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Chapter 15: The Promotion Mix: Personal Selling and Sales Promotion

Every problem in the chapter beside the book’s answer, a chapter at a time as you scroll.

Chapter 15: The Promotion Mix: Personal Selling and Sales Promotion

33 problems · 0 figures

Knowledge Check 15.1.1 §15.1 source ↗

Companies typically use personal selling as the promotional strategy of choice when which of these is true?
  1. a.
    The product is higher in price.
  2. b.
    The product requires the sales professional to spend significant time educating the customer.
  3. c.
    The product has a lot of variation.
  4. d.
    All of these statements are true.

Answer

D. All of these statements are true.
Personal selling is used by companies when they have a product that needs explanation and education, it is higher in price, and it can be varied according to the needs of the customer.

Knowledge Check 15.1.2 §15.1 source ↗

Personal selling is ________.
  1. a.
    unpaid advertising to consumers
  2. b.
    a method of increasing sales in the short term
  3. c.
    one-on-one interaction between a sales professional and a potential buyer/customer
  4. d.
    used for handling routine purchases

Answer

C. one-on-one interaction between a sales professional and a potential buyer/customer
Personal selling is the one-on-one interaction between a sales professional and the potential customer.

Knowledge Check 15.1.3 §15.1 source ↗

If a company has a higher-priced product that requires some variation according to the customer’s needs and wants, which method of promotion is best?
  1. a.
    Direct marketing
  2. b.
    Personal selling
  3. c.
    Advertising
  4. d.
    Public relations

Answer

B. Personal selling
Personal selling allows for the sales professional to adjust the product to meet the needs and wants of the customer.

Knowledge Check 15.1.4 §15.1 source ↗

Which of the following is NOT a reason for personal selling to be used?
  1. a.
    When the product is complicated
  2. b.
    When the product has a lot of competition
  3. c.
    When the product needs to be demonstrated
  4. d.
    When the product is highly technical

Answer

B. When the product has a lot of competition
Most products in the market have a lot of competition. The level of competition has nothing to do with the use of personal selling.

Knowledge Check 15.1.5 §15.1 source ↗

Jasmine works for a Honda dealership. Jasmine has spent considerable time listening to a potential customer talk about what features they are looking for in a new car. Jasmine is able to identify the best Honda automobile to meet the needs of the customer. What feature of sales is Jasmine demonstrating?
  1. a.
    One-on-one interaction
  2. b.
    Meeting the needs and wants
  3. c.
    Personal communication
  4. d.
    All of these features are correct.

Answer

D. All of these features are correct.
Jasmine has effectively demonstrated the personal selling skills of one-on-one interaction with the customer, meeting the needs and wants of the customer, and having personal communication with the customer to satisfy their needs and wants.

Knowledge Check 15.2.1 §15.2 source ↗

The practice of using call centers, where employees receive calls from customers and provide service by taking orders and answering queries, is called ________.
  1. a.
    customer response marketing
  2. b.
    guerilla marketing
  3. c.
    reactive marketing
  4. d.
    inside order taking

Answer

D. inside order taking
When customers call into a company to place an order an inside order taker is the person answering and taking the order.

Knowledge Check 15.2.2 §15.2 source ↗

The management of Javier’s Bicycles has an approach where the call center makes appointments and the sales professionals go out to meet with the potential customers and discuss the various products available. This is an example of ________.
  1. a.
    inside order takers
  2. b.
    team selling
  3. c.
    technical specialists
  4. d.
    internal marketing

Answer

B. team selling
When several people within the organization are responsible for making the sale, this is considered a team selling approach

Knowledge Check 15.2.3 §15.2 source ↗

Special-Lite makes industrial doors for many commercial applications. Once the sales professional meets with the customer to discuss the products they wish to buy, the sale moves into production, and a special person within the company is assigned to make sure the doors meet the requirements specified in the blueprints. This person is a(n) ________.
  1. a.
    order getter
  2. b.
    order taker
  3. c.
    technical specialist
  4. d.
    telemarketer

Answer

C. technical specialist
The person who is responsible for making sure the product meets the needs of the customer is the technical specialist.

