Vocabulary:
- Promotion: a marketing function needed to communicate information about goods, services, images, and/or ideas to achieve a desired outcome.
- Promotional Mix: The specific combination, or blend, of marketing communication channels that a business uses to send its messages to customers
- Newspapers: Newspapers are a great way to get in touch with customers, since they reach a large audience.
- Publications are materials that are printed on a regular basis. Newspapers and magazines are good examples
- Magazines: Full-page, glossy magazine ads can make quite an impression with consumers. In addition, magazines appeal to very specific target groups.
- Human billboards: individuals to wear tattoos—temporary or permanent—that advertise their companies and products.
- Secondary information: comes from data that have already been collected for other purposes. These data are popular with marketers because they can be obtained quickly and less expensively than primary data
- Primary information: is developed from data that are collected for use in one particular situation
- A marketing-information management system (MkIS, for short): is an organized way of continuously gathering, sorting, analyzing, evaluating, and distributing marketing information.
- Laws: are the rules and regulations enforced by the government of a country or community
- Situation analysis: is a determination of a firm’s current business situation and the direction in which the business is headed.
- Slander: (saying something untrue that damages a person’s or business’s reputation)
- Libel (writing something untrue that damages a person’s or business’s reputation).
Questions and Answers
1. What is the specific goal of product promotion? The specific goal of product promotion is to persuade customers to buy a particular good or service.
2. List three examples of current product promotions. • Salespeople’s efforts to convince consumers to buy a diamond bracelet, an iPod, or a Honda Civic • Television interviews in which a movie star encourages viewers to see his/her latest film or Cents-off coupons for the purchase of Doritos, Burger King Whoppers, or Revlon lipstick
3. What are four uses of product promotion? • Create awareness of a good or service • Inform customers where a product can be purchased • Inform customers about product features • Build a reputation for a product
4. What is the purpose of primary product promotion? Primary product promotion aims to stimulate demand, or desire, for an entire class of goods or services.
5. Give an example of primary product promotion. For example, when you see television advertisements for beef or pork, you are probably receiving promotional messages from either the Cattlemen’s Beef Board or the National Pork Board.
6. What is the purpose of secondary product promotion? Secondary, or selective, product promotion is used to stimulate demand for a specific brand of a product.
7. Give an example of secondary product promotion. For example, Borden, Inc. uses advertising to promote its brand of milk, on the assumption that the American Dairy Association and Dairy Council promotion is stimulating primary demand for milk.
8. What is the primary goal of institutional, or corporate, promotion? Unlike product promotion, institutional (or corporate) promotion does not attempt to sell a good or service. The primary goal of corporate promotion is to create a certain image of the company in the customers’ eyes. This can be accomplished by informing customers about the company, its ideas, and its philosophy. Often, companies take positions on important issues, and these, too, are communicated to the public through institutional promotion.
9. Identify four uses of institutional promotion. • Change a particular attitude toward a firm or its products In recent years, the tobacco industry has come under fire for promoting its products, which are associated with various forms of disease. In an effort to clean up this negative image, tobacco companies such as Philip Morris have been engaging in institutional promotions such as its QuitAssist program and resources for helping smokers kick the habit. • Inform customers of the company’s interest in social or environmental issues Corporate giant IBM has a long-standing commitment to environmental leadership in the business world. The company has a written environmental-affairs policy and participates in many voluntary initiatives, such as membership in the Wildlife Habitat Council. • Inform the public about the company’s future When wireless communication provider Verizon bought Alltel in 2009, the company engaged in a promotional campaign to let its customers and the general public know about the change. • Inform customers of the company’s name and its type of business During the rise in the popularity of the Internet, many online travel agencies such as Expedia and Travelocity were born, and then they began promotions to let the public know about their services.
10. What is the purpose of the following types of institutional promotion—public service, public relations, and patronage? Public service. Public-service promotions inform customers about noncontroversial issues that are in the public’s best interest. For example, insurance companies sometimes promote improved health through changes in dietary and exercise habits. Many times, companies sponsor public-service announcements on local television stations, highlighting issues such as community drug prevention or after-school participation in sports or arts programs. Public-service promotions build goodwill for the company, especially when they depict the company as a friend of the community. Public relations. Public-relations promotions are created to deal with issues that are in the public’s interest but are also related to the company or its products. These promotional activities may be either proactive (the business takes the initiative to promote itself) or reactive (the business engages in the activities in response to an external situation, such as a lawsuit). They are used to influence a company’s image directly, such as improving a negative image or establishing a positive one before negative feelings arise. Patronage. Patronage promotions are designed to promote a firm’s prestige or its features. When GE’s marketers say that their company is “imagination at work,” they are positioning the company as prestigious and innovative in customers’ minds. Presenting information about the firm’s features that will benefit the customer is another way to sell the firm for non-product reasons. For example, patronage promotions developed for a local bank might tell customers about extended hours or a new location.
1. List three benefits of using promotional messages. Promotional activities can be viewed as providing advantages or benefits to society and the mass media. Promotion is thought to contribute to economic growth and business activity by encouraging customers to purchase and use new and improved products. Society also benefits from promotional activities because of the money these activities add to our economy and the jobs they create. The mass communication media—radio, television, newspapers, and magazines—are either partially or completely supported by promotional dollars. Without this money financial support of the media would probably be passed along to customers. ✓ Make up for the poor quality of a good or service. A product’s reputation will develop based on the quality of the good or service, not on its promotion. ✓ Immediately achieve major success for a company or its products. Promotion is believed to achieve better long-term, rather than immediate, customer response to the promotional message. ✓ Substitute for salespeople who are talented and well trained. For many goods and services, promotion just cannot take the place of qualified salespeople.
2. Identify three disadvantages or misuses of promotion. Every company or organization engages in some type of promotional activity, and alcohol companies are no exception. Their promotional activities are often controversial, especially when it comes to advertising. Most people agree that advertising affects everyone on a daily basis, whether they realize it or not.
3. List three disadvantages of institutional promotion• Some promotions are deceptive. Sometimes promotions make false or exaggerated claims about a product. While there are many laws in place to ensure “truth in advertising,” misleading claims about a product’s benefits are quite common. For example, drinking a sports/energy drink does not automatically mean you will become a gifted athlete, and taking certain weight-loss supplements will certainly not guarantee you a perfect body like the model in the commercial. • Promotion manipulates consumers. Critics feel that promotion persuades people to buy goods or services that they do not want or need. While promotion cannot make people act against their will, promotion does influence purchase behaviors. • Some promotion is offensive. Much promotion, especially advertising, is considered to be in bad taste, vulgar, and insulting to human intelligence. Advertisements that are sexually explicit are often considered offensive.
1. What are advertising media? Smart advertisers select the advertising media that best suits their needs. Think of advertising media as channels of communication—information travels through them to consumers.
2. Describe four ways in which newspapers vary. • How often they are published Perhaps someone at your home subscribes to a daily newspaper. If so, it arrives at your doorstep every day. If you live in a suburb or rural area, you might also receive a weekly community newspaper. Imagine the benefits of spreading the word about your business on such a frequent basis! • Their size Did you know that newspapers come in different sizes? Most daily newspapers are broadsheet size (the size most of us associate with newspapers), but newspapers come in tabloid size, too. If you’ve ever read the National Enquirer, then you’re familiar with tabloidsized newspapers. • What geographic areas they cover Two popular national newspapers are The Wall Street Journal and USA Today, which are circulated across the country. The mix of advertisements in national newspapers varies according to where they are printed. You might find a snowblower ad in a USA Today printed in Minneapolis, but not in a USA Today printed in Dallas. However, both copies might feature the same full-page computer ad. Unlike national newspapers, most newspapers focus on a smaller geographic area and are distributed locally. For example, the Columbus Dispatch is delivered to people who live in Columbus, Ohio, and its surrounding communities. This geographic area also benefits from several suburban newspapers, such as the Hilliard Northwest News. Suburban newspapers cover local events such as high school football games and community festivals. This makes them attractive to people in your area and your business’s advertising dollars. The Target insert is the second most widely read part of the Sunday newspaper. What’s the only section that’s more popular? You guessed it—the comics. • Whom they are intended to target Newspapers usually try to reach a particular target market of readers. Your local newspaper probably covers a variety of topics that appeal to a general population. The Wall Street Journal focuses on business issues. The Spanish-language newspaper El Nuevo Herald is geared toward Hispanics, while The Atlanta Voice targets Atlanta’s African-American market. There are even alternative-press newspapers that serve younger, trendier crowds interested in the arts and entertainment.
