Marketing Management, 14e (Kotler/Keller) Chapter 19 Managing Personal Communications: Direct and Interactive Marketing, Word of Mouth, and Personal Selling 1) The catalog you receive from a large apparel store, displaying their new summer collection, is an example of marketing A) buzz B) direct C) virtual D) word of mouth E) interactive Answer: B Page Ref: 535-536 Objective: Difficulty: Easy 2) A salesperson sends e-mails to persuade prospects to buy the products of his company This is a type of marketing A) buzz B) virtual C) word of mouth D) direct E) viral Answer: D Page Ref: 535-536 Objective: Difficulty: Easy 3) Market demassification has resulted in A) niche market creation B) product standardization C) mass production practices D) intrinsic marketing channels E) just-in time production Answer: A Page Ref: 536 Objective: Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 4) Which of the following is an example of a company that serves a niche market? A) a large apparel manufacturing company that produces a wide range of products for different segments B) a software company that creates standardized supply chain applications for manufacturers C) a manufacturer who creates tools such as bolts, latches, door handles etc for left-handed individuals D) a large multi-national manufacturer of consumer products, FMCG products, and consumer electronics E) a company that manufactures denim pants for men and women of all ages Answer: C Page Ref: 536 Objective: AACSB: Analytic skills Difficulty: Moderate 5) OrdOnline, a pure click company offering online auctioning, decides to launch a promotional program to increase its sales The company identifies customers who have made at least three purchases and spent at least $150 in the past six months and offers discount coupons to these customers Which of the following strategies is used here for targeting the customers? A) viral marketing B) objective screening C) internal targeting D) catalog marketing E) RFM formula targeting Answer: E Page Ref: 538 Objective: AACSB: Analytic skills Difficulty: Moderate 6) Which of the following is a major advantage of using direct mails? A) Direct mails permit target market selectivity B) It is the best suited tool for selling complex products C) Campaign testing is not needed for direct mails D) Direct mails have very high conversion rates E) It is the best method to sell industrial products Answer: A Page Ref: 538 Objective: Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 7) Which of the following is a factor considered when a customer is evaluated based on RFM formula? A) the amount of time passed after the customer's last visit B) the product categories purchased by the customer C) the mode of payment used by the customer D) the location from which the customer has bought goods E) the type of feedback provided by the customer Answer: A Page Ref: 538 Objective: Difficulty: Easy 8) Which of the following is an element of an offer strategy? A) the medium used for delivery B) the number of customers in the locality C) the vision of the company D) the skills required for production E) the details of customer order received Answer: A Page Ref: 538 Objective: Difficulty: Easy 9) The practice of using call centers, where employees receive calls from customers and provide service by taking orders and answering queries, is called A) customer response marketing B) guerilla marketing C) rective marketing D) internal marketing E) inbound telemarketing Answer: E Page Ref: 539 Objective: Difficulty: Easy 10) In outbound telemarketing, the call center employees A) sell high-involvement products B) initiate calls from a location closer to prospects C) offer huge discounts to customers D) initiate calls to prospects and customers E) answer the queries of consumers who call for information Answer: D Page Ref: 539 Objective: Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 11) The management of Raleigh Bicycles observes that the company's selling costs are affected by the increased number of visits that the salespeople make to meet dealers The company decides to reduce its personal selling costs by making sales calls to dealers via the telephone This marketing strategy used by Raleigh is an example of A) inbound telemarketing B) search marketing C) internal marketing D) outbound telemarketing E) paid-search marketing Answer: D Page Ref: 539 Objective: AACSB: Analytic skills Difficulty: Moderate 12) Which of the following is a disadvantage of direct marketing? A) invasion of privacy B) inability to build brand awareness C) low chances of customers avoiding messages D) inability to control marketing communication E) inability to maintain information security Answer: A Page Ref: 540 Objective: Difficulty: Easy 13) The Internet provides marketers and consumers with opportunities for much greater interaction and than other marketing channels A) control B) data security C) high involvement selling D) order conversion E) individualization Answer: E Page Ref: 540 