Knowledge Check 15.2.4 §15.2 source ↗

Pfizer uses sales professionals to visit with physician offices and inform the physicians of the new medications and the uses for the medications and to encourage them to prescribe the new medications to their patients. This form of sales professional is often called ________?
  1. a.
    technical specialist
  2. b.
    order taker
  3. c.
    order getter
  4. d.
    missionary sales

Answer

D. missionary sales
Missionary sales is responsible for educating and informing while also encouraging the use of a product.

Knowledge Check 15.2.5 §15.2 source ↗

84 Lumber has personnel who work to set appointments and check inventory levels. What type of person does this for the sales force?
  1. a.
    Support personnel
  2. b.
    Missionary sales
  3. c.
    Technical specialist
  4. d.
    Order getter

Answer

A. Support personnel
Companies often have support personnel to assist with elements of the sale. This can include checking on inventory and setting appointments for outside sales professionals.

Knowledge Check 15.3.1 §15.3 source ↗

Lucia works for ABC Home Centers. The company sells roofing and windows to customers looking to make home improvements. Lucia’s main job with the company is to identify people who might be in the market for home improvement products. As part of Lucia’s job, she calls people to see if they would be interested in finding out more about ABC’s products. What stage of the sales process is Lucia doing?
  1. a.
    Closing
  2. b.
    Handling objections
  3. c.
    Presentation
  4. d.
    Prospecting and qualifying

Answer

D. Prospecting and qualifying
Lucia is trying to find the qualified people to buy the products.

Knowledge Check 15.3.2 §15.3 source ↗

Tony likes everything about the products from Supreme Restaurant Equipment. He is just about ready to purchase, but he has some questions about the payment methods and financing. At what stage of the selling process does the sales professional deal with Tony’s questions?
  1. a.
    Handling objections
  2. b.
    Closing
  3. c.
    Pre-approach
  4. d.
    Qualifying

Answer

A. Handling objections
When customers have questions and the sales professional is ready to answer the questions, this is typically considered handling objections.

Knowledge Check 15.3.3 §15.3 source ↗

Shakira has been working with a customer for quite some time. She has a good rapport with the customer, and the customer often asks her a lot of questions regarding other matters in the industry. When Shakira is ready to work with the customer for an order, she talks with them about the pros and cons as well as other companies’ products that might be a good fit. What type of selling approach is Shakira using?
  1. a.
    Adaptive
  2. b.
    Hard sell
  3. c.
    Stimulus-response
  4. d.
    Consultative

Answer

D. Consultative
Shakira is acting more as a consultant to help her customer have the best fit for their needs.

Knowledge Check 15.3.4 §15.3 source ↗

“Besides you, are there other decision makers that buy apparel?” This is a question that you might ask during what stage of the sales call?
  1. a.
    Pre-approach
  2. b.
    Close
  3. c.
    Approach
  4. d.
    Handling objections

Answer

C. Approach
During the approach phase, the sales professional gathers insights and seeks to contact the prospect to build rapport and gather more information on the needs and wants of the prospect.

Knowledge Check 15.3.5 §15.3 source ↗

Keith is with his prospect, and he is out on a test drive for the new Ford F-150. He is telling the prospect about the safety features of the truck. What stage of the selling process is Keith in?
  1. a.
    Approach
  2. b.
    Close
  3. c.
    Presentation
  4. d.
    Handling objections

Answer

C. Presentation
Keith is demonstrating the product and telling about the features that are important to the prospect. Keith is doing the presentation.

Knowledge Check 15.4.1 §15.4 source ↗

Lev is the sales manager for John Paul Mitchell Systems. He is responsible for the North American sales division. Lev is currently reviewing the total number of salons and looking to estimate the size of his sales force. What sales force management function is Lev performing?
  1. a.
    Setting sales goals
  2. b.
    Looking at territories
  3. c.
    Estimating the number of sales professionals he will need
  4. d.
    Writing job descriptions

Answer

C. Estimating the number of sales professionals he will need
Lev needs to know how many sales professionals he will need to hire.

