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Chapter 14 Integrated Marketing Communications: Personal Selling, Direct Marketing, and Interactive Marketing True/False Questions 1. Salespeople and the personal selling function are the single most effective approach for establishing and enhancing the personal relationship between company and customer. Answer: True Rationale: Salespeople and the personal selling function are the single most effective approach for establishing and enhancing the personal relationship between company and customer. This is especially true for B2B customers. 2. While it is important to be a good listener, it is more important that salespeople are skillful communicators. Answer: False Rationale: While it is important to be a good communicator, the reality is that great salespeople are skilful listeners. They know that to really learn the customer's needs and then create a value-based solution it is essential to listen. 3. Missionary salespeople often take orders from customers directly. Answer: False Rationale: Missionary salespeople often do not take orders from customers directly but persuade customers to buy their firm's product from distributors or other suppliers. 4. Outbound telemarketing involves calling potential customers at their home or office. Answer: True Rationale: Outbound telemarketing involves calling potential customers at their home or office, either to make a sales call via telephone or to set up an appointment for a field salesperson. 5. Facts are important, but customers, whether they are consumers or businesses, do not buy features. Answer: True Rationale: Customers, whether they are consumers or other businesses, do not buy features. They buy solutions to problems. So it is fundamental that salespeople link knowledge of the company's products to customer need solutions. 6. A feature is the particular product/service characteristic that helps meet the customer's needs. Answer: False Rationale: A feature is any material characteristic or specification of a product. An advantage is the particular product/service characteristic that helps meet the customer's needs. 7. Salespeople consistently report that price is the most common customer apprehension. Answer: True Rationale: Salespeople consistently report that price is the most common customer apprehension. In many cases, the customer has legitimate objections about the price of a product. Nevertheless, the price objection usually means the customer has not accepted the value proposition. 8. One of the most critical aspects to the selling process is not what happens before the purchase decision but what happens after, the follow-up. Answer: True Rationale: One of the most critical aspects in the selling process is not what happens before the purchase decision but what happens after, the follow-up. Salespeople often rely on support people inside the company to help in post-sales service. 9. The primary advantage of a market organization is that individual salespeople can develop familiarity with the technical attributes, applications, and most effective selling methods associated with a single product. Answer: False Rationale: The above is an advantage related to product organization. When salespeople specialize in calling on a particular type of customer, they gain a better understanding of those customers' needs and requirements. 10. A commission is a fixed sum of money paid at regular intervals. Answer: False Rationale: Compensation is a fixed sum of money paid at regular intervals. A commission is payment based on short-term results, usually a salesperson's dollar or unit sales volume. 11. Objective measures reflect statistics the sales manager gathers from the firm's internal data. Answer: True Rationale: Objective measures reflect statistics the sales manager gathers from the firm's internal data. 12. Direct mail is much more effective in B2B than B2C markets because reaching the appropriate individual inside an organization is easier. Answer: False Rationale: Direct mail is much more effective in B2C than B2B markets because reaching the appropriate individual inside an organization is difficult. 13. Most people are comfortable buying products over the phone. Answer: False Rationale: Given the negative perception of telemarketing and the frequent abuses of unwanted telephone solicitations, most people react negatively to telemarketing calls. 14. Sales people drive interactive marketing, controlling when, where, and how they interact. Answer: False Rationale: Customers drive interactive marketing, controlling when, where, and how they interact. 15. Bloggers are a highly reputable source of determining an unbiased value of the product. Answer: False Rationale: Bloggers may be paid for supporting products or services. 16. Customers do not appreciate or expect customization of their Web site experience. Answer: False Rationale: The ability to create a unique individual experience with a company Web site adds great value to the customer interface. Customers appreciate and expect customization of their Web site experience. 17. Banner ads are small boxes containing graphics and text and have a hyperlink embedded in them. Answer: True Rationale: Banner ads are small boxes containing graphics and text and have a hyperlink embedded in them. While still prevalent throughout the Internet, the click-through rate is very low and companies have expanded to other forms of Internet advertising. 18. Viral marketing is considered a traditional advertising tool. Answer: False Rationale: The American Marketing Association defines viral marketing as a "marketing phenomenon that facilitates and encourages people to pass along a marketing message." 19. Antivirus software from Norton, McAfee, as well as Windows enables users to block Interstitials. Answer: True Rationale: Interstitials are more graphic, visually interesting ads that move across the Web page. As with banner ads, people find these ads distracting, and antivirus software from Norton, McAfee, as well as Windows enables users to block them. 20. Sponsorships allow companies to purchase space on web pages. Answer: True Rationale: High-traffic Web sites sell sponsorships that enable companies to subsidize some section of Web page on the site. Multiple Choice Questions 21. From the following options, identify an element that is an essential tool in an integrated marketing communications strategy, but is, for the most part, unidirectional-the company communicates with the customer but the customer has limited ability to provide feedback. A. Personal selling B. Advertising C. Direct marketing D. Interactive marketing E. Door-to-door selling Answer: B. Advertising Rationale: Advertising, sales promotion, and public relations are essential tools in an integrated marketing communications strategy. However, they are all, for the most part, unidirectional. In other words, the company communicates with the customer but the customer has limited ability to provide feedback. 22. _______________ is a distinct advantage of personal selling over the other marketing communication methods. A. Ability to tailor the message B. Delayed feedback C. Adds more noise to the communication process D. Cost of delivering the message E. Customers have a hard time saying ‘no' Answer: A. Ability to tailor the message Rationale: The ability to tailor the message to the customer is a distinct advantage that personal selling has over other marketing communication methods. No other marketing communication method does a better job of creating personal, unique customer messages in real time. Salespeople generate distinctive sales messages that directly address customer problems and concerns. 23. _______________ is/are essential tools in an integrated marketing strategy. A. Advertising B. Sales promotion C. Public relations D. Personal selling E. All of the above Answer: E. All of the above Rationale: Advertising, sales promotion, and public relations are essential tools in an integrated marketing communications strategy. However, they are all, for the most part, unidirectional. As a result, effective integrated marketing communications incorporates interactive, personal communication methods, including personal selling, direct marketing, and interactive marketing. 