Question 1

An experiment or test is used by direct marketers to measure the effect of change. Which of the following questions would a direct marketer use in designing an experiment?
A)how many current customers are likely to buy a new product in development?
B)what do current customers think about the company's current product offerings?
C)what happens to customer demand when a company raises or lowers a price level?
D)all of the above

Accepted Answer

All the options listed are relevant questions a direct marketer might explore through experiments or tests to measure the effects of changes in product offerings, pricing, or understanding customer preferences and behaviors.

Question 2

A _________ is a group on which the experiment is not conducted but that is otherwise identical to the test group.
A)dependent group
B)control group
C)focus group
D)independent group

Accepted Answer

A control group is used in experiments as a baseline to compare results with the test group where the experimental procedure is performed. This group does not receive the experimental treatment or intervention.

Question 3

The two types of errors that can occur in hypothesis testing are known as:
A)ho and ha
B)type A and type B
C)type I and type II
D)implicit and explicit

Accepted Answer

Type I and Type II errors are the two types of errors in hypothesis testing. Type I error occurs when a true null hypothesis is incorrectly rejected, while Type II error occurs when a false null hypothesis fails to be rejected.

Question 4

In the event it is decided to reject the null hypothesis, it is rejected in favor of the __________:
A)previous null hypothesis
B)alternative hypothesis
C)observed hypothesis
D)none of the above

Accepted Answer

When the null hypothesis is rejected, it is done in favor of the alternative hypothesis, which proposes a different outcome or relationship than the null hypothesis.

Question 5

Which of the following represent ways in which a key code could be placed on an order form for direct mail purposes?
A)a departmental number
B)a unique telephone number
C)an individual's name
D)all of the above

Accepted Answer

All of the options listed (a departmental number, a unique telephone number, and an individual's name) can be used as key codes on an order form for direct mail purposes. These codes help in tracking responses and effectiveness of the direct mail campaign.

Question 6

If you are creating a direct mail campaign, a lift can ______ the mailing quantity needed (via selectivity) and ______ the overall response rate.
A)increase/increase
B)decrease/impair
C)decrease/increase
D)help/help

Accepted Answer

A lift in a direct mail campaign refers to an improvement in targeting the right audience, which can decrease the mailing quantity needed by focusing on more likely respondents and increase the overall response rate by reaching those more interested or in need of the product or service.

Question 7

In attempting to measure the impact of a lift, marketers will utilize_________
A)a control group
B)an experimental
C)panel group
D)all of the above

Accepted Answer

In measuring the impact of a lift, marketers utilize a control group to compare against the group exposed to the marketing effort, an experimental group that is exposed to the marketing effort, and panel groups which can consist of a variety of structured groups for observational studies. All these methodologies help in isolating and understanding the effects of marketing strategies.

Question 8

In the conversion rate calculation, if you have 1000 inquiries and 300 of them subsequently become buyers, you have a ________ conversion rate:
A)30 percent
B)300 percent
C)33 percent
D).03 percent

Accepted Answer

The conversion rate is calculated by dividing the number of conversions (in this case, buyers) by the total number of inquiries and then multiplying by 100 to get a percentage. So, $ \frac{300}{1000} \times 100 = 30\% $.

Question 9

In direct marketing, the budget is a function of:
A)net order contribution of the items sold
B)media and sales costs
C)response rates
D)all of the above

Accepted Answer

The budget in direct marketing is influenced by the net order contribution of items sold, media and sales costs, and response rates, making all of the options correct.

Question 10

The process by which an order response is tracked back to the original source from which it was generated is known as:
A)identifier key
B)coding
C)matchback
D)split test

Accepted Answer

Matchback is the process used to track an order response back to the original source from which it was generated, allowing businesses to understand the effectiveness of their marketing efforts.

Question 11

The term "unit margin" is defined as:
A)target price for an item in a campaign
B)amount left after subtracting costs of goods sold/variable costs from price
C)the approximate amount of marketing costs allocated to each item sold
D)amount left when subtracting variable costs from fixed costs

Accepted Answer

Unit margin is the amount left after subtracting the costs of goods sold (COGS) or variable costs from the selling price of an item. This calculation helps businesses understand how much profit is made on each unit sold, excluding fixed costs.

Question 12

Which of the following is not a variable cost in a direct marketing campaign?
A)cost of goods sold
B)advertising costs
C)shipping
D)allowance for bad debt

Accepted Answer

The answer of Which of the following is not a...

Question 13

Net profit is defined as:
A)amount of money left after subtracting fixed costs from gross revenues
B)amount of money left after subtracting variable costs from gross revenue
C)amount of money after dividing fixed costs by margin unit in dollars
D)breakeven amount plus profit incentive in dollars added in

Accepted Answer

Net profit is the amount of money left after subtracting all expenses, including fixed costs, from gross revenues, not just variable costs or specific calculations related to fixed costs or breakeven amounts.

