Module 14 - Integrated Promotion Decisions

Question 1

1 Which of the following is NOT part of a sales programme?
A.Salesforce organisation.
B.Training.
C.Account management policies.
D.Deployment/territory design.
E.Quotas

Answer 1

B

Question 2

2 What is the final test of a successful implementation of a strategic sales programme?
A.Salesperson’s job performance.
B.Return customers.
C.New customers.
D.Sales.
E.Customer satisfaction.

Answer 2

A

Question 3

3 Ultimately, the sales programme defines:
A.a salesperson’s aptitude.
B.a salesperson’s skill set.
C.a salesperson’s role expectation.
D.a salesperson’s motivators.
E.a salesperson’s salary.

Answer 3

C

Question 4

4 When a company, such as General Foods, places coupons in the Sunday newspaper supplement, it is using which element in the promotion mix?
A.Advertising.
B.Packaging.
C.Personal selling.
D.Sales promotion.
E.Public relations

Answer 4

D

Question 5

5 Account management policies are guidelines for:
A.how the sales budget should be allocated.
B.the way different types of customers are approached, persuaded and serviced.
C.how salespeople should be compensated.
D.how salespeople should be kept motivated.
E.how to open and close a sales account.

Answer 5

B

Question 6

6 A sales cycle is expressed in:
A.calendar time.
B.numbers of sales visits.
C.hours in a work day.
D.all of the above.
E.only ‘A’ and ‘B’ above

Answer 6

E

Question 7

7 For which of the following products would a personal selling approach be most appropriate when trying to reach a target audience?
A.Aim toothpaste.
B.Sony television.
C.BMW automobile.
D.IBM mainframe computer.
E.Sharp compact disc player

Answer 7

D

Question 8

8 If Chrysler Corporation offers a $500 cash refund to consumers who purchase a new Chrysler minivan within the next 60 days, which type of sales promotion activity is Chrysler using?
A.Couponing.
B.Sampling.
C.Premiums.
D.Trade promotions.
E.None of the above

Answer 8

E

Question 9

9 The strategic circumstances often recommend the best promotion mix element. For example, when resources are plentiful, ____ is best; when product complexity is high, ____ is best; and when using a ‘pull’ distribution strategy, ____ is best.
A.personal selling; advertising; advertising.
B.personal selling; personal selling; sales promotion.
C.personal selling; personal selling; advertising.
D.advertising; sales promotions; advertising.
E.advertising; personal selling; advertising.

Answer 9

E

Question 10

10 In monitoring a salesforce in order to evaluate and control their performance, sales managers typically use three types of evaluation procedure. What are they?
A.sales, territorial, customer.
B.cost, customer, managerial.
C.managerial, cost, behavioural.
D.customer, managerial, territorial.
E.sales, cost, behavioural.

Answer 10

E

Question 11

1 All of the following are examples of public relations except:
A. new product press release.
B. magazine articles.
C. charitable contributions.
D. product samples.
E. speeches.

Answer 11

D

Question 12

2 All of the following are examples of advertising except:
A. sales presentations.
B. direct mail.
C. in-store displays.
D. web pages.
E. billboards.

Answer 12

A

Question 13

3 The process of helping and persuading people to purchase a good or service through the use of person-to-person communication is called:
A. public relations.
B. sales promotion.
C. personal selling.
D. packaging.
E. advertising.

Answer 13

C

Question 14

4 The final step in developing a promotion mix is:
A. design the promotion mix.
B. set the promotional objective.
C. evaluate the results.
D. define the audience to be targeted.
E. set the promotion budget.

Answer 14

C

Question 15

5 What is missing from the following promotional objective in order to make it correct? To create a 20 per cent gain in knowledge of Porsche’s unique engine characteristics among businessmen between the ages of 35 and 55 with incomes of $60 000 or more.
A. Definition of target market.
B. A statement of how the audience should change.
C. A statement of how fast the change should occur.
D. A statement as to the degree of change desired.
E. A statement about the promotional channels to be used.

