BUS 121 – FINAL EXAM
Part A: 10 marks multiple choice – 2 each from chapters 8, 9, 11, 12 and 20
Part B: 60 marks short answer questions – 19 questions, 1-5 marks each
Part C: 30 marks problems – 3 questions, 10 marks each
• unlabelled ratio formula sheet attached at back of exam – do not remove
MARKETING (10% - short answer questions only)
Promoting Products and Services
Promotion (communication mix: total message sent to consumers about product) is any
technique designed to sell a product. Promotional techniques – advertising must communicate the
uses, feature, and benefits of products.
The Promotional Mix
There are four types of promotional tool. The promotional mix is the portion of marketing
concerned with choosing the best combination of advertising, personal selling, sales promotions,
and publicity to sell a product.
Buyers recognize the need to make a purchase. Marketers must make sure that buyers are
aware of their products. Advertising and publicity, which can reach many people quickly,
Buyers seek information about available products. Advertising an personal selling can
both be use to educate consumers.
Buyers compare competing products. Personal selling can be vital. Sales representatives
can demonstrate product quality and performance in comparison with competitor’s
Buyers purchase products. Sales promotion if effective because it can give consumers an
incentive to buy. Personal selling can help by bringing product to convenient purchase
Buyers evaluate products after purchase. Advertising, or even personal selling is
sometimes used to remind consumers that they made wise purchases.
Advertising is promotional tool consisting of paid, non-personal communication used by an
identified sponsor to inform an audience about a product. i.e., Buckley’s, it tastes awful and it
During the introduction stage, informative advertising can help develop an awareness of the
company and its product among buyers and can establish a primary demand for the product. i.e.,
instructors receive direct-mail advertising for new textbooks informing them of content and
During the growth stage, persuasive advertising can influence a larger number of consumers to
buy a firm’s products rather than its competitors.
During the maturity stage, comparative advertising is a strategy in which the goal is to influence
the customer to switch from a competitor’s similar product by directly comparing the two –
making one look inferior. i.e., Bounty claims (through ads) to have more absorbency than Scott
During the latter part of the maturity stage and all of the decline stage, reminder advertising
keeps the product’s name in the minds of consumers. Advertising Media
The specific communication devices – television, radio, newspapers, direct mail, magazines,
billboards, and the Internet – used to carry a firm’s advertising message to potential customers.
Most consumers ignore the bulk of the ads so it is crucial marketers know who their customers
are and what messages appeal to them. Multimedia companies convey the seller’s message the
same across mediums. The combination of media through which a company chooses to advertise
its products is called its media mix.
• Which medium will reach the people I want to reach? If a firm is selling hog breeding
equipment, it might choose a business magazine or digest read by mostly hog farmers
(Think lemonade stand or job interview) Personal selling involves a salesperson communicating
one-on-one with a potential customer to identify the customer’s need and match that need with
the seller’s product. It is the oldest form of selling and provides a (credible) personal link between
buyer and seller. Sales calls are expensive because it includes compensation, travel, food, and
lodging. Telemarketing conducts the personal selling process and arranges appointments with
salesmen, thus cutting costs.
Sales Force Management
Setting goals at top levels of an organization; setting practical objectives for salespeople;
organizing a sales force to meet those objectives; implementing and evaluating the success of a
Personal Selling Situations
• Retail selling is selling a consumer product for the buyer’s personal or household use.
The buyer comes to the seller.
• Industrial selling is selling products to other businesses, either for resale or
manufacturing. The salesperson comes to the buyer.
Personal Selling Tasks
Sales jobs usually require salespeople to perform all three tasks (to some degree, depending on
product an the company):
1. In order processing, the receiving and follow-through on handling and delivery of an
order by a salesperson. They call routinely to check supply, determine size of reorder, fill
the order on their trucks, and stack the customer’s shelves.
2. Creative selling may persuade buyers that they have need for the benefits of a product (if
they are not clear). Industrial products involve creative selling because buyers have not
used the products before. It is also important in real estate and high-priced consumer
products, but any new product can benefit from it.
3. Missionary selling promotes the company and its products over the long term, rather
than to make a quick sale. (Think Drug companies)
The Personal Selling Process
Creative personal selling process:
• Prospecting and Qualifying. Prospecting is the process of identifying potential
customers. Salespeople can sift through past company records, existing customers,
friends, relatives, company personnel, and business associates. Qualifying determines if
prospects have the authority and to buy and ability to pay.
• Approaching. The success of the later stages depends on the prospect first impression.
