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Chapter 13 Developing and Promoting Goods and Services MULTIPLE CHOICE QUESTIONS. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following is correct with regard to the opening case entitled “Psst! Did You Hear the Latest”? A) In the 19th century, products began to be sold on a truly national basis B) In the 1930’s, word-of-mouth advertising was overshadowed by mass marketing C) Word-of-mouth advertising has become more important because of the internet D) Word-of-mouth advertising is effective, but expensive E) About half of the consumers surveyed say that word-of-mouth advertising is their most trusted source for information about products Answer: C 2) A 12-horsepower motor on a lawn mower is considered a product A) mix. B) line. C) specification. D) benefit. E) feature. Answer: E 3) Relatively inexpensive consumer products that are generally consumed rapidly are known as A) luxury goods. B) industrial goods. C) specialty goods. D) convenience goods. E) shopping goods. Answer: D 4) Suppose Mr. Tyler is coming home from a business trip. It is late at night, his cab is waiting, and he suddenly remembers that he forgot to buy his wife a gift. The only shop in the airport that is open sells souvenir T-shirts. Mr. Tyler quickly buys a shirt for $14.95. For him, the shirt was a(n) ________ good. A) convenience B) industrial C) shopping D) accessory E) specialty Answer: A 5) What type of consumer product is milk? A) Specialty goods B) Convenience goods C) Shopping goods D) Industrial goods E) Luxury goods Answer: B 6) For which of the following goods would a consumer purchase frequently and thus spend little time looking for them or comparing their prices? A) Shopping goods B) Capital items C) Convenience goods D) Specialty goods E) Comparison goods Answer: C 7) Which of the following does not apply to convenience goods? A) Relatively inexpensive B) Purchased with little time or effort C) Purchased frequently D) Brands are compared E) Consumed rapidly Answer: D 8) Milk, newspapers, bread, and batteries are examples of ________ goods. A) specialty B) shopping C) convenience D) coincidental E) impulse Answer: C 9) Identify the categories of consumer goods and services. A) Pre-teens, teens, adults B) Convenience, shopping, specialty C) Ideas, products, services D) High, medium, and low-priced E) Impulse, convenience, coincidental Answer: B 10) Melissa was visiting San Francisco. When she arrived at Fisherman's Wharf, she decided to purchase a souvenir T-shirt for her boyfriend back home. Since there are about 40 T-shirt retailers in that area, Melissa spent the rest of the day searching for the shirt that would convey just the right meaning to her boyfriend. For Melissa, the shirt was a(n) ________ good. A) specialty B) convenience C) shopping D) accessory E) industrial Answer: C 11) Which of the following would most likely be considered a shopping good? A) A package of chewing gum B) A Bic pen C) A ream of typing paper D) A birthday gift for your mother E) A loaf of bread Answer: D 12) Which of the following does not apply to shopping goods? A) Customers compare brands B) Evaluated on performance C) Frequently purchased D) Evaluated on style E) Customers compare different stores Answer: C 13) Stereos, tires, business suits, and furniture are examples of ________ goods. A) convenience B) impulse C) coincidental D) shopping E) specialty Answer: D 14) Goods which are very important, expensive, and rarely purchased are ________ goods. A) shopping B) impulse C) convenience D) coincidental E) specialty Answer: E 15) Which of the following does not apply to specialty goods? A) Customers will accept substitutes B) Customers will often go from store to store looking for what they want C) They are very expensive D) Customers are willing to spend a lot of time to find them E) Customers know exactly what they want Answer: A 16) For which of the following goods would a consumer compare several brands in several stores and evaluate alternatives for style, performance, colour, and price? A) Expense items B) Specialty goods C) Shopping goods D) Capital items E) Convenience goods Answer: C 17) Goods which are consumed rapidly and regularly, priced inexpensively, and purchased frequently with little time or effort are ________ goods. A) shopping B) convenience C) coincidental D) industrial E) specialty Answer: B 18) Bread is an example of a(n) _____________, while the catering for a wedding reception is an example of a(n) _____________. A) shopping good; shopping service B) convenience good; specialty good C) specialty good; specialty service D) convenience good; specialty service E) shopping good; shopping good Answer: D 19) Coffee, potato chips, newspapers, bread, and batteries are examples of ________, while stereos and tires are examples of _____________. A) shopping goods; shopping services B) convenience goods; shopping goods C) specialty goods; specialty services D) convenience goods; specialty services E) shopping goods; shopping goods Answer: B 20) Goods which are moderately priced, purchased infrequently, and which involve consumers in brand and price comparisons are ________. A) specialty services B) convenience goods C) impulse goods D) shopping goods E) specialty goods Answer: D 21) Stereos are an example of a(n) ________, while insurance is an example of a(n) ___________. A) specialty service; specialty good B) shopping good; shopping service C) convenience good; shopping good D) shopping service; shopping good E) specialty good; specialty service Answer: B 22) Diamond rings, Rolex watches, Godiva chocolates, and Rolls Royces are examples of ________. A) a product mix B) convenience goods C) shopping goods D) a product line E) specialty goods Answer: E 23) Televisions, tires, and suits are examples of ________. A) convenience goods B) shopping goods C) shopping services D) impulse goods E) specialty goods Answer: B 24) Wedding gowns, Rolex watches, Godiva chocolates, and Rolls Royces are examples of ________ goods. A) coincidental B) shopping C) convenience D) impulse E) specialty Answer: E 25) Sara's parents will be celebrating their fiftieth wedding anniversary. Sara is planning to have the party catered. The catering is considered A) a specialty service. B) a convenience good. C) a specialty good. D) a shopping good. E) a shopping service. Answer: A 26) Any materials and services that are consumed within a year by firms producing other goods or services are called ________. A) fixed expense goods B) current expense goods C) capital items D) expense items E) impulse items Answer: D 27) Items that are expensive, durable, and infrequently purchased by firms producing other goods or services are called ________. A) capital items B) impulse items C) expense items D) current expense goods E) fixed expense goods Answer: A 28) Light bulbs, pencils, pads of paper, and lubricating oils for machines are examples of ________ purchased by companies that make other goods. A) capital items B) fixed expense goods C) expense items D) depreciation goods E) impulse items Answer: C 29) Buildings, manufacturing equipment, computers and desks are examples of ________ purchased by companies that make other goods. A) impulse items B) capital items C) current expenses D) fixed expenses E) expense items Answer: B 30) The ________ is the group of products that a company makes available for sale. A) product offering B) multiple product lines C) product line D) product mix E) product blend Answer: D 31) The ________ is a group of similar products intended for a similar group of buyers that will use them in similar ways. A) multiple product lines B) product blend C) product mix D) product line E) product offering Answer: D 32) Black & Decker makes toasters, vacuum cleaners, electric drills and a variety of appliances and tools. This is Black & Decker's A) product blend. B) product offering. C) product mix. D) product line. E) multiple product lines. Answer: C 33) Ford offers four different models of the Escort which run the gamut from the three-door sport model to the five-door sedan. This represents A) a product offering. B) multiple product lines. C) a product line. D) a product blend. E) a product mix. Answer: C 34) Procter & Gamble offers soap, foods, coffee, baby products, and paper products. These products represent Procter & Gamble's A) convenience goods. B) product mix. C) product line. D) shopping goods. E) specialty goods. Answer: B 35) The group of products a firm has for sale is known as A) specialty goods. B) convenience goods. C) capital items. D) the product mix. E) shopping goods. Answer: D 36) Which term is used to identify industrial products consisting of permanent goods and services? A) Product mix B) Industrial expense items C) Product line D) Capital items E) Enduring items Answer: D 37) Which of the following is not an example of an expense item used with industrial products? A) Supplies B) Temporary services C) Raw materials D) Capital items E) Materials and parts Answer: D 38) Which of the following is an expensive, durable, infrequently purchased industrial product such as a building? A) Product line B) Enduring item C) Product mix D) Expense item E) Capital item