1. In the marginal costing approach to promotional budgeting, the marketer only spends up to the point where any further spending would not generate enough extra business to justify the outlay. Which of the following statements reflects the advantages of this method?
1. Company cannot become over-committed or run into trouble by relying on sales that do not, materialize.
2. Simple to calculate; also ensures that, if sales drop off, costs also drop.
3. Ensures that the firm remains on a par with the competitors, and does not waste expenditure.
4. Has a logical basis, and if carried out correctly will achieve the firm's strategic goals.
5. This method would maximize profits since no excess spending would result.
Answer: This method would maximize profits since no excess spending would result
1. Extremely difficult to calculate, given the changing nature of markets
2. Is based on the false premise that sales cause promotion, rather than promotion causing sales
3. Relies on the marketer being able to persuade other departments within the firm to give up expenditure on their own pet projects
4. Bears no relationship to the state of the marketplace
5. Takes no account of changes in the market, or opportunities that might arise; is not customer-orientated, in other words
6. Difficult to calculate the necessary spend to achieve the objective. Time-consuming and expensive in terms of market research.
Answer: Is based on the false premise that sales cause promotion, rather than promotion causing sales
1. Market growth
2. Share of market against largest competitor
3. Competitor analysis
4. Market attractiveness
5. Market growth and share of market against largest competitor
Answer: Market growth and share of market against largest competitor
1. Ansoff Model
2. General Electric Model
3. Boston Consulting Group Model
4. Porter's Five Forces Model
5. All of the above
Answer: All of the above
2. Marketing audit
3. Corporate strategy
4. Critical issues
5. Marketing mix
Answer: Marketing audit
6. The US Company Hilton Hotels only operates and markets the 163-bed luxury Hilton London Green Park Hotel. The building is owned and maintained by London and Regional Properties. What kind of market entry strategy are they using here?
1. Joint venture
7. Hormel Foods Corporation in the USA allows the Danish company Tulip International to produce and market SPAM for the UK market under its own name. What kind of market entry strategy is Hormel using?
3. Joint venturing
1. Direct exporting
2. Indirect exporting
3. Joint venturing
4. Direct investment
Answer: Indirect exporting
1. Forward integration
2. Concentric diversification
3. Conglomerate diversification
4. Backward integration
Answer: Conglomerate diversification
1. Determining the point at which we cannot afford to spend any more.
2. Determining the point at which we will be spending more than our competitors.
3. Determining the point at which further expenditure will not be justified by increased sales.
4. Determining the point at which the organization breaks even.
Determining the point at which further expenditure will not be justified by increased sales.
Determining the point at which we will be spending more than our competitors.