MKT 3000 Final Exam
General Merchandise Retailers
(1) Department Stores (2) Full-line discount stores (3) Specialty stores (4) Drugstores (5) Category Specialists (6) Extreme Value Retailers (7) Off-price retailers
value added by personal selling
-salespeople provide information and advice -salespeople save time and simplify buying -salespeople build relationships
Steps in the Selling Process
1.Generate and Qualify leads 2. Pre-approach 3. Sales presentations and overcoming reservations 4.Closing the sale 5.Follow up
109) In one test before product launch, customers try a sample product and are then surveyed to understand whether or not they would buy/use the product again. This is known as A) premarket testing. B) market testing. C) alpha testing. D) concept testing. E) prelaunch testing.
A
122) What makes a high/low pricing strategy appealing to sellers? A) It attracts two distinct market segments. B) It allows the seller to market itself as an "everyday low price leader." C) It doesn't require the seller to continually offer sales or deep discounts. D) It allows sellers to capture the most profit from a new product or service. E) It reduces the need for slotting and advertising allowances.
A
26) All of the following are benefits of new product development to a firm except A) reducing the costs of production. B) satisfying the changing needs of current and new customers. C) avoiding market saturation from products that have been on the market for a long time. D) creating diversification and reducing risk. E) keeping up in a market with short product life cycles where sales come mostly from new products.
A
26) When CarMax promises a "no-haggle" pricing structure, it exhibits ________ because it provides additional value to potential used car buyers by making the process simple and easy. A) a customer orientation B) a status-quo pricing structure C) competitive parity D) a competitor orientation E) consumer parity
A
34) Distribution intensity is commonly divided into three levels: A) intensive, exclusive, and selective. B) primary, secondary, and tertiary. C) administered, vertical, and independent. D) global, national, and local. E) corporate, contractual, and independent.
A
transmitter
An agent or intermediary with which the sender works to develop the marketing communications; for example, a firm's creative department or an advertising agency.
alpha testing
An attempt by the firm to determine whether a product will perform according to its design and whether it satisfies the need for which it was intended; occurs in the firm's research and development (R&D) department.
AIDA model
Attention, Interest, Desire, Action (THINK, FEEL,DO)
103) When using the objective-and-task method of IMC budgeting for multiple products and services, how often must the process be repeated? A) never, after the first product/service B) once, for each individual product and service C) once, by each management team member D) only when a product is removed from the line E) when the prior year's budget is exceeded
B
114) All of the following are public relations tools except A) donating a portion of profits to a charitable cause. B) coupons and rebates. à sales promotion C) event sponsorships. D) news releases. E) websites.
B
119) Firms are willing to offer generous rebates because A) the retailer and manufacturer always split the cost. B) rebates increase sales, but firms may not have to pay off all the rebates offered. C) they are easier for the consumer to use than are coupons. D) rebates are the only type of sales promotion proven to impact sales. E) they tend to generate repeat customers.
B
122) ________ is when two or more firms join to reach a target audience. A) Promotional co-branding B) Cross-promotion C) Joint-venture promotion D) Multitarget promoting E) Convenience promoting
B
28) Especially for marketers with new products or services, IMC is needed because A) consumers need to know all about the features of new products before making a purchase decision. B) consumers are unlikely to buy products they are not aware of. C) it is impossible for products to sell themselves through word-of-mouth communication. D) pricing decisions cannot be made without IMC. E) new products and services need to be integrated into the supply chain value proposition.
B
31) In developing marketing strategies, why is price often the most challenging of the four Ps to manage? A) because most managers feel it is the least important element of the marketing mix B) because it is the least understood element of the marketing mix C) because it has to be based on the promotion budget for the product D) because it is difficult to calculate markups for products E) because managers don't understand the relationship between benefits and costs
B
51) The ________ stage occurs prior to meeting the customer for the first time and extends the qualification of leads. A) qualify leads B) preapproach C) closing the sale D) follow-up E) sales presentation
B
61) Many restaurants roll out new ideas first in Orlando, Florida, a location that attracts a vast range of diverse tourists and thus might offer insights into what various consumer groups will like. This is an example of A) target marketing. B) test marketing. C) product marketing. D) product launching. E) premarket testing.
