Q&A Hero

Q: When a retailer purchases excess inventory of a product while it is on-deal to sell later when it is off-deal, it is: A) a diversion. B) quantity-seeking. C) forward buying. D) a slotting fee.

Q: When the price of a product is reduced through a trade allowance, it is referred to as being: A) on-deal. B) off-deal. C) a side deal. D) a slotting fee.

Q: Retailers use each of the following reasons to justify slotting fees except: A) retailers must invest time and money in new products. B) the fees help retailers finalize decisions about carrying new products. C) the fees reduce the number of new products that are introduced each year. D) the fees level the playing field between small and large retail outlets.

Q: Exit fees are paid for: A) covering the cost of removing unsuccessful products from inventory. B) getting a retailer to agree to limit purchases from another vendor. C) shipping costs. D) cooperative advertising programs.

Q: Monies paid by a manufacturer to remove an item from a retailer's inventory are: A) reverse slotting fees. B) brokerage allowances. C) exit fees. D) cooperative merchandising agreements.

Q: Manufacturers use each of the following arguments against paying slotting fees except: A) they are a form of extortion. B) the fees favor new companies. C) manufacturers are forced to pay millions of dollars that could be used for advertising, sales promotions, and other marketing efforts. D) the fees favor large manufacturers over small manufacturers.

Q: With ________ a retailer is given a direct payment for stocking an item. A) an off-invoice allowance B) a drop-ship allowance C) slotting fees D) forward buying

Q: Funds paid to retailers by manufacturers to stock new products are: A) prepaid off-invoice allowances. B) drop-ship allowances. C) quantity discounts. D) slotting fees.

Q: A trade promotion that offers financial discounts on cases or pallets of merchandise ordered is called a(n): A) consumer promotion. B) off-invoice allowance. C) cooperative advertising. D) spiff money.

Q: Trade allowances include all of the following except: A) off-invoice allowance. B) exit fees. C) trade shows. D) slotting fees.

Q: Offering financial incentives to channel members in order to motivate them to make a purchase is a: A) trade allowance. B) trade incentive. C) trade contest. D) vendor support program.

Q: The primary role of a trade promotions program is to: A) build brand equity. B) encourage trial purchases. C) pull products through the channel. D) push products through the channel.

Q: Trade promotions are distinguished from other marketing and IMC tools since trade promotions: A) involve extensive advertising. B) are offered to consumers. C) are used to entice other members of the marketing channel to make purchases or stock an item. D) are limited to activities by manufacturers.

Q: What are the four categories of consumers?

Q: Promotion-prone and price-sensitive consumers are highly attractive segments to pursue with consumer promotions.

Q: A retailer will support a manufacturer's consumer promotion program if the program will increase traffic into the retail store, boost store sales, attract new customers, or increase the basket size of shoppers in the store.

Q: For brand-loyal consumers, price-offs and coupons are the most effective consumer promotions.

Q: Brand-loyal consumers purchase only one particular brand and do not respond to consumer promotions unless it is for their particular brands.

Q: Price-sensitive consumers regularly respond to consumer promotions, such as coupons, price-off deals, and premiums.

Q: For ongoing products in highly-competitive markets, a bonus pack is an effective method of maintaining brand loyalty and reducing brand switching at a minimal cost.

Q: Manufacturers should concentrate their efforts at trade shows on each of the following buyer groups except: A) solution seekers. B) buying teams. C) power buyers. D) education seekers.

Q: Manufacturers benefit from co-op advertising in all of the following ways except: A) gain additional advertising exposure at reduced costs. B) reimbursed by retailers for their share of the ad costs. C) co-op dollars are directly tied to retail sales. D) gain prominent exposure in an ad since no other competing brands can also be displayed.

Q: Retailers benefit from co-op advertising in all of the following ways except: A) they can expand their advertising program at a low cost. B) benefit from the image of promoting a national brand. C) attract new and additional customers to their store because of national brands. D) receive money in advance to cover the costs of advertising.