Salespeople need to present themselves as neat and professional.
• Presenting and Demonstrating. A full demonstration of the product, features, and uses. It
links the benefits to the needs of the prospect.
• Handling Objections. Prospects may have objectives to aspect of the product (price). It
shows the salesperson the prospects’ interest and uncertainty and how to sell to them. • Closing. The process of asking the customer to buy the product. Successful salespeople
know when the customer is ready to buy (signs like discussing monthly payments).
• Following Up. Closing is not the end. Follow-up activities include fast processing of the
order, timely delivery, and even quick service and repairs.
advertising – types, objectives, communication model – 3 key elements,
media selection, “greenwashing” – 6 sins
Types of Advertising
Brand advertising promotes a specific brand-name product.
Product advertising, a variation of brand advertising, promotes a general type of product or
Advocacy advertising promotes a particular viewpoint or candidate.
Institutional advertising promotes a firm’s long-term image rather than a specific product.
In consumer markets…
Retail advertising by local stores encourages customers to visit their store and to buy its
products and services. Often it is actually co-operative advertising, with cost of advertising
shared by the retailer and manufacturer.
In industrial markets, manufacturers use trade advertising designed to reach potential
wholesalers and retailers. Manufacturers use industrial advertising to reach professional
purchasing agents (firm managers buying raw materials or components).
sales promotions – types, uses
public relations and publicity
Sales promotions are short-term promotional activities designed to stimulate consumer buying or
co-operation from distributors and other members of the trade (sales agents). i.e., “Buy three and
get one free,” increases the likelihood consumers will try to product – that and convenience and
Types of Sales Promotions
Best sales promotions: coupons, point-of-purchase displays, incentives (free samples, premiums),
trade shows, and contests/sweepstakes.
• Coupons encourage new customers to try, pull customers from competition or induce
more spending from existing customers.
• Point-of-purchase displays strategically locate the product on sale
• Premiums are free or bargain-priced items offered to customers for making a specific
Publicity and Public Relations
Publicity is free. It is information about a company made available to consumers by the news
media. There is very little a company can do to control publicity. Public relations is company-
influenced activity that attempts to establish a sense of goodwill between the company and its
customers through public service announcements. i.e., corporate sponsorships.
Place/Distribution – desire vs. availability, choice of distribution channel,
implications of indirect channel on pricing and promotion – demand backward
pricing, push vs. pull
Once a firm’s promotional objectives are clear, it can develop a promotional strategy to achieve
those goals. A company using a push strategy (industrial) will aggressively push its product
through wholesalers and retailers, who persuade customers to buy it. In contrast a pull strategy
(consumer) appeals directly to customers, who then demand the product from retailers, who
demand the product from wholesalers. General Foods use a combination of both strategies. i.e.,
advertising creates consumer demand (pull) and it pushes wholesalers and retailers to stock these products (push). In rare cases, a company will purposely avoid both strategies. i.e., Langlitz
Leathers – expensive and waiting list
Distribution of Consumer Products
A distribution channel is the path a product follows from the producer to the end-user (industrial
• Channel 1: Direct Distribution of Consumer Products. In a direct channel, the product
travels from a producer to the consumer without an intermediary (own sales force, direct
• Channel 2: Wholesale Distribution of Consumer Products. Producers distribute products
through retailers (Levi’s has its own outlets as well as provides to Gap).
• Channel 3: Wholesale Distribution of Consumer Products. Retailers cannot always afford
both retail and storage space. Wholesalers enter in the distribution channel as storage.
Channel 4: Distribution Through Sales Agents or Brokers. Sales agents (or brokers)
represent a business and sell to wholesalers and/or retailers. They receive commission in
return, but never take legal possession. Firms can manufacture (do what they do best) and
not have to divert resources and distribution. i.e., travel agents represent airlines, car-
rental companies, hotels.
The Pros and Cons of Non-direct Distribution
Each link the distribution chain makes a profit by charging a markup or commission. Non-direct
(more intermediaries) distribution means higher prices. E-intermediaries – wholesalers/agents
who use Internet channels – also charge markups. Markup levels depend on competitive
conditions and practices in a particular industry. Intermediaries provide added value by saving
consumers time and money. Value accumulates with each link – intermediaries provide
timesaving information and accessible quantities. Even if intermediaries are eliminated, the costs
of their functions are not. i.e., selling a home agent less
• Channel 5: Distribution by Agents to Consumers and Businesses. It differs from the first
four channels. An agent serves as the sole intermediary and distributes to both consumers
and businesses. i.e., a travel agent serves