Deck 12: Sales Promotions

Question 1

A sporting goods store offering a free golf bag with the purchase of three or more golf clubs is an example of a self-liquidating premium.

Answer 1

False

Question 2

A scanner-delivered coupon is sent out by the Internet.

Answer 2

False

Question 3

Premiums are prizes or gifts consumers receive when purchasing products.

Answer 3

True

Question 4

A coupon is a price reduction offer to a consumer.

Question 5

Some marketing experts believe overuse of premiums can damage a brand's image, while the use of coupons can actually enhance a brand's image.

Question 6

A coupon for peanut butter on a jar of jelly is a cross-ruff coupon.

Question 7

Trade promotions are used by manufacturers and other members of the marketing channel to help push products through to retailers.

Question 8

A cross-ruffing coupon is placing a coupon for one product on another product.

Question 9

When a company offers a premium, consumers pay full price for the good or service.

Question 10

An instant redemption coupon may lead to a trial purchase because the customer has immediate access to the discount.

Question 11

A contest requires the use of a skill while a sweepstakes relies on random chance.

Question 12

FSI, or Free Standing Inserts, are the most common method used to deliver coupons to consumers.

Question 13

A free toy placed inside a package of cereal is an example of an in- or on-package premium.

Question 14

A scanner-delivered coupon is often given for a competing brand to encourage brand-switching.

Question 15

Premiums are normally much more successful than coupons in increasing sales and profits.

Question 16

The majority of coupons are sent out through print media.

Question 17

Customers who already have a preference for a brand redeem the majority of all coupons.

Question 18

The consumer is typically required to make a purchase when entering a sweepstakes.

Question 19

A self-liquidating premium is one in which the consumer pays some money for the gift or item.

Question 20

Bounce-back coupons tend to encourage trial purchases of products.

Question 21

Putting a sample of a dryer sheet in a box of laundry detergent is a form of response sampling.

Question 22

Bonus packs can lead to brand switching if the consumer has used the brand previously.

Question 23

Refunds and rebates suffer the disadvantages of costs, paperwork, and diminished effectiveness.

Question 24

Shania received a sample of a new tea drink when she attended a football game in Miami. This is an example of selective sampling.

Question 25

A major disadvantage of sampling is the cost, both of producing the sample and for distributing the sample.

Question 26

In-store sampling is a program in which samples are given directly to consumers in a retail store.

Question 27

The primary goals of contests and sweepstakes are to encourage customer traffic and boost brand switching behavior.

Question 28

A major advantage of using the Internet for a contest is that individuals can participate in the contest for its intrinsic value.

Question 29

It is not possible to offer sampling programs over the Internet.

Question 30

In a contest or sweepstakes, extrinsic value is determined by the value of the prize to the consumer.

Question 31

Price-offs can encourage customers to switch brands in brand parity situations or when the consumer has a high level of brand loyalty to another brand.

Question 32

In a contest or sweepstakes, an intrinsic value is the challenge or fun in playing the game or in participating.

Question 33

Instant redemption coupons are a form of direct sampling.

Question 34

For some products, such as automobiles, increasing the amount of a rebate no longer seems to spur additional sales activity, but discontinuing or reducing the rebate level tends to have an immediate negative impact on sales.

Question 35

Marketers now use the Internet and social media to offer contests and sweepstakes.

Question 36

For ongoing products in highly competitive markets, a bonus pack is an effective method of maintaining brand loyalty and reducing brand switching at a minimal cost.

Question 37

In recent years, marketers have increased the use of free standing inserts (FSI) for the distribution of samples.

Question 38

A bonus pack works best for current customers.

Question 39

To encourage consumers to continue playing a contest, the intrinsic value of prizes can be steadily increased by allowing small, incremental rewards.

Question 40

Rebate programs tend to be more effective than other promotions because consumers get excited about them and this leads them to wait patiently until one is offered before making a purchase.

Question 41

Consumer promotions are for end-users and customers while trade promotions are for channel members.

Question 42

To be successful, a price-off should feature a monetary appeal to consumers and provide consumers with an immediate reward.