Answer 15

C

Question 16

6 A public relations objective for Bold detergent could be stated as:
A. getting Bold into 95 per cent of all possible retail outlets.
B. placing print advertisements about Bold in 90 per cent of local newspapers in a geographic territory.
C. placing items in 40 per cent of local print media (newspapers) about how environmentally safe Bold detergent is.
D. increase awareness of Bold from 30 per cent to 60 per cent.
E. placing coupons in Sunday supplements covering 95 per cent of the target area

Answer 16

C

Question 17

7 When the US Beef Council pays for an advertisement in Time magazine encouraging people to ‘eat more beef’, what type of advertisement is this?
A. Co-operative advertisement.
B. Brand advertisement.
C. Primary demand advertisement.
D. Selective demand advertisement.
E. Institutional advertisement.

Answer 17

C

Question 18

8 Comparative advertisements which demonstrate the superiority of one product over that of a competitor can be helpful in developing which advertising objective?
A. Primary demand.
B. Conviction.
C. Awareness.
D. Reach.
E. Involvement.

Answer 18

B

Question 19

9 If a company has 50 salespeople, 1000 A accounts which require 20 contacts per year and 1000 B accounts which should receive 10 sales calls per year, how many calls must each salesperson make?
A. 400.
B. 500.
C. 600.
D. 700.
E. None of the above.

Answer 19

C

Question 20

Define each of the promotion mix components.

Answer 20

• Advertising – Any paid form of nonpersonal (i.e. through some medium, such as radio, print, direct mail, or email) presentation and promotion of ideas, goods, or services by an identified sponsor.
• Personal selling – A process of helping and persuading one or more prospects to purchase a good or service or to act on any idea through the use of an oral presentation (person-to-person communication).
• Sales promotion – Incentives designed to stimulate the purchase or sale of a product, usually in the short term.
• Public relations – Nonpaid, nonpersonal stimulation of demand for a product, service, or business unit by planting significant news about it or a favourable presentation of it in the media

Question 21

What are the steps needed to develop a promotion programme?

Answer 21

Question 22

What subjects is advertising decision making concerned with?

Answer 22

Advertising decision making is concerned with setting objectives and budgets, choosing which media types and vehicles to use with what frequency, deciding what the message should be and how to present it, and analysing the effectiveness of the advertising programme.

Question 23

What are the contents of a copy platform?

Answer 23

Question 24

Describe the various ways to pre-test message effectiveness.

Answer 24

number of ways to pretest message effectiveness including the following

recall tests – remember ads that were put in simulated magazines, unfortunately often it’s the brand rather than the message that gets through
sales tests – measure the effect of fake tv commericals by analysising what products get bought after ad has been placed

Question 25

Describe the various ways to measure the effects of an advertising message after it has run.

Answer 25

measure the effect of the total advertising effort (including pr)
problems – does not reflect repeated behaviour, measurements depend on how soon after the ad you make the measurement

types include

recognition tests – interview people to see what they noted and read
recall tests – show respondent a range of brands and ask them which they have seen recently

you can also include increased traffic or sales to ascertain success – but they may not be linked to adverstising

Question 26

Define the term ‘sales promotion’.

Answer 26

sales promotion is those activities other than personal selling, advertising and publicity that stimulate consumer purchases and dealer effectiveness e.g. incentives to consumer to stimulate short term demand

• two kinds
  
  • consumer promotion – targeted at consumers as part of a pull strategy
  • trade promotion – targeted at channel members, push strategy

Question 27

What are the most commonly used sales promotion techniques?

Answer 27

• consumer promotion – targeted at consumers as part of a pull strategy
• trade promotion – targeted at channel members, push strategy

Question 28

Define the term ‘integrated marketing communications plan’.

Answer 28

• marketer develops an integrated marketing communicated plan (imc)
• the imc plan is developed by : segmenting , targeting and positioning , which would provide choice criteria for the target audience

Question 29

All of the following are examples of promotion mix components EXCEPT:
A. advertising.
B. personal selling.
C. sales promotion.
D. public relations.
E. price.