Question 14

What calculation do you perform to find the target (in units of goods sold) once you know your target profit margin and your breakeven amount?
A)add all fixed costs to all variable costs and divide by production units
B)subtract variable costs from selling price and divide by fixed costs
C)add desired profit margin to other fixed costs and divide by margin per unit
D)multiply breakeven units by target profit margin

Accepted Answer

To find the target units of goods sold to achieve a specific profit margin, you add the desired profit to the fixed costs (since breakeven covers fixed costs by definition) and then divide by the profit per unit (margin per unit). This gives you the total units needed to sell to achieve both covering fixed costs and earning the desired profit.

Question 15

A twostep direct marketing campaign can best be defined as:
A)a campaign where two different segments are addressed sequentially
B)a campaign where a smaller amount is spent initially, then a higher amount
C)a campaign where two different media are used in sequence
D)a campaign where the first step is to get inquiries only; the second to produce a sale

Accepted Answer

A two-step direct marketing campaign involves an initial step designed to generate interest or inquiries, followed by a second step aimed at converting those inquiries into sales.

Question 16

A "cost per inquiry" (CPI) differs from a "cost per response" (CPR) because:
A)the CPI is not indicative of the true cost of a campaign
B)the CPI tells us how much it costs to get a customer to inquire, but not to get him to buy
C)the CPR is always more expensive
D)they are essentially the same, just different terms

Accepted Answer

CPI (Cost Per Inquiry) measures the cost to get a customer to inquire about a product or service, while CPR (Cost Per Response) could encompass any type of response, including purchases, making them distinct in their focus.

Question 17

The rate by which a company converts _______ into _______ is called the conversion rate.
A)buyers/sellers
B)advocates/ distributers
C)buying customers/prospects
D)leads/sales

Accepted Answer

The conversion rate is a metric that measures the rate at which a company turns leads (potential customers) into actual sales. This involves converting someone interested in a product or service (a lead) into a paying customer.

Question 18

Return on investment (ROI) or Return on Advertising Investment (ROAI) is calculated by:
A)dividing net profit by the average amount invested (in a company or campaign)
B)dividing fixed costs by all revenues before taxes
C)dividing all revenues by fixed and variable costs
D)dividing all marketing costs by revenues

Accepted Answer

ROI or ROAI is calculated by dividing the net profit by the average amount invested, which can refer to the total amount invested in a company or specifically in an advertising campaign. This formula helps in understanding the efficiency of an investment.

Question 19

A good reason to conduct a marketing test before rolling out a full campaign would be:
A)to test two different versions of an offer
B)to test whether the campaign can be successful at a specific allowable margin
C)to see if assumptions about the response rate from a given list are reasonable
D)all of the above

Accepted Answer

Conducting a marketing test allows businesses to evaluate different aspects such as offer versions, success at specific margins, and response rate assumptions, ensuring a more effective full campaign rollout.

Question 20

To calculate whether a marketing test met the allowable margin in terms of cost per order, you would:
A)multiply the variable costs by the number of orders received
B)divide the costs of the test by the number of orders received
C)divide the total revenues by the marketing costs
D)divide the total revenues by the number of names on the list used

Accepted Answer

To calculate the cost per order, you divide the total costs of the marketing test by the number of orders received. This gives you the average cost incurred for each order, allowing you to assess whether the marketing test met the allowable margin.

Quiz 4: Marketing Analytics: Testing and Measurement

An experiment or test is used by direct marketers to measure the effect of change. Which of the following questions would a direct marketer use in designing an experiment?

A _________ is a group on which the experiment is not conducted but that is otherwise identical to the test group.

The two types of errors that can occur in hypothesis testing are known as:

In the event it is decided to reject the null hypothesis, it is rejected in favor of the __________:

Which of the following represent ways in which a key code could be placed on an order form for direct mail purposes?

If you are creating a direct mail campaign, a lift can the mailing quantity needed (via selectivity) and the overall response rate.

In attempting to measure the impact of a lift, marketers will utilize_________

In the conversion rate calculation, if you have 1000 inquiries and 300 of them subsequently become buyers, you have a ________ conversion rate:

In direct marketing, the budget is a function of:

The process by which an order response is tracked back to the original source from which it was generated is known as:

The term "unit margin" is defined as:

Which of the following is not a variable cost in a direct marketing campaign?

Net profit is defined as:

What calculation do you perform to find the target (in units of goods sold) once you know your target profit margin and your breakeven amount?

A twostep direct marketing campaign can best be defined as:

A "cost per inquiry" (CPI) differs from a "cost per response" (CPR) because:

The rate by which a company converts _ into _ is called the conversion rate.

Return on investment (ROI) or Return on Advertising Investment (ROAI) is calculated by:

A good reason to conduct a marketing test before rolling out a full campaign would be:

To calculate whether a marketing test met the allowable margin in terms of cost per order, you would: