IMC Exam 3 Questions and Answers: Sales Promotion Strategies, Exams of Marketing Business-to-business (B2B)

Download IMC Exam 3 Questions and Answers: Sales Promotion Strategies and more Exams Marketing Business-to-business (B2B) in PDF only on Docsity!

IMC Exam 3 Questions with Excellent Solutions.

Sales Promotion - Correct Answer Any incentive that is additional to the basic benefits provided by the brand and temporarily changes its perceived price or value Sales Promotion Effectiveness - Correct Answer Sales promotions are short-erm oriented and capable of influencing behavior because it offers buyers superior value and can make them feel better about the buying experience. Promotions vs. Advertising - Correct Answer - Short-term vs. long-term demand

• Encourage brand switching vs. brand loyalty
• Induce trial vs. encourage repeat purchase
• Promote price vs. promote image
• Immediate results vs. long term effects
• Measurable results vs. difficult to measure Sales Promotion Targets - Correct Answer Sales force, retailers, consumers Why sales promotions to sales force? - Correct Answer Encourage Why sales promotions to retailers? - Correct Answer Push Why sales promotions to consumers? - Correct Answer Pull Sales Promotion Can... - Correct Answer Sales promotions can:

1. Stimulate sales force enthusiasm for a new, improved, or mature product.
2. Invigorate sales of a mature brand
3. Facilitate the introduction of new products to the trade
4. Increase on- and off-shelf merchandising space
5. Neutralize competitive advertising and sales promotions
6. Obtain trial purchases from consumers
7. Hold current users by encouraging repeat purchases

8. Preempt competition by loading consumers
9. Reinforce advertising Sales Promotions Cannot... - Correct Answer Sales promotions cannot...
10. Compensate for a poorly trained sales force or for a lack of advertising.
11. Give the trade or consumers any compelling long-term reason to continue purchasing a brand.
12. Permanently stop an established brand's declining sales trend or change the basic nonacceptance of an undesired product Shift from Advertising to Sales Promotions - Correct Answer 1. Balance-of-power shift from manufacturers to retailers
13. Increased brand parity and price sensitivity
14. Reduced brand loyalty
15. Splintering of the mass market and reduced media effectiveness
16. Short-term orientation and corporate reward structures
17. Consumer responsiveness Why trade promotion? - Correct Answer 1. Introduce new or revised products
18. Increase distribution of new packages or sizes
19. Build retail inventories
20. Maintain/increase manufacturer's shelf space
21. Obtain displays outside shelf locations
22. Reduce excess inventory
23. Achieve product features in retailer's ads
24. Counter competitive activity
25. Sell as much as possible to final consumers Major Forms of Trade Allowances - Correct Answer Off-invoice allowances, bill-back allowances, slotting allowances Off-invoice allowances - Correct Answer 1. Most frequently used form

2. Deals offered periodically to trade that permit wholesalers and retailers to deduct a fixed amount from the invoice
3. Retailers do not necessarily pass along to consumers the discounts Bill-back allowances - Correct Answer Retailers receive allowances for featuring the manufacturer's brand in advertisements or for providing special displays. Slotting allowances - Correct Answer 1. The fees manufacturers pay retailers for access to the slot, or location
4. Typically paid by a manufacturer to get its new brand accepted by retailers
5. A form of bribery? or legitimate cost of business? Why trade promotions good for manufacturers and retailers? - Correct Answer Manufacturers use trade promotions to advance their brands' sales and profit performance. Retailers tend to regard trade dollars as an opportunity for increasing their profit margin and thus boosting bottom lines. Forward Buying - Correct Answer Retailers purchase enough products on deal to carry them over until the manufacturer's next regularly scheduled deal.

