Deck 8: Manufacturer and Retailer Promotions

Question 1

The most common promotion by the manufacturer to retailers is a new line fee (straight cash payment to retailer or sometimes a proportion of stock donated free).

Answer 1

False

Question 2

Bonus packs are really only suited to low-involvement products (e.g., laundry detergent).

Answer 2

True

Question 3

A self-liquidating premium is a giveaway and is always inexpensive merchandise.

Answer 3

False

Question 4

Direct price-off promotions are very successful as a manufacturer's repeat-purchase tool.

Question 5

Grocery retailer sales come from two main types of customer: store loyals who will buy from a store regardless and are not price-sensitive, and favorable store switchers who are distinctly price-sensitive.

Question 6

Variety and department stores should have freeform layout (asymmetric and varied displays) to encourage customers to visit departments and shop for longer.

Question 7

POP (point-of-purchase) displays draw customers' attention to the brand-item and always include a price-off promotion.

Question 8

Rounded price-endings, such as $20 or $400, suggests that the brand is higher quality.

Question 9

In U.S. supermarkets, store brands account for about 40% of unit sales.

Question 10

Retailers' card-based loyalty programs do little other than keep market shares constant.

Question 11

The "double jeopardy" phenomenon, whereby the fewer number of people who buy the brand, the less frequently they buy it, is mainly caused by insufficient distribution.

Question 12

Price-off promotions usually you lose profit and therefore serve no useful purpose.

Question 13

Direct price-offs are the best way to introduce a new product category or new brand-item.

Question 14

Warranties act as an immediate incentive to buy as they reduce perceived risk and are therefore best suited to generate trial of high-involvement products.

Question 15

Multi-purchase premiums such as those used by children's cereals lead to increased brand loyalty.

Question 16

"Must buy" items such as milk and other staples, in the case of grocery retailers, should be placed at the back of the store in order to draw customers through the aisles past other product displays.

Question 17

Customer arousal levels should be kept high in unpleasant retail environments so as to offset negative affect.

Question 18

Supermarkets who want people to shop for longer and spend more should play slow music, which is about rumba speed.

Question 19

Retail feature ads are the most effective retailer promotion technique.

Question 20

Home shopping, whether online or from a catalog or a direct-mail ad, is a time-saving promotion rather than a money-saving promotion.