24. Before salespeople spend much time trying to establish a relationship with a prospective account, it is important to _______________ to determine if the company is a legitimate potential customer. A. Qualify the prospect B. Communicate the sales message C. Handle customer objections D. Follow up with other customers E. Make a sales presentation Answer: A. Qualify the prospect Rationale: Before salespeople spend much time trying to establish a relationship with the prospective account, it is important to qualify the prospect to determine if the company is a legitimate potential customer. The process involves answering five questions relating to the prospect's need for the product, the value-additions derived by the prospect from the product, the salesperson's ability to complete the sales process, the financial ability and authority of the prospect to make the sale, and the profitability of the sale. 25. _______________ is a two-way communication process with the goal of securing, building, and maintaining long-term relationships with profitable customers. A. Sales promotion B. Direct marketing C. Personal selling D. Publicity E. Advertising Answer: C. Personal selling Rationale: Personal selling is a two-way communication process between salesperson and buyer with the goal of securing, building, and maintaining long-term relationships with profitable customers. 26. _______________ is NOT one of the four basic selling activities that define the salesperson's job. A. Communicate B. Build customer relationships C. Manage information D. Set price E. Sell Answer: D. Set price Rationale: Four basic selling activities composed of dozens of individual tasks define the salesperson's job: communicate, sell, build customer relationships, and manage information. The challenge for many companies is defining the correct mix of activities and then adapting the activities as the selling environment changes. 27. Which of the following is a way in which B2B selling differs from B2C? A. Good interpersonal and communication skills are needed in B2C but not in B2B. B. Many of the goods and services sold by B2B salespeople are more expensive and technically complex than those in B2C. C. Excellent knowledge of the products being sold is vital in B2B but not in B2C. D. An ability to discover customer needs and solve their problems is relevant only to B2B selling. E. B2C customers tend to be larger and engage in extensive decision-making processes involving many people. Answer: B. Many of the goods and services sold by B2B salespeople are more expensive and technically complex than those in B2C. Rationale: B2C and B2B selling differ in some important ways. Many of the goods and services sold by B2B salespeople are more expensive and technically complex than those in B2C. In addition, B2B customers tend to be larger and engage in extensive decision-making processes involving many people. On the other hand, good interpersonal and communication skills, excellent knowledge of the products being sold, an ability to discover customer needs and solve their problems are common characteristics to both sales environments. 28. In the context of _______________, the initial approach to a prospective customer should involve the sales representative trying to determine who has the greatest influence or authority in the purchase. A. Opening the relationship B. Handling customer objections C. Closing the sale D. Following up with customers E. Prospecting for customers Answer: A. Opening the relationship Rationale: In the context of the initial approach to the prospective customer, the sales representative should try to determine who has the greatest influence or authority in the purchase. When the purchase involves people across the customer's organization, the salesperson often works with a team. 29. _______________ is NOT one of the three personal communication methods most widely adopted. A. Interactive marketing B. Personal selling C. Sales promotion D. Direct marketing E. All of the above Answer: C. Sales promotion Rationale: Sales promotion is not a personal communication method, but a unidirectional one, where the company communicates with the customer but the customer has limited ability to provide feedback. The three personal communication methods most widely adopted are personal selling, direct marketing, and interactive marketing. 30. _______________ is one of the three distinct advantages of personal selling. A. Large variety of media B. Immediate feedback C. Short term impact D. Consistent message E. Elimination of noise Answer: B. Immediate feedback Rationale: Personal selling offers a distinct advantage over other marketing communication methods in how it provides immediate feedback to the customer. Customers don't want to wait for information. Increasingly, they demand accurate information quickly, putting pressure on companies for immediate, personal communication with a salesperson or customer service representative. 31. _______________ is an example of a non-technology communication selling activity. A. Enhance language and overall communication skills B. Email C. Create useful company Web page content D. Database management E. Leaving voicemail messages Answer: A. Enhance language and overall communication skills Rationale: The selling activities that relate to communication and are non-technology involve the salesperson enhancing language and overall communication skills and developing effective presentation skills. 32. _______________ is an example of a technology communication selling activity. A. Learn relationship selling skills B. Follow up after customer contact C. Time management D. Develop strong supplier alliances E. Leave voicemail messages Answer: E. Leave voicemail messages Rationale: The selling activities that relate to communication and also to technology involve e-mail, making telephone calls or leaving voicemail messages. 33. Developing database management skills to manage customer databases is a selling activity related to: A. Non-technology information management B. Information management through technology C. Using technology to build customer relationships D. Non-technology selling E. Non-technology communication Answer: B. Information management through technology Rationale: Developing database management skills to manage customer databases is a selling activity related to information management through technology. 34. Being able to adjust the sales style from one sales situation to another in real time based on customer feedback, is called: A. Information management B. B2B selling C. Adaptive selling D. Interactive selling E. Missionary selling Answer: C. Adaptive selling Rationale: Being able to adjust the sales style from one sales situation to another in real time based on customer feedback is called adaptive selling. It is critical to long-term success since the "one size fits all" approach does not work with customers expecting personalized service. 35. _______________ are the group of resellers such as retailers or distributors with whom the sales force does business. A. Technical sellers B. Solutions servicers C. Missionary sales people D. Trade servicers E. Financial servicers Answer: D. Trade servicers Rationale: Trade servicers are the group of resellers such as retailers or distributors with whom the sales force does business. Their primary responsibility is to increase business from current or potential customers by providing them with merchandising and promotional assistance. 36. _______________ often do not take orders from customers directly but persuade customers to buy their firm's product from distributors or other suppliers. A. Technical sellers B. Solutions servicers C. Missionary sales people D. Trade servicers E. Sales engineers Answer: C. Missionary sales people Rationale: Missionary salespeople often do not take orders from customers directly but persuade customers to buy their firm's product from distributors or other suppliers. 37. The sales engineer from General Electric who calls on Boeing to sell the GE90 jet engine to be used in a Boeing aircraft is an example of a _______________. A. Technical seller B. Solutions servicer C. Missionary salesperson D. Trade servicer E. Telemarketer Answer: A. Technical seller Rationale: Technical selling involves selling products that are highly technical and complex in nature. Owing to the complexity of many of the products and associated services involved in technical selling, it might be difficult for any one salesperson to master all aspects of the sale. Thus, the trend is for most technical selling to be done in cross-functional teams. 38. _______________ is NOT a step in the personal selling process. A. Prospecting for customers B. Handling customer objections C. Advertising D. Qualifying the prospect E. Follow up Answer: C. Advertising Rationale: The personal selling process involves prospecting for customers, opening the relationship, qualifying the prospect, sales presentation, handling objections, closing the sale, and follow-up after the sale. 39. _______________, where prospective customers call a toll-free number for more information, can be used to identify and qualify prospects. A. Outbound telemarketing B. Viral hook C. Cold calls D. Follow up E. Inbound telemarketing Answer: E. Inbound telemarketing Rationale: Inbound telemarketing, where prospective customers call a toll-free number for more information, can be used to identify and qualify prospects. When prospects call for more information, a telemarketing representative determines the extent of interest and assesses the prospect qualifications and then passes the contact information on to the appropriate salesperson. 