Objective: Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 14) Which of the following is an example of contextual ad placement? A) advertisements that appear when a consumer types in the term "baby" in Google B) dynamic advertisements of an automobile company appear in a newspaper's Web site C) descriptive listings of products and services in an online shopping Web site D) "buy now" tags that appear near the product description in a company's Web site E) advertisement of a new movie that appears at the background of a news Web page Answer: A Page Ref: 540 Objective: AACSB: Analytic skills Difficulty: Moderate 15) Which of the following channels is best suited for interactive marketing? A) television B) news papers C) Internet D) hoardings E) magazines Answer: C Page Ref: 540 Objective: Difficulty: Easy 16) Which of the following is a disadvantage of using Web for interactive marketing? A) Consumers can effectively screen out most messages B) An average customer spends very little time on Internet C) Internet selling and advertising is costlier than other advertising media D) It is unable to create long-term marketing assets E) Online marketing limits the possibilities of personalization Answer: A Page Ref: 540 Objective: Difficulty: Easy 17) Companies design to embody or express their purpose, history, products, and vision and that are attractive on first viewing and interesting enough to encourage repeat visits A) Web sites B) microblogs C) banner ads D) operating programs E) social network pages Answer: A Page Ref: 541 Objective: Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 18) Individual Web pages or clusters of pages that function as supplements to a primary Web site are called A) banners B) pop-ups C) interstitials D) microsite E) interstitial Answer: D Page Ref: 542 Objective: Difficulty: Easy 19) Of the seven key design elements of an effective Web site, refers to layout and design A) character B) capability C) context D) customization E) connection Answer: C Page Ref: 542 Objective: Difficulty: Easy 20) Small Web pages of DTH Bank appear in the Web site of an online property brokerage firm The pages provide tips to home buyers and publishes its new home loan offerings These Web pages are examples of A) microsites B) online banners C) interstitials D) paid advices E) display advertisements Answer: A Page Ref: 542 Objective: AACSB: Analytic skills Difficulty: Moderate Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 21) You are searching for the details of a refrigerator in Google When you perform the search, advertisements by home appliance manufacturers appear above the organic search results displayed by Google These advertisements link you to the online appliance store of the companies Which of the following terms refer to these advertisements? A) pay-per-click ads B) floating ads C) interstitials D) superstitials E) banner ads Answer: A Page Ref: 542 Objective: AACSB: Analytic skills Difficulty: Moderate 22) You are visiting FIFA's Web site to know the schedule of the football World cup On the top of the Web page showing the schedule, a small picture displays the official mascot and the text "Buy tickets for the World Cup now" This static exhibit provides the link to the official ticket booking Web site Identify the type of advertisement used here A) pay-per-click ad B) floating ad C) wallpaper ad D) superstitial E) banner ad Answer: E Page Ref: 542 Objective: AACSB: Analytic skills Difficulty: Moderate 23) In , marketers bid in a continuous auction on search terms that serve as a proxy for the consumer's product or consumption interests A) paid searches B) pop-up advertising C) display advertising D) banner marketing E) micro-advertising Answer: A Page Ref: 542 Objective: Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 24) A banner ad is a(n) A) large ad shown on the screen for complementary products B) advertisement that appears before displaying a Web page C) advertisement that comes up when viewing a Web site D) small, rectangular box containing text and perhaps a picture E) advertisement that is put up on hoardings Answer: D Page Ref: 542 Objective: Difficulty: Easy 25) are advertisements, often with video or animation, which pop up between changes on a Web site A) Interstitials B) Pay-per click ads C) Podcasts D) Wallpaper ads E) Floating ads Answer: A Page Ref: 543 Objective: Difficulty: Easy 26) Podcasts are A) digital representations of animated pictures B) dynamic advertisements that change color and fonts while being displayed C) advertisements that pop up between Web pages D) digital media files created for playback E) advertisements that alter the contents of the Web page Answer: D Page Ref: 543 Objective: Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 27) You are browsing through an entertainment Web site When you click on one of the links, the screen turns grey and displays the advertisement of an automobile manufacturer Clicking on the advertisement leads to the automobile manufacturer's