Q: Rewards given to channel members such as brokers, retail salespeople, and others as prizes for winning a contest are known as: A) slotting fees. B) volume incentives. C) spiff money. D) pay for play.

Q: Rewards given as contest prizes to brokers, retail salespeople, retail stores, wholesalers, or agents is considered a: A) trade allowance. B) trade contest. C) cooperative merchandise agreement. D) drop-ship allowance.

Q: Oscar is on a tight budget so he uses the consumer promotions that will give him the best price for products he buys. Oscar is a ________ consumer. A) promotion prone B) brand loyal C) price sensitive D) shopper prone

Q: Trey likes to drink Pepsi and will use a consumer promotion, such as a coupon or premium, only if it is for Pepsi. Trey is a ________ consumer. A) promotion prone B) brand loyal C) price sensitive D) shopper prone

Q: Britney likes to use coupons and tends to purchase the brand of food that has the best coupon offer. Britney is a ________ consumer. A) promotion prone B) brand loyal C) price sensitive D) shopper prone

Q: A consumer who makes a purchase decision based on price is: A) promotion prone. B) brand loyal. C) a repeat buyer. D) price sensitive.

Q: In terms of planning promotions, consumers can be divided into all of the following categories except: A) promotion prone. B) brand loyal. C) price sensitive. D) casual purchasers.

Q: A consumer who only purchases his or her favorite brand is: A) promotion prone. B) brand loyal. C) brand responsive. D) price sensitive.

Q: Which category of consumers best responds to coupons and premiums? A) Promotion-prone consumers B) Brand-loyal consumers C) Brand-image consumers D) Price-sensitive consumers

Q: Name the various forms of sampling.

Q: For contests and sweepstakes, what is the difference between extrinsic value and intrinsic value in prizes?

Q: What is the primary difference between a contest and a sweepstakes?

Q: How can a company build a successful premium program?

Q: What are the four major types of premiums?

Q: What are the major types of coupons?

Q: Intercompany tie-ins are the promotion of two different products from the same company using one consumer promotion.

Q: Intracompany tie-ins are the promotion of two different products from different companies using one consumer promotion.

Q: A tie-in combines two or more consumer promotional activities into a single campaign.

Q: To be successful, a price-off should feature a monetary appeal to consumers and provide consumers with an immediate reward.

Q: A consumer who purchases additional products because of a price-off tends to either consume more or to delay a future purchase of the product.

Q: Price-offs can encourage customers to switch brands in brand parity situations or when the consumer has a high level of brand loyalty to another brand.

Q: Bonus packs can lead to brand switching if the consumer has used the brand previously.

Q: A bonus pack works best to attract new customers.

Q: A major disadvantage of sampling is the cost, both of producing and distributing the sample.

Q: It is not possible to offer sampling programs over the internet.

Q: In recent years, marketers have reduced the use of freestanding inserts for the distribution of samples because of ineffectiveness.

Q: Shania received a sample of a new tea drink when she attended a football game in Miami. This is an example of instant redemption sampling.

Q: Instant redemption coupons are a form of direct sampling.

Q: Putting a sample of a dryer sheet in a box of laundry detergent is a form of response sampling.

Q: In-store sampling is a program in which samples are given directly to consumers in a retail store.

Q: For some products, such as automobiles, increasing the amount of a rebate no longer seems to spur additional sales activity, but discontinuing or reducing the rebate level tends to have an immediate negative impact on sales.

Q: Rebate programs tend to be more effective than other promotions because consumers get excited about them and this leads consumers to wait patiently until one is offered before making a purchase.

Q: Refunds and rebates suffer the disadvantages of cost and diminished effectiveness.

Q: The internet and social media have not been effective venues for contests and sweepstakes.

Q: The primary goal of contests and sweepstakes is to encourage brand switching behavior.

Q: To encourage consumers to continue playing a contest, the intrinsic value of prizes can be steadily increased by allowing small, incremental rewards.

Q: A major advantage of using the internet for a contest is that individuals can participate in the contest for its intrinsic value.

