Deck 18: Sales Promotion Overview and the Role of Trade Promotion

Question 1

The sales force,retailers,and consumers are targets of sales promotional efforts.

Answer 1

True

Question 2

Promotion refers to any incentive used by a manufacturer to induce the trade and/or consumers to buy a brand and to encourage the sales force to aggressively sell it.

Answer 2

True

Question 3

In recent years,the balance of power has been shifting from the retailer to the manufacturer.

Answer 3

False

Question 4

The difference between the "old" and "new" accounting procedures with respect to promotions is in the amount for the top-line revenue.

Question 5

Recent changes in accounting standards now require that promotions expenditures be treated in exactly the same fashion as advertising expenditures,namely,as current expenses that are deducted from top-line revenue.

Question 6

Sales promotion can enable a manufacturer to obtain extra shelf space for a temporary period.

Question 7

Sales promotion can permanently stop an established brand's declining sales trend.

Question 8

Sales promotion can be used to offset competitors' advertising and sales-promotion efforts.

Question 9

A push strategy is when a manufacturer directs personal selling,trade advertising,and trade-oriented sales promotion to wholesalers,retailers and consumers.

Question 10

Sales promotion can facilitate the introduction of new products and brands.

Question 11

Consumers increase their consumption rate of stockpiled products when the product is convenient to consume compared with when it requires preparation.

Question 12

Pushing and pulling are mutually exclusive activities.

Question 13

American marketing has experienced a shift from less push marketing to more pull marketing.

Question 14

One reason for increased budgetary allocations to promotions is the fact that consumers are less price sensitive.

Question 15

Sales promotion can provide consumers with a compelling,long-term reason to continue purchasing a brand.

Question 16

Sales promotion is better suited than advertising to enhance buyer attitudes and augment brand equity.

Question 17

Less money is spent on consumer sales promotions compared to trade sales promotions.

Question 18

A pull strategy consists of a manufacturer's consumer promotion efforts that encourage consumers to prefer the manufacturer's brand.

Question 19

Companies in the restaurant industry are the biggest users of sales promotion.

Question 20

Advertising spending as a percentage of total marketing communications expenditures has increased in recent years.

Question 21

Off-invoice allowances are deals offered periodically to the trade that permit retailers to deduct a fixed amount from the invoice,merely by placing an order during the period which the manufacturer is "dealing" a brand.

Question 22

The most effective trade promotions are those that target long-term sales goals.

Question 23

Trade promotions are appropriately timed when they are used strategically to offset competitive promotional activity.

Question 24

Slotting allowances are the fees that manufacturers pay retailers for access to more or better shelf space for existing brands.

Question 25

Trade promotions are appropriately timed when they are tied in with a seasonal event during a time of growing sales.

Question 26

Manufacturers can avoid paying slotting allowances by investing in a pull strategy to create consumer demand for their brands.

Question 27

Manufacturers pay slotting allowances to retailers to get the retailer to purchase the product.

Question 28

In certain respects,slotting allowances are a legitimate cost of doing business.

Question 29

Trade allowances are used by retailers to reward manufacturers for performing activities in support of the retailer.

Question 30

Manufacturers estimate that retailers usually comply with trade allowance agreements and pass through to consumers most of the trade funds that they provide to retailers.

Question 31

Most manufacturers believe that they receive good value from their trade promotion spending.

Question 32

An objective of trade allowances is to decrease retailers' inventories year-round.

Question 33

Trade allowances are also called trade deals.

Question 34

A manufacturer's objective for using trade-oriented sales promotion could include reducing excess inventories and increasing turnover.

Question 35

Retailers are contractually bound to pass along off-invoice allowances to consumers in the form of discounted prices.

Question 36

Slotting allowances could be considered a form of bribery because the retailer demands an up-front fee in order for the manufacturer to receive space for a new brand.

Question 37

The objectives of trade allowances for retailers often conflict with the objectives of manufacturers.

Question 38

Slotting allowances are a mechanism used by manufacturers to exploit the competition among retailers.

Question 39

A manufacturer's objective for using trade-oriented sales promotion could include introducing new or revised products.

Question 40

Bill-back allowances are for retailers who feature the manufacturer's brand in advertisements or for providing special displays.

Question 41

As with off-invoice allowance promotion,account-specific marketing directs promotional dollars to specific retailers.

Question 42

Nestlé shifted trade spending away from pay-for-performance because retailers would not cooperate with the program.

Question 43

Diverting occurs when products intended for foreign markets are diverted back into a domestic market.

Question 44

Most retailers acknowledge that they have engaged in the practice of diverting.

Question 45

Off-invoice allowances often induce retailers to stockpile products in order to take advantage of the temporary price reductions.

Question 46

It is difficult for small manufacturers to convert to a pure system of everyday low pricing.

Question 47

Pay-for-performance programs reward the retailer for buying the brand at an off-invoice price.

Question 48

Pay-for-performance programs reward retailers for selling increased quantities of the manufacturer's brand to consumers.

Question 49

Slotting allowances are legally prohibited in the marketing of alcohol products.

Question 50

The first stage of category management is targeting consumers.