3. Describe how magazines are classified. • Consumer magazines What magazines do you read “just for fun”? Perhaps People, Sports Illustrated, or GamePro? These are all consumer magazines that people read for personal enjoyment. Consumer magazines often target a very specific audience, including people who enjoy reading about celebrities, sports, or computer games, for example. • Business magazines Business magazines appeal to individuals in all different industries. Business Week and Fortune are aimed at a general population of workers, while trade magazines are aimed at specific areas of business or occupations. Brandweek, Independent Agent, and HR Magazine are examples of trade magazines.
4. How does network TV advertising differ from cable, satellite, and local TV advertising? Television. By now, you’ve likely spent one or more years of your life watching television. You may even know some commercials by heart. The experience of color, sound, and action makes them easy to remember— and quite believable. As a result, television is the most influential, best-selling type of advertising media. Making the decision to advertise on TV isn’t easy. There are a vast number of channels to choose from, each with its own type of audience and cost. Network TV advertising (think ABC, CBS, NBC, Fox, etc.) can reach a very broad audience, but it can also be extremely expensive. Advertising on cable and satellite TV, on the other hand, allows you to target a more specific audience, and it’s less expensive than network TV. If you need an even cheaper method to get your ads on the air, consider local TV advertising. Because it is relatively inexpensive and targets a small, highly specific audience, local TV advertising is popular among small businesses. If money isn’t an issue, you have several other options. You might consider an infomercial, which is essentially a 30-minute commercial instead of a 30-second one. You might advertise your products on a home shopping network such as QVC. You could sponsor a specific television program, much like the Hallmark Hall of Fame presentations, or you could even create your own television channel, again following in the footsteps of Hallmark.
5. What are three options for advertising on radio? Radio. Another effective (and affordable) way to reach your target market is through radio advertising. Because each radio station specializes in a certain type of music or talk format, it’s possible to target a very specific group of consumers in your area. Simply select a radio station with listeners who fit your market demographics, and choose the time slot that makes the most sense to you, financially and otherwise. Keep in mind that the world of radio is changing, though. Some radio networks now reach consumers across the country. ABC Radio Networks, for example, broadcasts Radio Disney and ESPN Radio nationwide. In addition, many traditionally local radio stations now broadcast their programming over the Internet as well as over the radio waves, which means that they can reach a much broader audience. So, if you want to reach out to consumers beyond your local area, consider radio stations that broadcast nationwide.
6. Describe a challenge in using direct mail advertising. Many potential customers now have two mailboxes—one outside their home at the curb and another on a computer network somewhere. The basic difference between the mailboxes is whether they receive printed or electronic direct mail. Printed mail. How many sales letters, catalogs, flyers, and postcards do you receive each day? Many small businesses have found that printed mail is good for advertising. It’s relatively inexpensive, but you run the risk of someone throwing your ad away with the junk mail. The trick is sending your printed mail to the right people. You wouldn’t want to send advertisements for your home improvement company to apartment dwellers, for example. Instead, you’d want to get your direct mail into the hands of homeowners. Electronic mail. Electronic mail is delivered over computer networks to an e-mail address. Electronic-mail advertising is popular among businesses because it’s quick, easy, and inexpensive. Just as with printed mail, though, recipients may not want the mail that Ad-quipping Your Business LAP-PR-003-Sp © 2009, MarkED you send them. Your e-mail could land in a spam folder or, worse yet, be deleted. To avoid this fate, ask your customers to sign up to receive your electronic newsletters and advertisements. That way, you know that you have permission to send e-mails to them, and you know that they want to hear from you. This form of direct mail is sometimes referred to as opt-in e-mail marketing.
7. What are four ways in which advertising on the Web can help you? The number of people on the Web continues to grow. As a result, the Web has become the fastest growing media outlet. On the Web, you can target a very specific audience, and you can track user response (find out who is responding to your ads online). The Web also helps you to build brand awareness and extend advertising reach beyond your local market. To advertise online, you can create a company web site where consumers could learn about your business, find your contact information and locations, and place orders online. You also might place business ads on other people’s web sites or on a portal such as Google or AOL—popular starting points for surfing the Web. By clicking on your online ad, people would be directed to your web site, where they might become your latest customers.
8. Give three examples of out-of-home media. Several forms of out-of-home media exist to reach people when they are away from home. Poster panels, or billboards, are panels or boards to which advertising posters are adhered. A variation on billboards is a sign painted on the side of a building, often in downtown business districts. Such advertisements are largescale—several stories tall—and designed for long-term use. Visit New York City, and you’ll see plenty of them. While you’re there, check out the large, elaborate electrical signs (a.k.a. spectaculars). Every bus and bus shelter is covered with transit posters, and the subway and office buildings are filled with indoor billboards. You’ll also find human directionals, people wearing or holding signs to advertise a business or product, and the sky may be littered with advertising on blimps, hot air balloons, and other airborne displays. New York City isn’t just the city that never sleeps; it’s the city that never stops advertising!
9. Describe the six types of “other” media. • Specialty media Specialty media remind people about your business. An item must pass three criteria to qualify as specialty media: 1) It must have the business’s name or logo on it; 2) It must be a useful item such as a pen or baseball cap; and 3) It must be given away. • Directory advertising Directory advertising informs people about how to contact a particular business, often with a telephone number, street address, or Web address. Some directories such as the Yellow Pages target a specific geographic area, while other directories target a specific group of people such as students at a university or college. • Movie theater advertising It seems like there are 20 minutes of cell phone, computer game, and soft drink advertising before every movie nowadays. Movie theater advertising—on and off the screen—is increasing in popularity. So, if you want to see the movie, you'll also see the onscreen advertising and the posters, stand-ups, and other advertisements in the lobby. Ad-quipping Your Business • Product placement It’s no coincidence that James Bond always flies British airways or that Bruce Wayne drives a Lamborghini. Those product manufacturers have paid millions of dollars for the right to use their brands as movie props. They hope that viewers will become just as loyal to their products as James Bond and Bruce Wayne. Keep your eyes open because the number of brands popping up in movies, on TV, and even in computer games (both online and offline) is only going to increase in the future. • Telemarketing Many people think of telemarketing as calling prospective customers on the telephone, but telemarketing also includes providing a number for people to call. Many companies purchase 800-numbers so that customers can call toll free, and most companies choose numbers that are easy for people to remember. • DVD and CD-ROM advertising One company that uses DVD advertising successfully is Disney. Upon request, customers can receive a free DVD that introduces them to the Disney theme parks and resort hotels. The hope is that customers will be so awestruck that they will call or go online immediately to purchase their Disney vacation package. CD-ROMs can be used similarly. Customers receive free computer software introducing them to a particular program or Internet service in the hopes that they will purchase the real thing.
1. Explain two advertising media that are the result of technological advances. One form of technology that advertisers are learning to use is short messaging service (SMS). SMS allows people (including advertisers) to send text messages over cell phones. Although still in the early stages in the U.S., text-message advertising is growing in popularity worldwide. It is an inexpensive, easy way to target a specific audience. Advertisers obtain the cell-phone numbers of people who might be interested in using their products and, voila!—those consumers receive text-message advertisements for the businesses’ upcoming events, updates, and specials. This new advertising medium has its drawbacks, however. Unsolicited commercial text messages are a good way to anger consumers, since recipients may have to pay for each message they receive. In addition, some disreputable people have become good at smishing, similar to online phishing for information. Would-be thieves pose as banks and send text messages requesting victims’ account numbers and passwords. To combat unwanted text messages and smishing, the federal government passed a law in 2005 to make sending unsolicited text messages illegal. So, if you want to send text messages to consumers, make sure that those individuals opt-in for your ads, first.
