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Global Marketing, 6e (Keegan/Green)
Chapter 14 Global Marketing Communications Decisions II: Sales Promotion, Personal
Selling, and Special Forms of Marketing Communication
1) Sweepstakes, rebates, and other promotional tools may require consumers to divulge personal
information that companies can add to their databases.
Answer: TRUE
Diff: 2
Page Ref: 427
AACSB: Reflective Thinking
2) Sales promotion can be defined as a short-term, paid marketing communication program that
adds tangible value to a product.
Answer: TRUE
Diff: 1
Page Ref: 427
3) Sales promotion programs can be designed to target consumers as well as distributors and
retailers.
Answer: TRUE
Diff: 2
Page Ref: 427
AACSB: Reflective Thinking
4) A marketer of fine French cognac offers a fancy cigar ashtray to persons who correctly solve a
crossword puzzle and mail it in. This is an example of a trade promotion.
Answer: FALSE
Diff: 2
Page Ref: 427
AACSB: Reflective Thinking
5) The Coca-Cola Company recently offered each McDonald's UK franchisees several hundreds
of gallons of free soft drink syrup if they agreed to serve only Coca-Cola beverages. This action is
an example of a trade promotion.
Answer: TRUE
Diff: 2
Page Ref: 427
AACSB: Reflective Thinking
6) Overall, sales promotion tools, such as coupons, are used less frequently as consumer products
companies increase budget allocations for media advertising.
Answer: FALSE
Diff: 2
Page Ref: 427-428
AACSB: Reflective Thinking
7) Kashani and Quelch note that mergers and acquisitions have resulted in increased concentration
in the retailing industry. One implication of this trend is increased reliance on centralized control
of promotional program formulation.
Answer: TRUE
Diff: 3
Page Ref: 428-429
AACSB: Reflective Thinking
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Copyright © 2011 Pearson Education, Inc.
8) In a low-income country, free samples are likely to be a more effective promotional tool than
coupons or on-pack premiums.
Answer: TRUE
Diff: 2
Page Ref: 429
AACSB: Reflective Thinking
9) When designing sales promotion programs, marketers should keep in mind that the most
fundamental thing consumers want to do is try before they buy.
Answer: TRUE
Diff: 2
Page Ref: 430
AACSB: Reflective Thinking
10) In 2002 Unilever hired attractive female models to offer samples of Axe deodorant body spray
to male shoppers at Wal-Mart and Costco stores in the United States.
Answer: TRUE
Diff: 2
Page Ref: 430
AACSB: Reflective Thinking
11) Japanese consumers are avid users of yen-off coupons.
Answer: FALSE
Diff: 2
Page Ref: 432-433
AACSB: Reflective Thinking
12) In China, consumers are reluctant to buy full-sized packages of unfamiliar imported products.
In such a marketing environment, sampling is an appropriate promotional strategy.
Answer: TRUE
Diff: 2
Page Ref: 430
AACSB: Reflective Thinking
13) As a sales promotion technique, couponing is equally popular in Malaysia and the United
States.
Answer: FALSE
Diff: 2
Page Ref: 431-432
AACSB: Reflective Thinking
14) Compared with other marketing promotion techniques, sampling is more likely to result in
actual product trial.
Answer: TRUE
Diff: 2
Page Ref: 430
AACSB: Reflective Thinking
15) "Point of use" product sampling is gaining in popularity among marketers.
Answer: TRUE
Diff: 2
Page Ref: 430
AACSB: Reflective Thinking
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16) Taiwan, Thailand, and Malaysia are regarded as collectivist according to Hofstede's social
values. It was found that positive attitude of family members and society influence individual's
positive attitude toward coupons and coupon usage.
Answer: TRUE
Diff: 2
Page Ref: 432-433
AACSB: Reflective Thinking
17) When MCI Communications first entered Latin America, it did so by utilizing low-cost local
sales personnel.
Answer: TRUE
Diff: 2
Page Ref: 433-434
AACSB: Reflective Thinking
18) When MCI Communications first entered Latin America, it utilized expatriate Americans
despite the high cost of doing so.
Answer: FALSE
Diff: 2
Page Ref: 433-434
AACSB: Reflective Thinking
19) Relationship marketing – i.e., an emphasis on developing long-term relationships with
customers – has been embraced by many U.S. companies.
Answer: TRUE
Diff: 2
Page Ref: 435
AACSB: Reflective Thinking
20) The U.S.-style "I'll do whatever it takes to get your business" has proven to be a successful
selling approach throughout the world.
Answer: FALSE
Diff: 2
Page Ref: 435-436
AACSB: Reflective Thinking
21) Building rapport and trust with customers is part of a sales representative's relationship
strategy.
