Marketing Strategy Text and Cases 6th Edition by O. C. Ferrell -Test Bank

Marketing Strategy Text and Cases 6th Edition by O. C. Ferrell -Test Bank

Chapter 6 The Marketing Program

MULTIPLE CHOICE

1. __________ refers to the strategic combination of the four basic marketing mix elements.
a. The marketing plan d. The strategic mix
b. The marketing program e. Implementation
c. Strategic control

ANS: B PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Strategy
TOP: A-Head: Introduction KEY: Bloom’s: Knowledge

2. Most firms today compete in mature markets characterized by commoditization. In these cases, the __________ typically becomes incapable of differentiating the product offering from those of the competition.
a. extended product d. experiential products
b. core product e. tangible products
c. supplemental products

ANS: B PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Strategy
TOP: A-Head: Introduction KEY: Bloom’s: Knowledge

3. Although the product is at the heart of the marketing program, it is important to remember that product offerings in and of themselves have little value to customers. An offering’s real value comes from:
a. its superiority to competing products.
b. its ability to further the image of the organization.
c. its value (good quality at a low price).
d. its ability to deliver benefits that solve a customer’s problems.
e. its easy of use and convenience.

ANS: D PTS: 1 DIF: Difficulty: Challenging
NAT: BUSPROG: Analytic STA: DISC: Product
TOP: A-Head: Product Strategy KEY: Bloom’s: Analysis

4. Mallory is an avid collector of antiques. In fact, she spends practically every weekend traveling to small towns and antique shops in search of unique antique treasures. For Mallory, antiques are a perfect example of a:
a. convenience product. d. influential product.
b. shopping product. e. specialty product.
c. supplemental product.

ANS: E PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Product
TOP: A-Head: Product Strategy KEY: Bloom’s: Application

5. Which of the following is the best example of an unsought product?
a. gasoline d. luxury products
b. clothing e. insurance
c. antiques

ANS: E PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Product
TOP: A-Head: Product Strategy KEY: Bloom’s: Knowledge

6. For laptop computers, processor chips, memory chips, and hard drives are examples of __________ because they are finished items that become a part of the computer after assembly.
a. raw materials d. component parts
b. process materials e. specialty products
c. installations

ANS: D PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Product
TOP: A-Head: Product Strategy KEY: Bloom’s: Comprehension

7. Firestone carefully watches the automotive market to ascertain the demand for cars, SUVs, and trucks. Firestone does this because the demand for its products is dependent on the demand for automobiles. This situation describes __________.
a. synergistic demand d. product line demand
b. shopping demand e. price elasticity
c. derived demand

ANS: C PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Product
TOP: A-Head: Product Strategy KEY: Bloom’s: Application

8. Why would a firm offer a deep assortment of products in its product portfolio?
a. To attract a wide range of customers and market segments.
b. To capitalize on the firm’s reputation.
c. To diversify its risk.
d. To maximize differentiation across its product lines.
e. None of the above.

ANS: A PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Product
TOP: A-Head: Product Strategy KEY: Bloom’s: Comprehension

9. Why would a firm offer a wide variety of products in its product portfolio?
a. To attract a wide range of customers and market segments.
b. To capitalize on the firm’s reputation.
c. To diversify its risk.
d. To maximize differentiation across its product lines.
e. None of the above.

ANS: C PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Product
TOP: A-Head: Product Strategy KEY: Bloom’s: Comprehension

10. Why is the demand for most services—such as popular restaurants—extremely time-and-place dependent?
a. Because popular services typically lack sufficient capacity.
b. Because services cannot be stored for future use.
c. Because customers must be present for service to be delivered.
d. Because service customers are typically unsure of their needs.
e. Because competing services force customers to make tradeoffs between quality and time.