2. What are three forms of technology that help consumers to avoid advertising? While some new technology helps advertisers to reach consumers, other technology helps consumers stay away. Do-Not-Call registries, online pop-up ad blockers, spam e-mail filters, and podcasts allow consumers to go about their day without the bother of advertising. 3. How can fast-forwarded commercials influence viewers? Now, you might ask, why aren't DVRs (digital video recorders) on that list? After all, your DVR lets you fast-forward through the commercials. That’s true, but those commercials may have influence on you even at fast speed. Don't you watch the screen pretty closely while fast-forwarding? You don’t want to go too far and miss any of your show, right? You probably could even identify some brand names in the ads based on what you saw in fast-forward, couldn’t you? Maybe DVRs aren't the death of television advertising, after all. Even at fast speed, commercials can still reach their target audience.
4. What are human billboards? Due to the many new ways to avoid advertising, many companies are pushing the envelope to get consumers’ attention. Ever hear of human billboards? Several companies hire individuals to wear tattoos—temporary or permanent—that advertise their companies and products. Advertisements have appeared on foreheads, bald heads, arms, chests, and even pregnant bellies in recent years.
1. What are laws? Laws are the rules and regulations enforced by the government of a country or community.
2. Why are laws important in sales? Just like laws against violence and theft protect our society, selling laws protect both customers and the economy. Without laws, businesses would be free to do whatever they wanted, including lying and misrepresenting their products, to convince customers to buy from them. Businesses also wouldn’t have to keep their promises or uphold their warranties. How hard would it be for customers to trust companies if there were no laws? Laws also protect the economy. We all want the economy to be healthy, and to be healthy, the economy needs competition. Regulations ensure that competition exists and that one company can’t control too much of the market. And when customers trust businesses, they’re more likely to buy from them, which also helps the economy grow.
3. Give an example of an illegal behavior involving customers. When dealing with customers, there are many ways a salesperson can find him/herself on the wrong side of the law. In the United States, the Federal Trade Commission (FTC) develops and enforces regulations that protect customers. Although the Federal Trade Commission Act was initially passed simply to regulate competition, the FTC’s responsibilities have expanded to include safeguarding customers from unfair and deceptive acts or practices. Customers are also protected by their specific state’s regulations. Most states have either adopted the Uniform Deceptive Trade Practices Law, which regulates unfair and deceptive acts, or they have developed their own similar lists of deceptive trade practice violations. That’s why it’s so important for salespeople to research their individual state’s regulations. Two specific areas in which salespeople can find themselves in legal trouble are misrepresentation and negligence. You probably know that it’s not a good idea to tell your customer a bold-faced lie. But did you know that it can also be illegal? Telling the facts in an inaccurate way is known as misrepresentation. That means that if you make an untrue claim about your product’s features or benefits, you’re misrepresenting the product—and breaking the law. However, you don’t necessarily have to say something untrue about a product to find yourself in legal hot water. Sometimes, it’s what you don’t say that’s the problem. For example, let’s say you’re a salesperson trying to sell manufacturing equipment to factories. If you really need to get the commission, you might not want to jeopardize the sale by mentioning that the machine emits a toxic smoke when it’s operating. However, not telling your client about this could be considered negligence. Negligence is not doing something necessary or required—in other words, not providing your customers with important information that they need to make educated buying decisions. A salesperson is also negligent if s/he fails to make sure his/her company’s products are safe. Negligence is dangerous because, depending on the situation, clients’ products (or clients themselves) can be harmed.
4. Give an example of an illegal behavior involving competition. Selling is one of the most competitive jobs there is! Of course salespeople want to make sales, earn commission, and be the best…but they should also exercise caution. Doing whatever it takes to beat the competition can lead to illegal behavior. When dealing with their competition, salespeople should avoid slander and libel, bribery, and engaging in unfair competition within the marketplace. Saying bad things about your competitors isn't just rude—it can be illegal! You might be tempted to spread untrue rumors about your competition in order to make yourself look better, but this can backfire if you find yourself convicted of slander (saying something untrue that damages a person’s or business’s reputation) or libel (writing something untrue that damages a person’s or business’s reputation). Try to keep your sales presentations focused on facts, not rumors or trash-talking. It’s hard for one company to behave honestly when other companies are engaging in bribery. Bribery can damage an entire industry in the long run. Another way salespeople can get themselves in trouble is through bribery. Bribery (making illegal payments intended to secure business or products in return) is definitely illegal, but it can be tempting when it seems like everyone else in an industry is doing it. If one company really wants to secure an order from another company, it may offer a bribe, like money, gifts, or other perks, in exchange for the sale. While bribing a customer may get you ahead in the short term, it damages your entire industry in the long term. In other words, bribes can negatively affect competition by making it difficult for your competitors to be truthful. It’s hard for one company to behave honestly and legally when other companies are engaging in bribery! Bribery isn't the only thing a salesperson can do to compete unfairly. Competition is the heart of the economy, so actions that jeopardize competition are closely watched. The Federal Trade Commission Act, the Sherman Antitrust Act, and the Clayton Act all, at least in part, prevent unfair competition such as monopolies. A monopoly exists when the market is controlled by one supplier and there are no substitute goods or services readily available. Many large companies have either faced legal consequences or been suspected of being a monopoly, including Amazon, Windows, and Google.
5. Give an example of an illegal behavior involving employers. In a perfect world, an employer will be a good role model who encourages legal behavior and practices such behavior her/himself. Unfortunately, that’s not always the case. If an employer requires that an employee engage in illegal selling practices, this act itself could be considered illegal. An employer should never convince an employee to lie, withhold information from customers, or engage in bribery. For example, what if an employer pushes his/her employee to avoid mentioning that their product recently failed a safety test? Of course the employee wants to please his/her boss and make a sale, but this is considered illegal behavior that could harm the customer and company.
6. Give an example of an illegal behavior involving coworkers. You and your coworkers can have a pretty big influence on each other! This can be a good thing if your coworker motivates you to do a better job on your sales presentation, or if you can convince him/her to try a new sandwich place for lunch. But it’s not always positive! If you convince a coworker to bribe someone or lie to a customer, you could also find yourself in legal hot water. And what about when you see someone else do something illegal in your company? It’s important not to keep it to yourself! Sometimes, just knowing about someone else’s illegal activity without reporting it is enough to get you in serious legal trouble.
1. What are ethics? As the basic principles that govern behavior, ethics are not laws. Ethics are not enforced by the government—they go beyond laws to the heart of a situation. Your moral and ethical standards (what you determine to be right or wrong) influence every decision you make.
2. Why are ethics important in sales? Selling is about a whole lot more than just making a sale—it’s about building a relationship. As the face of their companies, salespeople are responsible for building and maintaining these relationships. As any self-help book or television psychologist could tell you, the foundation of a personal relationship is trust. The same is true of sales relationships! If clients know they can trust a salesperson (and, by extension, his/her company), they’re more likely to keep buying. What happens when the level of ethics is low? When salespeople cross the moral line, negative events can follow. If clients suspect that a salesperson just wants to make a quick buck and doesn’t have a strong code of ethics, they will realize they can’t trust the company and they'll stop buying. Even worse, they’ll spread the word about the company’s unethical practices. Soon even people who’ve never done business with the company will know about its bad reputation. The company will be in serious trouble if it loses customers and is unable to attract new ones. What’s even more disheartening is that it only takes one salesperson’s unethical behavior to make the whole company look bad. That’s why it’s so important for every employee to have a high level of ethics in every selling situation.
