1. Copyright © 2010 Nelson Education Limited. PowerPoint Presentations for Small Business Management Longenecker, Donlevy, Calvert, Moore, Petty & Palich Canadian Edition Prepared by Cheryl Dowell, Algonquin College

2. Copyright © 2010 Nelson Education Limited. Chapter 7 Promotional and Pricing Strategies

3. Copyright © 2010 Nelson Education Limited. 1. Promotion consists of marketing communications that inform consumers about a firm’s product and persuade them to use it. 1.True 2.False

4. Copyright © 2010 Nelson Education Limited. 2. Personal selling is more feasible in a widely dispersed market. 1.True 2.False

5. Copyright © 2010 Nelson Education Limited. 3. Prospecting is a systematic process of continually looking for new customers. 1.True 2.False

6. Copyright © 2010 Nelson Education Limited. 4. Sales promotion serves as an inducement to buy a certain product while typically offering value to prospective customers. 1.True 2.False

7. Copyright © 2010 Nelson Education Limited. 5. The greatest benefit of trade show exhibits is their potential cost savings over personal selling. 1.True 2.False

8. Copyright © 2010 Nelson Education Limited. 6. Total variable costs are those that remain constant at different levels of quantity produced or sold. 1.True 2.False

9. Copyright © 2010 Nelson Education Limited. 7. Markups may be expressed as a percentage of either the selling price or the cost. 1.True 2.False

10. Copyright © 2010 Nelson Education Limited. 8. A firm using a penetration pricing strategy prices products or services higher than normal. 1.True 2.False

11. Copyright © 2010 Nelson Education Limited. 9. Which of the following is NOT a promotional method. 1.Advertising. 2. Personal selling. 3. Sales promotion.

12. Copyright © 2010 Nelson Education Limited. 10. Which of the following is NOT a technique of prospecting. 1.Waiting for customers to arrive at the place of business. 2.Personal referrals. 3.Marketer-initiated contacts. 4.Customer-initiated contacts.

13. Copyright © 2010 Nelson Education Limited. 11. A type of advertising agreement in which one firm pays another to include a click-on link on it site is known as _____. 1.Web sponsorship 2.Banner Ad 3.Email promotion 4.Linkage

14. Copyright © 2010 Nelson Education Limited. 12. Joining with another firm to promote products is a form of a strategic alliance. 1.True 2.False

15. Copyright © 2010 Nelson Education Limited. 13. The preferred approach to estimating promotional expenditures is to decide what it will take to do the job. 1.True 2.False

16. Copyright © 2010 Nelson Education Limited. 14. The revenue of a firm is a direct reflection of two components: sales volume and ______. 1.price 2.mark-up 3.cost 4.demand

17. Copyright © 2010 Nelson Education Limited. 15. When new products are first introduced into the market, penetration pricing and skimming pricing are the _____ strategies used. 1.long-term 2.short-term 3.average 4.never used

18. Copyright © 2010 Nelson Education Limited. 16. Break-even analysis determines the quantity to be sold to maximize profit. 1.True 2.False