Review of Related Literature

This subchapter contains facts about Strategic Position and Sales Performance related to
the present study. These are both essential and practical researches taken from local and foreign
sources. Toward this end, the researchers had included in this section various related literature
and studies that pose a bearing on the research they had undertaken.

Sales Performance

"By analyzing sales force performance, managers can make changes to optimize sales going
forward. Toward that end, there are many ways to gauge the performance of individual salespeople
and of the sales force as a whole, in addition to total annual sales." In a survey of nearly 200 senior
marketing managers, 54 percent responded that they found the "sales force effectiveness" metric
very useful.

https://en.wikipedia.org/wiki/Sales_effectiveness

Companies today need to be smarter about enhancing their returns on sales

investments. They need to capitalize on emerging trends to create a more dynamic
sales capability that will grow revenue and build loyalty. And they need to transform
their traditional sales approach to meet the needs of an always-connected customer
who expects to be served and sold to in a completely different way. (Accenture, in
collaboration with CSO Insights, a leading research and benchmarking organization,
conducted in 2014, the 20th annual study on sales performance optimization).This
study highlights the importance of Knowledge, Orientation for Learning, and
Working Smart, reinforcing the statement by Verbeke, Dietz, and Verwaal (2011)
that we are moving in direction of an intensive knowledge economy. Therefore,
managers need to recruit, select, develop, and retain more qualified salespeople to
deal with the ambiguity of the role, which is incorporated to the sales work, and who
have the capacity and resilience to assume the responsibility of developing, sharing
and using knowledge and skills.

https://rbgn.fecap.br/RBGN/article/viewFile/1686/pdf_74

Another study examined the interaction between the salesperson and the client and
evaluated the secret signals a salesperson displays. According to the author,
secret signals are primitive, non-linguistic communication (Buchanan, 2009).
Buchanan suggests that it isnt what the salesperson says, but the intonation, pace,
and amplitude the salesperson uses that is of importance. These are the prosodic
features of verbal behavior. What the author identifies as a secret signal is
actually the salespersons verbal behavior. In effect, the salespersons verbal
behavior is a crucial element of making the sale. The Buchanan (2009) study is not
a behavior-based sales approach and it is not empirical in nature. This notion is
conceptual perhaps in part because secret signals are not easily observable. The
current study sought to operationalize some of these sales behaviors and improve
them through a training session dedicated to verbal and non-verbal behavior and
how verbal and non-verbal behavior (both client and representative) can affect sales
performance. In addition, the current study attempted to train participants to
recognize the secret signals of the client and engage in appropriate verbal and
motor behavior in the presence of such signals.

Consumer behavior is another factor that influences sales performance. Although

the current study does not examine consumer behavior per se, given the influence
of consumer behavior in the sales process, it makes sense to briefly review some
work in this area. Salespersons assist consumers with purchases by evaluating the
consumers behavior and modifying sales techniques to fit the consumers behavior.
Hantula and Wells (2010) conducted a study on consumer behavior. The authors
found that conditioning, choice, and marketing all affect consumer behavior which
in turn affects sales performance.

Other business studies have been conducted to examine the effects of other
organizational factors on sales performance. For example, one correlational study
examined the effects of an ethical work climate on a salespersons organizational
identification, supervisory trust, organizational commitment, turnover intentions,
and actual turnover (DeConinck, 2011). The authors found that salespersons who
believe in the integrity of their organization tend to have improved sales
performance relative to their peers. In other words, the more a salesperson believes
the product they are selling is going to be a benefit to their targeted consumer, the
more likely they are to do a better presentation in content and/or delivery, which
leads to making the sale or making a larger sale. Making more sales relates directly
to a salespersons turnover intentions. If they sell, they make more money, which
makes it less likely they will look for a position elsewhere.

http://scholarworks.wmich.edu/cgi/viewcontent.cgi?article=1124&context=dissertations