Question 43

Intercompany tie-ins are the promotion of two different products from the same company using one consumer promotion.

Question 44

Intracompany tie-ins are the promotion of two different products from different companies using one consumer promotion.

Question 45

An off-invoice allowance is money paid to a retailer who is willing to bypass wholesalers.

Question 46

Unsuccessful products that do not sell and are taken off the market may be charged exit fees.

Question 47

A retailer will support a manufacturer's consumer promotion program if the program will increase traffic into the retail store, boost store sales, attract new customers, or increase the basket size of shoppers in the store.

Question 48

A trade allowance is a financial incentive offer made to other channel members to motivate them to make a purchase.

Question 49

A consumer who purchases additional products because of a price-off tends to either consume more or delay a future purchase of the product.

Question 50

A trade promotion is a physical product sent as part of a promotional deal.

Question 51

Promotion-prone and price-sensitive consumers are not highly attractive to pursue with consumer promotions.

Question 52

Brand-loyal consumers purchase only one particular brand and do not respond to consumer promotions unless it is for their particular brand.

Question 53

Retailers believe charging slotting fees forces manufacturers to eliminate poor product introductions, knowing that the majority of new products fail.

Question 54

An overlay combines two or more consumer promotional activities into a single campaign.

Question 55

Slotting fees are funds charged by retailers to stock new products.

Question 56

The most controversial form of trade allowance is the off-invoice allowance.

Question 57

One reason retailers use slotting fees is that retailers must spend money to add new products to inventories and to stock new merchandise.

Question 58

For brand-loyal consumers, consumer promotions can be crafted to both boost sales and reinforce the firm's image.

Question 59

Price-sensitive consumers regularly respond to consumer promotions, such as coupons, price-off deals, and premiums.

Question 60

Manufacturers consider slotting fees to be almost like extortion, because the company has no choice but to pay the fees in order to place products on retail shelves.

Question 61

A premium or bonus pack offers retailers more merchandise to make a purchase rather than a price discount.

Question 62

One of the disadvantages of trade allowances is that almost half of the time retailers do not pass along the allowance to consumers.

Question 63

Rewards given as part of a trade contest is also known as spiff money.

Question 64

From a retailer's perspective, a trade show allows buyers to compare merchandise and to make contacts with several prospective vendors.

Question 65

Spiff money refers to cash, not prizes, paid to consumers in sales contests.

Question 66

Diversion is purchasing extra inventory while it is on-deal and shipping it to other locations where it is off-deal.

Question 67

From a manufacturer's perspective, co-op advertising is beneficial because the payments are almost always tied to sales.

Question 68

Co-op advertising programs allow retailers to use the manufacturer's dollars to expand advertising programs.

Question 69

In almost all cases, for a retailer to receive co-op advertising dollars from a manufacturer, there cannot be a competing brand in the advertisement.

Question 70

From a manufacturer's perspective, a trade show offers the potential to meet customers and sell products.

Question 71

Cooperative merchandising agreements are popular with manufacturers because the retailer performs a marketing function in order to receive the allowance or incentive.

Question 72

A cooperative merchandising agreement is a formal agreement between the retailer and the manufacturer to undertake a two-way marketing effort.

Question 73

A trade incentive involves the retailer performing a function in order to receive an allowance.

Question 74

Only a small number of retailers charge exit fees compared to the large percentage that use slotting fees.

Question 75

In most cooperative advertising programs, retailers accrue co-op advertising monies based on purchases of the product from the manufacturer.

Question 76

Trade contests encourage sales by making rewards and prizes available to brokers, salespeople in retail stores, wholesalers, and agents.

Question 77

Offering Coke on sale one week, Pepsi the next week, and 7UP the following week can be planned out using a calendar promotion program.

Question 78

A calendar promotion allows a retailer to set a schedule among competing brands of a product so that the retailer can feature one of the brands on sale almost all of the time.

Question 79

Forward-buying is purchasing extra inventory while it is on-deal so it can be sold later when it is off-deal.

Question 80

A diversion is a form of exit fee where funds are transferred from failing products to successful products.