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Indicate whether the statement is true or false.
1. Social networking is an informal communication method that can be controlled by the company through its website.
a. True
b. False
2. Many small manufacturers, while agreeing that trade-show exhibits can be helpful in promotion, rightly believe that
they are not as cost-effective as media advertising.
a. True
b. False
3. The type of advertising used should be based on the nature of the business, industry practice, available media, and the
firm’s objectives.
a. True
b. False
4. A key decision in developing a promotional strategy is to decide how much you want to spend on it.
a. True
b. False
5. Most small businesses create their own promotional messages.
a. True
b. False
6. Straight salaries are best for motivating salespeople because of the financial security salaries provide.
a. True
b. False
7. Specialty items are effective because they last, are generally delivered personally, and have value to the customer while
they keep the name of the company or product in front of them.
a. True
b. False
8. A small business that is search engine-friendly will have lower ranks and therefore it will attract more visitors.
a. True
b. False
9. Personal selling is an effective method for promoting toothpaste.
a. True
b. False
10. Trade show groups claim that the cost of an exhibit is less than one-fourth the cost of a sales call.
a. True
b. False
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11. Spending as much as the competition does for promotional efforts can lead the firm to copy the mistakes and
successes of a rival.
a. True
b. False
12. By first identifying the objectives for a promotional campaign, the small business owner will have a better idea of the
budget required.
a. True
b. False
13. Every communication has a receiver, a source, and a channel through which the message is passed.
a. True
b. False
14. Advertising is considered to be part of sales promotion.
a. True
b. False
15. The preferred approach for estimating promotional costs is to use a percentage of sales for allocating expenses.
a. True
b. False
16. Regular contact with news media is required if publicity programs are to be effective.
a. True
b. False
17. The percentage of sales method for estimating promotional expenditures does not make sense for new businesses
because these companies do not have historical sales figures.
a. True
b. False
18. While e-mail promotion provides a low-cost way to pinpoint customers and achieve response rates higher than those
for banner ads, the issue of churning is a concern.
a. True
b. False
19. Personal selling is promotion that is delivered in a one–on–one environment.
a. True
b. False
20. Institutional advertising is primarily concerned with a company and its reputation.
a. True
b. False
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21. An issue with motivating salespeople is that the goals of the entrepreneur may differ from the salesperson.
a. True
b. False
22. A generous salary with a commission cap is typically best for most small businesses.
a. True
b. False
23. The way a business combines its communications is a promotional mix.
a. True
b. False
24. Inquiries by a potential customer that do not lead to a sale can still create what is known as a “promising prospect.”
a. True
b. False
25. The promotional mix is influenced by three major factors: the geographical nature of the market to be reached,
customer income, and the target market.
a. True
b. False
26. Product advertising makes potential customers aware of a particular product or service and create a desire for it.
a. True
b. False
27. QR codes work like UPC codes: they identify the product on which they are found.
a. True
b. False
28. Social websites have an increasing number of subscribers providing reviews of establishments, providing the astute
entrepreneur with impersonal referrals.
a. True
b. False
29. Sales promotion refers to promotional techniques other than personal selling or advertising.
a. True
b. False
30. Publicity is accurately described as free advertising.
a. True
b. False
31. The most cost-efficient mode of personal selling may be the use of a self-employed sales or marketing representative.
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a. True
b. False
32. Advertising can make a product successful in the long term.
a. True
b. False
33. Product advertising is intended to keep the public conscious of the company and its good reputation.
a. True
b. False
34. Both wholesalers and retailers can utilize sales promotion tools to increase sales.
a. True
b. False
35. The majority of small business advertising is institutional advertising.
a. True
b. False
36. The best approach to promotional funding is allocating what can be spared.
a. True
b. False
37. Domain name should be checked for availability and registered with ICANN.
a. True
b. False
38. Because technology is changing, promotion is no longer based on communication.
a. True
b. False
39. An app is an application for business or entertainment loaded onto any mobile device.
a. True
b. False
40. Prospecting is the ongoing search for new customers.
a. True
b. False
41. Advertising seeks to sell by informing, persuading, and reminding customers of the existence or superiority of a firm’s
product or service.
a. True
b. False
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42. Promotion consists of marketing communictions that inform and persuade.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
43. Customer objections can be categorized as relating to
a. product and price.
b. need and sequence.
c. source and pitch.
d. timing and sequence.