Answer 29

E

Question 30

The vice president for marketing at a consumer goods company picks up Wall Street Journal (WSJ) and notices a front-page article which announces the introduction of the firm’s highly innovative new product. This article is an example of which element of the promotion mix?
A. A sales promotion.
B. A press release.
C. Public relations.
D. An exclusive interview.
E. A barter arrangement with the WSJ.

Answer 30

C

Question 31

Two friends are having lunch and one tells the other about a great new movie that she and her husband saw, the text would classify this exchange as:
A. publicity.
B. advertising.
C. a consumer sales promotion.
D. personal selling.
E. none of the above.

Answer 31

E

Question 32

Any paid form of nonpersonal presentation and promotion of ideas, goods or services by an identified sponsor is called:
A. public relations.
B. sales promotion.
C. personal selling.
D. packaging.
E. advertising.

Answer 32

E

Question 33

All of the following are examples of sales promotion activities EXCEPT:
A. coupons.
B. contests.
C. free samples of the product.
D. rebates.
E. new product press release.

Answer 33

E

Question 34

The first step in developing a promotion mix is:
A. design the promotion mix.
B. set the promotional objectives.
C. define the audience to be targeted.
D. set the promotion budget.
E. evaluate the results.

Answer 34

C

Question 35

Which of the following is the best method for setting promotional budgets, by using careful analysis of the specific situation?
A. Affordable method.
B. Percentage of sales method.
C. Competitive parity method.
D. Objective-and-task method.
E. Return on sales method.

Answer 35

D

Question 36

Which of the following is the most commonly used top-down method of setting the promotion budget?
A. Affordable method.
B. Percentage of sales method.
C. Competitive parity method.
D. Objective-and-task method.
E. Return on sales method.

Answer 36

B

Question 37

Which of the following is an example of a decision to be made in designing the promotion mix?
A. Determining the target market.
B. Selecting actors for a television commercial.
C. Determining the cost of advertising in different magazines.
D. Deciding the value and message of a coupon.
E. Evaluating effectiveness of past advertising results.

Answer 37

D

Question 38

What promotional strategy is best for consumer goods, when advertising is the dominant element in the promotional mix?
A. Objective-and-task.
B. Creative strategy.
C. Push strategy.
D. Pull strategy.
E. Unique selling proposition

Answer 38

D

Question 39

When a product is complex and expensive and distribution is likely to be difficult, what element in the promotion mix is best utilised?
A. Advertising.
B. Personal selling.
C. Sales promotion.
D. Public relations.
E. None of the above.

Answer 39

B

Question 40

Of the following elements in the promotional mix, which would a company have the most control over the message?
A. Advertising.
B. Sales promotion.
C. Personal selling.
D. All of the above.
E. Only A and B above.

Answer 40

E

Question 41

Of the following elements in the promotional mix, which is best suited for the push strategy?
A. Public relations.
B. Personal selling.
C. Sales promotion.

E. Only B and C above.

Answer 41

D

Question 42

Of the following elements in the promotional mix, which gives virtually no information about the product?
A. Advertising.
B. Personal selling.
C. Sales promotion.
D. Public relations.
E. None of the above

Answer 42

C

Question 43

A rate card specifies:
A. the nature of the audience a particular advertising medium reaches.
B. the size of the audience a particular advertising medium reaches.
C. the cost of advertising in a particular advertising medium.
D. all of the above.
E. only A and B above.

Answer 43

D

Question 44

Of the four major types of mass media what is their order in terms of use in the US, from largest to smallest?
A. Network and cable TV, newspaper advertising, direct mail, radio.
B. Newspaper advertising, network and cable TV, direct mail, radio.
C. Newspaper advertising, direct mail, radio, network and cable TV.
D. Network and cable TV, radio, newspaper advertising, direct mail.
E. Direct mail, network and cable TV, newspaper advertising, radio.

