Evaluation of the effectiveness of sales promotor’s

performance

In the case Addis Ababa St. George beer company

Name - Kalekidan Ashenafi

BER/5020/10 R3MM1

Advisor: - Nestanet. B
Acknowledgment

First and for most I would like to glory and honor the almighty God. And then next would like to thank
my family for their encouragement, moral and support.

My recognition to my advisor Netsanet Beneberu for her suggestions and guidance.

Finally, I acknowledge the sales promotors and employees of the marketing department of St. George
Brewery Company for their support during the field practicum and their honest response to my
questions.
Table of Contents
Chapter one ........................................................................................................................ 5
1 Background of the study .................................................................................................................... 5
1.2 Background of the organization ...................................................................................................... 5
1.2.1 BGI Ethiopia history ................................................................................................................................ 5
1.2.2 Its products and distribution .................................................................................................................. 6
1.2.3 St. George Breweries production ........................................................................................................... 7
1.2.4 BGI target, distribution channels and competitors ................................................................................ 7
1.2.5 Logo of BGI ............................................................................................................................................. 8
1.3 Statement of the problem .............................................................................................................. 9
1.4 Basic research questions ............................................................................................................... 10
1.5 Study Objectives............................................................................................................................ 10
1.5.1 General objective ................................................................................................................................. 10
1.5.2Specific objective................................................................................................................................... 10
1.6 Scope of the study......................................................................................................................... 11
1.7 Limitation of the study .................................................................................................................. 11
Chapter two ...................................................................................................................... 12
2. Review of Literature: Theoretical review........................................................................................ 12
2.1 Sales Promotion ...................................................................................................................................... 12
2.1.2 Performance evaluation ....................................................................................................................... 13
2.1.3 Components of a Performance Management System ......................................................................... 14
2.1.4 Salesperson Performance .................................................................................................................... 15
2.1.5 Relationship of skill level, knowledge and ability................................................................................. 16
2.1.6 Productivity .......................................................................................................................................... 19
2.1.7 Characteristics of productivity measurement ...................................................................................... 20
2.1.8 Performance ......................................................................................................................................... 20
2.1.9 Determinants of sales force performance ........................................................................................... 22
2.2 Empirical review ............................................................................................................................ 23
2.2.1 Antecedents of Salesperson Performance ........................................................................................... 24
Chapter 3 .......................................................................................................................... 26
3.1 Research design and methodology ............................................................................................... 26
 3.1.1 Research Methodology ........................................................................................................................ 26
3.1.2 Research Design and research approach ............................................................................................. 26
3.2 Source of data and data collection instruments ........................................................................... 26
3.3 Methods of data collection ........................................................................................................... 27
3.4 Population and sampling technique ............................................................................................. 27
3.4.1 Target population ................................................................................................................................. 27
3.4.1.2 .Sampling ........................................................................................................................................... 27
3.5. Data analysis ................................................................................................................................ 27
Chapter one
1 Background of the study
Most of the enterprises in the word are evaluating performance of their employees as a motivational
tool. Because, it is one of the key element in motivating function in human resource management.
Performance evaluation is a systematic evaluation of a worker’s performance potential for
development. It is a process that estimating or judging the value excellence qualities or status of
some object, person or thing individually and collectively, it is part of the other staffing processes, viz
recruitment, selection, placement and indoctrination. (Mamoria 1968). Performance evaluation helps
to achieving objectives, productivity result achievement of individual and organizational goals.
productivity is increased by performance, and effectiveness of sales promoters of St. George can also
be enhanced through the productivity of the performance.

The field of performance management can comprise two separate types of management. In one
aspect, an analyst may view the performance of a company as a whole, and also evaluate the
effectiveness of the managers and heads of companies in reaching goals. In another sense, it may be
a system of evaluating employees to help them reach reasonable goals and thus ensure that the
company performs better. How the performance of individual employees is managed can differ, but it
generally includes planning work, setting goals, offering feedback and reviews, offering opportunities
to learn more in one‟s field, and rewarding employees who perform well; Meidan, (1996).

1.2 Background of the organization

1.2.1 BGI Ethiopia history
BGI is the leading brewery in Ethiopia with a leading share of the domestic beer market. BGI services
thousands of sales outlets all over the country, and deploys promotors to visit and monitor this outlet
regularly. St. George beer is the most popular and oldest beer in Ethiopia. Founded in 1922, it is
brewed by BGI Ethiopian in Addis Ababa, St. George named after the patron saint of Ethiopia, a
patron saint it so happens to share with England and which underlies the country’s deep Christian
past. The founder was a Belgian called Mussie Dawit Hal, who later sold it to a German company. At
the beginning, the factory used basic raw materials like barley and hops all imported from Europe,
and the management staff of the factory and the leading technicians who controlled the brewery’s
activities were all foreigners. Eventually, however, an Ethiopian company took over the brewery
1952. This company was said to have been organized as a shareholding entity, the larger share of
which was owned by emperor Haile Selassie, the Rastafari messiah and big time leader of Ethiopia.
Over time the brewery grew and grew and become increasingly popular in the country, with the
locals proud to drink an Ethiopian beer and not some import from afar. The factory is now owned by
BGI, an internationally acclaimed brewing company that exports to Europe and to north America.
(http://www.bgiethiopia.com/history/)