ANS: C PTS: 1 DIF: Difficulty: Challenging
NAT: BUSPROG: Analytic STA: DISC: Strategy
TOP: A-Head: Product Strategy KEY: Bloom’s: Comprehension

11. Which of the following IS NOT an important benefit of offering a large product portfolio?
a. package differentiation d. standardization
b. economies of scale e. equivalent quality beliefs
c. sales and distribution efficiency

ANS: A PTS: 1 DIF: Difficulty: Challenging
NAT: BUSPROG: Analytic STA: DISC: Strategy
TOP: A-Head: Product Strategy KEY: Bloom’s: Analysis

12. Unlike tangible goods, virtually all services are susceptible to inconsistency and variations in quality. Why is this so?
a. Because services depend on people for their delivery.
b. Because services cannot be managed due to their intangibility.
c. Because services are extremely time-and-place dependent.
d. Because service marketers cut corners to reduce expenses.
e. Because service marketers make unrealistic promises to customers.

ANS: A PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Product
TOP: A-Head: Product Strategy KEY: Bloom’s: Comprehension

13. The phrase “Unused service capacity is lost forever” refers to which major challenge associated with the marketing of services?
a. client-based relationships
b. limited standardization
c. simultaneous production and consumption
d. perishability
e. heterogeneity

ANS: D PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Product
TOP: A-Head: Product Strategy KEY: Bloom’s: Evaluation

14. To compete in the fast-growing hybrid segment, Honda introduced the Civic Hybrid with unique styling and great fuel economy. The Civic Hybrid was based on the traditional Honda Civic. Which product development strategy has Honda implemented?
a. repositioning d. product improvement
b. new product line e. product line extension
c. product innovation

ANS: E PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Product
TOP: A-Head: Product Strategy KEY: Bloom’s: Application

15. Assume Kia has developed a new product idea to launch a midsize pickup. Currently, Kia is developing a prototype and working on projected costs, revenues, and profit potential. Kia is currently at what stage of the new product development process?
a. idea generation d. test marketing
b. development e. commercialization
c. screening and evaluation

ANS: C PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Strategy
TOP: A-Head: Product Strategy KEY: Bloom’s: Application

16. Why are firms so obsessed with the pricing element of the marketing mix?
a. Because pricing is the most difficult element of the marketing mix to change.
b. Because the firm’s pricing has a direct bearing on its ability to increase revenue.
c. Because pricing is the only marketing element that matters to customers.
d. Because pricing is the best part of the marketing mix in which to make an educated guess about the most appropriate strategy.
e. Because pricing is directly responsible for demand.

ANS: B PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Pricing
TOP: A-Head: Pricing Strategy KEY: Bloom’s: Evaluation

17. Although break-even analysis and cost-plus pricing are important tools in setting prices based on the firm’s cost structure, they should never be the driving force behind pricing strategy. Why?
a. Because firms want to make a profit, not just break even.
b. Because customer expectations are far more important in setting prices.
c. Because prices should be based on demand, not costs.
d. Because different firms have different cost structures.
e. Because competitor’s prices are far more important in setting prices.

ANS: D PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Pricing
TOP: A-Head: Pricing Strategy KEY: Bloom’s: Evaluation

18. __________ is defined as a customer’s subjective evaluation of benefits relative to costs to determine the worth of a firm’s product offering relative to other product offerings.
a. Quality d. Breakeven cost
b. Value e. Opportunity cost
c. Price

ANS: B PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Pricing
TOP: A-Head: Pricing Strategy KEY: Bloom’s: Knowledge

19. Which of the following statements is TRUE with respect to the relationship between price and revenue?
a. When business is good, a price increase will increase revenue.
b. When business is bad, a price increase will increase revenue.
c. Price cuts must be offset by an increase in sales volume to keep the same level of revenue.
d. In highly differentiated markets, price cuts will capture greater market share.
e. In highly commoditized markets, price cuts will increase revenue.

ANS: C PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Pricing
TOP: A-Head: Pricing Strategy KEY: Bloom’s: Comprehension

20. Which pricing objective is associated with the phrase “charging what the market will bear”?
a. volume-oriented d. market demand
b. profit-oriented e. status quo
c. cash flow

ANS: D PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Pricing
TOP: A-Head: Pricing Strategy KEY: Bloom’s: Comprehension

21. Price elasticity is defined as:
a. a situation where prices routinely move up and down in a short period of time.
b. customers’ responsiveness or sensitivity to changes in price.
c. the impact on a product’s demand when customers are in unique buying situations.
d. the relative ease with which prices can be changed.
e. price flexibility—a pricing strategy used by startup firms.