Web site This advertisement is an example of a(n) A) interstitial B) superstitial C) floating ad D) pay-per-click ad E) wallpaper ad Answer: A Page Ref: 543 Objective: AACSB: Analytic skills Difficulty: Moderate 28) Which of the following is a disadvantage of using e-mails in marketing? A) Non-technical products cannot be promoted using e-mails B) E-mails are not a cost-effective alternative C) Customers can filter the e-mails and many won't reach them D) E-mails cannot be used for prospecting E) Customer feedback cannot be sought when using e-mails Answer: C Page Ref: 543 Objective: Difficulty: Easy 29) Which of the following statements is true about mobile apps? A) They are advertisements that avoid the use of animations B) They are text messages sent in response to promotions C) They are software used to control basic functions such as texting D) They are programs designed to enhance the performance of a cell phone's processor E) They are software programs that can be loaded on to smart phones Answer: E Page Ref: 544 Objective: Difficulty: Easy Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 30) Which of the following is a valid observation about word of mouth advertisements? A) It is the one form of advertisement that cannot be controlled by companies because it occurs naturally B) Social media can be used as a tool to generate positive word of mouth C) Word-of-mouth strategy will be less effective for smaller organizations D) Attempts to manage word-of-mouth would lead to negative consequences E) Organic word of mouth is always positive whereas facilitated word of mouth is negative Answer: B Page Ref: 546 Objective: Difficulty: Easy 31) All the PR benefits a firm receives without having directly paid for anything is called media A) earned B) open C) passive D) inherent E) internal Answer: A Page Ref: 546 Objective: Difficulty: Easy 32) Inception, a recent Hollywood blockbuster, had created a lot of interest among the viewers even before its release due to the credentials of its makers The movie was discussed in social network pages and discussion forums The discussions increased after its release and it helped the movie good business Which of the following most closely describes the type of marketing discussed in this example? A) personalized marketing B) direct marketing C) interactive marketing D) word of mouth marketing E) technology marketing Answer: D Page Ref: 546 Objective: AACSB: Analytic skills Difficulty: Moderate 10 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 73) Which of the following is the first step in the process of personal selling? A) prospecting and qualifying B) sales preapproach C) sales presentation D) unearthing objections E) demonstrating advantages Answer: A Page Ref: 561 Objective: Difficulty: Easy 74) A salesperson who is contacting possible buyers by mail or phone to assess their level of interest and financial capacity is in the step of the selling process A) preapproach B) prospecting C) qualifying D) following up E) objection handling Answer: B Page Ref: 561 Objective: Difficulty: Easy 75) In which of the following stages of personal selling does a salesperson tell the product story to the buyer? A) preapproach B) prospecting C) presentation D) closing E) objection handling Answer: C Page Ref: 561 Objective: Difficulty: Easy 76) Catalog marketing and telemarketing are examples of indirect marketing Answer: FALSE Page Ref: 536 Objective: Difficulty: Easy 77) One of the shortcomings of direct marketing is that the firms cannot easily measure its response Answer: FALSE Page Ref: 536 Objective: Difficulty: Easy 24 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 78) Direct mail permits target market selectivity and allows early testing and response measurement Answer: TRUE Page Ref: 538 Objective: Difficulty: Easy 79) A company's best prospects are customers who have never bought its products Answer: FALSE Page Ref: 538 Objective: Difficulty: Easy 80) Direct marketing has the ability to test different elements of an offer strategy under real marketplace conditions Answer: TRUE Page Ref: 539 Objective: Difficulty: Easy 81) If a company exaggerates the features of its products in its product catalogue, it can be classified as deception Answer: TRUE Page Ref: 540 Objective: Difficulty: Easy 82) Internet is not a suitable channel for engaging in interactive marketing Answer: FALSE Page Ref: 540 Objective: Difficulty: Easy 83) Display advertisements can be used as a medium for interactive advertising Answer: TRUE Page Ref: 541 Objective: Difficulty: Easy 84) Microsites are versions of Web sites designed for access from mobile devices Answer: FALSE Page Ref: 542 Objective: Difficulty: Easy 25 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 85) Paid search refers to the practice of charging Internet users a small premium for obtaining individualized search results Answer: FALSE Page Ref: 542 Objective: Difficulty: Easy 86) Interstitials are advertisements that pop up between changes on