Chapter 16
1. What are the effects of advertising?
a.
Popular form of
promotion, new brands with small market shares spend more on advertising and
sales promotion because of the following two reasons: advertising response
function and requirement of a minimum level of exposure to measurably affect
purchase habits
2. What is Advertising Response Function? What are the
implications of Advertising Response Function for advertising expenditure?
a.
Phenomenon in which
spending for advertising and sales promotion increases sales or market share up
to a certain level but then produces diminishing returns. Increasing efficiency
as Ad Budget Level becomes sufficient “to be heard” then diminishing returns on
incremental spending.
3. What is institutional advertising?
a.
Designed to enhance a company’s image
rather than promote a particular product. Designed
to establish, change, or promote the corporation’s identity as a whole.
4. What is advocacy advertising?
a.
Advertising
in which an organization expresses its views on controversial issues or responds to media attacks. A
form of institutional advertising is advocacy advertising, and is typically
used to safeguard against negative consumer attitudes and to enhance the
company’s credibility among consumers who already favor its position.
5. What is pioneer advertising? How should this type
of advertising be used?
a.
Designed to stimulate primary demand for a new
product or product category. Used in the introductory stage of the product life
cycle. Offers consumers in-depth information about the benefits of the product
class.
6. What is competitive advertising? How should this
type of advertising be used?
a.
Designed to influence demand for a
specific brand. Used when product enters its growth phase.
Goal - Influence demand for a specific brand
7. What is comparative advertising? How should this
type of advertising be used?
a.
Compares two or more specifically
named or shown competing brands on one or more
specific attributes. Used by some advertisers against their own brands. Used when products experience slow growth or when
competition in the market is strong.
8. What is advertising campaign?
a.
Series of related
advertisements focusing on a common theme, slogan, and set of advertising appeals
9. How to define advertising objectives?
a.
Specific communication task that a campaign should accomplish for a specified target audience
during a specified period
10. What are the creative decisions involved in
advertising?
a.
Identifying product
benefits, Developing and evaluating advertising appeals, Executing the message, Advertisers
do a post-campaign analysis (To identify how the campaign might have been
more efficient and what factors contributed to its success)
11. What is advertising appeal? What are some of the
common advertising appeals?
a.
Reason for a person
to buy a product, Advertising appeals play off
consumers’ emotions or address some need or want of the consumers, Criteria for
evaluation of an appeal include desirability, exclusiveness, and
believability. Unique selling
proposition: Desirable, exclusive, and
believable advertising appeal selected as the theme for a campaign. Executing the message
involves the style in which information is
portrayed.
12. What is media planning? Why should marketers do
media planning?
a.
Series of decisions
advertisers make regarding the selection and use of media. Allows the marketer
to optimally and cost-effectively communicate the message to the target
audience
13. What are the qualitative and quantitative factors
that will influence Media Mix Selection?
a.
Quantitative: cost
per contact, cost per click, reach, noise level, frequency, audience
selectivity, flexibility, life span. Qualitative: Attention to the
commercial and the program, Involvement, Program liking, Lack of distractions, Other
audience behaviors
14. What elements in the promotion mix are relevant to public
relation?
a.
Evaluates public
attitudes, Identifies issues that may elicit public concern, Executes programs
to gain public understanding and acceptance, Publicity: Effort
to capture media attention, often initiated through press releases that further
a corporation’s public relations plans
15. What are some of the public relations tools and
functions?
a.
Tools: New-product
publicity, Product placement, Consumer education, Sponsorship, Experiential
marketing, Company websites. Functions: Press relations, Product publicity, Corporate
communication, Public affairs, Lobbying, Employee and investor relations, Crisis
management (Coordinated effort to handle all the effects of unfavorable
publicity or another unexpected unfavorable event)
16. What is sales promotion? What is the goal of sales
promotion?
a.
Marketing communication
activities other than advertising, personal selling, and public relations. Short-term
incentive motivates consumers or members of the distribution channel to
purchase a good or service immediately by: Lowering the price, Adding value.