Answer 44

A

Question 45

Of the following categories, where do billboards fall?
A. Out-of-home.
B. Exhibition.
C. Supplementary.
D. Print media.
E. Direct marketing

Answer 45

A

Question 46

Of the following, which is best medium for enhancing the likelihood that a company website will be the first that customers find on the Web?
A. Email.
B. Banner ads.
C. Portal deals.
D. Websites.
E. Text links

Answer 46

C

Question 47

The major reason advertisers repeat the same message over and over is that repetition:
A. is more cost effective.
B. increases audience retention of the message.
C. focuses on a key message and does not confuse the consumer.
D. is more efficient, since it takes a great deal of time and manpower to develop an effective message.
E. enables the advertiser to be more efficient in presenting the message in multiple media outlets.

Answer 47

B

Question 48

‘Reach’ can be defined as:
A. the number (or per cent) of the target audience exposed to a given media mix during a given time period.
B. how many times the target audience is exposed to a message within a given time period.
C. how often the target audience is expected to receive the message in a given time period.
D. the rate of retention in the average consumer after exposure to the message.
E. a ranking of media based on which media will provide the greatest exposure to the target audience.

Answer 48

A

Question 49

The number of times an individual in a given target market could see an ad is a definition of:
A. subscribe rate.
B. frequency.
C. duplication.
D. repetition.
E. the recognition period (usually 3 months).

Answer 49

B

Question 50

If the target audience is 80 000 households and the media schedule reached 50 000 of these households, the reach of this ad was:
A. 50 per cent.
B. 57.2 per cent.
C. 62.5 per cent.
D. 160 per cent.
E. None of the above

Answer 50

C

Question 51

How many gross rating points (GRPs) would be needed in a media schedule if an advertisement had a reach of 60 per cent and a need for an average frequency of 15?
A. 600.
B. 1500.
C. 900.
D. 300.
E. 1200.

Answer 51

C

Question 52

An advertising manager for a company marketing a product with broad mass-market appeal wants to select a media type that will allow the product to be displayed and shown in use. Which media type would probably be the most appropriate?
A. Radio.
B. Local newspapers.
C. National network television.
D. Direct mail.

Answer 52

C

Question 53

While ____ media offer greater reach to particular audiences, ____ media offer greater reach to heterogeneous audiences. And ____ media are more involving.
A. print; broadcast; outdoor.
B. print; broadcast; print.
C. broadcast; print; broadcast.
D. print; outdoor; broadcast.
E. broadcast; outdoor; print.

Answer 53

B

Question 54

Which is the largest interactive medium in the world?
A. Newspapers.
B. Television.
C. Direct mail.
D. The Internet.
E. Magazines and other related publications

Answer 54

D

Question 55

Measuring reach and frequency for ads on websites is:
A. very difficult because once at the website, we do not know where the user goes.
B. difficult unless the website registers its visitors.
C. no different than for any other media.
D. easy if we use roster recall tests.
E. very easy given the electronic ‘trail’ users leave behind

Answer 55

E

Question 56

Which types of tests measure the effects of TV commercials by using consumer panel data from families which are located in several cities?
A. Sales tests.
B. Recognition tests.
C. Double-blind tests.
D. Repetition tests.
E. Image tests

Answer 56

A

Question 57

A primary advantage of new technology like BehaviorScan is that:
A. it is extremely cost effective relative to other tests.
B. it enables the researcher to test physiological as well as attitudinal responses to ads.
C. it is capable of multiple message designs at the same time.
D. both purchase and viewing behaviour data are collected at the same time.
E. it has less sampling error than other message tests.

Answer 57

D

Question 58

If a planned advertisement is inserted into a recent issue of Time magazine and a respondent is told to read whatever interests her in this magazine and is then asked to ‘play back’ the ads which she remembers, what type of testing procedure does this represent?
A. Repetition test.
B. Recall test.
C. Double-blind test.
D. Roster recall test.
E. Image test.