40. The delivery of information relevant to meet the customer's needs is a _______________. A. Customer database B. Value proposition C. FAB D. Sales presentation E. Transaction cost analysis Answer: D. Sales presentation Rationale: The sales presentation is the delivery of information relevant to meet the customer's needs and is the heart of the selling process. It is the process salespeople use to transition customers from interest in the product to purchase of the product. 41. "Does the prospect have a need for the company's products?" "Can the prospect derive added value from the product in ways that the company can deliver?" "Does the prospect have the financial ability and authority to make the sale?" All of these questions form part of which step in the personal selling process? A. Qualifying the prospect B. Opening the relationship C. Making the sales presentation D. Handling customer objections E. Following up with consumers Answer: A. Qualifying the prospect Rationale: Before salespeople spend much time trying to establish a relationship with the prospective account, it is important to qualify the prospect to determine if the company is a legitimate potential customer. The process involves answering five questions relating to the prospect's need for the product, the value-additions derived by the prospect from the product, the salesperson's ability to complete the sales process, the financial ability and authority of the prospect to make the sale, and the profitability of the sale. 42. Which of the following is one of the ways in which a salesperson can counter the customer's price objection? A. Raise the price until it exceeds the product's perceived benefits B. Lower the perceived benefits until they are just under the price C. Lower the price until they are just above the perceived benefits D. Raise the perceived benefits until they exceed the price E. Lower the value proposition till it falls below the price Answer: D. Raise the perceived benefits until they exceed the price Rationale: The price objection usually means the customer has not accepted the value proposition. In essence, if the customer does not perceive that the product benefits exceed the price, there will be no sale. The salesperson is left with two options. Lower the price until it is below the product's perceived benefits, or raise the perceived benefits until they exceed the price. 43. _______________ is a characteristic of a great sales presentation. A. Explaining the value proposition B. Maximizing change conflict C. Developing win-lose solutions D. Focusing on technology E. Emphasizing features over benefits Answer: A. Explaining the value proposition Rationale: The goal of a sales presentation is not simply to make the sale but to create a strong value proposition that will lead to a mutually beneficial long-term relationship. 44. The process of salespeople linking knowledge of the company's products to customer need solutions is often referred to as _______________. A. TCA B. IMC C. AIDA D. FAB E. CRM Answer: D. FAB Rationale: Customers do not buy features. They buy solutions to problems. So it is fundamental that salespeople link knowledge of the company's products to customer need solutions. This process is often referred to as FAB (Features, Advantages, and Benefits). 45. FAB stands for _______________. A. Find Attract Buy B. Features Advantages Benefits C. Features Awareness Benefits D. Find Advantage Buy E. First Awareness Buy Answer: B. Features Advantages Benefits Rationale: The process of salespeople linking knowledge of the company's products to customer need solutions is often referred to as FAB—features, advantages, and benefits. 46. A material characteristic of a product is called _______________. A. Advantage B. Feature C. Brand D. Value Proposition E. Need Answer: B. Feature Rationale: A feature is any material characteristic or specification of a product. 47. A particular characteristic that helps meet the customer's needs is a(n) _______________. A. Advantage B. Awareness C. Benefit D. Brand E. Value proposition Answer: A. Advantage Rationale: An advantage is the particular product/service characteristic that helps meet the customer's needs. 48. A _______________ is the advantageous outcome from the advantage found in the product feature. A. Need B. Brand C. Trust D. Benefit E. Want Answer: D. Benefit Rationale: A benefit is the advantageous outcome from the advantage found in the product feature. 49. Managing a customer's expectations is a good way to minimize _______________. A. The value proposition B. FAB C. Customer trust D. Price E. Change conflict Answer: E. Change conflict Rationale: The nature of the sales presentation creates stress for the customer because the salesperson is asking the customer to choose change by selecting the company's product. As a result, salespeople understand the importance of minimizing change conflict for the customer. The best way to manage customer change conflict is to manage the customer's expectations. 50. Which of the following is NOT one of the critical mistakes salespersons make in closing a sale? A. Negative attitude B. Failure to conduct an effective pre-approach C. Too much talking D. Avoiding a "one-size fits all" approach E. Not enough listening Answer: D. Avoiding a "one-size fits all" approach Rationale: Research suggests salespeople make four critical mistakes in closing. These are- a negative attitude about the customer or situation, failure to conduct an effective pre-approach, too much talking and not enough listening, and using a "one size fits all" approach. 51. The next purchase decision of the customer is based to a large extent on the customer's experience with the product and the company. Thus, one of the most critical aspects in the selling process is not what happens before the purchase decision but what happens after, that is, in the _______________ stage. A. Follow-up B. Prospecting C. Sales presentation D. Pricing E. Closing Answer: A. Follow-up Rationale: One of the most critical aspects in the selling process is not what happens before the purchase decision but what happens after—the follow-up. Salespeople often rely on support people inside the company to help in post-sales service. The next purchase decision is based to a large extent on the customer's experience with the product and the company. 52. _______________ is referred to as outsourcing the sales force. A. Organizing a company sales force by geographic orientation B. Having a separate sales force for each product C. Structuring the sales force by customer type D. Using independent sales agents E. Classifying all the company's customers into categories Answer: D. Using independent sales agents Rationale: One option is to use independent agents instead of company salespeople. It is not unusual for a company, such as IBM, to use both company salespeople and independent agents. Using independent sales agents is referred to as outsourcing the sales force. 53. The simplest and most common method of organizing a company sales force is _______________. A. Geographic orientation B. Product organization C. Customer type D. Market organization E. Work load method Answer: A. Geographic orientation Rationale: The simplest and most common method of organizing a company sales force is by geographic orientation, where individual salespeople are assigned to separate geographic territories. 54. The _______________ method of organizing the sales force suffers from the major disadvantage of duplication of effort with salespeople across different products assigned to the same geographic territory, generally leading to higher sales costs. A. Geographic orientation B. Product-based C. Work load-based D. Market-based E. Size-based Answer: B. Product-based Rationale: Some companies have a separate sales force for each product or product category. The major disadvantage is the duplication of effort with salespeople across different products assigned to the same geographic territory. This generally leads to higher sales costs. 55. Organizing the sales force by _______________ is a natural extension of creating value for the customer and reflects a market segmentation strategy. A. Geographic orientation B. Product C. Size D. Customer type E. Work load Answer: D. Customer type Rationale: Organizing the sales force by customer type is a natural extension of creating value for the customer and reflects a market segmentation strategy. 