Marketing Management, 15e (Kotler)
Chapter 22 Managing Personal Communications: Direct and Database Marketing and
Personal Selling
1) The catalog you receive from a large apparel store, displaying their new summer collection, is
an example of ________ marketing.
A) buzz
B) direct
C) virtual
D) word-of-mouth
E) interactive
2) A salesperson sends e-mails to persuade prospects to buy the products of his company. This is
a type of ________ marketing.
A) buzz
B) virtual
C) word-of-mouth
D) direct
E) viral
3) Market demassification has resulted in ________.
A) niche market creation
B) product standardization
C) mass production practices
D) intrinsic marketing channels
E) just-in-time production
4) Which of the following is an example of a company that serves a niche market?
A) a large apparel manufacturing company that produces a wide range of products for different
segments
B) a software company that creates standardized supply chain applications for manufacturers
C) a manufacturer who creates tools such as bolts, latches, door handles etc. for left-handed
individuals
D) a large multinational manufacturer of consumer products, FMCG products, and consumer
electronics
E) a company that manufactures denim pants for men and women of all ages
5) Which of the following is NOT one of the advantages of direct mail?
A) The cost per thousand is lower than for mass media.
B) It permits target market selectivity.
C) It can be personalized.
D) It allows early testing and response measurement.
E) It is flexible.
6) Greta is attempting to get as many orders as possible. Which direct marketing tool is generally
associated with the highest order response rate?
A) e-mail to an internal company list
B) direct mail to an internal company list
C) e-mail to a general list
D) direct mail to a general list
E) banner advertising on the company’s Web site
7) Greta is marketing a product that is technologically advanced and requires a great deal of
explanation. Which direct response tool should she use?
A) direct mail
B) e-mail
C) infomercial
D) inbound telemarketing
E) outbound telemarketing
8) OrdOnline, a pure click company offering online auctioning, decides to launch a promotional
program to increase its sales. The company identifies customers who have made at least three
purchases and spent at least $150 in the past six months and offers discount coupons to these
customers. Which of the following strategies is used here for targeting customers?
A) viral marketing
B) objective screening
C) internal targeting
D) catalog marketing
E) RFM formula targeting
9) Which of the following is a major advantage of using direct mail?
A) Direct mail permits target market selectivity.
B) It is the best suited tool for selling complex products.
C) Campaign testing is not needed for direct mail.
D) Direct mail has very high conversion rates.
E) It is the best method to sell industrial products.
10) Which of the following is a factor considered when a customer is evaluated based on the
RFM formula?
A) the amount of time passed after the customer’s last visit
B) the product categories purchased by the customer
C) the mode of payment used by the customer
D) the location from which the customer has bought goods
E) the type of feedback provided by the customer
11) Which of the following is an element of an offer strategy?
A) the medium used for delivery
B) the number of customers in the locality
C) the vision of the company
D) the skills required for production
E) the details of customer order received
12) In 2010, three top B-to-B ________ were Thermo Scientific lab and research supplies ($10.8
billion), Henry Schien dental, medical, and vet supplies ($7.5 billion) and WESCO International
electrical and industry maintenance supplies ($5 billion).
A) inbound telemarketers
B) catalog sellers
C) outbound telemarketers
D) infomercial marketers
E) mobile marketers
13) In 2010, the three top B-to-C ________ were Dell ($52 billion), Staples ($9.8 billion), and
CDW ($8.8 billion).
A) inbound telemarketers
B) catalog sellers
C) outbound telemarketers
D) infomercial marketers
E) mobile marketers
14) The practice of using call centers, where employees receive calls from customers and
provide service by taking orders and answering queries, is called ________.
A) customer response marketing
B) guerilla marketing
C) reactive marketing
D) internal marketing
E) inbound telemarketing
15) In outbound telemarketing, the call center employees ________.
A) sell high-involvement products
B) initiate calls from a location closer to prospects
C) offer huge discounts to customers
D) initiate calls to prospects and customers
E) answer the queries of consumers who call for information
16) The management of Raleigh Bicycles observes that the company’s selling costs are affected
by the increased number of visits that salespeople make to meet dealers. The company decides to
reduce its personal selling costs by making sales calls to dealers via telephone. This marketing
strategy used by Raleigh is an example of ________.