3. Give an example of an ethical issue involving customers. When dealing with customers, salespeople must be cautious with gift-giving, entertaining, answering questions, and maintaining confidences. You already know that it’s illegal to offer or accept a bribe. But, at what point does a gift become a bribe? Is it okay to send out boxes of candy to your clients around the holidays? Is it appropriate to send promotional notepads, key chains, and pens to potential customers? What about larger gifts that “obligate” a customer to buy from your company? Ultimately, how much giving is too much? Some industries and companies have gift-giving guidelines or price limits. But if they don’t, it can be tough to know what’s appropriate. The same goes for entertainment. In certain industries, taking clients out to dinner or to sporting events is just part of the relationship building process. But in other industries, especially those where contracts are awarded, entertaining can be viewed as favoritism, or even bribery! If you’re not careful, your simple golf outing can turn into serious trouble very quickly. Another issue is answering questions without really knowing the answers. You might not intend to misrepresent your products to your customers, but you can easily do so if you’re just guessing instead of relaying facts. Of course you want your customers to think you’re an expert, but tread carefully! It’s always better to check with a supervisor or someone else who knows the answer instead of guessing. Salespeople who try to appear knowledgeable when they’re actually uncertain risk crossing into the legal issues of misrepresentation and negligence. Because building relationships and communicating go together, it’s important for salespeople to carefully guard what customers tell them in confidence. Spreading information that is not intended for others’ knowledge can tear down a relationship and hamper communication in the long run. It’s generally expected that salespeople will ask a customer’s permission before sharing his/her confidential information. It’s also expected that salespeople will not share company secrets to make a sale.
4. Give an example of an ethical issue involving competition. Some salespeople are tempted to do what it takes to cripple their competitors. They tamper with competitors’ products and relocate (or even hide) those products on store shelves. Unfair competition is illegal, but little things like these can go unnoticed. It takes a salesperson with high ethical standards to avoid sabotaging a competitor’s opportunity to make a sale, even when no one’s looking. Although it’s tempting, try to refrain from badmouthing your competition in front of your customers. Even if you aren’t saying anything slanderous or libelous, spending too much time downplaying your competitors won’t make you look very good. It will likely make your customers think less of you. Instead, focus on your own product and its benefits.
5. Give an example of an ethical issue involving employers. Just as with legal issues, employers and employees can influence each other when it comes to ethical concerns. Some questionable employer activities include: 4 Putting unreasonable pressure on salespeople (by setting out-of-reach quotas, for example) 4 Being a poor role model for ethical sales behavior 4 Looking the other way when staff members behave unethically Sales employees can be involved in questionable activities, too. These include fudging expense accounts, working a second job (or going to school) on company time, and taking customer records when leaving the company.
6. Give an example of an ethical issue involving coworkers. Coworkers Employee-to-employee relationships have their share of ethical issues. A little friendly competition is only natural, but sometimes that competition can get too intense. When a sales department holds a contest, for example, certain employees might be tempted to do whatever it takes to win. They might declare sales that were completed at the end of the previous month as completed at the beginning of the current month. Coworkers can have a big influence on each other’s ethical decisions. Is it right to encourage someone else to behave unethically? What about keeping unethical behavior “under the table”? Do these activities seem ethically questionable? Questions frequently arise in the course of examining ethical issues. What helps the most is having an ethical standard by which to measure each questionable activity
2. List three examples of current product promotions. • Salespeople’s efforts to convince consumers to buy a diamond bracelet, an iPod, or a Honda Civic • Television interviews in which a movie star encourages viewers to see his/her latest film or Cents-off coupons for the purchase of Doritos, Burger King Whoppers, or Revlon lipstick
3. What are four uses of product promotion? • Create awareness of a good or service • Inform customers where a product can be purchased • Inform customers about product features • Build a reputation for a product
4. What is the purpose of primary product promotion? Primary product promotion aims to stimulate demand, or desire, for an entire class of goods or services.
5. Give an example of primary product promotion. For example, when you see television advertisements for beef or pork, you are probably receiving promotional messages from either the Cattlemen’s Beef Board or the National Pork Board.
6. What is the purpose of secondary product promotion? Secondary, or selective, product promotion is used to stimulate demand for a specific brand of a product.
7. Give an example of secondary product promotion. For example, Borden, Inc. uses advertising to promote its brand of milk, on the assumption that the American Dairy Association and Dairy Council promotion is stimulating primary demand for milk.
8. What is the primary goal of institutional, or corporate, promotion? Unlike product promotion, institutional (or corporate) promotion does not attempt to sell a good or service. The primary goal of corporate promotion is to create a certain image of the company in the customers’ eyes. This can be accomplished by informing customers about the company, its ideas, and its philosophy. Often, companies take positions on important issues, and these, too, are communicated to the public through institutional promotion.
9. Identify four uses of institutional promotion. • Change a particular attitude toward a firm or its products In recent years, the tobacco industry has come under fire for promoting its products, which are associated with various forms of disease. In an effort to clean up this negative image, tobacco companies such as Philip Morris have been engaging in institutional promotions such as its QuitAssist program and resources for helping smokers kick the habit. • Inform customers of the company’s interest in social or environmental issues Corporate giant IBM has a long-standing commitment to environmental leadership in the business world. The company has a written environmental-affairs policy and participates in many voluntary initiatives, such as membership in the Wildlife Habitat Council. • Inform the public about the company’s future When wireless communication provider Verizon bought Alltel in 2009, the company engaged in a promotional campaign to let its customers and the general public know about the change. • Inform customers of the company’s name and its type of business During the rise in the popularity of the Internet, many online travel agencies such as Expedia and Travelocity were born, and then they began promotions to let the public know about their services.
10. What is the purpose of the following types of institutional promotion—public service, public relations, and patronage? Public service. Public-service promotions inform customers about noncontroversial issues that are in the public’s best interest. For example, insurance companies sometimes promote improved health through changes in dietary and exercise habits. Many times, companies sponsor public-service announcements on local television stations, highlighting issues such as community drug prevention or after-school participation in sports or arts programs. Public-service promotions build goodwill for the company, especially when they depict the company as a friend of the community. Public relations. Public-relations promotions are created to deal with issues that are in the public’s interest but are also related to the company or its products. These promotional activities may be either proactive (the business takes the initiative to promote itself) or reactive (the business engages in the activities in response to an external situation, such as a lawsuit). They are used to influence a company’s image directly, such as improving a negative image or establishing a positive one before negative feelings arise. Patronage. Patronage promotions are designed to promote a firm’s prestige or its features. When GE’s marketers say that their company is “imagination at work,” they are positioning the company as prestigious and innovative in customers’ minds. Presenting information about the firm’s features that will benefit the customer is another way to sell the firm for non-product reasons. For example, patronage promotions developed for a local bank might tell customers about extended hours or a new location.
1. List three benefits of using promotional messages. Promotional activities can be viewed as providing advantages or benefits to society and the mass media. Promotion is thought to contribute to economic growth and business activity by encouraging customers to purchase and use new and improved products. Society also benefits from promotional activities because of the money these activities add to our economy and the jobs they create. The mass communication media—radio, television, newspapers, and magazines—are either partially or completely supported by promotional dollars. Without this money financial support of the media would probably be passed along to customers. ✓ Make up for the poor quality of a good or service. A product’s reputation will develop based on the quality of the good or service, not on its promotion. ✓ Immediately achieve major success for a company or its products. Promotion is believed to achieve better long-term, rather than immediate, customer response to the promotional message. ✓ Substitute for salespeople who are talented and well trained. For many goods and services, promotion just cannot take the place of qualified salespeople.
2. Identify three disadvantages or misuses of promotion. Every company or organization engages in some type of promotional activity, and alcohol companies are no exception. Their promotional activities are often controversial, especially when it comes to advertising. Most people agree that advertising affects everyone on a daily basis, whether they realize it or not.
3. List three disadvantages of institutional promotion• Some promotions are deceptive. Sometimes promotions make false or exaggerated claims about a product. While there are many laws in place to ensure “truth in advertising,” misleading claims about a product’s benefits are quite common. For example, drinking a sports/energy drink does not automatically mean you will become a gifted athlete, and taking certain weight-loss supplements will certainly not guarantee you a perfect body like the model in the commercial. • Promotion manipulates consumers. Critics feel that promotion persuades people to buy goods or services that they do not want or need. While promotion cannot make people act against their will, promotion does influence purchase behaviors. • Some promotion is offensive. Much promotion, especially advertising, is considered to be in bad taste, vulgar, and insulting to human intelligence. Advertisements that are sexually explicit are often considered offensive.