Answer: TRUE
Diff: 2
Page Ref: 435-436
AACSB: Analytic Skills
22) A commitment to the marketing concept and a desire to serve as a problem solver when
helping customers is part of a sales representative's personal selling philosophy.
Answer: TRUE
Diff: 2
Page Ref: 435-436
AACSB: Reflective Thinking
23) In personal selling, the goal of negotiation should be to ensure that both the customer and the
salesperson come away from the presentation as winners.
Answer: TRUE
Diff: 2
Page Ref: 435-436
AACSB: Reflective Thinking
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24) The final step in the 6-step sales presentation plan is closing the sale.
Answer: FALSE
Diff: 2
Page Ref: 436-437
AACSB: Reflective Thinking
25) The most crucial element of the last step of the sales presentation plan is to completely
understand the decision-making process.
Answer: TRUE
Diff: 2
Page Ref: 437
26) Ethnocentric companies are likely to use an expatriate sales force in countries at all levels of
economic development.
Answer: TRUE
Diff: 2
Page Ref: 440-441
AACSB: Multicultural and Diversity
27) In companies where a polycentric management orientation prevails, host-country nationals
will be used in most selling situations with the exception of high-tech products sold in developed
countries.
Answer: TRUE
Diff: 3
Page Ref: 440-441
AACSB: Multicultural and Diversity
28) A company with a regiocentric orientation is likely to utilize third-country nationals for its
sales force in less developed countries.
Answer: TRUE
Diff: 3
Page Ref: 440-441
AACSB: Multicultural and Diversity
29) "High cost" and "high turnover" are two disadvantages to using an expatriate sales force.
Answer: TRUE
Diff: 3
Page Ref: 440-441
AACSB: Multicultural and Diversity
30) Sales agents are more expensive than full-time, in-country national sales representatives.
Answer: FALSE
Diff: 2
Page Ref: 442
AACSB: Reflective Thinking
31) Generally speaking, consumers view direct marketing as entailing a higher level of risk than
traditional mass marketing.
Answer: TRUE
Diff: 2
Page Ref: 443
AACSB: Reflective Thinking
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32) Direct marketing does not work well as a global marketing tool because it is not well suited to
the task of addressing cultural differences among consumers.
Answer: FALSE
Diff: 1
Page Ref: 443-444
AACSB: Reflective Thinking
33) Germany leads the world in terms of amount of direct mail received per capita.
Answer: TRUE
Diff: 2
Page Ref: 444
AACSB: Reflective Thinking
34) Following the economic crisis in Asia, many companies in that region have turned to direct
mail in order to save costs.
Answer: TRUE
Diff: 2
Page Ref: 444
AACSB: Reflective Thinking
35) Nestlé uses direct mail in Asia for its Friskies brand cat food.
Answer: TRUE
Diff: 1
Page Ref: 445
AACSB: Reflective Thinking
36) Industry observers expect the popularity of home shopping to decrease during next few years
as interactive television technology is introduced into more households.
Answer: FALSE
Diff: 2
Page Ref: 447
AACSB: Use of IT
37) France is leading in the rankings showing expenditures for outdoor advertising as percentage
of total ad spending.
Answer: TRUE
Diff: 2
Page Ref: 448
AACSB: Reflective Thinking
38) In Indonesia ads cannot show cigarettes or people in the act of smoking.
Answer: TRUE
Diff: 2
Page Ref: 449
39) Sometimes referred to as "branded entertainment," the effective integration of products and
brands with entertainment can be seen on the popular TV hit American Idol.
Answer: TRUE
Diff: 2
Page Ref: 452
AACSB: Reflective Thinking
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Copyright © 2011 Pearson Education, Inc.
40) The more an audience suspiciously distrusts the content of promotional programs or suspect a
hidden agenda, the less likely that they will be responsive to the message.
Answer: TRUE
Diff: 2
Page Ref: 453
AACSB: Reflective Thinking
41) A marketer of fine French cognac offers fancy cigar ashtrays as prizes to consumers who
correctly solve a crossword puzzle. Which of the following most accurately describes this offer?
A) price promotion
B) non-price promotion
C) trade sales promotion
D) sweepstakes promotion
E) sampling
Answer: B
Diff: 2
Page Ref: 427-428
AACSB: Reflective Thinking
42) Which of the following is NOT an advantage of using sales promotions?
A) provides a tangible incentive to buyers
B) provides accountability to marketing managers
C) enables company to build its database
D) builds long-term brand awareness
E) develops relationship with customers
Answer: C
Diff: 2
Page Ref: 427-428
AACSB: Reflective Thinking
43) Which of the following trends is consistent with a relatively high level of headquarters
involvement in sales promotions?
A) higher proportion of marketing budget allocated to sales promotion activities
B) need for managerial skills with promotion formulation and implementation
C) strong global brand
D) increased retail concentration and consolidation
E) all of the above
Answer: E
Diff: 2
Page Ref: 428-429
AACSB: Reflective Thinking
44) Which promotional technique is best suited to a situation in which a company wants
consumers to actually try its product or service at no cost?