1.2.2 Its products and distribution

BGI Ethiopia has been operating in Ethiopia since 1998 and engaged in the production and
distribution and distribution of beer, wine and beverages. BGI owns five breweries including the
iconic St. George brewery in AddisAbaba, the Kombolcha brewery, the Hawassa brewery, Zebidar
brewery and Mayechew northern brewery with a combined production capacity of 3.6 million
hectoliters of beer (bottle and draft) annually.st. George, Castel, Panach, Raya are its beer products.
BGI Ethiopia PLC. Also owns and manages the castle winery and vineyard located in the town of
Zeway. Established in 2012, the winery produces twelve thousand hectoliters of different wine
varieties annually under the brand names Acacia and rift valley. Acacia medium sweet rose, Acacia
medium sweet white, Acacia medium sweet red, Acacia dry red, Rift valley merlot, Rift valley dry rose
are its wine products. Its products are distributed by partner agents in all corners of the country and
exported internationally to north America (USA and Canada), Europe (UK, Italy, France, Germany,
Switzerland, Belgium, Netherlands etc..), middle east (Israel, and UAE), Australia, Africa (Kenya,
Tanzania, south Africa, South Sudan, Djibouti etc..), Asia (china, japan etc.).
(http://www.addismap.com/bgi-ethiopia).
1.2.3 St. George Breweries production

The Addis Ababa St. George brewery located in Mexico square, Lideta sub-city, Addis Ababa, its
production capacity is started with 200 to 300 bottles per day in 1923 and presently producing
555,000 HL. Per annum after a series of upgrades and expansions, its number of employees for 956
permanents and 58 seasonal employees, produces both St, George and panach. The Kombolcha
brewery established in 1998, and it’s the first brewery from the ground up by BGI Ethiopia, located in
348km from Addis in Kombolcha city, Wello, Amhara regional state, its number of employees for 449
permanents and 3 seasonal employees. The Hawassa brewery established in 2011, this is the largest
brewery built by BGI Ethiopia so far, located in 275km, from Addis in Hawassa, SNNPR regional state,
there are about 498 permanents and 13 seasonal employees. The Zebidar brewery established in
2012 by Jemar Hlegeb industry Share Company by prominent local businessman and women and the
Belgian brewing giant UNIBRA (owners of SKOL brand) and started operations in 2017. In 2018
Zebidar brewery and Zebidar beer joined the BGI brands family when the company acquired the
shares of UNIBRA. Located in 167km from Addis near Welkite town, Gurage region. Number of
employees is 184 permanents and 6 seasonal. The Raya brewery established in 2012 by Raya Share
Company and BGI Ethiopia (60%- 40% share) and started operations in 2016. In 2017 BGI Ethiopia
managed to acquire all individual shares and assumed full ownership of Raya brewery. Located in
822.5 km from Addis in Mayechew town and 327 permanents and 103 seasonal employees. Over the
entire firm is in the 2nd market share in capacity of 4.3 million HL a year.
(http://www.bgiethiopia.com/our%20breweries)

1.2.4 BGI target, distribution channels and competitors

BGI main target are the young and adult people who take these drinks daily and those areas where
the demand is higher than the other areas. And its distribution channel is direct selling by using their
own transports and indirectly using agents assigned in different regions of the country, its common
advertising mediums were print media, national and international Tv commercials, billboards and
holdings, posters and stickers display in the stores and in different areas. Sales promotion activities
are national football (St. Giorgis club) and price-off promotion during national holidays. BGI’s trade
promotion gives incentives to middle men or retailers in a way that they offer them free samples and
free empty bottles. The company have major competitors from both the beer and wine firms, when
Heineken, Harrer, Bedelde, Habesha, Walia, Dashen, and meta categorizes in the beer and the Guder,
Axumit, and Gebeta will categorized in the wine factories. (http://www.bgiethiopia.com/aboutus/)

1.2.5 Logo of BGI

It has an interesting cover on its bottle. We got to see a medieval type knight slaying a dragon. Well
of course that knight is St. George, the geezer that slayed that big old dragon back in the day. Overall
it is a nice stand out distinct design and in a lovely looking brown bottle.
1.3 Statement of the problem

Sales are activities related to selling or the number of goods or services sold in a given time period.
The seller or the provider of the goods or services completes a sale in response to an acquisition,
appropriation, requisition or a direct interaction with buyer at the point of sale. Sales promoters are
responsible for attracting new customers and helping the company reach revenue targets. His/her
activity is making product presentations, approaching potential customers, answering to questions,
and understanding customer needs and worries. They should demonstrate excellent communication
and listening skills, selling abilities and observation sprit.

Every organization is very most interested in cultivating high productivity from the employees. For
this purpose, they regularly evaluate the performance of their employees. In a way, performance
evaluation is considered as a significant element in the organization, because performance increases
productivity.

