Review and Discussion Questions

Enhance your understanding further with the following review and discussion questions.

Review questions

1. What elements comprise a firm’s promotional mix?

Answer: Advertising, personal selling, sales promotion, and public relations

2. Define sales promotion and name its two primary activities?

Answer: 

a. Sales promotions are marketing activities that are designed to stimulate consumer and marketing channel demand for a product or service.

b. Consumer promotions and trade promotions

3. Describe a push strategy and a pull strategy in international marketing.

Answer: 

a. A pull strategy focuses on stimulating product demand at the consumer level. When a consumer expresses interest in a product at the retail store, retailers are encouraged to carry the item. The product will be ordered from wholesalers who purchase the product from the manufacturer. Consequently, demand for the product is “pulled” through the marketing channel by consumer from the intermediary and then the manufacturer.

b. A push strategy occurs when a marketer promotes a product to intermediaries. In general, these efforts are aimed at wholesalers first, who then promote the product to retailers. Retailers promote the product to consumers. Here, the product demand is “pushed” downward through the marketing channel.

4. Define consumer promotions and name the major types of consumer promotions.

Answer: 

a. Consumer promotions are sales promotions directed at retail customers.

  • Coupons
  • Premiums
  • Bonus packs
  • Contests and sweepstakes
  • Refunds and rebates
  • Price-off programs
  • Sampling

5. Name the forms of coupons and how they are offered in international markets.

Answer: 

a. Print media

b. Direct mail

c. In or on-package

d. In-store (display)

e. In-store (scanner delivered at check-out)

f. Response offer

g. Internet delivered (electronic coupons)

6. Describe a premium and a bonus pack.

Answer: 

a. A premium is an item offered as a reward for purchasing another item. The reward item is usually given free of charge, but it can sometimes be priced modestly, sometimes under the guise of a shipping and handling fee. Premiums take the form of gifts or prizes. A premium represents an additional incentive for a consumer to buy a product.

b. A bonus pack offers additional merchandise in a package for the same price, such as a buy-three, get one free package of bar soap. A bonus pack may also take the form of a bottle that is larger than the product's standard size and is marked "25% more, free." By purchasing the pack, consumers receive additional merchandise at the standard price. Bonus packs are often used when the goal is to entice consumers to stock up on a given item. This decreases the chance that the consumer will switch to a competitor and can be a proactive way to protect a product’s market share.

7. What is the difference between an international contest and an international sweepstakes?

Answer: 

a. Contests are promotions with game-like qualities that rely on consumer skill at some activity.

b. Sweepstakes rely on chance drawings of consumer names in order to select the winner of a promotion.

c. Contests take skill, sweepstakes do not

8. How can international marketers use social networking sites in marketing campaigns?

Answer: International marketers employ social networking sites for advertising and send promotional materials such as coupons and contest entries directly to consumers. Consumers are able to register for contests and to print coupons directly from these sites. Consumers can become fans of companies and brands by joining their social networking pages. To achieve success in social media programs, the marketing team matches messages with other content and consumer promotion offers as well as a country’s language and culture.

9. What three types of consumer reactions are present when individuals encounter international consumer promotions?

Answer: 

a.  Promotion-prone consumers

b. Price sensitive consumers

c. Brand loyal consumers

10. Describe trade promotions and the forms they take.

Answer: 

a. Trade promotions are aimed at marketing channel intermediaries. Trade promotions are particularly useful for establishing initial support for new brands, for encouraging intermediaries to promote existing brands, and for building and maintaining strong working relationships with marketing channel members. Intermediary cooperation is essential to the success of international marketing campaigns. Trade-oriented promotions help ensure cooperation from channel members.

b. Trade shows – A trade show gathers industry representatives to examine products and services that are presented to prospective buyers. Trade shows generally focus on generating buyer interest. Shows are also useful for making contacts with industry representatives as well.

c. Trade allowances – A trade allowance is a price reduction or other consideration paid by a company that is offered by a company to intermediaries as an incentive to purchase or promote a specific product.

d. Cooperative advertising results from an agreement between a manufacturer and an intermediary. Under a co-op advertising arrangement, a manufacturer agrees to pay for part of the advertising expenses of a retailer when the retailer promotes a product in a local market. Co-op advertising agreements are widely used. It is most common to see an advertisement that says something like “our products are found in finer stores, including ABC retailers.” The expense of the promotion would be split based on an agreement between marketer and retailer.

e. Trade contests – Trade contests are developed by manufacturers to provide a reward or incentive for intermediaries that either reach certain sales goals or outsell other intermediaries. These contests have proven to be effective in some international markets. In general, the reward or incentive takes a monetary form. Other things of value, ranging from special event tickets to merchandise, can also be used as incentives in trade contests.

f. Training programs – Manufacturers often offer training programs to marketing intermediaries as part of a trade promotions effort. Although training does not necessarily apply to every industry, it can be an important form of trade promotion for complex products. . Training programs have been positively correlated with increased sales and productivity.

g. Point-of-purchase materials – POP materials take a variety of forms, but the goal is the same: to encourage the immediate sale of the product by the end user. Point-of-purchase materials can be classified as trade promotions, because they assist intermediaries, most generally retailers, in promoting a product to the end user. POP materials are effective because many items that are purchased in retail stores are chosen on impulse with little or no pre-planning. Marketers understand that making contact with consumers at the point of purchase increases the probability a product being chosen.