a Web site Answer: TRUE Page Ref: 543 Objective: Difficulty: Easy 87) Podcasts are digital media files created for playback on portable MP3 players and computers Answer: TRUE Page Ref: 543 Objective: Difficulty: Easy 88) Word of mouth marketing is not an effective marketing strategy for small firms Answer: FALSE Page Ref: 546 Objective: Difficulty: Easy 89) Earned media refers to the various paid advertising channels used by companies to obtain visibility on the Internet Answer: FALSE Page Ref: 546 Objective: Difficulty: Easy 90) An important characteristic of online communities and forums is the two-way information flow Answer: TRUE Page Ref: 547 Objective: Difficulty: Easy 91) Blogs cannot be used for word of mouth advertising as they are not updated on a regular basis Answer: FALSE Page Ref: 547 Objective: Difficulty: Easy 26 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 92) Advertising is the only way companies can tap social networks to their benefit Answer: FALSE Page Ref: 548 Objective: Difficulty: Easy 93) Niche social networks provide a more targeted market to the advertisers Answer: TRUE Page Ref: 548 Objective: Difficulty: Easy 94) Viral marketing is a form of direct marketing where a company advertises its products through multiple channels simultaneously to spread the word as fast as possible to the maximum number of people Answer: FALSE Page Ref: 549 Objective: Difficulty: Easy 95) Buzz marketing is most useful for products that are unconventional and unique Answer: FALSE Page Ref: 550 Objective: Difficulty: Easy 96) Viral and buzz campaigns are performed with minimal involvement of consumers and prospects Answer: FALSE Page Ref: 551 Objective: Difficulty: Easy 97) A clique is a small group whose members interact frequently Answer: TRUE Page Ref: 551 Objective: Difficulty: Easy 98) A firm is said to engage in shill marketing if it pays people to anonymously promote a product or service to consumers in public places without disclosing their financial relationship to the sponsoring firm Answer: TRUE Page Ref: 551 Objective: Difficulty: Easy 27 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 99) Proxies and cookies can be used by firms to monitor customers when they are blogging, commenting, or posting in social networks Answer: TRUE Page Ref: 552 Objective: Difficulty: Easy 100) Most industrial companies rely heavily on Internet selling and buzz marketing to promote their products Answer: FALSE Page Ref: 553 Objective: Difficulty: Easy 101) A salesperson calling on supermarkets to take repeat orders is called an order taker Answer: TRUE Page Ref: 553 Objective: Difficulty: Easy 102) Demand creators are not permitted to take an order but expected rather to build goodwill or educate the actual or potential user Answer: FALSE Page Ref: 553 Objective: Difficulty: Easy 103) Targeting refers to the process of deciding which customers will get scarce products during product shortages Answer: FALSE Page Ref: 554 Objective: Difficulty: Easy 104) Information gathering refers to the act of conducting market research and doing intelligence work Answer: TRUE Page Ref: 554 Objective: Difficulty: Easy 105) A contractual sales force consists of part-time employees who work exclusively for the company Answer: FALSE Page Ref: 555 Objective: Difficulty: Easy 28 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 106) A company that sells one product line to one end-using industry with customers in many locations would use product or market structure for its salesforce Answer: FALSE Page Ref: 555 Objective: Difficulty: Easy 107) The first step in the workload approach for designing salesforce size is to establish desirable call frequencies for each customer class Answer: TRUE Page Ref: 556 Objective: Difficulty: Easy 108) The fixed amount in a salesperson's salary is majorly designed to stimulate and reward efforts from salespeople Answer: FALSE Page Ref: 556 Objective: Difficulty: Easy 109) Variable compensation is common in jobs where the selling task is technically complex and requires teamwork Answer: FALSE Page Ref: 556 Objective: Difficulty: Easy 110) Sales representatives who are paid mostly in commissions require more supervision than other salespeople Answer: FALSE Page Ref: 557 Objective: Difficulty: Easy 111) An employee who provides clerical backup for outside salespersons, runs credit checks, follows up on deliveries, and answer customers' business-related questions is called a sales assistant Answer: TRUE Page Ref: 558 Objective: Difficulty: Easy 29 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 112) A manager is using feed-forward sales supervision when he communicates what the sales reps should be doing and motivates them to it Answer: TRUE Page Ref: 559 Objective: Difficulty: Easy 113) Implication questions ask about the consequences of a buyer's problems, difficulties, or dissatisfactions Answer: TRUE Page Ref: 560 Objective: Difficulty: Easy 114) Situation questions focus on the problems, difficulties, and