It is natural that every business organization whether small or large, private or government,
domestic or international operate in a turbulent and uncertain environment. In the context of
changing customer expectations technological discontinuities, increasing environmental and
government uncertainties so that business managers have a big challenge of making the right
strategic choice and setting their strategic priorities in order to allocate their resources to different
functions in an efficient manner for the firm to success. In fact, when you run a business, everything
might not be easily accomplished. It is known that a promotional strategy specifically sales promoter
influences the company’s ability to generate profits or to stay in business. Likewise, St. George
brewery is facing with some problems in completion its beer industry in relations to the sales
promoters. The sales promoters are given 10-12 routes to work on their sales and promotions that
they have to visit them door to door to collect and gather information in a week. In one route there
may be about 150 max outlets, which too much routes given to one sales promoter and they get
tiresome of it easily to visit door to door and also hard to get probability of accurate information. And
having their tab on hand to fill the questions on the app called Tanjo asked there (stock, sales of the
product user weekly and daily as well as the competitors) they lose good enough available internet
connections. Even though, St. George brewery is the oldest and successful beer in Ethiopia but
promotional strategies practice of competitors creates a shift of customer to the new products and
use their full potential to penetrate the market through promotion and to widen their destination
demographically and geographically (Habesha, Heineken, Walia, Dashin).
For all this reasons it is difficult to remain competitive and sustain growth. So this study will try to
evaluate the effectiveness of the sales promotor’s performance in St. George company

1.4 Basic research questions

This research will try to answer the following questions;

 How does the sales promotors performance influence the company sales productivity and
sales promotion?
 How much is the degree of effectiveness of sales promoter’s performance in the company?
 How dos the sales promotors qualify the components of KSA (knowledge, skill, and ability)?

1.5 Study Objectives

1.5.1 General objective- is to evaluate the effectiveness of the sales promotor’s performance in St.
George Company

1.5.2Specific objective-

 To determine the influence of sales promotor performance on the company sales

productivity and sales promotion?
 To find out the degree of effectiveness of sales promoters performance in the
company
 To identify How does the sales promotors qualify the components of KSA (knowledge,
skill, and ability)?
1.6 Scope of the study

The scope of the study covers how the sales promotors performance is practiced in St. George beer
company aiming to evaluate the effectiveness of the sales promotor’s performance in St. George
company. Delimitation of the is Therefore, conceptually, the study is concerned in areas of the
performance of its sales promotors and their effectiveness but does not include other areas of
promotional mix tools, even though they have power in influencing promotional practices or activities
in the company sales profit. Methodologically, the research was focused on those sales promotors
who promote the firm’s product in Addis Ababa and its surrounding.

1.7 Limitation of the study

The research to achieve the objective at hand basically relied only on examining the sales promoter’s
performance and effectiveness in the company Moreover, the research is restricted on the samples
that were drawn only from Addis Ababa city thus this may limit the research’s ability to draw
conclusions about others sales promotors of all the branches of the company found on the regional
areas thus, conducting researches on national level is appropriate to reach at more accurate
conclusion on the issue.

Brief description of the field practicum

I was assigned in the firm’s sales department which is divided by seven territories and each territory
is located in different geographical area in Addis Ababa also borders of Addis Ababa , has its own one
supervisor and maximum nine sales promotors as a sales promotor in one territory to promote, to
assess how the products are doing in the market, to identify and know well about the firm’s
competitors and their activities and to make the products reach to the firm’s potential customers by
still reminding and offering the current clients and by informing, persuading and enhancing new
retailers, wholesalers and grocery owners to purchase the product. So I was doing the same job as
the sales promotors by practicing with the help of them which are given 10-12 routes (one route max
150 outlets) to work on their sales and promotions that they have to visit them door to door to
collect and gather information in a week by filling the questions provided by the app called Tanjo.
Chapter two
2. Review of Literature: Theoretical review

Literature review provides various insights associated with marketing practices. The researcher from
assessing the literature review tries to find out the gaps in the existing research. “This chapter covers
all the material used in the form of various books, international and national journals and research
reports. The chapter has very purpose to state the reference material used in the study, further it
aims to review the relevant research articles and, to find out the research gaps in the existing
literature.

2.1 Sales Promotion

Sales promotion can be considered as any strategy or activity intended to increase the business or
trade and thereby boost the sales (Shimp. 2003). Promotion is a form of communication with the
target customers. Rather it can be considered as a form of persuasive communication aimed at
changing the buying behavior of the customers. A right promotional strategy will be helpful to the
company in making the customers understand the fact that it has the right product or service for
them. Thus the promotional strategies have mainly three objectives: Making the customer aware
about the product or service, Persuading the customer to purchase the product, Remind the
customer about the product and make them think in favor of it.