B
72) The content of an advertising message is closely tied to A) the size of the advertising team. B) the characteristics of the media selected to carry the message. C) the opportunity for posttesting. D) the sales promotion opportunities. E) the coupon redemption rate.
B
107) Which of the following is true of competitive parity? A) It assumes the same percentage used in the past, or by competitors, is still appropriate for the firm. B) It does not take into account new plans (e.g., to introduce a new line of products in the current year). C) It does not allow firms to exploit the unique opportunities or problems they confront in a market. D) It assumes communication expenses do not stimulate sales and profit. E) If all competitors use this method to set communication budgets, their market shares will stay increase over time.
C
111) Gretchen has just started as a fashion marketing intern for an up-and-coming design firm. She expected to immediately begin implementing the four Ps she had learned about in class. Instead, she was asked to work on a project identifying important events where celebrities might wear the fashions. Gretchen soon realized that this activity was part of ________, directly related to marketing. A) sales promotions B) cause-related marketing C) public relations D) press release development E) a push-pull strategy
C
115) ________ are special incentives or excitement-building programs that encourage consumers to purchase a particular product, often used in conjunction with advertising or personal selling programs. A) B2B programs B) Trade incentives C) Sales promotions D) Push programs E) Targeted leader items
C
123) Traditionally, marketers have seen the role of ________ as generating short-term results, whereas the goal of ________ was to lead to long-term results. A) public relations; institutional advertising B) advertising; personal selling C) sales promotion; advertising D) advertising; public relations E) corporate blogs; public relations
C
21) The difference between advertising and publicity is that advertising is A) more effective in reaching consumers. B) almost always used in conjunction with consumer satisfaction surveys. C) a paid form of marketing communication. D) designed to remind consumers, while publicity is used to persuade consumers. E) designed for very targeted audiences, while publicity reaches mass audiences.
C
31) One of the disadvantages associated with personal selling is A) cold calling is easier than direct mail advertising. B) a salesperson often changes the message based on consumers' needs. C) it is expensive. D) it can be directed toward those customers with the highest potential. E) it is structured and finite.
C
32) The three elements of any IMC strategy are the consumer, the channels, and A) the receiver. B) the product. C) evaluation of the results. D) the company. E) event sponsorship.
C
34) The process by which the use of a new product or service spreads throughout a market group is referred to as A) new product introduction. B) lead user dispersion. C) diffusion of innovation. D) the product life cycle. E) product development diffusion.
C
39) A(n) ________ distribution intensity helps a seller maintain a particular image and control the flow of merchandise into an area. A) intensive B) widespread C) selective D) collective E) variable
C
fixed costs
Costs that do not vary with the quantity of output produced
102) Using prior sales and communication activities to determine the present communication budget describes which method of IMC budgeting? A) reach and frequency B) track and decode C) objective-and-task D) rule-of-thumb E) sender-receiver
D
49) A customer orientation toward pricing implicitly invokes the concept of A) knowing the dimensions of the target market. B) positioning. C) the income effect. D) value. E) profit.
D
78) All of the following are interactive elements of an IMC strategy except A) personal selling. B) consumer contests. C) mobile marketing. D) public relations. E) online marketing.
D
81) One of the categories of products for which brand extension is especially logical is A) generic goods. B) generic services. C) commodities. D) complementary goods. E) licensed brands.
D
83) Retailers can gain valuable knowledge about their customers from the transaction process and from A) trade industry profiles. B) store brand/private-label brand ratios. C) omnichannel flow process. D) the insights of store personnel. E) end-of-aisle positioning studies.
D
124) Cross-promotion is most successful when A) one product is well known and one product is less known. B) the firms have a prior marketing relationship. C) the two products are similar in price. D) the promotion takes place over a very short time period. E) the two products appeal to the same target market.
