Deck 18: Relationship Building: Direct Marketing, Personal Selling, and Sales Promotion

Question 1

Excessive trade deals build brand loyalty because they encourage customers to buy whatever brand is on sale.

Answer 1

False
Explanation: Excessive trade deals threaten brand loyalty because they encourage customers to buy whatever brand is on sale. Furthermore, marketers who use trade discounts extensively find themselves in a vicious circle. This is because if they cut back on the promotions, they may lose shelf space and then market share.

Question 2

Database marketers communicate with customers using various media that ranges from personal contact to mass media.

Answer 2

True
Explanation: Database marketers build and maintain a pool of data on current and prospective customers. They communicate with them using a variety of media ranging from personal contact to direct mail to mass media.

Question 3

Trade concentration refers to lesser products going through fewer retailers.

Answer 3

False
Explanation: Trade concentration refers to more products going through fewer retailers. This gives greater control to the retailers and lesser to the manufacturers.

Question 4

A broadside is a certificate with a stated value presented to the retail store for a price reduction on a specified item.

Question 5

In a direct-sales strategy, marketers' representatives sell to customers through a retail establishment.

Question 6

In an IMC program, the objective of personal selling is solely to make a sale.

Question 7

Direct mail has a higher cost per thousand than personal selling.

Question 8

Letter shops stuff and seal envelopes, affix labels, and calculate postage on a cost-per-thousand basis.

Question 9

The two processes required to work with a marketing database are data storage and data retrieval.

Question 10

Another name for behavioristics data is lifestyle data.

Question 11

Consumer sales promotions are an example of a push strategy.

Question 12

The customer lifetime value (LTV) model is based on historical and potential share of business.

Question 13

Direct mail has a higher cost per thousand than personal selling.

Question 14

In a direct-sales strategy, marketers' representatives sell to customers through a retail establishment.

Question 15

Rented lists can be used without limit, for several mailings.

Question 16

One of the drawbacks of direct marketing is that it does not offer precision to cost-sensitive marketers.

Question 17

While advertising helps build market volume, sales promotion helps build long-term market value.

Question 18

Direct marketing is the best way to develop a good database.

Question 19

The print ads for Fitness X exercise equipment asks readers to call them in order to place orders for the equipment. The print ads used by Fitness X is an example of direct-response advertising.

Question 20

The trend toward self-service retailing is decreasing the importance of P-O-P materials.

Question 21

_____ is the process of gathering, consolidating, updating, and enhancing the information about customers that resides in an organization's database.

A)Data modeling
B)Trade concentration
C)Data management
D)Trade promotion
E)Datacasting

Question 22

Sierra Miller Inc. is a travel company that sells whitewater rafting and kayaking travel packages. The company has a telemarketing team which regularly gathers information about travel needs from potential customers. This information is entered into the company's electronic system to help segment customer groups based on their needs and requirements. Sierra Miller is using:

A)direct selling.
B)database marketing.
C)sampling.
D)forward buying.
E)cooperative advertising.

Question 23

_____ allows marketers to get a snapshot of what their customers look like at any given time by identifying common characteristics and ranking their relative importance in different segments.

A)Customer profiling
B)Diverting
C)Observational research
D)Customer retention
E)Sampling

Question 24

A contest offers prizes based on a chance drawing of entrants' names.

Question 25

Direct marketing experts Stone and Jacobs use an RFM formula to identify the best customers. "RFM" is an acronym for:

A)replicate, find, and monitor.
B)research, finance, and manage.
C)regulate, fund, and maintain.
D)recency, frequency, and monetary.
E)reach, frugality, and marketability.

Question 26

Bennett and Wood Inc. an interior designing firm, uses its print ads to help customers connect with them. The ads provide the company's e-mail and Web site details for customers to inquire about their services. In such a scenario, which of the following is Bennett and Wood Inc. using?

A)Linkage media
B)Letter shop
C)Spiffs
D)Broadsides
E)Statement stuffers

Question 27

Which of the following is true of database marketing?

A)Its drawback is that it is not a cost effective way to increase sales.
B)It helps maintain a pool of data on current and prospective customers.
C)It uses solely direct mail to reach out to customers.
D)It is the striking opposite of direct marketing.
E)It is limited to databases related to mail order and catalog sales.

Question 28

A continuity premium is given weekly to customers who frequent the same store.

Question 29

Which of the following statements about direct marketing is true?

A)It is more public in nature than mass media.
B)It lacks the precision and flexibility that cost-sensitive marketers require.
C)It offers accountability by providing a tangible response.
D)It is based on the idea that people like to see themselves as a part of the mass market.
E)Its campaigns are effective for all customers except time-sensitive consumers.