Sales promotion, a key ingredient in marketing campaigns, consists of a collection of incentive tools,
mostly short term, designed to stimulate quicker or greater purchase of particular products or
services by consumers or the trade. Whereas advertising offers a reason to buy, sales promotion
offers an incentive. Sales promotion includes tools for consumer promotion (samples, coupons, cash
refund offers, prices off, premiums, prizes, patronage rewards, free trials, warranties, tie-in
promotions, cross-promotions, point-of purchase displays, and demonstrations), trade promotion
(prices off, advertising and display allowances, and free goods), and business and sales force
promotion (trade shows and conventions, contests for sales reps, and specialty advertising). Sales
promotions in markets of high brand similarity can produce a high sales response in the short run but
little permanent gain in brand preference over the longer term. In markets of high brand dissimilarity,
they may be able to alter market shares permanently, (Kotler and Keller, 2012). Sales promotion
involves activities that create buyer incentives to purchase a product or that add value for the buyer
or the trade. Sales promotion can be targeted toward consumers, channel intermediaries, or the sales
force. Sales promotion includes broad assortment of promotional elements because it encompasses
activities other than advertising, public relations, and personal selling, (Ferell and Hartline, 2011)

2.1.2 Performance evaluation

Performance evaluation is considered as main aspect in inducing people. The success of an

organization largely depends upon how its resources are efficiently and effectively deployed in order
to achieve its objectives and goals. Human resources are considered to be the most important
resource. Therefore, the performance of employees has great impact on the success of any
organization. Performance management system has been adopted by organizations in order to
enhance employee’s performance make more timely and accurate staffing decision and enhance the
overall quality of the fine’s services and products.

Performance evaluation could, thus, be seen as an objective method of judging the relative worth or
ability of an individual employee in performing his tasks. If objectively done, the evaluation can help
to identify a better worker from a poor one. Similarly, there is a strong between induction, training,
and appraisal. In a large number of firms in UK, a new recruit is expected to discuss this schedule of
work in achieving induction objectives, and this schedule of work become part of his job (Stewart and
Stewart, 1977). Sales Performance Management Sales Performance management is the process of
creating a work environment or setting in which people are enabled to perform to the best of their
abilities. Performance management is a whole work system that begins when a job is defined as
needed. Performance management is not an annual appraisal meeting. It is not preparing for that
appraisal meeting nor is it a self-evaluation. It's not a form nor is it a measuring tool although many
organizations may use tools and forms to track goals and improvements; they are not the process of
performance management. It ends when an employee leaves your organization.
2.1.3 Components of a Performance Management System

Performance management defines our interaction with an employee at every step of the way in
between these major life cycle occurrences. Performance management makes every interaction
opportunity with an employee into a learning occasion. The performance management system may
contain all of these components, but it is the overall system that matters, not the individual
components; Bititci et al, (1997). The field of performance management can comprise two separate
types of management. In one aspect, an analyst may view the performance of a company as a whole,
and also evaluate the effectiveness of the managers and heads of companies in reaching goals. In
another sense, it may be a system of evaluating employees to help them reach reasonable goals and
thus ensure that the company performs better. How the performance of individual employees is
managed can differ, but it generally includes planning work, setting goals, offering feedback and
reviews, offering opportunities to learn more in one’s field, and rewarding employees who perform
well; Meidan, (1996).

Performance appraisal identifies areas where the employees need training and once the contents are
identified, it becomes easy to select teaching technology, reading, material and other training
necessities. Similarly, performance appraisal can also provide data to determine promotions,
transfers and even demotions of the employee. Thus it has direct bearing on other personnel
decisions (Shetty, 1970). It has also been found that data provided by performance appraisal is
increasingly being used by a superior as a basis for counseling the employee (Mc Gregor, 1972). The
purpose is to help the employee to overcome his weaknesses and become more effective in his job.
Perhaps, one of the most important roles of a manager or a supervisor is to “motivate, encourage,
build, train, reinforce, and modify behavior” of his subordinates (Yager, 1981). This can happen only if
there is regular and frequent interaction between the superior and his subordinates. If the interaction
is based on acknowledgement, there should be ample praise, corrections, comments and suggestions
by the supervisor on the tasks performed by the subordinate. This interaction process can be seen as
performance appraisal because in each interaction process some comments are exchanged on the
tasks in hand. In any appraisal process, three elements are involved (Niazi, 1979). These are
administrative matters related to appraisal, appraisal itself and identification of potential. Niazi
(1982) pointed out that in performance appraisal there are subsystems, and there is need to dealing
them from each other. In fact, he goes to the extent of suggesting that each one of these subsystems
should be handled by separate individuals. One distinct advantage foreseen in any such attempts is
that, to some extent, the “string pulling” can be minimized, because the subsystems are managed
independently leading to greater effectiveness of performance appraisal.

Generally, after the appraisal interview the employee is left alone to improve his performance on the
dimensions discussed in the interview till his performance comes up for evaluation next year. And
with the interview over, the supervisor may think that his job is over. In effect, his real job begins
from the moment. The supervisor should monitor now and then whether the improvement. In the
performance in the areas found weak is taking place or not, and, if not, help the employee to achieve
the required improvement. Malhotra (1982) suggested a performance improvement model which
necessitates supervisors to monitor the performance every four months on the achievement of
targets given key factors determining success and making necessary mid-course corrections.

