Quiz 21: Managing the Marketing Mix: Product, Price, Place and Promotion

When consumers calculate the value of a product, they look at the benefits and then subtract the cost.

To satisfy consumers managers must learn to listen better than they do now and to adapt constantly to changing market demands.

Once an organization surveys the consumer's wants and needs, has designed a group of products to meet those needs, and begun to market them in stores, the organization is assured of success.

Fast-food organizations must constantly monitor all sources of information for new-product ideas.

Product development is a key activity in any modern business, anywhere in the world.

From a strategic marketing viewpoint, a total product offer includes all of the tangible attributes of a good or service, and excludes any intangible attributes.

The image created by advertising is part of the total product offer of a product.

The reputation of the manufacturer and the retail store surroundings are considered part of the value enhancers of a total product offer.

Price, store surroundings, service, and brand name are all elements that consumers evaluate in a total product offer.

Successful marketers attempt to think like consumers and evaluate the total product offer as a collection of impressions created by all parts of the value package.

The critical component of a total product offer is always a low price.

Low prices can often help retailers create an attractive total product offer.

In evaluating a total product offer, value enhancers such as service, guarantees, reputation of the seller, etc. are as important to customers as the basic product.

A firm's product line refers to all of the different geographic markets in which it sells the same good or service.

The term product line describes the combination of product mixes offered by a manufacturer.

A product line is a group of products that are physically similar or are intended for a similar market.

The several product lines that a company offers for sale make up that organization's product mix.

While service providers offer product lines, they are unable to offer product mixes.

In order for product differentiation to be effective, real product differences must be identified so that one product is clearly better than others.

Marketers use pricing, advertising, and packaging to differentiate their products from competitors' products even when actual differences are quite small.

Creative product differentiation can enable a small business to increase market share.

Packaging is an important part of the total product offer.

One function of effective packaging is to attract the attention of consumers.

One function of effective packaging is to protect the goods inside during handling and storage, as well as deter product tampering and theft.

One function of effective packaging is to provide information regarding warranties, benefits, and uses of the good inside the package.

More than any other component of a total product offer, technology has reduced the importance of packaging.

Changes in packaging can transform the product in the minds of consumers and open larger market opportunities.

While packaging innovations benefit the consumer, they have vastly increased the workload of retailers.

While the packaging of services has not yet captured the attention of businesses, technological improvements will likely create new opportunities.

The exclusive goal companies expect of packaging is to protect the product from damage in transit.

In recent years, the packaging of products has been given a greater role in product promotion.

The trend toward self-service retailers has increased the importance of packaging.

Whole grain breads, bagels, bread sticks, sandwiches, soup, and pastries are products that would be included in the product mix of El Trovodor's Bread Company.

Car dealers realize that consumers focus exclusively on price and warranty.

A bank's product line may include safety deposit boxes, car loans, and traveler's checks.

The concepts of product lines and product mixes apply to marketers of products and services.

The Spotlight on Small Business box showed us through the example of Randy Hetrick's TRX Suspension Trainer that in order to remain successful, sometimes expanding the product mix is essential.

As a result of increased advertising and well-trained salespeople, packaging is less important than in the past.

Regardless of changes in packaging, the total product offer remains unchanged.

While the UPC improves efficiency at the retail checkout counter, it has increased problems in controlling inventory.

A traditional McDonald's and a McCafe are examples of the McDonald's Corporation product mix.

At Isuzu's Appliance Store, all new products are offered with an extended service contract, as well as free delivery and installation. By offering these value enhancers, Isuzu's has added to their total product offer.

Miller Light Beer, Maxwell House Coffee, Jell-O brand gelatin, Kraft mayonnaise, and Marlboro Cigarettes, were all at one time products of the Philip Morris Company. These products represented a part of the product line Philip Morris offered.

Dutch owns and operates a small pizzeria that competes with a variety of other restaurants offering pizza on their menus. His largest competitors are large nationally known organizations. The small size of Dutch's business prevents him from successfully utilizing a product differentiation strategy.

Since Kazam Cleaners offers home and office cleaning services no different from competitors, the company cannot utilize a product differentiation strategy.

Mystic Beverages, a producer of soft drinks, wants to differentiate its products from those of other soft drink providers. To implement this strategy successfully will require Mystic to create tangible differences in the physical product it offers.