56. The most common method to determine the correct size of a sales force is the _______________ method. A. Geographic orientation B. Product organization C. Customer type D. Market organization E. Work load Answer: E. Work load Rationale: The most common method used to determine the correct sales force size is called the workload method. It is based on the premise that all salespeople should undertake an equal amount of work. 57. That _______________ is an advantage of the workload method of determining the size of the sales force. A. Data is readily available B. The method allows for differences in sales response among customers C. The method assumes all salespeople use their time with equal efficiency D. The method distributes workload according to ability E. All of the above Answer: A. Data is readily available Rationale: The workload method of determining the size of the sales force is based on the premise that all salespeople should undertake an equal amount of work. One of the advantages of the method is that the data to estimate the sales force are readily available. 58. By the workload method of determining the size of the sales force, to _______________, estimate the number of hours a typical salesperson works per week, and then multiply that by the number of weeks the salesperson works during the year. A. Determine the frequency with which each type of account should be called B. Calculate the workload involved in covering the entire market C. Calculate the number of salespeople needed D. Determine the time available for each salesperson E. Apportion the salesperson's time by task performed Answer: D. Determine the time available for each salesperson Rationale: One of the steps to determine the correct sales force size through the workload method involves determining the time available for each salesperson by estimating the number of hours a typical salesperson works per week, and then multiplying that by the number of weeks the salesperson works during the year. 59. _______________ rewards are those controlled and given by people other than the salesperson such as managers and customers. A. Intrinsic B. Bonus C. Contest D. Extrinsic E. Subjective Answer: D. Extrinsic Rationale: A company bestows a variety of rewards on any given level of performance. Extrinsic rewards are those controlled and given by people other than the salesperson such as managers and customers. 60. Feelings of accomplishment, personal growth, and self-worth are examples of _______________ rewards. A. Intrinsic B. Bonus C. Contest D. Extrinsic E. Subjective Answer: A. Intrinsic Rationale: A company bestows a variety of rewards on any given level of performance. Intrinsic rewards are those salespeople primarily attain for themselves and include feelings of accomplishment, personal growth, and self-worth. 61. Commissions tied to sales volume or profitability, or bonuses for meeting or exceeding specific performance targets are examples of _______________. A. Salary B. Benefits C. Intrinsic rewards D. Output measures E. Incentive pay Answer: E. Incentive pay Rationale: Most firms that pay a salary also offer incentive pay to encourage better performance. Incentives are generally commissions tied to sales volume or profitability, or bonuses for meeting or exceeding specific performance targets (for example, meeting quotas for a particular product). 62. Payment based on short-term results, usually a salesperson's dollar or unit sales volume is known as _______________. A. Salary B. Benefits C. Intrinsic rewards D. Commission E. Nonfinancial incentives Answer: D. Commission Rationale: A commission is payment based on short-term results, usually a salesperson's dollar or unit sales volume. 63. Young, well-educated sales people are highly motivated by _______________. A. Salary B. Non-financial incentives C. Extrinsic rewards D. Commissions E. Incentive pay Answer: B. Non-financial incentives Rationale: In addition to financial compensation, sales managers also incorporate a range of nonfinancial incentives like promotional opportunities. This is particularly true for young, well- educated salespeople who tend to view their sales position as a steppingstone to a senior management position. 64. _______________ focus on the efforts of salespeople during the sales process. A. Subjective measures B. Output measures C. Objective measures D. Input measures E. Non-financial incentives Answer: D. Input measures Rationale: A salesperson's performance can be measured by objective or subjective measures. Objective measures reflect statistics the sales manager gathers from the firm's internal data. One of the two categories of objective measures is input measures which focus on the efforts of salespeople during the sales process. 65. A fixed sum of money paid at regular intervals is a(n) _______________. A. Salary B. Non-financial incentive C. Intrinsic reward D. Output measure E. Incentive pay Answer: A. Salary Rationale: A salary is a fixed sum of money paid at regular intervals. 66. Number of orders, average size of orders, number of active accounts, and number of new accounts are all examples of which measure of a salesperson's performance? A. Subjective measures B. Output measures C. Intrinsic rewards D. Input measures E. Nonfinancial incentives Answer: B. Output measures Rationale: Output measures show the results of the efforts expended by the salesperson. Examples include number of orders, average size of orders, number of active accounts, and number of new accounts. 67. Total number of calls, number of planned calls, days worked, total expenses, and letters to prospects are all examples of which measure of a salesperson's performance? A. Subjective measures B. Non-financial incentives C. Intrinsic rewards D. Input measures E. Output measures Answer: D. Input measures Rationale: Input measures focus on the efforts of salespeople during the sales process. Examples include total number of calls, number of planned calls, days worked, total expenses, and letters to prospects. 68. Statistics the sales manager gathers from the firm's internal data reflect _______________. A. Subjective measures B. Personal evaluations C. Objective measures D. Intangible measures E. Non-financial incentives Answer: C. Objective measures Rationale: Objective measures used to evaluate a salesperson's performance reflect statistics the sales manager gathers from the firm's internal data. 69. _______________ rely on personal evaluations by someone connected to the salesperson's sales process, usually the immediate sales manager or a customer. A. Subjective measures B. Output measures C. Objective measures D. Input measures E. Non-financial incentives Answer: A. Subjective measures Rationale: Subjective measures of evaluating a salesperson's performance rely on personal evaluations by someone connected to the salesperson's sales process, usually the immediate sales manager or a customer. 70. _______________ show the results of the efforts expended by the salesperson. A. Subjective measures B. Output measures C. Intangible measures D. Input measures E. Non-financial incentives Answer: B. Output measures Rationale: Output measures are a type of objective measure that show the results of the efforts expended by the salesperson. 71. _______________ is an interactive marketing system that uses one or more advertising media to affect a measurable response and/or transaction at any location. A. Personal selling B. Sales promotion C. Direct marketing D. Public relations E. Skimming Answer: C. Direct marketing Rationale: As defined by the Direct Marketing Association, direct marketing is an interactive marketing system that uses one or more advertising media to affect a measurable response and/or transaction at any location. 72. Catalogs, telemarketing, and Internet marketing are communication channels for _______________. A. Personal selling B. Public relations C. Direct marketing D. In-store marketing E. Targets short term objectives Answer: C. Direct marketing Rationale: Direct marketing is an interactive marketing system that uses one or more advertising media to affect a measurable response and/or transaction at any location. The term direct marketing includes a number of communication channels: direct mail, catalogs, telemarketing, and Internet marketing. 73. _______________ is NOT a step in a direct marketing campaign. A. Identify qualified target customers B. Test the offer of the campaign C. Specify direct marketing channels D. Develop a compensation plan E. Analyze results of offer Answer: D. Develop a compensation plan Rationale: A direct marketing campaign encompasses a series of specific steps: set strategy for campaign, specify direct marketing channels, identify qualified target customers, develop and test the offer for the campaign, and analyze results of offer. 74. _______________ is NOT a component of a direct mail piece. A. Outside envelope B. Sales collateral C. Market space D. Contact information E. Coupons Answer: C. Market space Rationale: The contents or elements in a direct-mail offer include outside envelope, sales collateral, contact information, and maybe coupons. 75. _______________ has one of the highest response rates of any direct marketing channel. A. Catalogs B. Telemarketing C. Advertising D. Sales promotion E. Direct mail Answer: B. Telemarketing Rationale: Research conducted by the Direct Marketing Association suggests telemarketing works—it had one of the highest response rates of any direct marketing channel—8.55 percent. 