Deck 18: Sales Promotion Overview and the Role of Trade Promotion

Question 1

Pushing and pulling are mutually exclusive activities.

Answer 1

False

Question 2

Research has shown that consumers seem to increase their consumption rate of stockpiled products when the product is convenient to consume compared with when it requires preparation.

Answer 2

True

Question 3

A push strategy is when a manufacturer directs personal selling,trade advertising,and trade-oriented sales promotion to wholesalers,retailers and consumers.

Answer 3

False

Question 4

Promotion refers to any incentive used by a manufacturer to induce the trade and/or consumers to buy a brand and to encourage the sales force to aggressively sell it.

Question 5

American marketing has experienced a shift from less push marketing to more pull marketing.

Question 6

Sales promotion can facilitate the introduction of new products and brands.

Question 7

Advertising spending as a percentage of total marketing communications expenditures has increased in recent years.

Question 8

Consumer packaged-goods companies are the biggest users of sales promotion.

Question 9

Recent changes in accounting standards now require that promotions expenditures be treated in exactly the same fashion as advertising expenditures,namely,as current expenses that are deducted from top-line revenue.

Question 10

Less money is spent on consumer sales promotions compared to trade sales promotions.

Question 11

Sales promotion is better suited than advertising to enhance buyer attitudes and augment brand equity.

Question 12

In recent years,the balance of power has been shifting from the retailer to the manufacturer.

Question 13

The difference between the "old" and "new" accounting procedures with respect to promotions is in the amount for the top-line revenue.

Question 14

A pull strategy consists of advertising and promotion directed at consumers.

Question 15

Sales promotion can permanently stop an established brand's declining sales trend.

Question 16

One reason for increased budgetary allocations to promotions is the fact that consumers are less price sensitive.

Question 17

Sales promotion can enable a manufacturer to obtain extra shelf space for a temporary period.

Question 18

Sales promotion can be used to offset competitors' advertising and sales-promotion efforts.

Question 19

Sales promotion can provide consumers with a compelling,long-term reason to continue purchasing a brand.

Question 20

The sales force,retailers,and consumers are targets of sales promotional efforts.

Question 21

The objectives of trade allowances for retailers often conflict with the objectives of manufacturers.

Question 22

A manufacturer's objective for using trade-oriented sales promotion could include building retail inventories.

Question 23

Trade allowances are used by manufacturers to reward wholesalers and retailers for performing activities in support of the manufacturer's brand.

Question 24

The most effective trade promotions are those that target long-term sales goals.

Question 25

Slotting allowances are the fees that manufacturers pay retailers for access to more or better shelf space for existing brands.

Question 26

Manufacturers estimate that retailers usually comply with trade allowance agreements and pass through to consumers most of the trade funds that they provide to retailers.

Question 27

Research has shown that the vast majority of manufacturers do not feel they receive good value from their trade promotion spending.

Question 28

Trade promotions are appropriately timed when they are used strategically to offset competitive promotional activity.

Question 29

Slotting allowances are a mechanism used by manufacturers to exploit the competition among retailers.

Question 30

Trade allowances are also called trade deals.

Question 31

Trade promotions are appropriately timed when they are tied in with a seasonal event during a time of growing sales.

Question 32

A manufacturer's objective for using trade-oriented sales promotion could include introducing new or revised products.

Question 33

Manufacturers pay slotting allowances to retailers to get the retailer to purchase the product.

Question 34

Slotting allowances could be considered a form of bribery because the retailer demands an up-front fee in order for the manufacturer to receive space for a new brand.

Question 35

In certain respects,slotting allowances are a legitimate cost of doing business.

Question 36

Retailers are usually contractually bound to pass along discounted prices to consumers.

Question 37

An objective of trade allowances is to increase consumers' purchases of the manufacturer's brand from retailers.

Question 38

Manufacturers can avoid paying slotting allowances by investing in a pull strategy to create consumer demand for their brands.

Question 39

Bill-back allowances are for retailers who feature the manufacturer's brand in advertisements or for providing special displays.

Question 40

Off-invoice allowances are deals offered periodically to the trade that permit retailers to deduct a fixed amount from the invoice,merely by placing an order during the period which the manufacturer is "dealing" a brand.

Question 41

Diverting occurs when products intended for foreign markets are diverted back into a domestic market.

Question 42

Wholesalers and retailers pay greater carrying charges in holding inventories of large quantities of forward-bought items.

Question 43

Pay-for-performance programs and the efficient consumer response (ECR)initiative have similar outcome objectives.

Question 44

Retailers tend to prefer pay-for-performance programs more so than do manufacturers.

Question 45

Pay-for-performance programs reward the retailer for buying the brand at an off-invoice price.

Question 46

Everyday low pricing (M)is a form of pricing whereby a manufacturer lowers the price at the end of every month.

Question 47

Almost all retailers welcome everyday low pricing.

Question 48

In a deslotting allowance agreement,the risk of a new brand introduction is transferred from the manufacturer to the retailer.

Question 49

Everyone benefits from forward buying because a substantial portion of retailers' savings are passed on to consumers.