Question 30

Contests are easier to enter and take lesser time than sweepstakes.

Question 31

Allen Hall Inc. makes redwood furniture for gardens. The company places ads in newspapers to encourage potential customers to place orders for its furniture catalogs. When these requests are received by the company, prospects' names and product details are entered into the company's electronic system to segment and grade prospective customers. In this scenario, Allen Hall is using:

A)polybagging.
B)in-store sampling.
C)diverting.
D)telemarketing.
E)database marketing.

Question 32

A drawback of direct marketing is that it:

A)can deprive customers of their privacy.
B)is relationship oriented.
C)is more public than mass media.
D)does not allow marketers to test different creative executions like mass media does.
E)is limited to one primary medium-direct mailing.

Question 33

Which of the following is a reason why an advertiser would decide against using direct marketing?

A)It does not allow advertisers to determine the cost per response.
B)It is the least effective way of developing a good database.
C)It does not offer convenience to time-sensitive consumers like mass media does.
D)It does not help advertisers in judging the effectiveness of the medium they are using.
E)It is more costly than mass media to build an image for a product.

Question 34

The three types of data that are typically available for purchase by companies are:

A)broadsides, brochures, and catalogs.
B)inquiries, sales, and returns.
C)primary, secondary, and tertiary.
D)demographics, lifestyle, and behavioristics.
E)direct, indirect, and systematic.

Question 35

_____ is defined as an "interactive process of addressable communication that uses one or more advertising media to effect, at any location, a measurable sale, lead, retail purchase or charitable donation, with this activity analyzed on a database for the development of ongoing mutually beneficial relationships between marketers and customers, prospects or donors."

A)Data management
B)Trade deal
C)Cooperative advertising
D)Direct marketing
E)Personal selling

Question 36

Which of the following terms is defined as "a measurable system of marketing that uses one of more advertising media to effect a measurable response and/or transaction at any location, with this activity stored in a database?"

A)Direct marketing
B)Trade promotion
C)Customer profiling
D)Data accessing
E)Personal selling

Question 37

The kind of advertising direct marketers use is called direct-response advertising. This is because:

A)it is restricted to direct-mail advertising.
B)responses from prospective customers cannot be tallied.
C)advertising is limited to requests for information.
D)it allows manufacturers to make trade deals directly with retailers.
E)direct marketing efforts are aimed at stimulating action from the customer.

Question 38

Which of the following statements about direct marketing is true?

A)Its main advantage is that it is unaccountable.
B)It is static in nature.
C)It is restricted to direct mails.
D)It involves a measurable response.
E)It is non-interactive in nature.

Question 39

Combination offers are the most costly of all sales promotions.

Question 40

For combination offers to be effective, items should be unrelated.

Question 41

Which of the following is a difference between telemarketing and personal selling?

A)Telemarketing is a direct-sales strategy whereas personal selling is not.
B)Telemarketing involves more face-to-face selling activities than personal selling.
C)Telemarketing costs lesser money than personal selling.
D)Personal selling involves providing sales-related services to callers whereas telemarketing does not.
E)Telemarketing occurs away from a fixed retail location whereas personal selling does not.

Question 42

Advertising that asks the reader, viewer, or listener to provide feedback to the sender is called:

A)a 360 degree feedback.
B)a spiff.
C)direct-response advertising.
D)co-op advertising.
E)an advertising allowance.

Question 43

Which of the following statements about telemarketing is true?

A)It costs more money than personal selling.
B)It is more effective than personal selling.
C)Its primary form is person-to-person selling.
D)It is also known as door-to-door sales.
E)It is a direct-sales strategy.

Question 44

Direct-mail advertisers use three types of lists: house, mail-response, and _____.

A)broadside
B)premium
C)letter shop
D)direct
E)compiled

Question 45

_____ are any form of direct mail that can travel without an envelope.

A)Statement stuffers
B)Folders
C)Sales letters
D)Self-mailers
E)Brochures

Question 46

What are the two primary forms of personal selling?

A)Trade concentration and trade promotion
B)Buyback allowances and advertising allowances
C)Rebates and contests
D)Diverting and forward buying
E)Person-to-person sales and group sales

Question 47

_____ lists are the house lists of other direct-mail advertisers and they can be rented with a wide variety of demographic breakdowns.

A)Self-mailer
B)Sampling
C)Rebate
D)Premium
E)Mail-response

Question 48

Which of the following is a type of direct-mail format?

A)Premiums
B)Broadsides
C)Samples
D)Spiffs
E)Rebates

Question 49

Which of the following is true of compiled lists?