Healthy Pick designed a new type of packaging that significantly improves taste and texture of food when defrosted. Unfortunately, firms seldom find that improvements in packaging impact market share and profits.

A brand includes practically all means of identifying a product.

The purpose of a brand name is to establish an image of generic goods or services.

Brand names can significantly impact consumer perceptions of a product.

A trademark is a brand that has been given exclusive legal protection for both the brand name and the pictorial design.

The U.S. legal system does not offer trademark protection.

Brand equity refers to those factors that people associate with a specific brand name, such as awareness, perceived quality, and loyalty.

Event sponsorship like the Tostito's Fiesta Bowl football game helps improve brand awareness.

Brand managers have direct responsibility for all the elements of the marketing mix for a particular brand or product line.

Firms use brand managers or brand teams to give them greater control over both new-product development and product promotion.

Federal legislation requires that the brand name of a product clearly identify the manufacturer of that product.

Brand managers are responsible for the marketing of a product after it has been developed and a clear promotional message has been identified.

According to the box Reaching Beyond Our Borders, brand names must hold great meaning or customers will not acknowledge them.

Travelwell manufactures and sells luggage and briefcases. Their marketing research indicates that durability is the attribute that consumers most desire in their luggage and briefcases. Travelwell now emphasizes durability in all of their promotional efforts. This strategy is intended to build brand equity.

The product life cycle presents a theoretical model describing what happens to sales and profits for a class of products over time.

While the time in each stage may vary, all products progress through each stage of the product life cycle.

The four stages in the product life cycle are introduction, market, exchange, and disposal.

While some products remain in the introductory stage of the product life cycle for years, other products may go through the entire cycle in a few months.

Knowledge of the product life cycle model can help firms develop marketing strategies and anticipate market changes.

Successful firms maintain consistency in their marketing mix strategies throughout the product life cycle.

Profits peak during the maturity stage of the product life cycle.

While the product life cycle is a good theory, it's not important for marketers to recognize what life cycle stage a product is in.

Successful businesses develop a mix of price, product, place, and promotion that is consistently applied throughout a product's life cycle.

Some goods have a product life cycle that is completed in a shorter amount of time than other goods.

After several years as a brand manager for an established product, Pete has taken a job with a microbrewery. He is responsible for managing the marketing mix for a new product introduction. In his new job, Pete will find that while the products may be at different stages of the product life cycle, the marketing strategies will be essentially the same.

As consumers evaluate a product, price plays a small role.

A long-run pricing objective of almost all firms is to optimize profit.

Sometimes a firm will lower prices below their costs in order to build a customer base.

In order to achieve a social objective, firms use low prices to enable people with low incomes to buy their product.

Consumer perceptions of product quality are affected by promotions and packaging, but not by the price of the product.

Successful firms coordinate pricing objective strategies with decisions regarding product design, packaging, branding, distribution, and promotion.

Successful firms always try to maintain consistency in their short-run and long-run pricing objectives.

Cost-based pricing adds a desired profit margin to the cost of producing a product.

Target costing adds a profit margin to estimated cost of production to determine the optimal price.

Demand-based pricing is another name for cost-based pricing.

Target costing is a cost-based pricing strategy.

The target costing strategy establishes a selling price that consumers are willing to pay for a product, and then subtracts a desired profit margin to determine a target cost of production.

In the long run, the cost of production and the length of the firm's supply chain determine the price of a product.

Competition-based pricing is a strategy based on what all the other competitors are doing.

Price leadership is a demand-based pricing strategy.

Price leadership occurs when one or more dominant firms set pricing practices that other firms in the market follow.

The purpose of break-even analysis is to determine the lowest price a firm can charge and still be able to cover its costs of production.

Break-even analysis determines profitability of a firm at various levels of sales.

The break-even point is that level of sales where total revenues equals total costs.

Total fixed costs are those costs that change when the volume of production changes.

Variable costs are costs that change with the level of production.

A skimming price strategy involves a low pricing policy intended to attract price-sensitive customers from competitors.

A penetration strategy calls for a firm to charge low prices with the intent of attracting a large number of customers and discouraging competition.

Firms utilizing an everyday low pricing (EDLP) strategy establish a policy of special sales on a regular basis.

A high-low pricing strategy may condition consumers to avoid paying the regular prices by waiting for sale prices.