1. What are advertising media? Smart advertisers select the advertising media that best suits their needs. Think of advertising media as channels of communication—information travels through them to consumers.
2. Describe four ways in which newspapers vary. • How often they are published Perhaps someone at your home subscribes to a daily newspaper. If so, it arrives at your doorstep every day. If you live in a suburb or rural area, you might also receive a weekly community newspaper. Imagine the benefits of spreading the word about your business on such a frequent basis! • Their size Did you know that newspapers come in different sizes? Most daily newspapers are broadsheet size (the size most of us associate with newspapers), but newspapers come in tabloid size, too. If you’ve ever read the National Enquirer, then you’re familiar with tabloidsized newspapers. • What geographic areas they cover Two popular national newspapers are The Wall Street Journal and USA Today, which are circulated across the country. The mix of advertisements in national newspapers varies according to where they are printed. You might find a snowblower ad in a USA Today printed in Minneapolis, but not in a USA Today printed in Dallas. However, both copies might feature the same full-page computer ad. Unlike national newspapers, most newspapers focus on a smaller geographic area and are distributed locally. For example, the Columbus Dispatch is delivered to people who live in Columbus, Ohio, and its surrounding communities. This geographic area also benefits from several suburban newspapers, such as the Hilliard Northwest News. Suburban newspapers cover local events such as high school football games and community festivals. This makes them attractive to people in your area and your business’s advertising dollars. The Target insert is the second most widely read part of the Sunday newspaper. What’s the only section that’s more popular? You guessed it—the comics. • Whom they are intended to target Newspapers usually try to reach a particular target market of readers. Your local newspaper probably covers a variety of topics that appeal to a general population. The Wall Street Journal focuses on business issues. The Spanish-language newspaper El Nuevo Herald is geared toward Hispanics, while The Atlanta Voice targets Atlanta’s African-American market. There are even alternative-press newspapers that serve younger, trendier crowds interested in the arts and entertainment.
3. Describe how magazines are classified. • Consumer magazines What magazines do you read “just for fun”? Perhaps People, Sports Illustrated, or GamePro? These are all consumer magazines that people read for personal enjoyment. Consumer magazines often target a very specific audience, including people who enjoy reading about celebrities, sports, or computer games, for example. • Business magazines Business magazines appeal to individuals in all different industries. Business Week and Fortune are aimed at a general population of workers, while trade magazines are aimed at specific areas of business or occupations. Brandweek, Independent Agent, and HR Magazine are examples of trade magazines.
4. How does network TV advertising differ from cable, satellite, and local TV advertising? Television. By now, you’ve likely spent one or more years of your life watching television. You may even know some commercials by heart. The experience of color, sound, and action makes them easy to remember— and quite believable. As a result, television is the most influential, best-selling type of advertising media. Making the decision to advertise on TV isn’t easy. There are a vast number of channels to choose from, each with its own type of audience and cost. Network TV advertising (think ABC, CBS, NBC, Fox, etc.) can reach a very broad audience, but it can also be extremely expensive. Advertising on cable and satellite TV, on the other hand, allows you to target a more specific audience, and it’s less expensive than network TV. If you need an even cheaper method to get your ads on the air, consider local TV advertising. Because it is relatively inexpensive and targets a small, highly specific audience, local TV advertising is popular among small businesses. If money isn’t an issue, you have several other options. You might consider an infomercial, which is essentially a 30-minute commercial instead of a 30-second one. You might advertise your products on a home shopping network such as QVC. You could sponsor a specific television program, much like the Hallmark Hall of Fame presentations, or you could even create your own television channel, again following in the footsteps of Hallmark.
5. What are three options for advertising on radio? Radio. Another effective (and affordable) way to reach your target market is through radio advertising. Because each radio station specializes in a certain type of music or talk format, it’s possible to target a very specific group of consumers in your area. Simply select a radio station with listeners who fit your market demographics, and choose the time slot that makes the most sense to you, financially and otherwise. Keep in mind that the world of radio is changing, though. Some radio networks now reach consumers across the country. ABC Radio Networks, for example, broadcasts Radio Disney and ESPN Radio nationwide. In addition, many traditionally local radio stations now broadcast their programming over the Internet as well as over the radio waves, which means that they can reach a much broader audience. So, if you want to reach out to consumers beyond your local area, consider radio stations that broadcast nationwide.
6. Describe a challenge in using direct mail advertising. Many potential customers now have two mailboxes—one outside their home at the curb and another on a computer network somewhere. The basic difference between the mailboxes is whether they receive printed or electronic direct mail. Printed mail. How many sales letters, catalogs, flyers, and postcards do you receive each day? Many small businesses have found that printed mail is good for advertising. It’s relatively inexpensive, but you run the risk of someone throwing your ad away with the junk mail. The trick is sending your printed mail to the right people. You wouldn’t want to send advertisements for your home improvement company to apartment dwellers, for example. Instead, you’d want to get your direct mail into the hands of homeowners. Electronic mail. Electronic mail is delivered over computer networks to an e-mail address. Electronic-mail advertising is popular among businesses because it’s quick, easy, and inexpensive. Just as with printed mail, though, recipients may not want the mail that Ad-quipping Your Business LAP-PR-003-Sp © 2009, MarkED you send them. Your e-mail could land in a spam folder or, worse yet, be deleted. To avoid this fate, ask your customers to sign up to receive your electronic newsletters and advertisements. That way, you know that you have permission to send e-mails to them, and you know that they want to hear from you. This form of direct mail is sometimes referred to as opt-in e-mail marketing.
7. What are four ways in which advertising on the Web can help you? The number of people on the Web continues to grow. As a result, the Web has become the fastest growing media outlet. On the Web, you can target a very specific audience, and you can track user response (find out who is responding to your ads online). The Web also helps you to build brand awareness and extend advertising reach beyond your local market. To advertise online, you can create a company web site where consumers could learn about your business, find your contact information and locations, and place orders online. You also might place business ads on other people’s web sites or on a portal such as Google or AOL—popular starting points for surfing the Web. By clicking on your online ad, people would be directed to your web site, where they might become your latest customers.
8. Give three examples of out-of-home media. Several forms of out-of-home media exist to reach people when they are away from home. Poster panels, or billboards, are panels or boards to which advertising posters are adhered. A variation on billboards is a sign painted on the side of a building, often in downtown business districts. Such advertisements are largescale—several stories tall—and designed for long-term use. Visit New York City, and you’ll see plenty of them. While you’re there, check out the large, elaborate electrical signs (a.k.a. spectaculars). Every bus and bus shelter is covered with transit posters, and the subway and office buildings are filled with indoor billboards. You’ll also find human directionals, people wearing or holding signs to advertise a business or product, and the sky may be littered with advertising on blimps, hot air balloons, and other airborne displays. New York City isn’t just the city that never sleeps; it’s the city that never stops advertising!
9. Describe the six types of “other” media. • Specialty media Specialty media remind people about your business. An item must pass three criteria to qualify as specialty media: 1) It must have the business’s name or logo on it; 2) It must be a useful item such as a pen or baseball cap; and 3) It must be given away. • Directory advertising Directory advertising informs people about how to contact a particular business, often with a telephone number, street address, or Web address. Some directories such as the Yellow Pages target a specific geographic area, while other directories target a specific group of people such as students at a university or college. • Movie theater advertising It seems like there are 20 minutes of cell phone, computer game, and soft drink advertising before every movie nowadays. Movie theater advertising—on and off the screen—is increasing in popularity. So, if you want to see the movie, you'll also see the onscreen advertising and the posters, stand-ups, and other advertisements in the lobby. Ad-quipping Your Business • Product placement It’s no coincidence that James Bond always flies British airways or that Bruce Wayne drives a Lamborghini. Those product manufacturers have paid millions of dollars for the right to use their brands as movie props. They hope that viewers will become just as loyal to their products as James Bond and Bruce Wayne. Keep your eyes open because the number of brands popping up in movies, on TV, and even in computer games (both online and offline) is only going to increase in the future. • Telemarketing Many people think of telemarketing as calling prospective customers on the telephone, but telemarketing also includes providing a number for people to call. Many companies purchase 800-numbers so that customers can call toll free, and most companies choose numbers that are easy for people to remember. • DVD and CD-ROM advertising One company that uses DVD advertising successfully is Disney. Upon request, customers can receive a free DVD that introduces them to the Disney theme parks and resort hotels. The hope is that customers will be so awestruck that they will call or go online immediately to purchase their Disney vacation package. CD-ROMs can be used similarly. Customers receive free computer software introducing them to a particular program or Internet service in the hopes that they will purchase the real thing.
