Price Elasticity of Demand is calculated by dividing the percentage change in demand by the percentage change in price .
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