44. What provides visibility for a business at little or no cost?
a. salesmanship
b. communication
c. publicity
d. advertising
45. To make an informed selection about where to advertise, a small business manager should
a. consult different banks for loans to pay for the process.
b. create the message in conjunction with past campaigns.
c. learn about the strengths and weaknesses of each advertising medium.
d. perform a statistical analysis of the target market (s).
46. Anne owns a small business dealing with industrial products. She currently uses personal selling extensively, but she
wants to reduce her cost without losing exposure. Which promotional tool should she use?
a. Contests
b. Coupons
c. Specialties
d. Trade show exhibits
47. A widely dispersed market favors which promotional method?
a. Personal selling
b. Sales promotion
c. Personal promotion
d. Advertising
48. The two basic types of advertising are ____, which makes potential customers aware of products and their need for
them, and ____, which conveys an idea about the firm that produces the product.
a. institutional, product
b. product, institutional
c. product, publicity
d. specialty, publicity
49. Which medium is considered to have a low pass-along rate?
a. Newspapers
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b. Outdoor Media
c. Radio
d. Television
50. Promotional funds are determined according to past experience in which of the following methods?
a. What can be spared
b. Spending as much as the competition
c. Percentage of sales
d. Forecasted industry standard
51. Get Moving, a fitness equipment retailer, has been successful in a strong economy by spending 4% of its sales
revenues on promotions. What adjustments, if any, should Get Moving make now that the economy has gone into
recession?
a. Continue to spend 4% of sales on promotions, even though this results in a lower promotional budget.
b. Increase the promotional budget to attract new customers
c. Decrease the promotional budget. No one has any money to spend anyway.
d. Spend 4% of profits on promotions rather than 4% of sales.
52. Hands-on experience with a product is possible with
a. coupons.
b. personal selling.
c. specialty promotions.
d. trade show exhibits.
53. Ned’s company has supported the Little League, Pop Warner football, the high school band, and many other local
charities but isn’t getting the amount of press he feels his actions deserve. Why might this be true?
a. The local media disagree with the nature of Ned’s business.
b. A good publicity program requires regular contacts with the news media so Ned needs to make them aware of his
support.
c. The charities are not publicizing the names of their supporters.
d. Ned’s contributions are too small to mention in the press.
54. Marcia is considering offering a promotional item for her sales people to give to prospects at their first
appointment. Which of the following would be the best choice?
a. A calendar.
b. A coupon for a discount on the first purchase
c. Tickets to a professional sports event
d. A bottle of fine wine
55. An inducement to buy a certain product while typically offering value to recipients is
a. a sales promotion.
b. a specialty trade show.
c. specialty advertising.
d. includes all of the above.
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56. Inspiring Toys, a small manufacturer of educational toys, is formulating a budget for next year’s promotional activities.
What method should be considered to react to a short run promotional tactic done by Mattel?
a. spending as much as the competition
b. percentage of sales
c. how much for specific results
d. deciding what can be spared
57. Martel visited the website of his favorite music store looking for a specific CD from years past. The website touted a
vast library of classic rock CDs but after just a few minutes Martel gave up and left the site. It is probable the website
suffered from:
a. inferior quality of the site design.
b. poor performance in order fulfillment.
c. slow downloading.
d. too much information at the site.
58. Marketers and customers alike enjoy specialties because they
a. allow customers to sample the product.
b. cast doubt on the products offered by competitors.
c. create goodwill for the company.
d. prevent price competition.