1. Explain two advertising media that are the result of technological advances. One form of technology that advertisers are learning to use is short messaging service (SMS). SMS allows people (including advertisers) to send text messages over cell phones. Although still in the early stages in the U.S., text-message advertising is growing in popularity worldwide. It is an inexpensive, easy way to target a specific audience. Advertisers obtain the cell-phone numbers of people who might be interested in using their products and, voila!—those consumers receive text-message advertisements for the businesses’ upcoming events, updates, and specials. This new advertising medium has its drawbacks, however. Unsolicited commercial text messages are a good way to anger consumers, since recipients may have to pay for each message they receive. In addition, some disreputable people have become good at smishing, similar to online phishing for information. Would-be thieves pose as banks and send text messages requesting victims’ account numbers and passwords. To combat unwanted text messages and smishing, the federal government passed a law in 2005 to make sending unsolicited text messages illegal. So, if you want to send text messages to consumers, make sure that those individuals opt-in for your ads, first.
2. What are three forms of technology that help consumers to avoid advertising? While some new technology helps advertisers to reach consumers, other technology helps consumers stay away. Do-Not-Call registries, online pop-up ad blockers, spam e-mail filters, and podcasts allow consumers to go about their day without the bother of advertising. 3. How can fast-forwarded commercials influence viewers? Now, you might ask, why aren't DVRs (digital video recorders) on that list? After all, your DVR lets you fast-forward through the commercials. That’s true, but those commercials may have influence on you even at fast speed. Don't you watch the screen pretty closely while fast-forwarding? You don’t want to go too far and miss any of your show, right? You probably could even identify some brand names in the ads based on what you saw in fast-forward, couldn’t you? Maybe DVRs aren't the death of television advertising, after all. Even at fast speed, commercials can still reach their target audience.
4. What are human billboards? Due to the many new ways to avoid advertising, many companies are pushing the envelope to get consumers’ attention. Ever hear of human billboards? Several companies hire individuals to wear tattoos—temporary or permanent—that advertise their companies and products. Advertisements have appeared on foreheads, bald heads, arms, chests, and even pregnant bellies in recent years.
1. What are laws? Laws are the rules and regulations enforced by the government of a country or community.
2. Why are laws important in sales? Just like laws against violence and theft protect our society, selling laws protect both customers and the economy. Without laws, businesses would be free to do whatever they wanted, including lying and misrepresenting their products, to convince customers to buy from them. Businesses also wouldn’t have to keep their promises or uphold their warranties. How hard would it be for customers to trust companies if there were no laws? Laws also protect the economy. We all want the economy to be healthy, and to be healthy, the economy needs competition. Regulations ensure that competition exists and that one company can’t control too much of the market. And when customers trust businesses, they’re more likely to buy from them, which also helps the economy grow.
3. Give an example of an illegal behavior involving customers. When dealing with customers, there are many ways a salesperson can find him/herself on the wrong side of the law. In the United States, the Federal Trade Commission (FTC) develops and enforces regulations that protect customers. Although the Federal Trade Commission Act was initially passed simply to regulate competition, the FTC’s responsibilities have expanded to include safeguarding customers from unfair and deceptive acts or practices. Customers are also protected by their specific state’s regulations. Most states have either adopted the Uniform Deceptive Trade Practices Law, which regulates unfair and deceptive acts, or they have developed their own similar lists of deceptive trade practice violations. That’s why it’s so important for salespeople to research their individual state’s regulations. Two specific areas in which salespeople can find themselves in legal trouble are misrepresentation and negligence. You probably know that it’s not a good idea to tell your customer a bold-faced lie. But did you know that it can also be illegal? Telling the facts in an inaccurate way is known as misrepresentation. That means that if you make an untrue claim about your product’s features or benefits, you’re misrepresenting the product—and breaking the law. However, you don’t necessarily have to say something untrue about a product to find yourself in legal hot water. Sometimes, it’s what you don’t say that’s the problem. For example, let’s say you’re a salesperson trying to sell manufacturing equipment to factories. If you really need to get the commission, you might not want to jeopardize the sale by mentioning that the machine emits a toxic smoke when it’s operating. However, not telling your client about this could be considered negligence. Negligence is not doing something necessary or required—in other words, not providing your customers with important information that they need to make educated buying decisions. A salesperson is also negligent if s/he fails to make sure his/her company’s products are safe. Negligence is dangerous because, depending on the situation, clients’ products (or clients themselves) can be harmed.
4. Give an example of an illegal behavior involving competition. Selling is one of the most competitive jobs there is! Of course salespeople want to make sales, earn commission, and be the best…but they should also exercise caution. Doing whatever it takes to beat the competition can lead to illegal behavior. When dealing with their competition, salespeople should avoid slander and libel, bribery, and engaging in unfair competition within the marketplace. Saying bad things about your competitors isn't just rude—it can be illegal! You might be tempted to spread untrue rumors about your competition in order to make yourself look better, but this can backfire if you find yourself convicted of slander (saying something untrue that damages a person’s or business’s reputation) or libel (writing something untrue that damages a person’s or business’s reputation). Try to keep your sales presentations focused on facts, not rumors or trash-talking. It’s hard for one company to behave honestly when other companies are engaging in bribery. Bribery can damage an entire industry in the long run. Another way salespeople can get themselves in trouble is through bribery. Bribery (making illegal payments intended to secure business or products in return) is definitely illegal, but it can be tempting when it seems like everyone else in an industry is doing it. If one company really wants to secure an order from another company, it may offer a bribe, like money, gifts, or other perks, in exchange for the sale. While bribing a customer may get you ahead in the short term, it damages your entire industry in the long term. In other words, bribes can negatively affect competition by making it difficult for your competitors to be truthful. It’s hard for one company to behave honestly and legally when other companies are engaging in bribery! Bribery isn't the only thing a salesperson can do to compete unfairly. Competition is the heart of the economy, so actions that jeopardize competition are closely watched. The Federal Trade Commission Act, the Sherman Antitrust Act, and the Clayton Act all, at least in part, prevent unfair competition such as monopolies. A monopoly exists when the market is controlled by one supplier and there are no substitute goods or services readily available. Many large companies have either faced legal consequences or been suspected of being a monopoly, including Amazon, Windows, and Google.
5. Give an example of an illegal behavior involving employers. In a perfect world, an employer will be a good role model who encourages legal behavior and practices such behavior her/himself. Unfortunately, that’s not always the case. If an employer requires that an employee engage in illegal selling practices, this act itself could be considered illegal. An employer should never convince an employee to lie, withhold information from customers, or engage in bribery. For example, what if an employer pushes his/her employee to avoid mentioning that their product recently failed a safety test? Of course the employee wants to please his/her boss and make a sale, but this is considered illegal behavior that could harm the customer and company.
6. Give an example of an illegal behavior involving coworkers. You and your coworkers can have a pretty big influence on each other! This can be a good thing if your coworker motivates you to do a better job on your sales presentation, or if you can convince him/her to try a new sandwich place for lunch. But it’s not always positive! If you convince a coworker to bribe someone or lie to a customer, you could also find yourself in legal hot water. And what about when you see someone else do something illegal in your company? It’s important not to keep it to yourself! Sometimes, just knowing about someone else’s illegal activity without reporting it is enough to get you in serious legal trouble.
1. What are ethics? As the basic principles that govern behavior, ethics are not laws. Ethics are not enforced by the government—they go beyond laws to the heart of a situation. Your moral and ethical standards (what you determine to be right or wrong) influence every decision you make.