76. In a telemarketing campaign, a good _______________ helps boost success rate by 60%. A. Media plan B. Market space C. Sales collateral D. Catalog E. List of prospects Answer: E. List of prospects Rationale: In a telemarketing campaign, access to an accurate list of qualified prospects is very important. Research suggests a good list of prospects boosts the success rate by 60 percent. 77. Interactive marketing is a(n) _______________ relationship between companies, their brands, and customers. A. Unidirectional B. Linear C. Internet-driven D. Traditional E. Personal selling Answer: C. Internet-driven Rationale: Interactive marketing is an Internet-driven relationship between companies, their brands, and customers. It enables customers to control information flow and encourages customer-company interaction as well as a higher level of customer service. 78. _______________ drive(s) interactive marketing, controlling when, where, and how they interact. A. The company B. Intermediaries C. Salespeople D. Customers E. Sales managers Answer: D. Customers Rationale: Customers drive interactive marketing, controlling when, where, and how they interact. While companies expand access to information and explore new methods to facilitate the exchange process, customers define the relationship on their terms. 79. _______________ are the individual's learned proficiency at performing necessary sales tasks. A. Sales aptitude B. Sales skill levels C. Sales collateral D. Motivations E. Sales ability Answer: B. Sales skill levels Rationale: Sales skill levels are the individual's learned proficiency at performing necessary sales tasks. They include such learned abilities as interpersonal skills, leadership, technical knowledge, and presentation skills. 80. _______________ and company bulletin boards encourage a sense of community that enhances the customer's company and product experience. A. Blogs B. Advertisements C. Telemarketers D. Catalogs E. Sales promotions Answer: A. Blogs Rationale: Blogs and company bulletin boards encourage a sense of community that enhances the customer's company and product experience. Companies are still learning how to effectively harness the power of community for their products. 81. The overall layout, design and aesthetic appeal of a Web site is called _______________. A. Content B. Community C. Customization D. Connection E. Context Answer: E. Context Rationale: Context refers to the overall layout, design, and aesthetic appeal of a Web site. 82. Text, photos, charts, and graphics are all part of Web _______________. A. Content B. Community C. Customization D. Connection E. Context Answer: A. Content Rationale: Text, photos, charts, and graphics are all part of Web content. 83. _______________ are small boxes containing graphics and text and have a hyperlink embedded in them. A. Sponsorships B. Banner ads C. Blogs D. Interstitials E. Search related ads Answer: B. Banner ads Rationale: Banner ads are small boxes containing graphics and text and have a hyperlink embedded in them. Clicking on a banner ad will take you to the company's Web site. 84. _______________ percent of all Internet searches are for products and services. A. 35 B. 5 C. 95 D. 75 E. 10 Answer: A. 35 Rationale: Search-related ads have shown the greatest growth in the last several years because 35 percent of all Internet searches are for products and services. 85. _______________ are more graphic, visually interesting ads that move across the Web page. A. Sponsorships B. Banner ads C. Blogs D. Interstitials E. Search related ads Answer: D. Interstitials Rationale: Interstitials are more graphic, visually interesting ads that move across the Web page. 86. _______________ enable companies to subsidize some section of Web page on the site. A. Sponsorships B. Banner ads C. Blogs D. Interstitials E. Search related ads Answer: A. Sponsorships Rationale: High-traffic Web sites sell sponsorships that enable companies to subsidize some section of Web page on the site. 87. _______________ facilitates and encourages people to pass along a marketing message. A. Internet advertising B. Viral marketing C. Banner advertising D. Sponsorships E. Outbound telemarketing Answer: B. Viral marketing Rationale: The American Marketing Association defines viral marketing as a "marketing phenomenon that facilitates and encourages people to pass along a marketing message. Nicknamed viral because the number of people exposed to a message mimics the process of passing a virus or disease from one person to another." 88. Warner Bros. created interest in the movie "Batman: The Dark Knight" not by spending money on traditional advertising tools such as print or television advertising, but by using a technique called _______________ to create a buzz about the movie using word of mouth or Internet social networks. A. Banner ads B. Skimming C. Viral marketing D. Spamming E. Interstitials Answer: C. Viral marketing Rationale: The American Marketing Association defines viral marketing as a "marketing phenomenon that facilitates and encourages people to pass along a marketing message. Nicknamed viral because the number of people exposed to a message mimics the process of passing a virus or disease from one person to another." 89. Internet advertising _______________. A. Is decreasing in popularity B. Costs are high relative to other advertising channels C. Is more targeted D. Is harder to measure E. Is described by all of the above Answer: C. Is more targeted Rationale: Internet advertising is growing and there is no indication the demand is slowing. Costs are still low relative to other advertising channels such as television, and, since it is much more targeted and measured, advertisers appreciate the ability to know exactly how well their dollars are working on the Internet. 90. _______________ is NOT one of the guidelines for viral marketing success. A. Define broad goals B. Target a younger demographic C. Focus on a narrow goal D. Connect people to an experience E. Give people a reason to come back Answer: C. Focus on a narrow goal Rationale: A more broadly defined goal may be appropriate for viral marketing since more defined metrics such as unit sales are difficult to identify. Short Answer Questions 91. What are the three types of online advertising discussed in the book? Answer: Banner, search, interstitials. 92. What are the seven design elements of a website's customer interface? Answer: Content, context, community, commerce, communication, connection, customization. 93. Describe the various ways a sales person is compensated. Answer: A salary is a fixed sum of money paid at regular intervals. Most firms that pay a salary also offer incentive pay to encourage better performance. Incentives are generally commissions tied to sales volume or profitability, or bonuses for meeting or exceeding specific performance targets (for example, meeting quotas for a particular product). Such incentives direct salespeople's efforts toward specific strategic objectives during the year, as well as offer additional rewards for top performers. A commission is payment based on short-term results, usually a salesperson's dollar or unit sales volume. In addition to financial compensation, sales managers (and management across the company) also incorporate a range of nonfinancial incentives. 94. What are the differences between intrinsic and extrinsic rewards? Answer: Extrinsic rewards are those controlled and given by people other than the salesperson such as managers and customers. They include pay, financial incentives, security, recognition, and promotion. Intrinsic rewards are those salespeople primarily attain for themselves and include feelings of accomplishment, personal growth, and self-worth. 