DECA Marketing

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What activity might be viewed as unethical selling behavior?

Giving gifts to customers. Some businesses view giving and/or accepting gifts as a form of bribery. Therefore, it is important for businesses to establish specific gift-giving policies for their salespeople. If a salesperson does not know if it is appropriate to give a certain type of gift, s/he can refer to the company's written guidelines about acceptable and unacceptable behavior. In general, expensive gifts such as vacations are not appropriate. On the other hand, giving or accepting a holiday gift basket may be an acceptable practice for some businesses. Asking for sales leads, allowing customers to try a product, and holding sales events are ethical practices.

Which of the following is an example of legal tender issued by the federal government:

Bank notes. Bank notes are currency. Currency is the paper or metal (coin) money that individuals and businesses use to buy and sell goods and services. Paper money and coins are issued by a country's government. Corporate bonds are bonds issued by corporations to fund operating expenses. A mutual fund is a collection of shareholders' money that is invested by professional fund managers in an assortment of different securities, such as stocks and bonds. A bond is a piece of paper (real or virtual) that says the governing body or corporation will borrow your money at a particular interest rate for a particular period of time. Municipal bonds are issued by local governments.

. A consumer advantage of cooling-off laws is that it allows

Buyers a limited amount of time to withdraw from a purchase agreement without penalty. Cooling-off laws protect consumers who purchase products as a result of high-pressure or fear-based sales tactics. Such laws provide buyers with a set amount of time to think about their purchases and allow the buyers an opportunity to withdraw from the purchase agreement without penalty.

The government requires a business to stop running an advertisement that consumers find offensive. What type of remedy is the government using to enforce promotional regulations?

Cease-and-desist order. A cease-and-desist order is a court-ordered demand requiring an advertiser to stop running an advertisement. Affirmative disclosure is a legal remedy in which the government orders the advertiser to include product information in future advertisements that it omitted in its previous advertisements. Appropriation refers to the unauthorized use of an individual's name or likeness for commercial purposes. An indictment is the legal process of formally accusing a person of a crime and putting that person on trial.

Accountants are legally required to follow established guidelines when preparing financial documents to ensure that the information presented is

Clear and consistent. The accounting function is responsible for collecting and reporting the business's financial information. Governments require businesses to provide certain types of financial information to regulatory agencies and shareholders in specific ways. By requiring businesses to follow the same standards and rules, financial reports are prepared in a consistent way, so the information is clear, objective, and transparent to all people who read and work with financial information. Subjective information is open for interpretation. Irrational information is not logical or meaningful to the reader. In other words, it is unclear.

What type of survey rating scale involves assigning a value to each option within a set of circumstances provided on a questionnaire?

Constant sum. Constant sum is a type of comparative rating scale that requires the respondent to assign a value (e.g., percentage or points) to the options provided on the questionnaire. For example, the survey may ask respondents to rate the importance of various factors in relation to one another, such as characteristics of delivery service including charges, timeliness, invoice accuracy. The respondents assign a percentage value to each factor on the basis of importance to the respondent in a way that the total of all of the values added together totals 100%. The Likert scale rates respondents' attitudes or feelings according to degree. An example is asking participants to respond to questions on a scale of 1 to 5 with 1 indicating strong disagreement and 5 indicating strong agreement. The semantic differential scale provides seven spaces, which are bounded by descriptive antonyms at each end, such as durable and fragile. The respondent places an "X" at the point or space on the continuum that best describes his/her feelings about the object or idea that s/he is rating. Frequency is a type of category scale and provides respondents with options such as very often, often, sometimes, rarely, and never.

Which of the following are examples of customer-related services that a business might consider when setting a product's price:

Credit, delivery, and installation. Services are costs for the business and should be considered when setting a product's price. Credit, delivery, and installation are types of services that businesses often provide their customers. Although advertising is a consideration when pricing products, it is a form of promotion rather than a service that businesses provide for their customers. Research is a product consideration when setting prices.