A) inbound telemarketing
B) search marketing
C) internal marketing
D) outbound telemarketing
E) paid-search marketing
17) Which of the following is a disadvantage of direct marketing?
A) invasion of privacy
B) inability to build brand awareness
C) low chances of customers avoiding messages
D) inability to control marketing communication
E) inability to maintain information security
18) Catalog marketing and telemarketing are examples of indirect marketing.
19) During the 2012 election, much of the $690 million raised online by the Obama campaign
resulted from carefully targeted and tested e-mails.
20) Direct marketing has not been growing as fast as US retail sales.
21) Direct marketing produced $2.05 trillion in sales in 2012, accounting for approximately 8.7
percent of GDP.
22) A direct marketer must consider returned merchandise and bad debts when s/he determines
the needed break-even response rate for direct mail.
23) If a specific campaign does not break even in the short run, it will not be profitable in the
long run if we factor in customer lifetime value by calculating the average customer longevity,
average customer annual expenditure, and average gross margin, minus the average cost of
customer acquisition and maintenance (discounted for the opportunity cost of money).
24) One of the shortcomings of direct marketing is that the firm cannot easily measure the
response.
25) Direct mail permits target market selectivity and allows early testing and response
measurement.
26) A company’s best prospects are customers who have never bought its products.
27) Direct marketing has the ability to test different elements of an offer strategy under real
marketplace conditions.
28) Although it varies with product category, price, and the nature of the offering, in general,
average response rates for e-mails is higher than order-response rates for letter-sized direct mail.
29) Direct mail can produce prospect leads, strengthen customer relationships, inform and
educate customers, remind customers of offers, and reinforce recent customer purchase
decisions.
30) Points are established for varying RFM levels; the more points, the more attractive the
customer.
31) The Internet and catalog retailing industry includes 20,000 companies with combined annual
revenue of $350 billion.
32) Direct marketers use the RFM formula to select customers according to how much time has
passed since their last purchase, how many times they have purchased, and how much they have
spent since becoming a customer.
33) If a company exaggerates the features of its products in its product catalogue, it can be
classified as deception.
34) Business-to-business telemarketing is increasing.
35) Business-to-consumer telemarketing is increasing.
36) What is direct marketing? What are the various channels that direct marketers use?
37) How did the Obama campaign use direct marketing during the 2012 election?
38) How have consumers benefited from market demassification?
39) How have sellers benefited from market demassification?
40) How do successful direct marketers view customer interactions?
41) Why is direct mail popular among marketers? What are its weaknesses?
42) What are the elements of a direct mail offer? How can each be tested?
43) How do direct mail response rates relate to a campaign’s long-term impact? Provide an
example.
44) Most direct marketers apply the RFM formula to select customers. Explain this formula and
how it is used to select customers.
45) Why do companies use infomercials?
46) Describe the darker side of direct marketing solicitations.
47) DB Bank is launching a new investment product targeting senior citizens in the United
States. The company decides to use direct marketing for selling the product. What direct
marketing strategy would allow the company early testing and response measurement of the
product?
48) What are the five elements of an offer strategy?
49) Integron Inc., a company that manufactures office furniture, has recently observed a dip in its
profitability. Salespeople visit an average prospect at least six times before closing a deal. What
suggestion can you give the company to reduce this expense of direct marketing and increase its
profitability?
50) Roler Telecom, a leading mobile telephone operator in Asia, engages in aggressive
marketing promotions. The company sends promotional messages to customers and makes
promotional calls on a regular basis. However, these aggressive promotion efforts often irritate
its customers. What could be the likely outcome of this?
51) The Internet provides marketers and consumers with opportunities for much greater
interaction and ________ than do other marketing channels.
A) control
B) data security
C) high involvement selling
D) order conversion
E) individualization
52) The offer strategy has five elements: the product, the offer, the medium, the distribution
method, and the ________.
A) outside envelope
B) creative strategy
C) sales letter
D) circular
E) reply form
53) The darker side of direct marketing, from a consumer perspective, includes all of the
following EXCEPT ________.
A) irritation
B) unfairness
C) deception and fraud
D) federal regulation
E) invasion of privacy
54) Which of the following is NOT conducive to database marketing?
A) Rushbury Theater relies on the generosity of donors to keep functioning.
