The Disadvantage of Product Sales Organization Is

question 133

Multiple Choice

The disadvantage of product sales organization is

• A)it increases the number of salespersons in the salesforce since most product sales organizations are based around standard rebuys.
• B)there is a larger cost for sales since this method is chosen for products that inherently have little or no product variation.
• C)significantly maximizes travel time,expenses,and duplication of selling effort from one territory to another.
• D)increases the requirement for more sales managers since the salesforce is paid strictly on commission,which acts as a significant self-motivator.
• E)produces high administration costs and duplication of selling effort because two company salespeople may call on the same customer.

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Definitions:

Equity Carve-out

A corporate strategy where a company sells a portion of the equity of a wholly owned subsidiary or division through an initial public offering.

Spin-off

A type of corporate restructuring where a company creates a new independent company by selling or distributing new shares of its existing business.

Lockup Transaction

Agreements restricting company insiders from selling their shares for a set period after an initial public offering to prevent a sudden oversupply of stock.

Synergies

Synergies are the additional value created by the combination of two companies, expected to result in cost savings or increased revenues beyond what the individual entities could achieve alone.