dissatisfaction a buyer might be experiencing with the existing situation Answer: FALSE Page Ref: 560 Objective: Difficulty: Easy 115) Closing signs from the buyer include physical actions, statements or comments, and questions Answer: TRUE Page Ref: 561 Objective: Difficulty: Easy 116) What is direct marketing? What are the various channels that direct marketers use? Answer: Direct marketing is the use of consumer-direct (CD) channels to reach and deliver goods and services to customers without using marketing middlemen Direct marketers can use a number of channels to reach individual prospects and customers: direct mail, catalog marketing, telemarketing, interactive TV, kiosks, Web sites, and mobile devices They often seek a measurable response, typically a customer order, through direct-order marketing Page Ref: 535-536 Objective: Difficulty: Easy 30 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 117) Most direct marketers apply the RFM formula to select customers Explain this formula and how it is used to select customers Answer: Most direct marketers apply the RFM (recency, frequency, monetary amount) formula to select customers according to how much time has passed since their last purchase, how many times they have purchased, and how much they have spent since becoming a customer Suppose a company is offering leather jackets It might make this offer to the most attractive customers, those who made their last purchase between 30 and 60 days ago, who make three to six purchases a year, and who have spent at least $100 since becoming customers Points are established for varying RFM levels; the more points, the more attractive the customer Page Ref: 538 Objective: Difficulty: Easy 118) What are the advantages and disadvantages of engaging in interactive marketing using the Web? Answer: It allows the companies to send tailored messages that engage consumers by reflecting their special interests and behavior Marketers can build or tap into online communities, inviting participation from consumers and creating a long-term marketing asset in the process The Web offers the advantage of contextual placement, buying ads on sites related to the marketer's offerings Marketers can also place advertising based on keywords from search engines, to reach people when they've actually started the buying process Using the Web also has disadvantages Consumers can effectively screen out most messages Marketers may think their ads are more effective than they are if bogus clicks are generated by software-powered Web sites Advertisers also lose some control over their online messages, which can be hacked or vandalized Page Ref: 538 Objective: Difficulty: Easy 119) Briefly describe the various forms of online interactive marketing Answer: Web sites: Companies must design Web sites that embody or express their purpose, history, products, and vision and that are attractive on first viewing and interesting enough to encourage repeat visits Search ads: A hot growth area in interactive marketing is paid search or pay-per-click ads, which now account for roughly half of all online ad spending In paid search, marketers bid in a continuous auction on search terms that serve as a proxy for the consumer's product or consumption interests Display ads: Display ads or banner ads are small, rectangular boxes containing text and perhaps a picture that companies pay to place on relevant Web sites E-mail: E-mail allows marketers to inform and communicate with customers at a fraction of the cost of a "d-mail," or direct mail, campaign Page Ref: 541-543 Objective: Difficulty: Easy 31 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 120) Explain the importance of word of mouth marketing Briefly describe some of the channels that customers use to spread word of mouth Answer: Consumers use word of mouth to talk about dozens of brands each day Positive word of mouth sometimes happens organically with little advertising, but it can also be managed and facilitated It is particularly effective for smaller businesses, with whom customers may feel a more personal relationship Some of the channels that the customers use are the following Social media: Social media are a means for consumers to share text, images, audio, and video information with each other and with companies and vice versa Online communities and forums: Online communities and forums can be a valuable resource for companies and provide multiple functions by both collecting and conveying key information Information flow in online communities and forums is two-way and can provide companies with useful, hard-to-get customer information and insights Social networks: Social networks have become an important force in both business-to-consumer and business-to-business marketing Advertising in social networks and establishing pages are ways of using social network Blogs: Blogs are regularly updated online journals or diaries Blogs have become an important outlet for word of mouth Page Ref: 546-548 Objective: Difficulty: Easy 121) Explain viral marketing and buzz marketing Answer: Buzz marketing generates excitement, creates publicity, and conveys new relevant brand-related information through unexpected or even outrageous means Viral marketing is another form of word of mouth, or "word of mouse," that encourages consumers to pass along company-developed products and services or audio, video, or written information to others online Buzz and viral marketing both try to create a splash in the marketplace to showcase a brand and its noteworthy features Page Ref: 549-551 Objective: Difficulty: Easy 122) The term sales representative covers a broad range of positions, tasks, and responsibilities List and briefly describe each of the positions Answer: The "positions" include: (1) deliverer: the major task is the delivery of a product; (2) order taker: who acts predominantly as an inside order taker or outside order taker; (3) missionary: a salesperson who is not expected or permitted to take an order but whose major task is to build goodwill or to educate the actual or potential user; (4) technician: a salesperson with a high level of technical knowledge; (5) demand creator: one who relies on creative method for selling tangible products; and (6) solution vendor: one whose expertise is in the solving of a customer's problems Page Ref: 553 Objective: Difficulty: Easy 32 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 123) Briefly explain the various tasks that the salespeople of an organization perform Answer: The following are the basic tasks that salespeople perform (1) Prospecting: searching for new leads or prospects; (2) targeting: deciding how to allocate time among prospects and customers; (3) communicating: communicating information about the company's products and services; (4) selling: approaching, presenting, answering questions, overcoming objections, and closing sales; (5) servicing: providing various services to the customers—consulting on problems, rendering technical assistance, arranging financing, expediting delivery; (6) information gathering: conducting market research and doing intelligence work; and (7) allocating: deciding which customers will get scarce products during product shortages Page Ref: 554 Objective: Difficulty: Easy 124) Most companies set annual quotas Quotas can be on dollar sales, unit volume, margin, selling effort, or activity and product type Compensation is often tied to the degree of quota attainment What problems does the setting of quotas present to both the company and to the sales representative? Answer: If the company underestimates and the sales reps easily achieve their quotas, the company has overpaid its reps If the company overestimates sales potential, the salespeople will find it very hard to reach their quotas and be frustrated or quit Another downside is that quotas can drive reps to get as much business as possible—often resulting in their ignoring the service side of the business Page Ref: 558-559 Objective: Difficulty: Easy 125) What are the six steps in personal selling? Answer: The six steps are: (1) prospecting and qualifying; (2) preapproach; (3) presentation and demonstration; (4) overcoming objections; (5) closing; and (6) follow-up and maintenance Page Ref: 561-562 Objective: Difficulty: Easy 126) DB bank is launching a new investment product targeting senior citizens in the U.S The company decides to use direct marketing for selling the product What direct marketing strategy would allow the company early testing and response measurement of the product? Answer: The company can use direct mails to communicate with prospects It permits target market selectivity, can be personalized, is flexible, and allows early testing and response measurement Page Ref: 538 Objective: AACSB: Analytic skills Difficulty: Moderate 33 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 127) What are the five elements of an offer strategy? Answer: The five elements of the offer strategy are the product, the offer, the medium, the distribution method, and the creative strategy Page Ref: 538 Objective: Difficulty: Easy 128) Integron Inc., a company that manufactures office furniture, has recently observed a dip in its profitability Salespeople visit an average prospect at least six times before closing a deal What suggestion can you give the company to reduce this expense of direct marketing and increase its profitability? Answer: Student answers can vary The company can replace some of the sales calls with telemarketing This would help them reduce the costs and increase profitability Page Ref: 539 Objective: AACSB: Analytic skills Difficulty: Moderate 129) Roler Telecom, a leading mobile telephone operator in Asia, engages in aggressive marketing promotions The company sends promotional messages to customers and makes promotional calls on a regular basis However, these aggressive promotion efforts often irritate its customers What could be the likely outcome of this? Answer: Many people don't