A) sampling
B) sweepstakes
C) couponing
D) free-standing inserts
E) personal selling
Answer: A
Diff: 2
Page Ref: 430
AACSB: Reflective Thinking
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45) Coupons are not a favorite promotion tool for use in:
A) the United Kingdom.
B) Belgium.
C) the United States.
D) Italy.
E) Malaysia.
Answer: E
Diff: 2
Page Ref: 431-432
46) A box of Crest toothpaste contains a coupon entitling the buyer to save 50 cents when
purchasing a Crest toothbrush. What type of sales promotion does this represent?
A) cross coupon
B) product placement coupon
C) trade promotion coupon
D) free-standing coupon
E) on-line coupon
Answer: A
Diff: 2
Page Ref: 431-432
47) Consumers in the United States redeem approximately what percentage of coupons issued
each year?
A) less than 5 percent
B) 10-15 percent
C) 25-30 percent
D) 45-50 percent
E) more than 60 percent
Answer: A
Diff: 2
Page Ref: 432
AACSB: Reflective Thinking
48) Unilever hired a promotional marketing firm to pass out Lever2000 hand wipes in food courts
and petting zoos. This is an example of:
A) point-of-use sampling.
B) point-of-sale sampling.
C) point-of-dirt sampling.
D) point-of-event sampling.
E) point-of-work sampling.
Answer: C
Diff: 2
Page Ref: 430
AACSB: Reflective Thinking
7
Copyright © 2011 Pearson Education, Inc.
49) Environmental issues and challenges faced by a company which is in the initial stages of
implementing a personal selling strategy include all of the following except:
A) political risks.
B) regulatory hurdles.
C) product innovation.
D) currency fluctuations.
E) market unknowns.
Answer: C
Diff: 2
Page Ref: 434-435
AACSB: Reflective Thinking
50) Which of the following is not one of the steps in the Strategic/Consultative Selling Model?
A) develop personal selling philosophy
B) develop relationship strategy
C) develop product strategy
D) develop ethnocentric policy
E) develop customer strategy
Answer: D
Diff: 2
Page Ref: 435-439
AACSB: Reflective Thinking
51) Which of the following is not a step in the strategic/consultative selling model?
A) develop a marketing mix
B) develop a personal selling philosophy
C) develop a product strategy
D) develop a relationship strategy
E) develop a presentation strategy
Answer: A
Diff: 2
Page Ref: 435-439
AACSB: Reflective Thinking
52) Building a prospect base is typically part of which step of the strategic/consultative selling
model?
A) development of a customer strategy
B) development of a personal selling philosophy
C) development of a product strategy
D) development of a relationship strategy
E) development of a presentation strategy
Answer: A
Diff: 2
Page Ref: 435-439
AACSB: Reflective Thinking
8
Copyright © 2011 Pearson Education, Inc.
53) In the six-step presentation plan the first and last steps are respectively:
A) presentation; demonstration.
B) approach; close.
C) presentation; negotiation.
D) approach; presentation.
E) approach; servicing the sale.
Answer: E
Diff: 2
Page Ref: 437-438
AACSB: Reflective Thinking
54) A company in which an ethnocentric orientation prevails is likely to utilize primarily
_________ in its sales force.
A) host-country nationals
B) third-country nationals
C) expatriates
D) agents of any nationality
E) agents of host-country
Answer: C
Diff: 2
Page Ref: 440-441
55) A company with a polycentric orientation is likely to employ host-country nationals in all but
which of the following selling situations?
A) selling high-tech products in developed countries
B) selling high-tech products in less-developed countries
C) selling low-tech products in developed countries
D) selling low-tech products in less-developed countries
E) none of the above
Answer: A
Diff: 3
Page Ref: 440-441
AACSB: Reflective Thinking
56) Which type of sales person is best suited to selling technologically-sophisticated products in
developed countries?
A) expatriates
B) third-country nationals
C) host-country nationals
D) agents of any nationality
E) none of the above
Answer: A
Diff: 3
Page Ref: 440-442
AACSB: Reflective Thinking
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57) Which of the following is an advantage of using an expatriate sales force?
A) superior product and company knowledge
B) headquarters can maintain greater control
C) those achieving success abroad gain valuable experience that can enhance promotion prospects
D) can be trained for promotion
E) all of the above are advantages
Answer: A
Diff: 2
Page Ref: 440-442
AACSB: Reflective Thinking
58) When a company must decide on the composition of its foreign sales force, which alternative
is generally the most expensive?
A) expatriates
B) third-country nationals
C) host-country nationals
D) agents of any nationality
E) agents of host-country
Answer: A
Diff: 2
Page Ref: 440-442
AACSB: Reflective Thinking
59) Assuming a company is not characterized by an ethnocentric orientation, in which global
selling situation would it be most likely to utilize sales agents?