What distribution method is best for a manufacturer to use when the product is complex and is difficult to install and repair?

Exclusive distribution involves selling a product through just one middleman in a geographic area and allows the manufacturer to maintain tight control over the product. This method is often used when the products are technical in nature and require specialized knowledge to install and repair. Intensive distribution involves selling a product through every available wholesaler and retailer in a geographic area where consumers might look for it. Chewing gum is an example of a product sold through intensive distribution. Selective distribution involves selling a product (e.g., designer handbags) through a limited number of wholesalers and retailers in a geographic area. Invasive is not a distribution

The exchange rate of a nation's currency is most likely to decrease when the nation

Experiences political instability. Currency exchange rates are constantly fluctuating, and are affected by many factors. When a nation experiences political instability, the value of its currency tends to decrease because the nation's future is uncertain. A nation's currency value tends to increase when its exports exceed its imports, when it carries a low level of debt, and when it limits the amount of money it prints and circulates

What is an advantage to businesses that use product-bundling strategies?

It often reduces customers' comparison-shopping activities. Product bundling is the practice of putting together two or more goods/services to create a one-price package, which is less expensive for the customer than purchasing the products individually. Product bundling provides customers with a greater sense of value because they are getting more for less. When customers believe that they are getting a bargain, they are more likely to purchase the bundled package quickly rather than comparison shop for similar products. This is an advantage to a business providing the bundled products because it is less likely to lose sales to a competitor. Bundled products do not necessarily reduce a business's need to follow up with customers, reduce product training activities, or reduce suggestion selling and advertising efforts.

When Kaitlin walked into the office conference room, she saw a coworker speaking on the telephone. To respect her coworker's privacy, Kaitlin should

Leave the room immediately and shut the door. An employee who respects others' privacy would leave the room when a coworker is on the telephone. Standing quietly until being noticed, coughing loudly, and shutting the door and waiting for the telephone call to end are not ways of respecting a coworker's privacy.

Which of the following is an activity that a firm's public-relations department would perform to influence legislation:

Lobbying government officials. The government regulates many types of industries and businesses. Businesses often want to influence legislation that affects the way they operate. The activities that the business uses to influence legislators are called lobbying. Lobbying efforts are a public-relations function. A debate moderator is a neutral third party who guides a discussion about a controversial issue. A publicrelations audit is an examination of the business's public-relations processes and activities. Coordinating service projects is not a public-relations activity that businesses use to influence legislation.

. Elise is the public-relations director for Divine Frozen Yogurt and has assembled a packet that contains key information about the company. The packet contains a cover letter, an overview of the company, photos, recent press releases, published news articles, staff biographical information, and product brochures. Elise had developed a(n)

Media kit. The public-relations function involves establishing good relationships between the business and the public. A business tries to maintain positive relationships with different groups that make up the public, such as employees, shareholders, local businesses, government officials, and the media. It is important for a business to build positive relationships with the media because they have access to large groups of people through the airwaves and their publications. Often, a business provides newspaper and magazine publishers and television and radio stations with media kits that provide information about the business and its employees. It is the business's goal that the media will air or publish news stories that portray the business in a favorable way, which provides positive publicity. The public-relations director did not develop a sponsorship program, creative brief, or advertising profile.

A business that provides excellent customer service is more likely to

Obtain referrals. A referral is a method of prospecting that involves asking for names of individuals who might be interested in the business's products. Customers who have had positive service experiences with the business are more likely to provide the business with referrals. Referrals often lead to more sales and profits for the business. The business's profit margin depends on many factors, including the type of product and the business's objectives. Excellent customer service does not always involve providing rebates or expanding the business's product line.

According to the law of diminishing returns, what aspect of production decreases when fixed resources have reached their maximum level of efficiency?