Goal is to give the consumer an incentive to make an immediate purchase
17. What is trade sales promotion and what is consumer
sales promotion?
a.
Trade: Activities directed to members of the
marketing channel. Consumer: Activities
targeted to the ultimate consumer market (An effective tool for strengthening
brand loyalty is the frequent buyer program, which rewards consumers for repeat
purchases.)
18. Understand different type of consumers based on
their loyalty to a company’s brand. Be sure to know the desired results and
some examples of sales promotion for each group of consumers.
a.
Loyal: customers who
buy product most or all of the time. (desired results: reinforce behavior,
increase consumption, change purchase timing. Example: loyalty marketing
programs, such as frequent buyer cards or frequent shopper clubs.) Competitor’s
customers: people who buy a competitor’s products most or all of the time.
(desired results: break loyalty, persuade to switch to your brand. Example:
sampling to introduce your product’s superior qualities compared to their
brand) Brand switchers: people who buy a variety of products in the category
(desired results: persuade to buy your brand more often. Example: any promotion
that lowers the price of the product, such as coupons, price-off packages, and
bonus packs) Price buyers: people who consistently buy the least expensive
brand. (desired results: appeal with low prices or supply added value that
makes price less important. Example: coupons, price-off packages, refunds, or
trade deals that reduce the price of the brand to match that of the brand that
would have been purchased)
Chapter 17
19. What are the advantages and limitations of personal
selling?
a.
Advantages: Provides detailed
explanation or demonstration of the product, Sales message can be varied
according to motivations of each prospective customer, Directed only to
qualified prospects, Costs can be controlled by adjusting the size of the sales
force in one-person increments, More effective in obtaining a sale and gaining
a satisfied customer in comparison to other forms of promotion. Limitations: Cost per contact is much greater than for mass
forms of communication, Message provided can be inconsistent and inaccurate if
the sales force is not properly trained, Salespeople can convince customers to
make unnecessary purchases
20. Comparing personal selling with advertising or
sales promotion, please tell what are their differences.
a.
Personal selling is
more important if: the product has a high value, it is a custom-made product, there
are few customers, the product is technically complex, customers are
concentrated. Advertising and sales promotion are more important if: the product
has a low value, it is a standardized product, there are many customers, the
product is easy to understand, customers are geographically dispersed.
21. What is relationship selling?
a.
Involves building, maintaining, and enhancing
interactions with customers. Purpose - To develop long-term satisfaction
through mutually beneficial partnerships
22. What are the key differences between traditional
selling and relationship selling?
a.
Traditional: sell
products, focus on closing sales, limited sales planning, spend most contact
time telling about product, conduct “product specific” needs assessment, “lone
wolf” approach to the account, proposals and presentations based on pricing and
product features, sales follow up is short term, focused on product delivery.
Relationship: sell advice assistance and counsel, focus on improving the
customers bottom line, consider sales planning as top priority, spend most
contact time attempting to build a problem-solving environment, conduct
discovery in the full scope of the customers operations, team approach to the
account, proposals and presentations based on profit impact and strategic
benefits to the customer, sales follow up in long term and focused on long term
relationship enhancement
23. What are the steps in personal selling process? Be
sure to understand what salespersons need to do in each step.
a.
Generating leads(Identification
of firms and people that are most likely to buy the seller’s offerings),
qualifying leads(Determining a sales prospect’s: Recognized need, Buying
power, Receptivity and accessibility), approaching the customer and probing
needs(Preapproach tasks, Needs assessment: Should be
knowledegable about the product or service, customers, competition, and
industry. Customer profile, Summary of the prospect’s need, problem, and
interest: Salesperson should get a commitment from the customer to some kind
of action), developing and proposing solutions and handling objections(Solutions
are presented to the client in the form of a sales proposal at a
sales presentation, Objections should be considered a legitimate part of
the purchase decision, Salespeople should anticipate specific objections: Must
fully investigate the objections with the customer and be aware of the
competitor’s offer), closing the sale(Customers usually exhibit signs if
they are ready to purchase a product or service, Salesperson should keep an
open mind when asking for the sale, Effective negotiators avoid: Using price
as their negotiation tool; Show increased value in their products or
services. Giving unilateral concessions), following up(Final step of the
selling process, in which the salesperson ensures: Delivery schedules are
met, Goods or services perform as promised, Buyers’ employees are properly
trained to use the products.