Question 51

While manufacturers incur increased costs due to forward buying,their margins are increased to off-set the price discounts.

Question 52

In a deslotting allowance agreement,the risk of a new brand introduction is transferred from the manufacturer to the retailer.

Question 53

The quality and safety of a product could be jeopardized as a result of diverting.

Question 54

Everyone benefits from forward buying because a substantial portion of retailers' savings are passed on to consumers.

Question 55

Wholesalers and retailers pay greater carrying charges in holding inventories of large quantities of forward-bought items.

Question 56

Everyday low pricing (M)is a form of pricing whereby a manufacturer lowers the price at the end of every month.

Question 57

P&G lost market share and its overall profits decreased as a result of using everyday low pricing.

Question 58

A bill-and-hold program invoices the retailer as soon as the retailer places a forward-bought order but delays shipping the order until desired quantities are requested by the retailer.

Question 59

Diverting occurs when a manufacturer makes a deal available nationally.

Question 60

Scanner-verified programs provide an incentive to the retailer for any items sold to consumers during the agreed-on time period.

Question 61

Co-op funds can be used by the retailer at any time of the year because the manufacturer sets no limits on the funds.

Question 62

_____ refers to any incentive used by a manufacturer to encourage the sales force to aggressively sell it.

A) Promotion 
B) Placement 
C) Advertising 
D) Marketing 
E) Inducement

Question 63

Account-specific practices include radio tie-in advertising.

Question 64

Advertising expenditures as a percentage of total marketing communications expenditures are approximately _____ percent.

A) less than 25 
B) 25 
C) 35 
D) 45 
E) 55

Question 65

Which of the following is an example of a push strategy? 

A) a cereal manufacturer advertising during cartoon programs to reach children 
B) a bank sending a mailing to the senior citizens 
C) a soft drink manufacturer sending point-of-purchase displays to grocery stores 
D) a children's clothing store sending gift certificates to families 
E) a bicycle store advertising in the university newspaper to attract the attention of college students

Question 66

The target of sales promotion can be _____.

A) retailers, consumers, and the sales force 
B) retailers, manufacturers, and the sales force 
C) retailers, consumers, and manufacturers 
D) wholesalers, retailers, and manufacturers 
E) competitors, retailers, and consumers

Question 67

The balance of power began shifting from manufacturers to retailers when network television dipped in effectiveness as an advertising medium and,especially,with the _____.

A) shortening of distribution channels 
B) growth of internet marketing 
C) use of EDLP 
D) advent of optical scanning equipment 
E) development of mega-stores

Question 68

The effects of promoting higher- and lower-quality brands are symmetric.

Question 69

Which of the following is a factor accounting for the shift from consumer advertising to promotion? 

A) manufacturers have more power over retailers 
B) increased brand parity and price sensitivity 
C) increased brand loyalty 
D) increased effectiveness of mass media 
E) long-term corporate orientation

Question 70

Trade promotions on average represent approximately _____ percent of total U.S.marcom expenditures.

A) 20 
B) 30 
C) 40 
D) 50 
E) 60

Question 71

Assume that Coppertone invests heavily in trade allowances to encourage retailers to stock and promote QT,its skincare product designed for a quick suntanned look without the dangers of sunbathing.What type of strategy is Coppertone using? 

A) specialty advertising 
B) trade pull 
C) pull 
D) push 
E) stocking

Question 72

Promotion refers to any incentive used by a _____ to induce the trade.

A) wholesaler 
B) retailer 
C) manufacturer 
D) salesperson 
E) channel partner

Question 73

In contrast to advertising,which typically,though not always,is relatively long term in orientation and best suited to enhancing buyer attitudes and augmenting brand equity; promotion is more short-term oriented and capable of influencing _____.

A) awareness 
B) intentions 
C) knowledge 
D) perceptions 
E) behavior

Question 74

The most common users of sales promotion are _____.

A) online companies 
B) athletic teams 
C) restaurants 
D) consumer packaged-goods companies 
E) not-for-profit organizations

Question 75

Vendor-support programs are initiated by consumers requesting customer support for a product.

Question 76

A _____ strategy consists of manufacturers directing advertising and promotion at the consumers.

A) strategic channel 
B) forced channel 
C) planned 
D) push 
E) pull

Question 77

Aunt Marie's is a local restaurant.The owner advertises in the local newspaper to attract customers.This is an example of a _____ strategy.

A) planned 
B) push 
C) pull 
D) forced channel 
E) strategic channel

Question 78

Cooperative advertising is used because consumers of infrequently purchased products are more responsive to manufacturer ads.

Question 79

Which of the following statements is true? 

A) Push and pull strategies are mutually exclusive. 
B) There has been a shift from a primarily push promotion strategy to a primarily pull strategy on the part of manufacturers. 
C) There has been a shift from a primarily pull promotion strategy to a primarily push strategy on the part of manufacturers. 
D) Push strategies are targeted to consumers. 
E) Pull strategies are targeted to the trade.

Question 80

The _____ strategy consists of a manufacturer directing personal selling,trade advertising,and trade-oriented sales promotion to wholesalers and retailers.

A) forced channel 
B) push 
C) pull 
D) planned 
E) strategic channel