2.1.4 Salesperson Performance

The importance of salesperson performance cannot be overstressed. The success of any sales and
marketing organization ultimately depends on the success of individual salespeople, for their
performance directly affects the firm’s bottom line, not just in the short run, but in the long run as
well. In the process of buyer-seller interaction and communication, salespeople develop new
business, build customer trust, nurture long-term relationships, create added value for customers,
and provide market information to management. With changing and more diverse buyer behavior,
the Reproduced with permission of the copyright owner. Further reproduction prohibited without
permission. Salespeople’s role as relationship managers in the marketing organization has never been
more critical (Anderson et al. 1999; Weitz, Castleberry, and Tanner 1998).

Advances in technology are not replacing the salesperson (Keenan 1994); instead, the demand for
salespeople has been increasing and continues to increase. By 2005, total sales jobs are projected to
increase by 18% from 1992 to 16,400,000 (Bureau of Labor Statistics 1997). Further, costs associated
with salespeople recruiting, selection, and training keep soaring. Therefore, knowledge of how to
achieve superior salesperson performance is of fundamental and enduring interest to sales managers
and organizations, as well as salespeople themselves. While salesperson performance is the central
concern of all sales organizations, firms emphasize different aspects of performance. In general,
salesperson performance has been defined and measured from either objective or subjective
perspectives, or both (Behrman and Perreault 1982). Objective performance is defined and measured
in terms of unit sales volume, dollar sales volume, contribution to profit, number of new accounts,
and the like. Subjective performance, on the other hand, is measured through evaluations by
supervisors, customers, coworkers, or salespeople themselves on such aspects as communication
effectiveness, sales volume, customer relations, controlling expenses, territory management,
mastering selling skills, teamwork, providing information to management, and so forth. A controversy
exists as to whether salesperson performance should be measured subjectively or objectively and, if
subjective measures are to be used, whose evaluations would be the most reliable. It has been
suggested that a choice can be made on the basis of the aspects of performance in which the
researcher is most interested (Landy Reproduced with permission of the copyright owner. Further
reproduction prohibited without permission. And Farr 1980). A number of researchers have argued
for the validity and appropriateness of self-evaluations in assessing the performance of boundary-
spanning employees such as salespeople (Behrman and Perreault 1982; Harris and Schaubroeck 1988;
Sujan, Weitz, and Kumar 1994). Since the focus of this dissertation is to examine the effects of certain
aspects of the salesperson’s behavior (i.e., creative behavior) on performance, an attempt is made to
emphasize the quantitative outcome aspect of performance. Given that self- evaluation measures of
salesperson performance are widely used and accepted, sales performance is operationalized here as
the salesperson’s perception of his or her overall achievement in sales, especially in the quantity of
sales achieved, as compared with his or her fellow salespeople.

2.1.5 Relationship of skill level, knowledge and ability

Skills and knowledge are inseparable. They tend to reinforce each other in that knowledge facilitates
the development and application of skills, and in the meantime, skills improve knowledge acquisition
and utilization (Churchill et al. 1997). Salespeople need an elaborate knowledge base of sales-related
situations, behaviors, and contingencies that link behaviors to situations (Weitz et al. 1986). Research
has examined the salesperson’s knowledge developmental stages. Anderson (1982) posits a three-
stage model of knowledge development. The first stage is referred to as the declarative stage where
knowledge is represented propositionally or as facts. Declarative knowledge (or schema-based
knowledge) is attribute information pertaining to clients that is organized in categories (Szymanski
1988). It is the set of situational cues that enables a salesperson to recognize or classify a particular
selling situation as an instance of a more general category (Leigh and McGraw 1989). The second
developmental stage is a gradual compilation process by which knowledge is converted from
declarative to procedural form so that it can be applied directly to generating behavior. In the final
stage, fine-tuned procedural knowledge is developed so that it will be applied more appropriately
and efficiently. Procedural knowledge, also called “script” knowledge, is essentially “a set of learned
behavioral routines that fit various selling situations. Once activated from memory in a sales context,
procedural knowledge guides the implementation of an intended selling approach” (Leigh and
McGraw 1989, Reproduced with permission of the copyright owner. Further reproduction prohibited
without permission. Based on the three stages of knowledge development, Weitz et al. (1986)
propose that procedural knowledge is the key feature distinguishing an expert’s knowledge structure
from that of a non-expert, and that procedural knowledge should be positively related to the
effectiveness of adaptive selling. Adaptive selling refers to altering sales behaviors during a customer
interaction or across customer interactions based on the perception of the selling situation (Weitz et
al. 1986). Thus, adaptive selling has an emphasis on customer interactions and the message
communicated from the salesperson to the customer. As Weitz et al. (1986) put it, an extreme
example of non-adaptive selling is delivering the same “canned” presentation to all customers. When
the salesperson uses unique sales presentation for each customer and also alters his or her behavior
during an interaction, he or she is said to be extremely adaptive. With an elaborate knowledge
structure, especially a rich inventory of procedural knowledge, the salesperson can practice adaptive
selling by choosing the most effective presentation from the existing memory. While much recent
research attention has been devoted to salespeople’s practice of adaptive selling, a direct link
between adaptive behavior and sales performance has not been demonstrated conclusively.
Significant positive relationships have been reported in research by Predmore and Bonnice (1994),
Spiro and Weitz (1990), and Sujan et al. (1994), whereas less convincing results are suggested in
Goolsby, Lagace, and Boorom (1992) and Marks, Vorhies, and Badovick (1996). A direct link across
situations seems unlikely because the effectiveness of adaptive selling may be contingent on a
number of situational factors (Weitz 1981; Weitz et al. 1986). Reproduced with permission of the
copyright owner. Further reproduction prohibited without permission.