59. Stephen is a new entrepreneur who would like to advertise his business but feels his creativity is insufficient to the
task. Where can he find help?
a. Competing businesses
b. Neighboring businesses
c. Computer sales firms
d. Advertising media
60. The key to effective ___________ is that they last.
a. contests.
b. samples.
c. specialties.
d. trade shows.
61. Rebecca is starting a new consulting business for a small, local target market. She has determined the amount for the
four methods: percentage of sales $2,000; how much to spare $1,000; competition spending $5,000; and specific results
$3,000. How much should she spend?
a. $1,000 because it is the least amount.
b. $3,000 because it is within the range and also for specific results.
c. $5,000 because it is the largest amount.
d. $10,000 because it twice the total of the competition.
62. Which category would be best for ink pens?
a. Advertising
b. Personal Selling
c. Sales Promotions
d. Social media
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63. A small, specialized software program is called
a. e-mail.
b. spam.
c. social media.
d. an app.
64. Stacy was pleased when positive comments about her products appeared on a blog but became discouraged when
other reviewiers panned the same products. Stacy must remember:
a. business owners cannot absolutely control how their businesses are viewed by consumers.
b. customers will misuse the products, resulting in negative comments.
c. people are more likely to share complaints than compliments.
d. if she wants more positive comments, she will have to write them herself.
65. A promotional mix is influenced by the
a. geography of the market, the promotional budget, and product characteristics.
b. geography of the market, retailer market, and product characteristics.
c. firm’s target customers, product characteristics, and budget requirements.
d. firm’s target customers, market size, and product characteristics.
66. Terrance is concerned that printing and distributing coupons will be a waste of time and money because the coupons
may not be redeemed. You remind him that:
a. the printing expenses are sunk costs and have no impact on the decision.
b. customers who received but did not redeem coupons actually increased their purchasing from the stores associated
with the coupons.
c. he can still make a profit by issuing coupons.
d. coupons will attract only browsers but not shoppers.
67. A widely used piecemeal approach to determining the level of promotional expenditures is
a. expert opinion.
b. what can be spared.
c. what the market will bear.
d. cost plus.
68. The major problem with the ____ method of determining promotional expenditures is the tendency to spend more
when sales are increasing and less when they are declining.
a. percentage of sales
b. what it will take to do the job
c. sales plus
d. what can be spared
69. Mary, a sales representative for a small cleaning business, asks current customers for names of friends, customers and
other businesses that might be interested in the company’s cleaning services. Mary is relying on ____ to identify potential
customers.
a. customer-initiated contacts
b. impersonal referrals
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c. marketer-initiated contacts
d. personal referrals
70. Personal selling degenerates into order-takers when a salesperson
a. has limited knowledge of the product or service.
b. is persistent about selling the product or service.
c. is not friendly and enthusiastic when a customer enters the store.
d. cannot handle objections.
71. The two major steps in preparing for a sales presentation are
a. advertising and practicing.
b. prospecting and practicing.
c. publicity and prospecting.
d. exhibits and prospecting.
72. The nonprofit corporation currently overseeing the global Internet is called the
a. Global Internet Management Corporation.
b. Internet Corporation for Assigned Names and Numbers.
c. International Office for Internet Oversight.
d. International Public Internet Corporation.
73. Which category would be best for a CPA firm?
a. Advertising
b. Personal Selling
c. Sales Promotions
d. Point-of-display promotion
74. Media Corporation posts an photo of the week’s top salesman on the company website. Every month, it includes an
article about its top salesperson in its internal newsletter. This is an example of:
a. personal recognition.
b. compensation.
c. a stock plan.
d. a bonus plan.
75. The successful combination of advertising media depends on
a. the type of business.
b. customer income.
c. the ad agency.
d. the class of the customer.
76. Payment for banner advertising is usually based on the number of people who actually
a. click on the banner.
b. make a purchase.
c. spend a certain length of time on the advertiser’s website.
d. visit the website.
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77. Telephone calls and mail surveys are examples of
a. impersonal referrals.
b. marketer-initiated contacts.
c. personal referrals.
d. customer-initiated contacts.