like hard-sell, direct marketing solicitations from marketers The given scenario is one example of this This issue, if left unattended, will lead to increasingly negative consumer attitudes, lower response rates, and calls for greater state and government regulation Page Ref: 540 Objective: AACSB: Analytic skills Difficulty: Moderate 130) Ardrino Inc., which produces computer gadgets such as Webcams, earphones, and mouse devices, makes effective use of the Web to sell its products The company uses email as the major medium for prospecting because it is cost effective What are the possible challenges that the company can face due to its heavy dependence on the Internet? Would you suggest any changes in their strategy? Answer: Using the Web has disadvantages The consumers of Ardrino can effectively screen out most messages that the company sends The company will also lose some control over their online messages, which can be hacked or vandalized The company should also use direct selling to build a rapport with existing and prospective customers, which would enable them to explain their value proposition better, and convince prospects to choose them over competitors Student answers can vary Page Ref: 540 Objective: AACSB: Analytic skills Difficulty: Moderate 34 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 131) What aspects need to be considered when designing a company Web site? Answer: Companies must design Web sites that embody or express their purpose, history, products, and vision and that are attractive on first viewing and interesting enough to encourage repeat visits The Web site should be physically attractive and easy to use Page Ref: 541-542 Objective: Difficulty: Easy 132) When you search Google for keywords such as "insurance," you observe highlighted results in a different color and format, above the search results What are these results? Do they bring revenue to Google? Answer: These results above the organic search are called paid search or pay-per-click advertisements In paid search, marketers bid in a continuous auction on search terms that serve as a proxy for the consumer's product or consumption interests Google allows the highest bidders' ads to appear during the search of a key term and gets paid accordingly Page Ref: 542 Objective: AACSB: Analytic skills Difficulty: Moderate 133) When you click on some of the links in a Web site, before displaying the intended page, you see advertisements from third parties What are these advertisements called? Answer: These advertisements are called interstitials Interstitials are advertisements, often with video or animation, which pop up between changes on a Web site Page Ref: 543 Objective: Difficulty: Moderate 134) What is the major difference between earned media and paid media? Answer: Paid media results from press coverage of company-generated advertising, publicity, or other promotional efforts Earned media is all the PR benefits a firm receives without having directly paid for anything, all the news stories, blogs, social network conversations that deal with a brand Page Ref: 546 Objective: Difficulty: Easy 135) Many individuals, including famous personalities, maintain online diaries to express their views on a regular basis What are these online journals called? What marketing implications these journals have? Answer: These journals are called blogs Blogs can be an important source of word-of-mouth marketing Page Ref: 547 Objective: Difficulty: Easy 35 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 136) Provide two examples of social networking Web sites that can be used for marketing purposes Answer: Twitter and Facebook are two social networks used extensively by marketers Most modern companies have a twitter and facebook page Page Ref: 548 Objective: Difficulty: Moderate 137) Ranbor Mobiles is planning to launch a new smart phone The company wants to create awareness and hype about the product in the target market It releases an ad featuring a popular youth icon and highlights the phone's special features on a popular video sharing Web site Within an hour of its release, the ad was viewed a million times Is Ranbor using a viral marketing strategy or a shill marketing strategy? Explain your answer Answer: The company is using viral marketing here Viral marketing is a form of word of mouth that encourages consumers to pass along company-developed products and services or audio, video, or written information to others online A million hits within the first hour of its release suggests that people have liked it and will talk about it Shill marketing, on the other hand, is a controversial tactic where a firm pays people to anonymously promote a product or service in public places without disclosing their financial relationship to the sponsoring firm There is no indication of Ranbor having paid anyone to anonymously promote the phone Page Ref: 549 Objective: AACSB: Analytic skills Difficulty: Moderate 138) What is buzz marketing? Answer: Buzz marketing generates