Product Knowledge as a Behavioral Outcome Variable and Its ...
Product Knowledge as a Behavioral Outcome Variable and Its Impact on Sales Eff... Page 1 of 10
Product Knowledge as a Behavioral Outcome Variable and Its Impact on
Michael L. Boorom, California State University - San Bernardino
Product knowledge is explicated within the Plank and Reid (1994) Performance
Framework as a customer interaction behavioral variable wherein the relative
quality of salesperson performance in possessing and utilizing product knowledge
impacts sales effectiveness. Using a sample of 225 salespeople, MANOVA analysis
indicates that salespeople with "above average" product knowledge report
significantly higher levels of sales effectiveness.
The received view of sales performance incorporates possession of product
knowledge as an antecedent to customer interactions, assuming that acquisition of
knowledge occurs prior to salespeople engaging in any sales presentations
(Walker, Churchill and Ford 1979). Also, product knowledge is depicted as a skill
variable that impacts sales effectiveness (Walker, Churchill and Ford 1979)
because varying levels of product knowledge possessed by salespeople will
partially account for differing levels of sales effectiveness. While the portrayal of
product knowledge in this manner is quite common sensical, the theorized
relationship between product knowledge and sales effectiveness has not been
demonstrated in empirical studies: Moore Business Forms and Forum Corporation
report studies revealing weak correlations between classroom test scores on
product knowledge and sales performance (Hequet 1988): a meta-analysis found
that skill variables account for less than 10% of the variation in sales performance
(Churchill et. al. 1985).
A partial explanation of these insignificant findings may result from range
restriction in salesperson product knowledge. in that, purchasers expect and
demand salespeople to exhibit sufficient product knowledge, and salespeople
generally meet this requirement (93% of industrial purchasers thought supplier
salespeople possess adequate product knowledge. Forbes 1993). Additionally,
those salespeople lacking adequate knowledge may be eventually separated,
voluntarily or involuntarily, from the sales force (insufficient product knowledge is
viewed as a major cause of salesperson failure. Ingram. Schwepker and Hutson
A more convincing explanation of the perplexing knowledge-effectiveness
relationship has been offered in a recent framework (see Figure 1) re-
conceptualizing various components of salesperson performance (Plank and Reid
Product Knowledge as a Behavioral Outcome Variable and Its Impact on Sales Eff... Page 2 of 10
1994). Noting that skill level is defined as "learned proficiency at performing the
necessary tasks" (Walker, Churchill and Ford 1979. p. 23), skill variables are
posited to be related to specific sales behaviors (Plank and Reid 1994), and in this
case, salespeople acquire expertise in product knowledge in order to understand
customer problems and offer solutions. Sales behaviors are defined as "what
people do (the tasks they expend effort on) in the course of working" (Walker,
Churchill and Ford 1979, p. 35) and previous studies have demonstrated several
salesperson behaviors related to product knowledge: "keeping abreast of market
conditions" (Lamont and Lundstrom 1974), and "possessing technical
knowledge" (Behrman and Perreault 1982). Additionally, sales behaviors can be
classified into two categories: customer interaction, e.g., product knowledge
discussed during a sales presentation, or noncustomer interaction, e.g., preparing a
proposal involving product specifications prior to a sales meeting (Plank and Reid
1994). Last, each sales behavior can be evaluated by how well salespeople execute
the necessary tasks, so behavior implies a relative performance component (Plank
and Reid 1994), and product knowledge has been measured as a performance
outcome in the Behrman and Perreault (1982) study.