Answer: E 39) Which of the following is correct with regard to the concept of a “product”? A) The product is made up of the visible features and benefits B) When consumers buy a product, they are also buying an image and a reputation C) Products are normally classified into two basic groups: those that are consumed in a short period of time and those that last a long time D) The value package is the objective features of the product E) For a computer, most items in the value package are tangible Answer: B 40) The modern consumer regards a product as a bundle of attributes which, taken together, are called ___________. A) product differentiation B) brand awareness C) the value package D) the cost-benefit ratio E) the product mix Answer: C 41) Advertisements for the Swatch Chrono watch remind consumers that they don’t get just “real” features like shock and water resistance when they buy the product. This is an example of A) the value package. B) emotional advertising. C) institutional advertising. D) product differentiation. E) focusing on the visible features of a product. Answer: A 42) Product ________ are the qualities—both tangible and nontangible—that a company builds into its products. A) enticements B) mixes C) lines D) features E) specifications Answer: D 43) Industrial products are normally divided into two general categories. What are they? A) Emotional and rational B) Those costing more than $10,000 and those costing less than $10,000 C) Industrial and consumer D) Expense items and capital items E) Domestic and international Answer: D 44) With regard to classifying industrial products, goods and services that are consumed within a year are called ________ items. A) expense B) capital C) accessory equipment D) offices and factories E) fixed equipment Answer: A 45) With regard to classifying industrial products, goods and services that are expensive and long-lasting are called ________ items. A) expense B) capital C) supplies D) support materials E) services Answer: B 46) Pencils, brooms, and gloves are examples of ________, while factories, water towers, and airplanes are examples of __________. A) capital items; expense items B) supplies; installations C) services; capital items D) expense items; capital items E) capital items; supplies Answer: D 47) With regard to industrial products, which of the following is classified as an expense item? A) Temporary office help B) Pencils C) Oil D) Window cleaning E) All of these Answer: E 48) What is the term used to refer to a group of products that are closely related and function in a similar manner or are sold to the same customer group? A) Product features B) The product mix C) The product line D) Consumer and industrial goods E) Product positioning Answer: C 49) For many years, ServiceMaster focused on residential customers, but now it has added business and industry services. This is an example of A) product mortality. B) product positioning. C) multiple product lines. D) product differentiation. E) the product mix. Answer: C 50) Why are businesses interested in the development of new products? A) The federal government encourages every product manufacturer to spend 1% of revenue on new product development B) New products are necessary to stay in business C) New products keep the warranty and service departments busy D) New products provide the fun that marketing managers need E) Product development provides an opportunity for large tax write-offs Answer: B 51) Speed to market is very important to a firm's success. One study has estimated that a product that is six months late will sacrifice ________ percent of its lifetime profit potential. A) 18 B) 28 C) 12 D) 33 E) 23 Answer: D 52) What is the first step in new product development? A) Product testing and test marketing B) Development of a prototype C) Concept testing D) Screening E) Search for new product ideas Answer: E 53) You are asked to come up with a new widget. What would your first step be? A) Idea screening B) Idea generation C) Commercialization D) Business analysis E) Test marketing Answer: B 54) What is the purpose of the screening stage of the product development process? A) To identify potential production problems B) To identify the benefits which consumers want C) To actively seek out ideas for new products D) To eliminate all ideas that do not mesh with the firm's objectives, abilities, or expertise E) To compare costs and benefits of the proposed product Answer: D 55) Suppose you work for a firm that manufactures and sells pet accessories. As part of your job you frequently visit city parks and observe how people interact with their pets. You also talk to the staff members of veterinary clinics to discover how people relate to their pets. This activity is consistent with the ________ phase of new product development. A) idea generation B) business analysis C) prototype development D) screening E) product testing Answer: A 56) In which stage of the product development process is a preliminary version of the product produced? A) Product test run B) Screening C) Prototype development D) Concept testing E) Test marketing Answer: C 57) In which stage of product development does market research have a major role? A) Prototype development B) Commercialization C) Business analysis D) Product testing E) Concept testing Answer: E 58) You are asked to justify market research for a new product. You explain that it is required A) to determine if the product will meet performance requirements. B) to ensure that the new product will mesh with the firm's objectives. C) to identify future production problems. D) to identify benefits to be provided by the product. E) to determine whether there will be a market for the product. Answer: D 59) In which stage of the product development process does the firm eliminate all product ideas that do not mesh with the firm's abilities, expertise, or objectives? A) Product ideas B) Screening C) Concept testing D) Test marketing E) Prototype development Answer: B 60) Penny has been hired by a manufacturing company to come up with a new remote control. Penny's first step would be A) prototype development. B) test marketing. C) screening. D) business analysis. E) product ideas. Answer: E 61) RMH Research & Development Inc.'s employees spend a high percentage of their day brainstorming new product ideas, as they are very aware that it takes about ________ new product ideas to generate just one new product that reaches the market successfully. A) 100 B) 50 C) 200 D) 1 E) 1000 Answer: B 62) It takes _________ new product ideas to generate just one new product that reaches the market, and then only __________ out of 10 new products on the market succeeds. A) 100; 1 B) 200; 3 C) 50; 1 D) 30; 4 E) 20; 6 Answer: C 63) If a company requires consumer response to a new product under real conditions, which phase of the product development process would the company use? A) Business analysis B) Concept testing C) Commercialization D) Screening E) Product testing and test marketing Answer: E 64) If RMH Research & Development Inc. introduces a product three months behind a competitor’s, it is likely to lose as much as _________ percent of its lifetime profit potential. A) 12 B) 28 C) 23 D) 33 E) 18 Answer: A 65) Batson Corp. marketing staff have developed a long list of possible new product ideas. In terms of the new product development process, what should they do next? A) Business analysis B) Screening C) Product testing D) Concept testing E) Prototype development Answer: B 66) Lexington Corp. has been involved in a new product development process for several months. They have completed several preliminary tasks, the most recent of which was estimating costs and benefits for a proposed new product. What should they do next? A) Business analysis B) Test marketing C) Product testing D) Concept testing E) Prototype development Answer: E 67) Which phase of the product development process gives the company its first information on consumer response to the product under real conditions? A) Product testing and test marketing B) Commercialization C) Screening D) Concept testing E) Business analysis Answer: A 68) How does the product life cycle mesh with the product development process? A) Product commercialization is the start of the introduction stage of the life cycle B) Commercialization indicates that the product has become a "star" C) Prototype development is the start of the introduction stage of a life cycle D) Product testing and test marketing take place during the growth stage of the life cycle E) The two do not mesh Answer: A 69) The ________ is a series of stages through which a product passes during its profit-producing life. A) product development model B) profit cycle C) profit life cycle D) market segmentation model E) product life cycle Answer: E 70) The ________ is a natural process in which products are born, grow in stature, mature and finally decline and die. A) product life stages B) profit life cycle C) product life cycle D) product profit stages E) profit life stages Answer: C 71) During this stage of a product's life cycle marketers focus on making potential consumers aware of the product and its benefits. Profits are non-existent or small. This is the ________ stage. A) decline B) growth C) maturity D) development E) introduction Answer: E 72) Hydrogen fuel cells and solar-powered cars are in the ________ stage of their product life cycles. A) growth B) decline C) introduction D) maturity E) development Answer: C 73) During this stage of a product's life cycle sales begin to climb and the product begins to show a profit. Competitors introduce similar products. This is the ________ stage of a product's life cycle. A) growth B) maturity C) decline D) development E) introduction Answer: A 74) During this stage of a product's life cycle sales begin to slow down, but profit levels are at their highest. Competition becomes more active and toward the end of this stage sales start to fall. This is the ________ stage of a product's life cycle. A) development B) growth C) maturity D) decline E) introduction Answer: C 75) During this stage of a product's life cycle sales and profits fall. New products in the introduction stage take away sales. Companies remove or reduce promotional support. This is the ________ stage. A) development B) decline C) introduction D) maturity E) growth Answer: B 76) Automobiles, colour TVs, and DVD players are in the ________ stage of their product life cycle. A) introduction B) growth C) decline D) maturity E) development Answer: D 77) Audiocassette tapes, rotary telephones, and black and white TVs are in the ________ stage of their product life cycles. A) growth B) decline C) development D) introduction E) maturity Answer: B 78) The Internet, cellular phones, and satellite TV are in the ________ stage of their product life cycles. A) development B) introduction C) maturity D) decline E) growth Answer: E 79) During this stage of the product life cycle, the promotion strategy is to emphasize brand differences and benefits. This is the ________ stage. A) introduction B) decline C) maturity D) growth E) development Answer: C 80) What is the fundamental idea in the product life cycle? A) That only one in 50 new product ideas becomes commercially viable B) That profitability is highest in the growth stage C) That competition becomes very strong in the maturity stage D) That risk is very high during the introduction stage E) That successfully commercialized products have a limited profit-producing life Answer: E 81) Coca-Cola, Pepsi-Cola, Kleenex, and Chevrolet are examples of A) private label. B) brand names. C) product names. D) product line names. E) public label. Answer: B 82) What type of brand would you describe Coca-Cola as having? A) Generic brand B) National brand C) Off-the-shelf brand D) Copyrighted brand E) Private brand Answer: B 83) Which brands are often widely recognized by consumers because of campaigns for products produced and distributed by the manufacturer? A) Private brands B) National brands C) Licensed brands D) Launched brands E) Generic brands Answer: B 84) What is a trademark? A) A universal product code B) An operating license from the Canadian government C) The exclusive legal right to use a brand name D) Protection for an invention E) A licensed brand Answer: C 85) What can a firm do to protect its products and brand names from being used by a competitor? A) Obtain a trademark B) Use tamper-resistant packaging C) Use a private brand name D) Use a generic brand name E) Obtain a Universal Product Code Answer: A 86) When John wants a particular item, he buys the same brand each time. This is an example of A) brand awareness. B) brand identification. C) label preference D) brand equity. E) brand loyalty. Answer: E 87) The process of using symbols to communicate the qualities of a product made by a particular producer is called A) branding. B) product differentiation. C) promotion. D) publicity. E) advertising. Answer: A 88) Maxwell House, Kleenex, and Lysol are all examples of A) brand names. B) private brands. C) industrial products. D) brand equity. E) licensed brands. Answer: A 89) In the 2009 Country Brand Index, Canada ranked A) first. B) second. C) third. D) fifth. E) twelfth. Answer: B 90) If consumers have a favourable attitude toward a product, they are likely at what level of brand loyalty? A) Brand indifference B) Brand awareness C) Brand preference D) Brand insistence E) Brand management Answer: C 91) Shawna prefers Tim Horton's coffee, but she will buy other types of coffee if a Tim Hortons is not conveniently located. She is exhibiting A) brand awareness. B) brand recognition. C) brand preference. D) brand insistence. E) licensed brand insistence. Answer: C 92) Which of the following is correct with respect to brand loyalty? A) It is more important in cosmetics brands than in sports brands B) It means that consumers have a high level of trust in a product C) It does not have a major impact on company profits D) It is important in some sports but not others E) All of these are correct Answer: D 93) What are the three stages of brand loyalty? A) Brand recognition, brand preference, and brand insistence B) National brands, private brands, and generic brands C) Brand insistence, tamper resistant packaging, and label requirements D) Licensed brands, generic products, and trade marks E) Question marks, stars, dogs Answer: A 94) What term refers to the physical container in which a product is sold? A) Packaging B) Generic products C) Label D) UPC bar code E) Brand identification Answer: A 95) Which of the following does not represent a reason for packaging products? A) Serves as an in-store advertisement B) Serves as an attractive display C) Provides reassurance of safety for consumption of the product D) Packaging is harmful to the environment E) Reduces the risk of damage, breakage, or spoilage Answer: D 96) A ___________ gives exclusive legal right to use a brand name, while a _________ protects an invention or idea. A) patent; trademark B) copyright; trademark C) trademark; copyright D) copyright; patent E) trademark; patent Answer: E 97) How long does a patent protect an idea or an invention? A) 5 years B) 10 years C) 20 years D) 50 years E) Indefinitely Answer: C 98) Which of the following is correct with regard to packaging? A) Fresh fruit and structural steel do not really need much packaging B) The function of packaging is limited to product protection C) Packaging does not provide advertising or promotion for products D) Packaging costs can be as high as 50 percent of the total cost to make a product E) All of these Answer: A 99) What are the two main purposes of the Consumer Packaging and Labelling Act? A) To restrict what cigarette and alcohol manufacturers can say on the labels of their products, and to provide a set of rules for packaging and labeling of consumer products B) To state packaging requirements for consumer goods, and to state packaging requirements for industrial goods C) To state packaging and labeling requirements for goods, and to state packaging requirements for services D) To provide a set of rules for packaging and labeling of consumer products, and to ensure that the manufacturer provides full and factual information on labels E) To make sure that product quantities are stated in English and French and to ensure that the manufacture provide full and factual information on labels Answer: D 100) Promotion seeks to accomplish all of the following with potential customers except A) persuade them to purchase products. B) persuade them to dislike all other competitors' products. C) make them aware of products. D) make them knowledgeable about products. E) persuade them to like products. Answer: B 101) When Burger King tells you about a new restaurant that it is opening near you, it is attempting to fulfill which promotional objective? A) Remind you about the product B) Communicate information C) Positioning products D) Controlling sales volume E) Eliminate competition Answer: B 102) What is the ultimate objective of any type of promotion? A) Image enhancement B) Creative selling C) To increase sales D) To advertise E) To increase consumer knowledge of the product Answer: C 103) A ________ strategy is a promotional strategy designed to encourage wholesalers and retailers to market those products to the consumer. A) push B) position C) product D) pull E) place Answer: A 104) Mega Computer, a computer manufacturer, is using direct mail to send 10 percent off coupons to its list of potential customers. This strategy is called a ________ strategy. A) pull B) product C) position D) push E) place Answer: A 105) Mega Computers, a computer manufacturer, has decided to promote its new line of computers by offering its wholesalers and retailers an additional 5 percent off list prices. This strategy is called a ________ strategy. A) product B) pull C) push D) place E) position Answer: C 106) Why would a business firm want to use controlling sales volume as a promotional objective? A) A company will aggressively push its products through wholesalers and retailers who persuade customers to buy it B) The production and distribution systems will run more smoothly when the firm achieves a more stable sales volume during the year C) The company is trying to appeal to a specific segment of the market D) Consumers are more likely to purchase a product when they have been informed about it E) The company wants to