Answer 58

B

Question 59

Probably the single most important disadvantage of public relations over other elements of the promotional mix is the:
A. lack of coordination with other promotional elements.
B. inability to create awareness about products.
C. high cost of developing and maintaining a PR department.
D. lack of credibility associated with publicity.
E. lack of company control over publicity

Answer 59

E

Question 60

IBM does a substantial amount of television advertising for its various computer products. On the other hand, Cray Research – the most successful builder of the supercomputers used by government agencies, the US Weather Service and large scientific research organisations – does no television advertising. In fact, Cray does very little advertising of any kind. Instead, the firm relies on the efforts of a small salesforce. Why do the two firms pursue such different promotion strategies?

Answer 60

Three factors lead to the different promotion strategies. First, the markets for the types of computers marketed by IBM are much larger than the market for super- computers; consequently, IBM can justify spending large amounts of money on advertising to reach these markets. Second, the markets which IBM targets are quite competitive and while IBM dominates many of them, it must still advertise to maintain its position in those markets. Cray, on the other hand, has so dominated the supercomputer market, especially in the USA, that there is little need to adver- tise. Finally, while all computers are complex and require some personal selling, supercomputers are among the most complex and intricate machines in existence. As a result, advertising can do little to enhance the marketing process, while personal selling is essential so that customers can explain their needs in detail and salespeople can, in turn, respond to their questions.

Question 61

You are the marketing manager for a major airline. How would you vary the emphasis among the tools in your promotion mix when designing promotional strategies for (a) individual consumers who travel for pleasure and (b) corporate travel departments that select the airlines to be used by company employees?

Answer 61

Individual consumers focus on advertising media which reach consumers such as print media (local newspapers, national news magazines such as Time). Develop incentive (frequent flyer) promotions. Target certain segments in order to increase the load factor. Also develop package vacations. Corporate travellers focus on media designed to reach decision makers in the travel department; for example, trade publications within the travel industry. Also, if the company maintains a salesforce, it should have them call on large corporations to explain in detail what exactly each airline is offering and at what price.

Question 62

Suppose you are the advertising manager of a large insurance company that has just developed a new policy designed to protect against hurricane losses. You ask your agency to help develop a copy platform for this new policy. What should be included and from what source will the required information come?

Answer 62

The information needed to develop a copy platform for the new hurricane policy and the sources of the needed information are described below:

Question 63

What medium would you recommend using as your primary buy for each of the following situations?

a. A small ice cream retail chain selling premium products.
b. A consumer electronics firm selling sophisticated and relatively expensive equipment.
c. A large home-appliance company selling such major units as refrigerators, stoves, washing machines and dryers.
d. A laundry detergent firm selling several brands of such a product.

Answer 63

Question 64

The advertising manager for a large firm asked you – the marketing vice president – to approve a $500 000 increase in the advertising budget for one of the company’s products. She predicts that the additional advertising will produce a $2 million increase in the product’s sales. What additional information would you ask for before making a decision?

Answer 64

(a) How will the money be spent – how will it be divided among various advertis-ing media?
(b) Over what time frame are the additional funds to be spent?
(c) What is the time frame for the projected sales increase – how long will it take to achieve the $2 million sales increase?
(d) What percentage increase in total sales does this $2 million represent and what is the percentage increase in the advertising budget if the $500 000 is appropriated?
(e) What is the amount of the marginal contribution generated by this expenditure?
(f) Could a better return be achieved by spending the $500 000 on other promotional tools, such as hiring more salespeople?

Question 65

A car company sets the advertising and promotion budget for one of its car lines by allocating a fixed number of dollars for each car it forecasts will be sold in the company year. What are the advantages and limitations of this approach to determining a promotional budget?

Answer 65

Advantages: (1) simple to calculate; (2) risk adverse – since spending is tied to sales it keeps the company from getting too far out of line with the rest of the industry.

Disadvantages: (1) provides little direction in setting promotional budgets; (2) does not work well with new brands or in situations where sales volume is unstable or declining.

Question 66

A manufacturer of a line of men’s personal care products (including razor blades, aftershave lotions and deodorants) sold through a variety of retailers, including supermarkets, drugstores and discount general merchandise stores, is considering switching from a company salesforce to the use of manufacturers’ representatives. The latter are independent agent middlemen who work on commission. What would be the argument for doing so? What would be the disadvantages?