Psychological pricing utilizes high prices to create the image of a high-quality product.

Ultimately, the price of a good is determined by the interaction of supply and demand in the marketplace.

The key to demand-oriented pricing is the recognition that not all producers face the same costs of production.

Despite the fact that microeconomic theory places a great deal of emphasis on price, marketers often try to find ways to compete on product attributes other than price.

For most firms, price competition is the most important way to gain a competitive advantage over rivals.

Small firms often rely on nonprice competition when competing against larger firms.

One way firms can gain a competitive advantage without relying on low prices is by developing close, friendly relationships with their customers.

The pricing objectives of a firm should be set independently of the other elements of their marketing mix.

Gill's Gadgets establishes the price it charges for its products by determining the cost of production and then adding on a desired profit margin. Gill's strategy is known as target costing.

Rather than having frequent special sales, Walt's Warehouse has a pricing strategy that maintains lower prices than competitors all the time. Walt's pricing strategy is known as everyday low prices (EDLP).

Carlotta owns and manages the Carlite Car Wash. She charges $8 per car wash. Her fixed costs are $600 per month, while her variable costs per car wash amount to $2. Carlotta must wash 60 cars to break even.

Shuichi owns and operates his own sushi bar. His fixed costs would include rent, insurance, and property taxes.

Pattie Bunz operates the Zestee Burgers restaurant. The cost of pickles, onions, buns, catsup, and meat patties would all be considered variable costs for her type of business.

Miranda is a marketing manager for a large manufacturer. Her boss has asked her to evaluate a new-product idea. One of the things Miranda wants to determine is how much of this product her firm would have to sell in order to break even. In order to compute this break-even level of sales, she will need to know the price of the good, the total fixed costs, and variable cost of producing each unit.

Webster Industries is one of the first producers of a unique consumer product. The company has chosen a low-price strategy, hoping this will enable them to quickly attract many customers while discouraging potential competitors from entering the market. Webster's approach to pricing is a classic example of the skimming strategy.

Admiral Motors is the dominant firm in the auto market. When Admiral announces an increase in the prices of its automobiles, Chord and Frysler, the smaller firms in the market usually quickly announce similar price increases for their own cars. This situation is an example of demand-oriented pricing.

Budd's Floral Shoppe is located in a large town that has several other florists. The owner, Rose Budd, is likely to find that the presence of many larger competitors means that the only way she can survive is to charge rock-bottom prices.

Community Catering Services, Inc., advertises that they are the "friendliest caterers in town." Their prices are no lower than the rates charged by competing caterers, but they put a lot of emphasis on getting to know the needs of their customers. They tailor their efforts to meet these needs, providing a unique dining experience that exactly matches the customer's expectations. Community Catering is likely to find that this approach is more effective in achieving its goals than the use of aggressive price-cutting.

Organizations that assist in moving goods and services from producers to business and consumer users are called supply-side transition specialists.

Agents and brokers and wholesalers are types of marketing intermediaries.

Wholesalers are marketing intermediaries who sell goods or services to ultimate consumers.

A channel of distribution consists of the marketing intermediaries who join together to transport and store goods in their path from producers to consumers.

Brokers are marketing intermediaries that do not take title to the goods they help distribute.

Retailers are marketing intermediaries who sell to ultimate consumers.

Some manufacturers sell directly to consumers or businesses rather than relying on marketing intermediaries.

Agents are marketing intermediaries who take title to the goods they distribute and provide credit to customers who need it.

Manufacturers are usually able to perform marketing functions, such as transporting, advertising, and storing, faster and more cheaply than marketing intermediaries.

One way marketing intermediaries improve marketing efficiency is by reducing the number of exchange relationships necessary to move goods through the channel of distribution.

Some economists would say that intermediaries add costs to the channel of distribution and need to be eliminated.

Marketers claim that intermediaries add value to the channel of distribution that outweighs the cost.

The activities performed by most marketing intermediaries are not essential to the marketing process.

The best way to reduce the cost of goods is to eliminate marketing intermediaries from the distribution channel.

Marketing intermediaries have survived because they have been able to perform marketing functions more efficiently and effectively than a manufacturer or consumer could perform these functions.

The costs added by marketing intermediaries usually outweigh the value they create.

