Question 1

CVS Pharmacy wants Pfizer to pay them $3,000 per store to stock a new brand of medicine. This is an example of

Accepted Answer

CVS Pharmacy wants Pfizer to pay them $3,000 per store to stock a new brand of medicine. This is an example of slotting fees and is used by most retailers for stocking new products.

Question 2

Duracell offers retailers a 15% discount on batteries if the retailer is willing to utilize a new point-of-purchase display in their stores. This is an example of a(n)

Accepted Answer

Duracell offers retailers a 15% discount on batteries if the retailer is willing to utilize a new point-of-purchase display in their stores. This is an example of a cooperative merchandise agreement since the effort is a joint effort between Duracell and retails stores.

Question 3

Target has worked on deals with several clothing manufacturers for the next year. This will allow target to have at least one brand of dress pants on sale all of the time. This promotion is an example of a(n)

Accepted Answer

A calendar promotion is a planned marketing strategy where specific products are promoted at certain times throughout the year. In this case, Target's arrangement to have dress pants on sale all the time fits this description.

Question 4

A manufacturer offers retailers a free case of toothpaste for every 20 cases of toothpaste they order. This is an example of a(n)

Accepted Answer

This is an example of a trade incentive, which is a promotional strategy used by manufacturers to encourage retailers to purchase more products by offering them additional benefits, such as free goods.

Question 5

Reebok offers to reimburse retailers 60% of the cost of their ads if the retailers prominently display the Reebok brand in the ad and the ad does not feature any competing brands. This is an example of a(n)

Accepted Answer

This is an example of a cooperative advertising program, where a manufacturer reimburses a retailer for a portion of the advertising costs when the retailer features the manufacturer's brand prominently.

Question 6

Many brand managers and marketing experts believe shifting marketing dollars away from advertising to promotions will eventually erode brand equity that a firm has spent years in establishing.

Accepted Answer

Many brand managers and marketing experts believe shifting marketing dollars away from advertising to promotions will eventually erode brand equity that a firm has spent years in establishing because the focus shifts from quality to price.

Question 7

While most consumer, or sales, promotions are aimed at consumers, consumer promotions can also be directed to businesses if the business is the end user of the good or service.

Accepted Answer

Consumer promotions can target businesses when the business acts as the final consumer of the product or service, rather than reselling it.

Question 8

Approximately 50% of all American consumers use coupons, although most are not avid coupon users.

Accepted Answer

Approximately 85% of all American consumers use coupons, although most are not avid coupon users. Only 18.5% of consumers use coupons on a regular basis.

Question 9

If a premium is picked carefully, using a premium as a consumer promotion can enhance a brand's equity.

Accepted Answer

If a premium is picked carefully, using a premium as a consumer promotion can enhance a brand's equity since the consumer is still paying full price for the product.

Question 10

Premiums are not as effective as coupons in encouraging trial purchases.

Accepted Answer

Premiums are not as effective as coupons in encouraging trial purchases because with a premium consumers must pay the full price for the product while with a coupon the overall price is reduced.

Question 11

Both contests and sweepstakes provide participants an opportunity to win prizes. The difference between the two is the size and number of prizes that are offered.

Accepted Answer

Both contests and sweepstakes provide participants an opportunity to win prizes. The difference between the two is that with a contest a skill or activity can be required to enter while a sweepstake is based on random chance.

Question 12

Intracompany tie-ins are those involving two or more distinct products within the same company.

Accepted Answer

Intracompany tie-ins are those involving two or more distinct products within the same company, such as tie-in between cake mix and cake icing by Betty Crocker.

Question 13

Intercompany tie-ins involve two or more similar products within the same company.

Accepted Answer

Intercompany tie-ins involve two or more products from different companies, such as a tie-in between Tyson chicken and a General Mills stove-top mix that uses chicken.

Question 14

For frequency programs to be effective, customers must see the frequency program as a reward for their loyalty, not as a means of earning rewards.

Accepted Answer

Frequency programs are designed to reward customers for their loyalty, not as a means of earning rewards.

Question 15

While sampling works well for goods, it does not work well for services or for business-to-business products.

Accepted Answer

Sampling works well for goods and also works well for services and with business-to-business products.

Question 16

Price-offs are used by companies to attract customers, reduce purchase risk, and to stimulate demand.

Accepted Answer

Price-offs are used by companies to attract customers, reduce purchase risk, and to stimulate demand, because of the reduced price consumers will pay for the product.

Question 17

In terms of consumer promotions, refunds tend to be used for hard goods while rebates tend to be used for soft goods.

Accepted Answer

In terms of consumer promotions, refunds tend to be used for hard goods, such as automobiles, while rebates tend to be used for soft goods, such as clothing or bedding.

Question 18

An example of branded media is a movie or television show that contains a brand name or logo with the storyline and intersects the brand's mission or current advertising campaign.

Accepted Answer

Branded media integrates a brand's message or product into entertainment content, aligning with the brand's mission or campaign.

Question 19

While shoppers may compile a shopping list, more than two-thirds of all brand purchase decisions are made while in a retail store and most shoppers walk out with twice the number of products they had planned on purchasing.

Accepted Answer

Research indicates that a significant portion of purchase decisions are made in-store, influenced by factors like promotions, product placement, and impulse buying, leading to shoppers often buying more than initially planned.

Question 20

The primary objectives of trade promotions are to build relationships with members of the marketing channel and to provide an incentive for consumers to purchase the product.

Accepted Answer

The primary objectives of trade promotions are to build relationships with members of the marketing channel and to provide channel members with an incentive to stock their products.

Quiz 15: Consumer and Trade Promotions