ANS: B PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Pricing
TOP: A-Head: Pricing Strategy KEY: Bloom’s: Knowledge

22. Which of the following IS NOT a situation that can cause customers to be less sensitive to price increases?
a. When customers have few product choices.
b. When products are highly differentiated.
c. When the product is a real or a perceived necessity.
d. When the total expenditure is high.
e. When the product is considered to be “worth it”.

ANS: D PTS: 1 DIF: Difficulty: Challenging
NAT: BUSPROG: Analytic STA: DISC: Pricing
TOP: A-Head: Pricing Strategy KEY: Bloom’s: Analysis

23. The inherent goal of product differentiation is to make the demand curve for a product more inelastic. This happens because increased differentiation:
a. reduces the number of perceived substitutes for a product.
b. makes the product more expensive than its competitors.
c. increases the quality of the product making it worth the expense.
d. reduces the time and effort required to obtain the product.
e. increases the just noticeable differences among competing products.

ANS: A PTS: 1 DIF: Difficulty: Challenging
NAT: BUSPROG: Analytic STA: DISC: Pricing
TOP: A-Head: Pricing Strategy KEY: Bloom’s: Evaluation

24. Because service capacity is perishable and service demand is highly time dependent, service firms employ yield management strategies in an effort to:
a. control costs.
b. control demand through effective advertising strategies.
c. establish fair guidelines for overbooking capacity.
d. shift customer demand to other firms that can handle the excess business.
e. balance price and revenue considerations with their need to fill unused capacity.

ANS: E PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Pricing
TOP: A-Head: Pricing Strategy KEY: Bloom’s: Analysis

25. The goal of __________ is to maximize sales, gain widespread market acceptance, and capture a large market share quickly by setting a relatively low initial price.
a. price skimming d. first-mover pricing
b. odd pricing e. market acceptance pricing
c. penetration pricing

ANS: C PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Pricing
TOP: A-Head: Pricing Strategy KEY: Bloom’s: Knowledge

26. The Fairmont Hotel is widely known for its exceptional quality and impeccable customer service. Not surprisingly, the Fairmont sets prices at the top end of all competing hotels. Which pricing strategy is the Fairmont using?
a. exclusive pricing d. prestige pricing
b. image pricing e. service-based pricing
c. psychological pricing

ANS: D PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Pricing
TOP: A-Head: Pricing Strategy KEY: Bloom’s: Application

27. Firms such as IKEA and The Home Depot are known for their use of __________ because they set reasonably low prices but still offer high-quality products and adequate customer services.
a. penetration pricing d. relational pricing
b. market equity pricing e. value-based pricing
c. prestige pricing

ANS: E PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Pricing
TOP: A-Head: Pricing Strategy KEY: Bloom’s: Knowledge

28. The Club is a local hair salon and day spa that caters to an upper-middle class clientele. Although price competition in the local area has been increasing, the owners of The Club have decided to focus their marketing efforts on quality, service, and value, and to resist the temptation to compete on price. In pursuing this non-price strategy, managers of The Club are ascribing to which of the following assumptions?
a. Customers see all salons as being about the same.
b. The market for salon services is very price sensitive.
c. Customers of The Club are so loyal that price competition is not necessary.
d. It is difficult for competitors to copy The Club’s differentiating characteristics.
e. The managers are ascribing to all of these assumptions.

ANS: D PTS: 1 DIF: Difficulty: Challenging
NAT: BUSPROG: Analytic STA: DISC: Pricing
TOP: A-Head: Pricing Strategy KEY: Bloom’s: Evaluation

29. Retailers use __________ extensively. This occurs when the retailer compares sale prices to regular prices, such as when Best Buy promotes a DVD player as “Regularly $99, Now $49.”
a. reference pricing d. value-based pricing
b. EDLP e. sale pricing
c. odd pricing

ANS: A PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Pricing
TOP: A-Head: Pricing Strategy KEY: Bloom’s: Application

