Global Marketing
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
Page Ref: 427
2) Sales promotion can be defined as a short-term, paid marketing communication program that
adds tangible value to a product.
Answer: TRUE
Page Ref: 427
3) Sales promotion programs can be designed to target consumers as well as distributors and
retailers.
Answer: TRUE
Page Ref: 427
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
Page Ref: 427
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
Page Ref: 427
6) Overall, sales promotion tools, such as coupons, are used less frequently as consumer products
companies increase budget allocations for media advertising.
Answer: FALSE
Page Ref: 427-428
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
Page Ref: 428-429
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
Page Ref: 429
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
Page Ref: 430
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
Page Ref: 430
11) Japanese consumers are avid users of yen-off coupons.
Answer: FALSE
Page Ref: 432-433
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
Page Ref: 430
13) As a sales promotion technique, couponing is equally popular in Malaysia and the United
States.
Answer: FALSE
Page Ref: 431-432
14) Compared with other marketing promotion techniques, sampling is more likely to result in
actual product trial.
Answer: TRUE
Page Ref: 430
15) "Point of use" product sampling is gaining in popularity among marketers.
Answer: TRUE
Page Ref: 430
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
Page Ref: 432-433
17) When MCI Communications first entered Latin America, it did so by utilizing low-cost local
sales personnel.
Answer: TRUE
Page Ref: 433-434
18) When MCI Communications first entered Latin America, it utilized expatriate Americans
despite the high cost of doing so.
Answer: FALSE
Page Ref: 433-434
19) Relationship marketing – i.e., an emphasis on developing long-term relationships with
customers – has been embraced by many U.S. companies.
Answer: TRUE
Page Ref: 435
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
Page Ref: 435-436
21) Building rapport and trust with customers is part of a sales representative's relationship
strategy.
Answer: TRUE
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
Page Ref: 435-436
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
Page Ref: 435-436
24) The final step in the 6-step sales presentation plan is closing the sale.
Answer: FALSE
Page Ref: 436-437
25) The most crucial element of the last step of the sales presentation plan is to completely
understand the decision-making process.
Answer: TRUE
Page Ref: 437
26) Ethnocentric companies are likely to use an expatriate sales force in countries at all levels of
economic development.
Answer: TRUE
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
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
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
Page Ref: 440-441
AACSB: Multicultural and Diversity
30) Sales agents are more expensive than full-time, in-country national sales representatives.
Answer: FALSE
Page Ref: 442
31) Generally speaking, consumers view direct marketing as entailing a higher level of risk than
traditional mass marketing.
Answer: TRUE
Page Ref: 443
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
Page Ref: 443-444
33) Germany leads the world in terms of amount of direct mail received per capita.
Answer: TRUE
Page Ref: 444
34) Following the economic crisis in Asia, many companies in that region have turned to direct
mail in order to save costs.
Answer: TRUE
Page Ref: 444
35) Nestlé uses direct mail in Asia for its Friskies brand cat food.
Answer: TRUE
Page Ref: 445
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
Page Ref: 447
37) France is leading in the rankings showing expenditures for outdoor advertising as percentage
of total ad spending.
Answer: TRUE
Page Ref: 448
38) In Indonesia ads cannot show cigarettes or people in the act of smoking.
Answer: TRUE
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
Page Ref: 452
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
Page Ref: 453
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
Page Ref: 427-428
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
Page Ref: 427-428
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
Page Ref: 428-429
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
Page Ref: 430
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
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
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
Page Ref: 432
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
Page Ref: 430
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
Page Ref: 434-435
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
Page Ref: 435-439
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
Page Ref: 435-439
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
Page Ref: 435-439
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
Page Ref: 437-438
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
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
Page Ref: 440-441
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
Page Ref: 440-442
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
Page Ref: 440-442
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
Page Ref: 440-442
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
Page Ref: 440-442
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
Page Ref: 440-442
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
Page Ref: 440-442
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
Page Ref: 443-444
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
Page Ref: 443-444
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
Page Ref: 443-444
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
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
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
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
Page Ref: 446
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
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
Page Ref: 447-448
71) Traditional support media include:
A) indoor posters.
B) billboards.
C) newspapers.
D) magazines.
E) catalogs.
Answer: B
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
Page Ref: 449
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
Page Ref: 451-452
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
Page Ref: 448
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
Page Ref: 449
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
Page Ref: 450
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
Page Ref: 451-452
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
Page Ref: 451-452
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
Page Ref: 451-452
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
Page Ref: 456-457
AACSB: Multicultural and Diversity
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.
Page Ref: 427-430
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.
Page Ref: 428-429
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.
Page Ref: 429-430
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 nonfood items such as free viewing of cable TV channel at no cost for a certain period of time or nocost 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.
Page Ref: 430
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 onshelf 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.
Page Ref: 431-432
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.
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.
Page Ref: 435-437
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 lowtech 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.
Page Ref: 440-442
AACSB: Analytic Skills
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.
Page Ref: 443-444
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.
Page Ref: 446-448