• Retailers' savings from forward buying often are not passed on to consumers
• Manufacturers experience reduced margins, retailers experience increased margins due to price discounts Diverting - Correct Answer Occurs when a manufacturer restricts a deal to a limited geographical area. Retailers buy large quantities at the deal price and then resell the excess quantities in other geographical areas. Why Consumer Sales Promotion? - Correct Answer 1. Stimulate trial purchase

2. Stimulate repeat purchases
3. Stimulate larger purchases
4. Reduce inventory
5. Enhancing brand image

6. Consumer data
7. Introduce a new brand
8. Combat or disrupt competitors
9. Contribute to IMC Consumers often need to be induced to: (consumer sales promotions) - Correct Answer 1. Buy now rather than later
10. To buy your brand rather than a competitor's
11. To buy more and to buy frequently Price Off Deals - Correct Answer Offers consumer reduced price at point of purchase through specially marked packages, displays, etc. Advantages:

• Controllable by manufacturer
• Can effect positive price comparisons
• Consumers believe it increases value of a known brand Disadvantages:
• Retailers believe it creates inventory and pricing problems Premiums - Correct Answer Free or at a reduced price with another purchase. Free Premiums - Correct Answer Provide item at no cost Self-Liquidating Premiums - Correct Answer Require consumers to pay most of the cost of the item Advertising Specialties - Correct Answer A message placed on a free, useful item Contests - Correct Answer Consumers compete for prizes based on skill or ability. Sweepstakes - Correct Answer Winners picked by chance Downsides to contests and sweepstakes - Correct Answer 1. Legal and regulatory requirements are complex

2. Consumers may focus on the game rather than the brand
3. Difficult to get an IMC message across in a game Frequency Programs - Correct Answer Aka continuity programs Offers customers discounts or free products for repeat patronage Common in airline, travel, and restaurant businesses Sampling - Correct Answer Delivers an actual or trial-sized product to consumers (usually targeted)

• Direct mail
• Newspapers/magazines
• Door to door
• On or in pack
• High traffic locations
• In store
• Internet Generates trial usage When should sampling be used? - Correct Answer 1. Brand is demonstrably superior/has distinct relative advantages

2. Concept is difficult to communicate by advertising alone
3. Can afford to generate consumer trial quickly
4. Positive ROI evaluation. Assessment of cost relative to converters needed for profitability Problems with sampling - Correct Answer 1. Expensive
5. Mishandling in distribution
6. Distributed to the wrong market
7. In- or on-package samples do not capture current non-consumers
8. Can fail to reach sufficient numbers of consumers to justify its expense
9. May be misused by customers

Rebates - Correct Answer Money back offer requiring the buyer to mail a request for money back from the manufacturer. Often tied to multiple purchases Many consumers fail to send the request Couponing - Correct Answer Promotional devices that provide cents-off to consumers upon redemption Distributed via

• Freestanding insert (low redemption)
• Direct mail (3.5% redemption). Cooperative coupon programs (ValPack Direct)
• POP (11% redemption)
• Scanner delivery
• Coordination with print media
• Online Classification of Promotion Methods (Chart) - Correct Answer Direct Marketing - Correct Answer Consists of direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships. Types of direct marketing - Correct Answer 1. Face-to-face selling

2. Telemarketing
3. Direct-mail marketing
4. Catalog marketing
5. Direct-response television marketing
6. Kiosk marketing
7. Online marketing Categories of direct marketing (updated) - Correct Answer 1. Telemarketing
8. Text messaging

3. Email
4. Ads on mobile devices
5. Online advertising
6. Catalogs and postal mailings Is direct marketing still relevant? - Correct Answer Yes, marketers spend 168.5 billion in direct marketing last year. DM generates 2.05 trillion in sales anually. DM accounts for 9. million US jobs Common purposes of direct marketing - Correct Answer 1. Close the sale
7. Identify prospects for future contacts
8. Provide in-depth information
9. Seek information from consumers
10. Foster brand loyalty The New Direct-Marketing Model - Correct Answer - Some firms use direct marketing as a supplemental medium

• For many companies, direct marketing constitutes a new and complete model for doing business
• Some firms employ the direct model as their only approach
• Some see this as the new marketing model of the next millennium. What's driving direct marketing? - Correct Answer 1. Convenience

