Question 1

In most cases, for a manufacturer to obtain additional shelf space for their particular brand at retail stores will require some type of trade promotion offer.

Accepted Answer

Manufacturers often use trade promotions to incentivize retailers to allocate more shelf space to their products, as it can help increase visibility and sales.

Question 2

In theory, trade promotions should enhance a manufacturer's relationship with other channel members, but, in reality, channel members tend to push the manufacturer's brand that offers the best trade promotions.

Accepted Answer

In theory, trade promotions should enhance a manufacturer's relationship with other channel members, but, in reality, channel members tend to push the manufacturer's brand that offers the best trade promotions that enhance the channel member's profit.

Question 3

To gain the most from the use of trade promotions, firms need to plan the trade promotions into their IMC program and not use trade promotions as a reactive measure to boost sales or counter competitive actions.

Accepted Answer

Integrating trade promotions into an Integrated Marketing Communications (IMC) program ensures they are strategically aligned with overall marketing goals, rather than being used haphazardly as a short-term fix.

Question 4

When manufacturer provide trade allowances to retailers, they would like to see that price reduction passed on to consumers so that it would stimulate sales of the manufacturers' brands. However, more than 70 percent of the time, retailers do not pass the savings on to the consumer.

Accepted Answer

When manufacturer provide trade allowances to retailers, they would like to see that price reduction passed on to consumers so that it would stimulate sales of the manufacturers' brands. However, more than 50 percent of the time, retailers do not pass the savings on to the consumer.

Question 5

Although retailers are slow to admit it, slotting fees provide additional funds to support retail operations, providing from 20 to 40 percent of the retailers' net profit.

Accepted Answer

Although retailers are slow to admit it, slotting fees provide additional funds to support retail operations, providing from 20 to 40 percent of the retailers' net profit. Slotting fees are monies manufacturers must pay retailers to get the retailer to stock their brand.

Question 6

Instead of slotting fees, some retailers charge an exit fee, which is a fee the manufacturer will pay for the initial inventory investment a retailer needs to push the product.

Accepted Answer

Instead of slotting fees, some retailers charge an exit fee, which is a fee the manufacturer will pay for the retailer to remove the item from the shelf and from the company's inventory system.

Question 7

Trade contests sponsored by manufacturers are directed to retail stores rather than other channel members since the retailers are the only channel members that sell directly to the consumer.

Accepted Answer

Trade contests sponsored by manufacturers are directed any of the channel members and can have various objectives.

Question 8

Calendar promotions are promotional campaigns the retailer can develop for its customers through scheduled CMA agreements made with manufacturers, that allow the retailer to plan in advance when a brand will be offered to the retailer's customers on-deal.

Accepted Answer

Calendar promotions are promotional campaigns the retailer can develop for its customers through scheduled CMA agreements made with manufacturers, that allow the retailer to plan in advance when a brand will be offered to the retailer's customers on-deal. The advantage to retailers is that they can have a brand on sale almost all of the time by rotating agreements with various brands.

Question 9

To receive funds through a cooperative advertising program, retailers usually have to follow specific guidelines concerning the placement of ads, their content, design, and especially how the manufacturer's brand is displayed.

Accepted Answer

To receive funds through a cooperative advertising program, retailers usually have to follow specific guidelines concerning the placement of ads, their content, design, and especially how the manufacturer's brand is displayed. Normally the brand must be prominently displayed and no competing brands can be in the ad.

Question 10

Occasionally a deal or sale is made during a trade show; however, trade shows primarily allow companies to share and gather information and obtain leads for future sales calls.

Accepted Answer

Trade shows are mainly for networking, showcasing products, and generating leads rather than immediate sales.

Question 11

Approximately _____ percent of all marketing dollars are now being spent on promotions, compared to 40 percent 15 years ago.

Accepted Answer

The answer of Approximately _____ percent of all marketing dollars...

Question 12

All of the following are reasons for the shift toward greater use of promotions and less reliance on advertising over the last two decades except

Accepted Answer

The answer of All of the following are reasons for...

Question 13

A consumer promotion that offers consumers some type of reduced price is a

Accepted Answer

A coupon is a consumer promotion that offers a reduced price or discount on a product or service.

Question 14

The primary method used to distribute coupons is by

Accepted Answer

The primary method used to distribute coupons is by free standing inserts (FSI), which are primarily located in newspapers.

Question 15

The majority, 80%, of all coupons are distributed by

Accepted Answer

Manufacturers are responsible for distributing the majority of coupons, often to promote their products directly to consumers.

Question 16

Coupons that can be instantly redeemed are called

Accepted Answer

Coupons that can be instantly redeemed are called instant redemption coupons, since they can be used immediately.

Question 17

Coupons that cannot be used immediately but must be used on the next trip to the store are called _____ coupons.

Accepted Answer

Coupons that cannot be used immediately but must be used on the next trip to the store are called bounce-back coupons. Bounce-back coupons are normally located inside product packages.

Question 18

Coupons issued at the cash register during checkout are called

Accepted Answer

Scanner-delivered coupons are issued at the cash register during checkout, and are usually for a competing brand of one that was purchased.

Question 19

Coupons placed on one product that are for another product are called

Accepted Answer

Cross-ruffing coupons are placed on one product that are for another product, such as a coupon for cake icing on a box of cake mix.

Question 20

Coupons that are issued upon the request of consumers are called

Accepted Answer

Response-offer coupons are issued upon the request of consumers, often over the Internet or from a direct-response ad.

Quiz 15: Consumer and Trade Promotions