95. Define Transactional Cost Analysis. Answer: TCA states that when substantial transaction-specific assets are necessary to sell a manufacturer's product, the cost of using and administering independent agents is likely higher than the cost of hiring and managing a company's sales force.29 96. Briefly describe the different types of sales force organization. Answer: Organizing the Sales Force: Since salespeople work closely with many departments inside the company, marketing managers have a real interest in working with sales managers to organize the sales force to maximize the efficiency and effectiveness of not only the sales force but also everyone in the company that interacts with the customer. The best sales structures are based on the company's objectives and strategies. In addition, as the firm's environment, objectives, or marketing strategy changes, its sales force must be flexible enough to change as well.28 Company Sales Force or Independent Agents Maintaining a sales force is expensive, and companies are constantly assessing the most practical method to reach customers. One option is to use independent agents instead of company salespeople. It is not unusual for a company, such as IBM, to use both company salespeople and independent agents. Using independent sales agents is referred to as outsourcing the sales force. The decision to use independent agents or a company sales force involves four factors. • Economic: Basic analysis of the costs and expected revenue associated with maintaining a sales force is weighed against outsourcing to independent agents. • Control: A critical factor is the amount of control senior management believes is necessary for the sales function. A company sales force offers complete control in key areas such as recruiting, training, and compensation. On the other hand, independent agents operate without direct company management supervision. • Transaction costs: Finding a good replacement for a poor-performing independent sales agent can be difficult, and once one is found, it is often months before the new agent learns enough about the product and its applications to be effective in the sales job. Transaction cost analysis (TCA) states that when substantial transaction-specific assets are necessary to sell a manufacturer's product, the cost of using and administering independent agents is likely higher than the cost of hiring and managing a company's sales force.29 • Strategic flexibility: In general, a vertically integrated distribution system incorporating a company sales force is less flexible than outsourcing. Independent agents can be added or dismissed at short notice, especially if no specialized assets are needed to sell the product. Furthermore, it is not necessary to sign a long-term contract with independent agents. Firms facing uncertain and rapidly changing competitive or market environments and industries characterized by shifting technology or short product life cycles often use independent agents to preserve flexibility in the distribution channel. The simplest and most common method of organizing a company sales force is geographic orientation, as illustrated in Exhibit 18.5. Individual salespeople are assigned to separate geographic territories. In this type of organization, each salesperson is responsible for performing all the sales activities in a given territory. The geographic sales organization has several advantages. First, and most importantly, it tends to have the lowest cost because (1) there is only one salesperson in each territory, (2) territories tend to be smaller than other organizational structures so travel time and expenses are minimized, and (3) fewer managerial levels are required for coordination so sales administration and overhead expenses are lower. Second, the simplicity of the geographical structure minimizes customer confusion because each customer is called on by one salesperson. The major disadvantage is that it does not encourage or support any division or specialization of labor. Each salesperson is expected to be good at many things (various customer needs, product applications and specifications). Product Organization: Some companies have a separate sales force for each product or product category (see Exhibit 18.6). The primary advantage of a product organization is that individual salespeople can develop familiarity with the technical attributes, applications, and most effective selling methods associated with a single product. Also, there tends to be a closer relationship between sales and engineering, product development, and manufacturing when salespeople focus on one product or product category. Finally, this structure enables greater control in the allocation of selling effort across various products. Management can then adjust sales assets based on the needs of individual products. The major disadvantage is the duplication of effort with salespeople across different products assigned to the same geographic territory. This generally leads to higher sales costs. 97. List and describe the impact of the 4 common customer concerns. Answer: Product need, Price, More time, Company trust. The customer may not be convinced there is a need for the product. The customer's perspective can be summarized as, "We've always done it one way; why should we start something new now?" Key to the answer is a well-conceived value proposition that explains clearly how the product will benefit the customer and how it will be better than the existing solution.22 It is important to remember that customers are generally not risk takers. A much more common concern is whether the customer views the salesperson's product as a better solution than existing options. The customer is already familiar with the current products and change means learning a new product. Careful preparation is critical in dealing with questions about competitors, which is why salespeople spend a great deal of time learning about Personal selling is based, in part, on mutual trust between the buyer and seller. As we discussed, most customers already have a supplier, and while they may not be totally satisfied, they are familiar with them. For example, they know the process for resolving a problem (who to call, expected wait times, costs, etc.). If the customer is unaware of the company, a common concern is the company's ability to deliver what is needed, when it's needed, and where it's needed.23 This is a legitimate concern as the customer puts the company at risk by choosing the salesperson's company as the supplier. In other situations, customers may not object to the salesperson's company but are happy with their existing supplier. One of the most common customer objections is, "I need more time to consider the proposal." Certainly, concern about making a purchase decision too quickly is legitimate; however, the most likely scenario is that the value proposition has not been sufficiently developed. Salespeople consistently report that price is the most common customer apprehension. In many cases, the customer has legitimate objections about the price of a product. Nevertheless, the price objection usually means the customer has not accepted the value proposition. In essence, if the customer does not perceive that the product benefits exceed the price, there will be no sale. The salesperson is left with two options. Lower the price until it is below the product's perceived benefits, or raise the perceived benefits until they exceed the price.24 98. Define the elements of FAB is how they interact. Answer: Features advantage and benefits: The FAB approach is designed to make the company's products more relevant for customers. A feature is any material characteristic or specification of a product. Antilock brakes on a Cadillac Escalade are an example of a feature. An advantage is the particular product/service characteristic that helps meet the customer's needs. The Escalades' antilock brakes help the SUV stop faster than normal brake systems. A benefit is the advantageous outcome from the advantage found in the product feature. The SUV will provide greater security for the driver and passengers. 99. What are the three post sales activities that must be monitored by the sales person? Answer: (1) delivery, installation, and initial service of the product, (2) any training needed to operate the equipment correctly, and (3) the effective and efficient disposition of appropriate customer problems that arise from the product purchase. 100. What are three reasons Geographical organization tends to have the lowest cost? Answer: Because (1) there is only one salesperson in each territory, (2) territories tend to be smaller than other organizational structures so travel time and expenses are minimized, and (3) fewer managerial levels are required for coordination so sales administration and overhead expenses are lower. 101. What is the equation to calculate sales force size? Answer: The number of salespeople the company will need is determined by dividing the total number of hours required to service the entire market by the number of hours available per salesperson for direct selling activities. 102. What are the five factors for determining sales person performance? Answer: (1) role perceptions, (2) aptitude, (3) skill level, (4) motivation, and (5) personal, organizational, and environment factors. 103. What are the 4 direct marketing communication channels? Answer: Direct mail, catalogs, telemarketing, and Internet marketing. 104. List the 4 elements of a direct marketing campaign. Answer: Outside envelope: The offer comes in an envelope that must get the prospect's attention. Colorful illustrations, a more "personal" address, and a unique envelope feature (size, color, shape) all contribute to the prospect opening the envelope. • Sales collateral: The offer is conveyed in the sales material inside the envelope. Most often this includes a letter detailing the offer and a brochure that presents a more graphic presentation of the material. • Contact information: The offer gives contact information in several places. It is also important to provide multiple contact opportunities—toll-free number, response card, and Web site. Companies have found mentioning discounts such as coupons in the direct mail and then posting them on the Web site increases response rates as prospects are moved to additional action. If a response card is included, then a postage-paid return envelope is also included in the packet of material. 