2. More liberal attitudes toward using credit
3. Greater access to toll-free calling
4. Computer technology to facilitate transactions
5. On-line shopping
6. Access to data
7. Cost per inquiry (CPI) and coster per order (CPO) advantages of direct marketing

Database marketing - Correct Answer Relies on collection of comprehensive data about individual consumers or prospects, including geographic, demographic, psychographic, and behavioral data. ID best customers as well as what and how often they buy. Goal of database marketing - Correct Answer Develop profiles to facilitate a niche strategy. Marketing database applications - Correct Answer 1. RFM (recency, frequency, monetary value) analysis and data mining

2. Frequency-marketing programs
3. Cross-selling
4. CRM vs. dialogue marketing? Common media for direct response - Correct Answer 1. Direct mail
5. Telemarketing
6. Broadcast
7. Catalogs
8. Kiosks Telemarketing - Correct Answer Used in both consumer and B2B markets. Can be outbound or inbound calls (ie don't wait another day, call now and place an order) Direct Response via Broadcast Media (examples) - Correct Answer Infomercials (Veg-o- Matics) and Home shopping channels Direct-mail marketing - Correct Answer Involves sending an offer, announcement, reminder, or other item to a person at a particular address Objectives of direct-mail marketing - Correct Answer 1. Stimulate trial
9. Distribute promotional offers
10. Generate leads
11. Delivers information
12. Gathers information on consumers

6. Communicates privately Why direct-mail marketing? - Correct Answer 1. Seen as less intrusive than other DM tools
7. Permits high target-market selectivity
8. Personal and flexible
9. Easy to measure results Catalog marketing - Correct Answer - With the internet, more and more catalogs going electronic.

• Print catalogs still the primary medium
• Harder to attract new customers with internet catalogs Catalog marketing (consumers' POV) - Correct Answer - Time saving
• Fear of online
• Convenient
• Ease of purchase
• Allows for comparison shopping
• Novelty (declining) Catalog marketing (marketer's perspective) - Correct Answer - Efficient way to reach targets
• Costs of production and distribution are increasing Kiosk marketing - Correct Answer Information and ordering machines generally found in stores, airports, and other locations. Integrated direct marketing (steps) - Correct Answer Paid ad with a response channel - > direct mail - > outbound marketing - > face-to-face sales call - > continuing communication Integrated direct marketing coordination challenges (why?) - Correct Answer - Functional specialists across several media need to work together
• Marketing databases can lead to interdepartmental rivalries

• Growth of direct marketing often means cuts in other promotional budgets Public Policy/Ethics in relation to DM - Correct Answer - Irritation to consumers
• Taking unfair advantage of impulsive or less sophisticated buyers
• Targeting TV-addicted shoppers
• Deception, fraud
• Invasion of privacy Public Relations (PR) - Correct Answer Communication (other than paid mass media and direct promotion) aimed at fostering goodwill between a company and its various publics The Role of PR (why use?) - Correct Answer 1. Media relations

2. Employee relations
3. Financial relations
4. Public affairs
5. Fund-raising
6. Cause marketing and donation management
7. Crisis management Media Use (PR) - Correct Answer - Use of publicity

• PR seeks to persuade media gatekeepers to carry stories about their companies
• Beneficial as traditional media use becomes less effective Control (PR) - Correct Answer 1. In the case of news stories, PR is at the mercy of the media

2. Advertising runs exactly as the client who paid for it has approved Credibility (PR) - Correct Answer - The public tends to trust the media more than they do advertisers

• Implied third-party endorsement Cost (PR) - Correct Answer Cost per exposures is substantially lower

Most effective at generating interest/attention? - Correct Answer Public Relations Public Relations Tools - Correct Answer 1. Advertising (ish)