E
40) A ________ strategy involves accurately measuring all the factors needed to predict sales and profits at various price levels, so that the price level that produces the highest return can be chosen. A) sales orientation B) target profit C) target return D) status quo E) maximizing profits
E
Early Majority (34%)
Wait until bugs are worked out. Few new products can be profitable until this large group buys them.
status quo pricing
a competitor-oriented strategy in which a firm changes prices only to meet those of competition
high/low pricing
a pricing strategy that relies on the promotion of sales, during which prices are temporarily reduced to encourage purchases - attracts two distinct market segments, those who are not price sensitive and are willing to pay "high" price and more price sensitive customers who wait for the "low" sale price - creates excitement and attracts customers during limited sale time
Communication Process
a source trying to reach a receiver with a message Sender Transmitter Encoding Comm Channel Receiver Noise Feedback
dynamic pricing
adjusting prices continually to meet the characteristics and needs of individual customers and situations
feedback loop
allows the receiver to communicate with the sender and thereby informs the sender whether the message was received and decoded properly
noise
any interference that stems from competing messages, a lack of clarity in the message, or a flaw in the medium; a problem for all communication channels
Sales Orientation
based on the belief that increasing sales will help the firm more than increasing profits
competitor orientation
based on the premise that the firm should measure itself primarily against its competition
Integrated CRM
centralizer customer data warehouse that houses a complete history of each customer's interaction with the retailers
5 C's of Pricing
competition, costs, company objectives, customers, channel members
line extension
extending an existing brand name to new forms, colors, sizes, ingredients, or flavors of an existing product category
brand extension
extending an existing brand name to new product categories
Distribution Strategies
intensive, selective, exclusive
gray markets
result when products are sold outside the channels of distribution authorized by a manufacturer
everyday low pricing
setting a low list price rather than relying on frequent sales, discounts, or allowances
Service Reatilers
starbucks
intensive distribution
stocking the product in as many outlets as possible
brand equity
the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service
individual brand
using different brand names for different products
86) Sales promotions include all of the following except A) coupons. B) rebates. C) online ads. D) point-of-purchase displays. E) free samples.
C
communication channel
The medium—print, broadcast, the Internet—that carries the message.
relationship selling
the practice of building ties to customers based on a salesperson's attention and commitment to customer needs over time
sales presentation and overcoming reservations
the presentation handling reservations
118) With a ________ pricing strategy, marketers set a low initial price for the introduction of a new product or service. A) market penetration B) bundling C) price fixing D) reference E) skimming
A
36) Generally, when advertising to consumers, the objective of an advertising campaign is A) a pull strategy—to get the product into stores by having consumers demand it. B) a push strategy—to increase demand by focusing on wholesalers, retailers, or salespeople. C) to win advertising awards. D) to offset sales promotion costs. E) to maximize media planning.
A
39) Monica works as a salesperson in a retail clothing store. Of the five stages in the selling process, Monica is least likely to engage in A) generating and qualifying leads. B) making the preapproach. C) closing the sale. D) following up. E) making a sales presentation.
A
43) Julia wants her firm's gourmet snacks to be the leading brand in the U.S. market. When adopting a pricing strategy designed to gain market share, she should remember that A) rarely is the lowest-price offering the dominant brand in a market. B) prestige products need to be competitively priced. C) companies can gain market share by offering low-quality products at a high price. D) total value equals total cost minus variable costs leading to price escalation. E) price wars are the way to become the dominant brand.
A
60) The price elasticity of demand for a specific brand of deodorant is 1. The market for this product is considered A) inelastic. B) elastic. C) saturated. D) dynamic. E) a prestige market.
A
70) The Coffee Express company is located in a business district with few customers on the weekend. To attract customers on Saturday and Sundays, it reduces its prices on these two days. This is an example of A) dynamic pricing. B) the substitution effect. C) the income effect. D) the target return effect. E) cross-price elasticity.
A
78) Marketers spend millions of dollars annually trying to create or reinforce brand loyalty. Brand loyalty changes the demand curve for the firm's products by A) reducing the price elasticity of demand. B) making demand more oligopolistic and less monopolistic. C) increasing the income effect. D) reducing fixed costs and increasing the gray marketing effect. E) shifting the market from a monopoly to pure competition.