Outputs. The law of diminishing returns is an economic principle stating that after a certain point, hiring additional employees will result in a decrease in the overall level of production. Most often, available resources are finite, which means that there are fixed amounts of resources (e.g., equipment) available to produce goods and services. Overall productivity reaches its peak when there are a certain number of employees using all of the available resources to do the work. When there are too many laborers and not enough fixed resources, resource efficiency and output decreases. The reduction of outputs does not necessarily affect product quality, order lead time, or product usefulness

What do lean operations involve?

Reducing waste throughout the entire supply chain. Lean operations are often associated with manufacturing processes but have evolved to include all business functions throughout the supply chain. Businesses that are lean operations optimize their resources and productivity levels and reduce wasted resources, including time, materials, money, etc. Lean operations strive to continuously reduce waste and maximize efficiency. Lean operations may improve the business's image with the public, but that is not the primary purpose. Eliminating certain jobs is an action that a business may take to reduce waste, but this action is not what drives the concept of lean operations

What element of the promotional mix is most appropriate to use for a complex or technical product that is difficult to explain?

Personal selling. Promotional mix is the blend of marketing communications channels (advertising, sales promotion, personal selling, and publicity) that a business uses to send its messages to customers. Personal selling uses planned, personalized communication in order to influence purchase decisions and enhance future business opportunities. Although personal selling is an expensive type of promotion, it is most effective to use when the product is complex or difficult to explain. Companies train salespeople about complex or technical products so they can clearly explain the items' features and benefits to potential customers. Sales promotion consists of promotional activities other than advertising, personal selling, and publicity that stimulate customer/client purchases. Examples of sales promotion include premiums, coupons, and free samples. Advertising is a nonpersonal form of promotion that is paid for by the company. Examples of advertising include television commercials, billboards, and newspaper advertisements. Publicity is a nonpersonal form of promotion that is not paid for by the company or individual that benefit from it.

A business's finance function may be compromised by groupthink because the practice is likely to

Pressure employees to conform under questionable circumstances. Groupthink is a psychological phenomenon that evolves when conformity and the cohesiveness of the group become more important than the group's objective, purpose, or problem. As a result, group members often feel pressured to conform and behave in ways that they normally would not. Members learn to not "rock the boat" by sacrificing their individuality, opinions, and personal ethics so they are not ostracized from the group. In its extreme form, groupthink practices may result in unethical practices such covering up financial mistakes, using company money inappropriately or carelessly, lying to the business's shareholders about the financial health of the company, embezzling activities, etc.

A business sends a survey to ask its customers about their buying intentions for the next year and will use the survey data to develop its annual sales forecast. What type of sales forecast is the business using?

Qualitative. A sales forecast is a prediction of future sales over a specific period of time. Businesses use many tools to forecast sales. Qualitative methods are based on expert opinions and feedback, as well as personal experience. Asking customers to complete a survey of buyer intentions provides the business with general feedback about their customers' anticipated buying activities. The information gathered from this type of survey usually does not provide specific numerical data that the business can obtain from previous sales reports; however, it does help the business identify and consider customer trends when it develops its sales forecast. Cooperative, predatory, and exploratory are not types of sales forecasts.

What form of technology allows channel members to track a product's movement through the supply chain in real time?

Radio frequency identification (RFID). A radio frequency identification (RFID) tag is a small computer chip that is attached to the item. The tag contains product information such as price, style, model number, etc., and allows channel members to track the item's movements from the time it leaves the production line to the point of purchase. The tag allows channel members to know where the product is at all times. Universal product codes are bar-coded tags that are read by a scanner. Supplier performance index is a method to measure and evaluate a channel member's performance. A global transit mapping system, universal product codes, and the supplier performance index are not forms of technology that track a product's movement through the supply chain.

What type of marketing-research error occurs when the researcher interviews unqualified people?