A) developed country/high tech product
B) developed country/low tech product
C) less developed country/high tech product
D) less developed country/low tech product
E) none of the above
Answer: D
Diff: 3
Page Ref: 440-442
AACSB: Reflective Thinking
60) In which global selling situation would a company be most likely to utilize host country sales
agents?
A) developed country/high tech product
B) developed country/low tech product
C) less developed country/high tech product
D) less developed country/low tech product
E) none of the above
Answer: D
Diff: 3
Page Ref: 440-442
AACSB: Reflective Thinking
10
Copyright © 2011 Pearson Education, Inc.
61) In which global selling situation would a regiocentric company be most likely to utilize third
country nationals as sales agents?
A) developed country/high tech product
B) developed country/low tech product
C) less developed country/high tech product
D) less developed country/low tech product
E) none of the above
Answer: D
Diff: 3
Page Ref: 440-442
AACSB: Reflective Thinking
62) Which of the following is not characteristic of direct marketing?
A) A marketer relinquishes control of product when it is turned over to channel intermediaries.
B) Advertising serves to generate an immediate inquiry or purchase.
C) Repetition is used in individual advertisements.
D) The customer experiences high perceived risk.
E) Direct response advertising is used.
Answer: A
Diff: 2
Page Ref: 443-444
AACSB: Reflective Thinking
63) Which of the following is not characteristic of mass marketing?
A) Product benefits do not typically include home delivery.
B) Advertising is used to generate an immediate inquiry or purchase.
C) Repetition of ads is the key to awareness and remembering.
D) The customer perceives relatively little risk.
E) Purchase action is deferred.
Answer: A
Diff: 2
Page Ref: 443-444
AACSB: Reflective Thinking
64) Which of the following environmental characteristics affects use of direct marketing in
Europe?
A) the European Commission's concern about privacy
B) high postal rates in several countries
C) mailing list industry is still developing
D) linguistic, cultural, and regional diversity
E) all of the above
Answer: D
Diff: 2
Page Ref: 443-444
AACSB: Reflective Thinking
11
Copyright © 2011 Pearson Education, Inc.
65) Which of the following is not a useful guideline for U.S.-based direct marketers wishing to
reach global customers?
A) Do not treat prospects as though they are American.
B) Do not automatically assume that a direct-mail campaign that works in one country will work in
another country.
C) Do not assume that all Europeans are similar in their tastes and wants.
D) Customers should be able to return products to an address in their local country market.
E) All of the above are useful guidelines.
Answer: E
Diff: 2
Page Ref: 443-444
AACSB: Multicultural and Diversity
66) Which country or region offers direct marketers the advantage of a well-developed mailing list
industry?
A) United States
B) Japan
C) Western Europe
D) Latin America
E) South Korea
Answer: A
Diff: 1
Page Ref: 444
67) Which country ranks as Europe's catalog sales leader?
A) France
B) UK
C) Spain
D) Germany
E) Italy
Answer: D
Diff: 1
Page Ref: 445-446
68) Thomas Burke, an executive at Saatchi & Saatchi, is quoted as saying _________ are "the
most powerful form of advertising ever created."
A) corporate advocacy ads
B) infomercials
C) banner ads on the Internet
D) direct mail campaigns
E) catalog sales
Answer: B
Diff: 2
Page Ref: 446
AACSB: Reflective Thinking
12
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69) Chinese direct-response television has learned that there are many obstacles that still need to
be overcome, which includes all of the following except:
A) consumers' savings rate is very low.
B) limited number of private telephones.
C) low penetration of credit cards.
D) delivery logistics in crowded cities.
E) all of the above are correct
Answer: C
Diff: 2
Page Ref: 446-447
AACSB: Multicultural and Diversity
70) Industry observers expect the popularity of home shopping to increase during the next few
years due to:
A) the formation of European Union.
B) the economic development in India.
C) the introduction of interactive television.
D) the introduction of iPhone.
E) the introduction of TV shops.
Answer: C
Diff: 2
Page Ref: 447-448
AACSB: Use of IT
71) Traditional support media include:
A) indoor posters.
B) billboards.
C) newspapers.
D) magazines.
E) catalogs.
Answer: B
Diff: 2
Page Ref: 448-449
AACSB: Multicultural and Diversity
72) Worldwide spending on outdoor advertising amounts to about ________ of total advantage
spending.
A) 1 percent
B) 2 percent
C) 4 percent
D) 6 percent
E) 10 percent
Answer: D
Diff: 2
Page Ref: 449
AACSB: Reflective Thinking
13
Copyright © 2011 Pearson Education, Inc.
73) The Mini Cooper automobile was featured prominently in the blockbuster film The Italian Job.