Knowledge Check 15.4.2 §15.4 source ↗

Part of Malika’s job with H2O Pool Supplies is to identify potential new customers. She is required to spend 20% of her time working to bring in new customers. What type of objective is Malika working toward?
  1. a.
    Serving existing customers
  2. b.
    Increasing profits
  3. c.
    Enhancing customer satisfaction
  4. d.
    Developing new customers

Answer

D. Developing new customers
Malika is focused on bringing in new customers.

Knowledge Check 15.4.3 §15.4 source ↗

Terra Cotta Landscape Supply is currently developing a two-day session for all sales professionals within the organization. During this two-day meeting, the sales professionals will be learning about new products and applications for their clients. This is an example of what element of managing a sales force?
  1. a.
    Compensating
  2. b.
    Training
  3. c.
    Recruiting
  4. d.
    Evaluating

Answer

B. Training
Companies regularly need to inform and educate their sales professionals about the products they are selling.

Knowledge Check 15.4.4 §15.4 source ↗

Johnny has worked for Nestlé for 15 years. He is paid based on the sales he makes. What type of compensation is Johnny most likely making?
  1. a.
    Base salary
  2. b.
    Bonus
  3. c.
    Commission
  4. d.
    Salary and commission

Answer

C. Commission
Nestle is most likely paying Johnny a commission on the sales he makes.

Knowledge Check 15.4.5 §15.4 source ↗

Ranee is concerned with making sure she has a set number of appointments with customers each week. Ranee is most likely being evaluated based on what?
  1. a.
    Percent of time spent on selling activities
  2. b.
    Percent of time spent generating leads
  3. c.
    Time it takes her to develop a proposal
  4. d.
    Percent of time working in the CRM

Answer

A. Percent of time spent on selling activities
Ranee needs to spend time on selling activities.

Knowledge Check 15.5.1 §15.5 source ↗

The retail store Ann Taylor is offering 75% off if you order online today and sign up to receive the newsletter. This is an example of what promotional mix strategy?
  1. a.
    Advertising
  2. b.
    Personal selling
  3. c.
    Public relations
  4. d.
    Sales promotion

Answer

D. Sales promotion
This is an example of sales promotion geared toward generating an immediate sale.

Knowledge Check 15.5.2 §15.5 source ↗

When Starbucks has a happy hour special from 2:00 to 4:00 and drinks are half price, what is the purpose of the sales promotion?
  1. a.
    Lose money
  2. b.
    Stimulate demand
  3. c.
    Spread information
  4. d.
    Increase customer satisfaction

Answer

B. Stimulate demand
The sales promotion is structured to stimulate demand for more product.

Knowledge Check 15.5.3 §15.5 source ↗

Rolex calls itself the “Official Timekeeper” of the Wimbledon and Australian Open tennis championships, by virtue of its sponsorships of the marquee events. What is the most likely objective for Rolex’s sponsorship deal with these events?
  1. a.
    Lose money
  2. b.
    Stimulate demand
  3. c.
    Spread information
  4. d.
    Increase customer satisfaction

Answer

C. Spread information
Rolex wants to spread information about its products to the target market of customers that will be present at the events.

Knowledge Check 15.5.4 §15.5 source ↗

Sales promotion consists of a collection of incentive tools designed to do what for the product?
  1. a.
    Stimulate demand
  2. b.
    Create brand awareness
  3. c.
    Provide free publicity
  4. d.
    Inform

Answer

A. Stimulate demand
Sales promotion is primarily to stimulate demand in the short term.

Knowledge Check 15.5.5 §15.5 source ↗

Sally loves to receive her coupons from American Eagle. She typically looks in her email every day to see what promotions the company will be sending. The American Eagle sales promotions are helping to accomplish which important task?
  1. a.
    Increased customer satisfaction
  2. b.
    Providing information
  3. c.
    Increasing brand awareness
  4. d.
    Developing junk mail