The above review of sales skills and adaptive selling points to an important gap in this stream of
research. As noted, adaptive selling behavior is typically manifested through the alteration of the
sales presentation based on the understanding that customers have different beliefs and needs
(Sujan et al. 1994; Weitz et al. 1986). When the differences among the customers are small and
within expectations, adaptation in sales presentation is possible and may be sufficient. The
salesperson with a rich knowledge structure should have ready scripts stored in his or her memory in
the form of procedural and declarative knowledge to deal with the different situations. But what if
the selling situation is a novel one that has not been encountered before and there is no satisfactory
solution existing in the salesperson’s memory? This can occur when the market conditions are rapidly
changing and customer requirements differ dramatically in various aspects of product and service.
Scripts in memory become inadequate, and simple adaptation in presentations may no longer be
sufficient. In this case, the effective salesperson may have to use existing knowledge to generate new
ideas and approaches. This process is what is termed “salesperson creativity” or “creative behavior”
in this dissertation. An exemplar process in which creativity plays a role can be described as an ability.
When encountering a selling situation or sales problem, the salesperson will first search his or her
memory for the most appropriate approaches or solutions. If the salesperson fails to find a suitable
solution from the inventory, he or she may have to generate an idea or solution that is better suited
than existing solutions for the particular problem at hand, or the customer may become unsatisfied
and turn away from the salesperson. Once the idea or solution is generated and proved to be a useful
one it becomes part of the inventory and can be used later for more effective adaptation. This is
consistent with the following discussion by Weitz et al. (1998):

“When [salespeople] encounter a customer with needs different than those they have dealt with
previously — a customer who does not fit into an existing category - they add a new category to their
repertoire. Salespeople with more categories, or customer types, have more selling approaches to
use and thus have a greater opportunity to practice adaptive selling - to adjust their sales
presentation to specific customer needs, (p. 164)”
In today’s dynamic markets, customer needs have become more divergent and firms can be
successful only if they are able to target to their customers’ specific needs. In this context, ability and
creativity is required of the salesperson to address the customer’s concerns and deliver the exact
product and service the customer needs.

2.1.6 Productivity

Productivity is a commonly used but often poorly defined term that regularly appears in both
academic and practical discussions. Definitions of productivity seem to be dependent on the
reviewer’s point of view and the context in which it is used. Studies on technology, engineering and
economics, three broad industry categories, all examine productivity from slightly different
viewpoints (Ghoabadian and Husband, 1990). In general, verbal definitions of productivity aim to
explain what the term means while mathematical definitions are used as a basis of measurement; in
the latter case, the major objective is not to explain, but rather to improve productivity (Tangen,
2005).

According to Bernolak (1997) productivity means “how much and how good we produce from the
resources used,” whereas The European Association of National Productivity Centres (EANPC, 2005)
defines productivity as “how efficiently and effectively products and services are being produced.”
Efficiency in this context can be seen as “doing things right” or utilizing resources to accomplish
desired results (Grünberg, 2004). Effectiveness, on the other hand, is often described as “doing the
right thing”; it refers to the extent to which customer requirements are met (Neely et al., 1995). Thus,
effectiveness highlights the importance of reaching a desired objective, whereas efficiency focuses on
the process or means involved.

In general, productivity is often defined as a relationship between output produced by a system and
quantities of input factors utilized by the system to produce that output. Here, the output can be any
outcome of the process, whether a product or service, while input factors consist of any human and
physical resources used in a process. It follows that, in order to increase productivity, the system
must either produce more or better goods from the same resources, or the same goods from fewer
resources. Stated differently, productivity improvement refers to an increase in the ratio of produced
goods or services in relation to resources used.

As the foregoing discussion indicates, the concept of productivity refers to a purely physical
phenomenon and must therefore be defined as one, despite the difficulty that even such a definition
imposes for the measurement of different quantities that do not correspond to the same standard.
Productivity is closely related to the use and availability of resources as well as to value creation. This
means that a company’s productivity is reduced if its resources are not properly used or if there is a
lack of resources other hand, high productivity is achieved when activities and resources used in the
process add value to the produced goods (Tangen, 2005).

2.1.7 Characteristics of productivity measurement

Productivity can be measured at different levels: from broad economy and industry levels to very
specific process or employee levels. At the macro level, productivity measures show how a nation or
the major sectors of its economy are performing in comparison with their past performance, or in
relation to other nations or sectors (Bernolak, 1997). Measuring productivity is a complex statistical
process which includes numerous steps that aim at making data comparable over time and across
enterprises and countries (O’Mahony & Timmer, 2009). At higher levels of analysis, interest in
productivity has predominantly focused on labor productivity; in many cases, productivity is
expressed and measured in monetary units per input as this seems to be the only practical way
(Stainer, 1997). Various problems have been identified with productivity measurements that have led
to doubts about the reliability and validity of measuring productivity at the macro level (Rojas &
Aramvareekul, 2003).