Most marketing intermediaries have survived in the past because consumers were unaware of how much these companies add to the cost of distributing goods.

An effective channel of distribution does more than simply ensure that goods are transported efficiently from producer to buyer.

Marketing intermediaries must charge a price for the functions they perform. Thus, a surefire way to reduce distribution costs is to eliminate marketing intermediaries from the channel of distribution.

Jessica Talmadge is a real estate agent who brings together the buyers and sellers of houses and commercial property. Jessica helps the parties negotiate the terms and conditions of real estate sales, but she does not take title to the property, provide credit, or assume any risks associated with the exchanges she helps negotiate. Because Jessica provides only limited services, she is not a true marketing intermediary.

Sav-U-More Grocery Store sells a wide range of foods and household supplies to households in Miller's Creek, a suburb of a large city. The store advertises that its prices are much lower than the prices charged by larger supermarket chains in the area. This low-price approach means that Sav-U-More is a classic example of a merchant wholesaler.

Although HelpUSell brings together buyers and sellers and helps negotiate exchanges, it does not actually take title to any of the goods being traded. HelpUSell would be classified as an agent or broker.

Currently, Halperin Electrical sells directly to thousands of industrial customers. Halperin could reduce the number of exchange relationships by including wholesalers in its channel of distribution.

Some marketing intermediaries make both wholesale and retail sales.

A retail sale is a sale to a consumer of products for his or her own use.

The sale of goods to a business purchasing the items for resale is a wholesale transaction.

Merchant wholesalers do not take title to the goods they handle.

About 80 percent of all wholesalers are classified as merchant wholesalers.

The two main types of merchant wholesalers are storage wholesalers and distribution wholesalers.

The main difference between agents and brokers is that agents perform a wide array of marketing functions while brokers only negotiate exchanges between buyers and sellers.

A key distinction between agents and brokers is that agents tend to maintain long-term relationships with the people they represent whereas brokers are hired on a temporary basis.

Retail organizations employ more than 5 million people in the U.S.

Discount stores, department stores, supermarkets, and specialty stores are all among the major types of retail stores.

Department stores offer a wide variety of products that are sold in separate departments.

Warehouse clubs compete with enhanced service to customers and seldom try to compete on price.

Discount stores compete in the retail market mainly on the basis of price.

A category killer is an extremely successful product that kills the sales of other products in its category in a retail store.

Specialty stores use a wide variety of products in one product category as their key competitive tool.

Category killer stores tend to compete mainly on the basis of carrying a wide array of products, superior service, and low prices.

Warehouse clubs are usually smaller than supermarkets.

Discount stores and department stores sell different brands of products that are usually priced about the same.

Exclusive distribution is the use of only one retail outlet in a given geographic area.

Candy, gum, cigarettes, and popular magazines are usually distributed using a selective distribution strategy.

A distribution strategy that puts the product into as many retail outlets as possible is known as an intensive distributive strategy.

Producers of shopping goods such as furniture, appliances, and clothing usually rely on an exclusive distribution strategy.

An advantage of a selective distribution strategy is that consumers are able to find a popular product at a wide variety of retailers.

Retailers that participate in an exclusive distribution strategy will have a strong incentive to carry a large inventory of the good and provide exceptional service to customers.

Firms that rely on electronic retailing are almost guaranteed success because they give companies easy access to literally millions of consumers all over the world.

Electronic retailing is selling goods and services online to the final consumer.

Some websites are trying to improve their service by providing assistance from a real person.

A large number of traditional retailers have developed websites in recent years, giving customers a choice of shopping techniques.

Traditional retailers that have begun using the Internet to supplement their physical stores are finding that it not only provides a new way to sell goods, it also requires a new system to distribute goods.

Telemarketing is the sale of goods and services by telephone.

Vending machines are used primarily to sell goods where consumers have little interest in convenience.

Mall owners tend to like kiosks because they create a marketplace atmosphere.

One drawback of kiosks is that their high overhead costs result in low profit margins.

Direct selling is a distribution strategy that makes extensive use of the Internet and telephone.

Because so many people work outside the home and aren't at home during the day, companies that use direct selling are sponsoring parties at workplaces to sell their products.

Direct marketing involves having a salesperson visit the customer's home or place of business.

A major advantage of direct marketing is that it is a very convenient way for consumers to shop.