This illustrates the importance of ________ as a global marketing communication tool.
A) consumer sales promotion
B) sampling
C) product placement
D) trade sales promotion
E) global awareness
Answer: C
Diff: 2
Page Ref: 451-452
AACSB: Reflective Thinking
74) Interactive television (ITV) allows viewers to see the ad in its entirety by pressing a remote
button; to order products from home-shopping channels; or choose different camera angles, such
as in sports events. Comments by James Pennefather, brand manager for Smirnoff, UK, based on
comparison of traditional TV ads to ITV features included all of the following except:
A) "it is an innovation of the century."
B) "it is a lot more unproven."
C) "it needs further testing."
D) "it is a calculated risk."
E) "it may or may not succeed."
Answer: A
Diff: 2
Page Ref: 448
AACSB: Reflective Thinking
75) Advertising clutter is a problem in Japan's fiercely competitive marketplace. This means that
advertisers and ad agencies must be especially ________ in order to make an impact amid all the
neon signs and electronic video billboards.
A) competitive
B) technical
C) aggressive
D) creative
E) global
Answer: D
Diff: 2
Page Ref: 449
AACSB: Reflective Thinking
76) Chinese authorities ratified the WHO's Framework Convention on Tobacco Controls; which
means:
A) Chinese TV can show tobacco ads only after midnight.
B) tobacco companies cannot show ads on TV but can sponsor sports events.
C) all forms of tobacco promotion and sponsorships will be phased out by the year 2010.
D) tobacco companies can use sponsorships of health and sporting events.
E) tobacco companies can sponsor China's national soccer tournament after the year 2010.
Answer: C
Diff: 2
Page Ref: 450
AACSB: Reflective Thinking
14
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77) Product placement has reached the world of live theater and opera. The difference between
product placement and other forms of promotion is:
A) ethical concerns are not taken into account.
B) viewers are being marketed to subliminally without their consent.
C) products are focused showing different angles.
D) prominent personalities add a message about the product.
E) sponsors are recognized for their contribution.
Answer: B
Diff: 2
Page Ref: 451-452
AACSB: Reflective Thinking
78) Celeste Atkinson is a lifestyle and entertainment manager for Audi and her job is to create buzz
by ensuring that vehicles such as the Audi A8L and the S8 sports sedan figure in paparazzi photos.
This is referred to as:
A) lifestyle placement.
B) blockbuster placement.
C) promotion placement.
D) product placement.
E) photo placement.
Answer: D
Diff: 2
Page Ref: 451-452
AACSB: Reflective Thinking
79) The effective integration of products and brands with entertainment can be seen on the TV hit
American Idol. This type of trend is referred to as:
A) advertising age.
B) traditional advertising.
C) global advertising.
D) branded entertainment.
E) image entertainment.
Answer: D
Diff: 2
Page Ref: 451-452
AACSB: Reflective Thinking
80) The management of a large manufacturer located in Mexico decided to improve productivity
by investing a large sum of money. Vendors from different countries showed interest in getting
involved. One such international manager of an American company reached Mexico without
knowing who to contact. Finally, he contacted the Commercial Attaché at the American embassy.
Realizing that the international manager had not done his homework, he advised him about
business in Latin America. His advice included all of the following except :
A) business cannot be done in Mexico as in the States.
B) sseveral contact are important before talking business.
C) price is only one of the many things that is taken into consideration.
D) people are very proud of their Spanish blood as well as liberation from Spain.
E) talk about their history and Spanish origin.
Answer: E
Diff: 2
Page Ref: 456-457
AACSB: Multicultural and Diversity
15
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81) To fight counterfeiting, large corporations such as Disney Magical Journey promotion was
keyed to mail-in hologram stickers on genuine Disney products. Discuss what makes the use of
sales promotion so effective and popular. Describe different types of sales promotions.
Answer: Sales promotion refers to any paid consumer or trade communication program of limited
duration that adds tangible value to a product or brand. In a price promotion, tangible value may
take the form of a price reduction, coupon, or mail-in refund. Nonprice promotions may take the
form of free samples, premiums, "buy one get one free" offers, sweepstakes, and contests.
Consumer sales promotions may be designed to make consumers aware of a new product, to
stimulate nonusers to sample an existing product, or to increase overall consumer demand. Trade
sales promotions are designed to increase product availability in distribution channels. The reason
why worldwide there is an increase in the popularity of sales promotions as a marketing
communication tool is due to several of its strengths and advantages. Besides providing a tangible
incentive to buyers, sales promotions also reduce the perceived risk buyers may associate with
purchasing the product. From the point of view of the sponsoring company, sales promotions
provide accountability; the manager in charge of the promotions can immediately track the results
of the promotions. Overall promotional spending is increasing at many companies as they shift
available allocations away from traditional print and broadcast advertising. Also, sweepstakes,
rebates, and other forms of promotions require consumers to fill out a form and return it to the
company, which can then build up information in its database for use when communicating with
customers in the future. A global company can sometimes leverage experience gained in one
country market and use it in another market.