be able to communicate information to consumers when it is more economical to do so Answer: B 107) Which promotional strategy aggressively promotes products through wholesalers and retailers who then persuade customers to buy? A) Pull strategy B) Hard sell C) Contests and sweepstakes D) Promotional mix E) Push strategy Answer: E 108) Which promotional strategy appeals directly to the consumer who demands the product from retailers, who, in turn, demand the product from wholesalers? A) Product positioning B) Layered promotion C) Pull strategy D) Contests E) Push strategy Answer: C 109) Which of the following is not one of the basic types of promotional tools? A) Advertising B) Publicity C) Personal selling D) The shopping network E) Sales promotions Answer: D 110) A marketing promotion strategy of ________ is designed to encourage wholesalers and retailers to market those products to the consumer. A) push B) position C) place D) pull E) product differentiation Answer: A 111) All of the following are basic types of promotional tools except A) advertising. B) personal selling. C) sales promotions. D) publicity and public relations. E) branding. Answer: E 112) Which advertising medium has historically been the most widely used? A) Radio B) Television C) Magazines D) Outdoor E) Newspapers Answer: E 113) Which of the following is not a disadvantage of using newspapers to carry the advertising message? A) Newspapers offer flexible, rapid coverage since the ads can change from day to day B) The newspaper is usually thrown out after one day C) Newspapers often are not printed in colour D) Newspapers do not permit advertising managers to target their audience very well E) Newspapers often have poor reproduction quality Answer: A 114) The specific communications device for carrying a seller's message to potential customers is called A) advertising media. B) communications vehicles. C) advertising vehicle. D) promotional methods. E) promotional media. Answer: A 115) The communications vehicle that is flexible, has rapid coverage, but lasts briefly and cannot target audiences very well is A) direct mail. B) newspapers. C) magazines. D) radio. E) television. Answer: B 116) The communications vehicle that appeals to many consumer senses, can be targeted to a specific audience, and reaches more people than any other medium is A) magazines. B) radio. C) television. D) newspaper. E) direct mail. Answer: C 117) The communications vehicle that is very selective about its audience, allows a more personalized message, and whose response rate is very predictable is A) direct mail. B) television. C) magazines. D) radio. E) newspaper. Answer: A 118) The sending of fliers or other types of printed advertisements to consumers' homes is A) magazines. B) radio. C) direct mail. D) newspaper. E) television. Answer: C 119) The communications vehicle that is inexpensive, that effectively segments the customers, but is not very long lasting is A) radio. B) direct mail. C) newspaper. D) television. E) magazines. Answer: A 120) This communications vehicle is highly segmented, allows for excellent visual communication, and is long-lived, but requires a long lead-time. A) Direct mail B) Television C) Magazines D) Newspaper E) Outdoor Answer: C 121) Which is a highly successful adaptation of direct mail advertising media? A) Newspapers B) Junk mail C) Fax attack D) Radio E) Outdoor Answer: C 122) Which advertising medium can present only limited information and sellers have little control over who sees their advertisements? A) Television B) Radio C) Direct mail D) Magazines E) Outdoor Answer: E 123) For sellers, which of the following is not an advantage of internet marketing? A) Elimination of intermediaries B) Convenience C) Reduced costs D) Feedback E) Flexibility Answer: B 124) Which of the following is correct with regard to the boxed insert entitled "Batman Embraces the Internet Age"? A) The movie The Dark Knight used a viral marketing campaign B) Fans competed with one another to solve puzzles C) The movie had a record-breaking box office debut D) The movie earned about half of what the previous five Batman movies had earned in total E) All of these are correct Answer: E 125) In 2008, online advertising sales were valued at A) $200 million. B) $800 million. C) $1.6 billion. D) $4.7 billion. E) 11.6 billion. Answer: C 126) Internet marketing has experienced several weaknesses, including ________. A) information overload B) security related issues C) limited markets D) profitability problems E) all of these are weaknesses Answer: E 127) Which method of advertising uses digital implants of brands or products onto live or taped programming? A) Television advertising B) Virtual advertising C) Retail advertising D) Industrial advertising E) Deceptive advertising Answer: B 128) The part of the promotional mix which is paid, nonpersonal communication used by an identified sponsor to inform an audience about a product is called A) publicity. B) sales promotion. C) personal selling. D) advertising. E) pricing. Answer: D 129) Based on the money that companies spend on advertising, which advertising medium is most widely used? A) Outdoor B) Television C) Radio D) Magazines E) Newspapers Answer: B 130) Samantha wanted to use a flexible communication vehicle which would give her rapid coverage. She should select ________ advertising. A) television B) newspaper C) magazine D) radio E) direct mail Answer: B 131) Adrianna developed a new perfume. She wanted to market the perfume via a communication vehicle that appeals to many consumer senses, targets a specific audience, and reaches as many people as possible. Adrianna would select ________ advertising. A) television B) magazine C) radio D) direct mail E) newspaper Answer: A 132) One disadvantage of television advertising is that A) it does not appeal to enough of the five senses. B) people who watch television are not a good target market. C) it reaches fewer people than any other kind of advertising. D) too many commercials cause viewers to confuse products. E) it has lost almost all of its influence due to the internet. Answer: D 133) Which of the following is correct with regard to the various media? A) About twice as much is spent on advertising in magazines than is spent on newspapers B) Newspapers generally allow advertisers to target their audiences well C) Radio stations are generally not highly segmented into listening categories D) Billboard messages are relatively expensive E) People tend to use radio as “background” while they are doing other things Answer: E 134) In Canada, advertising expenditures are smallest in which medium? A) Internet B) Television C) Magazines D) Radio E) Outdoor Answer: E 135) ________ advertising involves sending fliers or other types of printed advertisements to consumers' homes. A) Radio B) Television C) Direct mail D) Magazine E) Newspaper Answer: C 136) Sally selected ________ advertising because it is relatively inexpensive, faces little competition for customers' attention, and is subject to high repeat exposure. A) outdoor B) magazine C) television D) direct mail E) radio Answer: A 137) Jack wants to sell his new marketing ideas from any location and yet be as global as possible. Which advertising medium should Jack use? A) Word of mouth B) Radio C) Outdoor D) E-commerce E) Television Answer: D 138) Which of the following is correct with regard to the various media? A) Direct mail advertising has the highest advance costs of any advertising technique B) Direct mail advertising has the lowest cost-effectiveness of any advertising technique C) Radio advertisements are very expensive D) Magazine advertising is not very good at conveying to consumers the value of a product E) Outdoor advertising is the most important form of advertising, based on spending by companies Answer: A 139) All of the following are advantages of advertising for internet buyers except A) convenience. B) relationship building. C) privacy. D) control. E) selection. Answer: B 140) All of the following are advantages of advertising for internet sellers except A) relationship building. B) reduced expenses. C) feedback. D) flexibility. E) convenience. Answer: E 141) All of the following are weaknesses of internet marketing except A) profitability. B) information overload. C) limited markets. D) future prospects. E) consumer concerns about security issues. Answer: D 142) By using digital implants of brands or products onto live or taped programming, ___________ can give the illusion that the product is part of the show. A) internet advertising B) personal selling C) virtual advertising D) buzz marketing E) direct mail Answer: C 143) Which of the following is correct with regard to the box entitled “Fueling the World of Branded Entertainment”? A) Advergames allow companies to advertise their product in the context of a video game B) The advergame “Fairies and Dragons” was not as successful as McDonald’s had hoped C) ”Tween” girls have shown relatively little interest in video games D) With advergames, companies don’t need to worry as much about addressing the needs and wants of their target market as they used to E) None of these are correct Answer: A 144) The promotional tool in which a salesperson