Question 50

As with off-invoice allowance promotion,account-specific marketing directs promotional dollars to specific retailers.

Question 51

While manufacturers incur increased costs due to forward buying,their margins are increased to off-set the price discounts.

Question 52

The quality and safety of a product could be jeopardized as a result of diverting.

Question 53

Most retailers acknowledge that they have engaged in the practice of diverting.

Question 54

A bill-and-hold program invoices the retailer as soon as the retailer places a forward-bought order but delays shipping the order until desired quantities are requested by the retailer.

Question 55

Off-invoice allowances often induce retailers to stockpile products in order to take advantage of the temporary price reductions.

Question 56

The Federal Trade Commission (FTC)recently passed a ruling that prohibits the use of slotting fees in the marketing of food products.

Question 57

The use of scanning technology is critical to the implementation of a pay-for-performance program.

Question 58

Increases in sales volume necessarily lead to increased profits.

Question 59

Pay-for-performance programs reward retailers for selling increased quantities of the manufacturer's brand to consumers.

Question 60

Diverting occurs when a manufacturer makes a deal available nationally.

Question 61

Which of the following is an example of a push strategy?

A) a cereal manufacturer advertising during cartoon programs to reach children
B) a bank sending a mailing to the senior citizens
C) a soft drink manufacturer sending point-of-purchase displays to grocery stores
D) a children's clothing store sending gift certificates to families
E) a bicycle store advertising in the university newspaper to attract the attention of college students

Question 62

Which of the following statements is true?

A) Push and pull strategies are mutually exclusive.
B) There has been a shift from a primarily push promotion strategy to a primarily pull strategy on the part of manufacturers.
C) There has been a shift from a primarily pull promotion strategy to a primarily push strategy on the part of manufacturers.
D) Push strategies are targeted to consumers.
E) Pull strategies are targeted to the trade.

Question 63

A _____ strategy consists of manufacturers directing advertising and promotion at the consumers.

A) strategic channel
B) forced channel
C) planned
D) push
E) pull

Question 64

Trade promotions represent approximately _____ percent of total marketing communications expenditures.

A) 20
B) 30
C) 40
D) 50
E) 60

Question 65

Which of the following is a factor accounting for the shift from consumer advertising to promotion?

A) manufacturers have more power over retailers
B) increased brand parity and price sensitivity
C) increased brand loyalty
D) increased effectiveness of mass media
E) long-term corporate orientation

Question 66

When deals are frequently offered,the consumer's internal reference price is lowered.

Question 67

_____ refers to any incentive used by a manufacturer to encourage the sales force to aggressively sell it.

A) Promotion
B) Placement
C) Advertising
D) Marketing
E) Inducement

Question 68

The balance of power began shifting from manufacturers to retailers when network television dipped in effectiveness as an advertising medium and,especially,with the _____.

A) shortening of distribution channels
B) growth of internet marketing
C) use of EDLP
D) advent of optical scanning equipment
E) development of mega-stores

Question 69

The biggest users of sales promotion are _____.

A) banks
B) insurance companies
C) automobile manufacturers
D) consumer packaged-goods companies
E) chemical companies

Question 70

Combined efforts of advertising and display positively interact to boost a dealt brand's retail sales.

Question 71

In contrast to advertising,which typically,though not always,is relatively long term in orientation and best suited to enhancing buyer attitudes and augmenting brand equity; promotion is more short-term oriented and capable of influencing _____.

A) awareness
B) intentions
C) knowledge
D) perceptions
E) behavior

Question 72

Promotion refers to any incentive used by a _____ to induce the trade.

A) wholesaler
B) retailer
C) manufacturer
D) salesperson
E) channel partner

Question 73

The _____ strategy consists of a manufacturer directing personal selling,trade advertising,and trade-oriented sales promotion to wholesalers and retailers.

A) forced channel
B) push
C) pull
D) planned
E) strategic channel

Question 74

The effects of promoting higher- and lower-quality brands are symmetric.

Question 75

The target of sales promotion can be _____.

A) retailers, consumers, and the sales force
B) retailers, manufacturers, and the sales force
C) retailers, consumers, and manufacturers
D) wholesalers, retailers, and manufacturers
E) competitors, retailers, and consumers

Question 76

Advertising expenditures as a percentage of total marketing communications expenditures are approximately _____ percent.

A) less than 25
B) 25
C) 35
D) 45
E) 55

Question 77

Temporary retail price reductions substantially increase sales,both in the short- and long-term.

Question 78

Aunt Marie's is a local restaurant.The owner advertises in the local newspaper to attract customers.This is an example of a _____ strategy.

A) planned
B) push
C) pull
D) forced channel
E) strategic channel

Question 79

Assume that Coppertone invests heavily in trade allowances to encourage retailers to stock and promote QT,its skincare product designed for a quick suntanned look without the dangers of sunbathing.What type of strategy is Coppertone using?

A) specialty advertising
B) trade pull
C) pull
D) push
E) stocking

Question 80

Higher market share brands are more deal elastic.