2. Publicity
3. Special Events
4. Product Placement
5. Publications
6. Speakers
7. Donations
8. Displays and photos Advertising in PR - Correct Answer 1. In-house ads
9. Public service announcements
10. Corporate advertising Publicity Tools (PR) - Correct Answer 1. News releases
11. Press conferences
12. Media tours Special Events Tools (PR) - Correct Answer 1. Stealth marketing tools (eg stunts)
13. Product launch, information session, etc. Publications Examples (PR) - Correct Answer 1. Pamphlets
14. Booklets
15. Annual reports
16. Bulletins and newsletters
17. Inserts and enclosures
18. Position papers Proactive PR - Correct Answer - Dictated by a company's marketing objectives

• Offensively oriented and opportunity seeking
• Promotes media mentions and word of mouth (create win-win as media has a topic and firm has publicity) Reactive PR - Correct Answer - The conduct of public relations in response to outside influences
• Attempt to repair company's reputation, prevent market erosion, and regain lost sales
• Hope to be contacted by press Product intros or revisions (proactive PR) - Correct Answer - Provide relevant information, features, and benefits
• Product releases (print PRs, VNRs, executive statements) Executive Statements (proactive PR) - Correct Answer - News release quoting CEO's and other corporate executives
  • Related to company
  • Related to external issues
• Carry a significant degree of credibility Feature Articles (Proactive PR) - Correct Answer - Detailed descriptions of products or other newsworthy programs
• Written by a PR firm for immediate publications or airing
• Inexpensive to prepare BAND-AID - Correct Answer Objective: contemporize brand while relying on established equity Tools: Stick With It! Awards
• Nominated kids who "stuck with it" in school, art, sports, etc.
• Prizes awarded
• Media tour using Emma Roberts Result: 65 million media impressions Reactive PR (why?) - Correct Answer - Often product defects and failures are the factors

• Might anticipate - an earnings report that falls short
• Quick and positive responses are imperative
• Events can be actual or rumors
• Key is to have plan (be as proactive as possible) How to assess effectiveness of PR? - Correct Answer 1. Direct response measures
• Mail-in cards
• Website traffic
• Toll-free calls

2. Sales
3. Tracking surveys Branded Entertainment (PR) - Correct Answer Embedding a brand or brand icon as part of any entertainment property in an effort to connect brand with consumers Types of branded entertainment - Correct Answer 1. Event sponsorship
4. Product placement

• It's not uncommon (visual, audial, use, integration, even added digitally after filming Does product placement work? - Correct Answer Yes!
• Mere exposure
• Associative networks
• Reactance Can brand placements be effective even if they are not consciously recalled? - Correct Answer Yes Brand placement can have negative effects when? - Correct Answer - Obtrusive
• Placement is prominent in a well-liked program Media in which brand placement relevant? - Correct Answer Video games, music, books, board games, broadway

Why measure message effectiveness? - Correct Answer Enables management to increase advertising's contribution toward achieving marketing goals and yielding a reasonable return on investment What does advertising research involve? - Correct Answer - Measures of MEDIA effectiveness

• Measures of MESSAGE effectiveness Advantages to testing (measuring effectiveness of advertising) - Correct Answer 1. Avoid costly mistakes

2. Evaluate alternative strategies
3. Increase efficiency in general
4. Determine if objectives are achieved Disadvantages of Testing (measuring effectiveness of advertising) - Correct Answer 1. Cost of measurement
5. Research problems
6. Disagreement on what to test
7. Objectives of creatives
8. Time Pretesting (Assessing Message Effectiveness) - Correct Answer 1. Concept testing
9. Copy development stage
10. Rough stage
11. Final production Posttesting (Assessing Message Effectiveness) - Correct Answer 1. In progress campaigns
12. Finished campaigns Marketing Ladder (unawareness-brand loyalty) - Correct Answer

Market Research Measures - Correct Answer 1. Recognition and recall

2. Emotional reaction
3. Persuasive impact
4. Sales response Recognition and Recall (brand and ad awareness) - Correct Answer Have I seen the ad? What elements can I recall? Assesses whether advertising has successfully influenced brand awareness and influenced brand-related thoughts and feelings

• Measured via impressions
• Recognition and recall tests
  • Starch readership service (magazines)
  • Bruzzone test (TV)
  • Burkey day-after recall (TV)
  • Primary data collection Emotional Reaction Test - Correct Answer Provides indicators of whether advertisements have emotionally aroused customers Persuasive Impact Test - Correct Answer Represents prebehavioral indicators of whether an advertisement is likely to influence purchase intention and behavior Sales Response Measurement - Correct Answer Determines whether an advertising campaign has affect consumers' purchases of an advertised brand Starch Readership (measures what?) - Correct Answer People that noted the ad, people that associated it, people that read some of it, and people that read most of the body copy contained in the ad BRC Advertising Response Model (ARM) - Correct Answer Links responses to the 27 descriptive adjectives to consumers' attitudes towards both the advertisement and the advertised brand, and ultimately to the overall impact of the ad. What are you measuring? (assessing advertising effectiveness) - Correct Answer - Emotional connection

• Self-reported data
• Scales
• Dial testing
• Physiological responses
• Brain imaging (fMRI data)
• Persuasion
• Attitude assessment
• Ipos-ASI, ARS
• Primary data collection
• Sales response
• Sales data
• Other direct response
• Coupon/direct mail redemption
• Single source systems
• ACNielsen ScanTrack, IRI Behavior Scan
• Financial Impact ARS Persuasion Score - Correct Answer The postmeasure percentage of respondents preferring the target brand minus the premeasure percentage who prefer the brand. Post % for target brand - Pre % for target brand What are you measuring (assessing advertising effectiveness)? - Correct Answer - Emotional connection
• Persuasion
• Sales response
• Financial Impact Problems with current measurement methods - Correct Answer - Must provide measurements that can assess objective (validity)
• Must agree how results will be used in advance of test (e.g. go/no go)

• Must provide multiple measures (reliability)
• Measures must be based on human response
• Should assess whether stimulus should be exposed more than once (weight)
• Requires that alternative executions are tested in the same degree of finish (control) Questions related to ethical communication - Correct Answer - The target of an ad?
• What should be advertised?
• When should it be advertised?
• The symbolic tone of an ad? Issues relevant to other IMC Tools - Correct Answer - Privacy
• Spam
• Telemarketing
• Product placement
• Publicity
• Appropriation
• Copyright infringement Advertising's Social Role - Correct Answer Does advertising create a materialistic, oversexed, etc. culture or does it simply reflect it?
• Advertising can potentially shape AND mirror values Review and Regulation Chart - Correct Answer What does the FTC regulate? - Correct Answer Credit, packaging, warranties, and advertising. ie regulates deception Deception - Correct Answer Claims that mislead consumer by making false claims or failing to disclose important information

Basic elements of FTC deception policy (what makes it deceptive?) - Correct Answer - Ad must have a high probability of misleading consumer due to claim or omission

• Standard or reasonable consumer used
• Deception must be material (ie highly influence decision about product or service) Substantiation - Correct Answer Regulated by FTC Advertiser must have a reasonable basis for making claims (express or implied) about products. Basic elements of substantiation - Correct Answer - Type and specificity of claim "The laptop comes in 4 colors" vs. "4 of 5 doctors recommend"
• Type of product
• Possible consequences of false claims
• Degree of reliance on claims by customers
• Type and accessibility of evidence available for making claim
  • "Tests claim...."
  • "Doctor's show..." Puffery - Correct Answer Presentations that praise the item to be sold with subjective opinions, superlatives, or exaggerations, vaguely and generally, stating no specific facts. Types of remedies - Correct Answer - Consent decree
• Cease and desist order
• Corrective advertising
• Consumer redress Some responsibility is shared by the agency responsible for the ad. FDA oversees what? - Correct Answer Package labeling, ingredient listings and advertising for food and drugs. Watchdog for drug advertising

Types of Prescription Drug Promotions - Correct Answer - Detailing (sales activities of drug reps directed at physicians, both office and hospital-based)

• Sampling
• Medical journal advertising
• DTC promotions (magazines, newspapers, television, radio, outdoor) Product Claim Ads - Correct Answer - Mention drug by name
• Make representations about drug (safety, effectiveness)
• Fair balance required
• Must state major risks and link to additional information Reminder ads (drug advertising) - Correct Answer - Provide name, minimal information (e.g. cost, form)
• No risk disclosure required Help seeking ads (drug advertising) - Correct Answer - Educate about disease, condition, and treatment
• No specific drug named
• No risk disclosure required Product Placements for prescription drugs? - Correct Answer Yes, 337 audio or visual mentions of prescription drugs on TV in 2006 Direct to Consumer (DTC) Advertising Arguments - For - Correct Answer - Informative
• Education (early detection, prevention, etc.)
• Enhances communication
• Reduces stigma Direct to Consumer (DTC) Advertising Arguments - Against - Correct Answer - Raises price
• "Overmedicated society"
• Promotes self-treatment

• Encourages expensive options
• Biased information Federal Communications Commission - Correct Answer - Regulates radio and tv stations and networks
• Can issue and revoke licenses to broadcasting stations
• Can ban messages that are deceptive or in poor taste
• Has started to crack down on PR (eg VNRs) Other regulatory bodies - Correct Answer - Bureau of Alcohol, Tobacco, and Firearms (division of the US treasury department that regulates advertising for alcoholic beverages)
• US Postal Service (regulates direct mail advertising)
• States' Attorneys General (regulates advertising at the state level) Media Review of Advertising - Correct Answer - The media attempts to regulate advertising by screening and rejecting ads (not political ads)
• The First Amendment gives any publisher the right to refuse to publish Self Discipline (Regulation) - Correct Answer - Most advertisers and agencies have in- house review procedures
• Trade organization play a role (AMA, US Brewers' Association) Industry Self Regulation - Correct Answer - National Advertising Review Council (NARC)
• Better Business Bureau (BBB)
• National Advertising Review Board (NARB) Public and Community Review (regulation) - Correct Answer - Local Groups
• Consumer Activist Groups (eg Commercial Alert) Fastest growing ad medium - Correct Answer Internet #2 behind TV (passed newspapers in 2012) Advantages of using TV as medium - Correct Answer - Creativity and impact

• Coverage and cost effectiveness
• Repetition
• Captivity and attention
• Selectivity and flexibility Disadvantages of using TV as medium - Correct Answer - Fleeting message
• Cost
• Low selectivity
• Clutter
• Distrust
• Negative evaluation
• Limited attention Company with highest ad spending - Correct Answer Procter and Gamble Advantages of using radio as medium - Correct Answer - Cost and efficiency
• Reach and frequency
• Receptivity
• Selectivity
• Flexibility
• Mental imagery
• IMC Disadvantages of using radio as medium - Correct Answer - Creative limitations
• Audience fragmentation
• Less research
• Limited attention
• Chaotic buying
• Clutter

What's interesting about print? - Correct Answer - Reader sets the pace

• Not intrusive
• Selective audience
• High involvement
• High readership (depending on the class and target audience) Advantages of using magazines as medium - Correct Answer - Selectivity
• Reproduction quality
• Creative flexibility
• Permanence
• Prestige
• Receptivity/engagement
• Media buying services Advantages of using newspapers as medium - Correct Answer - Penetration
• Flexibility
• Geographic selectivity
• Involvement/acceptance
• Services offered Disadvantages of using newspaper as medium - Correct Answer - Low production quality
• Short life span
• Lack of selectivity
• Clutter
• Limited use of color Drivers of media costs - Correct Answer 1. Circulation/viewership

2. Size/length
3. Position/timing
4. Class

5. Vehicle
6. Frequency
7. Color/images Online advertising usually based on what model - Correct Answer Pay-per-click (PPC) model Types of online advertising - Correct Answer - Social media

• App ads
• Display/banner ads
• Pop-up/Pop-under ads
• Paid search Social media is about enabling... - Correct Answer Conversation (Conversations create communities. You cannot control conversations, but you can influence them) Social media is not advertising. The communication should be two-way. Can be a great relationship builder.