Chapter 17—Promotional Planning
TRUE/FALSE
1. Promotion consists of marketing communications that inform and persuade.
2. A key decision in developing a promotional strategy is to decide how much you want to spend on it.
3. While communication technology is changing, promotion is still based on communication.
4. Every communication has a receiver, a source, and a channel through which the message is passed.
5. The way a business combines its communications is a promotional mix.
6. The promotional mix is influenced by three major factors: the geographical nature of the market to be
reached, customer income, and the target market.
7. Personal selling is an effective method for promoting light bulbs.
8. The preferred approach for estimating promotional costs is to use a percentage of sales for allocating
expenses.
9. 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.
10. The best approach to promotional funding is allocating what can be spared.
11. Spending as much as the competition does for promotional efforts can lead the firm to copy the
mistakes and successes of a rival.
12. By first identifying the objectives for a promotional campaign, the small business owner will have a
better idea of the budget required.
13. Domain name should be checked for availability and registered with ICANN.
14. A small business that is search engine-friendly will have lower ranks and therefore it will attract more
visitors.
15. Social networking is an informal communication method that can be controlled by the company
through its website.
16. 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.
17. An app is an application for business or entertainment loaded onto any mobile device.
18. QR codes work like UPC codes: they identify the product on which they are found.
19. Personal selling is promotion that is delivered in a one-on-one environment.
20. Prospecting is the ongoing search for new customers.
21. Social websites have an increasing number of subscribers providing reviews of establishments,
providing the astute entrepreneur with impersonal referrals.
22. Inquiries by a potential customer that do not lead to a sale can still create what is known as a
“promising prospect.”
23. The most cost-efficient mode of personal selling may be the use of a self-employed sales or marketing
representative.
24. An issue with motivating salespeople is that the goals of the entrepreneur may differ from the
salesperson.
25. Straight salaries are best for motivating salespeople because of the financial security salaries provide.
26. A generous salary with a commission cap is typically best for most small businesses.
27. Advertising seeks to sell by informing, persuading, and reminding customers of the existence or
superiority of a firm’s product or service.
28. Advertising can make a product successful in the long term.
29. Product advertising makes potential customers aware of a particular product or service and create a
desire for it.
30. Product advertising is intended to keep the public conscious of the company and its good reputation.
31. Institutional advertising is primarily concerned with a company and its reputation.
32. The majority of small business advertising is institutional advertising.
33. The type of advertising used should be based on the nature of the business, industry practice, available
media, and the firm’s objectives.
34. Most small businesses create their own promotional messages.
35. Sales promotion refers to promotional techniques other than personal selling or advertising.
36. Advertising is considered to be part of sales promotion.
37. 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.
38. Trade show groups claim that the cost of an exhibit is less than one-fourth the cost of a sales call.
39. 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.
40. Regular contact with news media is required if publicity programs are to be effective.
41. Publicity is accurately described as free advertising.
42. Both wholesalers and retailers can utilize sales promotion tools to increase sales.
MULTIPLE CHOICE
1. A widely dispersed market favors which promotional method?
a.
Personal selling
b.
Sales promotion
c.
Personal promotion
d.
Advertising
2. 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.
3. Which category would be best for ink pens?
a.
Advertising
b.
Personal Selling
c.
Sales Promotions
d.
Social media
4. Which category would be best for a CPA firm?
a.
Advertising
b.
Personal Selling
c.
Sales Promotions
d.
Point-of-display promotion
5. 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
6. Just Add Water, a boat dealership, has been successful in a strong economy by spending 5% of its
sales revenues on promotions. What adjustments, if any, should Just Add Water make now that the
economy has gone into recession?
a.
Continue to spend 5% 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 5% of profits on promotions rather than 5% of sales.
7. 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
8. 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.
9. 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.
10. 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
11. 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.
12. 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.
13. 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.
14. 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.
15. Stacy was pleased when positive comments about her products appeared on a blog but became
discouraged when other reviewers 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.
16. 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.
17. 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 is called
a.
an email.
b.
spam.
c.
a website.
d.
a hyperlink.
18. 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.
19. 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
20. HubSpot, Inc. used a(n) ______ to establish the company’s platform of inbound marketing.
a.
app
b.
Blog
c.
e-mail campaign
d.
hyperlink
21. 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.
can not handle objections.
22. Media publications, public records, and directories are sources of
a.
impersonal referrals.
b.
marketer-initiated contacts.
c.
personal referrals.
d.
customer-initiated contacts.
23. A salesperson at Carpet Warehouse searches public records of new building permits to identify
potential customers for new carpets. This salesperson is relying on ____ to identify sales prospects.
a.
personal referrals
b.
marketer-initiated contacts
c.
impersonal referrals
d.
customer-initiated contacts
24. 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.