Salary Increase

Given the relative attention afforded to performance-based pay in the

literature, including ethical risks in each system (Wharam et al., 2008), we
recommend that policy-makers and managers in organisations do not prematurely
rule out the possibility of performance for pay (Krupp and Madhivanan, 2009), as
there appears to be insufficient evidence to either support or refute its
effectiveness.
https://assets.publishing.service.gov.uk/media/57a08ab9e5274a31e000073a/Increasing_salaries_
2011Carr.pdf

Individual performance-related pay schemes can either base the whole of the
individuals pay on her performance, or affect only a performance-related bonus in
addition to a fixed wage or salary. The examples above link the performance
component of pay to an objective measure of output the number of pieces made,
the value of contracts sold, etc. Since most measures often deal with only part of
the output, however, pay based on objective measures can be misleading.
Accordingly, individual performance pay may also be based on subjective measures
of the employees performance. This form of performance pay, called merit pay,
includes pay raises or bonuses that depend in part on managements' subjective
assessment of the employees performance. Performance may be evaluated directly
by the line manager or more formally via a performance appraisal scheme that may
include not only production or service targets but also colleague and client
evaluations. Almost by definition, subjective measures of performance are likely to
be affected by biases, whether of a personal nature or due to prejudice against or
favouritism for some ethnic, gender, age, sexual preference group. It should thus be
less robust to management vagaries than objective measurement. But it is also
possible to discriminate indirectly, for example in the definition of the objectives or
thresholds that determine performance bonuses. Many firms base pay for
performance by a mix of objective and subjective elements. (Bryson et. al. 2011)

http://cep.lse.ac.uk/conference_papers/26_05_2011/pellizzari.pdf

Finally, when the product market is imperfectly competitive there may also be
effects of the minimum wage on profitability in both the short-run and the long run.
Appendix A in Draca et al (2008) discusses these models in some detail, but it is
sufficient to note that positive price cost margins are an equilibrium phenomenon in
standard industrial organization models such as Cournot or differentiated product
Bertrand. For example, consider a Cournot oligopoly where firms have
heterogeneous marginal costs and constant returns to scale. Introducing a minimum
wage has a differential impact on the firm employing more low skilled workers
causing this firm to lose market share and suffer a fall in its price cost margin.
However, so long as profits do not fall below the exit threshold it will remain in the
market with lower profitability.

http://personal.lse.ac.uk/draca/images/min_wage_feb2010.pdf
Increase in Manpower

The literature review suggests a positive relationship between labor levels

and quality, but also suggests that the relationship between quality and profitability
will depend on the context. At retail stores, increasing the labor level is likely to
increase both Conformance Quality and Service Quality. When store employees
have more time, they are less likely to make errors in activities such as shelving
merchandise or placing price tags on display shelves and more likely to spend time
with customers. In turn, sales are likely to be higher when products are shelved
properly (Ton and Raman 2008) and salespeople are available (Fisher et al. 2006).
Conformance Quality is also expected to increase future sales at retail chains that
use centralized merchandise planning systems, since the performance of these
system depends on conformance to in-store merchandising specifications and on
accurate point-of-sale and inventory data (Raman et al. 2001). In addition to
increasing sales, Conformance Quality is likely to improve labor productivity and
reduce shrink. Employees can shelve, replenish, and help customers find products
more quickly and fewer products are expected to be damaged or lost.

http://www.hbs.edu/faculty/Publication%20Files/09-040_146640ac-c502-4c2a-9e97-
f8370c7c6903.pdf

The greatest asset of any organization is its human resources that ensure
that achievement of the companys goal and objective. (Source: Human resource
Article 2012). The human personnel element represents one of the companys
largest investments. Susan,(2012). Consequently, organization should prioritize the
development of the human element to maximize talents, skills and ability which will
automatically reflects on the companys profit. It pre-supposes that we do need
people in order to firm a business which that no business can exist entirely without
people. Companies under study need to equip their labor force which will boost
quality product and profit making of their organization. Human resource
development makes sure that manpower planning in an organization is not static
but an ongoing process source Human resource Article (2009). It focuses on raising
productivity through improved quality, efficiency, cost reduction and enabling
customers concentrate on their core business activities. In recent years, it has been
noted that good number of business establishment are having poor performance as
a result of lack of effective and efficient human resources. Business is full of
uncertainty and the understanding of labor contribution or human resources
development is vital for management especially in the areas of boosting
organizational productivity and as well its profitability.