B) Kenilworthy retails luxury handbags and leather accessories to a select clientele.
C) 2Wheels sells its most profitable products to repeat customers.
D) Uncle Jim’s sells its range of snacks in stores throughout the country.
E) PetZone offers obedience classes, a doggie daycare, and other services for pets in the
Manhattan area.
55) In which of the following cases is building a database worthwhile for the company?
A) Clare’s creates personalized sculptures for special occasions.
B) Sales of Clarity soap have fallen over the past few months in all regions.
C) 2Wheels sells its most profitable products to repeat customers.
D) Uncle Jim’s sells its range of snacks in stores throughout the country.
E) Ready-to-wear clothes brand Zeep targets the teen and tween market throughout the United
States.
56) In which of the following cases is building a database worthwhile for the company?
A) where the product is a once-in-a-lifetime purchase
B) where customers show little loyalty to a brand
C) where the company has a long relationship with its customers
D) where the unit sale is very small
E) where the cost of gathering the information is high
57) Which of the following is most likely to use database marketing?
A) an airline
B) a candy bar manufacturer
C) a fast-food chain
D) a toothpaste manufacturer
E) a hairstylist
58) Which of the following statements demonstrates behavioral loyalty toward a brand?
A) 2Wheels has very customer-friendly return policies for its products.
B) I always buy 2Wheels products when I’m looking for bike accessories.
C) Most of my friends agree that 2Wheels is the best place for durable biking gear.
D) 2Wheels has the friendliest customer service people I’ve ever met.
E) I think that 2Wheels products are the highest-quality products in their price range.
59) Which of the following is a positive factor when considering the development of a customer
database?
A) The product is a once-in-a-lifetime purchase.
B) There is no contact between the buyer and seller.
C) There is a lot of customer churn.
D) The unit sale is very small.
E) Customer lifetime value is high.
60) Database marketing is ideal when a company does not have direct contact with its customers.
61) What are the five main challenges associated with database marketing?
62) In general, what are the five ways companies use database marketing?
63) What situations are not conducive to database marketing?
64) The original and oldest form of direct marketing is ________.
A) billboards
B) banner advertising
C) mail campaigns
D) outbound telemarketing calls
E) field sales calls
65) A salesperson performing over-the-counter sales in a medical store can be referred to as a(n)
________.
A) order taker
B) demand creator
C) solution vendor
D) phisher
E) missionary
66) Alduro Chemicals, a manufacturer of detergents, delivers chemicals used for commercial
washing to various hoteliers in the United States. Most of the company’s revenue comes from
routine orders from its existing customers. The company uses unskilled salespeople to collect
requirements from its customers. These unskilled customers are known as ________.
A) demand creators
B) deliverers
C) missionaries
D) order takers
E) solution vendors
67) Gordron Inc. manufactures and markets medical equipment. To ensure that its salespeople
are knowledgeable enough to answer all product queries, the company hires only those
individuals who have a good understanding of both the medical profession and the mechanics of
the equipment used. Which of the following is the most accurate classification of Gordron’s
salesforce?
A) technicians
B) demand creators
C) deliverers
D) order takers
E) missionaries
68) Robert is hired as a sales representative for a company that manufactures fire extinguishers.
His job description reads as follows: “The key duty of the sales representative is to unravel the
customer’s problems using the company’s products.” Which of the following positions would
best describe Robert’s profile?
A) deliverer
B) technical salesperson
C) missionary salesperson
D) order taker
E) solution vendor
69) A sales representative whose expertise is in unraveling customers’ problem is called a(n)
________.
A) order taker
B) missionary
C) technician
D) solution vendor
E) demand creator
70) A salesperson who relies on creative methods for selling a company’s tangible or intangible
offerings is called a(n) ________.
A) demand creator
B) deliverer
C) order taker
D) missionary
E) solution vendor
71) Which of the following tasks of the salesforce refers to conducting market research and
doing intelligence work?
A) servicing
B) communicating
C) targeting
D) prospecting
E) information gathering
72) US firms spend more on sales forces and sales force materials than on any other promotional
method.
73) In 2012, more than 20 percent of the total workforce worked full time in sales occupations,
both nonprofit and for profit.
74) A salesperson calling on supermarkets to take repeat orders is called an order taker.