communicates one-on-one with potential customers is A) direct mail. B) personal selling. C) television. D) radio. E) magazines. Answer: B 145) The most expensive promotional tool on a cost per contact basis is A) personal selling. B) direct mail. C) television. D) radio. E) magazines. Answer: A 146) Which of the following represents a reason for a firm's use of personal selling promotions? A) It is the only form of selling that works B) It provides a personal link between the seller and the buyer C) The sales force has the capability of contacting the greatest number of potential customers D) Personal selling provides the lowest promotional costs per contact E) Sales promotions must be convenient and accessible when the purchase decision is made Answer: B 147) Due to the high cost of personal selling many companies are turning to A) radio advertising. B) telemarketing. C) coupons. D) contests. E) magazine advertising. Answer: B 148) Which of the following is a type of sales promotion? A) Publicity B) Contests and sweepstakes C) Advertising D) Personal selling E) Public relations Answer: B 149) Which type of sales promotion uses a certificate that entitles the holder to a stated amount of savings off the purchase price? A) Coupons B) Point of purchase displays C) Contests D) Gift certificates E) Direct mail Answer: A 150) The Cream Soap Company has launched a new campaign geared at increasing the sales volume of its new Fresh Smelling line of soap products. The $1.6 million campaign will cover the costs of providing samples of their soap products to be delivered with the Toronto Star newspaper to 500 000 homes in Toronto. This marketing technique is known as A) personal selling. B) public relations. C) advertising. D) publicity. E) sales promotion. Answer: E 151) Short-term activities designed to stimulate consumer buying or cooperation from distributors and sales agents is known as A) personal selling. B) sales promotion. C) advertising. D) pricing. E) publicity. Answer: B 152) Coupons, point-of-purchase displays, free samples, and trade shows are examples of A) advertising. B) sales promotions. C) publicity. D) personal selling. E) pricing. Answer: B 153) Which type of sales promotion involves the renting of a booth to display wares and to demonstrate products to customers who have a special interest in the product? A) Trade shows B) Coupons C) Point-of-purchase displays D) Sweepstakes E) Contests Answer: A 154) What is an advantage to the firm when using trade shows as a type of sales promotion? A) They are relatively inexpensive, and are very effective since the buyer comes to the seller B) Coupons may be used to encourage customers to try new products C) The displays serve to attract customer attention as they walk through a store D) Free samples may be used to allow customers to try a product for a few days without any risk E) Contests may increase sales by stimulating buyers' interest in a product Answer: A 155) A gas station offering a free car wash with a fill-up is an example of A) sales promotion. B) advertising. C) publicity. D) premiums. E) public relations. Answer: A 156) Which of the following makes it easier for customers to find a product and eliminate competitors' products from consideration? A) POP displays B) Coupons C) Trade shows D) Contests E) Premiums Answer: A 157) Brian works at the local grocery store. His supervisor asked him to use point-of-purchase displays. Brian is to A) set up a product display so it is located in an area to encourage consumers to buy the products. B) set up a display where consumers can pick out one item free when they purchase a specified product. C) pass out coupons to customers purchasing the targeted products as they are checking out. D) set up a table and give out free samples. E) interview customers as they are considering a purchase of the targeted products. Answer: A 158) All of the following are examples of sales promotions except A) point of purchase displays. B) advertising. C) coupons. D) free samples. E) trade shows. Answer: B 159) Dove is introducing a new deodorant. In order to entice customers to purchase the deodorant, a free bar of soap is attached to the package. Which type of sales promotion is Dove using? A) Point of purchase display B) Premium C) Contest D) Trade show E) Coupons Answer: B 160) Algoma Banners set up a booth to display their products and to demonstrate products to customers who have a special interest in their product. Which sales promotion technique were they using? A) Coupons B) Premiums C) Contests D) Trade shows E) Point-of-purchase displays Answer: D 161) A_______ entitles the bearer to stated savings off a product's regular price, while a ________ is a free or reduced-price item given to consumers in return for buying a specified product. A) coupon; premium B) premium; coupon C) contest; premium D) point-of-purchase display; contest E) premium; contest Answer: A 162) When Molson included a free T-shirt with certain packages of its beer, this was an example of a A) premium. B) coupon. C) contest. D) point-of-purchase display. E) none of these. Answer: A 163) Which type of promotion is outside of the company's control? A) Coupons B) Television advertising C) Personal selling by sales agents D) Publicity E) Trade shows Answer: D 164) As a start-up company, you need to find ways to reduce costs. Which type of promotion is free? A) Coupons B) Gift certificates C) Free samples D) Publicity E) contests Answer: D 165) ________ attempts to build goodwill with customers by performing and publicizing a company's public service activities. A) Personal selling B) Public relations C) Advertising D) Sales promotion E) Publicity Answer: B 166) ________ is free, nonpersonal communication with potential customers. A) Publicity B) Personal selling C) Premiums D) Advertising E) Sales promotion Answer: A 167) The most negative aspect of publicity is that A) it is expensive. B) it isn't believable to many people. C) it isn't that important. D) it is viewed as being biased. E) it isn't controllable by the company. Answer: E 168) That part of promotion which includes activities designed to build good relations with various sectors of the population of buyers is called A) advertising. B) publicity. C) personal selling. D) public relations. E) sales promotion. Answer: D 169) When McDonald's announces that there are 168 Ronald McDonald houses in 12 countries, this announcement fits best in the category of A) publicity. B) creative selling. C) personal selling. D) public relations. E) missionary selling. Answer: D 170) Cartier Partners Financial Inc. builds goodwill by making their public service activities known. This activity is called A) publicity. B) sales promotion. C) advertising. D) public relations. E) personal selling. Answer: D 171) Which of the following is not a factor that makes global advertising a difficult proposition? A) Product variations B) Image differences C) Cultural receptiveness D) Different currencies E) Language differences Answer: D 172) All of the following are challenges to global advertising except A) product variations. B) language differences. C) cultural receptiveness. D) image differences. E) foreign currency values. Answer: E 173) Which of the following is correct with regard to language differences as a factor in international promotion? A) English is a more efficient and precise language than most others B) Advertisements in English require more print space than advertisements in most other languages C) Advertising agencies have found that it is not possible to set up worldwide agency networks that can coordinate a campaign’s central them while still allowing regional variations D) Advertisements in English require more air time than advertisements in other languages E) All of these are correct Answer: A TRUE/FALSE QUESTIONS. Write 'T' if the statement is true and 'F' if the statement is false. 