Q: In a contest or sweepstakes, intrinsic value is the perceived value the consumer places on the prizes offered.

Q: In a contest or sweepstakes, extrinsic value is determined by the value of the prize to the consumer.

Q: A contest requires the use of a skill while a sweepstakes relies on random chance.

Q: A consumer is typically required to make a purchase when entering a sweepstakes.

Q: Premiums are normally much more successful than coupons in increasing sales and profits.

Q: Some marketing experts believe overuse of premiums can damage a brand's image.

Q: The newest form of data analytics is location-data tracking, which is the process of: A) making the data anonymous so that specific individuals cannot be identified. B) analyzing data provided by mobile phone GPS technology and combining it with consumer profile information. C) purging names from a list of individuals who live within a specified area that do not meet a target profile. D) identifying individuals within a specified location that meet a firm's target audience for a mobile campaign.

Q: With location-data tracking, the term "hashing" refers to the process of: A) making the data anonymous so that specific individuals cannot be identified. B) locating individuals within a specific distance of a specified location. C) purging names from a list of individuals who live within a specified area that do not meet a target profile. D) identifying individuals within a specified location that meet a firm's target audience for a mobile campaign.

Q: Customer clustering is attractive to marketers because it: A) creates clusters from names purchased from a direct marketing vendor. B) allows marketers to identify external data lists that match the firm's target customers. C) creates clusters of a firm's actual customers along an important purchase criteria. D) creates clusters based on the profile of a firm's best customers.

Q: In determining lifetime value for individual customers, customer acquisition costs are determined by dividing: A) advertising costs by the number of customer transactions. B) total marketing and advertising costs by the number of new customers. C) total marketing and advertising costs by the number of total customers. D) advertising costs associated with acquiring new customers by the number of new customers.

Q: In calculating the lifetime value of a market segment, the figures that are the most difficult to obtain are: A) retention rates. B) fixed and variable costs. C) database costs and acquisition costs. D) marketing and advertising costs.

Q: Many marketing experts believe calculating the lifetime value of a market segment is superior to calculating the value for a single individual because it: A) is a larger number. B) is more stable than an individual. C) adds costs that cannot be allocated per individual. D) sums costs across a market segment.

Q: A lifetime value analysis creates a figure that represents the: A) sales revenue generated by a customer throughout his or her lifetime with a brand or company. B) present value of the profit revenue generated by a customer in a particular product category. C) present value of the profit revenue of a customer throughout the lifetime of a relationship with a brand or company. D) profit revenue of a customer throughout his or her lifetime.

Q: Common forms of database coding are: A) data mining and cluster customer analysis. B) lifetime value analysis, customer cluster analysis, and location-data tracking. C) lifetime value analysis and data mining. D) geocoding, data mining and location-data tracking.

Q: Using geocoding, a company's marketing department can add which of the following to each customer's record? A) Demographic information and lifestyle data as well as the geographical codes B) Total purchases made at each retail outlet in the area C) Demographic and political information D) A composite analysis of his or her neighbors

Q: Adding geographic codes to customer records to plot them on a map is called: A) geoidentification. B) geocoding. C) finding neighborhood lifestyle clusters. D) commercial database service analysis.

Q: Many times demographic and psychographic information about customers is not available through internal company records. In these situations: A) the information can be purchased from external marketing research firms. B) a company can offer customers an incentive to provide the necessary information. C) the database can be appended with interaction and history information. D) geocoding can be appended to each customer's record.

Q: An effective database contains: A) every transaction a customer has with a firm and interactions that resulted in purchases. B) all transactions and all interactions a customer has with a firm. C) transactions and interactions of customers that have a high lifetime value. D) only the transactions of customers.

Q: The most cost-effective means of communicating with customers is: A) the telephone. B) through computer cookies. C) the mail. D) the internet and email.

Q: The easiest part of building a data warehouse is: A) data coding through customer cluster analysis and lifetime value calculations. B) the appended demographic and psychographic information. C) obtaining the history of customer interactions and contact with a firm. D) collecting customer names and addresses.