Telemarketing, catalog sales, and online shopping are all examples of direct marketing.

The entire collection of organizations that move goods and services from the source of raw materials to the final consumer is referred to as the supply chain.

A broker can expect to earn a fixed amount of profit for her efforts regardless of the dollar value of the contract she negotiated.

In order to succeed in today's tough economic times all retailers must compete with low prices.

The main difference between selective distribution and exclusive distribution is the number and type of market segments the firm chooses. In a selective strategy, a variety of profitable niche markets are selected, while in an exclusive strategy one specific market segment is targeted, and all others are excluded.

In the battle between electronic retailers and traditional brick and mortar retailers, the electronic retailers seem to have all of the advantages needed to emerge as the clear winners.

Many firms that want to use an intensive distribution strategy would find vending machines an attractive method of selling their goods.

Direct selling has all but disappeared as a major form of nonstore retailing because the trend toward two-income households means fewer opportunities for selling in the home.

An important reason for the popularity of direct marketing is that many people enjoy developing a personal relationship with a salesperson that comes directly to their home or place or work.

Merrill helps growers of fresh fruits and vegetables negotiate sales to food processing companies. However, once he has helped negotiate the transaction, he does not maintain a long-term relationship with the growers. Merrill is an example of an agent in this market.

Words 4 Hire is a nationwide chain of stores that offers such a huge selection of paperback and hardback books at such competitive prices that small local bookstores have a hard time competing with them. Words 4 Hire is best classified as a discount store.

Saul-Mart is the name of a new chain of discount stores. A major part of Saul-Mart's competitive strategy is likely to be based on keeping its prices lower than those of other types of retailers.

Soundworthy Stereo is a producer of high-quality speakers. The company sells its products through a few preferred retailers in any geographic area. Soundworthy uses a selective distribution strategy.

The Newsville City Press is a daily newspaper serving a city with a population of just over 200,000. The publishers have placed vending machines for their paper throughout Newsville and its suburbs. They also sell their papers at most of the supermarkets, convenience stores, bookstores, and drug stores in the area. The Newsville City Press uses an intensive distribution strategy.

The owners of the TriCities Mall recently renovated the mall's interior. Much of the interior of the mall was made to look like scenes from famous movies. The mall also hired employees to dress like characters from these movies. There are many types of shops in the mall, including six different jewelers; however, only one jeweler carries the very expensive Romex brand of watch that appeals to customers who are looking for status in their jewelry. Romex is practicing exclusive distribution by placing its brand in only one store in a given area.

Fancy Feet sells high-quality socks and stockings by sending catalogs to customers and offering them a toll-free telephone number so that they can call in their orders 24 hours a day any day of the year. Fancy Feet uses telemarketing.

Lazee Ladd Furniture obtains materials from several suppliers and uses these materials to produce its goods. It relies on several marketing intermediaries to help it distribute the furniture. Together, Lazee Ladd, its suppliers, and the marketing intermediaries are all part of a supply chain.

A firm's promotion mix refers to the combination of different promotional tools used to persuade consumers to participate in an exchange.

Integrated marketing communication simplifies the marketing process by replacing personal selling with extensive use of advertising to create a positive brand image.

Integrated marketing communication combines all the promotional tools into one comprehensive, unified promotional strategy.

Depending upon the promotional campaign, advertising may include paid and nonpaid forms of nonpersonal communication.

Advertising provides the public with free TV and radio programs.

Newspapers, radio, and directories are especially attractive to local advertisers.

Advertising helps to cover the production costs of newspapers and magazines.

The major complaint with advertising is that it provides no real benefits to the public.

Magazine advertising's main strengths are high visibility, repeat exposures, and basically very low cost.

One problem with newspaper advertisements is that they have a short life span.

Radio advertising has certain shortcomings but offers businesses an opportunity to reach a specific target market.

When it comes to reaching global markets, evidence supports the conclusion that the "one size fits all" approach to promotional mix design is best.

Global advertising can save companies money in research and ad design.

The primary emphasis of advertising today is to move from a regional approach in global markets to a total globalist approach.

When advertising in global markets it is important to remember that brand names and promotional campaigns can often be translated into a local language differently from what the marketer has attempted to say.

Personal selling involves the face-to-face presentation and promotion of products.

Persuading others to buy your product represents the only goal of effective selling.