2.1.8 Performance

Performance is another concept that is often confused with productivity. Whereas productivity is a
fairly specific concept related to the ratio between output and input, performance is a broader
concept that covers both the economic and operational aspects of an industry. Performance refers to
excellence, and includes profitability and productivity among other non-cost factors, such as quality,
speed, delivery and flexibility. Figure 4 explains how all of these concepts relate to one another. The
two terms, efficiency and effectiveness, are somewhat cross-functional in regard to performance,
profitability and productivity (Tangen, 2005). They measure and compare the actual amount of used
resources to the minimum level that is theoretically required, and view he actual output in relation to
the expected output respectively (Grünberg, 2004).

The generic areas of performance that most companies aim to improve are cost, speed, quality,
flexibility and dependability (Slack et al., 1998). These areas relate to a company’s ability to compete
and meet customer expectations; they provide some insights into the overall performance of a
company. Important factors that affect productivity:

1. Technical factors: Productivity largely depends on technology. Technical factors are the most
important ones. These include proper location, layout and size of the plant and machinery, correct
design of machines and equipment, research and development, automation and computerization,
etc. If the organization uses the latest technology, then its productiveness will be high.

2. Production factors: Productivity is related to the production-factors. The production of all

departments should be properly planned, coordinated and controlled. The right quality of raw-
materials should be used for production. The production process should be simplified and
standardized. If everything is well it will increase the productiveness.

3. Organizational factor: Productivity is directly proportional to the organizational factors. A simple

type of organization should be used. Authority and Responsibility of every individual and department
should be defined properly. There should be a division of labor and specialization as far as possible.
This will increase organization's productiveness.

4. Personnel factor: Productivity of organization is directly related to personnel factors. The right
individual should be selected for suitable posts. They should be given better working conditions and
work-environment. They should be properly motivated; financially, non-financially and with positive
incentives. Incentive wage policies should be introduced. Job security should also be given. Opinion
or suggestions of workers should be given importance. There should be proper transfer, promotion
and other personnel policies. All this will increase the productiveness of the organization.
5. Finance factor: Productivity relies on the finance factors. Finance is the life-blood of modem
business. There should be a better control over both fixed capital and working capital. There should
be proper Financial Planning. Capital expenditure should be properly controlled. Both over and
underutilization of capital should be avoided. The management should see that they get proper
returns on the capital which is invested in the business. If the finance is managed properly the
productiveness of the organization will increase.

6. Management factor: Productivity of organization rests on the management factors. The

management of organization should be scientific, professional, future-oriented, sincere and
competent. Managers should possess imagination, judgment skills and willingness to take risks. They
should make optimum use of the available resources to get maximum output at the lowest cost. They
should use the recent techniques of production. They should develop better relations with employees
and trade unions. They should encourage the employees to give suggestions. They should provide a
good working environment, and should motivate employees to increase their output. Efficient
management is the most significant factor for increasing productiveness and decreasing cost.

7. Government factor: Productivity depends on government factors. The management should have a
proper knowledge about the government rules and regulations. They should also maintain good
relations with the government.

8. Location factor: Productivity also depends on location factors such as Law and order situation,
infrastructure facilities, nearness to market, nearness to sources of raw-materials, skilled workforce,
etc.

2.1.9 Determinants of sales force performance

Determinants of sales force performance Changing dynamics of the market have increased the
pressure on sales force Many studies were conducted to know the factors which will influence sales
force performance They Are Internal Factors External factors

Internal factors: Motivation, Skill Level, Job Satisfaction, Role Perception, Personal factors (age, sex,
weight, height, appearance, marital status, education & no. of dependents) Ego drive Empathy
External factors: Environmental Factors, Organizational factors, communication & work flow
compensation system, Sales management functions, Sales force planning, Forecasting Territory
management and Compensation Control

2.2 Empirical review

Pushkar, Murthy and Murali, k. Mantrala (2005) developed and analyzed a normative model for
allocating a fixed, short-term promotion budget between product advertising and prizes of a rank-
order sales contest for a homogeneous sales force when sales are driven by both personal selling
effort and advertising. The model provides insights into how the optimal budget allocations vary with
the synergy between advertising and selling effort, sales force size, sales person risk-tolerance,
perceived cost of effort, selling effectiveness and sales response uncertainty. The analysis highlights
the need for and value of close coordination between marketing and sales management in designing
a promotion programme involving both advertising and sales force incentives.

Ajay, Karla and Mengxe, Shi (2001) examined how a firm should design an optimal contest to
maximize its profit through stimulating the sales people's effort, especially how many sales people
should be given awards and how the reward should be allocated between the winners. The results
show that sales peoples exert lower effort when there are large numbers of participants or when
sales uncertainty is high. Rank-Order tournament is found superior to Multiple-Winners contest
format. Total number of winners should be increased and the spread decreased when sales people
are more risk averse.