174) A newspaper, coffee and an Egg McMuffin at McDonald's are all consumer convenience goods. Answer: True 175) Specialty goods are important and expensive purchases for the buyers who decide on what they want and accept no substitutes. Answer: True 176) Shopping goods are important, expensive, and consumers will accept no substitutes. Answer: False 177) The product mix is a group of similar products intended for a similar group of buyers that will use them in similar ways. Answer: False 178) Multiple product lines allow a company to grow more rapidly and minimize the consequences of slow sales in any one product line. Answer: True 179) A product line is a group of products that are closely related because they function in similar manner or are sold to the same customer group who will use them in similar ways. Answer: True 180) It is estimated that it takes 50 new product ideas to generate one product that finally reaches the marketplace. Even then, only a few of those become successful products. Answer: True 181) In the screening stage of the development process, companies use market research to solicit consumers' input. Answer: False 182) Product development begins with a search for ideas for new products. These ideas can come from consumers, the sales force, research and development people, or engineering personnel. Answer: True 183) A product that is six months late to market will lose 70 percent of its lifetime profit potential. Answer: False 184) High-definition TV has been slow to catch on because the technology continues to have problems. Answer: False 185) The average supermarket carries about 20,000 to 25,000 different items. Answer: True 186) The product life cycle is the concept that states that products have a limited profit-producing life. Answer: True 187) The product life cycle is a series of stages through which a product passes during its profit-producing life. Answer: True 188) The four stages of a product life cycle are introduction, growth, maturity, and decline. Answer: True 189) Because companies spend a large amount of money to develop a brand, they are looking for consumer brand loyalty. Answer: True 190) One measure of brand loyalty is the extent to which consumers show a brand preference when making a purchase. Answer: True 191) Branding is a process of using symbols to communicate the qualities of a particular product made by a particular company. Answer: True 192) A national brand name is produced and distributed by the manufacturer of the product. Answer: True 193) Private brands are products promoted by and carrying a name associated with the retailer or wholesaler, not the manufacturer. Answer: True 194) A trademark protects an invention or idea for a period of 20 years. Answer: False 195) Copyrights apply to the tangible expressions of an idea, not to the idea itself. Answer: True 196) Packaging costs can be as high as 15 percent of the total cost to make a product. Answer: True 197) Many Canadian companies have different labels for their products in Quebec. Answer: True 198) The two general values to be gained from any promotional activity are communicating information and creating satisfying exchanges. Answer: True 199) The ultimate objective of any promotion is to sell more products. Answer: True 200) The two major forms of promotional strategy are personal and nonpersonal. Answer: False 201) A push strategy appeals directly to consumers who push for the product to be placed in stores. Answer: False 202) A pull strategy is generally more effective than a push strategy because a pull strategy shows that consumers actually want the product. Answer: False 203) The pull strategy involves retailers who attempt to "pull" customers in to the store through aggressive advertising. Answer: False 204) There is one optimal promotional mix that will work for almost all products and companies. Answer: False 205) Makers of industrial products most often use a pull strategy, and makers of consumer products often use a push strategy. Answer: False 206) The best promotional mix includes only 2 factors: the company's product and the target audience Answer: False 207) Each promotional tool should be properly matched with the product being promoted and the target customer. Answer: True 208) Television is a good medium to use if a company wants to educate viewers about complex products. Answer: False 209) Newspapers, as an advertising medium, offer flexible, rapid coverage, but usually do not allow advertisers to target their audience well. Answer: True 210) The major advertising media include newspaper, television, direct mail, radio, magazines, and outdoor. Answer: True 211) One disadvantage of radio advertisements is that many people use the radio as "background" and pay little attention to advertisements. Answer: True 212) One advantage of using magazine advertisements is that magazines represent a market that has already been segmented. Answer: True 213) The most widely used advertising medium is newspapers. Answer: True 214) Spending on television advertising in Canada in 2008 totaled about $7 billion. Answer: False 215) Television is the most widely used advertising medium. Answer: False 216) A catchy slogan will increase the chance that consumers will remember a brand name. Answer: True 217) A silverware company would be smart to advertise in bridal magazines. Answer: True 218) Television is a popular form of advertising because it is a combination of sight, sound and motion appeals to almost all a viewer's senses. Answer: True 219) Word-of-mouth advertising is also known as “buzz marketing.” Answer: True 220) Internet advertising is more advantageous for buyers than for sellers. Answer: False 221) One of the disadvantages of the internet is limited markets. Answer: True 222) The combination of media that a company chooses to advertise its products is called the promotional mix. Answer: False 223) Virtual marketing, viral marketing, and buzz marketing are different names for basically the same idea. Answer: False 224) Personal selling provides the personal link between seller and buyer, which adds to a firm's credibility. Answer: True 225) The average cost of an industrial sales call has been estimated at nearly $300.00. Answer: True 226) Coupons may be used to encourage customers to try new products, to attract customers away from competitors, or to induce current customers to buy more of a product. Answer: True 227) Premiums are gifts, such as pens, pencils, calendars, or coffee mugs that are given away in return for buying a specific product. Answer: True 228) Generally speaking, the most effective sales promotion tool is free samples. Answer: False 229) Publicity and public relations are important tools in making the buyer aware that the firm's product exists, especially when the buyer is in the information seeking stage of the buying process. Answer: True 230) Public relations is company-influenced publicity that seeks to build good relations with the public and to deal with the effects of unfavourable events. Answer: True 231) Most large firms do not have a department to manage their relations with the public as they already have a desired company image. Answer: False 232) The most obvious barrier to the global ad is language. When Coca-Cola first went to China, the translation of its name read "Bite the wax tadpole." Answer: True 233) The truly global perspective means designing products for multinational appeal. Answer: True 234) Compared with other languages, ads in English take up more print space and air time because English takes more words to explain concepts. Answer: False 235) In order to communicate product variation, advertising must reflect these differences. Answer: True 236) A company's image typically remains fairly constant from nation to nation. Answer: False SHORT ANSWER QUESTIONS. Write the word or phrase that best completes each statement or answers the question. 237) What is a product feature? Answer: A feature is a tangible or intangible quality that a company builds into a product. For example, a feature of a Swatch Chrono watch is shock and water resistance. 238) What is a benefit? Answer: A benefit is what the consumer gets from owning the product. Product features are important in providing benefits. 239) What is a value package? Answer: The bundle of attributes which are evident in a product. Consumers obviously want products with value, i.e., products with more benefits at a reasonable cost. 240) What are the three major classes of consumer goods? Answer: Convenience goods, shopping goods, and specialty goods. 241) Describe the two major classes of industrial products. Answer: Expense items and capital items are the two major classes of industrial products. Expense items are goods or services that are consumed within a year by firms producing other goods or supplying other services. Capital items are permanent goods and services that usually have expected lives of more than a year. 242) How do expense items differ from capital items? Answer: The distinction is largely based on time. Expense items are goods or services that are consumed within a year by firms producing other goods or supplying other services. Capital items are goods and services that usually have expected lives of more than a year. 243) What is the product mix? Answer: The product mix is the group of products that a firm makes available for sale. 244) What is a product line? Answer: A product line is a group of similar products intended for a similar group of buyers who will use the products in similar ways. 245) How does a product mix differ from a product line? Answer: A product mix is the group of products that a firm makes available for sale. A product line is a group of similar products intended for a similar group of buyers who will use the product in similar ways. A company will have only one product mix but may have multiple product lines. 246) Describe an example that demonstrates the riskiness of new product development. Answer: Both Toshiba and Sony battled for dominance of high-definition DVDs. Both companies spent millions of dollars developing their respective products (HD DVD for Toshiba and Blu-ray for Sony). In the end, Sony was victorious and Toshiba had little to show for all the money it had spent trying to develop the new product. New product development is also risky because it may require years of work to bring a new product to the market, and even then it may be unsuccessful. 