Answer

A. Increased customer satisfaction
Sally is happy and satisfied when she gets email and promotions from American Eagle.

Marketing Dashboard 15.5 §15.5 source ↗

Table 15.1 in the book ↗
Type of Promotion Expense Yield
Television Advertising $1,250,000 400,000 customers
Catalog Mailing $750,000 250,000 customers
Search Engine Marketing $550,000 90,000 customers
Outdoor Activation $1,500,000 70,000 customers
Ad Agency Fees $600,000 0 customers
TOTAL $4,650,000 810,000 customers

We often think about profitability based on the difference between what we spend to create a product or service and the amount a customer pays for that product or service. However, we have to remember that there are costs to acquiring customers. In this chapter, you learned about two promotional activities that create costs to reach customers: sales and sales promotion.

Within the sales process, an organization pays a salesperson salary and/or commission to make sales. This is an example of a cost to acquire a customer. As you can imagine, we want our cost to acquire to stay low. For example, if we sold multimillion-dollar airplanes, it would be reasonable to spend thousands of dollars on a salesperson to make that sale. However, if we were selling several-hundred-dollar televisions, our cost to acquire a customer must be much lower.

Sales promotion is another promotional expense. For example, if a pizza brand provides samples at Costco, this might encourage a customer to purchase pizza. And if that customer keeps buying pizza, the cost of the pizza sample was worth it for the value that the customer will bring over the life of the relationship. Other categories of promotional costs include advertising, public relations, social media, search, and direct marketing.

The formula for cost of acquisition is the total cost of marketing activities divided by number of customers acquired.

Cost of Acquistion=Total Cost of Marketing ActivitiesNumber of Customers Acquired

In this formula, you will see an assumption that all customers are worth the same amount, but as savvy marketers, we know that this is untrue. This is why we need to use a variety of marketing metrics when evaluating campaigns.

Give the cost of acquisition calculation a try for yourself. What is the cost of acquisition in the example provided below?

Answer

$5.74 per customer

Formula:

$4,650,000 / 810,000

Marketing Dashboard 15.5 (b) §15.5 source ↗

Table 15.1 in the book ↗
Type of Promotion Expense Yield
Television Advertising $1,250,000 400,000 customers
Catalog Mailing $750,000 250,000 customers
Search Engine Marketing $550,000 90,000 customers
Outdoor Activation $1,500,000 70,000 customers
Ad Agency Fees $600,000 0 customers
TOTAL $4,650,000 810,000 customers

We often think about profitability based on the difference between what we spend to create a product or service and the amount a customer pays for that product or service. However, we have to remember that there are costs to acquiring customers. In this chapter, you learned about two promotional activities that create costs to reach customers: sales and sales promotion.

Within the sales process, an organization pays a salesperson salary and/or commission to make sales. This is an example of a cost to acquire a customer. As you can imagine, we want our cost to acquire to stay low. For example, if we sold multimillion-dollar airplanes, it would be reasonable to spend thousands of dollars on a salesperson to make that sale. However, if we were selling several-hundred-dollar televisions, our cost to acquire a customer must be much lower.

Sales promotion is another promotional expense. For example, if a pizza brand provides samples at Costco, this might encourage a customer to purchase pizza. And if that customer keeps buying pizza, the cost of the pizza sample was worth it for the value that the customer will bring over the life of the relationship. Other categories of promotional costs include advertising, public relations, social media, search, and direct marketing.

The formula for cost of acquisition is the total cost of marketing activities divided by number of customers acquired.

Cost of Acquistion=Total Cost of Marketing ActivitiesNumber of Customers Acquired

In this formula, you will see an assumption that all customers are worth the same amount, but as savvy marketers, we know that this is untrue. This is why we need to use a variety of marketing metrics when evaluating campaigns.

What additional information do you need to determine whether the cost of acquisition is appropriate for the product or service?

