Question 1

An ethical concern in direct marketing is whether some companies exaggerate the features of their products in catalog copy.

Accepted Answer

Exaggerating the features of products in catalog copy can be considered a form of false advertising, which is an unethical marketing practice. This can mislead consumers and potentially harm their trust in the company.

Question 2

Which of the following is NOT one of the advantages of direct mail?

Accepted Answer

The cost per thousand for direct mail is typically higher than for mass media.

Question 3

Greta is attempting to get as many orders as possible. Which direct marketing tool is generally associated with the highest order response rate?

Accepted Answer

Direct mail to an internal company list is generally associated with the highest order response rate because these individuals have an existing relationship with the company and are more likely to respond positively to the offer. E-mail to an internal company list may also be effective, but direct mail tends to have a higher response rate overall. E-mail to a general list and direct mail to a general list may have lower response rates as the recipients may be less interested or have no relationship with the company. There is no difference between e-mail and direct mail in terms of effectiveness; it depends on the target audience and the offer being promoted.

Question 4

Direct marketing has the ability to test different elements of an offer strategy under real marketplace conditions.

Accepted Answer

Direct marketing allows for testing of various elements such as offer, price, creative, and targeting under actual market conditions. This allows for better optimization of the overall offer strategy.

Question 5

The catalog you receive from a large apparel store, displaying their new summer collection, is an example of ________ marketing.

Accepted Answer

The catalog is a form of direct marketing as it is being directly sent to potential customers.

Question 6

Which of the following is a criticism of direct marketing?

Accepted Answer

Direct marketing is often perceived negatively by consumers due to the delivery of unwanted and misleading messages. This can lead to a high level of annoyance among consumers which may impact the effectiveness of the strategy.

Question 7

The practice of using call centers, where employees receive calls from customers and provide service by taking orders and answering queries, is called ________.

Accepted Answer

The practice described in the question is specifically referring to inbound telemarketing, where call center employees are receiving incoming calls from customers and providing service. Customer response marketing, guerilla marketing, and reactive marketing are broader terms that can encompass various marketing tactics, but do not specifically refer to call centers. Internal marketing is focused on building employee engagement and a positive company culture, and is not directly related to customer service.

Question 8

OrdOnline, a pure click company offering online auctioning, decides to launch a promotional program to increase its sales. To select a target market, the company identifies customers who have made at least three purchases and spent at least $150 in the past six months. Which of the following strategies is used here for targeting customers?

Accepted Answer

RFM formula targeting is used here as OrdOnline has defined its target market based on Recency (purchases made in the past six months), Frequency (at least three purchases), and Monetary value (spending at least $150). This approach uses data to segment customers based on their past behavior and is commonly used in direct marketing. The other options, such as viral marketing, objective screening, internal targeting, and catalog marketing, do not match the approach used by OrdOnline.

Question 9

Business-to-consumer telemarketing is increasing.

Accepted Answer

Business-to-consumer (B2C) telemarketing has been on the decline due to stricter regulations, consumer preferences shifting towards digital communication, and the rise of spam filters and caller ID technologies that make it harder for telemarketers to reach potential customers.

Question 10

The offer strategy for direct mail has five elements: the product, the offer, the medium, the distribution method, and the ________.

Accepted Answer

The creative strategy is the design and messaging used in the direct mail piece to make it attractive and persuasive to the target audience. It can include the use of images, colors, fonts, and language to create a compelling offer and call-to-action. The other elements (product, offer, medium, distribution method, and reply form) are important, but the creative strategy can make or break the effectiveness of the campaign.

Question 11

Direct marketing has not been growing as fast as U.S. retail sales.

Accepted Answer

Direct marketing has been growing faster than U.S. retail sales, as it allows businesses to target specific audiences and personalize their marketing efforts.

Question 12

Greta is marketing a product that is technologically advanced and requires a great deal of explanation. Which direct response tool should she use?

Accepted Answer

Since the product requires a great deal of explanation, an infomercial is the best choice. Infomercials allow marketers to demonstrate the product in detail and provide in-depth information to potential customers.

Question 13

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 ________.

Accepted Answer

The marketing strategy used by Raleigh, making sales calls to dealers via telephone, is an example of outbound telemarketing, where the company initiates a call to potential or existing customers to sell its products or services.

Question 14

One of the shortcomings of direct marketing is that the firm cannot easily measure the response.

Accepted Answer

Direct marketing often includes mechanisms for tracking and measuring response rates, such as unique URLs, promo codes, or response forms, making it easier for firms to measure the effectiveness of their campaigns.

Question 15

Direct mail permits target market selectivity and allows early testing and response measurement.

Accepted Answer

Direct mail allows for the targeting of specific groups of people, enabling businesses to measure the effectiveness of their marketing efforts more accurately. It also allows for early testing and response measurement, as businesses can track how many responses they receive from their direct mail campaigns.

Question 16

Which of the following is a major advantage of using direct mail?

Accepted Answer

Direct mail allows advertisers to target specific demographics, geographic areas, or other criteria, making it a highly selective form of advertising. This can increase the chances of reaching an interested audience and can lead to more effective campaigns.

Question 17

The Internet and catalog retailing industry includes 20,000 companies with combined annual revenue of $350 billion.

Accepted Answer

The statement is true, according to the latest available data.

Question 18

Which of the following is an element of an offer strategy?

Accepted Answer

The medium used for delivery is a key element of an offer strategy as it directly impacts the customer's experience and can affect their decision to purchase.

Question 19

If a specific campaign does not break even in the short run, it will not be profitable in the long run, even if we factor in customer lifetime value.

Accepted Answer

This statement is false. Customer lifetime value takes into account the potential future revenue from a customer beyond the initial purchase, which means that even if a campaign does not immediately break even, it may still be profitable in the long run thanks to repeat customers or further sales to the same customer.

Question 20

Which of the following is a factor considered when a customer is evaluated based on the RFM formula?

Accepted Answer

In RFM formula, the factor considered is recency, frequency, and monetary value. Recency refers to the time elapsed since the customer's last purchase. Hence, the amount of time passed after the customer's last visit is considered. Product categories, mode of payment, location, and feedback are not direct factors in the RFM formula.

Quiz 17: Managing Personal Communications: Direct and Database Marketing and Personal Selling