The skill - behavior - performance linkage provides clarity to the inconclusive
results concerning product knowledge and sales effectiveness by demonstrating
that mere possession (skill level) may not impact sales effectiveness. Possession of
knowledge in isolation from customer interactions contributes little to sales
outcomes, as reflected in the weak associations between classroom scores and sales
effectiveness. More explanatory power exists in studying actual use (behavior) of
product knowledge that dynamically impacts customer interactions by harmonizing
customer needs to available products. However, the quality level of knowledge
usage (performance) may range from useful to detrimental, so behavioral
performance (on product knowledge) mediates any impact of knowledge upon
sales outcomes. Knowledgeable salespeople, who speak in "technical jargon" and
bore or offend prospects, discover that product knowledge alone does not facilitate
completed sales. Conversely, salespeople, who can explain complex products in
simple, understandable terms and can provide unique solutions for unusual
customer dilemmas, find that product knowledge facilitates sales effectiveness.
While this conceptualization adds clarity, confusion also arises because a variable
such as product knowledge can be characterized as an antecedent, a process
behavior, or a performance outcome within the framework. Rather than use a
generic label such as "product knowledge," each framework variable must be
identified by its position within a specific linkage or path and by its specific
interrelationships with other variables.
Given the new conceptualization of salesperson performance, the purpose of this
Product Knowledge as a Behavioral Outcome Variable and Its Impact on Sales Eff... Page 3 of 10
study is to assess impact of product knowledge, using a performance outcome
measure of the quality of salesperson product knowledge, upon sales effectiveness.
This study is organized into five parts: (1) explication of study variables. (2)
proposition tested, (3) methodology, (4) results and (5) discussion.
Figure 1 Annotated Framework of Salesperson Performance and
Effectiveness Plank and Reid 1994
Antecedents of Sales Process Outcomes of Sales
Sales Process Process
Behavior --- > Performance --- > Sales
Skill --- >
Possession of Use of Quality Quota Achieved
Product Product Knowledge of Behavior
Typically, product knowledge is defined as possession and understanding of
information about a company's economic offering (including tangible goods,
intangibles such as services, and systems combining goods and services),
competing products, and their company's policies and procedures relevant to
selling. In this study, salesperson behavior to attain product knowledge is
addressed and the quality of the behavior is specifically used as a performance
(outcome) measure. The measure attempts to identify how well salespeople attain
and retain product knowledge for use in sales presentations.
Conceptually, some confusion has resulted in the study of sales effectiveness
because work behavior (performance) has been used interchangeably with work
outcomes (effectiveness). Performance is limited to criterion variables controllable
by salespeople, e.g., effort expended, and sales effectiveness measures include
uncontrollable factors such as market potential, competitors, and national
Product Knowledge as a Behavioral Outcome Variable and Its Impact on Sales Eff... Page 4 of 10
economic conditions. Walker. Churchill and Ford ( 1979, p. 35) describe
effectiveness as, "some summary index of organizational outcomes in which an
individual is at least partially responsible." In this study, sales effectiveness is
defined as accomplishing sales objectives, i.e., meeting quotas.
Many times, selling is a mini-marketing research project wherein salespeople ask
questions and listen in order to identify customer importance weights on various
products attributes, then, salespeople provide adequate product information about
valued attributes. Expansive product knowledge is used to activate adaptation of
sales presentations that provide customers with offerings that meet their product-
specific needs (Alessandra, Wexler and Barrera 1988). Knowledgeable salespeople
can provide more information to customers about a variety of products allowing
increased flexibility in presentations and customization of problem solutions.
Although studies have not found differences in product knowledge, by itself, to
impact sales effectiveness (Sujan, Sujan and Bettman 1988, Szymanski and
Churchill 1990), range restriction related to salesperson background and
experience may account for the lack of divergence in sales effectiveness.
Szymanski and Churchill (1990) suggest that sales differences may be discovered
when salespeople vary more widely in their levels of product knowledge, and
variation may result from a combination of training and preparation and from the
number and complexity of products sold. As the number of and complexity of
offerings expand, the product knowledge of salespeople becomes more widely
distributed and knowledge differences may affect sales effectiveness.
In this study, salespeople, due to insurance industry circumstances, must possess
knowledge of many, complex company products, and salesperson knowledge
levels may be sufficiently dispersed to detect sales differences related to product
knowledge performance outcomes. Using a sample of salespeople manifesting a
wide range of knowledge allows investigation of range effects. Additionally,
customizing product solutions to unique customer situations can increase potential
sales through cross-selling and upselling (Weisberg 1994). Therefore, product
knowledge is more likely to demonstrate significant impact upon sales
effectiveness. In summary, the preceding discussion justifies the testing of a
proposition offered by Plank and Reid (1994. p. 54).
A combination of customer interaction performance and noncustomer
Product Knowledge as a Behavioral Outcome Variable and Its Impact on Sales Eff... Page 5 of 10
interaction performance affects success or failure in a single transaction.
Since performance aspects of both product knowledge behaviors related to
customer interactions and/or noncustomer interactions are predicted to impact sales
effectiveness, no categorization was attempted to differentiate the impact of the
two similar behaviors. Such categorization of product knowledge behaviors can
occur in future studies, if the current analysis is useful.
A convenience sample of 225 (47 female, 178 male) salespeople, selling insurance
in Florida and California, was generated through their participation in sales
training seminars. Salesperson characteristics indicate their average age was 39.6
and average selling experience with their current company was 5.6 years with a
range of 6 months to 30 years. About 18% of the salespeople earned below $
30,000, 47% earned between $ 30,000 - $ 60,000, and the remaining 35% earned
above $ 60,000. Also, salespeople indicated they sold a "wide variety of products"
with an average response of 3.72 out of a possible 5.00.
Product Knowledge (PK): Product knowledge is measured by four self-report
items reflecting salesperson behaviors associated with attaining product knowledge
used to support customer interactions. The outcome component of these behaviors
is captured by asking salespeople to compare their actions to other salespeople and
report their relative performance using a five-point ("outstanding" "above average"
"average" "below average" "needs substantial improvement") scale that has
displayed internal consistency reliability of .81 (Behrman and Perreault 1982,
Lagace and Howe 1988). Items cover content such as: "knowing product
specifications," "knowing product applications." and "keeping abreast of
Sales Effectiveness. This variable is measured by a single, self-report item that
asked salespeople to report their percentage of quota attained. Insurance companies
utilized in the study set total point quotas based on the type (life, disability income,
etc.) of policy sold and the dollar amount of coverage. Salespeople sell a variety of
policies that earn points toward fulfilling their quotas, and the percentage of quota
attained is a direct measure of sales effectiveness.
Product Knowledge as a Behavioral Outcome Variable and Its Impact on Sales Eff... Page 6 of 10
Exploratory factor analysis and internal consistency reliability will be generated to
assess the unidimensionality of the product knowledge performance outcome
variable. The proposition will be tested by computing a product moment
correlation between a summate of product knowledge and the sales effectiveness
item. Also, the proposition is tested by categorizing salespeople into three groups
based on their summated product knowledge ratings ["above average" ( 16-20),
"average" (12-15), and "below average" (below 12)], and using MANOVA to
investigate if significant differences exist among group means on the single item of
Viewing Table 1, the product knowledge dimension exhibits acceptable
psychometric properties with all factor loadings above .60, high variance explained
(92.8%), and a coefficient alpha of .86. Since the measure is unidimensional,
adding items to form summate totals is appropriate. The sales effectiveness item, a
single measure of percentage of quota attained, produced a sample average of 71.8
%, standard deviation of 22%, and a range of 20% to 100%.
Table 1. Exploratory Factor Analysis of Product Knowledge
PK1 0.84599 Eigenvalue 2.35
PK2 0.93064 Variance Explained 92.8%
PK3 0.67110 Coefficient Alpha: .86
PK4 0.69929 Method: Iterated Principal
In the first test of the proposition, a significant correlation of .40 is exhibited
between product knowledge and sales effectiveness. In the next test the MANOVA
results (Table 2) reveal that salespeople attaining "above average'' product
knowledge report significantly higher levels percentage of quota attained than do
salespeople categorized as "average" and "below average" on product knowledge.
These results would partially support the proposition that higher reported product
knowledge performance is associated with greater levels sales effectiveness:
however, significant effects are revealed only for the "above average" group.
