Question

49) Rather than merely counting media exposures, a better measure of marketing public rela- tions effectiveness is the ________.

A) number of promotional tools required

B) effect it has on its market capitalization

C) change in product awareness, comprehension, or attitude

D) changes observed in media behavior

E) impact it has on the company's market share

Often companies will be tempted to cut prices in an economic downturn or when
confronted with a sudden drop in sales. In many (if not most) circumstances, cutting prices to
increase sales volume is not a good idea. 1) Explain why this is so. 2) What are some strategic
alternatives that are preferable to cutting prices?

Answer 1

Solution:

49: Option C

A better way to measure the effectiveness of public relations is to measure product awareness, comprehension about the product, and the changes in attitude about the product from the consumers. These metrics would be more effective in determining the effectiveness of marketing activities.

50:

1: Cutting prices to increase sales volume is not a good idea because cutting prices is a short term solution that solves a short term problem of lower sales volume. However, whenever we cut the prices to increase sales volume we do not always have confirmation of appropriate levels of sales volume and hence there is still a risk of not meeting expected sales volume after price cuts and hence it is a highly risky step because uplifting the prices of the products then becomes very difficult if consumers become habitual at lower prices and it then impacts long term revenues and profits of the companies. Hence, cutting prices is not a good idea to increase sales volume.

2: Instead of cutting prices we can introduce promotional offers that offer related diversification to the consumers and hence it increases the sales volume of the product. Another way is to bundle the products with the ones that are doing better to increase the overall sales volume of the products. This helps in maintaining the prices and still increasing the sales volume because of such promotional offers. Limited time offers that offer great value to the consumers helps in developing a strong demand among the consumers and it helps in increasing the demand. Such promotional offers help in maintaining the demand for the products which we can meet. Hence, these are all alternatives to cutting prices to increasing sales volume.