Question 1

Sales promotions are&#10;A) based only on price reductions&#10;B) used when sales are falling&#10;C) incentives used to stimulated sales or add perceived value&#10;D) used mainly when there is significant competition

Accepted Answer

Sales promotions are incentives used to stimulate sales, create brand awareness, and add perceived value to a product. While they may sometimes involve price reductions, they can also involve other types of incentives such as free gifts, loyalty programs, and contests. They are not necessarily used only when sales are falling, but can be used at any time as a way to boost sales or attract new customers. Similarly, while they may be used when there is significant competition, they can also be used in other situations such as introducing a new product or trying to increase sales during a seasonal period.

Question 2

Manufacturer sales promotions&#10;A) may damage brand equity&#10;B) are more cost efficient the more they are used&#10;C) may lead to retailers leveraging advantage for their own brands&#10;D) decrease price sensitivity

Accepted Answer

A

Question 3

Sales promotions cannot compensate for&#10;A) poor product or service quality&#10;B) poor distribution&#10;C) a and b&#10;D) neither a nor b

Accepted Answer

Sales promotions can help to drive short-term sales and increase awareness, but they cannot address underlying issues such as poor product or service quality, or inadequate distribution channels. These issues need to be addressed through other means such as improving product development and distribution strategies. Only then can sustainable long-term growth be achieved.

Question 4

The sales promotion case for Thomas Cook shows that&#10;A) price discounts are ineffective for services&#10;B) price promotions can be effective for services&#10;C) sales promotions wear out quickly&#10;D) sales promotions build loyalty among retailers

Accepted Answer

The case of Thomas Cook shows that price promotions can be effective for services. The company offered a £100 voucher to customers who booked a holiday package, which led to an increase in sales and bookings. This demonstrates that sales promotions can work for service-based businesses.

Question 5

Sales promotions are&#10;A) used primarily as strategic tools&#10;B) used only as short term tactical activity&#10;C) rarely used for new product introductions&#10;D) can aid in gaining desirable shelf locations

Accepted Answer

Sales promotions can help in gaining desirable shelf locations by incentivizing retailers to give better placement to products.

Question 6

Sweepstakes and competitions are&#10;A) subject to legislation and regulation&#10;B) totally unregulated&#10;C) designed to give products extra status&#10;D) dependent on extensive product knowledge

Accepted Answer

Sweepstakes and competitions are subject to legislation and regulation to ensure fairness and prevent fraud. For example, in the US, the Federal Trade Commission regulates sweepstakes and requires that all rules and conditions be clearly stated.

Question 7

Value-added promotions&#10;A) involve adding extra volume at no cost&#10;B) offer free product or additional benefits&#10;C) offer the chance of winning prizes&#10;D) are used to make old model stock more appealing

Accepted Answer

Value-added promotions offer free products or additional benefits to provide more value to the customers. They aim to attract customers and increase sales. Free samples, extended warranties, and bonus products are some examples of value-added promotions. Option A is incorrect because adding extra volume at no cost is a form of discount or a BOGO offer, not value-added promotion. Option C is also incorrect as the chance of winning prizes is a sweepstake promotion. Option D is incorrect as old model stock can be liquidated through clearance sales or discounts, but it is not a value-added promotion.

Question 8

Large retailers&#10;A) run sales promotions only with manufacturers&#10;B) run sales promotions only for their own brands&#10;C) use sales promotions as part of normal communication activity&#10;D) decide on pricing and timing of promotions with manufacturers

Accepted Answer

Large retailers often use sales promotions as a part of their normal communication activity. This includes promotions for both manufacturer's products as well as products under their own brand. They may also collaborate with manufacturers to decide on pricing and timing of promotions, but it is not limited to only sales promotions with manufacturers.

Question 9

Sales promotions may be aimed at&#10;A) end purchasers&#10;B) retailers&#10;C) company sales representatives&#10;D) a and b only&#10;E) a, b and c

Accepted Answer

Sales promotions can be targeted at various levels including end purchasers (consumers), retailers, and company sales representatives. Each target group can be influenced by different types of sales promotions tailored to their specific needs and roles in the purchasing process.

Question 10

Competitive responses to sales promotions may&#10;A) create interest in a product category&#10;B) erode the effect of other sales promotions&#10;C) increase the price of all products in a category&#10;D) reduce the volume of sales in a category

Accepted Answer

Competitive responses to sales promotions are actions taken by competitors to counter or neutralize the effects of a particular promotion. This can include offering their own promotions or discounts, lowering prices, or increasing advertising. As a result, the promotional impact of one company's promotion may be eroded or reduced by these competitive responses.

Deck 11: Integrated Campaign Development: Sales Promotion