excitement, creates publicity, and conveys new relevant brand-related information through unexpected or even outrageous means Page Ref: 549 Objective: Difficulty: Easy 139) Stromm Inc is a leading manufacturer of electronic appliances The company has recently invented an air conditioner that consumes much less power than competing offerings and wants to create a hype for the new product What marketing strategies can the company use to make the product a talking point? Answer: The company can use buzz and viral marketing to initiate word of mouth Buzz marketing generates excitement, creates publicity, and conveys new relevant brand-related information through unexpected or even outrageous means Viral marketing is another form of word of mouth that encourages consumers to pass along company-developed products and services or audio, video, or written information to others online Page Ref: 549 Objective: AACSB: Analytic skills Difficulty: Moderate 36 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 140) What are cliques? How can two cliques be related? Answer: Small groups whose members interact frequently are called cliques Clique members are similar, and their closeness facilitates effective communication but also insulates the clique from new ideas Cliques should exhibit openness in exchanging information with others and this openness is helped along by people who function as liaisons and connect two or more cliques without belonging to either, and by bridges, people who belong to one clique and are linked to a person in another Page Ref: 551 Objective: Difficulty: Easy 141) Jack is the sales representative of a company that designs and installs modular kitchens The company's salesforce is trained to customize their offerings as per customer requirements After analyzing factors such as the space available and the budget, Jack provides personalized designs to individual customers What kind of a salesperson is Jack? Briefly explain your answer Answer: A salesperson whose expertise is solving a customer's problem, often with a system of the company's products and services is called a solution vendor Here, Jack is providing different solutions to different customers after analyzing their problems Jack can be called a solution vendor Page Ref: 553 Objective: AACSB: Analytic skills Difficulty: Moderate 142) You are appointed as the B2B sales representative of a manufacturing company What are the various tasks that you will have to perform as a B2B salesperson? Answer: The following activities have to be performed by a salesperson: (1) prospecting, (2) targeting, (3) communicating, (4) selling, (5) servicing, (6) information gathering, and (7) allocating Page Ref: 554 Objective: Difficulty: Easy 143) You are the sales manager of a company that manufactures and markets server computers The company's products require high-involvement from the sellers and require salespeople to provide complex and technical information What kind of a compensation structure you select for your sales representatives? Answer: The salespeople in the given scenario should have a pay structure that gives prominence to fixed pay Fixed compensation is common in jobs with a high ratio of nonselling to selling duties, and jobs where the selling task is technically complex and requires teamwork Page Ref: 556 Objective: Difficulty: Moderate 37 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall 144) Which type of questions allow salespeople to understand facts or explore the buyer's present state of affairs? Answer: Situation questions ask about facts or explore the buyer's present situation Page Ref: 560 Objective: Difficulty: Easy 145) You work as a sales representative in a company that manufactures surgical equipment Before calling on an important prospect, you decide to search the Internet and find out details about him What step in the selling process is being carried out here? What is the importance of this step? Answer: This step is called preapproach This helps to understand aspects such as how the purchasing process is conducted at the company, how is purchasing structured, number of purchasing departments in larger companies, and so forth This information is useful to qualify the prospect, gather information, or make an immediate sale Page Ref: 561 Objective: AACSB: Analytic skills Difficulty: Moderate 38 Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall ... describes the type of marketing discussed in this example? A) personalized marketing B) direct marketing C) interactive marketing D) word of mouth marketing E) technology marketing Answer: D Page... response marketing B) guerilla marketing C) rective marketing D) internal marketing E) inbound telemarketing Answer: E Page Ref: 539 Objective: Difficulty: Easy 10) In outbound telemarketing,... video, or written information to others online A) Buzz marketing B) Viral marketing C) Guerrilla marketing D) Motivational marketing E) Internal marketing Answer: B Page Ref: 549 Objective: Difficulty: