MGT 301 Chapter 17

4 March 2023
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communication
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The process of conveying a message to others that requires six elements: a source, a message, a channel of communication, a receiver, and the processes of encoding and decoding.
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source
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A company or person who has information to convey during the communication process.
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message
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The information sent by a source to a receiver during the communication process.
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channel of communication
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The means (e.g., a salesperson, advertising media, or public relations tools) of conveying a message to a receiver during the communication process.
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receivers
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Consumers who read, hear, or see the message sent by a source during the communication process.
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encoding
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The process of having the sender transform an idea into a set of symbols during the communication process.
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decoding
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The process of having the receiver take a set of symbols, the message, and transform them back to an idea during the communication process.
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field of experience
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A mutually shared understanding and knowledge that the sender and receiver apply to the message so that it can be communicated effectively during the communication process.
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response
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In the feedback loop, the impact the message had on the receiver's knowledge, attitudes, or behaviors during the communication process.
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feedback
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In the feedback loop, the sender's interpretation of the response, which indicates whether a message was decoded and understood as intended during the communication process.
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noise
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Extraneous factors that can work against effective communication by distorting a message or the feedback received during the communication process.
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three of these elements—advertising, sales promotion, and public relations
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are often said to use mass selling because they are used with groups of prospective buyers
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personal selling
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uses customized interaction between a seller and a prospective buyer
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advertising
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Any paid form of nonpersonal communication about an organization, product, service, or idea by an identified sponsor.
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personal selling
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The two-way flow of communication between a buyer and seller, often in a face-to-face encounter, designed to influence a person's or group's purchase decision.
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public relations
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A form of communication management that seeks to influence the feelings, opinions, or beliefs held by customers, prospective customers, stockholders, suppliers, employees, and other publics about a company and its products or services.
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publicity
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A nonpersonal, indirectly paid presentation of an organization, product, or service.
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sales promotion
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A short-term inducement of value offered to arouse interest in buying a product or service.
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direct marketing
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A promotional alternative that uses direct communication with consumers to generate a response in the form of an order, a request for further information, or a visit to a retail outlet.
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Introduction Stage
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Informing consumers in an effort to increase their level of awareness is the primary promotional objective in the introduction stage of the product life cycle
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Growth Stage
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The primary promotional objective of the growth stage is to persuade the consumer to buy the product rather than substitutes, so the marketing manager seeks to gain brand preference and solidify distribution.
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Maturity Stage
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In the maturity stage, the need is to maintain existing buyers, and advertising's role is to remind buyers of the product's existence. Sales promotion, in the form of discounts and coupons offered to both ultimate consumers and intermediaries, is important in maintaining loyal buyers.
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Decline Stage
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The decline stage of the product life cycle is usually a period of phaseout for the product, and little money is spent in the promotional mix.
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Ancillary services
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pertain to the degree of service or support required after the sale
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customer's stage of decision
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as follows
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Prepurchase Stage
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In the prepurchase stage, advertising is more helpful than personal selling because advertising informs the potential customer of the existence of the product and the seller.
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Purchase Stage
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At the purchase stage, the importance of personal selling is highest, whereas the impact of advertising is lowest.
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Postpurchase Stage
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In the postpurchase stage, the salesperson is still important. In fact, the more personal contact after the sale, the more the buyer is satisfied.
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Channel Strategies
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as follows
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push strategy
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Directing the promotional mix to channel members to gain their cooperation in ordering and stocking the product. p. 480 EX) ford offers incentives to dealers to push products through the channel to consumers
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pull strategy
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Directing the promotional mix at ultimate consumers to encourage them to ask the retailer for a product. p. 481 ex) big Pharma used this to sell medication to doctors, who then order more later.
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promotion decision process is divided into
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(1) developing, (2) executing, and (3) assessing the promotion program
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Development of the promotion program focuses on the four Ws:
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Who is the target audience? What are (1) the promotion objectives, (2) the amounts of money that can be budgeted for the promotion program, and (3) the kinds of promotion to be used? Where should the promotion be run? When should the promotion be run?
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behavioral targeting
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collecting information about your web-browsing behavior to determine the banner and display ads that you will see as you surf the Web
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hierarchy of effects
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The sequence of stages a prospective buyer goes through from initial awareness of a product to eventual action that includes awareness, interest, evaluation, trial, and adoption of the product.
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The five stages are:
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Awareness—the consumer's ability to recognize and remember the product or brand name. Interest—an increase in the consumer's desire to learn about some of the features of the product or brand. Evaluation—the consumer's appraisal of the product or brand on important attributes.Trial—the consumer's actual first purchase and use of the product or brand. Adoption—through a favorable experience on the first trial, the consumer's repeated purchase and use of the product or brand.
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percentage of sales budgeting
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Allocating funds to promotion as a percentage of past or anticipated sales, in terms of either dollars or units sold.
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competitive parity budgeting (matching competitors or share of market.)
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Allocating funds to promotion by matching the competitor's absolute level of spending or the proportion per point of market share. Also called matching competitors or share of market.
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all-you-can-afford budgeting
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Allocating funds to promotion only after all other budget items are covered.
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objective and task budgeting
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Allocating funds to promotion whereby the company: (1) determines its promotion objectives; (2) outlines the tasks to accomplish those objectives; and (3) determines the promotion cost of performing those tasks.
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IMC tools
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advertising, personal selling, sales promotion, public relations, and direct marketing
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direct orders
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The result of direct marketing offers that contain all the information necessary for a prospective buyer to make a decision to purchase and complete the transaction.
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lead generation
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The result of a direct marketing offer designed to generate interest in a product or service and a request for additional information.
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traffic generation
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The outcome of a direct marketing offer designed to motivate people to visit a business.