http://hrmars.com/hrmars_papers/The_Effect_of_Human_Resources_Development_o
n_Organizational_Productivity.pdf
Theoretical and Conceptual Framework

More recently, in 2006 and since, a new buy-in technique has been
developed, called Strategy and Tactics Trees. These trees represent an
entirely different approach used to plan and gain a buy-in where the
objective is the pursuit of a very aggressive positive goal.This approach
emerged from a Theory of Constraints initiative called the Viable Vision,
where the goal was to have VERY aggressive profit growth, at a level
where a simple elimination of negative performance issues wouldnt come
close to generating the target performance, so skepticism as to th
practicality of the approach could be very high. In Theory of Constraints,
the Solution for Sales (getting a customer to Buy-In to your solution, via
your product offering, to business problems that hurt them) and internal
Buy-In (getting your bosses, peers or subordinates to buy-in to a plan of
action, for example) are both very similar applications of the TOCs
Thinking Processes and extremely powerful. http://www.synchronix.com/about-
theory-of-constraints/theory-of-constraints-applications/solutions-for-sales/

Sales theory is about the relationship between the sales force and the product itself. Marketing professor
Thomas Ingram of Colorado State University stresses the integration of marketing and sales. This means
that the sales staff must be knowledgeable about the product, which means the product, sales and
promotion are integrated on the sales floor. Selling a car, for example, cannot effectively be done unless
the sales staff is knowledgeable about the product, its specifications and distinctions, as well as
contrasting its specifications to the competition.(Johnson 2016)

http://smallbusiness.chron.com/sales-management-theory-practice-17980.html

As a result of a lack of empirical investigation, the variance in salesmen's performance attributable to

motivational constructs has not been estimated. Vroomian expectancy theory was used to show that the
motivational perceptions attributed to a set of sales "incentives" by a sample of life insurance salesmen
were related to two performance criteria. (Oliver 2000)

https://www.jstor.org/stable/3151139?seq=1#page_scan_tab_contents

According to the expectancy theory the choice of the amount of effort people exert
is based on a systematic analysis of (a) the values of the rewards from these
outcomes, (b) the likelihood that rewards will result from these outcomes, and (c)
the likelihood of attaining these outcomes through their actions and efforts (Chen et
al, 2006). Expectancy theory identifies three factors which play an interactive role in
motivation (Vroom, 1964).

http://www.ccsenet.org/journal/index.php/ijms/article/viewFile/12924/10150

4-Drive Model: New Theory on Employee Motivation By Kurt Nelson, PhD The 4-Drive
Model of Employee Motivation was presented by Lawrence and Nohria in 2002. The
model is a holistic way of looking at employee motivation beyond the typical pay
model that is prevalent in the corporate world today. I will not go into detail
regarding the model here, but just give an overview and how this model presents a
new way of thinking for organizational leaders. The Four Drive theory is based on
research that shows four underlying drives the drive to Acquire & Achieve, to Bond
& Belong, to be Challenged & Comprehend and to Define & Defend.

http://lanterngroup.com/wp-content/uploads/2014/01/4-Drive-Model-Driving-Sales-
Performance.pdf

Location theory has become an integral part of economic geography, regional science, and spatial
economics. Location theory addresses questions of what economic activities are located where and
why. Location theory or microeconomic theory generally assumes that agents act in their own self-
interest. Firms thus choose locations that maximize their profits and individuals choose locations that
maximize their utility.

https://en.wikipedia.org/wiki/Location_theory