Diff: 2
Page Ref: 427-430
AACSB: Reflective Thinking
82) The authors of one study noted that Nestlé and other large companies that once had a
polycentric approach to consumer and trade sales promotions have redesigned their efforts. Based
on a study by Kashani and Quelch, identify factors that contribute to more headquarters
involvement in the sales promotions effort.
Answer: As with other aspects of marketing communication, a key issue is whether headquarters
should direct promotion efforts or leave it to local country managers. Kashani and Quelch
identified four factors that contribute to more headquarters involvement in the sales promotion
effort, namely, cost, complexity, global branding, and transnational trade as follows: (1) as sales
promotions command ever-larger budget allocations, headquarters naturally takes a greater
interest; (2) the formulation, implementation, and follow-up of a promotion program may require
skills that local mangers lack; (3) the increasing importance of global brands justifies headquarters
involvement to maintain consistency from country to country and ensure that successful local
promotions programs are leveraged in other markets; and (4) as mergers and acquisitions lead to
increased concentration in the retail industry and as the industry globalizes, retailers will seek
coordinated promotional programs from their suppliers.
Diff: 2
Page Ref: 428-429
AACSB: Reflective Thinking
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83) A number of factors must be taken into account when determining the extent to which the
promotions must be localized. List and describe those factors giving examples.
Answer: The number of factors that must be taken into account when determining the extent to
which the promotions must be localized can be summarized as follows: (a) in countries with low
levels of economic development, low incomes limit the range of promotional tools available. In
such countries, free samples and demonstrations are more likely to be helpful than coupons or
on-pack premiums; (b) market maturing can be different from country to country; consumer
sampling and coupons are appropriate in growing markets, but mature markets might require trade
allowances or loyalty programs; (c) local perceptions of a particular promotional tool or program
can vary. Japanese consumers, for example, are reluctant to use coupons at the checkout counter. A
particular premium can be seen as a waste of money; (d) local regulations may rule out use of a
particular promotion in certain countries. There are countries which regulate coupon distribution;
(e) trade structure in the retailing industry can affect the use of sales promotions. For example, in
the United States and parts of Europe, the retail industry is highly concentrated. This situation
requires significant promotional activity at both the trade and consumer level.
Diff: 2
Page Ref: 429-430
AACSB: Reflective Thinking
84) Giving examples, show how sampling can be an effective sales promotion technique.
Answer: Sampling is a sales promotional technique that provides potential customers with the
opportunity to try a product or service at no cost. A typical sample is an individual portion of a
consumer product, such as breakfast cereal, shampoo, cosmetics, or detergent, distributed through
the mail, door-to-door or at a retail location. Kikkoman brand soy sauce was unknown in the
United States until they initiated a sampling program in American supermarkets and gave free
samples of food seasoned with Kikkoman. Today they have a considerable size market in the
United States. Similarly, Unilever launched Axe deodorant body spray in the United States with
print ads and in-store sampling as promotion strategy. They hired female models to offer samples
to male shoppers at Wal-Mart and Costco stores. This was also very successful. Cost is one of the
major disadvantages associated with sampling. It may also be difficult to assess the contribution a
sampling program makes to return on investment. Event marketing and sponsorships are used to
distribute samples at concerts, sports events, or special events where food and beverages are
served to large numbers of people. Sampling may also consist of non-food items such as free
viewing of cable TV channel at no cost for a certain period of time or no-cost trial subscriptions to
a computer service or newspaper service. Web sites can also be used for requesting free samples.
Compared to the other forms of marketing communication, sampling is more likely to result in
actual trial of the product. To ensure trial, consumer products companies are increasingly using a
technique known as "point-of-use" sampling. In another example "point-of-dirt" sampling was
conducted by Unilever. Unilever recently hired a promotional marketing firm to pass out
Lever2000 hand wipes in food courts and petting zoos. Sampling can be especially important if
consumers are not persuaded by claims made in advertising or other channels. In China, for
example, shoppers are reluctant to buy full-sized packages of imported consumer products that
they have not tried or if products have higher prices than local brands. Proctor & Gamble's
dominance in China's shampoo market can be attributed to the company's skilled use of market
segmentation coupled with an aggressive sampling program. They distributed millions of free
samples of its shampoo products. After the no-risk trial, many consumers became adopters.
Diff: 2
Page Ref: 430
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85) Coupons are a favorite promotion tool of consumer packaged goods companies such as Proctor
& Gamble and Unilever. How does the couponing work and what are the advantages for using
different types of coupons?