Answer

The price of the product/service, total sales, expenses, and margins associated with the product or service

Marketing Dashboard 15.5 (c) §15.5 source ↗

Table 15.1 in the book ↗
Type of Promotion Expense Yield
Television Advertising $1,250,000 400,000 customers
Catalog Mailing $750,000 250,000 customers
Search Engine Marketing $550,000 90,000 customers
Outdoor Activation $1,500,000 70,000 customers
Ad Agency Fees $600,000 0 customers
TOTAL $4,650,000 810,000 customers

We often think about profitability based on the difference between what we spend to create a product or service and the amount a customer pays for that product or service. However, we have to remember that there are costs to acquiring customers. In this chapter, you learned about two promotional activities that create costs to reach customers: sales and sales promotion.

Within the sales process, an organization pays a salesperson salary and/or commission to make sales. This is an example of a cost to acquire a customer. As you can imagine, we want our cost to acquire to stay low. For example, if we sold multimillion-dollar airplanes, it would be reasonable to spend thousands of dollars on a salesperson to make that sale. However, if we were selling several-hundred-dollar televisions, our cost to acquire a customer must be much lower.

Sales promotion is another promotional expense. For example, if a pizza brand provides samples at Costco, this might encourage a customer to purchase pizza. And if that customer keeps buying pizza, the cost of the pizza sample was worth it for the value that the customer will bring over the life of the relationship. Other categories of promotional costs include advertising, public relations, social media, search, and direct marketing.

The formula for cost of acquisition is the total cost of marketing activities divided by number of customers acquired.

Cost of Acquistion=Total Cost of Marketing ActivitiesNumber of Customers Acquired

In this formula, you will see an assumption that all customers are worth the same amount, but as savvy marketers, we know that this is untrue. This is why we need to use a variety of marketing metrics when evaluating campaigns.

Let’s suppose that this example is for a national bookseller. The bookseller has an average profit per customer of $90 over the customer’s lifetime. Would the cost per acquisition that you calculated provide a good value for the bookseller? Why or why not?

Answer

Yes. It is worth it to spend $5.74 to acquire a customer worth $90 on average over the lifespan of the relationship;

$90>$5.74

Knowledge Check 15.6.1 §15.6 source ↗

________ are certificates that entitle the bearer to a stated saving on the purchase of a specific product.
  1. a.
    Samples
  2. b.
    Coupons
  3. c.
    Rebates
  4. d.
    Premiums

Answer

B. Coupons
Coupons provide a saving off of the purchase of a specific product.

Knowledge Check 15.6.2 §15.6 source ↗

Which of the following consumer promotion tools offers a free amount of a product or service delivered door-to-door, sent in the mail, picked up in a store, attached to another product, or featured in an advertising offer?
  1. a.
    Coupons
  2. b.
    Rebates
  3. c.
    Premiums
  4. d.
    Samples

Answer

D. Samples
Samples provide for a free amount of product.

Knowledge Check 15.6.3 §15.6 source ↗

Which of the following allows consumers to do things in order to have a chance of winning?
  1. a.
    Coupons
  2. b.
    Sweepstakes
  3. c.
    Contests
  4. d.
    Rebates

Answer

B. Sweepstakes
Sweepstakes give consumers a chance to win when they purchase something or follow the rules of the sweepstakes.

Knowledge Check 15.6.4 §15.6 source ↗

Which of the following is an example of a trade promotion?
  1. a.
    Allowances and discounts
  2. b.
    Coupons
  3. c.
    Loyalty programs
  4. d.
    Premiums

Answer

A. Allowances and discounts
Allowances and discounts are typically provided to the trade and used to push the product to the customer.

Knowledge Check 15.6.5 §15.6 source ↗

Which of the following elements of the marketing communications mix consists of a collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade?
  1. a.
    Advertising
  2. b.
    Personal selling
  3. c.
    Public relations
  4. d.
    Sales promotion

Answer

D. Sales promotion
Sales promotion is a short-term incentive to consumers and the trade.

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Problems and answers are adapted from Principles of Marketing by Maria Gomez Albrecht, Mark Green and Linda Hoffman, OpenStax, and are used under the CC BY-NC-SA 4.0 licence. Access for free at https://openstax.org/books/principles-marketing/pages/1-unit-introduction. Illustrations: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license. This adaptation is released under the same licence, is non-commercial, and is neither affiliated with nor endorsed by OpenStax or Rice University.