247) What are the seven steps in the new product development process? Answer: Product ideas, screening, concept testing, business analysis, prototype development 248) How is the screening phase of new product development different than the concept testing phase? Answer: In the screening phase, the emphasis is on eliminating new product ideas that don't match the company's abilities, expertise, or objectives. By contrast, in the concept testing phase, the emphasis is on market research to determine possible customer interest in promising new product ideas that have already been identified as matching with the company's abilities, expertise, and objectives. 249) What are the four stages in the product life cycle? Answer: Introduction, growth, maturity, and decline. 250) What is the basic idea behind the product life cycle? Answer: The fundamental notion is that each product or service has a time frame in which it is useful for the company to produce and market it. For a given product type, the time frame may be very long (for example, beer) or relatively short (for example, 8-track stereo tapes). 251) What is branding? Why do companies engage in branding? Answer: Branding is the use of symbols to communicate the qualities of a particular product made by a particular producer. Companies emphasize branding because a well-recognized brand can make it easier for the company to encourage existing customers to make repeate purchases of the product, or to get new customers to try the product. 252) What is brand equity? Answer: Products with higher brand equity generate greater brand awareness and loyalty on the part of consumers, have larger market shares than competing brands, and are perceived to have greater quality. 253) What are the three categories of brand names? Answer: National, licensed, and private. 254) What is the difference between licensed brands and private brands? Answer: When a company with a well-known brand sells another company the right to place that brand on its products, these are called licensed brands (for example, Harley-Davidson's logo is placed on many products). By contrast, a private brand is simply a brand developed by a retailer (for example, President's Choice brand that has been developed by Loblaw). 255) What are the three levels of brand loyalty? Answer: Brand awareness (customers recognize the brand name) , brand preference (consumers have a favourable attitude toward the product) , and brand insistence (customers demand the product and are willing to go out of their way to get it). 256) Explain the difference between patents, trademarks, and copyrights. Answer: A patent protects an invention or idea for a period of 20 years, while a trademark protects a brand name for a period of 15 years. A copyright gives exclusive ownership rights to the creators of books, article, designs, illustrations, photos, computer programs, films, and music. Copyrights apply to the tangible expression of an idea, not the idea itself (for example, the idea of cloning dinosaurs cannot be copyrighted, but a book like Jurassic Park can be. 257) What are three functions of packaging? Answer: Packaging serves as an in-store advertisement, makes the product attractive, displays the brand name, identifies features and benefits, and reduces the risk of damage, breakage, or spoilage. 258) What are the two general values to be gained from any promotional campaign? Answer: Communicating information and creating more satisfying exchanges. 259) List four promotional objectives (other than increasing sales). Answer: Communicating information, positioning products, adding value, and controlling sales volume. 260) What is the promotional mix? Answer: The promotional mix is the combination of tools used to promote a product. 261) List the six primary advertising media. Answer: Television, newspapers, direct mail, radio, magazines, and outdoor advertising. 262) What is the first question an advertiser must ask when selecting media for advertisements? Answer: The question is this: Which medium will reach the people I want to reach? 263) What is virtual advertising? Answer: Virtual advertising is the use of digital implants of brands or products onto live or taped television programming, giving the illusion that the product is part of the show. 264) What is personal selling? Answer: Personal selling is a promotional tool in which a salesperson communicates one-on-one with potential customers. 265) List five sales promotion tools. Answer: Coupons, point-of-purchase displays, purchasing incentives (free samples and premiums) , trade shows, and contests and sweepstakes. 266) What is the difference between coupons and premiums? Answer: Coupons use certificates entitling buyers to discounts in order to encourage customers to try new products, lure them away from competitors, or induce them to buy more of a product. Premiums are free or reduced-price items, such as pencils, coffee mugs, and six-month low-interest credit cards, given to consumers in return for buying a specified product. 267) What is the purpose of point-of-sale displays? Answer: POS displays make it easier for customers to find products and easier for sellers to eliminate competitors from consideration. 268) What is publicity? Answer: Publicity is a promotional tool in which information about a company or product is transmitted by general mass media. 269) What are the advantages and disadvantages of publicity? Answer: The major advantage is that publicity is free. If something newsworthy happens that involves the company, that information will be conveyed to the public and the company doesn't have to pay for it. The obvious downside is that the news about the company may be negative. A related problem is publicity on the internet that the company doesn't want (for example, Playboy Playmate Kendra Wilkinson making positive comments about the restaurant chain Olive Garden). 270) What is public relations? Answer: Public relations is company-influenced publicity directed at building goodwill with the public or dealing with favorable events. 271) What are the advantages and disadvantages of public relations? Answer: If it is done well, public relations creates a very positive image for the company, and this image may translate into increased sales and profits. The disadvantage is that carrying out public relations activities costs the company money, and it is often unclear whether such activities have any effect on company sales. For example, when a company sponsors a high-profile athletic event, it may be difficult to measure the effect that the sponsorship had on sales. ESSAY QUESTIONS. Write your answer in the space provided or on a separate sheet of paper. 272) What is the difference between expense and capital items? Answer: Expense items (for example, brooms and paint) are materials and services that are used in the production process and are consumed within one year. Capital items (for example, buildings and factories) are expensive and much longer-lasting goods and services. 273) What are the steps needed to successfully develop a new product? Answer: • the actions follow the seven-step development process: • product ideas • screening • concept testing • business analysis • prototype development • product testing and test marketing • commercialization • services have the same steps except: • service ideas replaces product ideas • service process design replaces prototype development 274) Explain what occurs in each stage of the new product development process. Answer: The steps are as follows: (1) new product ideas (search for new product ideas) ; (2) screening (eliminate product ideas that don't match with the firm's abilities and expertise) ; (3) concept testing (use market research to get consumers' input about promising ideas) ; (4) business analysis (develop estimate of costs versus benefits for proposed new products) ; (5) prototype development (produce a preliminary version of the proposed new product) ; (6) product testing and test marketing (begin limited production of the new product and test its sales in limited markets) ; (7) commercialization (begin full-scale production and marketing of the product). 275) Why is product development a long and expensive process? Answer: Faced with competition and shifting consumer preferences, no firm can count on a single successful product to carry it forever. Even products that have been popular for decades need ongoing renewal. Many firms have research and development (R&D) departments for exploring new product possibilities. 