Answer: A coupon is a printed certificate that entitles the bearer to a price reduction or some other
special consideration for purchasing a particular product or service. In the United States, marketers
rely heavily on newspapers to deliver coupons. Most of the coupons are distributed in a printed
ride-along vehicle referred to as a "free-standing insert (FSI)." "On-pack coupons" are those that
are attached to, or part of, the product package; they can frequently be redeemed immediately at
checkout. "In-pack coupons" are placed inside the package. Coupons have the flexibility since
they can also be handed out in stores, offered on a self-service basis from on-shelf dispensers,
delivered to homes by mail, or distributed electronically at the checkout counter. Also, the number
of coupons distributed via the Internet is growing. "Cross coupons" are distributed with one
product but redeemable for a different product. The United States leads the world in number of
coupons issued by a wide margin. The goal of couponing is to reward loyal users and stimulate
product trial by nonusers. In the EU, couponing is widely used in the United Kingdom and
Belgium. Couponing is not as prevalent in Asia where saving face is important. Although Asian
consumers have a reputation for thriftiness, some are reluctant to use coupons because doing so
might bring shame upon them or their families. Thus, couponing also depends on the culture of a
particular country. There are also regulations in many countries pertaining to the use of coupons by
manufacturers.
Diff: 2
Page Ref: 431-432
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86) What are the issues and problems related to sales promotion in different parts of the world?
Answer: Many companies are very selective in targeting their sampling programs. In the case of
coupons, retailers must bundle the redeemed coupons together and ship them to a processing point.
Many times, coupons are not validated at the point of purchase; fraudulent redemption costs
marketers hundreds of millions of dollars each year. Sometimes the code on packaging can be read
easily and used without purchasing the product. Thus, the formulation and execution of sales
promotion requires planning in addition to creativity. In some emerging markets, sales promotion
efforts can raise eyebrows if companies appear to be exploiting regulatory loopholes and lack of
consumer resistance to intrusion. Sales promotion in Europe is highly regulated, whereas it is very
popular in Scandinavia. In the Nordic countries there are regulations pertaining to sales promotion.
A recent study examined coupon usage and attitudes toward both coupons and sweepstakes in
Taiwan, Thailand, and Malaysia. The study has particular relevance to global companies that are
targeting these and other developing nations in Asia. All three countries in the studies were
collectivist, and the researchers found that positive attitudes of family members and society as a
whole influence an individual's positive attitude toward coupons and coupon usage. However, the
three nations show some differences in value orientation. For example, Malaysia has a higher
power distance and lower uncertainty avoidance than the others. For Malaysians, the fear of public
embarrassment was a constraint on coupon usage. In all three countries, media consumption habits
were also a factor; persons who were not regular readers of magazines or newspapers were less
likely to be aware that coupons were available. Consumers in Taiwan and Thailand look more
favorably upon coupons than sweepstakes. Thus, one implication for marketing in developing
countries is that, despite cultural differences, increased availability of promotions will result in
higher levels of consumer utilization.
Diff: 2
Page Ref: 432-433
AACSB: Multicultural and Diversity
87) The Strategic/Consultative Selling Model has gained wide acceptance in the United States.
Describe briefly what the model consists of and how it can serve as a checklist for sales personnel.
Answer: The Strategic/Consultative Selling Model consists of five interdependent steps, each
with three prescriptions that can serve as a checklist for sales personnel. The first step requires a
sales representative to develop a personal selling philosophy. A commitment to the marketing
concept and a willing to adopt the role of problem solver or partner in helping customers is
required at this first step. The second step is to develop a relationship strategy, which is a game
plan for establishing and maintaining high-quality relationships with prospects and customers.
This step connects sales personnel directly to the concept of relationship marketing. The third step,
developing a product strategy, results in a plan that can assist the sales representative in selecting
and positioning products that will satisfy consumer needs. The next step deals with customer
strategy, which is a plan that ensures that the sales professional will be maximally responsive to
customer needs. For this a general understanding of consumer behavior is needed. The final step,
the actual face-to-face selling situation, requires a presentation strategy. This consists of setting
objectives for each sales call and establishing a presentation plan to meet those objectives. The
presentation strategy must be based on the sales representative's commitment to provide
outstanding service to customers. A presentation plan that is the heart of the presentation strategy
typically consists of six stages: approach, presentation, demonstration, negotiation, closing, and
servicing the sale.
Diff: 3
Page Ref: 435-437
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88) Basic issues for companies that sell globally are the composition of the sales force in terms of
nationality. List choices that are available to companies for selecting a sales force, Outline
advantages and disadvantages of each choice.