105. List the three essential elements of a telemarketing campaign. Answer: First, access to an accurate list of qualified prospects is very important. Research suggests a good list of prospects boosts the success rate by 60 percent. Second, the offer must persuade the prospect to act immediately. Enhancing the offer to encourage immediate action includes a lower price, discounts on shipping, added product features and benefits. In addition, the offer must convey a sense of exclusivity demonstrating that the product cannot be purchased anywhere else. Finally, the telemarketer must engage the prospect with the highest ethical standards. 106. The number of salespeople the company will need for direct selling activities is determined by dividing the _______________ by the number of hours available per salesperson. Answer: Total number of hours required to service the entire market 107. List the advantages of viral marketing. Answer: Connects people to the experience, Targets a younger demographic, incorporates a word-of-mouth, one-on-one methodology. 108. Discuss the aptitude factors necessary for a good sales person. Answer: • Listening. Many people have the impression that salespeople are great talkers. While it is important to be a good communicator, the reality is that great salespeople are skillful listeners. They know that to really learn the customer's needs and then create a value-based solution it is essential to listen. • Follow-up. When a salesperson commits to doing something, the customer expects it to be done. Follow up and addressing customer concerns is a critical skill. • Ability to adapt sales style from situation to situation. Being able to adjust the sales style from one sales situation to another in real time based on customer feedback, called adaptive selling, is critical to long-term success. The "one size fits all" approach does not work with customers expecting personalized service. • Persistence. Building customer relationships takes time and effort. Long-term success is not based on a single sale but, rather, a relationship, which makes the salesperson (and company) a critical partner with the customer in the customer's success. • Good verbal communication skills. Effective communication skills have never been more important. Customers expect a salesperson to be good at verbal communications and incorporate appropriate technologies into the presentation. • Effective personal planning and time management. Customers demand it and good salespeople recognize the importance of effective time management. As salespeople take on more activities and customer expectations increase, managing time becomes essential in relationship building. • Ability to interact with individuals at every level of the organization. Salespeople interact with a wide range of people inside their customer organizations. As a result, they must be just as comfortable in front of C level executives (CEOs) as well as lower-level managers. 109. Define and discuss at least three sales training topics. Answer: Exhibit 18.9 Three sales training topics include: 1. Effective Communication: Techniques for building rapport, active listening, and delivering persuasive messages. 2. Product Knowledge: In-depth understanding of features, benefits, and competitive advantages of the products or services being sold. 3. Objection Handling: Strategies to address common customer concerns and objections, turning them into opportunities for closing sales. 110. Define and discuss three input measures of sales performance. Answer: Exhibit 18.11 Three input measures of sales performance include: 1. Number of Sales Calls: Quantifying the amount of outreach and customer engagement. 2. Training Hours: Assessing the investment in sales skill development. 3. Lead Generation Activities: Evaluating the effectiveness of efforts to generate potential customers. Essay Questions 111. Describe the advantages of personal selling in the promotion mix. Answer: With the average cost of a sales call exceeding $300 and the Internet's interactive capabilities, some people have predicted the decline of personal selling as an effective marketing communications tool. However, this has not been the case; indeed, IBM, Pfizer, and other companies are expanding their sales forces. While there is no question that selling is among the most expensive forms of marketing communication, personal selling offers three distinct advantages over other marketing communications methods: • Immediate feedback to the customer. Customers don't want to wait for information. Increasingly, they demand accurate information quickly, putting pressure on companies for immediate, personal communication with a salesperson or customer service representative.2 • Ability to tailor the message to the customer. No other marketing communication method does a better job of creating personal, unique customer messages in real time. Salespeople generate distinctive sales messages that directly address customer problems and concerns.3 • Enhance the personal relationship between company and customer. Salespeople and the personal selling function are the single most effective approach for establishing and enhancing the personal relationship between company and customer. In particular, business-to-business (B2B) customers appreciate the efficiency of the Internet and other communication tools but expect a personal relationship with their suppliers. There is no substitute for a salesperson working with the customer one-on-one to solve problems.4 112. Discuss the non-technology selling activities. Answer: MATRIX OF SELLING ACTIVITIES 113. Discuss three of the seven key success factors in personal selling. Answer: • Listening. Many people have the impression that salespeople are great talkers. While it is important to be a good communicator, the reality is that great salespeople are skillful listeners. They know that to really learn the customer's needs and then create a value-based solution it is essential to listen. • Follow-up. When a salesperson commits to doing something, the customer expects it to be done. Follow up and addressing customer concerns is a critical skill. • Ability to adapt sales style from situation to situation. Being able to adjust the sales style from one sales situation to another in real time based on customer feedback, called adaptive selling, is critical to long-term success. The "one size fits all" approach does not work with customers expecting personalized service. • Persistence. Building customer relationships takes time and effort. Long-term success is not based on a single sale but, rather, a relationship, which makes the salesperson (and company) a critical partner with the customer in the customer's success. • Good verbal communication skills. Effective communication skills have never been more important. Customers expect a salesperson to be good at verbal communications and incorporate appropriate technologies into the presentation. • Effective personal planning and time management. Customers demand it and good salespeople recognize the importance of effective time management. As salespeople take on more activities and customer expectations increase, managing time becomes essential in relationship building. • Ability to interact with individuals at every level of the organization. Salespeople interact with a wide range of people inside their customer organizations. As a result, they must be just as comfortable in front of C level executives (CEOs) as well as lower-level managers. 114. Diagram the personal selling process. Answer: 115. Discuss the factors used to understand sales force performance. Answer: 16. Discuss the four factors involved in the decision to use independent agents or a company sales force. Answer: • Economic: Basic analysis of the costs and expected revenue associated with maintaining a sales force is weighed against outsourcing to independent agents. • Control: A critical factor is the amount of control senior management believes is necessary for the sales function. A company sales force offers complete control in key areas such as recruiting, training, and compensation. On the other hand, independent agents operate without direct company management supervision. • Transaction costs: Finding a good replacement for a poor-performing independent sales agent can be difficult, and once one is found, it is often months before the new agent learns enough about the product and its applications to be effective in the sales job. Transaction cost analysis (TCA) states that when substantial transaction-specific assets are necessary to sell a manufacturer's product, the cost of using and administering independent agents is likely higher than the cost of hiring and managing a company's sales force.29 • Strategic flexibility: In general, a vertically integrated distribution system incorporating a company sales force is less flexible than outsourcing. Independent agents can be added or dismissed at short notice, especially if no specialized assets are needed to sell the product. Furthermore, it is not necessary to sign a long-term contract with independent agents. Firms facing uncertain and rapidly changing competitive or market environments and industries characterized by shifting technology or short product life cycles often use independent agents to preserve flexibility in the distribution channel. 