11. What are the major forms of trade allowances?

Answer: 

a. Off-invoice allowances

b. Bill-back programs

c. Slotting fees

d. Display allowances

12. What is cooperative advertising?

Answer: Cooperative advertising results from an agreement between a manufacturer and an intermediary. Under a co-op advertising arrangement, a manufacturer agrees to pay for part of the advertising expenses of a retailer when the retailer promotes a product in a local market. Co-op advertising agreements are widely used. It is most common to see an advertisement that says something like “our products are found in finer stores, including ABC retailers.” The expense of the promotion would be split based on an agreement between marketer and retailer.

13. Define public relations and name the types of internal and external stakeholders reached by public relations programs.

Answer: 

a. Public relations is the management of communication with all organizational stakeholders.

b. External stakeholders

i. Unions Customers

ii. Shareholders Local community

iii. Government Financial community

iv. Media Special interest groups

v. Channel members

c. Internal stakeholders

  • Employees

14. What is damage control?

Answer: Damage control is reacting to negative events caused by a company mistake, consumer grievances, or unjustified or false claims made by the press or others seeking to injure a company.

15. What methods can a company use for damage control?

Answer: 

a. Crisis management programs

b. An apology strategy

c. Partial guilt

16. Define entitling and enhancement.

Answer: 

a. An entitling involves the company taking credit for a positive outcome, such as when pharmaceutical company takes credit for reducing illness and mortality rates by vending its products in a less developed nation.

b. An enhancement emphasizes the value of an outcome. A firm dedicated to lessening carbon emissions will likely note that it is, at the same time, “helping to save the planet for the next generation.”

17. What positive publicity and image-enhancement programs are used in international public relations efforts?

Answer: 

a. Sponsorships

b. Event marketing

c. Cause-related marketing

d. Green marketing and sustainability

 

Discussion questions

1. Which do you think are more important for an international marketer who is introducing a new product: a push or a pull strategy? Why? What specific types of tactics do you think are most important in introducing new products?

Answer: I would say that a push strategy is more important for a new product, this will create awareness and trial of the product. The pull strategy seems like it would be harder to get enough awareness for consumers to ask for the product to be put on shelves.

2. What consumer promotion technique or techniques would work best in a country that does not have wide-scale access to mass media technologies such as television or the Internet? Defend your answer.

Answer: Coupons, sampling, bonus packs would all work without access to TV and the internet. Coupons can be mailed to individuals, sampling can take place in the stores they visit, and bonus packs are at the point of purchase.

3. What role does social media play in international consumer promotions? How will the use of social networking grow in the future?

Answer: Social media and social networking sites such as Facebook have become important components of marketing strategy. The majority of international Internet users visit social networking sites regularly. International marketers are therefore increasing the focus on these sites and including them in their consumer promotion campaigns. Consumers can request samples through social media. International marketers employ social networking sites for advertising and send promotional materials such as coupons and contest entries directly to consumers. Consumers are able to register for contests and to print coupons directly from these sites. Consumers can become fans of companies and brands by joining their social networking pages. The use of social media will grow in the future – companies will find new and creative ways to increase the use of social media in their marketing campaigns.

4. How do trade promotions differ in developed versus developing nations? In what ways could an international marketer use this information when developing sales promotions in these countries?

Answer: Point of purchase displays will differ in developed versus developing nations – the sizes of the stores and space allowed for these will vary. An international marketer will need to keep this in mind when designing these displays. Training programs will need to differ in developed versus developing nations – the skills that the workers will need to be trained in will be different, based on education level. An international marketer will need to keep this in mind when designing the training.

5. Explain how a public relations program would be different in a country in which the media is owned and operated by the government, as opposed to those that operate freely.

Answer: In these countries the government would influence how the public relations messages are designed and delivered, the government would have to approve all messages – this would not happen in a country that operates freely.

6. Describe an incident that occurred in another country that caused a company negative publicity. How did the company respond? Was the response appropriate? Why or why not?

Answer: British Petroleum (BP) had an oil spill take place in the Gulf of Mexico. This caused a huge amount of extremely negative publicity. The company’s response will be regarded as one of the worst responses ever. The CEO came off as uncaring and conceded – topped with his British accent, the entire situation became worse. They eventually replaced their spokesperson and the new one had a southern accent. The company’s response was not appropriate, they did not do enough, they angered individuals, said they would help out financially and turned people down – the entire situation was a public relations nightmare.