78. Will is a salesperson for a small appliance store. In an attempt to locate potential new customers, he decides to poll
Facebook visitors; they are entered into a drawing for a gift certificate at the store. Those individuals who complete the
poll will receive a phone call from Will about the store’s products and current promotions. Will is gaining knowledge of
potential customers through
a. personal referrals.
b. marketer-initiated contacts.
c. impersonal referrals.
d. customer-initiated contacts.
79. A good way to increase the volume and quality of traffic to a particular website is to:
a. place banner ads on reciprocal sites.
b. offer rebates that can be applied toward future purchases.
c. make sure that the site is accessible by search engines.
d. All of the above are good methods.
80. HubSpot, Inc. used a(n) ______ to establish the company’s platform of inbound marketing.
a. app
b. Blog
c. e-mail campaign
d. hyperlink
81. Which channel option would be the least personal for a business to its customer?
a. Blog
b. E-mail
c. Greeting Card
d. Personal Visit
82. Tyler cannot afford to hire a sales person for his small business but feels personal selling is the best way to encourage
prospects to become customers.You remind him that:
a. he may have to be his own sales person for a while.
b. good sales people are expensive.
c. the most cost-efficient mode of selling may be to use sales or marketing representatives.
d. he can always send his production people out to make sales calls.
83. Raymond is considering whether to advertise on the placemats used in many local restaurants. One of the arguments
in favor of this action is:
a. publicity is important to a small business and should be used at every opportunity.
b. you never know who might see the ad on the placemat.
c. the cost of printing is shared with many other local businesses.
d. every ad will generate approximately 1,000% of its cost in revenues.
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84. A salesperson at Plumbers Warehouse searches public records of new building permits to identify potential customers
for new bathrooms. This salesperson is relying on ____ to identify sales prospects.
a. personal referrals
b. marketer-initiated contacts
c. impersonal referrals
d. customer-initiated contacts
85. The problem with selling some items on the _________ is that the customer cannot see them. Which medium is
considered to have a no visual treatment?
a. Magazines
b. Outdoor Media
c. Radio
d. Television
86. The “spending as much as the competition” method
a. can be used to duplicate the promotional efforts of close competitors.
b. depends on past experiences.
c. should be used to introduce a unique, new product.
d. should never be used.
87. Which compensation plan is best suited for new salespersons in a small business?
a. Straight salary plan
b. Strictly commissions-on-sales plan
c. Combination of salary and commissions, with the salary representing the larger portion
d. Combination of salary and commissions, with the commissions representing the larger portion
88. Ricky created an attractive website but is disappointed that he hasn’t received many hits. Your suggestion is that he:
a. place a banner add on other websites.
b. purchase a billboard add to advertise his website.
c. buy a newspaper ad to promote his website.
d. hire a different website creator.
89. Media publications, public records, and directories are sources of
a. impersonal referrals.
b. marketer-initiated contacts.
c. personal referrals.
d. customer-initiated contacts.
Match the term with its definition. Some terms may not be used.
a. Advertising
b. Blog
c. Institutional advertising
d. Social media
e. Personal selling
f. Product advertising
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g. Promotion
h. Prospecting
i. Publicity
j. Sales promotion
90. A face-to-face meeting with a customer
91. Marketing communications that inform and persuade consumers
92. An online journal that offers a writer’s experiences, opinions, etc.
93. A promotional strategy that provides visibility for a business at little or no cost
94. A strategy to sell by informing, persuading, and reminding customers of the availability or superiority of a firm’s
products or services
95. A systematic process of continually looking for new customers
96. Social networking and microblogging websites
97. A presentation designed to make potential customers aware of a specific product or service and create a desire for it
98. A presentation of information about a particular firm, designed to enhance the firm’s image in order to make its other
advertising more credible and effective
Match the term with its definition. Some terms may not be used.