A)They are purchased from list vendors.
B)They are lists that offer the highest response rate.
C)They can be rented but not bought.
D)They are confidential and cannot be shared with sources outside a company.
E)They are also known as house lists.

Question 50

Which of the following is a drawback of direct mails?

A)It has a junk mail image.
B)It is the least effective method of closing a sale.
C)It is limited to two main formats-sales letters and brochures.
D)Its primary disadvantage is that it reduces the effectiveness of ads in other media.
E)It is the most uneconomical medium for business promotion.

Question 51

Which of the following is true of postcards, a direct-mail format?

A)They are also known as statement stuffers.
B)They are the most common direct-mail format.
C)They are used to generate customer traffic.
D)They are larger in size than broadsides.
E)They constitute newsletters and consumer magazines.

Question 52

_____ is one of the three basic costs of direct mail.

A)Manpower used in providing tele-services to customers
B)Creative production expenses
C)Transportation costs of door-to-door sales representatives
D)Costs of recruitment of new distributors
E)Telephonic expenses

Question 53

To increase the number of orders it receives from recipients of its direct-mail advertising campaign, Red, a furniture manufacturing company, encloses a special envelope. This envelope is used by customers to mail their order details without paying postage. This is an example of a _____.

A)house organ
B)self-mailer
C)postcard
D)business reply
E)broadside

Question 54

Which of the following is an example of direct-response broadcast advertising?

A)An e-mail offering a trial subscription to an online music station
B)A catalog featuring children's clothing
C)A television infomercial for exercise equipment
D)A telemarketing call selling health insurance schemes
E)A billboard that asks viewers to shop at a furniture store

Question 55

Forever Young, a brand of cosmetics, places print ads in fashion magazines. Through these ads, the company asks customers to get in touch with company representatives to provide feedback on the quality of their products. This strategy helps the company understand customer needs and implement innovative changes. In this example, Forever Young is using:

A)direct-response advertising.
B)a trade promotion.
C)a trade deal.
D)in-store sampling.
E)a diverting strategy.

Question 56

_____ is defined as face-to-face selling away from a fixed retail location.

A)Interactive commerce
B)Personal direct selling
C)Telemarketing
D)Direct-response advertising
E)Sampling

Question 57

The most common form of direct-mail format is a _____.

A)statement stuffer
B)brochure
C)self-mailer
D)broadside
E)sales letter

Question 58

All direct marketers must make two basic strategy decisions. The first is the extent to which they will use direct sales. The second is:

A)the extent to which they will require the medium of marketing to be interactive.
B)the frequency of customer feedback that they will require.
C)the extent to which they will use direct-response advertising.
D)the balance they will need between personal selling and telemarketing.
E)the extent to which they will need marketers' representatives to sell to customers directly.

Question 59

Which of the following is true of personal direct selling?

A)It is also known as forward buying.
B)It consists of two main forms -diverting and direct-mail advertising.
C)It is a process in which a representative convinces the customer of a product's value.
D)It takes place at a fixed retail location.
E)It is defined as personal selling only if it leads to a sale.

Question 60

_____ includes selling and prospecting by telephone, answering phone inquires, and providing sales-related services to callers.

A)Data mining
B)Data warehousing
C)Telemarketing
D)Polybagging
E)Merchandising

Question 61

Which of the following statements about sales promotion is true?

A)Its use is restricted to manufacturers.
B)It is designed primarily to keep the timing of a purchase constant.
C)It reduces a product's movement from producer to consumer.
D)It is known as a value-added tool.
E)It is the least expensive method of adding value to a brand.

Question 62

Which of the following is an example of a trade promotion?

A)A magazine carries a shampoo sachet as a sample for customers to try out before buying more of the product.
B)A restaurant sends its customers a direct mail about food festivals and discounted meals that they can avail at the restaurant.
C)A newspaper carries freestanding inserts about discounts customers can avail at a movie theatre.
D)A clothing brand provides consumers coupons with which they can avail a discount on the woolen line of clothing.
E)A manufacturer offers a department store a buyback allowance for a line of cosmetic products that it hasn't sold.

Question 63

A _____ is paid by a manufacturer for the privilege of obtaining shelf space for a new product.

A)slotting allowance
B)buyback allowance
C)forward buying allowance
D)premium
E)rebate

Question 64

Personal selling is the most costly way to communicate with prospects because:

A)it has a poor reputation among customers.
B)it is labor intensive in nature.
C)it does not give sales reps the flexibility to negotiate with prospects.
D)it has high time-constraints for sales representatives.
E)it cannot be integrated into a company's marketing strategy.