Respondent-selection. When interviewers survey an inappropriate sample of the population, the marketing research becomes skewed. For example, an interviewer who is supposed to interview only 18- to 24-year-old males but interviews some 25- to 40-year-old-males, is not conducting the research appropriately. This type of error is called a respondent-selection error. Deliberate-falsification errors occur when people provide false information on purpose. These errors often occur when the respondents do not want to reveal personal information, are bored, or are embarrassed by the question. Respondentinability errors occur when respondents forget the answer to a question (e.g., What did you have for lunch last Tuesday?). Data-analysis errors occur during the data-analysis phase rather than the datacollection phase of the marketing-research process.

A retailer that overcharges customers for small items at the point of purchase may be engaging in the unethical practice of

Scanner fraud. Businesses occasionally make honest pricing mistakes. An employee may forget to key in the sale price of an item or key it incorrectly into the computer system. When this happens the customer is charged an incorrect amount for the item when it is scanned at the checkout counter. On the other hand, scanner fraud is a deliberate action that involves overcharging customers, usually for smaller goods, with the expectation the customer will not notice or fuss about it. This is unethical behavior because the business is acting in a deceptive, intentional way to pad the business's bottom line. Predatory pricing is the practice of pricing goods extremely low with the goal of driving the competition out of business. Retail price maintenance involves producers pressuring retailers to sell goods at the suggested retail price, which is unethical and, in some jurisdictions, an illegal practice. Price fixing is an illegal agreement in which businesses agree on prices of their goods or services, resulting in little choice for customers.

Which of the following are communication channels that businesses often use when engaging in the push promotion strategy:

Trade advertising and trade shows. Sales promotion encompasses promotional activities other than advertising, personal selling, and publicity. Depending on their target markets, businesses use different types of sales-promotion strategies to stimulate sales. When a business uses the "push" sales-promotion strategy, it is attempting to move or push the product through the distribution channel to the end user. To do this, businesses use sales-promotion techniques (e.g., discount coupons and rebates) to provide channel members with incentives to sell the products to their customers, which are often the end users. Businesses often use trade advertising and trade shows to inform channel members about their products and sales promotions. If a business uses a pull strategy, it is likely use mass advertising communication channels (e.g., national television commercials) to reach the target market. Pricing is a marketing function that involves determining and adjusting prices to maximize returns and to meet customers' perceptions of value.

What can a pharmaceutical manufacturer do to help ensure that its pain reliever and allergy medications are safe for consumer use?

Use protective packaging. To reduce the risk of product tampering, businesses package their products in ways that ensure that the products are safe for consumption. For example, pharmaceutical companies often use heat seals, blister packs, and bottle safety caps to make it difficult to alter the product before it is sold to the end user. Consumers feel more confident about using the product when they open the package and the item is sealed and protected. Governments often require businesses to place clear, detailed labels on product packages that indicate the ingredients and the proper way to use or administer the products. Competitive pricing and a disclaimer on the package do not ensure a product's safety

What is an advantage to companies that use integrated software programs?

Users can combine information from different applications. Integrated software applications consist of two or more related computer programs that work together to record information or perform specific business tasks or functions. For example, Microsoft Office combines a variety of programs that perform wordprocessing, spreadsheet, slideshow presentation, desktop publishing, and database functions. The software allows users to import data, text, or graphics from one application to another and allows users to access multiple applications at one time. Licensing requirements vary by software producer. Integrated software does not reduce the need for firewalls

Which of the following is an example of an internal source of secondary marketing data:

Warranty agreements. Internal secondary data is data from within the business that has been collected for purposes other than the project at hand. Warranty agreements outline conditions under which the seller will repair or replace a product. Customers can often upgrade or extend the warranties for a fee. Businesses usually maintain their customers' warranty information in their computer systems. This information usually contains contact information, product information, purchase date, types of repairs made, etc. The business might gather the contact information on warranty agreements to send promotional information about a new product. Or, the business might want to determine a pattern for product defects by examining repair information. Census reports, consumer blogs, and business directories are external sources of information.


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