A
84) Personal selling is an especially important part of IMC in A) business-to-business settings. B) cause-related marketing. C) event sponsorships. D) stealth marketing. E) web tracking.
A
target return pricing
A pricing strategy implemented by firms less concerned with the absolute level of profits and more interested in the rate at which their profits are generated relative to their investments; designed to produce a specific return on investment, usually expressed as a percentage of sales.
target profit pricing
A pricing strategy implemented by firms when they have a particular profit goal as their overriding concern; uses price to stimulate a certain level of sales at a certain profit per unit.
price skimming
A strategy of selling a new product or service at a high price that innovators and early adopters are willing to pay in order to obtain it; after the high-price market segment becomes saturated and sales begin to slow down, the firm generally lowers the price to capture (or skim) the next most price sensitive segment.
81) _______ refers to the process of evaluating and selecting the ________. A) Advertising; media buy B) Media planning; media mix C) Promotion planning; advertising mix D) Media buying; media mix E) Media mixing; media buy
B
83) The ________ step in the product development process is critical, requiring tremendous resources and extensive coordination of all aspects of the marketing mix. A) pretesting B) product launch C) posttesting D) product development E) evaluation of results
B
36) Whether or not a salesperson will go through all five steps of the selling process depends on the sales situation and A) the use of sales representatives versus independent reps. B) the effectiveness of role playing. C) the buyer's readiness to purchase. D) the number of sales support personnel available. E) how the person was trained.
C
56) A demand curve is built on the assumption that A) income is derived from demand. B) price remains the same, and fixed costs change. C) everything but price and demand remains the same. D) fixed costs change with quantity demanded. E) the firm does not advertise
C
76) The more substitutes that exist in a market, A) the lower the price elasticity for each product. B) the greater the income elasticity for each product. C) the easier it will be to utilize a target profit pricing strategy. D) the more sensitive consumers will be to changes in the price of a particular product. E) the more likely the market will be characterized as an oligopoly.
C
80) Personal selling is particularly important for retailers selling A) online services. B) discount items. C) products that are complicated or expensive. D) low-cost services. E) trend or fashion items.
C
85) ________ involves the planning, direction, and control of personal selling activities, including recruitment, selection, training, motivation, compensation, and evaluation of members of the sales force. A) Human resource management B) Integrated marketing communications management C) Sales management D) Marketing management E) Sales administration
C
87) In general, prices should not be based on costs because A) consumers are cost-conscious. B) producers rarely know what their costs are. C) consumers make their purchase decisions based on perceived value. D) producers need to avoid creating a cost competitive parity debate. E) customers are always right.
C
90) When Disney flooded retail stores with products based on its movie Frozen, this illustrated A) strategic brand alteration. B) rebranding. C) brand licensing. D) brand repositioning. E) brand scaling.
C
generate and qualify leads
Inbound marketing - Draw the attention of customers through blogs like twitter, linkedIn, and other online sources Trade shows are an excellent way to find leads Cold calls - sales people call or go see people without appointments Telemarketing - same thing as cold call but on the phone and usually outsourced
pioneers
New product introductions that establish a completely new market or radically change both the rules of competition and consumer preferences in a market; also called breakthroughs.
PR vs. Advertising
PR- NOT paid for, can be in media or social media, special events, brochures and many others, can be external or internal, broad in scope, earned space Advertising- PAID for time/ space, goes to external audiences, purpose is to sell product, is specialized type
early adopters
People who adopt new products early, choose new products carefully, and are viewed as "the people to check with" by later adopters - opinion leaders
preapproach and the use of CRM systems
Preapproach occurs prior to meeting the customer for the first time and extends the qualification of leads procedure
retailer/store brands
Products developed by retailers. Also called private-label brands. - Costco brand, Trader Joes
ROI
Return on Investment of Marketing. ROI measures the profits generated by investments in marketing activities.