Question 65

A disadvantage of sales promotion is that:

A)it does not add immediate value to a brand.
B)it does not help in building market value.
C)it can draw competitors into a price war if overly aggressive sales promotions are used.
D)it cannot be used by manufacturers and wholesalers in the marketing channel.
E)it is less effective than advertising in motivating customers to switch to a new brand.

Question 66

_____ is the best marketing communication tool for relationship building.

A)Infomercials
B)Print advertising
C)Direct mailing
D)Telemarketing
E)Personal selling

Question 67

_____ is defined as a direct inducement offering extra incentives anywhere along the marketing route to enhance the product's movement from producer to consumer.

A)Personal selling
B)Interpersonal communication
C)Public relations
D)Sales promotion
E)Direct-response advertising

Question 68

What is the biggest strength of personal selling?

A)It involves extremely low costs.
B)It is the least time consuming method.
C)It steers clear from being labor intensive.
D)It is persuasive and personal in nature.
E)It has established a great reputation among all groups of consumers.

Question 69

The maker of Quality Paints is offering a one-month deal to retail stores to purchase its paints at 25 percent off the regular price. Rainbow Paints, a retailer, avails the offer by stocking up on these discounted products. By doing this, it plans to sell these products to customers at the listed price and thus, generating a higher profit margin. Rainbow paints is engaging in _____.

A)refunding
B)forward buying
C)polybagging
D)cooperative advertising
E)sampling

Question 70

Which of the following is an advantage of using sales promotions?

A)It is an inexpensive medium of publicizing a brand.
B)It maximizes sales volume by adding immediate value.
C)It needs to rely on over aggressive methods in order to close a sale.
D)It reduces a product's movement from producer to consumer.
E)It is designed effectively to maintain the timing of a purchase.

Question 71

Soles, a brand of footwear, has recently opened its store in London. The company uses attractive window displays and wall racks to showcase its products in an appealing way to customers. What strategy is Soles using?

A)Diverting strategy
B)Co-op advertising strategy
C)Spiff strategy
D)Pull strategy
E)Forward buying strategy

Question 72

An IMC should reduce the cost of personal selling by:

A)eliminating the need for database management.
B)communicating relevant information about the company before the sales call.
C)replacing the company's sales force with customer service representatives.
D)converting personal selling into a one-on-one medium.
E)making personal selling labor intensive.

Question 73

Orbit Bank is organizing a public marathon event for its customers, employees, and prospects to participate in. For the event, the company is developing posters, displays, and banners. These will be displayed along the run course to help publicize the bank. Which of the following is Orbit bank using to promote its brand?

A)Personal selling
B)Interpersonal communication
C)Sales promotion
D)Database marketing
E)Infomercials

Question 74

The single biggest weakness of personal selling is that it:

A)is the most costly way to communicate with prospects.
B)is not a one-on-one medium of communicating with customers.
C)prevents sales representatives from observing customers' nonverbal signs.
D)does not allow representatives to demonstrate products live.
E)is the most ineffective way of developing customer databases.

Question 75

The objective of personal selling in an IMC program is to:

A)make communication between sellers and buyers nonpersonal.
B)create primarily transactional relationships between retailers and sellers.
C)build a relationship that will provide long-term benefits to both buyers and sellers.
D)shift from being labor intensive to being capital intensive.
E)lower selling costs.

Question 76

_____ is the use of promotional discounts to purchase large quantities of an item in one region, then shipping portions of the buy to areas where the discount is not offered.

A)In-store sampling
B)Sweepstaking
C)Diverting
D)Counteradvertising
E)Personal selling

Question 77

Trade advertising refers to:

A)advertising targeted at members of the trade.
B)using broadcast media to attract customers for a product.
C)different types of pull strategies.
D)using a promotional discount to purchase large quantities of an item.
E)using freestanding inserts to reach out to customers.

Question 78

A sales promotion aimed at members of the distribution channel is called a _____.

A)spiff
B)diverting promotion
C)sampling process
D)trade promotion
E)polybagging promotion

Question 79

The practice of charging a slotting allowance is controversial because:

A)large-scale sellers complain that the allowances shut out all but the smallest suppliers.
B)the allowance prevents new products from acquiring shelf space.
C)it leads to retailers stocking up on a product when it is on discount.
D)manufacturers are not entitled to charge retailers a fee to display new products.
E)some manufacturers feel they're being forced to subsidize the retailer's cost of doing business.

Question 80

A push strategy is:

A)primarily created to generate publicity for a product among consumers.
B)designed to gain shelf space.
C)developed to attract customers.
D)created to increase demand for a product.
E)build traffic and promote impulse buying.