2. Why are ethics important in sales? Selling is about a whole lot more than just making a sale—it’s about building a relationship. As the face of their companies, salespeople are responsible for building and maintaining these relationships. As any self-help book or television psychologist could tell you, the foundation of a personal relationship is trust. The same is true of sales relationships! If clients know they can trust a salesperson (and, by extension, his/her company), they’re more likely to keep buying. What happens when the level of ethics is low? When salespeople cross the moral line, negative events can follow. If clients suspect that a salesperson just wants to make a quick buck and doesn’t have a strong code of ethics, they will realize they can’t trust the company and they'll stop buying. Even worse, they’ll spread the word about the company’s unethical practices. Soon even people who’ve never done business with the company will know about its bad reputation. The company will be in serious trouble if it loses customers and is unable to attract new ones. What’s even more disheartening is that it only takes one salesperson’s unethical behavior to make the whole company look bad. That’s why it’s so important for every employee to have a high level of ethics in every selling situation.
3. Give an example of an ethical issue involving customers. When dealing with customers, salespeople must be cautious with gift-giving, entertaining, answering questions, and maintaining confidences. You already know that it’s illegal to offer or accept a bribe. But, at what point does a gift become a bribe? Is it okay to send out boxes of candy to your clients around the holidays? Is it appropriate to send promotional notepads, key chains, and pens to potential customers? What about larger gifts that “obligate” a customer to buy from your company? Ultimately, how much giving is too much? Some industries and companies have gift-giving guidelines or price limits. But if they don’t, it can be tough to know what’s appropriate. The same goes for entertainment. In certain industries, taking clients out to dinner or to sporting events is just part of the relationship building process. But in other industries, especially those where contracts are awarded, entertaining can be viewed as favoritism, or even bribery! If you’re not careful, your simple golf outing can turn into serious trouble very quickly. Another issue is answering questions without really knowing the answers. You might not intend to misrepresent your products to your customers, but you can easily do so if you’re just guessing instead of relaying facts. Of course you want your customers to think you’re an expert, but tread carefully! It’s always better to check with a supervisor or someone else who knows the answer instead of guessing. Salespeople who try to appear knowledgeable when they’re actually uncertain risk crossing into the legal issues of misrepresentation and negligence. Because building relationships and communicating go together, it’s important for salespeople to carefully guard what customers tell them in confidence. Spreading information that is not intended for others’ knowledge can tear down a relationship and hamper communication in the long run. It’s generally expected that salespeople will ask a customer’s permission before sharing his/her confidential information. It’s also expected that salespeople will not share company secrets to make a sale.
4. Give an example of an ethical issue involving competition. Some salespeople are tempted to do what it takes to cripple their competitors. They tamper with competitors’ products and relocate (or even hide) those products on store shelves. Unfair competition is illegal, but little things like these can go unnoticed. It takes a salesperson with high ethical standards to avoid sabotaging a competitor’s opportunity to make a sale, even when no one’s looking. Although it’s tempting, try to refrain from badmouthing your competition in front of your customers. Even if you aren’t saying anything slanderous or libelous, spending too much time downplaying your competitors won’t make you look very good. It will likely make your customers think less of you. Instead, focus on your own product and its benefits.
5. Give an example of an ethical issue involving employers. Just as with legal issues, employers and employees can influence each other when it comes to ethical concerns. Some questionable employer activities include: 4 Putting unreasonable pressure on salespeople (by setting out-of-reach quotas, for example) 4 Being a poor role model for ethical sales behavior 4 Looking the other way when staff members behave unethically Sales employees can be involved in questionable activities, too. These include fudging expense accounts, working a second job (or going to school) on company time, and taking customer records when leaving the company.
6. Give an example of an ethical issue involving coworkers. Coworkers Employee-to-employee relationships have their share of ethical issues. A little friendly competition is only natural, but sometimes that competition can get too intense. When a sales department holds a contest, for example, certain employees might be tempted to do whatever it takes to win. They might declare sales that were completed at the end of the previous month as completed at the beginning of the current month. Coworkers can have a big influence on each other’s ethical decisions. Is it right to encourage someone else to behave unethically? What about keeping unethical behavior “under the table”? Do these activities seem ethically questionable? Questions frequently arise in the course of examining ethical issues. What helps the most is having an ethical standard by which to measure each questionable activity
Practice Test:
1. What pricing tactic might be considered questionable by some businesses?
A. Matching the prices of a competitor
B. Developing a complex pricing structure
C. Marking up prices to earn a profit
D. Providing a reference price
2. Why do some new companies set their selling prices as low as they can?
A. To eliminate all possible competition
B. To get market share as fast as possible
C. To earn a high return on investment
D. To quickly make a large profit
3. Which of the following is an example of an ethical issue as it relates to predatory pricing:
A. An international book publisher sells similar products to similar customers at different prices.
B. A tire producer introduces a new item to its product line and sets the initial price very low.
C. A salesperson encourages a customer to purchase an extended vehicle warranty for a new car.
D. A local ice-cream shop prices menu items below cost in an effort to eliminate its competition.
4. One way that many businesses use technology to reduce the costs associated with marking prices on products is by using
A. electronic scanning devices.
B. automated inventory systems.
C. preprinted gummed labels.
D. computer-generated tags.
5. Companies A, B, and C sell similar products. Together, they recently decided to sell their products for the same price. In what unethical activity are the businesses engaging?
A. Bait-and-switch
B. Price fixing
C. Loss-leader pricing
D. Gray markets
6. Which of the following factors should businesses consider when establishing a product's selling price:
A. Economic conditions
B. Unfair sales laws
C. Pricing agreements
D. Trade practices
7. What is an example of an unethical pricing practice?
A. A company prices its products low in an attempt to drive its competitors out of business.
B. A business increases its prices when the cost of the materials to make the products increases.
C. A firm sets a business objective to increase its profit margins over the next five years.
D. A business prices a new product line to reflect high quality and status.
8. What is an external factor that affects the price that a business charges for its products?
A. Operating costs
B. Variable expenses
C. Economic conditions
D. Employee benefits
9. The Standard Oil Company's price-fixing tactics and monopolistic control over oil refining and distribution in the late 1800's was a major contributing factor in the enactment of which piece of legislation?
A. Sherman Antitrust Act
B. Clayton Act
C. Robinson-Patman Act
D. Federal Trade Commission Act
10. What is an advantage for producers in using the producer to wholesaler to retailer to consumer distribution channel?
A. It enables them to control channel activities.
B. Wholesalers do not take title to the goods.
C. Wholesalers usually buy in large quantities..
D. It enables them to reach large retailers directly.
11. What is one action that customer service can take to facilitate order processing?
A. Negotiate aggressively
B. Oversee assembly
C. Communicate effectively
D. Monitor inventory
12. How do channel members add value to a product?
A. By performing certain channel activities expertly
B. By making the product more costly
C. By making the product available in all locations
D. By pursuing individual goals
13. What statement is true about technology in relation to channel management?
A. Some businesses have the capacity to distribute most or all of their products through the internet.
B. Because technology continues to evolve, vertical conflict among channel memners is occurring less often.
C. Technological advancements generally require businesses to increase the number of intermediaries they use.
D. For most businesses, technology makes it more difficult to monitor the channel members' activities.
14. What indirect channel of distribution is used to reach large retailers when the producer does not want responsibility for the selling activities?