Answer 66

The primary argument for switching from a company salesforce to the use of manufacturers’ representatives would lie in the economics of the situation. Representatives work on a commission basis and, therefore, they are a variable cost. In a period of declining sales, the sales cost would decline. Such would not be the case with the use of a company salesforce. It may also be that company salespersons cannot provide the same coverage and contact frequency as representatives – for the same costs. The danger is that representatives will not spend as much time on in-store activities to support the product line of a single seller as would a dedicated salesforce.

Question 67

Recent developments have made it much more difficult to support and grow brands in the UK by means of traditional vehicles such as brand advertising. For example the combined annual advertising expenditure for Persil and Ariel, the UK’s two top detergent brands, is close to £20 million annually. The same is true within the grocery market, where it is estimated that the average cost of maintaining a top brand is around 10% of sales. If the advertising succeeds then the ratio of advertising expenditure to sales falls rapidly. However if it does not succeed in its objectives the ratio becomes very high. At the same time, the traditional mass market for advertising is fragmenting as hundreds of new television channels become available and as the Internet and the World Wide Web become increasingly popular.

Some commentators believe that marketers in many categories of products are too influenced by competitors’ expenditure and advertising patterns rather than concentrating on what is actually needed to build a credible overall presence for the brand.

As advertising costs rise and as audiences fragment, consider how brand managers may make their advertising more effective. Discuss the extent to which traditional advertising may be substituted by alternative promotional techniques which might ensure that fast moving consumer brands receive adequate promotional support?

Answer 67

Candidates should explain the role of brand advertising which is to create selective demand. The relevant advertising objectives will be to influence awareness and attitude. However much depends on the level of consumer involvement in the purchase. Given that grocery products are relatively inexpensive and carry low social or economic risk; one might assume that they would tend to be low involvement products and that the decision process would be characterised by ‘inertia’ or ‘variety seeking’. However candidates may express alternative views which should be accepted by the examiner if supported by argument. Much advertising for low involvement goods is via television. As TV viewers are often not involved either with the advertising or the subject area TV ads may not change attitudes. They may simply facilitate consumer learning about a brand so that the name is recalled in the purchase situation and the brand is purchased. Evaluation and attitude change then occur because of product experience.

How to make traditional advertising more effective? Candidates may make a range of points here such as – ensure that the media audience contains a high proportion of target customers; ensure that the advertisement itself is involving, by linking this to an involving person or situation; block book media for all products rather than purchasing for just one brand at a time; attach a corporate (umbrella) signature to all ads to raise corporate awareness and retention of brand; pre-test all ads for adequacy of appeal and message structure; ensure that the media vehicle has the desired reach and frequency to achieve advertising objectives.

The second part of the question asks candidates to consider the effectiveness of traditional advertising against other forms of promotion. The task is to consider the other components of the communications mix in order to determine whether they can fill the gap left by advertising. Alternative approaches include personal selling, sales promotions and public relations and direct marketing. Answers should include reference to the ability of each promotional tool to satisfy promotional objectives. Sales promotions, including sampling, couponing, rebates, contests and price-off promotions work best in the purchase situation. They do not substitute for the prior learning offered by traditional advertising. In contrast to advertising, personal selling can be expensive when taken on a per capita basis. While personal selling is very useful in converting prospects, it is prohibitively expensive to use as a tool for awareness raising in consumer markets. Public relations ensures that the company and its products receive a favourable share of voice in the media and can be instrumental in creating awareness and favourable opinions; however publicity is outside the control of the organisation and may be negative. Some candidates may refer to direct marketing as a potential alternative to advertising. (In Module 14 this is covered in the section on advertising). Direct marketing is specific targeted information to known consumers of a brand which can, if managed on a suitable scale possibly substitute for advertising.

Candidates should be rewarded not for their conclusion but for the quality of the discussion in leading to a conclusion to this question.