24. What are some of the methods for lead generation?
a.
Cold calling(Salesperson approaches
potential buyers without any prior knowledge of the prospects’ needs or
financial status), referral(Recommendation from a
customer or business associate), networking(Using friends, business
contacts, coworkers, acquaintances, and fellow members in professional and
civic organizations to identify potential clients)
25. How to decide a potential consumer’s lead
qualification?
a.
Determining a sales
prospect’s: Recognized need, Buying power, Receptivity and accessibility
26. How should salespeople prepare with consumers’
objections?
a.
Salespeople should
anticipate specific objections: Must fully investigate the objections with
the customer and be aware of the competitor’s offer
27. How should effective negotiators respond to
consumers’ request on lowering the price?
a.
Show increased value
in their products or services
28. What are some of the responsibilities of a sales
manager?
a.
Maximizing sales and
profits, Defining sales goals and the sales process, Determining the sales
force structure, Recruiting and training the sales force, Compensating and
motivating the sales force, Evaluating the sales force
Chapter 18
29. What is social media?
a.
Any tool or service
that uses the Internet to facilitate conversations
30. What are the characteristics of social media
consumers? How should marketers respond to such consumers?
a.
Social media
consumers want to: Exchange information, Collaborate with others, Have
conversations. Marketers must: Decide if engaging in online
conversations will be profitable, Find the most effective method of entering
the conversation
31. What is social commerce?
a.
Subset of e-commerce
that involves the interaction and user contribution aspects of social online
media: To assist online buying and selling of products and services
32. How can social media help with marketing?
a.
Marketers have conversations with consumers, forge
deeper relationships, and build brand loyalty, Consumers connect with each
other, share opinions, and collaborate on new ideas according to interests
33. What is crowd sourcing?
a.
Using consumers to develop and market products
34. What are the stages in creating an effective social
media plan?
a.
Listening to
customers, Setting social media objectives, Defining strategies, Identifying
the target audience, Selecting tools and platforms, Implementing and monitoring
the strategy
35. What is the first action a marketing team should
take when initiating a social media campaign?
a.
Listening!
36. What is social media monitoring?
a.
Identifying and assessing what is being said about
a company, individual, product, or brand. Failure to respond to criticism leads
to crisis
37. What are the objectives of social media?
a.
Listen and learn,
build relationships and awareness, promote products and services, manage one’s
reputation, improve customer service.
38. What is owned media, earned media, and paid media? What
are the differences and similarities among them?
a.
Owned media - Brand's
presence on social platforms(facebook etc presence). Earned media - Word of
mouth or online buzz about a brand(viral videos). Paid media - Use of
traditional media(display advertising)
39. What are the different categories of social media
users?
a.
Creators - Produce
and share online content like blogs, websites, articles, and videos. Critics -
Post comments, ratings, and reviews of products and services on blogs and
forums. Collectors - Use RSS feeds to collect information and vote for websites
online. Joiners - Maintain a social networking profile and visit other sites. Spectators
- Read blogs, listen to podcasts, watch videos, and consume media. Inactives -
Do none of these things. Conversationalists - People who post status updates on
social networking sites and microblogging services
40. How to evaluate and measure the effects of social
media? How those different measurements can be valuable to a business?
a.
Buzz, search engine
ranks and results, interest, influence, participation and engagement, sentiment
analysis, website metrics. (The measurements are only valuable if they are tied
to performance indicators that allow marketers and managers to see how social
media directly impact the business.)