Effective selling involves helping others to satisfy their wants and needs.

The average cost of a single sales call to a potential B2B buyer is expensive, costing as much as $500.

After-sale follow-up is an important but often neglected step in B2C sales.

As one of the tools included in a firm's promotion mix, public relations is intended to earn public understanding and acceptance.

To be effective and maintain its independence, the public relations department should avoid establishing close relationships with the media, community leaders, and other corporate stakeholders.

Using effective public relations involves establishing a dialogue with customers so that information can be exchanged and trust can be developed.

Publicity is often referred to as the talking arm of public relations.

Unlike other promotional tools, such as advertising and personal selling, publicity is free.

Compared to effective comparative advertising, publicity is generally considered less believable.

One fact that marketers must keep in mind is that publicity can be either positive or negative.

Compared to advertising, publicity offers a firm greater control over when and how often the message is communicated.

Publicity works and is often used only if the media finds the information interesting or newsworthy.

A firm's promotion mix consists of its pricing and distribution strategies.

Advertising reaches a national audience more effectively than it communicates with a local market.

Mailing ads to nearby residents helps grocery stores reach their target market with information about special sales. This represents direct mail advertising.

Magazines such as People, Sports Illustrated, and Bloomberg Businessweek pay for much of the cost of producing their publications by selling advertising space in the magazines.

Informing consumers about goods and services represents advertising's only benefit to society.

It is important to design promotional efforts specifically for individual countries or cultures and also with great care, at risk of the brand's not being appealing in the targeted market. For example, a Japanese company tried to use English words to name a popular drink and called it Pocari Sweat.

According to the Making Ethical Decisions box, celebrities can earn thousands by tweeting their love for specific products and tag them #ad.

In evaluating personal selling it is safe to conclude that it represents a form of individualized advertising.

Businesses always welcome publicity because it presents the name of the firm and its products to the public for free.

Marla has developed a new advertising message for one of her firm's new products. She has sent copies of the ad to all of the salespeople in the firm and asked them to stress the benefits mentioned in the ad when they call on their customers. Finally, the ad includes a free sample coupon to encourage people to try this new product. She is attempting to create one positive, unified brand image for the new product. Marla is practicing brand communication.

Phil's activities as a salesperson for Marquette Publishing are part of Marquette's promotion mix.

After adopting integrated marketing communication, Madison Furniture puts less emphasis on public relations, sales promotion, and personal selling, and concentrates on advertising designed to provide a uniform message to all markets.

Businesses pay for product placement to have their products displayed in a TV episode of The Big Bang Theory or a feature movie.

Anita enjoys her job as a salesperson for a store that sells high-quality entertainment systems. As an effective salesperson, Anita is expected to help her customers resolve any doubts they might have before the sale, and follow up to ensure that the customer is satisfied after the sale.

Bob is a salesperson for a firm that markets products in a B2B market. His wife, Sally, is a salesperson for a retail store selling top-quality electronics goods. While Bob is likely to be successful using follow-up after the sale, Sally should avoid this approach.

After her sales presentation, Whitney asks her customers what color they prefer and if they would like to pay by credit card. She hopes that these questions will help the sales process move beyond the customer's questions and objections. With limited time, Whitney is utilizing a trial close to help finalize the sale more quickly.

As customers walk into Phat Pat's clothing store, they are greeted by a salesperson who asks the question, "May I help you?" Studies indicate that this is an effective opening in the B2C sales process.

As a manager for a firm that produces a variety of recreational equipment and sporting goods, Kevin is convinced that his firm markets the safest, highest-quality equipment in the entire industry. Recent studies from the Consumer Product Safety Commission support his position. Kevin feels that the best way to create an image of high-quality, safe products is to develop an extensive advertising campaign. Kevin realizes that publicity lacks the credibility that advertising can generate.

Maryland Chemical demands complete control over any message communicated to the public regarding their products. The most efficient element of the promotion mix to achieve their desired control is publicity.

Sales promotion involves the long-term strategies firms use to enhance their image by listening to the public.

Sales promotion programs can be used as a means to generate employee enthusiasm.

Coupons, contests, and sampling are examples of sales promotion activities.

Internal sales promotion programs are targeted to reach the firm's internal auditors as well as external customers.

