Chapter 12

Question 1

Five promotion mix tools

Answer 1

• Advertising
• Sales Promotion
• Personal selling
• Public Relations
• Digital & Direct Marketing

Question 2

Push Strategy

Answer 2

A promotion strategy that calls for using the sales force and trade promotion to push the product through channels. The producer promotes the product to channel members who in turn promote it to final consumers.

Question 3

Pull Strategy

Answer 3

A promotion strategy that calls for spending a lot on consumer advertising and promotion to induce final consumers to buy the product, creating a demand vacuum that “pulls” the product through the channel.

Question 4

Affordable Method

Answer 4

Setting the promotion budget at the level management thinks the company can afford.

Question 5

Percentage-of-sales Method

Answer 5

Setting the promotion budget at a certain percentage of current or forecasted sales or as a percentage of the unit sales price.

Question 6

Competitive-parity method

Answer 6

Setting the promotion budget to match competitors’ outlays.

Question 7

Objective and task method

Answer 7

Developing the promotion budget by (1) defining specific promotion objectives, (2) determining the tasks needed to achieve these objectives, and (3) estimating the costs of performing these tasks. The sum of these costs is the proposed promotion budget.