a. App
b. E-mail promotion
c. Hyperlink
d. Mobile device
e. Promotional mix
f. Publicity
g. Quick response (QR) code
h. Sales promotion
i. Social media
j. Social networking
99. A generic term used to refer to a variety of wireless handheld computing devices that allow people to access
information from wherever they are
100. Abbreviation for a software application for business or entertainment
101. A square bar code that connects to a website, a video, or some other web content
102. Social networking, microblogging websites, and other means of online communicatin where users share personal
messages, information, videos, and other content
103. A word, phrase, or image that a user may click on to go to another part of a document or website or to a new
document or website
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104. An inclusive term for any promotional technique other than personal selling and advertising that stimulates the
purchase of a particular product or service
105. Delivery of a firm’s message by electronic mail
106. A blend of nonpersonal, personal, combined, and special forms of communication aimed at a target market
107. Interacting online with other users who share common interests
108. Tori is the lead singer for the band Rockin’ Rebels. The band would like to have items at their live shows to gain
exposure and attract fans to their merchandise table. What promotion items should Rockin’ Rebels use and what
advantages will this provide?
109. Patty has been in operation for 5 years with a seasonal business, Patty’s Pickin’ Patch, offering U-Pick organic
vegetables in season. Other services include hay rides around the farm and a corn maze. For each basic type advertising,
discuss what Patty would use and how would these types benefit the company?
110. William is analyzing his financials and determining a budget for promotional activities for his company. He has data
from last year’s budget, past financial statements, projections for next year’s budget as well as a general idea of what the
competition spent last year. How should he determine the new budget and what concerns should he be aware of during
the process?
111. List and briefly explain the four common methods of earmarking funds for promotion.
112. What are the advantages and disadvantages of using salary and commission as methods of compensating
salespeople?
113. What are five website design guidelines?
114. List three sales promotional tools and briefly explain the unique characteristics of each tool. When should these tools
be used?
115. What factors determine the combination of the promotional mix for a business? Use examples of non-personal,
personal and special forms of communication for each.
116. What are the specific services that an advertising agency can provide?
117. Zoe has decided to start a personal shopper company in her metropolitan town of 250,000. She wants to concentrate
on college professors at the small university she graduated from which has 85 professors employed full time. After
deciding whether each medium would be acceptable, complete the following chart.
Medium Acceptable? Why or Why not?
Newspaper – Campus and Local
Radio – Campus and Local
Internet
Others?
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Answer Key
1. False
2. False
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52. d
53. b
54. a
55. a
56. a
57. c
58. c
59. d
60. c
61. b
62. a
63. d
64. a
65. a
66. b
67. b
68. a
69. d
70. a
71. b
72. b
73. b
74. a
75. a
76. a
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103. c
104. h
105. b
106. e
107. j
108. Rockin’ Rebels should use specialty items at their live shows to attract fans to their merchandise table. The items
should be imprinted with the Rockin’ Rebels name and/or identifying slogan and be consistent in color, fonts, and designs.
The items should be enduring in nature and tangible especially since many fans may want to have the band autograph the
item. The result is an item that will be worth something to the fan and will have value. Most bands would have CDs for
sale but could also offer pictures, calendars, keychains, T-shirts or anything unique for the fans. Offering these items will
allow the band to develop a one–on–one relationship with their fans, develop good will for their business and help develop
their band image.
109. For product advertising, Patty could make customers aware of the products and services such as the organic
vegetables, hay rides, and corn maze. A newspaper, radio or television advertisement could stress these products and drive
potential customers to the website.
Institutional advertising would focus on the business (especially its 5 year history) and should add to the credibility and
the image of the business. This advertising would be best for the website.
The same advertisement could be used to promote both the product and the institutional themes. Both should be
consistent in either informing, persuading and reminding customers of what Patty’s Pickin’ Patch can offer.
110. William has enough information to complete all four methods.
Percentage of sales can be determined by using last year’s sales. He also could examine industry data for a comparison.
How much can be spared would be what was left after next year’s estimated sales and expenses. The pro-formas for next
year’s financial statements could provide this information.
Spending as much as the competition is easily completed since he has an idea about competitive spending.