30. In business markets, __________ is used to quote prices in terms of reductions or increases based on transportation costs or the actual physical distance between the buyer and the seller.
a. transfer pricing d. logistics pricing
b. countertrade e. GPS pricing
c. geographic pricing

ANS: C PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Pricing
TOP: A-Head: Pricing Strategy KEY: Bloom’s: Knowledge

31. A __________ is an organized system of marketing institutions through which products, resources, information, funds and/or product ownership flow from the point of production to the final user.
a. marketing network d. marketing channel
b. distribution hub e. product network
c. supply chain

ANS: D PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Distribution
TOP: A-Head: Supply Chain Strategy KEY: Bloom’s: Knowledge

32. Ensuring the availability of products in the right place in the right quantities at the right time in a cost efficient manner is the main focus of:
a. physical distribution. d. channel management.
b. marketing networks. e. network management.
c. supply chain management.

ANS: A PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Distribution
TOP: A-Head: Supply Chain Strategy KEY: Bloom’s: Comprehension

33. The creation of an extended enterprise in the supply chain depends heavily on the ability of channel members to integrate their operations. Which of the following IS NOT a key factor in successful supply chain integration?
a. trust d. mutual benefit
b. interdependence e. coercive power
c. cooperation

ANS: E PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Distribution
TOP: A-Head: Supply Chain Strategy KEY: Bloom’s: Knowledge

34. The most basic benefit of marketing channels is __________ where channels reduce the number of contacts necessary to exchange products.
a. contraction d. contact creation
b. time efficiency e. accumulation
c. contact efficiency

ANS: C PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Distribution
TOP: A-Head: Supply Chain Strategy KEY: Bloom’s: Comprehension

35. In terms of marketing channel functions, which of the following statements describes the concept of discrepancy of quantity?
a. Manufacturers make one or a few product(s)—customers need variety and assortment.
b. Channels must make products available in convenient locations.
c. Channels add value to products by standardizing the exchange process.
d. Channels must provide for the storage of products for future purchase and use.
e. Manufacturers produce large quantities; customers usually want only one item.

ANS: E PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Distribution
TOP: A-Head: Supply Chain Strategy KEY: Bloom’s: Comprehension

36. Which member of the marketing channel has the primary responsibility of fulfilling the channel’s main functions?
a. manufacturers d. customers
b. wholesalers e. It does not matter.
c. retailers

ANS: E PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Distribution
TOP: A-Head: Supply Chain Strategy KEY: Bloom’s: Comprehension

37. In the Mercedes dealer network, individual dealers are given the sole right to sell Mercedes vehicles within a defined geographic area. What type of distribution does Mercedes employ?
a. exclusive distribution d. limited distribution
b. intensive distribution e. prestige-based distribution
c. selective distribution

ANS: A PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Distribution
TOP: A-Head: Supply Chain Strategy KEY: Bloom’s: Application

38. What is the most appropriate type of distribution to use when customers need the opportunity to comparison shop, or when after-sale services are important?
a. exclusive distribution d. comparative distribution
b. service-based distribution e. selective distribution
c. intensive distribution

ANS: E PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Distribution
TOP: A-Head: Supply Chain Strategy KEY: Bloom’s: Comprehension

39. Many products, such as candy, soft drinks, and gum are sold via intensive distribution. However, this strategy has a major drawback. What is it?
a. It maximizes profit margin rather than sales volume.
b. It encourages customers to shop around for the lowest price.
c. It promotes a very high degree of brand switching.
d. The manufacturer must give up a good degree of control over pricing and product display.
e. It gives customers fewer opportunities to find the product.

ANS: D PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Distribution
TOP: A-Head: Supply Chain Strategy KEY: Bloom’s: Comprehension

40. Because the company was angered by the actions of its resellers, Acme Manufacturing decided to slow down deliveries and postpone product availability to these resellers. What type of power is Acme wielding in the channel?
a. legitimate power d. reward power
b. coercive power e. logistical power
c. referent power

ANS: B PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Distribution
TOP: A-Head: Supply Chain Strategy KEY: Bloom’s: Application

41. Which of the following statements best describes the term “slotting allowances”?
a. The amount of shelf space that a retailer grants to a specific brand or product.
b. The amount of product from a specific manufacturer that a wholesaler agrees to carry.
c. A fee, paid by manufacturers to retailers, to get a product placed on retail shelves.
d. A fee, paid by retailers to wholesalers, to get them to carry the retailer’s private label brand.
e. The amount of product from a specific manufacturer that a retailer agrees to carry.

ANS: C PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Distribution
TOP: A-Head: Supply Chain Strategy KEY: Bloom’s: Comprehension

42. In most marketing channels for consumer products, the balance of power has shifted to __________ due to their size and buying power.
a. consumers d. brokers and distributors
b. mass merchandise retailers e. manufacturers
c. wholesalers

ANS: B PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Distribution
TOP: A-Head: Supply Chain Strategy KEY: Bloom’s: Comprehension

43. Today, though cutting expenses is still a main factor, the desire of many firms to focus on core competencies is a driving force behind the increase in:
a. category management. d. product differentiation.
b. channel integration. e. outsourcing.
c. referent power.

ANS: E PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Distribution
TOP: A-Head: Supply Chain Strategy KEY: Bloom’s: Comprehension

44. Hallmark is a good example of a company that uses __________ distribution as a means of offering two or more lines of the same merchandise through two or more channels
a. direct d. dual
b. secondary e. complementary
c. split

ANS: D PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Distribution
TOP: A-Head: Supply Chain Strategy KEY: Bloom’s: Comprehension

45. Overall, the trends occurring in marketing channels today (growth in e-commerce, outsourcing, growth of nontraditional channels) have one major theme in common. What is that theme?
a. Enhancing the reputation of the supply chain.
b. Reducing the risk of legal action in the supply chain.
c. Increasing channel efficiency by reducing waste, overhead, and other costs.
d. Securing more power and control for manufacturers.
e. All of the above are common themes.

ANS: C PTS: 1 DIF: Difficulty: Challenging
NAT: BUSPROG: Analytic STA: DISC: Distribution
TOP: A-Head: Supply Chain Strategy KEY: Bloom’s: Synthesis

46. Which of the following statements about integrated marketing communications (IMC) is FALSE?
a. IMC refers to the strategic, coordinated use of promotion to create one consistent message.
b. IMC takes a 360-degree view of the customer.
c. The role of mass television advertising is growing more important to IMC strategy.
d. IMC reduces costs and increases efficiency because it can reduce or eliminate redundancies and waste.
e. The key to IMC is consistency and uniformity of message across all elements of promotion.

ANS: C PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Promotion
TOP: A-Head: Integrated Marketing Communications KEY: Bloom’s: Comprehension

47. To be successful, firms must move potential customers beyond mere interest in the product. Good promotion will stimulate __________ by convincing potential customers of the product’s superiority and its ability to satisfy specific needs.
a. dedication d. action
b. investigation e. desire
c. attention

ANS: E PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Promotion
TOP: A-Head: Integrated Marketing Communications KEY: Bloom’s: Comprehension

48. In terms of the AIDA model, mass communication elements such as advertising and public relations tend to be very effective at:
a. stimulating awareness of and interest in a product.
b. explaining highly complex and technical products.
c. stimulating immediate purchase of a product.
d. marketing high priced products.
e. closing the sale.

ANS: A PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Promotion
TOP: A-Head: Integrated Marketing Communications KEY: Bloom’s: Analysis

49. When firms use a(n) __________ strategy, they focus their promotional efforts toward stimulating demand among final customers, who then exert pressure on the supply chain to carry the product.
a. pressurization d. guerilla
b. IMC e. push
c. pull

ANS: C PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Promotion
TOP: A-Head: Integrated Marketing Communications KEY: Bloom’s: Knowledge

50. In launching its new line of power tools, Black and Decker spent a considerable amount of time and resources to educate, motivate, and compensate members of its supply chain. By investing heavily in these types of promotions, Black and Decker hopes its __________ strategy will lead to a more effective product launch.
a. pull d. push
b. AIDA e. placement
c. institutional

ANS: D PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Promotion
TOP: A-Head: Integrated Marketing Communications KEY: Bloom’s: Application

51. Which of the following is perhaps the main advantage associated with the use of advertising?
a. It takes little time to develop an advertising campaign.
b. The total dollar layout in advertising is usually low.
c. It is an extremely cost efficient way to reach a large number of people.
d. It can quickly convey a large amount of technical information.
e. It can be quite memorable.