117. Discuss the three elements of the recruitment and selection process for sales people. Answer: Recruiting and Selecting Salespeople: Hiring the right people is important to long-term success, so there is a great deal of focus on recruiting and selecting qualified salespeople. The recruitment and selection process has three steps: (1) analyze the job and determine selection criteria, (2) find and attract a pool of applicants, and (3) develop and apply selection procedures to evaluate applicants. Firms often compete against competitors and other industries for the best candidates. As a result, companies develop a well-coordinated recruiting strategy that, contrary to popular belief, does not seek to maximize the number of applicants. Having too many recruits overloads the selection process. The true objective of a successful recruiting strategy is to identify a few exceptionally qualified recruits.38 118. Compare and contrast salary versus commission compensation packages. Answer: A salary is a fixed sum of money paid at regular intervals. Most firms that pay a salary also offer incentive pay to encourage better performance. Incentives are generally commissions tied to sales volume or profitability, or bonuses for meeting or exceeding specific performance targets (for example, meeting quotas for a particular product). Such incentives direct salespeople's efforts toward specific strategic objectives during the year, as well as offer additional rewards for top performers. A commission is payment based on short-term results, usually a salesperson's dollar or unit sales volume. Since there is a direct link between sales volume and the amount of commission received, commission payments are useful for increasing salespeople's sales efforts.41 Exhibit 18.11 summarizes the components and objectives of financial compensation plans. 119. Discuss the advantages and disadvantages of objective versus subjective measures of sales performance. Answer: Objective measures reflect statistics the sales manager gathers from the firm's internal data. Subjective measures rely on personal evaluations by someone connected to the salesperson's sales process, usually the immediate sales manager or a customer. Objective measures fall into two major categories: (1) output measures and (2) input measures. Output measures show the results of the efforts expended by the salesperson while input measures focus on the efforts of salespeople during the sales process (see Exhibit 18.12). 120. Compare and contrast viral marketing with interactive marketing. Answer: INTERACTIVE MARKETING: The Internet has redefined the relationship between companies and customers. In less than 15 years, it has established a powerful new communication channel known as market space, which encourages customer-company interaction and a higher level of customer service.48 Even though it represents less than 20 percent of U.S. commerce and less than 10 percent of global business, the Internet and, more broadly, interactive electronic marketing are the future. In both B2C and B2B markets, electronic interactive channels are considered essential elements in an overall marketing communications strategy. Indeed, many companies including Procter & Gamble and General Motors are shifting communication budgets to Internet marketing and away from traditional communication channels, particularly network television. Customers drive interactive marketing, controlling when, where, and how they interact. While companies expand access to information and explore new methods to facilitate the exchange process, customers define the relationship on their terms. The speed of this transformation has caught many companies by surprise. Finding what works, and equally important what doesn't work, on the Internet presents a number of challenges. For example, as customers become more connected to a company, their expectations about service and the customer-company relationship also increase. In addition, combining traditional marketing communications channels with online, interactive media has proven to be a challenge. Communicating with customers is faster using e-marketing media, which often creates a challenge coordinating online and traditional marketing messages. Ethical Dimension 18 discusses one interactive communication tool, the use of company sponsored Web bloggers to present information about a product, which has come under criticism for misrepresenting the nature of the relationship between company and blogger. Another technique called viral marketing is used to create buzz about a product using word of mouth or Internet social networks. The American Marketing Association defines viral marketing as a "marketing phenomenon that facilitates and encourages people to pass along a marketing message. Nicknamed viral because the number of people exposed to a message mimics the process of passing a virus or disease from one person to another." Marketing managers have known how valuable strong word of mouth can be in a product's success. However, with the growth of social networking on the Internet and the ability of marketers to target individuals more carefully, it is now possible to create marketing communication campaigns that incorporate a word-of-mouth, one-on-one methodology. Viral Marketing Guidelines: In many respects, successful viral marketing requires a very different approach to marketing communications than, for example, advertising or personal selling. When it works, it can be possible to connect the success of the viral marketing with sales success. One successful viral marketing effort was the Mentos-Diet Coke "geyser" ad, which showed the effect of dropping several Mentos in a bottle of Diet Coke. The Mentos ad generated 5 million views in three months. People viewing the ad were encouraged to participate in "Make your own Mentos geyser" competitions and the company distributed thousands of product samples. The result was a 20 percent sales increase, which it attributes to the ad. However, the link between a viral marketing campaign and sales is often not that easy to establish. Let's consider some guidelines. Measuring Success: One of the biggest challenges marketing managers face in viral marketing is measurement. While it is certainly easy to know how many hits there are to a particular Web site, translating that into marketing metrics, such as higher unit sales, is more difficult. As a result, marketers often define broad goals for a viral campaign. Another viral campaign started by Mentos, the Mentos-intern, encourages Web site visitors to assign tasks to a 19-year-old student intern named, Trevor. Success for the campaign was not defined in terms of sales but "how well the campaign can integrate the idea of Mentos into pop culture." This more broadly defined goal may be appropriate since more defined metrics such as unit sales are difficult to identify. Connect People to the Experience: One key to a successful campaign is enabling participants to be part of the experience. In the campaign for Batman: The Dark Knight, individuals were encouraged to take pictures of each other dressed as the "The Joker" and submit them to whysoserious.com. Giving people a reason to come back and become engaged connects people to the product. Target a Younger Demographic: Viral marketing works well with a younger demographic and enables marketers to reach out to a different market segment. For example, Folgers's "Happy Morning" viral video campaign was a creative stretch for the company that has focused primarily on an older market segment. The video, a funny send-up on happy morning commercials, was widely distributed to video Web sites and represented Folgers' first significant attempt to reach younger audiences using a viral marketing strategy. The ability to target younger audiences without offending existing target markets that are not likely to be part of the same social networks gives companies the freedom to experiment. Test Bank for Essentials of Marketing Management Greg W. Marshall, Mark W. Johnston 9780078028786, 9780071082020, 9780077400187

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