Product Knowledge as a Behavioral Outcome Variable and Its Impact on Sales Eff... Page 7 of 10
Table 2. Analysis of Variance by Levels of Product Knowledge
Quota(%) Means by Level of Product Knowledge
Product Knowledge N Mean SD
Below Average 22 55.5 25.4
Average 110 66.4 25.4
Above Average 93 80.8 21.1
Quota(%) Mean Differences by Level of Product Knowledge
Product Knowledge Quota (%)
Below Average- Average 10.9
Below Average - Above Average 25.3*
Average - Above Average 14.4*
variance explained by 12.2%
* significant at p < .05
These study results demonstrate that salesperson product knowledge, when
measured as a behavioral outcome. does impact sales effectiveness. Interestingly, a
knowledge threshold may exist to obscure and limit the significant effects of
product knowledge. No differences are detected between salespeople realizing
"below average" and "average" levels of product knowledge, but when salespeople
attain "above average" knowledge significant differences become discernible in
sales effectiveness. Salespeople, who exceed the "normal" knowledge levels for a
company or industry by incrementally adding to their product knowledge, through
various modes of learning, e.g. company training, conversations with customers,
etc., may gain a competitive advantage over other, less knowledgeable salespeople.
Pragmatically, the real questions become, "how much product knowledge is
enough?" and "what types of information are most useful?" Obviously, these
questions can not be considered in isolation because other behavioral variables
Product Knowledge as a Behavioral Outcome Variable and Its Impact on Sales Eff... Page 8 of 10
such as adaptive selling impinge on the effectiveness of product knowledge.
Research findings have implications for both academicians and practitioners. First,
reinforcing conventional wisdom, sales managers must realize that novice
salespeople need as much product training and education as possible to boost their
knowledge to a level that can satisfactorily support selling activities (behaviors).
Next and most difficult, sales managers must convince veteran salespeople that
additional time and effort invested in attaining extra product knowledge is
worthwhile and will be rewarded with additional sales. Many veterans think they
have sufficient product knowledge to succeed and will not pursue additional
Last, managers must address situations wherein product knowledge is multiplying
and changing so quickly that salespeople really cannot stay current with all
products within a line. To help novice and veteran salespeople access product
knowledge, many companies are providing salespeople with laptop computers and
software designed to explain numerous products in extensive depth. In multimedia
format, computer hardware and software facilitate both noncustomer interactions,
e.g., learning and presentation preparation, and customer interactions, e.g., actually
making presentations to customers (Trumfio 1994).
Academicians should recognize the usefulness of the alternative framework of
salesperson performance, especially the mediating power of sales behaviors and
their respective performance outcomes on sales effectiveness (Plank, and Reid
1994). Obviously, further study of sales behaviors, the activities salespeople
actually render, and performance outcomes, the relative success of effecting sales
behaviors, may potentially increase understanding of the sales process. Sales
researchers are encouraged to investigate propositions encompassed in the Plank
and Reid (1994) alternative framework, and determine if the relationships are
viable and provide explanatory power.
Importantly, future study of the alternative framework will require development of
a taxonomy of sales behaviors and appropriate measurement items. As Plank and
Reid (1994) note, the taxonomy of sales behaviors for specific sales positions
needs to be expanded and made more inclusive of a variety of activities actually
performed by salespeople. Coincidentally, measurement items must be created to
accurately describe specific sales behaviors to categorize behaviors as customer or
noncustomer interactions, and to measure the relative success or outcomes of
performing the sales behaviors. In the current study, the product knowledge
measurement items (Behrman and Perreault 1982) did not categorize sales
behavioral performance into noncustomer interactions and customer interactions,
Product Knowledge as a Behavioral Outcome Variable and Its Impact on Sales Eff... Page 9 of 10
so the possible differential effects of customer versus noncustomer behaviors
cannot be discerned. In order to properly assess variable relationships, suitable
measurement items must be crafted.
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