ANS: C PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Promotion
TOP: A-Head: Integrated Marketing Communications KEY: Bloom’s: Evaluation

52. In the context of IMC strategy, what is the difference between public relations and publicity?
a. Public relations deals with positive information; publicity deals with controlling negative information.
b. Publicity deals with many stakeholders; public relations deals only with customers.
c. Publicity is normally done via an in-house staff; public relations is typically outsourced to a specialist.
d. Publicity is more narrowly defined and focused on gaining media attention.
e. There is no difference between public relations and publicity.

ANS: D PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Promotion
TOP: A-Head: Integrated Marketing Communications KEY: Bloom’s: Analysis

53. Overall, what is the major disadvantage associated with the use of public relations and publicity?
a. It is normally very expensive.
b. The amount of negative publicity always outweighs the good.
c. Few, if any, customers pay attention to public relations messages.
d. Most people find it to be less credible than advertising.
e. The firm has limited control over how the message will be delivered or interpreted.

ANS: E PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Promotion
TOP: A-Head: Integrated Marketing Communications KEY: Bloom’s: Comprehension

54. __________ is paid personal communication that attempts to inform customers about products and persuade them to purchase those products.
a. Personal selling d. Public relations
b. Sales promotion e. Advertising
c. Publicity

ANS: A PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Promotion
TOP: A-Head: Integrated Marketing Communications KEY: Bloom’s: Knowledge

55. In today’s economy, personal selling has evolved to take on elements of customer service and marketing research. Why is this the case?
a. It is less expensive to deliver service and conduct research with the sales staff.
b. It is more time efficient because salespeople are already interacting with customers.
c. Personal selling focuses more on developing customer relationships than on generating transactions.
d. It allows salespeople to earn higher commissions for doing more work.
e. None of the above is correct.

ANS: C PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Promotion
TOP: A-Head: Integrated Marketing Communications KEY: Bloom’s: Evaluation

56. Which sales force compensation system is best suited to situations where salespeople are responsible for pre- and post-sale service and sales managers want maximum control over selling expenses?
a. straight commission d. geographic allocation
b. a combination approach e. straight salary
c. direct compensation

ANS: E PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Promotion
TOP: A-Head: Integrated Marketing Communications KEY: Bloom’s: Comprehension

57. Despite conventional thinking, __________ accounts for the bulk of promotional spending in many firms. This is especially true for firms selling consumer products in grocery stores and mass-merchandise retailers.
a. personal selling d. sales promotion
b. advertising e. publicity
c. public relations

ANS: D PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Promotion
TOP: A-Head: Integrated Marketing Communications KEY: Bloom’s: Knowledge

58. Which of the following statements best represents the universal goal of all sales promotion activities?
a. To increase sales volume in the long term.
b. To stimulate customer interest and attention.
c. To induce product trial and purchase.
d. To enhance the image of the firm.
e. To gain the attention of members of the supply chain.

ANS: C PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Promotion
TOP: A-Head: Integrated Marketing Communications KEY: Bloom’s: Knowledge

59. Which of the following sales promotion methods would you recommend to a packaged goods marketer who wants to stimulate trial of a new product?
a. a contest or sweepstake d. a rebate
b. a coupon e. a point-of-purchase display
c. a free sample of the product

ANS: C PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Analytic STA: DISC: Promotion
TOP: A-Head: Integrated Marketing Communications KEY: Bloom’s: Evaluation

60. A price reduction offered to channel intermediaries for purchasing specified quantities of a product at a single time is called a:
a. merchandise credit. d. push money allowance.
b. buying allowance. e. cooperative incentive.
c. selling incentive.

ANS: B PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Analytic STA: DISC: Promotion
TOP: A-Head: Integrated Marketing Communications KEY: Bloom’s: Knowledge