A. Producer to wholesaler to retailer to consumer
B. Producer to agent to retailer to consumer
C. Producer to consumer
D. Producer to retailer to consumer
15. Which of the following is an aspect of channel management that impacts customer service?
A. Advertising
B. Taxes
C. Protectionism
D. Timeliness
16. Which of the following situations most accurately depicts a promotional ethical issue in relation to children:
A. A television commercial portrays preschool-age children eating breakfast.
B. A print ad in a national teen magazine shows a girl modeling fashionable outerwear.
C. A radio spot announces an upcoming concert for preteens during the morning time slot.
D. A newscast teaser televises graphic film clips of a war zone during prime-time viewing.
17. How does promotion benefit customers?
A. Causes them to postpone making buying decisions
B. Enables them to identify their buying decisions
C. Helps them to select appropriate products
D. Requires them to spend more on products
18. Banner and pop-up ads impact the way audiences receive promotional information. These types of messages exist because of the following technological development:
A. HTMT
B. Euronet
C. URL
D. Internet
19. Which statement is true about regulating international promotional activities?
A. Most countries have a system of checks and balances to verify that promotion regulations are fair.
B. Businesses must submit all promotional materials to the International Ad Coalition for approval.
C. Governments bear the sole responsibility of monitoring promotional materials and regulations.
D. A business must understand that the laws governing promotional activities vary by country.
20. What is an objective of institutional advertising?
A. To support personal selling activities
B. To demonstrate the organization's role in community affairs
C. To introduce new goods or services
D. To create customer interest in the company's goods or services.
21. What is an example of an external factor that affects promotion?
A. Reorganization of the business
B. Increase in a product's price
C. Government regulation of ads
D. A change in distribution methods
22. Determine whether the following is a true statement: It is important for the promotional message to be factual.
A. False, it must only be memorable.
B. True, it should alter facts as necessary.
C. False, it need not be based on facts.
D. True, it must be based on facts.
23. What is an example of advertisement stereotyping?
A. A television commercial depicts a woman mopping the kitchen with a new floor cleaner.
B. A print ad shows a middle-aged male pouring orange juice for his children.
C. A magazine ad campaign presents a variety of people who encourage others to drink milk.
D. A well-known athlete records a PSA that emphasizes the importance of continuing education.
24. What is new technology enabling businesses to create that is impacting the promotion function?
A. Personalized premiums
B. Attractive commercials
C. Publicity campaigns
D. Individualized messages
25. Why are there specific guidelines for advertising to children?
A. Research indicated that juvenile offenders watched more advertising on television than the average child.
B. Children are impressionable, and the wrong kinds of advertising can affect their development.
C. Parents mounted a campaign against advertisers because their children demanded products they saw advertised.
D. Children revealed, in focus groups, that while they like watching ads, it doesn't make them behave differently.
A. Matching the prices of a competitor
B. Developing a complex pricing structure
C. Marking up prices to earn a profit
D. Providing a reference price
2. Why do some new companies set their selling prices as low as they can?
A. To eliminate all possible competition
B. To get market share as fast as possible
C. To earn a high return on investment
D. To quickly make a large profit
3. Which of the following is an example of an ethical issue as it relates to predatory pricing:
A. An international book publisher sells similar products to similar customers at different prices.
B. A tire producer introduces a new item to its product line and sets the initial price very low.
C. A salesperson encourages a customer to purchase an extended vehicle warranty for a new car.
D. A local ice-cream shop prices menu items below cost in an effort to eliminate its competition.
4. One way that many businesses use technology to reduce the costs associated with marking prices on products is by using
A. electronic scanning devices.
B. automated inventory systems.
C. preprinted gummed labels.
D. computer-generated tags.
5. Companies A, B, and C sell similar products. Together, they recently decided to sell their products for the same price. In what unethical activity are the businesses engaging?
A. Bait-and-switch
B. Price fixing
C. Loss-leader pricing
D. Gray markets
6. Which of the following factors should businesses consider when establishing a product's selling price:
A. Economic conditions
B. Unfair sales laws
C. Pricing agreements
D. Trade practices
7. What is an example of an unethical pricing practice?
A. A company prices its products low in an attempt to drive its competitors out of business.
B. A business increases its prices when the cost of the materials to make the products increases.
C. A firm sets a business objective to increase its profit margins over the next five years.
D. A business prices a new product line to reflect high quality and status.
8. What is an external factor that affects the price that a business charges for its products?
A. Operating costs
B. Variable expenses
C. Economic conditions
D. Employee benefits
9. The Standard Oil Company's price-fixing tactics and monopolistic control over oil refining and distribution in the late 1800's was a major contributing factor in the enactment of which piece of legislation?
A. Sherman Antitrust Act
B. Clayton Act
C. Robinson-Patman Act
D. Federal Trade Commission Act
10. What is an advantage for producers in using the producer to wholesaler to retailer to consumer distribution channel?
A. It enables them to control channel activities.
B. Wholesalers do not take title to the goods.
C. Wholesalers usually buy in large quantities..
D. It enables them to reach large retailers directly.
11. What is one action that customer service can take to facilitate order processing?
A. Negotiate aggressively
B. Oversee assembly
C. Communicate effectively
D. Monitor inventory
12. How do channel members add value to a product?
A. By performing certain channel activities expertly
B. By making the product more costly
C. By making the product available in all locations
D. By pursuing individual goals
13. What statement is true about technology in relation to channel management?
A. Some businesses have the capacity to distribute most or all of their products through the internet.
B. Because technology continues to evolve, vertical conflict among channel memners is occurring less often.
C. Technological advancements generally require businesses to increase the number of intermediaries they use.
D. For most businesses, technology makes it more difficult to monitor the channel members' activities.
14. What indirect channel of distribution is used to reach large retailers when the producer does not want responsibility for the selling activities?
A. Producer to wholesaler to retailer to consumer
B. Producer to agent to retailer to consumer
C. Producer to consumer
D. Producer to retailer to consumer
15. Which of the following is an aspect of channel management that impacts customer service?
A. Advertising
B. Taxes
C. Protectionism
D. Timeliness
16. Which of the following situations most accurately depicts a promotional ethical issue in relation to children:
A. A television commercial portrays preschool-age children eating breakfast.
B. A print ad in a national teen magazine shows a girl modeling fashionable outerwear.
C. A radio spot announces an upcoming concert for preteens during the morning time slot.
D. A newscast teaser televises graphic film clips of a war zone during prime-time viewing.
17. How does promotion benefit customers?
A. Causes them to postpone making buying decisions
B. Enables them to identify their buying decisions
C. Helps them to select appropriate products
D. Requires them to spend more on products
18. Banner and pop-up ads impact the way audiences receive promotional information. These types of messages exist because of the following technological development:
A. HTMT
B. Euronet
C. URL
D. Internet
19. Which statement is true about regulating international promotional activities?
A. Most countries have a system of checks and balances to verify that promotion regulations are fair.
B. Businesses must submit all promotional materials to the International Ad Coalition for approval.
C. Governments bear the sole responsibility of monitoring promotional materials and regulations.
D. A business must understand that the laws governing promotional activities vary by country.
20. What is an objective of institutional advertising?
A. To support personal selling activities
B. To demonstrate the organization's role in community affairs
C. To introduce new goods or services
D. To create customer interest in the company's goods or services.
21. What is an example of an external factor that affects promotion?
A. Reorganization of the business
B. Increase in a product's price
C. Government regulation of ads
D. A change in distribution methods
22. Determine whether the following is a true statement: It is important for the promotional message to be factual.
A. False, it must only be memorable.
B. True, it should alter facts as necessary.
C. False, it need not be based on facts.
D. True, it must be based on facts.
23. What is an example of advertisement stereotyping?
A. A television commercial depicts a woman mopping the kitchen with a new floor cleaner.
B. A print ad shows a middle-aged male pouring orange juice for his children.
C. A magazine ad campaign presents a variety of people who encourage others to drink milk.
D. A well-known athlete records a PSA that emphasizes the importance of continuing education.
24. What is new technology enabling businesses to create that is impacting the promotion function?
A. Personalized premiums
B. Attractive commercials
C. Publicity campaigns
D. Individualized messages
25. Why are there specific guidelines for advertising to children?
A. Research indicated that juvenile offenders watched more advertising on television than the average child.
B. Children are impressionable, and the wrong kinds of advertising can affect their development.
C. Parents mounted a campaign against advertisers because their children demanded products they saw advertised.
D. Children revealed, in focus groups, that while they like watching ads, it doesn't make them behave differently.
Practice Test Answers:
- B
- B
- D
- D
- B
- A
- A
- C
- A
- C
- C
- A
- A
- B
- D
- D
- C
- D
- D
- B
- C
- D
- A
- D
- B