Internal sales promotion efforts include training for salespeople and participation at trade shows where salespeople can meet potential customers.

Internal sales promotion efforts target salespeople and employees that handle customer complaints.

The use of coupons and sales contests represent internal public relations and sampling activities.

The most effective sales promotion programs target customers, rather than employees and marketing intermediaries.

It's just as important to generate employee enthusiasm about a product as it is to attract potential customers.

Sampling represents a quick and effective way to demonstrate a product's superiority at the time when consumers are making a purchase decision.

Anything that encourages people to talk favorably about an organization may be effective word-of-mouth promotion.

Viral marketing describes everything from paying people to say positive things online to schemes where consumers get commissions for directing friends to specific websites.

The popularity of the Internet has severely reduced the importance and effectiveness of word-of-mouth promotion.

Social media offers opportunities for positive and negative word-of-mouth promotion.

Any word-of-mouth promotion that puts a company's product in the public's attention is good promotion.

Personal selling provides the most efficient element of the promotion mix for a firm attempting to reach a large, homogeneous group of consumers.

In evaluating the promotion mix, it's fair to say that large organizations are best reached through personal selling.

A pull strategy utilizes consumer demand for a product to motivate retailers and wholesalers to actively market the product.

Push strategies target consumers with sales promotion and heavy discounting that are designed to create a strong demand for the product.

The objective of a push promotional strategy is to move a product through a distribution channel by offering incentives to wholesalers and retailers to stock and sell the merchandise.

Effective sales promotion efforts focus exclusively on external audiences such as dealers and consumers, since they ultimately decide the fate of a product.

Sales promotion efforts such as trade shows aimed at distributors and dealers are intended to generate their enthusiasm for a firm's products.

While word of mouth represents an effective promotional tool, the need for face-to-face communication limits its usefulness.

To execute an effective promotional strategy, firms are required to choose between a push strategy and a pull strategy.

According to the Adapting to Change box, companies can always control what is said about them online.

As a salesperson for an electrical contractor, Greg is included as part of the target audience for sales promotions from his own company.

Motivated by the disrespectful treatment he received at a department store, Karnell shared his bad experience on Yelp. He encouraged others to follow his lead and not patronize that store. Karnell's statements represent negative word of mouth.

MuscleUp promotes its liquid protein drink directly to consumers through television ads, infomercials, and newspaper coupons. The company is making use of a push strategy to reach their customers.

Nordic Track utilizes newspaper and TV ads designed to motivate potential buyers to seek out their product. This represents a push promotional strategy.

Advertising the newest Hunger Games movie during Saturday Night Live on TV is an example of a pull strategy being used by the film's producers.

When consumers calculate the value of a product, they: A) subtract the cost of production from the market price. B) eliminate all nontangible elements that might affect their perception of the product. C) look at the benefits the product provides then subtract the cost. D) identify the variable and the fixed components of the product's benefits.

Whether a consumer thinks a product provides the best value depends upon: A) the actual product benefits. B) the consumer's perceptions. C) the global situation. D) the laws covering the product's manufacture.

Restaurants, like other businesses, often find that the best way to succeed in the market is to: A) listen to customers and adapt products to their needs. B) create a product for which they could charge an exceptionally high price. C) create a winning combination of advertising and personal selling for all of the stores in the chain. D) open more stores in a single year than other food-service operators.

The combination of all the factors that consumers evaluate when deciding whether or not to buy a good or service is called a: A) total product offer. B) product mix. C) product differentiation. D) product package.

When people consider purchasing a good, they: A) are responding to the market forces of supply and demand. B) are most influenced by the price of the product or service. C) will not consider goods that require them to make a special effort to purchase. D) may evaluate and compare a variety of factors.

Which of the following refers to a group of products offered by a firm that are physically similar or are intended for a similar market? A) product matrix B) product line C) product mix D) total product offer

The combination of product lines offered by a manufacturer is called the firm's: A) product matrix. B) product mix. C) total product offer. D) product portfolio.

The purpose of __________ is to create real or perceived product differences. A) niche marketing B) product differentiation C) product mixing D) target marketing

For small businesses, product differentiation: A) is more difficult than it is for larger firms because of the high cost of product research and development. B) usually concentrates on the pricing component of the total product offer. C) can be an important strategy to gain market share. D) is less important than it is for big firms with multiple product lines.