Role of Sales Manager
Sales management includes planning, direction, and control of personal selling activities including recruiting, selecting, training, motivating, compensating, and evaluating
Food Retailers include:
Supermarkets, (conventional 30,000, limited 1,500) Supercenters, Warehouse clubs, Convenience stores, Online grocery retailers
customer orientation
a company objective based on the premise that the firm should measure itself primarily according to whether it meets its customers' needs
profit orientation
a company objective that can be implemented by focusing on target profit pricing, maximizing profits, or target return pricing
brand licensing
a contractual arrangement between firms, whereby one firm allows another to use its brand name, logo, symbols, or characters in exchange for a negotiated fee
lagged effect
a delayed response to a marketing communication campaign
family brand
a firm's own corporate name used to brand its product lines and products - Kraft mac and cheese
competitive parity
a firm's strategy of setting prices that are similar to those of major competitors
selective distribution
a form of distribution achieved by screening dealers to eliminate all but a few in any single area
demand curve
a graph of the relationship between the price of a good and the quantity demanded
product line
a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges
pull strategy
a marketing strategy that stimulates consumer demand to obtain product distribution. Goal is to get consumers to pull the product into the marketing channel by demanding it
push strategy
a marketing strategy that uses aggressive personal selling and trade advertising to convince a wholesaler or a retailer to carry and sell particular merchandise
manufacturer brands (national brands)
brands owned and managed by the manufacturer - manufacturer develops the merchandise, produces it, and invests in marketing for it ex: Kraft, Nike, Coca Cola
Integrated Marketing Communications(IMC)
carefully integrating and coordinating the company's many communications channels to deliver a clear, consistent, and compelling message about the organization and its products PROMOTION
Encoding
converting the sender's ideas into a message, which could be verbal, visual or both - WHAT IS RECEIVED not what is sent - the marketing department, or external agency transmits/encodes
variable costs
costs that vary with the quantity of output produced
beta testing
having potential consumers examine a product prototype in a real-use setting to determine its functionality, performance, potential problems, and other issues specific to its use
sales promotion
incentives that encourage customers to buy products or services. Typically used in conjunction with many advertising or personal selling programs
Product Life Cycle
introduction, growth, maturity, decline
brand dilution
occurs when a brand extension negatively affects consumer perceptions about the attributes the core brand is believed to hold
first movers
product pioneers that are the first to create a market or product category, making them readily recognizable to consumers and thus establishing a commanding and early market share lead
specialty products/services
products or services toward which the customer shows a strong preference and for which he or she will expend considerable effort to search for the best suppliers
maximizing profits strategy
relies primarily on economic theory. If a firm can accurately specify a mathematical model that captures all the factors required to explain and predict sales and profits, it should be able to identify the price at which its profits are maximized
penetration pricing
setting a low initial price on a new product to appeal immediately to the mass market - experience curve effect - drop in unit cost as accumulated volume sold increases, as sales continue to grow, the costs continue to drop, allowing even further reductions in price Competitors don't want to enter market because profit margin will be relatively low - : 1) firm must be able to satisfy rapid rise of demand 2) low price does not signal high quality 3) won't work if some segments of market are willing to pay more for product
concept testing
testing new product concepts with a group of target consumers to find out if the concepts have strong consumer appeal - happens very early in the product process
augmented product
the actual product plus other supporting features such as a warranty, credit, delivery, installation, and repair service after the sale
media mix
the combination of media to be used for a promotional campaign mass media: typical stuff(T.V Billboard, magazine)
Decoding
the process by which the receiver interprets the sender's message
market testing
the stage of the new-product process that exposes actual products to prospective consumers under realistic purchase conditions to see if they will buy
depth of product line
the store carries a large assortment of each item
breadth of product line
the variety of different items a store carries
innovators
those buyers who want to be the first to have the new product or service - 2.5% of the population
shopping products/services
those for which consumers will spend time comparing alternatives, such as apparel, fragrances, and appliances
convenience products/services
those for which the consumer is not willing to spend any effort to evaluate prior to purchase