Determining how much is needed for specific results can be obtained base on projections from next year’s budget.
While determining how much is needed for results would be the preferred approach, William could also examine the
minimum and maximum amounts and compare all totals.
111.
∙ Percentage of sales. A company’s own past sales experiences or industry averages are evaluated to establish the
firm’s promotion/sales ratio.
∙ What can be spared. Promotional budgeting is based on spending what is left over when all other activities have
been funded.
∙ Spending as much as the competition. This method studies competitors and allocates funds close to their levels.
∙ What it will take to do the job. This method analyzes the market and promotional alternatives to determine the
amount of funds required to do the job.
112. Security for the salesperson is the greatest advantage of a salary plan. However, a straight salary tends to restrict the
salesperson’s earning ability and can even promote laziness. On the other hand, when a salesperson is compensated with
salary, the firm can easily require that person to perform non-selling activities.
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A commission plan serves as a strong incentive to the sales force “no sale, no income.” A commission plan also helps with
a firm’s cash flow problems because payment is not made until sales revenue begins to come in. However, a 100 percent
commission plan may not help the salesperson’s morale if sales are slow.
113. 1. Select and register the domain name.
2. Choose a Web host.
3. Decide on the layout.
4. Provide easy navigation.
5. stay consistent in style.
6. Make sure the website can be accessed by multiple devices.
7. Engage in search engine optimization.
8. Keep the website fresh.
9. Include a call to action.
10. Supply contact information.
114.
∙ Specialties are sales promotion items with enduring nature and tangible value. Items should reinforce or add to a
company’s image and goodwill. These items can be used to remind a customer of the company in conjunction with
advertising and personal selling campaigns.
∙ Trade show exhibits are product demonstrations that provide hands-on experience with a product. Specialities could
be given out at the show in hopes to stimulate a purchase. These shows are involved with personal selling.
∙ Publicity is a less costly form of sales promotion that is almost “free” but can be unfavorable. Again, using publicity
in combination with advertising and personal selling would be best. Technology now makes it easer to create publicity
through social shopping websites.
∙ Coupons offer the user a discount off the regular price of an item. Their purpose is to attract new customers and
reward continuing users of the product or service. Coupons have value even when they are not redeemed. Customers
whodo not redeem coupons actually increased their purchasing from the stores associated with the coupons.
115. – Geographical nature of the market: A widely dispersed market generally requires mass coverage through
advertising (non-personal), in contrast to the more costly individual contacts of personal selling (personal). If the market is
local and/or customer number is small, personal selling may be more feasible. Sales promotions (special) could be used
for all geographical areas.
–Promotional budget size: Some promotional forms are not feasible due to high costs. For example, radio advertising is
generally less expensive than television advertising. The lower costs and more targeted nature of company websites have
led many small firms to choose electronic media and inbound marketing strategies.
-Product characteristics: If a product has high unit value, such as real estate, personal selling will be vital to the mix.
Non-personal advertising will be more effective for an inexpensive item such as chewing gum.
116.
∙ Graphic design, artwork, and even printing for specific advertisemenst andor commercials
∙ Recommendatoins for media with the greatest “pulling power” for the product or service
∙ Copywriting for traditional ads, as well as for blogs, press releases, and otehr promotional materials
∙ Assistance with trade shows and merchandise displays
∙ Website design and social media management
∙ Mailing and e-mail list management
117.
Medium Acceptable? Why or Why not?
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Newspaper – Campus and Local
Yes and No Yes to campus: its high individual coverage and short lead time may make it affordable. Cost would have
to be checked. No to local: cost would be expensive
Radio – Campus and Local
Yes and No Possible if radio has enough listeners. Typically low cost but have commercial clutter. No to area stations
as not specific to target market.
Internet
Yes Yes as people expect a site for information.
Easy to update, able to direct people to site for information. Concern is having to rely on another company for service
since business size would not have a web designer.
Others?
Yes Personal emails to professors she knows; offering discount for professors by going through university’s
human resources department.