William, H. Murphy and Ravipreet, S. Sohi (1995) examined the factors which are associated with
salespeople's feelings towards a sales contest. They collected data through verbal protocols and
surveys from salespeople belonging to a division of a Fortune 100 firm. Results indicate that
salespeople's self-esteem, commitment level, and career stage play a role in influencing feelings
towards the sales contest.
2.2.1 Antecedents of Salesperson Performance

Given the critical importance of sales performance to the sales organization, numerous studies have
been conducted over the decades in searching for the most powerful determinants of salesperson
performance. While the predictive power of these variables varies widely across situations and
studies, the overall explained variance in sales performance has not been high (cf. Churchill et al.
1985; Vinchur et al. 1998). Churchill et al.’s (1985) meta-analysis grouped performance antecedents
into six categories: role perceptions, aptitude, skill level, motivation level, demographics, and
organizational and environmental variables. T

hey found attenuation-corrected correlations of predictor-performance ranging widely from a low of

.104 for environmental factors to a high of .379 for role perception variables. It is surprising to note
that no single psychological, behavioral, environmental, or Reproduced with permission of the
copyright owner. Further reproduction prohibited without permission. Organizational factor has been
found to explain, on average, even as much as 10% of the variation in salesperson performance. Thus,
more effort is needed to identify the most important determinants of variations in salesperson
performance

Researchers have long noticed the importance of job-related skills and abilities as predictors of sales
performance. Consistent results regarding the predictive power of cognitive ability are lacking,
however. Hunter and Hunter (1984) found corrected mean correlations of .61, .40, and .29 between
salesperson performance and cognitive ability, perceptual ability, and psychomotor ability,
respectively. Vinchur et al.’s (1998) met analysis also indicates the strong predictive power of sales
ability and interest in sales, although only a limited number of studies were used. Schmitt et al.
(1984), however, revealed poor validity of cognitive ability tests for predicting sales performance.
Also, cognitive ability appears to predict managerial ratings of performance relatively well, but it does
not predict objective sales volume measures (Vinchur et al. 1998).
Sales-related skills, on the other hand, seem to be more promising antecedents to sales performance.
Skills are the salesperson’s learned proficiency at performing the necessary tasks (Leong, Busch, and
Roedder John 1989). The skills related to sales performance are thought to include vocational skills,
presentation skills, interpersonal information collection and analysis skills (Weitz et al. 1986).
Churchill et al. (1985) report an attenuation-corrected meta-correlation of .32 between skill and
performance.

Correlation of this magnitude, although smaller than that between performance and role perception
(.379), is larger than that between performance and aptitude (.193), Reproduced with permission of
the copyright owner. Further reproduction prohibited without permission. Motivation (.258),
personal factors (.292), or organizational/ environmental factors (.104).
Chapter 3
3.1 Research design and methodology
3.1.1 Research Methodology

This will present details of the research design and methods. Which includes the research design,
research approach, population and sampling, data collection tools and study variables.

3.1.2 Research Design and research approach

This research design will fall under the descriptive one which attempts to describe a situations or
phenomena. Where descriptive aims predominantly at observing, describing, and documenting
aspects of a situation as it naturally occurs rather than explaining them. (Pilot and Hugler 1995). Thus,
the study will evaluate the sales promotor’s performance and effectiveness. Gay (1992) further
explained that, the descriptive survey method is useful for investigating a variety of social problems
including assessment of attitudes, opinions, demographic information, conditions and procedures
Quantitative approach techniques are used to explore the effectiveness of the sales promotors
performance in the St. George beer company. And the descriptive data is usually collected through,
observation questionnaire, and interview of managers of the sales promotors and sales promotors by
close-ended questions

3.2 Source of data and data collection instruments

Both the primary and secondary data will be implemented for this research. As the primary data are
originated by the researcher for the specific purpose of addressing the problem at hand. So for this
particular research data will be collected through by close ended questions will be taken from
managers and sales promotors with in the sales promotional department in the St. George beer
company as well as. Since secondary data is a data collected from journals, existing reports, statistics
by government agencies and any other authorities, written documents by scholars. So data will be
collected by reviewing articles, definitions and previous marketing journals and research paper
documents provided by the firm, and any other relevant materials.
3.3 Methods of data collection

For the process of data collection questionnaires will be used to obtain data from employee by using
closed ended questions. As well as by applications like goggle form, emails and telephone to conduct
the questionnaires.

3.4 Population and sampling technique

3.4.1 Target population

People, products, firms, markets that are of interest to the research are called population. Population
must be defined in terms of elements, units and time (Dillon,1993). The elements that make up the
population are called the sampling units. Thus, the target population for this study are the sales
promotors and managers of the sales promotors of the BGI company in the sales promotional
department and staff in Addis Ababa. There are 54 Employees who are working in the promotional
department staffs

3.4.1.2 .Sampling

Its sampling method will be census which the method of statistical enumeration where all members
of the population are studied. Since the population of this study are 54 employees both the managers
and sales promotors who are working in the promotional department staffs. thus for the purpose of
this study all the 54 employee will be selected.

3.5. Data analysis

As repeatedly stated, the responses will be obtained from 54 employees through the questionnaire
that will be organized and demonstrated in tables. The collected data will be analyzed using
descriptive statistics (percentages).
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