Chapter 19
41. What is price? What does price represent for? How
does price imply value of the product?
a.
Monetary amount that
is given up in an exchange to acquire a good or service, Effects: Measure of
sacrifice, Information cue. Value is based upon perceived satisfaction: Reasonable
price means perceived reasonable value at the time of the transaction
42. What are the pricing objectives? How can we
categorize those objectives?
a.
Need to be
specific, attainable, and measurable, Categories: Profit oriented, Sales oriented, Status quo
43. How to calculate revenue and profit?
a.
Rev: price x units.
Profit: rev - expenses
44. What are profit-oriented, sales-oriented, and status
quo pricing objectives? How are they different among one another?
a. Profit: Profit maximization, Satisfactory profits, Target
return on investment (ROI): ROI = Net profit after taxes ÷ Total
assets. Sales: Market share is a company’s product sales as a percentage
of total sales for that industry. Companies with the objective of maximizing
sales ignore profits, competition, and the marketing environment as long as
sales are increasing. Status Quo: Maintains
existing prices or meets the competition’s prices: Leads to suboptimal
pricing as it ignores: Customers’ perceived value of the firm’s goods or
services, Goods or services offered by the competitors
45. How can demand determine price?
a.
Lower the price,
higher the demand for a product or service and vice versa. At higher
prices, supply increases as manufacturers earn more capital and vice
versa
46. What is elasticity of demand? What do elastic
demand and inelastic demand mean?
a.
Consumers’
responsiveness or sensitivity to changes in price. Elastic demand: Situation
in which consumer demand is sensitive to changes in price. Inelastic
demand: Situation in which an increase or a decrease in price will not
significantly affect the demand for a product
47. How do different factors (availability of
substitutes, price relative to purchasing power, product durability, product’s
other uses) affect elasticity of demand?
a.
Availability of
substitutes - When many
substitutes are available, it is easy to switch products. This makes demand
elastic. Price relative to purchasing power - If a price is so low that
it is an inconsequential part of an individual’s budget, demand will be
inelastic. Product durability - Repairing durable products rather than
replacing them prolongs their useful life. Thus, people are sensitive to the
price increase, and the demand is elastic. Product’s other uses - The
greater the number of uses for a product, the more elastic demand tends to be.
If a product has only one use, the quantity purchased probably will not vary as
price varies.
48. What are variable cost and fixed cost?
a.
Variable: cost that
varies with changes in the level of output. Fixed: cost that does not change as
output is increased or decreased.
49. What is markup pricing?
a.
Cost of buying the
product from the producer, plus amounts for profit and for expenses not
otherwise accounted for, To use markup based on cost or selling price
effectively, the marketing manager must calculate an adequate gross margin: Margin
must provide adequate funds to cover selling expenses and profit
50. What is break-even analysis? How to use break-even
analysis to make decisions? How to do the math?
a.
Determines what sales
volume must be reached so that total revenue equals total costs, Provides a
quick estimate of: How much the firm must sell to break even, How much
profit can be earned if a higher sales volume is obtained. Limitations: Hard
to determine if a cost is fixed or variable, Ignores demand
51. What are the different pricing strategies, price
skimming, penetration pricing, and status quo pricing? How to decide under what
situations marketers should use which pricing strategy?
a. Skimming: Firm charges a high introductory price,
coupled with heavy promotion. Situations when skimming is successful: There
is strong demand for a good or service, Product is legally well protected,
represents a technological breakthrough, or has blocked the entry to
competitors. Penetration: Firm
charges a relatively low price for a product when it is first rolled out as a
way to reach the mass market, Requires a higher volume of sales to reach
break-even point, Low prices can attract additional buyers to the market: Increased
sale can justify production expansion or the adoption of new technologies. Status
Quo: Charging a price identical to or very close to the competition’s price. Advantage
– Simplicity. Disadvantage - Strategy ignores demand or cost or both