Answer: It is possible to utilize expatriate salespersons, hire host country nationals, or utilize third
country sales personnel. The staffing decisions are based on several factors, including
managements' orientation, the technological sophistication of the product and the stage of
economic development exhibited by the target country. A company with an ethnocentric
orientation is likely to prefer expatriates and adopt a standardized approach without regard to
technology or the level of economic development in the target country. On the other hand,
polycentric companies selling in developed countries may opt for expatriates to sell
technologically sophisticated products; a host-country sales force can be used when technological
sophistication is lower. In less-developed countries, host-country nationals may be used for
products in which technology is a factor and host-country agents may be used for low-tech
products. The widest diversity of sales force nationality is found in a company in which a
regiocentric orientation prevails. Except in the case of high-tech products in developed countries,
third-country nationals are likely to be used in all situations. Management should weigh in
advantages and disadvantages of each nationality type. Expatriates, since they come from the
home country, often possess a high level of product knowledge and are likely to be thoroughly
versed in their company's commitment to after-sales service. They are also better able to institute
policies and standards. It is also very easy to train them for promotion. The disadvantages include
that there is high cost involved and with the high turnover the costs can go up further. Also, the
cost for language and cross-cultural training has to be taken into account. Host-country hiring is
economical, they have superior market knowledge, good language skills, superior cultural
knowledge and they can implement actions rapidly. The disadvantages include that they need
product training and may be held in low esteem. Also, language skills may not be important and it
is difficult to ensure their loyalty. Using the third country salesperson has advantages of cultural
sensitivity; language skills, economy and the possibility of regional sales coverage. The
disadvantages include that they face identity problems, promotions may be limited; and there may
be income gaps based on the country they are coming from. They will need product or company
training; however, their loyalty is not assured. After much trial and error in creating sales forces,
most companies today attempt to establish a hybrid sales force comprised of a balanced mix of
expatriates, and in-country nations.
Diff: 2
Page Ref: 440-442
AACSB: Analytic Skills
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89) Direct marketing and mass marketing are becoming a very popular method for communicating
with consumers. Giving reasons for their worldwide popularity, show the differences between
direct and mass marketing?
Answer: Direct marketing is defined as any communication with a consumer or business recipient
that is designed to generate a response in the form of an order, a request for further information,
and/or a visit to a store or other place of business. Mass marketing communications are typically
aimed at broad segments of consumers with certain demographic, psychographic, or behavioral
characteristics in common. More sophisticated techniques and tools are being used for direct
marketing as well as for mass marketing. Also, one-to-one marketing is developed on the basis of
CRM by treating different customers differently based on their previous purchase history or past
interactions with the company. Worldwide, the popularity of direct marketing has been steadily
increasing in recent years partly due to the availability of credit cards as a convenient payment
mechanism for direct response purchase. Another reason is societal, since dual-income families
have more money to spend but less time to shop outside the home. Technological advancements
have also made it easier for companies to reach customers directly. Cable and satellite television
allow advertisers to reach specific audiences on a global basis. The European Commission expects
investment in direct marketing to surpass expenditures for traditional advertising in the near
future. The primary differences between direct marketing and mass marketing include marketers
add values in direct marketing by arranging for delivery of products to customers door and
controls the product all the way through to delivery. Another difference is that in direct marketing
direct response is used to generate an immediate enquiry or order. Also, in direct marketing, the
customer perceives higher risk because product is bought unseen and recourse may be viewed as
distant or inconvenient.
Diff: 2
Page Ref: 443-444
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90) It is expected that information technology will have a big role in promotions using innovative
methods. Discuss how infomercials, teleshopping, and interactive television will change the way
consumers shop in the near future.
Answer: An infomercial is a form of paid television programming in which a particular product is
demonstrated, explained, and offered for sale to viewers who call a toll-free number shown on the
screen. This is considered as the most powerful form of advertising ever created. Because
infomercials are typically 30 minutes in length and often feature studio audiences and celebrity
announcers, many viewers believe they are watching a regular talk show-type programming.
Infomercials started with personal care, fitness, and household products, but now they are getting
into other products including automobiles and other technical products. Infomercials are also very
popular in other countries of the world. In Asia, infomercials generate several hundred million
dollars in annual sales. With teleshopping, home-shopping channels take the infomercial concept
one step further. They offer round-the-clock programming which is exclusively dedicated to
product demonstration and selling. The leading home shopping channels are also leveraging the
Internet. A number of local and regional teleshopping channels have sprung up in Europe.
Typically, Europeans are more discriminating than the average American teleshopping customers.
Industry observers expect the popularity of home shopping to increase during the next few years as
ITV (interactive television) or t-commerce technology is introduced into more households. ITV
allows television viewers to interact with the programming content that they are viewing. The
remote control units provided by pay-TV service providers in the United Kingdom have a red
button that viewers press during sports broadcasts, vote during audience participation, or order free
samples of advertised products. All of these technological advancements will have a distinct effect
on how consumers select and purchase.
Diff: 2
Page Ref: 446-448
AACSB: Use of IT
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