MCE CHAPTER 6 QUESTION BANK 1 If Rival 1 in an industry uses a particular promotion mix all other rivals will typically use the same mix a b false true 2 At the start of the school year many vendors near Pitt s Student Union will give away free T shirts to sign up for a credit card This is an example of discounting Threw out but the answer is true a In the past year US universities seem to have increased their use of scholarships to attract highly qualified students This is an example of sales promotion b false true a Personal face to face persuasive interaction including sales presentation order taking and customer assistance is called direct marketing a If the promotion mix produces sales that buyers subsequently wish they had not made the seller may lose customers in the long run b false a b false b false true true 6 Dell has alienated many buyers with shoddy customer service This can likely be fixed with a good public relations campaign a true b false 7 Avon sells cosmetics directly From this we can conclude that they do not use true personal selling a The primary goal of public relations is to increase the firm s NI in the short term a For a given firm there is usually one best channel mix for all of their products a b false b false b false true true 10 Over the course of the product life cycle channel mix may change both of the above b promotion mix may change d none of the above 11 The distribution system can be viewed as a subset of firm s marketing channels a c a 3 4 5 8 9 true b false 12 Services can be sold through direct or one level channels a true b false 13 Web based channels usually have unlimited capacity b false true a 14 Two level distribution systems are normal in some industries a true b false 15 A captive supplier is typically also a monopolist 16 true a In general markets are more efficient than hierarchies a b false b false true 17 Focused firms tend to be vertically integrated a true b false 18 One response to unstable market transactions is to shift from spot to future 1 transactions a true Promotion mix can vary by industry firm within industry and product within firm a b false 2 Giant Eagle often has buy one get one offers on standard goods This is an b false true example of a discount pricing b sales promotion 3 4 both of the above d none of the above c In the past year US auto firms seem to have reduced their use of rebates and low cost financing From this we can conclude these firms have increased their use of sales promotion a Finding a balance between the firm s ability to influence short term purchase decisions and customer retention in the long term requires the firm to engage in aggressive direct marketing a b false b false true true 5 A few years ago Wal Mart fired Thomas Coughlin a board member for diverting company funds for personal use Given this bad publicity we might expect Wal Mart to react by a beginning a direct mail campaign emphasizing quality products at a fair price developing a public relations campaign to reassure its investors that this was an isolated incident decreasing its advertisement of low prices d all of the above b c 6 Dell used to sell PCs only direct to end users via the web From this we can true conclude that Dell s promotion mix emphasizes personal selling a The primary goal of public relations is to increase the firm s revenue in the short term b false a For a given product there is usually one best channel mix for all firms b false a b false true true 7 8 9 Over the course of the product life cycle a d channel mix may change both of the above b promotion mix may change d none of the above 10 Market channels can be viewed as a subset of firm s distribution system a b false 11 Since services have little or no tangible components they cannot be sold true through retailers a true a true 12 Electronic channels usually have unlimited capacity b false b false 13 Two level distribution systems have essentially disappeared due to technology such as the internet a true b false 14 A sole source is typically also a captive supplier both of the above a c In general hierarchies tend to be more efficient than markets a b a monopolist d none of the above b false true 15 16 Vertical integration generally reduces the amount of market information available to the firm a true on your quiz true a 17 Manufacturing to estimated demand is typical in pull systems Push pull NOT b false b false 18 Assume a two level marketing channel between a manufacturer and the end user From this we can infer that intermediaries provide value added services 19 When competitive markets fail firms have incentives to vertically integrate b false a true a b false 20 T Mobile is a German firm that also sells mobile phone services in the US true Assume they learn that a particular promotion mix is very effective in Germany Most likely the same mix will be effective in the US market a true b false 21 Public relations can assist a firm 22 building a new image repairing a tarnished image a e In class I discussed my experience as the target of a promotion mix at a Mercedes dealership As you should recall I test drove a car but did not purchase one This suggests the campaign was not effective a b false d all of the above true b reinforcing an existing image 23 Assume market research learns that our firm s target market is especially price sensitive In this case the firm s promotion mix should most probably emphasize our low price a our broad range of products f service b our knowledgeable salespeople d our reputation for friendly 24 An effective promotion mix may increase a product s brand equity a true b false 25 Many sports cars are simultaneously targeted at different market segments an example in the notes concerned the Miata Since the product is identical we would expect the firm to use virtually the same promotion mix for both segments true a b false 26 Scholarships offered to university students are a form of a g direct marketing life cycle pricing b mark down pricing d sales promotion 27 Sales promotions are generally not used with premium priced goods 28 Media available for advertising have significantly changed in the past decade or b true so c true b false b false 27 As a product moves through the life cycle 28 the budget for the firm s promotion mix could increase or decrease the specific elements in the promotion mix could change both of the above a b c In recent years Target has added …