275a) Briefly describe the characteristics of each of the four stages in the product life cycle. Answer: The product life cycle is a series of stages through which a product passes during its profit-producing life. In the introductory stage, the product reaches the marketplace, but is not widely accepted and sales increase only slowly. In the growth phase, sales start to accelerate and the product starts to show a profit. In maturity, sales growth slows as profits decline, as increased competition forces price cutting. In the decline stage, sales and profits continue to fall as new products take sales away. 276) What is the importance of a brand name to a marketing manager? Identify the different types of brand names and ways that the firm protects its brand names. Answer: • brand names were introduced to try to simplify the product selection for consumers • some types of brand names include national, licensed, and private • brand names are protected through trade marks, patents, and copyrights • brand names lead to brand loyalty 277) Describe the three types of brand names and give an example of each. Answer: Brand names may be national, licensed, or private. National brands are produced by, widely distributed by, and carry the name off the manufacturer. Examples of national brands include Scotch tape, Scope mouthwash, Coke, and Pepsi. Licensed brands are brand names for whose name the seller has purchased the right from an individual or organization. Examples include Dilbert, the NFL, and Ferrari. Finally, private brand names are found when a wholesaler or retailer develops a brand name and has a manufacturer place that name on the product. Examples of private brands include Sears' Craftsman tools, Kenmore appliances, and Loblaw's Decadent Chocolate Chip Cookies. 278) Brand loyalty is measured in three stages. Describe each of these stages. Answer: • brand recognition — by putting the brand in front of consumers many times and associating it with a type of product, the producer hopes that consumers will become aware of its existence • brand preference — brand preference requires not only awareness that the brand exists but also a favourable attitude towards the ability of the brand to provide benefits • brand insistence — brand insistence is highly valued by brand owners, but it is very difficult to achieve. 279) In addition to increasing sales, what are four additional possible objectives of any promotion? Answer: • four objectives: • communication of information • product positioning • adding value • controlling sales volume 280) Define and contrast the difference between pull and push strategies in marketing. Answer: • pull: a promotional strategy in which a company appeals directly to customers, who demand the product from retailers, who demand the product from wholesalers • push: a promotional strategy in which a company aggressively pushes its product through wholesalers and retailers, who persuade customers to buy it 281) Describe the elements of the promotional mix. Answer: The promotional mix consists of advertising, personal selling, sales promotions, and publicity and public relations. Advertising is paid, nonpersonal communications by which an identified sponsor informs an audience about a product. The combination of media through which a company advertises is called its media mix, comprised primarily of television, direct mail, newspapers, magazines, radio, the internet, and outdoor advertising. In personal selling, a salesperson communicates one-to-one with potential customers to identify their needs and align them with the seller's products. Salespeople typically function as order processors, receiving orders and seeing to their handling and delivery, or creative sellers, helping to persuade buyers to purchase by providing information and demonstrating the product's benefits. Sales promotions are short-term promotional activities designed to encourage consumer buying; such promotions include coupons, premiums, point-of-sale displays, trade shows, and other gimmicks. Publicity, which is free, is thought of as "word-of-mouth" communications about the marketer and/or the products being offered. Public relations is company-influenced information that seeks either to build good relations with the public or to deal with unfavorable events. The nature of the product, the cost of each tool, the promotional budget, and the characteristics of the target audience will determine the most suitable combination for each stage of the product life cycle 282) What is internet marketing? What are some of the advantages and challenges for buyers and sellers of this advertising medium? Answer: Internet marketing refers to the promotional efforts of companies to sell their products and services to consumers over the internet, and is the most recent advertising medium to arise. Advantages for Buyers: convenience, privacy, selection, useful information, and control (build custom products for themselves) Advantages for Sellers: reach, direct distribution, eliminating intermediaries, reduced expenses, flexibility and feedback. Challenges: Profitability problems, information overload, limited markets, and security related issues. 283) Compare and contrast newspapers and television as advertising media. Answer: Newspapers offer excellent coverage (each local market typically has a daily newspaper) , and many people read the paper each day. Coverage is flexible and rapid and advertisements can be changed frequently. But newspapers do not allow advertisers to target their audience very well, and newspapers have been declining in importance in recent years. Television allows advertisers to combine sight and sound and therefore appeals to viewers' senses. Advertisers can promote to target audiences because of demographic data about which groups tend to watch which shows. But television has many commercials and they are expensive. Also, the increasing use of DVRs means that many advertisements are not watched. 284) Identify and briefly discuss five of the various advertising media. Answer: • newspapers—the most widely used advertising medium • television—allows advertisers to combine sight, sound, and motion, thus appealing to almost all of the viewer's senses • direct mail—involves fliers or other types of printed advertisements mailed directly to consumers' homes or places of business • radio—relatively inexpensive and a tremendous number of people listen to the radio each day • magazines—provides a high level of consumer selectivity • outdoor—outdoor advertising? billboards, signs, and advertisements on buses, taxis and subways—is relatively inexpensive, faces little competition for customers' attention and is subject to high repeat exposure • word of mouth—opinions about the value of products passed among consumers in informal discussions • the internet and virtual advertising 285) What are the advantages and disadvantages of word of mouth advertising? Answer: The big advantage of word of mouth advertising is that word about the product or service can spread very rapidly. It is also believable because people trust their friends' opinions about products or services. The main problem with word of mouth is this: if friends talk negatively about a product or service, its chances for success are markedly reduced. 286) How does the use of coupons, free samples, trading stamps, and premiums differ as types of sales promotions? Answer: • short-term promotional activities designed to stimulate consumer buying or cooperation from distributors • they increase likelihood that consumer will buy ₇ and it also helps enhance product recognition • such items can enhance product recognition and increase purchase size and amount 287) What is the difference between publicity and public relations? Answer: Publicity is information about the company that is made available to consumers, typically in a news format. The company pays little or nothing for publicity. By contrast, public relations attempts to create goodwill between the company and its customers through public-service announcements or other activities that are designed to enhance to company's image (for example, sponsoring a sporting event). Public relations costs the company money. 288) What is a trade show? How does a firm's participation in a trade show serve to promote the firm's products? Answer: • a sales promotion method in which members of a particular industry gather for displays and product demonstrations designed to sell products to customers • trade shows are relatively inexpensive and are very effective since the buyer comes to the seller already interested in a given type of product 289) Identify and discuss the four factors that make global advertising a difficult proposition. Answer: • language differences • product variations • cultural receptiveness • image differences 290) What personal selling strategies are likely to be used by a small business firm in a local market and in an international market? Answer: • locally: • advertising done in non-prime-time slots on TV • small firms will use newspapers and radio, and increasingly, direct mail • may rely on seasonal advertising • small firms maintain sales force • some small firms will turn over sales effort to sales agencies that sell for a number of small businesses • small businesses use the same promotional items that large companies use • publicity is important and small businesses often have an easier time to get it • internationally: • television, radio, and newspapers are seldom used because of the high cost • very difficult to develop advertising for foreign markets • will use direct mail and carefully targeted magazines • international sales representatives are prohibitively expensive • may combine telemarketing with direct mail • fierce competition limits a small business's ability to get publicity Test Bank for Business Essentials Ronald J. Ebert, Ricky W. Griffin, Frederick A. Starke, George Dracopoulos 9780132479769, 9780134384733

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